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公司公告

一致B:2019年半年度财务报告(英文版)2019-08-24  

						Section X. Financial Report


I. Audit reports

Whether the semi-annual report was audited or not
□ Yes √ No
The financial report of this semi-annual report was unaudited.


II. Financial State ment

Statement in Financial Notes are carried in RMB/CNY




                                               1
                    CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                        CONSOLIDATED BALANCE SHEET

                                                As at 30 June 2019

                                         (Expressed in Renminbi Yuan)



ASSETS                                    Note V                     30 June 2019    31 December 2018



Current assets

   Cash and bank balances                   1                   8,086,328,508.49      8,089,781,304.56
   Notes receiv able                        2                    790,664,828.26       1,357,311,929.63
   Accounts receiv able                     3
                                                               11,826,440,731.59      9,336,861,647.92
   Receivable financing                     4                    325,439,580.18                      -
   Advances to suppliers                    5                    357,078,819.64         583,484,515.95
   Other receivables                        6
                                                                 654,086,387.85         643,493,359.32
   Incl:Interest receivable                                          14,791,483.10        8,223,327.64
   Inventories                              7                   4,882,673,616.27      4,389,335,942.19
   Other current assets                     8                        97,317,287.60       95,347,629.18


Total current assets                                           27,020,029,759.88     24,495,616,328.75


Non-current assets

   Long-term equity investments             9                   2,077,811,395.30      1,880,393,786.10
   Other equity instruments                10
   investment                                                        13,685,760.00       13,685,760.00
   Other non-current financial assets      11                    140,000,000.00         140,000,000.00
   Investment properties                   12                    140,319,140.00         144,894,495.97
   Fixed assets                            13
                                                                 593,552,480.99         607,933,827.67
   Construction in progress                14                        31,980,582.21       36,412,614.61
   Right-of-use assets                     15                   1,910,981,197.63                     -
   Intangible assets                       16
                                                                 320,522,690.59         319,207,126.15
   Goodw ill                               17                    847,041,800.60         833,547,800.60
   Long-term prepaid expenses              18                    311,311,781.97         311,328,706.46
   Deferred tax assets                     19
                                                                     65,417,507.01       74,914,209.95
   Other non-current assets                20                        66,944,586.76       72,365,863.71


Total non-current assets                                        6,519,568,923.06      4,434,684,191.22


Total assets                                                   33,539,598,682.94     28,930,300,519.97


The accompanying notes form an integral part of these financial statements


                                                        2
                       CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                 CONSOLIDATED BALANCE SHEET (Continued)

                                                  As at 30 June 2019

                                            (Expressed in Renminbi Yuan)


LIABILITIES                                       Note V           30 June 2019     31 December 2018


Current liabilities

   Short-term borrowings                           21           3,290,877,595.23     2,597,652,702.43

   Notes payable                                   22           3,539,095,262.34     3,416,755,681.80

   Accounts payable                                23           8,088,697,602.94     6,468,535,961.17

   Advances from customers                                                      -                   -

   Employee benefits payable                       25            161,719,082.78        231,866,407.40

   Tax payable                                     26            215,579,001.83        241,980,412.72

   Other payables                                  27           1,474,526,698.43     1,539,436,971.93

        Incl: Interest payable                                    29,012,444.93         21,906,660.63

              Dividends payable                                     6,389,320.96         6,389,320.96

   Contract liabilities                            24            239,739,020.90        255,590,612.37

   Non-current liabilities due w ithin one year    28            558,296,784.75          5,861,324.37

   Other current liabilities                       29                  445,493.48         292,465.75



Total current liabilities                                      17,568,976,542.68    14,757,972,539.94


Non-current liabilities

   Long-term borrow ings                           30                           -       31,600,000.00

   Lease liabilities                               31           1,186,461,123.96                    -

   Long-term payables                              32                  800,000.00        4,563,978.52

   Long-term employee benefits payable             33               1,915,000.00         2,050,000.00

   Deferred income                                 34             88,722,818.18         91,491,170.40

   Deferred tax liabilities                        19             66,386,258.77         67,605,161.88

   Other non-current liabilities                   35             67,840,696.09         69,241,176.18



Total non-current liabilities                                   1,412,125,897.00       266,551,486.98



Total liabilities                                              18,981,102,439.68    15,024,524,026.92




The accompanying notes form an integral part of these financial statements



                                                           3
                   CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                              CONSOLIDATED BALANCE SHEET (Continued)

                                            As at 30 June 2019

                                       (Expressed in Renminbi Yuan)




SHAREHOLDERS’ EQUITY                   Note V                       30 June 2019            31 December 2018



Shareholders’ equity
   Share capital                          36                       428,126,983.00               428,126,983.00

   Capital surplus                        37                      4,363,409,728.51            4,320,984,981.51

   Surplus reserve                        38                       214,063,491.50               214,063,491.50
                                                                  7,134,839,714.47            6,655,257,147.27
   Retained earnings                      39


Shareholders’ equity attributable                               12,140,439,917.48           11,618,432,603.28
  to shareholders of the parent
                                                                  2,418,056,325.78            2,287,343,889.77
Non-controlling interests


Total shareholders’ equity                                      14,558,496,243.26           13,905,776,493.05


Total liabilities and shareholders’                             33,539,598,682.94           28,930,300,519.97
        equity




The accompanying notes form an integral part of these financial statements


The financial statements have been signed by:


Legal repres entative:                   Financial controller:                Head of Accounting Department:




                                                       4
                     CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                      CONSOLIDATED INCOME STATEMENT

                                       For the six months ended 30 June 2019

                                              (Expressed in Renminbi Yuan)



                                                                     For the six months ended    For the six months ended
                                                        Note V
                                                                                  30 June 2019                30 June 2018


Operating revenue                                        40                 25,228,147,377.43           20,778,425,602.22
       Less: Operating costs                             40                 22,415,519,952.87           18,367,643,723.84
               Tax and surcharge                         41                     62,139,226.44               56,620,527.25
               Selling expenses                          42                   1,483,332,500.73            1,273,588,756.07
               Administrative expenses                   43                    377,216,694.13              351,820,063.78
               Finance costs                             44                    104,095,254.24               57,541,544.32
               Incl: Interest cost                                             169,529,472.37                83,356,367.18
                Interest income                                                 60,630,036.91                23,082,233.56
       Add: Other incomes                                45                     14,990,919.02                11,330,310.02
               Investment income                         46                    169,142,289.99               162,693,771.35
               Incl: Investment income from
               associates                                                      169,142,289.99               162,662,271.35
               Impair ment loss on financial assets      47                    (11,434,101.13)                1,026,702.24
               Impair ment losses                        48
                                                                                  (125,554.34)                (508,849.26)
               Gain on disposal of assets                49                        (29,725.44)                4,281,164.61

Operating profits                                                              958,387,577.12              850,034,085.92
       Add: Non-operating income                         50                       3,667,170.25                5,498,951.11
      Less: Non-operating expenses                       51                       1,718,265.56                1,797,292.80

Total profit                                                                   960,336,481.81              853,735,744.23
       Less: Income taxes                                52                    192,243,926.50              164,486,734.32

Net profit                                                                     768,092,555.31              689,249,009.91

Net Profit from continuing operations                                          768,092,555.31              689,249,009.91

Net profit attributable to shareholders of the parent                          650,833,360.40              641,727,034.93

Profit or loss of non-controlling interests                                    117,259,194.91               47,521,974.98

Total comprehensive income                                                     768,092,555.31               689,249,009.91

Incl: Total comprehensive income for the year
       attributable to owners of the parent                                    650,833,360.40               641,727,034.93
                                                                               117,259,194.91                47,521,974.98
    Total comprehensive income for the year
     attributable to non-controlling interests
Earnings per share
     Basic earnings per share                                                            1.52                         1.50

     Diluted earnings per share                                                          1.52                         1.50


The accompanying notes form an integral part of these financial statements


                                                                 5
                                                          CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                                CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

                                                                           For the six months ended 30 June 2019

                                                                               (Expressed in Renminbi Yuan)


    For the six months ended                               Shareholders’ equity attributable to shareholders of the parent                                   Non-controlling         Total equity
                 30 June 2019                                                                                                                                       interests
                                                            Other equity
                                          Share capital      instrument         Capital surplus   Surplus reserve   Retained earnings            Subtotal

 Closing balance of the preceding year   428,126,983.00                -      4,320,984,981.51    214,063,491.50     6,655,257,147.27   11,618,432,603.28   2,287,343,889.77    13,905,776,493.05


 others                                               -                -                      -                 -                   -                   -                   -                    -


 Opening balance of the current year     428,126,983.00                -      4,320,984,981.51    214,063,491.50     6,655,257,147.27   11,618,432,603.28   2,287,343,889.77    13,905,776,493.05



 Movements in the current year                        -                -         42,424,747.00                  -     479,582,567.20      522,007,314.20     130,712,436.01       652,719,750.21

 (1) Total comprehensiv e income                      -                -                      -                 -     650,833,360.40      650,833,360.40     117,259,194.91       768,092,555.31
 (2) Capital paid and reduced by
      owners                                          -                -         42,424,747.00                  -                   -      42,424,747.00      14,780,000.00        57,204,747.00

    1.Capit al injection by owners                    -                -                      -                 -                   -                   -     14,780,000.00        14,780,000.00


    2.Others                                          -                -        42,424,747.00                   -                   -      42,424,747.00                    -      42,424,747.00

 (3) Profit distribution                              -                -                      -                 -    (171,250,793.20)    (171,250,793.20)     (1,326,758.90)     (172,577,552.10)

    1.Dis tribution to equity owners                  -                -                      -                 -    (171,250,793.20)    (171,250,793.20)     (1,326,758.90)     (172,577,552.10)

    2.Others                                          -                -                      -                 -                   -                   -                   -                    -

                                                                                                                                        12,140,439,917.48   2,418,056,325.78    14,558,496,243.26
 Closing balance of the current year     428,126,983.00                -      4,363,409,728.51    214,063,491.50     7,134,839,714.47

The accompanying notes form an integral part of these financial statements




                                                                                                    6
                                                          CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                                CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

                                                                           For the six months ended 30 June 2019

                                                                               (Expressed in Renminbi Yuan)


    For the six months ended                               Shareholders’ equity attributable to shareholders of the parent                                Non-controlling         Total equity
                 30 June 2018                                                                                                                                    interests
                                                            Other equity
                                          Share capital      instrument         Capital surplus   Surplus reserve   Retained earnings           Subtotal

 Closing balance of the preceding year   428,126,983.00                -      3,181,429,064.99    214,063,491.50     5,572,952,806.39   9,396,572,345.88   530,930,411.26     9,927,502,757.14


 others                                               -                -                      -                 -                   -                  -                 -                    -


 Opening balance of the current year     428,126,983.00                -      3,181,429,064.99    214,063,491.50     5,572,952,806.39   9,396,572,345.88   530,930,411.26     9,927,502,757.14



 Movements in the current year                        -                -            397,342.21                  -     513,288,940.03     513,686,282.24     37,434,714.46      551,120,996.70

 (1) Total comprehensiv e income                      -                -                      -                 -     641,727,034.93     641,727,034.93     47,521,974.98      689,249,009.91
 (2) Capital paid and reduced by
      owners                                          -                -            397,342.21                  -                   -         397,342.21    26,721,512.76       27,118,854.97

    1.Capit al injection by owners                    -                -                      -                 -                   -                  -    24,381,200.00       24,381,200.00


    2.Others                                          -                -            397,342.21                  -                   -        397,342.21      2,340,312.76         2,737,654.97

 (3) Profit distribution                              -                -                      -                 -    (128,438,094.90)   (128,438,094.90)   (36,808,773.28)    (165,246,868.18)

    1.Dis tribution to equity owners                  -                -                      -                 -    (128,438,094.90)   (128,438,094.90)   (36,808,773.28)    (165,246,868.18)

    2.Others                                          -                -                      -                 -                   -                  -                 -                    -


 Closing balance of the current year     428,126,983.00                -      3,181,826,407.20    214,063,491.50     6,086,241,746.42   9,910,258,628.12   568,365,125.72    10,478,623,753.84


The accompanying notes form an integral part of these financial statements




                                                                                                    7
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                CONSOLIDATED CASH FLOW STATEMENT

                                   For the six months ended 30 June 2019

                                          (Expressed in Renminbi Yuan)


                                                                      For the six months ended For the six months ended
                                                             Note V
                                                                                   30 June 2019             30 June 2018


 1.CASH FLOWS FROM OPERATING ACTIVITIES
      Cash receiv ed from sales of good or rendering of
         services                                                            25,674,088,675.82         22,055,082,715.59

      Tax refunds                                                                 2,721,287.63              1,593,193.21

      Cash receipts related to other operating activ ities    53                295,482,211.20            311,984,787.60


      Sub-total of cash inflows from operating activ ities                   25,972,292,174.65         22,368,660,696.40


      Cash paid for goods and services                                       22,598,237,854.68         19,799,894,631.80

      Cash paid to and on behalf of employees                                 1,088,230,430.51            956,322,585.28

      Cash paid for all types of taxes                                          627,174,776.80            548,616,793.36
      Cash payments related to other operating
         activities                                           53                494,891,531.31            838,468,976.76



      Sub-total of cash outflows from operating
          activities                                                         24,808,534,593.30         22,143,302,987.20
      Net cash flows from operating activities                54              1,163,757,581.35            225,357,709.20

 2.CASH FLOWS FROM INV ESTING ACTIVITIES


      Cash receiv ed from returns on investments                                 20,129,463.78             78,825,446.85
      Net cash received from disposal of fix ed assets,
        intangible assets and other long-term assets                                801,205.52              6,064,099.87

      Cash receipts related to other investing activities     53                             -             48,766,145.15


      Sub-total of cash inflows from investing activities                        20,930,669.30            133,655,691.87




The accompanying notes form an integral part of these financial statements

                                                               8
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                      CONSOLIDATED CASH FLOW STATEMENT (Continued)

                                   For the six months ended 30 June 2019

                                          (Expressed in Renminbi Yuan)


                                                                             For the six months For the six months
                                                                    Note V       ended 30 June      ended 30 June
                                                                                           2019               2018

2.CASH FLOWS FROM INV ESTING ACTIVITIES( Continued)

      Cash paid for acquis ition of fix ed assets,
         intangible assets and other long-term assets                            111,399,813.51      97,867,494.61
      Cash paid for acquis ition of investments                                   43,674,685.30      10,000,000.00
      Cash payments related to other investing activities            53            1,093,125.00      43,999,800.00

      Sub-total of cash outflows from investing activities                       156,167,623.81     151,867,294.61

      Net cash flows from investing activities                                 (135,236,954.51)    (18,211,602.74)

3.CASH FLOWS FROM FINANCING ACTIVITIES

      Cash proceeds from investments by others                                    14,780,000.00      11,781,200.00
        Incl: Cash received from capital contributions from
                 non-controlling         shareholders      of                     14,780,000.00      11,781,200.00
                 subsidiaries
      Cash receiv ed from borrowings                                              16,700,000.00      40,775,440.04
      Cash receipts related to other financing activ ities           53            3,512,659.71      83,745,164.60

      Sub-total of cash inflows from financing activities                         34,992,659.71     136,301,804.64

      Cash repayments for debts                                                   73,261,634.53      79,670,200.30
      Cash payments for distribution of dividends or profit
                                                                                 343,055,058.89     226,149,759.15
        and interest expenses
        Incl: Profit and dividends paid to non-controlling
                                                                                   1,326,758.90      40,392,215.98
                 shareholders of subsidiaries
      Cash payments related to other financing activities            53          510,162,167.74     118,725,719.23

      Sub-total of cash outflows from financing activities                       926,478,861.16     424,545,678.68

      Net cash flows from financing activ ities                                (891,486,201.45)   (288,243,874.04)




The accompanying notes form an integral part of these financial statements

                                                                9
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                   CONSOLIDATED CASH FLOW STATEMENT (Continued)

                               For the six months ended 30 June 2019

                                     (Expressed in Renminbi Yuan)


                                                       Note V    For the six months    For the six months
                                                                ended 30 June 2019    ended 30 June 2018


 4.EFFECT OF FOREIGN EXCHANGE RATE CHANGES
   ON CASH AND CASH EQUIVALENTS                                        (176,567.25)           314,863.47


 5.NET INCREASE IN CASH AND CASH EQUIVALENTS            54           136,857,858.14       (80,782,904.11)


  Add: Cash and cash equivalents at beginning of the
    year                                                           7,632,117,020.77      3,673,498,691.48


 6.CASH AND CASH EQUIVALENTS AT END OF YEAR             54
                                                                   7,768,974,878.91      3,592,715,787.37




The accompanying notes form an integral part of these financial statements




                                                       10
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                       COMPANY BALANCE SHEET

                                            As at 30 June 2019

                                       (Expressed in Renminbi Yuan)


ASSETS                                     Note XIV            30 June 2019    31 December 2018


Current assets

  Cash and bank balances                                    2,210,653,256.99    1,817,654,598.01
  Notes receivable                                            70,539,252.94        63,870,980.39
  Accounts receivable                         1              610,075,622.91       631,236,593.94
  Ad vances to suppliers                                        3,875,346.87        4,760,182.00
  Other receivables                           2             1,858,484,572.60    1,541,980,883.50
  Incl:Interest receivable                                    14,926,690.76         7,550,877.07
      Dividends receivable                                   106,074,898.00                    -
  Inventories                                                225,040,528.88       158,166,185.65
  Other current assets                                            39,482.38            39,482.38


Total current assets                                        4,978,708,063.57    4,217,708,905.87


Non-current assets
  Long-term equity investments                3             7,639,715,544.55    7,432,906,692.24
  Other non-current financial assets                         140,000,000.00       140,000,000.00
  Investment properties                                         1,635,946.12        1,955,854.46
  Fixed assets                                                19,952,922.05        21,362,422.03
  Right-of-use assets                                           6,316,333.03                   -
  Intangible assets                                             2,997,883.63        2,452,222.51
  Long-term deferred expenses                                   6,990,428.04        7,481,809.53
  Other non-current assets                                      7,000,000.00        7,000,000.00


Total non-current assets                                    7,824,609,057.42    7,613,159,000.77



Total assets                                               12,803,317,120.99   11,830,867,906.64




The accompanying notes form an integral part of these financial statements


                                                      11
                      CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                COMPANY BALANCE SHEET (Continued)

                                            As at 30 June 2019

                                       (Expressed in Renminbi Yuan)


LIABILITIES                                                 30 June 2019     31 December 2018


Current liabilities

   Short-term borrowings                                  570,000,000.00        539,000,000.00
   Notes payable                                          321,344,616.65        252,317,800.78
   Accounts payable                                       547,918,074.90        442,049,241.22
   Contract liabilities                                     9,058,538.51          4,182,083.40
   Employee benefits payable                               34,702,315.82         36,233,563.12
   Tax pa yables                                           11,430,926.20         13,426,601.90
   Other payables                                        1,729,610,132.84     1,481,817,856.56
   Incl:Interest payable                                    5,588,978.10          1,354,592.35
   Non-current liabilities due within one
      year                                                 32,452,757.27                     -
   Other current liabilities                                  208,701.01           226,427.99


Total current liabilities                                3,256,726,063.20     2,769,253,574.97


Non-current liabilities

   Long-term borrowings                                                 -        31,600,000.00
   Lease liabilities                                        5,584,622.27                     -
   Long-term payables                                         800,000.00           800,000.00
   Long-term employee benefits payable                        102,000.00           118,000.00
   Deferred income                                          1,508,786.84          1,687,899.50
   Deferred tax liabilities                                 1,635,298.63          2,298,426.39


Total non-current liabilities                               9,630,707.74         36,504,325.89


Total liabilities                                        3,266,356,770.94     2,805,757,900.86




The accompanying notes form an integral part of these financial statements



                                                   12
                   CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                 COMPANY BALANCE SHEET (Continued)

                                              As at 30 June 2019

                                         (Expressed in Renminbi Yuan)


SHAREHOLDERS’ EQUITY                                         30 June 2019    31 December 2018


Shareholders’ equity

   Share capital                                            428,126,983.00       428,126,983.00
   Capital surplus                                         4,468,787,524.26    4,426,362,777.26
   Surplus reserves                                         214,063,491.50       214,063,491.50
   Retained earnings                                       4,425,982,351.29    3,956,556,754.02


Total shareholders’ equity                                9,536,960,350.05    9,025,110,005.78


                                                          12,803,317,120.99   11,830,867,906.64
Total liabilities and shareholders’ equity




The accompanying notes form an integral part of these financial statements



                                                     13
                      CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                            COMPANY INCOME STATEMENT


                                         For the six months ended 30 June 2019


                                              (Expressed in Renminbi Yuan)



                                                         Note XIV     For the six months    For the six months
                                                                     ended 30 June 2019    ended 30 June 2018



Operating revenue                                           4           2,008,004,563.30      1,687,621,355.83

       Less: Operating costs                                4           1,921,272,394.76      1,614,717,473.91

                  Tax and surcharge                                         2,519,247.99          2,016,368.93

                  Selling expenses                                         31,052,044.81         25,894,795.45

                  Administrative expenses                                  38,056,806.31         33,679,106.75

                  Finance costs                                          (28,398,244.00)       (19,369,880.08)

                  Incl: Interest cost                                      23,271,307.72         20,770,113.43

                       Interest income                                     52,479,722.42         40,925,200.74
       Add: Other incomes                                                    332,764.13           1,299,345.14

                Investment income                           5             608,288,420.47        534,840,744.46

               Incl: Investment income from associates                    181,280,533.11        173,326,290.14

               Impair ment loss on financial assets                       (2,365,765.08)              7,411.02

               Impair ment losses                                           (102,112.84)          (630,953.33)

        Gain on disposal of assets                                           (26,074.52)                     -



Operating profits                                                         649,629,545.59        566,200,038.16

       Add: Non-operating income                                               46,069.40                33.08

Less: Non-operating expenses                                                           -           127,688.63



Total profit                                                              649,675,614.99        566,072,382.61

       Less: Income taxes                                                   8,999,224.52          6,292,873.84



Net profit                                                                640,676,390.47        559,779,508.77

Net Profit from continuing operations                                     640,676,390.47        559,779,508.77



Total comprehensive income                                                640,676,390.47        559,779,508.77




The accompanying notes form an integral part of these financial statements


                                                                14
                                                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                               COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY


                                                                  For the six months ended 30 June 2019


                                                                      (Expressed in Renminbi Yuan)




             For the six months ended 30                             Other equity
                                                  Share capital                       Capital surplus   Surplus reserve    Retained earnings          Total equity
                               June 2019                              instruments

           Closing balance of the preceding
                 year                           428,126,983.00                  -   4,426,362,777.26    214,063,491.50      3,956,556,754.02    9,025,110,005.78
           Others                                            -                  -                  -                 -                     -                   -
           Opening balance of the current
           year                                 428,126,983.00                  -   4,426,362,777.26    214,063,491.50      3,956,556,754.02    9,025,110,005.78


           Movements in the current year                     -                  -     42,424,747.00                   -       469,425,597.27      511,850,344.27
          (1) Total comprehensive income                     -                  -                   -                 -       640,676,390.47      640,676,390.47
          (2) Capital paid and reduced by
                 ow ners                                     -                  -     42,424,747.00                   -                    -       42,424,747.00
              1.     Capital injection by
              ow ners                                        -                  -                   -                 -                    -                     -
              2.     Others                                  -                  -     42,424,747.00                   -                    -       42,424,747.00
          (3) Profit distribution                            -                  -                   -                 -   (171,250,793.20)   (171,250,793.20)
              1.     Distribution to ow ners                 -                  -                   -                 -   (171,250,793.20)   (171,250,793.20)


           Closing balance of the current
           year                                 428,126,983.00                  -   4,468,787,524.26    214,063,491.50      4,425,982,351.29    9,536,960,350.05




The accompanying notes form an integral part of these financial statements

                                                                                       15
                                                   CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                           COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Continued)


                                                                  For the six months ended 30 June 2019


                                                                      (Expressed in Renminbi Yuan)




  For the six months ended 30 June                                  Other equity
                                                  Share capital                      Capital surplus   Surplus reserve   Retained earnings        Total equity
                              2018                                   instruments


 Closing balance of the preceding year          428,126,983.00                 -   4,407,091,484.13    214,063,491.50    3,329,412,821.48    8,378,694,780.11
                                  Others                     -                 -                   -                 -                   -                   -
  Opening balance of the current year           428,126,983.00                 -   4,407,091,484.13    214,063,491.50    3,329,412,821.48    8,378,694,780.11


        Movements in the current year                        -                 -         397,342.21                  -     431,341,413.87     431,738,756.08
      (1) Total comprehensive income                         -                 -                   -                 -     559,779,508.77     559,779,508.77
       (2) Capital paid and reduced by
                                                             -                 -         397,342.21                  -                   -        397,342.21
                                ow ners
        1. Capital injection by owners                       -                 -                   -                 -                   -                   -
      2.     Others                                          -                 -         397,342.21                  -                   -        397,342.21
       (3) Profit distribution                               -                 -                   -                 -    (128,438,094.90)   (128,438,094.90)
        1.    Distribution to ow ners                        -                 -                   -                 -    (128,438,094.90)   (128,438,094.90)


   Closing balance of the current year          428,126,983.00                 -   4,407,488,826.34    214,063,491.50    3,760,754,235.35    8,810,433,536.19




The accompanying notes form an integral part of these financial statements


                                                                                    16
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.


                                    COMPANY CASH FLOW STATEMENT


                                   For the six months ended 30 June 2019


                                          (Expressed in Renminbi Yuan)


                                                                 For the six months    For the six months
                                                                ended 30 June 2019    ended 30 June 2018


1.CASH FLOWS FROM OPERATING ACTIVITIES

    Cash received from sales of good or rendering
      of services                                                  2,136,424,520.77      1,787,065,555.60
    Cash receipts related to other operating
      activities                                                      18,658,823.82         43,943,301.92

    Sub-total of    cash inflows from operating
      activities                                                   2,155,083,344.59      1,831,008,857.52


    Cash paid for goods and services                               1,905,147,658.61      1,655,107,446.18
    Cash paid to and on behalf of employees                           48,424,818.87         44,855,325.83
    Cash paid for all types of taxes                                  27,913,893.13         18,706,775.51
    Cash payments related to other operating
      activities                                                      17,265,038.12         36,183,479.25

    Sub-total of cash outflows from operating
      activities                                                   1,998,751,408.73      1,754,853,026.77


    Net cash flows from operating activities                         156,331,935.86         76,155,830.75


2. CASH FLOWS FROM INV ESTING ACTIVITIES


    Cash receiv ed from returns of investments                        55,106,832.79        187,137,437.23
    Net cash received from disposal of fix ed assets,
      intangible assets and other long-term assets                       119,000.00                     -
    Cash receipts related to other investing activities              996,340,000.00        857,940,000.00


    Sub-total of cash inflows from investing activities            1,051,565,832.79      1,045,077,437.23

    Cash paid for acquisition of fixed assets,
      intangible assets and other long-term assets                     5,983,680.11          6,044,462.78
    Cash paid for investments                                                     -         10,000,000.00
    Cash payments related to other investing
      activities                                                   1,200,340,000.00      1,051,642,980.00

    Sub-total of cash outflows from investing
      activities                                                   1,206,323,680.11      1,067,687,442.78


    Net cash flows from investing activities                       (154,757,847.32)       (22,610,005.55)




The accompanying notes form an integral part of these financial statements



                                                          17
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.


                            COMPANY CASH FLOW STATEMENT (Continued)


                                    For the six months ended 30 June 2019


                                           (Expressed in Renminbi Yuan)


                                                                    For the six months    For the six months
                                                                   ended 30 June 2019    ended 30 June 2018


3. CASH FLOWS FROM FINANCING ACTIVITIES


     Cash receiv ed from borrowings                                      10,000,000.00         10,000,000.00
     Cash receipts related to other              financing           11,037,461,719.13      8,065,884,436.80
       activities

     Sub-total of    cash inflows from financing                     11,047,461,719.13      8,075,884,436.80
       activities


     Cash repayments for debts                                           10,000,000.00         10,000,000.00
     Cash payments for distribution of dividends or
                                                                        182,679,899.11        144,898,008.66
       profit and interest expenses
     Cash payments related to other financing
                                                                     10,463,180,682.33      8,230,488,300.78
       activities
     Sub-total cash outflows from financing activ ities              10,655,860,581.44      8,385,386,309.44


     Net cash flows from financing activ ities                         391,601,137.69       (309,501,872.64)


4.EFFECT OF FOREIGN EXCHANGE RATE
     CHANGES ON CASH AND CASH                                             (176,567.25)           314,863.47
     EQUIVALENTS

5. NET INCREASE IN CASH AND CASH
                                                                        392,998,658.98      (255,641,183.97)
      EQUIVALENTS
   Add: Cash and cash equivalents at beginning of                     1,817,654,598.01      1,776,696,342.87
     the year

6. CASH AND CASH EQUIVALENTS                                          2,210,653,256.99      1,521,055,158.90
      AT END OF YEAR




The accompanying notes form an integral part of these financial statements


                                                             183
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                   Notes to financial statements
                             For the six months ended 30 June 2019


                  (All amounts in Renminbi “RMB” unless otherwise stated)


I     Profile of the Company


(1)   Historical development and basic information

As approved by the People’s Government of Shenzhen (SFBF (1993) No.356), China National Accord
Medicines Corporation Lt d. (hereinafter referred to as the “t he Company”), formerly known as S henz hen
Healt h Mineral Water Corp., Ltd., was registered as a joint stock liability limited company on 1 February
1993 through stock transformation. In March 1993, with the approval from the Shenzhen Branch of the
People’s Bank of China, the Company issued 30 million A shares (including 16.5 million public shares,
3.5 million employee shares and 10 million corporation shares ) and 20 million B shares. After this
issuance, the Company’s share capital was RMB105 million. Through convert capital surplus into share
capital, bonus issues and issuance of shares for years, the share capital of the Company increased to
RMB428,126,983 as at 30 June 2019.

In November 2000, the Company entered into an Assets Exchange Agreement with S henz hen
Investment Management Company, the original major shareholder of the Company, to exchange all the
assets and liabilities of the Company as of 31 August 2000 for Shenz hen Investment Managemen t
Company’s 100% equity interests in 11 pharmaceutical companies and certain properties as well as 51%
equity interests in Shenz hen Tefa Modern Computer Co., Ltd. The above assets exchange proposal was
approved by shareholders in the Second Extraordinary General Meeting on December 29, 2000. The
transaction was complet ed on 8 January 2001.

On 18 February 2004, the Company’s original major shareholder, Shenzhen Investment Management
Company, ent ered into a Stock Trans fer Agreement with Sinopharm Group Co., Ltd. (hereinafter referred
to as “Sinopharm Group”) to transfer its 43.33% shares in the Company to Sinopharm Group. The legal
procedures of the above equity transfer were completed on 9 December 2004. At the same time, as
approved by the State-owned Assets Supervision and Administration Commission of the State Council
(GZCQ (2004) No.525) and the China Securities Regulatory Commission (ZJGS Z (2004) No.94), the
nature of these shares was changed from state-owned stock to state-owned legal entity stock and
Sinopharm Group became the largest shareholder of the Company.

On 14 April 2006, the Company’s proposal on reformation of segregated stocks was approved. To gain
liquidity for the restricted stocks of the Company, the holders of the restricted stocks of t he Company
agreed to pay the following consideration: based on the stock registration as of 27 April 2006, the
Company issued bonus shares on 28 April 2006 at the ratio of 3 shares to every 10 A shares to
liquidated A-shareholders which went public on the same day. After this bonus issue, the total number of
shares of t he Company remained unchanged with corresponding changes in the composition of
shareholdings.

On March 14 2014, the company issued 74, 482, 543 ordinary shares (A shares) through the non -public
offering. Par value per share is RMB1 yuan. The shares shall not be transferred within 36 months since
the issued day. The total number of shares of the Company was 362,631,943 since the dat e of issue.




                                                    20
               CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                           Notes to financial statements (Continued)
                             For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)


I     Profile of the Company (Continued)

(1)   Historical development and basic information (Continued)

As of 31 October 2016, the company issued RMB 65,495,040.00 ordinary shares (A shares) through the
non-public offering. Par value per share is RMB1 yuan. Through the non-public offering, the Company
acquired the companies under common cont rol, including Sinopharm Holding Guoda Pharmacy Co.,
Ltd. (“Guoda Pharmacy”), Foshan Nanhai Medicine Group Co., Ltd.(“Foshan Nanhai”),Guangdong
South Pharmaceutical Foreign Trade Co., Ltd. (“South Pharma & Trade), Guangdong Dong Fang
Uptodate & Special Medicines Co., Ltd. (“ Guangdong Uptodat e & Special Medicines”) by issuing
shares and raised supporting funds by issuing shares to Ping An Asset Management Co., Ltd.(“Ping A n
Asset Management”) to ac quire non-controlling interest of South Pharma & Trade. The relevant shares
were successfully issued and listed on 5 January 2017.

As of 30 June 2019, the total share capital was RMB428,126,983.

The Company is registered with Shenzhen Administration for Industry & Commerc e. Its Uniform Social
Credit Code is 91440300192186267U. The operation period of the Company is from 2 August 1986 to
the long term. The registered capital of the Company is RMB428,126,983. The legal representative of
the Company is Lin Zhaoxiong.

The approved scope of business of the Company and its subsidiaries (together “the Group”) includes:
the wholes ale of traditional Chinese medicine preparations, bulk pharmac eutical drugs, chemical
preparations, bulk antibiotic drugs, antibiotic preparations, biochemical drugs, biological products
(including vaccines and in vit ro diagnostic reagents psychotropic drugs and preparations, narcotic drugs,
toxic drugs for medical use, protein assimilation preparation and peptide hormones; trade of diet ary
supplement; research, development and consultation services of pharmaceutical packaging materials
and pharmaceutical industry products; industrial investment holding; domestic trade; material supply
and marketing industry (other than special licensing); sale of ambulances; trade of second -class and
third- class medical equipment; project investment; property management and lease of self-owned
properties; pharmacovigilance and medical information consulting; parking operation; logistics and
related services; package agency business; logistic design; import and export services (excluding
projects that are prohibit ed by the country; limited projects has to be approved before operating).




                                                   21
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                           Notes to financial statements (Continued)
                             For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)


I      Profile of the Company (Continued)


(2)     The Group’s parent and ultimate parent company is Sinopharm Group and China National
        Pharmaceutical Group Corporation respectively.

(3)     These financial statements were authorized for issue by the board of directors of the Company
        on 22 August 2019.

(4)     Subsidiaries consolidated in the financial statements for the current peri od and change in the
consolidation scope are shown in Note V I.


II      Basi s of preparation


The financial statements were prepared in accordance wit h the Basic Standard and specific standards
of the Accounting Standards for Business Enterprises issued by the Ministry of Financ e on 15 February
2006 and the specific accounting standards and the relevant regulations issued thereafter (hereafter
collectively referred to as the “Accounting Standards for Business Enterprises ” or “CAS”), and the
disclosure requirem ents in the Preparation Convention of Information Disclosure by Companies
Offering Securities to the Public No.15 – General Rules on Financial Reporting issued by the China
Securities Regulatory Commission.

These financial statements are prepared on a going concern basis.

Except for certain financial instruments, the financial statements have been prepared using historical
cost as the principle of measurement. Where assets are impaired, provisions for asset impairment are
made in accordance wit h the relevant requirements.

The Group has made accounting policies and accounting estimates according to its own operation and
production characteristics, which are mainly reflected in the bad debt provision for accounts receivable
(Note Ⅲ (10)), inventory costing methods (Note Ⅲ (13)), depreciation methods for fixed assets and
amortization method for intangible assets (NoteⅢ(18), NoteⅢ(22)), judgement basis for capitalization of
development costs (NoteⅢ(22)) , impairment of long-term assets (NoteⅢ(23)), revenue recognition
(Not eⅢ(30)).




                                                   22
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                             Notes to financial statements (Continued)
                              For the six months ended 30 June 2019

                   (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policies and accounting estimates


(1)     Statement of compliance with the Accounting Standards for Busine ss Enterpri se s

The financial statements of the Company for the year ended 30 June 2 019 are in compliance with
Accounting Standards for Business Enterprises, and truly and completely present the financial position
of the Group and the Company as of 30 June 2019 and the operating results, cash flows and other
information for the six months ended 30 June 2019 of the Group and the Company.

(2)     Accounting year

The Company’s accounting year starts on 1 January and ends on 31 December.

(3)     Functional currency

The functional currency is Renminbi (RMB).

(4)     Busine ss combinations

(a)     Business combinations involving entities under common control

Assets and liabilities (including goodwill arising from the ultimate c ontrolling shareholder’s acquisition of
the party being abs orbed) that are obtained by the abs orbing party in a business c ombination shall be
measured at their carrying amounts at the combination date as recorded by the party being absorbed.
The difference between the carrying amount of the net assets obtained and the carrying amount of the
consideration paid for the combination (or the aggregate face value of shares issued as consideration)
shall be adjusted to share premium under capital surplus. If the capital surplus is not sufficient to absorb
the difference, any excess shall be adjusted against retained earnings. The t rans action costs of issuing
equity securities or debt securities for a business combination are recognized at the initial recognition
amount of equity securities or debt securities.

(b)     Business combinations involving enterprises not under common control

The cost of combination and identifiable net assets obtained by the acquirer in a business combination
are measured at fair value at the acquisition date. Where the cost of the combination exceeds the
acquirer’s interest in the fair value of the acquirer’s identifiable net assets, the difference is recognized
as goodwill; where the cost of combination is lower than the acquirer’s interest in the fair value of the
acquirer’s identifiable net assets, the difference is recognized in profit or loss for the cur rent period.
Costs directly attributable to the combination are included in profit or loss in the period in which they are
incurred. Transaction costs associated with the issue of equity or debt securities for the business
combination are included in the initially recognized amounts of the equity or debt securities.Where the
business combination not involving ent erprises under common control which is achieved in stages, the
acquirer’s previously held equity interests in the acquiree are remeasured at the fair value on the
acquisition date, with the difference bet ween the fair value and carrying amount recognized as
investment income for the current period.




                                                      23
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                             Notes to financial statements (Continued)
                              For the six months ended 30 June 2019

                   (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)

(4)     Busine ss combinations (Continued)

(b)     Business combinations involving enterprises not under common control (Continued)

If the acquirer’s previously held equity interests of the acquiree involve other comprehensive income
(“OCI”) under the equity method, the accounting t reatment is conducted on the same basis as would
have been required if the investee had directly disposed of the related assets or liabilities, and the
changes in shareholders’ equity other than net profit or loss, OCI and profit distributions are cha rged to
profit or loss for the current period on the ac quisition date. For financial assets at fair value through OCI
held before the acquisition date, changes in fair value that was accumulated through OCI will trans fer to
retained earnings.

(5)     Preparation of consolidated financial statements

The consolidated financial statements comprise the financial statements of the Company and all of its
subsidiaries.

Subsidiaries are cons olidated from the date on which the Group obtains control and are de -
consolidated from the date that such control ceases. For a subsidiary that is acquired in a business
combination involving enterprises under common control, it is included in the consolidated financial
statements from the date when it, together with the Company , comes under common control of the
ultimate controlling party. The portion of the net profits realized before t he combination date is
presented separately in the consolidated income statement.

In preparing the consolidated financial statements, where the accounting policies and the accounting
periods of the Company and subsidiaries are inconsistent, the financial statements of the subsidiaries
are adjusted in accordance with the accounting policies and the accounting period of the Company. For
subsidiaries acquired from business combinations involving enterpris es not under common cont rol, the
individual financial statements of the subsidiaries are adjusted based on t he fair value of the identifiable
net assets at the acquisition date.

All significant intra-group balances, transactions and unrealized profits are eliminated in the
consolidated financial statements. The portion of a subsidiary’s equity and the portion of a subsidiary’s
net profits, losses and comprehensive income for the period not attribut able t o the Company are
recognized as non-cont rolling interests and presented separately in the consolidated financial
statements within equity, net profits and total comprehensive income, respectively. The unrealized gain
or loss from selling assets to subsidiaries fully offs ets the net income attributable to equity holders of the
Company. The unrealized gain or loss from purchasing assets from subsidiaries offsets the net income
attributable to equity holders of the Company and attributable to the non-controlling interest by the
distribution proportion regarding t he Company and the subsidiary. The unrealized gain or loss from a
transaction between subsidiaries offsets the net income attributable to equity holders of the Company
and attributable to t he non-controlling interest by the distribution proportion regarding the Company and
the selling side of the subsidiaries. If different recognition perspectives for the same t ransaction arise
within different accounting identities which are set up, there is an adjustment for the transaction from
the Group’s perspective.




                                                     24
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                             Notes to financial statements (Continued)
                              For the six months ended 30 June 2019

                   (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)

(5)     Preparation of consolidated financial statements (Continued)

When the Group loses control of a subsidiary in multiple transactions in which it dispos es of its long-
term equity investment in the subsidiary in stages, if each of the multiple transactions does not form part
of a bundled transaction, the transactions conducted before the loss of control of the subsidiary are
accounted for in accordance with the accounting policy for partial disposal of the equity investment in
subsidiaries where control is retained. If each of the multiple transactions forms part of a bundled
transaction which eventually results in the loss of control in the subsidiary, these multiple transactions
are accounted for as a single transaction. In the consolidated financial statements, the differenc e
between the consideration received and the corresponding proportion of the subsidiary’s net assets
(calculated continuously from the acquisition date) in eac h transaction prior to the loss of cont rol shall
be recognized in other comprehensive income and transferred to profit or loss when the parent
eventually loses control of the subsidiary.

(6)     Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, deposits that can be readily drawn on demand, and
short-term and highly liquid investments that are readily convertible to known amounts of cash and are
subject to an insignificant risk of changes in value.

(7)      Foreign currency translation

Foreign currency transactions are translated into RMB using the exchange rates prevailing at the dates
of the transactions.

At the balance sheet date, monetary items denominated in foreign currencies are translat ed into RMB
using the s pot exchange rates on the balance sheet date. Exchange differences arising from these
translations are recognized in profit or loss for the current period, except for t hose attributable to for eign
currency borrowings that have been taken out specifically for the acquisition or construction of
qualifying assets, which are capitalized as part of the cost of those assets. Non-monetary items
denominated in foreign currencies that are measured at historical cost are translated at the balance
sheet date using the spot exchange rates at the dates of the transactions. The effect of exchange rate
changes on cash is presented separately in the cash flow statement.

 (8)     Financial instruments

Financial instruments are the cont racts that formed the financial assets of one entity, and at the same
time formed the financial liabilities or equity instruments of other entities.

Recognition and derecognition of financial instruments

Financial assets and financial liabilities are recognised when the Group becomes a party to the
contractual provisions of the instrument.




                                                      25
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                             Notes to financial statements (Continued)
                              For the six months ended 30 June 2019

                   (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)

(8)     Financial instruments (Continued)

        Recognition and derecognition of financial instruments (Continued)

The Group derecognises a financial asset, part of a financial asset or group of financial assets, i.e.,
offset from the accounts and statement of financial position, if either of the follo wing conditions is
satisfied:

(i)     The contractual rights to the cash flows from the financial asset expire; or

(ii)    The contractual rights to the cash flows from the financial asset are trans ferred out, or obligated
        to trans fer out all generated cash flows on receipt; and (a) s ubstantially all the risks and
        rewards of ownership of the financial asset are trans ferred to the t rans feree; or (b) the Group
        neither transfers nor retains substantially all the risks and rewards of ownership of the financial
        asset, but has not retained cont rol of the financial asset.

The Group derecognises a financial liability only when the underlying present obligation is settled,
discharged or expired. An agreement to replace the original financial liability with a new financia l liability
with substantially different terms, or to modify the original financial liability’s terms substantially, is
accounted for as an extinguishment of the original financial liability and the recognition of a new
financial liability. The difference between the carrying amount of the financial liability Derecognized and
the new financial liability should be recognised in profit or loss for the current period.

All regular means of purchases or sales of financial assets are recognised and Derecognized on a trade
date basis. Regular means of purchases or sales are purchases or sales of financial assets that require
delivery of assets within the period generally established by regulation or convention in the marketplace.
Trade dat e is the date that the Group commits to purchas e or sell the financial asset.

        Classification and measurement of financial assets

At initial recognition, the Group classifies its financial assets into: financial assets at fair value through
profit or loss, financial assets at amo rtised cost, or financial assets at fair value through other
comprehensive income, according to the Group’s business model for managing financial assets and the
contract cash flow characteristics of the financial assets. Financial assets are measured at fa ir value at
initial recognition, provided that trade receivables or bills receivable not containing significant financing
components or for which financing components of not more than 1 year are not taken into consideration
shall be measured at their transaction prices at initial recognition.

For financial assets at fair value through profit or loss, the relevant transaction costs are directly
recognised in profit or loss; for other financial assets, the relevant transaction costs are recognised in
their initial recognition amount.




                                                      26
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                              For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)

(8)     Financial instruments (Continued)

        Classification and measurement of financial assets (Continued)

Subsequent measurement depends on the classification of the financial assets:

Financial assets measured at amortised cost (debt instruments)
The Group measures financial assets at amortized cost if both of the following conditions are met: The
financial asset is held within a business model with the objective to hold financial assets in order to
collect contractual cash flows; The contractual terms of the financial asset give rise on specified dates
to cash flows that are solely payments of principal and interest on the principal amount outstanding.
Interest income of this kind of financial assets is recognized using the effective interest method. Gains
and losses are recogniz ed in the income statement when the asset is derecognized, modified or
impaired. These financial assets mainly include cash and cas h equivalents, bills receivable and trade
receivables, other receivables, debt investment and long -term rec eivables. Debt investments and long -
term receivables due within one year from the balance sheet date are report ed by the Group as current
portion of non-current assets, and debt investments due within one year from the original maturity date
are reported as other current assets.

Financial assets at fair value through ot her comprehensive income (debt instruments)
The Group measures debt investments at fair value through other comprehensive income if both of the
following conditions are met: The financial asset is held within a business model with the objective of
both holding to collect contractual cash flows and selling; The contract ual terms of the financial asset
give rise on specified dates to cash flows that are solely payments of principal and interest on the
principal amount outstanding. Changes in fair values are recognized in other comprehensive income
except that interest income, impairment losses and exchange differenc es are recognized in current
profit or loss. Upon derec ognition, the cumulative fair value change recognised in other comprehensive
income is transferred to profit or loss. Such financial assets are report ed as ot her debt investment.
Other debt investment due within one year from the balance sheet dat e is reported as a current portion
of non-current assets and other debt investment due within one year from the original maturity date is
reported as an item of other current assets.

Financial assets designated at fair value through other comprehensive income (equity investments)
The Group irrevocably chooses to designate some non -tradable equity instrument investments as
financial assets at fair value through other comprehensive income. Only relevant dividend income
(excluding dividend income explicitly recovered as part of investment cost) is recognized in profit or loss,
and subsequent changes in fair value are included in other comprehensive income without provisi on for
impairment. When financial assets are derecognized, the accumulated gains or losses previously
recognized in other comprehensive gains are trans ferred from other comprehensive income and
recognized in retained earnings. Such financial assets are reported as other equity investment.

If one of the following conditions is met, it is a held-for-trading financial asset: the acquisition of the
relevant financial asset is intended primarily for sale or repurchase in the near future; it is a part of the
port folio of identifiable financial instruments under centralized management, and there is objective
evidence that the short-term profit model is adopted in the near future; it is a derivative, except for a
derivative that is designated as a valid hedging instrument, other than a derivative that complies with a
financial guarantee contract.


                                                     27
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                              Notes to financial statements (Continued)
                               For the six months ended 30 June 2019

                   (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)

(8)     Financial instruments (Continued)

        Classification and measurement of financial assets (Continued)

Financial assets at fair value through profit or loss
Financial assets other than the above-mentioned financial assets at amortised cost and financial assets
at fair value t hrough other comprehensive income are classified as financ ial assets at fair value t hrough
profit or loss. For such financial assets, fair value is used for subsequent measurement, and all changes
in fair value are recognised in profit or loss. Such financial assets are pres ented as held -for-trading
financial assets and are presented as other non -current financial assets if they expire after more than
one year from the balance sheet date or expected to be held more than one year from the balance
sheet date.

Only when an accounting mismatch is eliminated or signi ficantly decreas ed, financial assets are
designated as financial assets at fair value through profit or loss at initial recognition.

When an enterprise initially designates a financial asset as a financial asset at fair value through profit
or loss, it cannot be reclassified to other financial assets; other financial assets cannot be re-designated
after initial recognition as financial assets measured at fair value through profit or loss.

When and only when the Group changes its business model of managing financial assets, it reclassifies
all relevant financial assets affected.

        Classification and measurement of financial liabilities

On initial recognition of financial liabilities of the Group are classified as financial liabilities at fair value
through profit or loss, other financial liabilities and derivatives designated as effective hedging
instruments. For financial liabilities at fair value through profit or loss, the relevant transaction costs are
directly recognized in profit or loss, and the related transaction costs of ot her financial liabilities are
recognized in their initial amount.

Subsequent measurement of financial liabilities is determined by its classification:

Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss consist of held for trading financial liabilities
(including derivatives belonging to financial liabilities) and financial liabilities designated on initial
recognition as financial liabilities at fair value through profit or loss.

Financial liabilities are held-for-trading financial liabilities if one of the following conditions are met: the
purpose of assuming related financial liabilities is mainly to sell or repurchase in t he near future; they
are part of a centrally managed identifiable portfolio of financial instruments, and there is objective
evidence that enterprises have adopted a short-term profitability model in the near future; they are
derivatives, excluding derivatives that are designat ed as effective h edging instruments and derivatives
that meet the financial guarantee contract. Held-for-trading financial liabilities (including derivatives
belonging to financial liabilities) are subs equently measured at fair value. Except for hedging accounting,
all changes in fair value are recognized in profit or loss.



                                                       28
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                             Notes to financial statements (Continued)
                              For the six months ended 30 June 2019

                   (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)

(8)     Financial instruments (Continued)

        Classification and measurement of financial liabilities (Continued)

Only if one of the following conditions is met can financial liabilities be designated as financial liabilities
at fair value through profit or loss on initial recognition: (1) It can eliminate or significantly reduce the
accounting mismatch. (2) The formal written document of risk management or investment strategy has
stated that the port folio of financial instruments is managed, evaluated and reported to key managers
on the basis of fair value. (3) The financial liability is a hybrid instrument that contai ns one or more
embedded derivatives, unless the embedded derivatives have no signific ant change in the cash flows of
the hybrid instrument, or the embedded derivatives should obviously not be separated from the related
hybrid instruments. (4) Mixed instruments contain embedded derivatives that need to be split but cannot
be meas ured separately at the time of acquisition or on subsequent balance sheet days.

For such financial liabilities, subsequent measurements are made at fair value. Changes in fair value
caused by changes in the Group’s own credit risk are recognized in other comprehensive income, while
other changes in fair value are recognized in profit or loss. Unless changes in fair value caused by
changes in the Group's own credit risk recognized in other comprehensive income may result in or
expand accounting mismatches in profit or loss, the Group shall recognize all changes in fair value
(including the amount of impact of changes in its own credit risk) in profit or loss.When an enterprise
designates a financial liability as a financial liability at fair value through profit or loss, it cannot be
reclassified as other financial liabilities; nor can other financial liabilities be re-designated as financial
liabilities at fair value through profit or loss after initial rec ognition.

Other financial liabilities
For such financial liabilities, subsequent meas urement is made at amortized cost using the effective
interest rate method.

        Impairment of financial assets

Based on expected credit losses, the Group undertakes impairment treatment and confirms loss
provisions of financial assets at amortized cost, debt instrument investments at fair value through other
comprehensive income and financial guarantee contracts.

Credit loss refers to the difference bet ween the cash flows of all contracts discounted at the original
effective interest rate and the expected cash flows of all contracts receivable, i.e. the present value of
all cash shortages. Among them, the financial assets purchased by or originat ed from the Group to
which credit impairment has occurred shall be discounted at the effective int erest rate adjusted by the
credit of the financial assets.

For trade receivables and contractual assets that do not contain significant financing components, the
Group uses a simplified measurement method to measure loss provisions in accordanc e with the
amount of ex pected credit losses equivalent to the entire life cycle.




                                                      29
               CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                             For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)

(8)     Financial instruments (Continued)

        Impairment of financial assets (Continued)

For trade receivables and contractual assets with significant financing components, the Group us es a
simplified measurement method to measure loss provisions in accordance with the amount of the
expected credit loss equivalent to the entire lifetime.

For financial assets other than those measured with simplified valuation methods, the Group evaluates
at each balance sheet date whet her its credit risk has significantly increased since initial recognition.
The period during which credit risk has not significantly increased since initial recognition is considered
the first stage, at which the Group shall meas ure the loss provision based on the amount of the
expected credit loss for the next 12 months and shall compute interest income according to the book
balance and effective interest rate; the period during which credit risk has significantly increas ed since
initial recognition although no credit impairment has occurred is considered the second stage, at which
the Group shall measure the loss provision based on the amount of the expected credit loss for the
entire valid period and shall comput e interest income according to the book balanc e and effective
interest rate; The period during which credit impairment has occurred after initial recognition is
considered the third stage, at whic h the Group shall measure the loss provision based on the amount of
the expected credit loss for the entire period and shall compute interest income according to the
amortised cost and effective interest rate. For financial instruments with relatively low credit risk at the
balance sheet date, the Group assumes that its credit risk has not significantly increases since initial
recognition.

The Group evaluates the expected credit losses of financial instruments on a single and combined
basis. Taking into account the credit risk characteristics of different customers, the Group evaluates the
expected credit losses of trade rec eivables based on the agi ng port folio.

In assessing expected credit losses, the Group takes into account reasonable and valid information on
past events, current conditions and future economic forecasts.

Refer to Notes VIII.3 for the disclosure of the Group's criteria for judging the significant increase in
credit risk, the definition of assets with impaired credit losses, and the assumption of measuring
expected credit losses.

When the Group no longer reasonably expects to be able to recover all or part of the contract cash
flows of the financial assets, the Group will write off the book value of the financial assets directly.

        Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the statement of
financial position if there is a currently enforc eable legal right to offset the recognised amounts and
there is an intention to s ettle on a net basis, or to realize the financial assets and settle the financial
liabilities simultaneously.




                                                     30
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                              For the six months ended 30 June 2019

                   (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)

(8)     Financial instruments (Continued)

        Modification of financial assets

Where the Group modifies or renegotiates the cont ract with its counterparty and does not result in the
derecognition of financial assets, but results in a change in the cash flow of the cont ract, the Group
recalculat es the book value of the financial asset on the basis of the renegotiated or modified contract
cash flows at the discounted value of the original effective interest rat e (or credit-adjusted effective rate
of int erest) of the financial asset, and t he related gains or losses are recognized in profit or loss. The
revis ed cost or expense of the financial assets adjust the book value of the financial assets and are
amortized within the remaining period of the modified financial assets.

        Trans fer of financial assets

The Group derec ognises a financial asset when it has transferred substantially all the risks and rewards
of ownership of the financial asset to the transferee; the Group does not derec ognize those financial
assets when it retains substantially all the risks and rewards of the ownership.

If the Group neither transfers nor retains substantially all the risks and rewards of ownership of financial
assets, the related accounting treatments of such financial assets are as follows: the Group
derecognises financial assets when it retains no control on them, and associated assets and liabilities
are rec ognised at the same time. If the Group retains control of t he financial asset, it recognizes the
financial asset to the extent of its continuing involvement in the transferred financial asset and
recognizes an associated liability.

Continuing involvement that takes the form of a financial guarantee over the trans ferred asset is
measured at the lower of the original carrying amount of the asset and the financial guarantee. The
amount of the financial guarantee is the maximum amount of consideration that the Group could be
required to repay.

(9)     Note s receivables

For details of the method for determining the expected c redit loss of notes receivable, please refer to
“III.8 Financial instruments - Impairment of financial instruments.”

(10)    Accounts Receivable

For details of the met hod for determining the expected credit loss of accounts receivable, pleas e refer
to “III.8 Financial instruments - Impairment of financial instruments.”

(11)    Accounts Receivable Financing

It includes not es receivable and accounts receivable that are measured at fair value on the bala nce
sheet date and whos e changes are included in other comprehensive income.
For details of the method for det ermining the expected credit loss of receivables financing, please refer
“III.8 Financial instruments - Impairment of financial instruments.”



                                                     31
               CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                             For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)

(12)    Other receivables

For details of the method for determining the ex pected credit losses of other receivables, please refer to
“III.8 Financial instruments - Impairment of financial instruments.”

(13)    Inventories

Inventories include raw materials, work in progress, finished goods, delegate proc essing supplies and
turnover materials, and are measured at the lower of cost and net realizable value.

Cost is determined on the weighted average method. The cost of finished goods and work in progress
comprises raw materials, direct labor and an allocation of systematically allocated overhead
expenditures incurred based on the normal operating capacity.

Basis for determining the net realizable values of invent ories and method for making provisions for
decline in the value of inventories

Provisions for decline in the value of inventories are determined at the excess amount of the carrying
value of the invent ories over their net realizable value. Net realizable value is determined based on the
estimated selling price in the ordinary course of business, less the estimated costs to completion and
estimated costs necessary to make the sale and related taxes.

The Group adopts the perpetual inventory system.

(14)    Contract asse ts

The unconditional (namely, dependent only on the passage of time) right to receive consideration from
customers owned by the Group shall be present ed as amounts receivable. The right to rec eive
consideration following the transfer of products to customers which is dependent on factors other than
the passage of time is presented as contract assets.

(15)    Assets relating to contract cost

The Group’s assets relating to contract costs include the contract acquisition costs and contract
performance costs, presented respectively under inventories, other current assets and other non -
current assets.

Where the Group expects the incremental costs for acquiring a contract to be recoverable, such
contract acquisition costs are recognised as an asset (unless the amortisation period of the asset is not
more than 1 year).




                                                    32
               CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                             For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)

(15)    Assets relating to contract cost (Continued)

Costs incurred by the Group for the performance of a cont ract are recognised as an asset as contract
performance costs if they do not fall under the scope of the relevant standards for inventories, fixed
assets or intangible assets but meet all the following conditions:

(1)     They are directly related to a current or anticipated contract, including direct labour, direct
        materials, manufacturing expenses (or similar expenses), to be borne by customers as
        specifically stipulated, and otherwise incurred solely in connection with the contract;
(2)     they will increas e the resources to be utilised in the Company’s future performance of its
        contractual obligations; and
(3)     they are expected to be recoverable.

The Group amortises assets relating contract costs on the same basis as that for the rec ognition of
revenue relating to such assets and recognises the amortised assets in current profit or loss.

For assets relating to contract costs whose carrying value is higher than the difference between the
following two items, the Group makes provision for impairment for the excess to be recognis ed as asset
impairment losses:

(1)     The remaining consideration expected to be obtained as a result of the trans fer of goods
        relating to such assets;
(2)     Estimated costs to be incurred in connection with the transfer of relevant goods

In the event that the differenc e between (1) and (2) becomes higher than the carrying value of such
assets as a result of changes in the factors of impairment for previous periods, previous provision s for
asset impairment losses should be written back and included in current profit or loss, provided that the
carrying asset value following the write-back shall not exceed the carrying value that such assets would
have on the date of write-back were there no provision for impairment.

(16)    Long-term equity inve stments

Long-term equity investments comprise the Company’s long-term equity investments in its subsidiaries,
joint ventures and associates.

Long-term equity investments are accounted for using the coast method at the time it was acquired. For
long-term equity investments acquired through a business combination involving ent erprises under
common cont rol, the investment cost shall be the absorbing party’s share of the carrying amount of
shareholders’ equity of the party being absorbed at the combination date.

Subsidiaries are the investees over which the Company is able to exercise control. Associates are the
investees that the Group has significant influence on their financial and operating policies.




                                                     33
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                              For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)

(16)    Long-term equity inve stments (Continued)

Investments in subsidiaries are measured using the cost method in the Company’s financial statements,
and adjusted by using the equity method when preparing the consolidated financial statements.
Interests in associates are accounted for using the equity method. For long-term equity investments
acquired by way of the swap of non-monetary assets, the initial investment cost shall be determined in
accordance with “ASBE No. 7 — S wap of Non-monetary Assets.” For long-term equity investments
acquired by way of debt restructuring, the initial investment cost shall be determined in accordance with
“ASBE No. 12 — Debt Restructuring.”

(a)     Determination of investment cost

For long-term equity investments acquired through a business combination: for long-term equity
investments acquired through a business combination involving enterprises under common control, the
investment cost shall be the absorbing party’s share of the carrying amount of shareholders’ equity of
the party being absorbed at the combination date; for long-term equity investments acquired through a
business combination involving enterprises not under common control, the investment cost shall be the
combination cost.

(b)     Subsequent measurement and recognition of related profit or loss

For long-term equity investments accounted for using the cost method, they are measured at the initial
Investment costs, and cash dividends or profit distribution declared by the investees are recognized as
investment income in profit or loss.

For long-term equity investments accounted for using the equity method, where the initial investment
cost of a long-term equity investment exceeds the Group’s share of the fair value of the investee’s
identifiable net assets at the acquisition date, the long-term equity investment is measured at the initial
investment cost; where the initial investment cost is less than the Group’s share of the fair value of the
investee’s identifiable net assets at the acquisition date, the difference is included in profit or loss and
the cost of the long-term equity investment is adjusted upwards accordingly.

For long-term equity investments accounted for usin g the equity method, the Group recognizes the
investment income according to its share of net profit or loss of the investee. The Group discontinues to
recognize its share of net losses of an investee after the carrying amount of the long -term equity
investment together with any long-term interests that, in substance, form part of the investor’s net
investment in the investee are reduced to zero. However, if the Group has obligations for additional
losses and the criteria with res pect to the recognition of provisions under the accounting standards on
contingencies are satisfied, the Group continues to recognize the investment losses and the provisions.
For changes in shareholders’ equity of the investee ot her than those arising from its net profit or loss,
other comprehensive income, and profit distribution, the Group adjusts the book value of the investment
and records a capital surplus accordingly. The carrying amount of the investment is reduced by the
Group’s share of the profit distribution or cash dividends declared by an investee.




                                                     34
               CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                              For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)

(16)    Long-term equity inve stments (Continued)

(b)     Subsequent measurement and recognition of related profit or loss (Continued)

The unrealized profits or losses arising from the int ra-group transactions amongst the Group and its
investees are eliminated in proportion to the Group’s equity interests in the investees, and then based
on which the investment gains or losses are recognized. For the loss on intra-group transactions
amongst the Group and its investees attributable to asset impairment, any unrealized loss is not
eliminated.

(c)     Basis for det ermining existence of cont rol, joint control or significant influence over investees

Cont rol is the power to govern the financial and operating policies of the investee so as to obtain
benefits from its operating activities. In determining whet her the Company is able to exercise control
over the investee, the effect of potential voting rights over the investee is considered, such as
convertible debts and warrants currently exercisable.

Significant influence is the power to participate in the financial and operating policy decisions of the
investee, but is not control or joint control over thos e policies.

(d)     Impairment of long-term equity investments

The carrying amount of long-term equity investments in subsidiaries and associates is reduc ed to the
recoverable amount when the recoverable amount is less than the carrying amount.

(17)    Investment properties

Investment properties, including land use rights that have already been leased out, buildings that are
held for the purpose of leasing, and buildings that are being constructed or developed for the purpose of
leasing in future, are meas ured initially at cost. Subsequent ex penditures incurred in relation to
investment properties are included in t he cost of investment properties when it is probable that the
associated economic benefits will flow to the Group and their costs can be reliably measured;
otherwise, the expenditures are recognized in profit or loss in the period in which they are incurred.

                          Estimated useful lives     Estimated residual value         Annual depreciation
                                                                                      (amortization) rates

Buildings                            12-35 years                          0-5%                 2.71-7.92%
Land use rights                      30-50 years                              -                2.00-3.33%

When an investment property is transferred to owner -occupied property, it is reclassified as a fixed
asset or intangible asset at the date of transfer. When an owner-occupied property is transferred out for
earning rentals or for capital appreciation, the fixed asset or intangible asset is reclassified as an
investment property at its carrying amount at the date of transfer.

The investment properties’ useful life, net residual value and depreciation (amortiz ation) method applied
are reviewed and adjusted as appropriate at the end of each year.


                                                     35
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                              For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)

(17)    Investment properties (Continued)

An investment property is Derecognized on disposal or when the investment property is permanently
withdrawn from us e and no future economic benefits are expected from its disposal. The net amount of
proceeds from sale, transfer, retirement or damage of an investment property aft er its carrying amount
and related taxes and ex penses is recognized in profit or loss for the current period.

(18)    Fixed assets

Fixed assets are recognized when it is probable that the related economic benefits will flow to the
Group and the costs can be reliably measured. Subsequent expenditures incurred for a fixed asset are
included in the cost of the fix ed asset when it is probable that the associated ec onomic benefits will flow
to the Group and the related cost can be reliably measured. The carrying amount of the replaced part is
derecognized. All the other subsequent expenditures are recognized in profit or loss in the period in
which they are incurred.

Fixed assets are initially measured at cost and the effect of any expected costs of abandoning the asset
at the end of its use is considered. The cost of a fixed asset is the aggregate cost of purc hase price,
related taxes and any directly attributable expenditure for bringing the asset to its working condition for
its intended use.

Fixed assets are depreciated using the straight-line met hod to allocate the cost of the assets to their
estimated residual values over their estimated useful lives. For the fixed assets that have been provided
for impairment loss, the related depreciation charge is prospectively determin ed based upon the
adjusted carrying amounts over their remaining useful lives.

                           Estimated useful lives     Estimated residual value         Annual depreciation
rates

Buildings                            20-35 years                         0-5%                   2.71-5.00%
Machinery and equipment               5-14 years                         3-6%                  6.79-19.40%
Motor vehicles                        3-10 years                         0-5%                  9.50-33.33%
Other equipment                       3-10 years                         0-5%                  9.50-33.33%
Leasehold improvements             within 5 years                          0%                20%        and
above

Fixed assets held under finance leases are depreciated under the same depreciation method as other
fixed assets. The assets are depreciated over their estimated useful lives where ownership of the
assets can be reasonably estimated to be gained whe n leas e periods end; otherwise, the leased assets
are depreciated over the shorter of the leas e terms and the estimated us eful lives of the assets.

The Group reviews the useful life, estimated net residual value of a fixed asset and the depreciation
method applied at least once at each financial year end, and adjusts for any change when necessary.




                                                     36
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                              For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)

(18)    Fixed assets (Continued)

A fixed asset is Derecognized on disposal or when no future ec onomic benefits are expected from its
use or disposal. The amount of proc eeds from disposal on sale, transfer, retirement or damage of a
fixed asset net of its carrying amount and related taxes and expenses is recognized in profit o r loss for
the current period.

(19)    Construction in progre ss

Construction in progress is measured at its actual cost. The actual cost includes various necessary
construction expenditures during the construction period, borrowing costs capitalised before it is ready
for intended use and other relevant costs.

(20)    Borrowing costs

Borrowing costs refer to the interest and ot her relevant cost incurred from borrowing, whic h include loan
interest, discount or amortization of premiums, auxiliary expenses and exchange differences due to
foreign currency loans, etc.

Where the borrowing costs incurred to the Company can be directly attributable to the acquisition and
construction or production of assets eligible for capitalization, it shall be capitalized and re corded into
the costs of relevant assets. Other borrowing costs shall be recognized as expenses on the basis of the
actual amount incurred, and shall be recorded into the current profits and losses. The term “assets
eligible for capitalization” shall refer to the fixed assets, investment real estate, inventories and other
assets, of which the acquisition and construction or production may take quite a long time to get ready
for its intended use or for sale.

The borrowing costs shall not be capitalized unless they simultaneously meet the following
requirements:

(1)     The asset disbursements have already incurred;
(2)     The borrowing costs have already incurred; and
(3)     The acquisition and construction or production activities which are necessary to prepare the
        asset for its intended use or sale have already started.

When the qualified asset under acquisition and c onstruction or production is ready for the intended use
or sale, the capitalization of the borrowing costs shall be ceased. Borrowing costs incurred after the
intended use or sale shall be recorded in the current profits and losses.

During t he period of c apitalization, the capitalized amount of int erest in each accounting period shall be
calculated and determined in the ways below:

The enterprise shall calculate and determine the interest of a s pecific loan by deducting interest income
of the loan capital deposit in the bank or investment income obtained from a temporary investment.




                                                     37
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                              For the six months ended 30 June 2019

                   (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)

(20)    Borrowing costs (Continued)

The enterprise shall calculate and determine the to-be-capitalized amount of interests on the general
borrowing by multiplying the weighted average asset disburs ement of the part of the accumulative asset
disbursements minus the general borrowing by the capitalization rate of the general borrowing used.

Where the acquisition and construction or production of a qualified asset is interrupted abnormally and
the interruption period lasts for more than 3 mont hs, the capitalization of the borrowing costs shall be
suspended. The borrowing costs incurred during such period shall be recognized as expenses, and
shall be recorded int o the profits and losses of the current period, till the acquisition and construction or
production of the asset restarts.

(21)    Right-of-use assets

On the commencement date of the lease term, the lessee recognizes the right -of-use asset for the
lease (except for short-t erm leases and low-value asset leases). The right to use asset costs includes:
the initial measurement amount of the leas liability; the lease payment amount paid on or before the
start date of the lease period (if there is a lease incentive, deducting the relevant amount of the lease
incentive); The initial direct cost incurred by the lessee.

Where the lessee can reasonably determine the ownership of the leased asset at the expiration of the
lease term, the depreciation is provided within the remaining useful life of the leased asset; If it is not
reasonable to det ermine that the leasehold asset can be acquired at the expiration of the lease term,
the depreciation is provided during the period between the lease term and the remaining useful life of
the leased asset. The lessee is required to determine whether the right -of-use asset is impaired at the
same time and accounting for identified impairment losses.

(22)    Intangible assets

Intangible assets are recognised and measured on initial recognition at cost only if the related economic
benefits will probably flow into the Group and their costs can be measured reliably. However, the
intangible assets acquired through a business combination not involving enterpris es under c ommon
control should be measured at fair value separately as intangible assets when their fair values can be
reliably measured.




                                                     38
               CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                                For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)


(22)    Intangible assets (Continued)

The useful life of the int angible assets shall be assessed according to the estimated beneficial period
expected to generate economic benefits for the Group. An intangible asset shall be regarded as having
an indefinite us eful life when there is no foreseeable limit to the period over which the asset is expected
to generate economic benefits for the Group.

        Categories                                                                           Useful lives

        Land use rights                                    Between the approved useful period and the
                                                                         Company’s operating period
        Software                                                                            3-5 years
        Trademarks                                                                         5-10 years
        Technology patents                                                                    5 years
        Distribution net work                                                                20 years
        Franc hising rights                                                                  10 years
        Favorable leases                                                                 17-20 years

Land use rights obtained by the Group are usually accounted for as intangible assets. As for the
construction of plants, factories and other buildings of the Group, the related land use rights and other
buildings were accounted for as intangible assets and fixed assets, respectively. Purchase costs of land
use rights and buildings were allocated to intangible assets and fixed assets separately. Purchase costs
were rec ognised as cost of fixed assets, only if the separation was impractic able.

Intangible assets with a finite useful life are amortised over their estimated useful lives using the
straight-line method or other reasonable systematic methods. For an intangible asset with a finite us eful
life, the Group reviews the useful life and amortization method at least once at each financial year end,
and makes adjustments when necessary.A land use right grant ed by the government with an infinite
useful life would not be amortized. Other land use rights are amortized on the straight -line basis over
their approved useful period. If the acquisition costs of land use rights and the buildings located t hereon
cannot be reliably allocated bet ween the land use rights and the buildings, all of the acquisition costs
are recognized as fix ed assets.

The expenditure on an internal research and development project is classified into expenditure on the
research phase and expenditure on the development phase based on its nature and whether there is
material uncertainty that the research and development activities can form an intangible asset at the
end of the project.




                                                    39
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                             Notes to financial statements (Continued)
                               For the six months ended 30 June 2019

                   (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)


(22)    Intangible assets (Continued)

Expenditure for investigation, evaluation and selection of product ion process and new drug researc hes
is recognized in profit or loss in the period in which it is incurred. Expendit ure on the designation,
measurement of the final utilization of the production process and new drugs before mass production is
capitalized only if all of the following conditions are satisfied:

        development of the production process and new drugs has been fully demonstrated by the
        technical team;
        management has approved the budget of drug production development and new drugs;
        market research analysis suggests that the products produced by the new production
technology     are able to be promoted;
        adequate technical, financial and other resources to complete the development and the ability
to      use or sell the intangible asset;
        the expenditure attributable to the intangible asset during its development phase can be reliably
        measured.

Other development costs that do not meet the conditions above are recognized in profit or loss in the
period in whic h they are incurred. Development costs previously recognized as expenses are not
recognized as an asset in a subsequent period. Capitalized ex penditure on the development phase is
presented as development costs in the balance sheet and transferred to intangible asset s at the date
that the asset is ready for its intended use.

The Group classifies the expenses for internal research and development as research costs and
development costs. All research costs are charged to the current profit or loss as incurred. Expendit ure
incurred on projects to develop new products is capitalised and deferred only when the Group can
demonstrate the technical feasibility of completing the intangible asset so that it will be available for use
or sale, its intention to complet e and its ability to use or sell the asset, how the asset will generate future
economic benefits (including demonstration that the product derived from the intangible asset or the
intangible asset itself will be market able or, in the case of internal use, the usefulness of the intangible
asset as such), the availability of technical and financial resources to complete the project and procure
the use or sale of the intangible asset, and the ability to measure reliably the expenditure during the
development. Product development expenditure which does not meet these criteria is expensed when
incurred.




                                                      40
               CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                               For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)


(23)    Impairment of long-term assets

Fixed assets, construction in progress, intangible assets with finite useful lives, long-term prepaid
expenses and investment properties measured using the cost model and long-term equity investments
in subsidiaries and associates are tested for impairment if there is any indication that an asse t may be
impaired at the balance sheet date. If the result of the impairment test indicates that the recoverable
amount of the asset is less than its carrying amount, a provision for impairment and an impairment loss
are recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount.
The recoverable amount is the higher of an asset’s fair value less costs to sell and the present value of
the future cash flows expected to be derived from the asset. Provision for asset impairmen t is
determined and recogniz ed on the individual asset basis. If it is not possible to estimate the recoverable
amount of an individual asset, the recoverable amount of a group of assets to which the asset belongs
is determined. A group of assets is the smallest group of assets that is able t o generate independent
cash inflows.

Goodwill that is separately present ed in the financial statements, intangible assets with infinite useful
lives and capitalized development costs are tested at least annually for im pairment, irrespective of
whet her there is any indication that it may be impaired. In conducting the test, the carrying value of
goodwill is allocated to the related asset groups or groups of asset groups which are expected to benefit
from the synergies of the business combination. If t he result of the test indicat es that the recoverable
amount of an asset group or a group of asset groups, including the goodwill allocated, is lower than its
carrying amount, the corresponding impairment loss is recognized. The impairment loss is first
deducted from the carrying amount of goodwill that is allocated to the asset group or group of asset
groups, and then deducted from the carrying amount of other assets within the asset groups or groups
of asset groups in proportion to the carrying amount of ot her assets.

Once the above impairment loss is recognized, it will not be reversed for the value recovered in the
subsequent periods.

(24)    Long-term prepaid expenses

Long-term prepaid expens es include the expenditure for improvements to fixed assets under operating
leases, and other expenditures that have been made but should be recognized as expenses over more
than one year in the current and subsequent periods. Long -term prepaid expenses are amortized on the
straight-line basis over the expected beneficial period and are presented at actual expenditure net of
accumulated amortization.

(25)    Contract liabilities

The obligation to pass products to customers in connection with customer consideration rec eived or
receivable is presented as contract liabilities, for example, amounts received prior to the transfer of the
promised products.
Cont ract assets and contract liabilities under the same contract are present ed on a net basis after set -
off.




                                                    41
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                              For the six months ended 30 June 2019

                   (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)


(26)    Employee benefits

Short-term employee benefits

The actual occurred short-term employee benefits are recognizes as liabilities during the accounting
period in which t he service has been rendered by the employees and as costs of assets or expenses to
whichever the employee service is attributable.

Post-employment benefits (defined contribution plans)

The employees in t he Group participate in social ins urance and unemployment insurance schemes
administrated by the local governments, and the related expenditures are recorded in cost of related
assets or profit or loss in the period when they incurred.

Post-employment benefits (defined benefit plans)

The Group operates a defined benefit pension scheme. No funds have been injected into the scheme.
The cost of benefits provided under the defined benefit scheme is calculated using the expected benefit
accrual unit approac h.

Remeasurement arising from defined benefit pension schemes, including actuarial gains or losses,
changes in the asset cap effect (deducting amounts included in net interest) and returns on scheme
assets (deducting amounts included in net interest) are instantly recognised in the balance sheet and
charged to shareholders’ equity through other comprehensive inc ome for the period during which it is
incurred. It will not be reversed to profit and loss in subsequent periods.

Previous servic e costs are recognised as current expenses when: the defined benefit scheme is
revis ed, or relevant restructuring costs or termination benefits are recognised by the Group, whichever
earlier.

Net interest is arrived at by multiplying net liabilities or net assets of defined benefits with a discount
rate. Changes in net obligations of defined benefit s are recognised as operating costs and
administration expenses in the income statement. Service costs included current services costs, past
service costs and settlement of profit or loss. Net interest included interest income from scheme assets,
interest expenses for scheme obligations and interest of the asset cap effect.

Termination benefits

The Group recognizes a liability for termination benefits and charges to profit or loss at the earlier of the
following dat es: a) when the Group can no longer withdraw from the termination plan or the redundancy
offer; and b) when the Group recognizes costs or expense for a restructuring plan which involves the
payment of termination benefits.




                                                     42
               CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                           Notes to financial statements (Continued)
                             For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimate s (Continued)


(26)    Employee benefits (Continued)

Other long term employee benefits

Other long-term employees’ benefits provided to employees shall be recognised and measured as net
liabilities or net assets where provisions regarding post -employment benefits are applicable, provided
that changes shall be included in current profit and loss or related capital costs.

(27)    Lease liability

On the commencement date of the lease term, the lessee recognizes the lease liability for the lease
(except for short-term leases and low-value asset leases). The lease liability is initially measured using
the incremental borrowing rate as the present value of the discount rate based on the lease payments
that have not been paid on the start date of the leas e term. At the same time, the lessee calculates the
interest expense of the lease liability for each period of the lease term based on the effective interest
method and recognizes it in profit or loss for the current period.

(28)    Provi sions

An obligation related to a contingency shall be recognized by the Group as a provision when all of the
following conditions are satisfied, except contingent considerations and contingent liabilities assumed in
a business combination not involving enterprises under commo n control:

(1)     The obligation is a present obligation of the Group;
(2)     It is probable that an out flow of economic benefits from the Group will be required to settle
theobligation; and
(3)     The amount of the obligation can be measured reliably.

The provisions are initially measured at the best estimate of the expenditure required to settle the
related present obligation, taking into account factors pert aining to a contingency such as the risks,
uncertainties and time value of money as a whole. The carrying amount of provisions is reviewed at the
balance sheet dat e. Where there is clear evidence that the carrying amount of a provision does not
reflect the current best estimate, the carrying amount is adjusted to the current best estimate.

For business combinations not under common control, contingent liabilities of the acquiree obtained in a
business combination shall be measured at fair value in initial recognition. After initial recognition,
subsequent measurement is conducted using the higher of the amount recognized by provisions and
the amount of initial recognition deducting the accumulated amortization amount determined by the
principles of revenue recognition.




                                                   43
               CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                             For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)

(29)    Share-based payments

The share-based payments shall consist of equity-settled share-bas ed payments and cash-settled
share-based payments. The term "equity-settled share-based payment" refers to a transaction in which
the group grants shares or other equity instruments as a consideration in return for services.

The equity-settled share-based payment in return for employee services shall be measured at the fair
value of the equity instruments granted to the employees. As to an equity -settled share-based payment
in ret urn for servic es of employees, if the right may be ex ercised immediately after t he grant, the fair
value of the equity instruments shall, on the date of the grant, be included in the relevant cost or
expense and the capital reserves shall be increased accordingly. As to an equity-settled s hare-based
payment in return for employee services, if the right cannot be exercised until the vesting period comes
to an end or until the prescribed performanc e conditions are met, then on each balanc e sheet da te
within the vesting period, the Group shall make the best estimate of the number of vested equity
instruments based on the latest movement of the grant ed employee, the content of prescribed
performance and other conditions. Based on the best estimate, the services obtained in the current
period shall be included in the relevant costs or expens es and the capital res erves at the fair value of
the equity instruments on the date of the grant.

For awards that do not ultimately vest because non -market performanc e and service c onditions have
not been met, no expense is recognised. Where awards include a market or non-vesting condition, the
transactions are treated as vesting irrespective of whether t he market or non -vesting condition is
satisfied, provided that all other performance and service conditions are satisfied.

Where t he terms of an equity-settled award are modified, as a minimum an expens e is recognised as if
the terms had not been modified, if the original terms of the award are met. In addition, an expense is
recognised for any modification that increases the total fair value of the share -based payments, or is
otherwise beneficial to the employee as measured at the date of modification.

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation,
and any expense not yet recognised for the award is recognised immediately. This includes any award
where non-vesting conditions wit hin the control of either the Group or the employee are not met.
However, if a new award is substituted for the cancelled award, and is designated as a replacement
award on the date that it is granted, the cancelled and new awards are treated as if they were a
modification of the original award, as described in the previous paragraph.




                                                    44
               CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                               Notes to financial statements (Continued)
                                For the six months ended 30 June 2019

                    (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)

(29)    Share-based payments (Continued)

A cash-settled share-based payment shall be measured in accordance with the fair value of liability
calculated and confirmed based on the shares or other equity instruments undertaken by an ent erprise.
As to a cash-settled share-based payment instruments, if the right may be exercised immediately after
the grant, the fair value of the liability undertaken by the enterprise shall, on the date of the grant, be
included in the relevant costs or expenses, and the liabilities shall be increased accordingly. As to a
cash-settled share-based payment, if the right may not be exercised until the vesting period comes to
an end or until the specified performance conditions are met, on each balance sheet date within the
vesting period, the services obtained in the current period shall, based on t he best estimate of the
information about the exercisable right, be included in the relevant costs or expenses and the
corresponding liabilities at the fair value of the liability undertaken by the group. The group shall, on
each balance sheet date and on each account date prior to the settlement of the relevant liabilities, re -
measure the fair values of the liabilities and include the changes in the current profits and losses.

(30)    Revenue recognition

The group rec ognizes revenue when it has fulfilled its obligations under the contract, i, e. when the
customer acquires control relevant goods or services. Acquiring control over the goods or services
refers to the ability to dominate the use of the goods or the portion of services and to derive almost all
the economic benefits therefrom.

Cont racts for sale of goods

The contracts for the sale of goods betw een the Group and its customer usually only contain the
performance obligations for the trans fer of goods. The Group generally recognizes revenue at the point
of trans ferring the control of goods on the basis of a combination of the following factors: the current
right to collect the goods, the trans fer of major risks and benefits in the ownership of the goods, and the
transfer of the legal ownership of the goods, the trans fer of physical assets of the goods and that the
customers have accept ed the goods.

Service Contracts

The service contracts between the Group and its customers usually consist of performance obligations
such as engineering construction management, engineering design consulting and so on. As the
Group's performance of contracts is at the same time when the customer obtains and consumes the
economic benefits of the performance of the Group, and the Group has the right to collect receivables
from the performance of cont acts that has been completed to date, the Group regards it as a contact
obligation over a period of time, except that the progress of performanc e cannot be reasonably
determined. The Group determines the progress of the performanc e of contracts in accordance with the
input method. If the progress of performance of contracts cannot be reasonably determined and the
cost incurred by the Group are expected to be compensated, the revenue is recognized on the basis of
the incurred costs until the progress of performance of contacts can be reasonably measured.




                                                    45
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                             For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)

(30)    Revenue recognition (Continued)

Variable consideration

Cert ain contracts between the Group and its customers contain cash discounts and price guarantee
clauses whic h will give ris e to variable consideration. Where a contract contains variable consideration,
the Group determines the best estimates on the variable consideration based on expected values or the
most probable amount, provided that transaction prices including variable consid eration shall not
exceed the cumulative amount of recognised revenue upon the removal of relevant unc ertainties in
connection with which a significant reversal is highly unlikely.

Consideration payable to customers

Where consideration is payable by the G roup to a customer, such consideration payable shall be
deducted against the transaction price, and against current revenue upon the rec ognition of revenue or
the payment of (or the commitment to pay) the consideration to the customer (whichever is later), save
for consideration payable to the customer for the purpose of acquiring from the customer ot her clearly
separable products.

Return clauses

In connection with sales with a return clause, revenue is recognised according to the amount of
consideration it expects to be entitled to for the transfer to a customer when the customer acquires
control of the relevant. Amounts expected to be refunded for the return of sales are recognised as
liabilities. At the same time, the balance of t he carrying value of th e product expected to be returned
upon trans fer less expected costs for the recall of such product (including an impairment loss of the
recalled product) shall be recognised as an asset (i.e. cost of return receivables), and the net amount of
the carrying value of the transferred product upon the transfer less the aforesaid asset cost shall be
transferred to cost. At each balance sheet date, the Group reassesses the fut ure return of sales and
remeasures the above assets and liabilities.

Significant financing component

Where a contract contains a significant financing component, the Group determines transaction prices
based on amounts payable assumed to be settled in cash by customers immediately upon the
acquisition of control over the products. The differenc e between such trans action price and contract
consideration is amortised over the contract period using the effective interest rate method based on a
ratio that discounts the nominal contractual consideration to the current selling price of the products .

The Group shall not give consideration to any significant financing component in a cont ract if the gap
between the customer’s acquisition of control over the products and payment of consideration is
expected to be less than 1 year.




                                                    46
              CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                          Notes to financial statements (Continued)
                            For the six months ended 30 June 2019

                 (All amounts in Renminbi “RMB” unless otherwise stated)


III    Summary of significant accounting policie s and accounting e stimates (Continued)

(30)   Revenue recognition (Continued)

       Warranty clauses

       The Group provides quality assuranc e for products sold and assets built in accordance with
       contract terms and laws and regulations. The accounting treatment of quality assuranc e in the
       form of warranty assuring customers products sold are in compliance with required standards is
       set out in Note III.28. Where the Group provides a service warranty for a standalone service in
       addition to the assurance of compliance of products with required standards, such warranty is
       treated as a standalone contractual performance obligation, and a portion of the transaction
       price shall be allocated to the service warranty based on a percentage of the standalone price
       for the provision of product and service warranty. When assessing whether a warranty is
       rendering a standalone service in addition t o providing guarantee to customers that all sold
       goods are in complianc e with required standards, the Group will consider whether or not such
       warranty is a statutory requirement, the term of the warranty and the nat ure of t he Group’s
       undertaking to perform its obligations.

       Reward points program

       The Group grants reward points to customers when selling goods. Cust omers can use reward
       points to redeem free or discounted goods provided by the Group. This reward points program
       provides significant rights to customers, the Group consider it as an individual performance
       obligation, and an apportion part of the transaction price t o reward points based on pricing of
       goods or s ervices with warranty clauses. Revenue is recognised when customers obtain goods
       redeemed or when reward points expire.

       Principal responsible person/proxy

       For goods or other assets obtained from a third party which were trans ferred later to customers,
       the Group has the right to decide independently, pricing of goods. This means that the Group
       has obtained control over related goods before transferring t o customers. Therefore, the Group
       is the principal responsible person, and revenue is recognised based on total amount of
       consideration received or rec eivable. Ot herwise, the Group is proxy, and revenue is recognised
       based on expected commission. This amount should be the total amount of consideration
       received or receivable net of the amount payable to other parties, or based on the fixed amount
       or percentage.

(31)   Government grants
       A government grant is recognized when the conditions attached to it can be complied with and
       the government grant can be received. For a government grant in the form of t rans fer of
       monetary assets, the grant is measured at the amount received or receivable. For a
       government grant in the form of trans fer of non -monetary assets, it is measured at fair value; if
       the fair value is not reliably det erminable, the grant is measured at nominal amount.




                                                  47
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                              For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)


III     Summary of significant accounting policie s and accounting e stimates (Continued)

(31)    Government grants (Continued)

Government grants related to assets refer to government assets which are granted to enterprises for
the long-t erm assets formed by acquisition, construction or in other manners. Government grants
related to income refer to government grants other than those related to assets.

Government grants related to income to be used as compensation for fut ure expenses or losses shall
be recognized as deferred income and shall be charged to the current profit or loss or be used to write
down the relevant loss, during the recognition of the relevant cost expenses or losses; or used as
compens ation for relevant expenses or losses already incurred by enterprises shall be directly charged
to the profit or loss account in the current period or used to write down the relevant cost.

The government grants related to assets shall be used to write down the book value of the relevant
assets or be recognized as deferred income. The government grants related to assets, recognized as
deferred income, shall be charged to the profit and loss reasonably and systematically in stages over
the useful lives of the relevant assets. The government grants measured at a nominal amount shall be
directly charged to the current profit or loss.

If any related asset is sold, transferred, written off or destroyed before the end of its useful life, the
balance of the undistributed deferred income shall be transferred to the current gain or loss on disposal
of the asset.

(32)    Income tax

Income tax comprises current and deferred tax. Income tax is recognized as income or an expense in
profit or loss of the current period, or recognized directly in shareholders’ equity if it arises from a
business combination or relates to a transaction or event which is recognized directly in shareholders’
equity.

The Group measures a current tax asset or liability arising from the current and prior periods based on
the amount of income tax expected to be paid by the Group or returned by tax authorites calculated
according to related tax laws.

Deferred tax assets and deferred tax liabilities are calculated and rec ognized based on the differences
arising between the tax bases of assets and liabilities and their c arrying amounts (temporary
differenc es). A deferred tax asset is recognized for the deductible losses that can be carried forward to
subsequent years for deduction of t he taxable profit in accordance with the tax laws. No deferred tax
liability is recognized for a temporary difference arising from the initial recognition of goodwill. No
deferred tax asset or deferred tax liability is recognized for the temporary diffe renc es resulting from the
initial recognition of assets or liabilities due to a transaction other than a business combination, which
affects neither accounting profit nor taxable profit (or deductible loss). At the balance sheet date,
deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply
to the period when the asset is realized or the liability is settled.




                                                     48
                    CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                     Notes to financial statements (Continued)
                                      For the six months ended 30 June 2019

                          (All amounts in Renminbi “RMB” unless otherwise stated)


III        Summary of significant accounting policie s and accounting e stimates (Continued)

(32)       Income tax (Continued)

Deferred tax assets are only recognized for deductible temporary differences, deductible losses and tax
credits to the extent that it is probable that taxable profit will be available in the future against which the
deductible temporary differences, deductible losses and tax credits can be utilized.

Deferred tax assets and liabilities are offset when:
     the deferred tax es are related to the same tax payer within t he Group and the same taxation
        authority; and
     that tax payer has a legally enforc eable right to offset current tax assets against current tax
        liabilities.

Deferred tax liabilities are recognized for temporary differenc es arising from investments in subsidiaries
and associates, except where the Group is able to c ontrol the timing of the reversal of the temporary
differenc e, and it is probable that the temporary difference will not reverse in the foreseeable future.
When it is probable that the temporary differences arising from investments in subsidiaries, and
associates will be reversed in the foreseeable fut ure and that the taxable profit will be available in the
future against whic h the temporary differences can be utilized, the corresponding deferred tax assets
are recognized.

(33)       Changes in accounting policies and accounting e stimate s

Changes in accounting policies

      Details and reasons for changes in          Procedures for approval                                Notes
            accounting estimates
  On 7 December 2018, the Ministry of        Approval by The eleventh meeting        The Group implement the New             Lease
  Finance revised “Accounting Standard      of the eighth board of directors that   Standard from 1 January 2019. According to
  for Enterprises No. 21 - Lease” (the      held on August 22, 2019.                the convergence rules of the New Lease
  “New    Lease Standard”). It is also                                             Standard, it is optional to adjust the amount
  required that enterprises listed both                                              of the retained earnings and other relevant
  domestically      and     abroad     and                                           accounts at the beginning of the year when
  enterprises listed abroad and preparing                                            the   New    Lease     Standard    is   initially
  financial statements in accordance w i h                                           implemented based on the cumulative
  International     Financial    Reporting                                           impact of the initial implement of the New
  Standards or the Accounting Standards                                              Lease    Standard without      adjusting     the
  for Business Enterprises adopt the New                                             information for the comparable period. This
  Lease Standard from 1 January 2019.                                                change in accounting policy will increase the
                                                                                     company's total assets and total liabilities,
                                                                                     but it is not expected to have a signific ant
                                                                                     impact on the ow ner's equity and net profit.


The main impact of the retroactive adjustments resulting from the above changes in accounting policies on the
financial statements are as follows:

                                                               49
                       CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                     Notes to financial statements (Continued)
                                       For the six months ended 30 June 2019

                            (All amounts in Renminbi “RMB” unless otherwise stated)




III          Summary of significant accounting policie s and accounting e stimates (Continued)


(33)         Changes in accounting policies and accounting e stimate s (Continued)

Cons olidated balance sheet:


ASSETS                                        31 December 2018      1 January 2019          Adjustment

Current assets

      Cash and bank balances                   8,089,781,304.56    8,089,781,304.56

      Notes receiv able                        1,357,311,929.63     789,536,654.23      (567,775,275.40)

      Accounts receiv able                     9,336,861,647.92    9,336,861,647.92

      Receivable financing                                    -     567,775,275.40       567,775,275.40

      Advances to suppliers                      583,484,515.95     419,443,944.83      (164,040,571.12)

      Other receivables                          643,493,359.32     643,493,359.32

      Incl:Interest receivable                     8,223,327.64        8,223,327.64

      Inventories                              4,389,335,942.19    4,389,335,942.19

      Other current assets                        95,347,629.18      95,347,629.18

Total current assets                          24,495,616,328.75   24,331,575,757.63     (164,040,571.12)


Non-current assets

      Long-term equity investments             1,880,393,786.10    1,880,393,786.10
      Other equity instruments                    13,685,760.00      13,685,760.00
      investment
      Other non-current financial assets         140,000,000.00     140,000,000.00

      Investment properties                      144,894,495.97     144,894,495.97

      Fixed assets                               607,933,827.67     594,067,973.91       (13,865,853.76)

      Construction in progress                    36,412,614.61      36,412,614.61

      Right-of-use assets                                     -    1,782,725,159.78     1,782,725,159.78

      Intangible assets                          319,207,126.15     318,693,082.72          (514,043.43)

      Goodw ill                                  833,547,800.60     833,547,800.60

      Long-term prepaid expenses                 311,328,706.46     311,328,706.46

      Deferred tax assets                         74,914,209.95      74,914,209.95

      Other non-current assets                    72,365,863.71      58,168,919.11       (14,196,944.60)

Total non-current assets                       4,434,684,191.22    6,188,832,509.21     1,754,148,317.99



                                                           50
                          CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                      Notes to financial statements (Continued)
                                        For the six months ended 30 June 2019

                             (All amounts in Renminbi “RMB” unless otherwise stated)


Total assets                                         28,930,300,519.97        30,520,408,266.84       1,590,107,746.87

III           Summary of significant accounting policie s and accounting e stimates (Continued)


(33)          Changes in accounting policies and accounting e stimate s (Continued)


LIABILITIES                                              31 December 2018         1 January 2019          Adjustment



Current liabilities

      Short-term borrowings                                2,597,652,702.43      2,597,652,702.43

      Notes payable                                        3,416,755,681.80      3,416,755,681.80

      Accounts payable                                     6,468,535,961.17      6,468,535,961.17

      Advances from customers                                             -                       -

      Employee benefits payable                             231,866,407.40         231,866,407.40

      Tax payable                                           241,980,412.72         241,980,412.72

      Other payables                                       1,539,436,971.93      1,539,436,971.93

          Incl: Interest payable                             21,906,660.63          21,906,660.63

                Dividends payable                              6,389,320.96          6,389,320.96

      Contract liabilities                                  255,590,612.37         255,590,612.37

      Non-current liabilities due w ithin one year             5,861,324.37        495,132,751.96      489,271,427.59

      Other current liabilities                                 292,465.75             292,465.75

Total current liabilities                                14,757,972,539.94      15,247,243,967.53      489,271,427.59


Non-current liabilities

      Long-term borrow ings                                  31,600,000.00          31,600,000.00

      Lease liabilities                                                   -      1,104,600,297.80     1,104,600,297.80

      Long-term payables                                       4,563,978.52            800,000.00       (3,763,978.52)

      Long-term employee benefits payable                      2,050,000.00          2,050,000.00

      Deferred income                                        91,491,170.40          91,491,170.40

      Deferred tax liabilities                               67,605,161.88          67,605,161.88

      Other non-current liabilities                          69,241,176.18          69,241,176.18

Total non-current liabilities                               266,551,486.98       1,367,387,806.26     1,100,836,319.28



Total liabilities                                        15,024,524,026.92      16,614,631,773.79     1,590,107,746.87




                                                                  51
                      CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                 Notes to financial statements (Continued)
                                  For the six months ended 30 June 2019

                        (All amounts in Renminbi “RMB” unless otherwise stated)


III         Summary of significant accounting policie s and accounting e stimates (Continued)


(33)        Changes in accounting policies and accounting e stimate s (Continued)


SHAREHOLDERS’ EQUITY                     31 December 2018      1 January 2019          Adjustment



Shareholders’ equity
      Share capital                          428,126,983.00     428,126,983.00

      Capital surplus                      4,320,984,981.51    4,320,984,981.51

      Surplus reserve                        214,063,491.50     214,063,491.50

                                           6,655,257,147.27    6,655,257,147.27
      Retained earnings


Shareholders’ equity attributable
                                          11,618,432,603.28   11,618,432,603.28
  to shareholders of the parent
                                           2,287,343,889.77    2,287,343,889.77
Non-controlling interests


                                          13,905,776,493.05   13,905,776,493.05
Total shareholders’ equity


Total liabilities and shareholders’      28,930,300,519.97   30,520,408,266.84     1,590,107,746.87
        equity




                                                      52
                     CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                    Notes to financial statements (Continued)
                                     For the six months ended 30 June 2019

                          (All amounts in Renminbi “RMB” unless otherwise stated)


III         Summary of significant accounting policie s and accounting e stimates (Continued)


(33)        Changes in accounting policies and accounting e stimate s (Continued)


Company’s balance sheet:


ASSETS                                      31 December 2018       1 January 2019         Adjustment


Current assets

      Cash and bank balances                1,817,654,598.01    1,817,654,598.01
      Notes receivable                         63,870,980.39       34,154,774.75      (29,716,205.64)
      Accounts receivable                     631,236,593.94      631,236,593.94
      Receivable financing                                         29,716,205.64       29,716,205.64
      Ad vances to suppliers                    4,760,182.00        4,757,318.66           (2,863.34)
      Other receivables                     1,541,980,883.50    1,541,980,883.50
      Incl:Interest receivable                  7,550,877.07        7,550,877.07
          Di vidends receivable                            -                    -
      Inventories                             158,166,185.65      158,166,185.65
      Other current assets                         39,482.38           39,482.38
Total current assets                        4,217,708,905.87    4,217,706,042.53           (2,863.34)


Non-current assets
      Long-term equity investments          7,432,906,692.24    7,432,906,692.24
      Other non-current financial             140,000,000.00      140,000,000.00
      assets
      Investment properties                     1,955,854.46        1,955,854.46
      Fixed assets                             21,362,422.03       21,362,422.03
      Right-of-use assets                                  -        6,827,171.38        6,827,171.38
      Intangible assets                         2,452,222.51        2,452,222.51
      Long-term deferred expenses               7,481,809.53        7,481,809.53
      Other non-current assets                  7,000,000.00        7,000,000.00

Total non-current assets                    7,613,159,000.77    7,619,986,172.15        6,827,171.38


Total assets                               11,830,867,906.64   11,837,692,214.68        6,824,308.04




                                                        53
                      CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                  Notes to financial statements (Continued)
                                   For the six months ended 30 June 2019

                          (All amounts in Renminbi “RMB” unless otherwise stated)


III         Summary of significant accounting policie s and accounting e stimates (Continued)


(33)        Changes in accounting policies and accounting e stimate s (Continued)


LIABILITIES                              31 December 2018       1 January 2019          Adjustment


Current liabilities

      Short-term borrowings                539,000,000.00      539,000,000.00
      Notes payable                        252,317,800.78      252,317,800.78
      Accounts payable                     442,049,241.22      442,049,241.22
      Contract liabilities                   4,182,083.40        4,182,083.40
      Employee benefits payable             36,233,563.12       36,233,563.12
      Tax pa yables                         13,426,601.90       13,426,601.90
      Other payables                     1,481,817,856.56     1,481,817,856.56
      Incl:Interest payable                  1,354,592.35        1,354,592.35
      Non-current liabilities
                                                        -          786,068.44           786,068.44
      due within one year
      Other current liabilities               226,427.99           226,427.99


Total current liabilities                2,769,253,574.97     2,770,039,643.41          786,068.44


Non-current liabilities

      Long-term borrowings                  31,600,000.00       31,600,000.00
      Lease liabilities                                 -        6,038,239.60          6,038,239.60
      Long-term payables                      800,000.00           800,000.00
      Long-term employee                      118,000.00           118,000.00
         benefits payable
      Deferred income                        1,687,899.50        1,687,899.50
      Deferred tax liabilities               2,298,426.39        2,298,426.39


Total non-current liabilities               36,504,325.89       42,542,565.49          6,038,239.60


Total liabilities                        2,805,757,900.86     2,812,582,208.90         6,824,308.04




                                                       54
                      CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                 Notes to financial statements (Continued)
                                  For the six months ended 30 June 2019

                        (All amounts in Renminbi “RMB” unless otherwise stated)


III        Summary of significant accounting policie s and accounting e stimates (Continued)


(33)       Changes in accounting policies and accounting e stimate s (Continued)


SHAREHOLDERS’ EQUITY                      31 December 2018      1 January 2019       Adjustment


Shareholders’ equity

      Share capital                         428,126,983.00      428,126,983.00
      Capital surplus                      4,426,362,777.26    4,426,362,777.26
      Surplus reserves                      214,063,491.50      214,063,491.50
      Retained earnings                    3,956,556,754.02    3,956,556,754.02


Total shareholders’ equity                9,025,110,005.78    9,025,110,005.78


Total liabilities and shareholders’      11,830,867,906.64   11,837,692,214.68     6,824,308.04
        equity




                                                      55
               CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                           Notes to financial statements (Continued)
                             For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)


IV      Taxation


1.   Main categories and rates of taxes:

        Categories                Tax base                                                     Tax rate

        Corporate income tax
        (“CIT”)                 Taxable income                                      15%,20% or 25%
                                  Taxable value added amount (Tax
                                  payable is calculated by using the
                                  taxable sales amount multiplied
                                  by the effective tax rate less
        Value added tax           deductible VAT input of the                       0%,3%,5%,6%,9%,
        (“VA T”)                current period)                                       10%,13%,16%
        City maintenance and
           construction tax       Amount of VAT                                              5% or 7%
        Educational surcharge     Amount of VAT                                                    3%
        Local educational
        surcharge                 Amount of VAT                                                     2%

2.   Tax preferences

(a) In 2011, the Urumqi Head Office, Changji Branch and Karamay Branc h of Sinopharm Holding
    Xinjiang New & Special Medicines Chain Store Co., Ltd. (“Xinjiang New & Special Medicines”),
    subsidiaries of the group, shall pay tax at a rate of 15% by jurisdictions. According to the Circula r
    of the Ministry of Finance, the State Administration of Taxation, the General Administration of
    Customs on Issues Concerning Tax Policies for the Further Development of the Western Regions
    (Cai shui [2011] No.58), enterprises from encouraged industries in the Western Regions, could
    enjoy a reduc ed CIT rate of 15% from 1 January 2011 to 31 December 2020.

     In 2014, the Group’s subsidiary Sinopharm Holding Guangxi Logistics Co., Ltd. (“Sinopharm
     Guangxi Logistics”) was approved by the Guangxi Loc al Tax Burea u to enjoy a tax discount
     applicable to c orporations in the region of Western Development to pay income tax at a tax rate of
     15%.

     Eight subsidiaries in Guangxi Province of the Group, including Sinopharm Guangxi, Sinopharm
     Holding Liuzhou Co., Ltd. (“Sinopharm Liuzhou”) , Sinopharm Holding B eihai Co., Ltd (“Sinopharm
     Beihai”), Sinopharm Holding Guilin Co., Ltd. (“Sinopharm Guilin”), Sinopharm Holding Guigang
     Co., Ltd. (“Sinopharm Guigang”), Sinopharm Holding Yulin Co., Ltd. (“Sinopharm Yulin”),
     Sinopharm Holding Baise Co., Ltd (“Sinopharm B aise”)and Sinopharm Holding Wuzhou Co., Ltd.
     (“Sinopharm Wuzhou”) were all approved by the Guangxi Local Tax Bureau to enjoy a tax
     concession of Western Development at a preferential CIT rat e of 15%. The applicable period for
     Sinopharm Guangxi, Sinopharm Liuzhou and Sinopharm Beihai is 1 January 2014 to 31 December
     2020, and that for the other 5 subsidiaries is 1 January 2015 to 31 December 2020.




                                                   56
               CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                           Notes to financial statements (Continued)
                            For the six months ended 30 June 2019

                 (All amounts in Renminbi “RMB” unless otherwise stated)


IV      Taxation (Continued)

2.   Tax preferences (Continued)

     The Group's subsidiary Sinopharm Holding National Pharmacy Inner Mongolia Co., Ltd.
     (hereinafter referred to as "National University of Inner Mongolia"), Sinopharm Holding National
     Pharmacy Hulunbeier Co., Ltd., Sinopharm Holding National Pharmacy Wulanchabu Co., Ltd. ,
     National University Pharmacy Manz houli Co., Ltd., Sinopharm Holding National Pharmacy
     Bayannaoer Co., Ltd. and Inner Mongolia NUS Pharmaceutical Co., Ltd., in accordance with the
     provisions of Caishui [2011] No. 58 Document, meet the conditions for the enjoyment of corporate
     income tax benefits in the Western Development, and obtain the Notice of Approval for Reduction
     and Exemption of Taxes. In 2019, the enterprise income tax was paid at a preferential tax rate of
     15%. According to Caishui [2011] No. 58 Document, Sinopharm Holding National Pharmacy
     Guangxi Chain Co., Ltd. and Ningxia Guoda Pharmacy Chain Co., Ltd. reduced the corporate
     income tax of 2019 at a reduced rate of 15%.

     In the half year of 2019, according to the "Notice on Implementing the Incl usive Tax Deduction
     Policy for Small and Micro Enterprises" (Cai Shui [2019] No. 13): the Group's subsidiary
     Sinopharm Medic al Supply Chain Service (Guangxi) Co., Ltd., Shanghai Guoda Dongsheng
     Pharmacy Co., Ltd., Sinopharm Holding National P harmacy Guangz hou Chain Co., Ltd., Taishan
     City Guokong Guoda Group Kangda Pharmacy Chain Co., Ltd., Guangxi Guoda P harmaceutical
     Cons ulting Chain Co., Ltd., Changzhi City Guoda Wanmin Pharmacy Co., Ltd., Shanghai Fumei
     Xuhui Pharmacy Co., Ltd., Sanhe Liyang Jinxiang Pharmacy Co., Ltd., Sinopharm Holding
     National Pharmacy Hulunbeier Co., Ltd. The company, NUS Pharmacy Manzhouli Co., Ltd. pays
     taxable inc ome less than RMB 3 million, and meets the requirements of small and meager profit
     enterprises, so it pays corporate income tax at a rate of 20%.




                                                 57
               CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                             For the six months ended 30 June 2019

                 (All amounts in Renminbi “RMB” unless otherwise stated)


V    Notes to the consolidated financial statements

1.   Cash and bank balances

                                                       30 June 2019             1 January 2019

      Cash on hand                                      3,415, 085.25             5,587, 191.18
      Cash at banks                                 7,765, 559,793.66         7,626, 529,829.59
      Other cash balances                             317,353,629.58            457,664,283.79

                                                    8,086, 328,508.49         8,089, 781,304.56



At 30 June 2019, other cash balances were consisted of letter credit deposits amounting to RMB
305,806.00 (31 December 2018: RMB 4,191,246.00), bank acceptance notes deposits amounting to
RMB317,047,823.58 (31 December 2018: RMB453,473,037.79).


2.   Note s receivable

                                                        30 June 2019            1 January 2019

     Trade acceptance notes                           790,664,828.26            789,536,654.23
     Bank acceptance notes                                          -                         -

                                                      790,664,828.26            789,536,654.23




                                               58
                         CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                            Notes to financial statements (Continued)
                                             For the six months ended 30 June 2019

                             (All amounts in Renminbi “RMB” unless otherwise stated)


V     Notes to the consolidated financial statements (Continued)

2. Note s receivable (Continued)

       Notes rec eivable endorsed or discounted by the Group to other parties which were not yet due at
       30 June 2019 and 31 December 2018 are as follows:
                                                                                                                         30 June 2019
                                                                                                                  Derecognized     Not derecognized

       Trade acceptance notes                                                                                                                  216,316,836.99
       Bank acceptance notes                                                                                                                                -

                                                                                                                                               216,316,836.99

       As at 30 June 2019 and 31 December 2018, notes that were convert ed into accounts receivable
       due to the drawer’s inability to settle the note on maturity date are as follows:
                                                                                                                                                     30 June 2019

       Bank acceptance notes                                                                                                                                    -
       Trade acceptance notes                                                                                                                       20,010,459.85

                                                                                                                                                    20,010,459.85

3.     Accounts receivable

     The accounts receivable by category are analyzed below:

                                                                                                                            1 Januar y 2019
                                                      30 J une 2019
                             Gross carryi ng amount                     Provision for bad debt       Gross carryi ng amount                   Provision for bad debt

                             Amount          Proportion                Amount          Proportion      Amount          Proportion       Amount               Proportion


     Items for
      which
      provision for
      bad debt is
      recognised
      separatel y         613,529,239.36              5.17%           19,044,116.83         3.10%    595,919,487.29        6.36%       16,766,679.23               2.81%
     Items for
      which
      provision for
      bad debt is
      recognized by
      group (credit
      risk
      characteristics
      )                 11,262,211,636.12         94.83%              30,256,027.06         0.27%   8,780,463,595.37      93.64%       22,754,755.51               0.26%


                        11,875,740,875.48        100.00%              49,300,143.89         0.42%   9,376,383,082.66    100.00%         39,521,434.74              0.42%




                                                                                      59
                     CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                 Notes to financial statements (Continued)
                                     For the six months ended 30 June 2019

                      (All amounts in Renminbi “RMB” unless otherwise stated)


V    Notes to the consolidated financial statements (Continued)

3. Accounts receivable (Continued)

      At 30 June 2019, accounts receivable that are individually significant and individually assessed for provisions
      are as follows:

                                                  Carrying          Bad debt
      Accounts receiv able(by company)             amount           provis ion             Rate                   Assessment for impairment


      Receivable of medical insurance                                                               Part of the medical insurance receivable
                                                                                                      takes longer to collect, and has ris k of
                                               352,956,757.11           588,948.80         0.17%                                        default
      Receivable of E-Business other                                                                 Receivable of E-Business w ith low risk
        suppliers                              110,676,893.44        6,739,296.66          6.09%                               of recoverability
      Receivable of card settlement, e-                                                             Receivable of Franchises w ith no risk of
                                                                                   -
        commerce and third-party                55,508,719.88                              0.00%                                  recoverability
        payment platform party                                                                      Receivable due from a related party with
                                                                                   --
                                                47,567,694.11                              0.00%                     low ris k of recoverability
      Daton Xin Jian Kang Hospital                                                 -                Receivable due from a fix ed cooperativ e
                                                                                                       hospital w ith no risk of recoverability
                                                21,439,257.44                      -       0.00%
      Liuzhou Railw ay Central Hospital                                                                    Both parties to the transaction have
                                                                                                        differences in the amount of purchase
                                                13,820,739.09           156,693.08         1.13%              and sales and has risk of default
      Hubei xianning Pharmaceutical                                                                        A lawsuit has been filed against the
        Co., Ltd.,                                                                                       customer and has high risk of default
                                                11,559,178.29      11,559,178.29         100.00%



                                               613,529,239.36       19,044,116.83
      Total                                                                                     -                                               -




    Provision for bad debts of accounts receivable according to the general model of expected credit
    loss:

                                                                     30 June 2019
                                                                Expected credit loss in entire
                                      Estimated def ault amount                       lif etime                         Expected credit loss rate

                                              11,186,234,127.33                         25,495,025.53                                       0.23%
    Within 1 y ear
                                                   71,069,101.89                         3,646,494.40                                       5.13%
    1 to 2 y ears
                                                    1,616,063.02                          194,281.68                                      12.02%
    2 to 3 y ears
                                                    3,292,343.88                          920,225.45                                      27.95%
    Ov er 3 years


                                              11,262,211,636.12                         30,256,027.06




                                                                   60
                    CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                     Notes to financial statements (Continued)
                                      For the six months ended 30 June 2019

                      (All amounts in Renminbi “RMB” unless otherwise stated)


V   Notes to the consolidated financial statements (Continued)

3. Accounts receivable (Continued)

The aging analysis of accounts receivables was as follows:

                                                                                                                        30 June 2019


     Within 1 year                                                                                               11,753,416,277.07

     1 to 2 years                                                                                                       80,575,034.81

     2 to 3 years                                                                                                        3,374,443.53

     3 to 4 years                                                                                                       24,801,268.92

     4 to 5 years                                                                                                       12,775,655.02

     Over 5 years                                                                                                          798,196.13


     Total
                                                                                                                      11,875,740,875.48


    Bad debt provision for the current period as follows:

                                                                                                           Written
                         Opening        Reversal of write-off           Increases in     Reversal in                           Closing
                                                                                                             off in
                         balance          in previous years                 the year       the year                            balance
                                                                                                          the year

    Bad debts        39,521,434.74                   11,040.00          16,376,925.13   (6,609,255.98)            -       49,300,143.89
         total       39,521,434.74                   11,040.00          16,376,925.13   (6,609,255.98)            -       49,300,143.89


         On 30 June 2019, the top five accounts receivable by customer are summarised
         below:
                                                                                                          % of the
                                                                                                             total
                                                                                          Bad debt       accounts
                                                                                          provision      receivabl
                                                                           Amount          amount                e

       The top five accounts
         receivable total                                        861,862,590.71         363,240.29         7.25%



    On 30 June 2019, the Group's accounts receivable that were terminated due to the cooperation on
    accounts receivable factoring with financial institutions without recourse were RMB
    2,707, 165,636.40.




                                                                   61
                    CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                 Notes to financial statements (Continued)
                                  For the six months ended 30 June 2019

                         (All amounts in Renminbi “RMB” unless otherwise stated)


V        Notes to the consolidated financial statements (Continued)


    4.    Accounts receivable financing


                                                               30 June 2019                            1 January 2019

           Bank acceptance notes                                 325,439,580.18                           567,775,275.40

                                                                 325,439,580.18                           567,775,275.40

    5. Advance s to suppliers



(a)      The aging of advances to suppliers is analyzed below:

                                       30 June 2019                                     1 January 2019
                                      Amount    % of total balance                       Amount      % of total balance

         Within 1 year        355,664,414.27                99.60%                416,103,769.08               99.20%
         1 to 2 years           1,215,326.29                 0.34%                    873,351.85                0.21%
         2 to 3 years             109,088.48                 0.03%                  2,466,823.90                0.59%
         Above 3 years             89,990.60                 0.03%                             -                     -

                              357,078,819.64                         -            419,443,944.83                      -

         The prepayment aged for more than a year is mainly the advance equipment amounting to RMB1,414,405.37
         (31 December 2018: RMB3,340,175.75) as the hospital equipment procurement is a large project which
         takes a long time to complete.

(b)      On 30 June 2019, the top five ad vances to suppliers by custom er are summarized below:

                                                                          Amount             Proportion of total balance

Total amount of top five advances to suppliers                   128,740,740.37                                 36.05%




                                                          62
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                Notes to financial statements (Continued)
                                 For the six months ended 30 June 2019

                    (All amounts in Renminbi “RMB” unless otherwise stated)


V     Notes to the consolidated financial statements (Continued)

    6. Other receivables


                                                                  30 June 2019       1 January 2019

        Interest receivable                                    14,791,483.10            8,223,327.64
        Other receivables                                     639,294,904.75          635,270,031.68

                                                              654,086,387.85          643,493,359.32


      ( 1) Interest receivable

                                                                  30 June 2019        1 January 2019

       Fixed deposits                                             13,306,641.88          6,376,708.68
       Entrusted Loans                                             1,484,841.22          1,846,618.96

                                                                  14,791,483.10          8,223,327.64



      ( 2) Other receivables

         Category of other receivables by nature is as follows:


         Nature                                                      30 June 2019       1 January 2019


         Deposits                                                  257,903,552.46       278,455,623.30
         Receivable due from related parties                        10,414,842.49          8,119,399.79
         Entrusted borrowings                                       44,000,000.00        44,000,000.00
         Petty cash advance to employees                            17,538,148.13        12,439,613.27
         Receivable of equity transactions                            8,980,000.00         8,980,000.00
         Others                                                    321,989,366.05       303,197,349.04

         Total                                                     660,825,909.13       655,191,985.40




                                                    63
                    CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                   Notes to financial statements (Continued)
                                    For the six months ended 30 June 2019

                        (All amounts in Renminbi “RMB” unless otherwise stated)


V     Notes to the consolidated financial statements (Continued)

6. Other receivables (Continued)

        The changes in bad debt provision for other receivables based on the entire lifetime expected
        credit losses are as follows:


                                                   Stage 1            Stage 2                  Stage 3
                                                  Expected                               Entire lifetime           Total
                                                     credit     Entire lifetime        expected credit
                                                    losses    expected credit            losses(Credit
    Bad debt
                                                  over the    losses(No credit    impairment occurred)
                                                   next 12         impairment
                                                   months           occurred)


    Balance at 1 January 2019                             -      19,921,953.72                         -   19,921,953.72
    Balance at 1 January 2019 during the period
    Provisions during the period                          -       3,108,281.87                         -    3,108,281.87
    Reversal during the period                            -      (1,441,849.89)                        -   (1,441,849.89)
    Write-back during the period                          -                   -                        -                -
    Write-off during the period                           -         (57,381.32)                        -      (57,381.32)
    Other Changes                                         -                   -                        -                -




    Balance at 30 June 2019                               -      21,531,004.38                         -   21,531,004.38




                                                         64
                        CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                        Notes to financial statements (Continued)
                                          For the six months ended 30 June 2019

                            (All amounts in Renminbi “RMB” unless otherwise stated)


V     Notes to the consolidated financial statements (Continued)

6. Other receivables (Continued)

         The aging analysis of other receivables was as follows:

                                                                                                                                         30 June 2019


        Within 1 year                                                                                                                    526,279,992.21

        1 to 2 years                                                                                                                       98,441,809.40

        2 to 3 years                                                                                                                       15,955,086.40

        Over 3 years                                                                                                                       20,149,021.12


        Total                                                                                                                            660,825,909.13




         Bad debt provision of other receivables in 2019 was RMB3, 108, 281.87, with the recovered or
         reversed amount of RMB 1,441,849.89, and the written off amount of RMB 57,381.32.



         As at 30 June 2019, the top 5 parties that owed the largest amounts of other receivable
         balances are analyzed below:
                                                                    Nature           Amount        Age    % of total amount   Provision of bad debt


Guangdong Phar mac eutical electronic   Phar mac eutic al tradi ng platform                    Within 1
      trading platfor m                       repayment not yet cl eared      111,024,446.08      year             16.80%
Sinophar m Group Z hijun (Suzhou)                                                              Within 2
      Phar maceutical C o., Ltd.                  Entrusted borrowings         44,000,000.00      year              6.66%
TCM-Integrated C ancer C enter of          Deposit of logistics extension                      Within 2
      Southern Medic al Uni versity                      services projec t     30,082,900.00      year              4.55%
Shenyang Medical Insurance                                                                     Within 1
      Management Servic e Center         Amount due from government            27,635,423.96      year              4.18%
Shenzhen Social Insur ance Fund                                                                Within 1
      Admi nistration                    Amount due from government            18,714,610.23      year              2.83%

                                                                              231,457,380.27                       35.03%                         -




                                                                               65
                      CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                 Notes to financial statements (Continued)
                                    For the six months ended 30 June 2019

                       (All amounts in Renminbi “RMB” unless otherwise stated)


V    Notes to the consolidated financial statements (Continued)

7.   Inventories

 (a) Inventories by category are analyzed below:
                                               30 June 2019                                                  1 January 2019
                               Book v alue          Prov ision     Net book v alue             Book v alue         Prov ision       Net book v alue

     Raw materials                362,562.93                 -           362,562.93           1,410,012.28                     -        1,410,012.28
     Work in progress               5,344.32                 -             5,344.32           1,011,007.23                     -        1,011,007.23
     Finished goods         4,883,623,033.69      7,772,292.62     4,875,850,741.07       4,392,144,746.88          8,313,195.29    4,383,831,551.59
     Low cost consumables       6,454,967.95                 -         6,454,967.95           3,083,371.09                     -        3,083,371.09

                            4,890,445,908.89      7,772,292.62     4,882,673,616.27       4,397,649,137.48          8,313,195.29    4,389,335,942.19



(b) Provision for declines in value of inventories is analysed below:


                                                            Increases                                Decreases
                            1 January 2019                                             Reversal or                                   30 June 2019
                                                   charge               Other                                    Other
                                                                                       Written off

     Finished goods           8,313,195.29       1,567,262.18                   -      2,108,164.85                       -          7,772,292.62

                              8,313,195.29       1,567,262.18                   -      2,108,164.85                       -          7,772,292.62



8. Other current assets

                                                                                     30 June 2019                                  1 January 2019

     Input VAT to be credited                                                       95,048,826.51                                   94,312,573.34
     Corporate income tax to be deducted                                             2,041,094.25                                      723,000.46
     Others                                                                            227,366.84                                      312,055.38

                                                                                    97,317,287.60                                   95,347,629.18




                                                                        66
                                                                            CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                                                                                 Notes to financial statements (Continued)
                                                                                                        For the six months ended 30 June 2019

                                                                             (All amounts in Renminbi “RMB” unless otherwise stated)


V   Notes to the consolidated financial statements (Continued)

9. Long-term equity inve stments

     Associates in 2019
                                                                                                                                                              C ha n ge s in t he yea r
                                                                                                                                                                                                                                                                     Pro vi si o n f o r
           Inve stee                                                           1 Ja nu a ry 2 01 9                                                                                              C a sh di vid e nd                             30 Jun e 2 01 9
                                                                                                                 Ad diti on al   Profi t of l o ss u n de r         Ot he r ch a ng e s i n                             Im p airm e nt                                im pai rm en t
                                                                                                                                                                                                   de cl a red b y
                                                                                                               In ve st m e nt        eq uit y me th o d                          eq uit y                                pro vi si o n
                                                                                                                                                                                                       in ve st ee
           Associate s
           Sh e n zh e n M ain L u ck P h arm a ce uti cal I n c.
           (“Mai n Lu ck Ph a rm a ce uti cal ”).                            26 5, 3 16 ,6 5 3. 68                         -         33 ,5 9 2, 99 5. 7 0                               -                         -                -      29 8, 9 09 ,6 4 9. 38                     -
           Zhiju n M e di cin e                                                35 5, 3 53 ,1 9 6. 15                         -         58 ,5 3 6, 10 1. 7 4                               -                         -                -      41 3, 8 89 ,2 9 7. 89                     -
           Zhiju n Trad e
                                                                                   8, 73 0, 9 94 .8 7                        -          1, 46 7, 0 31 .7 7                                -                         -                -        10 ,1 9 8, 02 6. 6 4                    -
           Zhiju n Su zh o u                                                     23 ,3 7 9, 01 8. 9 2                        -       (1 1, 3 90 ,5 3 8. 03 )                              -                         -                -        11 ,9 8 8, 48 0. 8 9                    -
           Pin g sha n M e di cin e                                              86 ,2 9 2, 92 7. 3 3                        -         22 ,4 2 5, 90 0. 4 5                               -                         -                -      10 8, 7 18 ,8 2 7. 78                     -
           Sh yn de c Ph a rma ce uti cal                                    1, 09 8, 5 66 ,8 5 2. 51                        -         65 ,2 5 8, 50 3. 4 5            42 ,4 2 4, 74 7. 0 0   (1 6, 8 96 ,4 2 7. 80 )                -    1, 18 9, 3 53 ,6 7 5. 16                    -
           Sh a ng h ai B ei yi Gu o d a P h a rma ce uti cal C o. Lt d.         11 ,0 2 9, 91 8. 1 0                        -             24 7, 5 88 .4 9                                -    (1 ,0 5 2, 99 9. 9 9 )                -        10 ,2 2 4, 50 6. 6 0                    -
           Sh a ng h ai Li yi P h arm a cy C o., L td .                              95 5, 4 28 .2 3                         -                             -                              -                         -                -            95 5, 4 28 .2 3                     -
           Sh a ng h ai R en b ei P h arm a cy C o., L td                                           -       1, 80 0, 0 00 .0 0                             -                                                                                    1, 80 0, 0 00 .0 0
           Gu a ng d on g Ji a nh ui C o n st ru cti on I n ve st m en t
              M an a ge m e nt C o. , Lt d.                                                         -       2, 00 0, 0 00 .0 0                             -                                                                                    2, 00 0, 0 00 .0 0
           Sin op h a rm Ji en u o M edi cal Tre at m en t S e rvi ce
              Gu a ng d on g C o. , Lt d. (“Gu an g do n g Ji e n uo ”)          6, 80 2, 1 56 .1 9                        -           (9 9 5, 29 3. 5 8 )                              -                         -                -          5, 80 6, 8 62 .6 1                    -
           Sh a ng h ai Din g qu n M a na g e me nt & Co n sulti ng
              C o. , Lt d                                                        23 ,9 6 6, 64 0. 1 2                        -                             -                              -                         -                -        23 ,9 6 6, 64 0. 1 2                    -
           D on g yu an A cco rd Ph a rma ce uti cal C h ain Co .,
           Lt d.                                                                     39 6, 6 38 .3 2                         -                             -                              -                         -                -            39 6, 6 38 .3 2     39 6, 6 38 .3 2


                                                                             1, 88 0, 7 90 ,4 2 4. 42       3, 80 0, 0 00 .0 0       16 9, 1 42 ,2 8 9. 99             42 ,4 2 4, 74 7. 0 0   (1 7, 9 49 ,4 2 7. 79 )                -    2, 07 8, 2 08 ,0 3 3. 62    39 6, 6 38 .3 2



                                                                                                                                         67
                    CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                    Notes to financial statements (Continued)
                                       For the six months ended 30 June 2019


                        (All amounts in Renminbi “RMB” unless otherwise stated)



V      Notes to the consolidated financial statements (Continued)

10. Other equity instrument investment

                                                                      30 June 2019                       1 January 2019

         Sinopharm Health Online Co., Ltd.                              12 ,0 0 0, 00 0. 0 0                 12 ,0 0 0, 00 0. 0 0
         Sinopharm Guoda Hubei Co., Ltd.                                 1, 00 0, 0 00 .0 0                   1, 00 0, 0 00 .0 0
         Hunan Zhongbai Pharmaceutical
         Investment Co., Ltd.                                               31 5, 0 00 .0 0                      31 5, 0 00 .0 0
         Shanghai Guoda Shuguang Pharmacy
         Co., Ltd                                                           27 0, 7 60 .0 0                      27 0, 7 60 .0 0
         Shanghai Guoren Pharmacy Co., Ltd.                                 10 0, 0 00 .0 0                      10 0, 0 00 .0 0

                                                                        13 ,6 8 5, 76 0. 0 0                 13 ,6 8 5, 76 0. 0 0




11. Other non-current financial assets


                                                                      30 June 2019                       1 January 2019


           Financial asset measured at fair value
           through current profit or loss                           140,000,000.00                       140,000,000.00

                                                                    140,000,000.00                       140,000,000.00



    On June 30, 2019, the balance of other non-current financial assets was the fair value of the share of the
    Sinopharm CICC Medical Industry Fund (referred to as “the Industrial Fund”) subscribed by the Company. The
    Group's 21st meeting of the 7th Board of Directors held on January 6, 2017 reviewed and approved the proposal
    of the Company to subscribe for the industry fund and related party transactions. As a limited partner of the
    industry fund, the company plans to invest RMB 200 million to subscribe for the share of the industrial fund, which
    will be paid in three phases. The company paid the initial investment of RMB 60 million in 2017. As of December
    31, 2017, the fund did not complete the relevant licenses and approvals and did not start operations. Therefore,
    the company's initial investment amounted to RMB 60 million. Included in other non -current assets. In 2018, the
    company paid the second phase of the capital contribution of RMB 80 million. As of June 30, 2019, the company
    had paid a total of RMB 140 million. The industry fund has obtained relevant approvals in 2018 and has started
    operations. Since the cash flow obtained by the Company from the investment of the fund includes both the
    contractual cash flow generated by the underlying assets during the investment period and the cash flow of the
    disposal of the underlying assets, the contractual cash flow that does not satisfy the financial assets generated on
    a specific date is only The payment of interest on the basis of the outstanding principal amount, therefore, the
    Company classifies the investment of the industrial fund into financial assets measured at fair value through profit
    or loss and presented as other non-current financial assets. .




                                                           68
                       CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                       Notes to financial statements (Continued)
                                          For the six months ended 30 June 2019


                           (All amounts in Renminbi “RMB” unless otherwise stated)


V      Notes to the consolidated financial statements (Continued)

12. Investment propertie s

Subsequent measurement under the cost model:

                                                                                         Construction in
    2019                                           Buildings and                               progress
                                                   constructions        Land use right                              Total
    Original cost
                     Opening balance              242,555,189.91        22,719,102.03                      265,274,291.94
                     Purchase                                  -                    -                                   -
                     Transfer to fix ed assets      1,634,951.97                    -                        1,634,951.97
                     assets balance
                     Closing                      240,920,237.94        22,719,102.03                      263,639,339.97

Accumulated
depreciation and
amortization
                     Opening balance              111,131,166.21         7,948,629.76                      119,079,795.97
                     Provision                      3,376,058.13            51,879.46                        3,427,937.59
                     Transfer to fix ed assets        487,533.59                    -                          487,533.59
                     Closing balance              114,019,690.75         8,000,509.22                      122,020,199.97


     Provision for
    impairment
                     Opening balance                1,300,000.00                     -                       1,300,000.00
                     Closing balance                1,300,000.00                     -                       1,300,000.00


Carrying
amount
                     At end of the period         125,600,547.19        14,718,592.81                      140,319,140.00

                     At beginning of the period   130,124,023.70        14,770,472.27                      144,894,495.97




                                                                   69
                                              CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                                           Notes to financial statements (Continued)
                                                            For the six months ended 30 June 2019

                                                 (All amounts in Renminbi “RMB” unless otherwise stated)


V   Notes to the consolidated financial statements (Continued)

13. Fixed assets


    2019
                                                                                                                                  Fixed asset
                                                                 Buildings       Machinery         Vehicles   Other equipment                              Total
                                                                                                                                improvements
    Original cost
    Opening balance                                         489,661,268.82   185,444,104.09   89,613,300.13   294,575,902.89    54,661,564.43   1,113,956,140.36
    Purchase                                                    714,456.83    16,956,031.53    5,069,073.21    15,843,713.46    17,383,853.37      55,967,128.40
    Transfer from construction in progress                               -     2,113,175.66               -       816,880.96                -       2,930,056.62
    Business combination not involving enterprises under
                                                                         -                -               -                 -               -                  -
    common control
    Transfer from Investment properties                       1,634,951.97                -               -                 -               -      1,634,951.97
    Disposal or retirement                                               -     1,487,621.64    5,499,822.63      7,281,743.77   10,306,628.70     24,575,816.74

    Closing balance                                         492,010,677.62   203,025,689.64   89,182,550.71   303,954,753.54    61,738,789.10   1,149,912,460.61

    Accumulated depreciation
    Opening balance                                         164,477,441.12    85,085,741.31   59,523,264.14   172,436,749.05    38,364,970.83    519,888,166.45
    Provision                                                 7,866,027.60    14,213,255.59    3,843,870.06    12,354,113.52    10,639,915.07     48,917,181.84
    Transfer from Investment properties                         487,533.59                -               -                -                -        487,533.59
    Disposal or retirement                                               -     1,107,179.83    3,813,515.96     4,549,800.50     3,462,405.97     12,932,902.26

    Closing balance                                         172,831,002.31    98,191,817.07   59,553,618.24   180,241,062.07    45,542,479.93    556,359,979.62




                                                                                 70
                                         CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                                    Notes to financial statements (Continued)
                                                     For the six months ended 30 June 2019

                                           (All amounts in Renminbi “RMB” unless otherwise stated)


V   Notes to the consolidated financial statements (Continued)

13. Fixed assets (Continued)
    2019(Continued)
                                                                                                                          Fixed asset
                                                         Buildings       Machinery         Vehicles   Other equipment                            Total
                                                                                                                        improvements

    Provision for impairment
    Opening balance                                              -                -               -                 -               -                -
    Disposal of subsidiaries                                     -                -               -                 -               -                -

    Closing balance                                              -                -               -                 -               -                -

    Carrying amount
    At end of period                                319,179,675.31   104,833,872.57   29,628,932.47    123,713,691.47   16,196,309.17   593,552,480.99

    At beginning of the period                      325,183,827.70   100,358,362.78   30,090,035.99    122,139,153.84   16,296,593.60   594,067,973.91




                                                                          71
                                               CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                                            Notes to financial statements (Continued)
                                                                For the six months ended 30 June 2019

                                                  (All amounts in Renminbi “RMB” unless otherwise stated)


V   Notes to the consolidated financial statements (Continued)

13. Fixed assets (Continued)

    Fixed assets without official property right certificates

                         Items                                                 Carrying amount                               Reason for outstanding property right certificates
Buildings                                                                                             27,259,503.70                                                 In the process

14. Construction in progre ss

                                                                                                                            30 June 2019                       1 January 2019

     Construction in progress                                                                                              31,980,582.21                         36,412,614.61

                                                                           30 June 2019                                                  1 January 2019
                                                        Carrying balance      Impair ment        Carrying amount      Carrying balance        Impair ment         Carrying amount



      Warehouse improvement project                       862,479.40                    -       862,479.40            806,272.40                        -           806,272.40
      New office building project                         627,903.09                    -       627,903.09            188,251.26                        -           188,251.26
      Supply chain extension project                   15,025,013.15                    -    15,025,013.15         12,617,953.89                        -        12,617,953.89
      Software project                                  5,544, 210.47                   -     5,544, 210.47        12,930,498.53                        -        12,930,498.53
      Other projects                                    9,920, 976.10                   -     9,920, 976.10         9,869, 638.53                       -         9,869, 638.53

                                                       31,980,582.21                    -    31,980,582.21         36,412,614.61                        -        36,412,614.61

                                                                                      72
                                             CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.


                                                             Notes to financial statements (Continued)
                                                               For the six months ended 30 June 2019


                                                (All amounts in Renminbi “RMB” unless otherwise stated)


V     Notes to the consolidated financial statements (Continued)

14. Construction in progre ss (Continued)

(a)     Changes of significant construction in progress

      Changes of significant construction in progress in 2019 are presented as follows:

                                                                                                                                                     Proportion of    project   Source of
                                                                                                   Decrease                        At end of year   investment to    progres
                                                                                                                                                                                   funds
                                             At beginning of                                                                                           budget (%)           s
      Project name                 Budget                            Increase
                                                    the year                                       Transferred
                                                                                Transferred to    to intangible          Others
                                                                                  fixed asset s          assets
      Warehouse
       improvement
       project                2,981,387.76      806,272.40       1,309,197.95      278,461.63                 -     974,529.32      862,479.40           60.65%       60.65%    Own funds
      New office building
       Project                  627,903.08      188,251.26        439,651.83                  -               -               -     627,903.09          100.00%      100.00%    Own funds
      Supply chain
       extension project     33,412,417.24   12,617,953.89       5,137,275.29    2,606,162.49                 -      124,053.54   15,025,013.15          53.80%       53.80%    Own funds
      Software project       12,949,580.19   12,930,498.53       5,563,292.13       45,432.50                 -   12,904,147.69    5,544,210.47          43.20%       43.20%    Own funds
      Other construction
       projects             206,249,966.06    9,869,638.53         83,546.40                                  -      32,208.83     9,920,976.10            4.84%       4.84%    Own funds


                            256,221,254.33   36,412,614.61      12,532,963.60    2,930,056.62                     14,034,939.38   31,980,582.21                             -               -




                                                                                       183
                                     CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.


                                              Notes to financial statements (Continued)
                                                For the six months ended 30 June 2019


                                      (All amounts in Renminbi “RMB” unless otherwise stated)


V   Notes to the consolidated financial statements (Continued)

15、 Right-of-use assets

                             Items                     Stores           Office building       Warehouse         Others            Total

Original cost

Opening balance                                     1,471,295,979.51        48,588,435.58     239,171,388.66   23,669,356.03   1,782,725,159.78

Increase                                              364,813,035.13        25,970,953.21      33,172,962.78                    423,956,951.12

Closing balance                                     1,836,109,014.64        74,559,388.79     272,344,351.44   23,669,356.03   2,206,682,110.90

Accumulated depreciation

Opening balance                                                    -                      -                -               -                  -

Depreciation                                          261,325,528.91         8,926,444.74      22,855,535.44    2,593,404.18    295,700,913.27

Closing balance                                       261,325,528.91         8,926,444.74      22,855,535.44    2,593,404.18    295,700,913.27

Carrying amount

At end of the period                                1,574,783,485.73        65,632,944.05     249,488,816.00   21,075,951.85   1,910,981,197.63

At beginning of the period                          1,471,295,979.51        48,588,435.58     239,171,388.66   23,669,356.03   1,782,725,159.78

                                                                       74
                                      CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.


                                                      Notes to financial statements (Continued)
                                                       For the six months ended 30 June 2019


                                         (All amounts in Renminbi “RMB” unless otherwise stated)


V   Notes to the consolidated financial statements (Continued)

16. Intangible assets
     2019                            Land use right           Software     Trademarks    Favorable lease    Sales network    Franchise                 Total

     Original cost
     Opening balance                 62,083,143.97      142,108,155.42   65,977,850.00    93,242,000.00    112,117,142.86   710,000.00       476,238,292.25
     Purchase                                    -        3,733,823.60               -                -                 -            -         3,733,823.60
     Transfer from construction in
      progress                                    -      12,904,147.69               -                 -                -                -    12,904,147.69
     Disposal or retirement                       -                  -               -                 -                -                -                -

     Closing balance                 62,083,143.97      158,746,126.71   65,977,850.00    93,242,000.00    112,117,142.86   710,000.00       492,876,263.54

     Accumulated amortization
     Opening balance                 27,889,638.96       68,273,563.72     196,850.16     19,782,823.36     40,692,333.33   710,000.00       157,545,209.53
     Provision                          474,270.36        9,058,311.54              -      2,472,852.94      2,802,928.58            -        14,808,363.42


     Closing balance                 28,363,909.32       77,331,875.26     196,850.16     22,255,676.30     43,495,261.91   710,000.00       172,353,572.95

     Provision for impairment                     -                  -               -                 -                -            -                    -
     Opening balance                              -                  -               -                 -                -            -                    -
     Provision                                    -                  -               -                 -                -            -                    -

     Closing balance                              -                  -               -                 -                -            -                    -

     Carrying amount
                                     33,719,234.65       81,414,251.45   65,780,999.84    70,986,323.70     68,621,880.95            -       320,522,690.59
     At end of the period

     At beginning of the period      34,193,505.01       73,834,591.70   65,780,999.84    73,459,176.64     71,424,809.53            -       318,693,082.72



                                                                           75
                    CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                      Notes to financial statements (Continued)
                                        For the six months ended 30 June 2019

                        (All amounts in Renminbi “RMB” unless otherwise stated)


V   Notes to the consolidated financial statements (Continued)

17. Goodwill

(1) Goodwill cost

     30 June 2019                             Opening balance        Increase     Decrease   Closing balance



     Sinopharm Holding(Jiangmen)
         Medical Co., Ltd. (“Sinopharm
         Jiangmen”)                            27,392,317.73               -            -    27,392,317.73
     Sinopharm Holding Shenzhen
         Y anf eng Co., Ltd. (“Sinopharm
         Y anf eng”)                           16,868,644.87               -            -    16,868,644.87
     Sinopharm Holding Zhaoqing Co., Ltd.
         (“Sinopharm Zhaoqing”)                2,594,341.53               -            -     2,594,341.53
     Sinopharm Holding Shaoguan Co.,
         Ltd. (“Sinopharm Shaoguan”)           1,686,496.80               -            -     1,686,496.80
     Sinopharm Holding Meizhou Co., Ltd.
         (“Sinopharm Meizhou”)                 1,610,819.66               -            -     1,610,819.66
     Sinopharm Holding Huizhou Co., Ltd.
         (“Sinopharm Huizhou”)                   923,184.67               -            -       923,184.67
     Sinopharm Holding Zhanjiang Co.,
         Ltd. (“Sinopharm Zhanjiang”)            282,135.55               -            -       282,135.55
     Sinopharm Holding Dongguan Co.,
         Ltd. (“Sinopharm Dongguan”)               1,499.02               -            -         1,499.02
     South Pharma & Trade                        2,755,680.62               -            -     2,755,680.62
     Foshan Nanhai                              88,877,850.51               -            -    88,877,850.51
     Sinopharm Holding Zhuhai
     Co.,Ltd.(Sinopharm Zhuhai)                  6,772,561.47               -            -     6,772,561.47
     Sinopharm Holding Maoming Co., Ltd.
     (“Sinopharm Maoming”)                        66,417.07               -            -        66,417.07
     Sinopharm Holding Guoda ForMe
         Medicines (Shanghai) Co., Ltd.
         ( “ForMe Medicines”)                  3,033,547.53               -            -     3,033,547.53
     Sinopharm Holding Guoda Henan
         Pharmacy Chain Store Co., Ltd          22,666,179.77               -            -    22,666,179.77
     Sinopharm Holding Guoda Inner
         Mongolia Co., Ltd.                     70,485,777.00               -            -    70,485,777.00
     Sinopharm Hebei Lerentang
         Pharmaceutical Chain Co., Ltd.         29,482,149.57               -            -    29,482,149.57
     Sinopharm Guoda Pharmacy
         Jiangmen Chain Co., Ltd..              77,350,000.00               -            -    77,350,000.00
     Sinopharm Holding Guoda Shanxi
         Y iyuan Chain Co., Ltd.                 9,080,100.00               -            -     9,080,100.00
     Taiy uan Tongxinli Guoda Pharmacy
         Co., Ltd.                               2,818,647.85               -            -     2,818,647.85
     Sinopharm Holding Guoda Shanghai
         Pharmacy Chain Store Co., Ltd.          5,028,638.00               -            -     5,028,638.00
     Sinopharm Holding Guoda Yangzhou
         Dadesheng Pharmacy Chain Store
         Co., Ltd..                              7,979,000.00               -            -     7,979,000.00
     Zhejiang Guoda Pharmacy Co., Ltd.           3,045,183.85               -            -     3,045,183.85
     Shenzhen Guanganli Pharmacy Chain
         Store Co., Ltd. store acquisition.     13,420,000.00               -            -    13,420,000.00
     Taishan Sinopharm Holding Guoda
         Qunkang Pharmacy Chain Co., Ltd.       26,826,120.55               -            -    26,826,120.55
     Fujian Guoda Pharmacy Chain Store
         Co., Ltd.                               1,567,250.76               -            -     1,567,250.76




                                                                76
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                 Notes to financial statements (Continued)
                                   For the six months ended 30 June 2019

                      (All amounts in Renminbi “RMB” unless otherwise stated)


V   Notes to the consolidated financial statements (Continued)

17. Goodwill (Continued)

(1)Goodwill cost (Continued)

    30 June 2019 (Continued)            Opening balance            Increasel   Decrease   Closing balance


    Sinopharm Holding Guoda Shenyang
       Pharmacy Chain Store Co., Ltd.     41,047,958.08                    -          -    41,047,958.08
    Sinopharm Holding Guoda Nanjing
       Pharmacy Chain Store Co., Ltd.     11,598,341.12                    -          -    11,598,341.12
    Sinopharm Holding Guoda Shandong
       Pharmacy Chain Store Co., Ltd.     29,110,409.46                    -          -    29,110,409.46
    Quanzhou Guoda Pharmacy Chain
       Store Co., Ltd.                    41,298,622.59                    -          -    41,298,622.59
    Sinopharm Holding Hunan Guoda
       Minshengtang Pharmacy Chain
       Co., Ltd.                          41,165,574.64                    -          -    41,165,574.64
    Shanxi Guoda Wanmin Pharmacy
       Chain Store Co., Ltd.              65,025,000.00                    -          -    65,025,000.00
    Xiaoy i Guoda Wanmin Baicaotang
       Pharmacy Chain Store Co., Ltd.     15,866,680.00                    -          -    15,866,680.00
    Liy ang Guoda People Pharmacy
       Chain Store Co., Ltd.             107,275,095.74                    -          -   107,275,095.74
    Sinopharm Holding Guoda ForMe
       Pharmacy Chain Store Co., Ltd.     19,405,450.23                    -          -    19,405,450.23
    Beijing Golden Elephant Pharmacy
       Medicine Chain Company Limited     64,140,124.36                    -          -    64,140,124.36
    Sinopharm Holding Guoda
       Bay annaoer Co., Ltd.                          -        13,494,000.00          -    13,494,000.00



                                         858,547,800.60        13,494,000.00          -   872,041,800.60




                                                          77
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                    Notes to financial statements (Continued)
                                     For the six months ended 30 June 2019

                     (All amounts in Renminbi “RMB” unless otherwise stated)


V   Notes to the consolidated financial statements (Continued)

17. Goodwill (Continued)

(2)Provi sion of impairment loss

     Changes in provision for impairment of goodwill are presented as follows:

     2019                                        Opening balance       Increase         Decrease       Closing balance


     Quanzhou Guoda Pharmacy
          Chain Store Co., Ltd.                   25,000,000.00               -                  -     25,000,000.00

The method of goodwill impairment testing process, parameter and recognition of impairment loss:
The recoverable amount of an asset group or a group of asset groups is determined on a financial
budget approved by management covering a five-year period. The cash flows beyond the five -year
period are extrapolated using the inflation rate.

The recoverable amount of the asset group and asset group combination is calculated using the cash
flow forecasting method based on the five-year budget approved by the management. Management
determines the budgetary gross margin based on historical experience and forecasts of market
development, and uses a pre-tax rate that reflects the specific risk of the relevant asset group and asset
group combination as the discount rate. The above assumptions are used to analyze the recoverable
amount of each asset group and asset group combination within the business segment.

18. Long-term prepaid expense s

     2019                            Opening balance       Additions     Amortization Other decrease    Closing balance

    Fixed asset improvement
      expenditure                     249,458,261.87   47,060,353.55    42,594,066.57   1,166,437.43    252,758,111.42
    Acquisition expenditure to
      obtain the right to operate      57,617,166.63    3,971,737.95     7,010,668.66              -     54,578,235.92
    Others                              4,253,277.96      760,218.61     1,002,537.39      35,524.55      3,975,434.63

                                      311,328,706.46   51,792,310.11    50,607,272.62   1,201,961.98    311,311,781.97




                                                          78
                   CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                 Notes to financial statements (Continued)
                                   For the six months ended 30 June 2019

                       (All amounts in Renminbi “RMB” unless otherwise stated)


V     Notes to the consolidated financial statements (Continued)

19. Deferred tax assets/liabilities

(a)   Deferred tax assets before offseting

                                             30 June 2019                                1 January 2019
                               Deductible temporary       Deferred tax          Deductible temporary       Deferred tax
                                         differences            assets                    differences            assets

      Provision for
       impairment of assets          79,547,128.04       18,378,950.01                68,153,222.07       15,676,020.10
      Deductible tax loss            34,968,710.28        8,677,091.14                77,791,621.20       19,311,837.06
      Deferred Income                25,565,030.92        6,387,445.17                30,188,142.13        7,547,758.26
      Accrued payroll                13,435,720.26        2,963,493.05                64,598,625.74       15,656,015.32
      Accrued expenses              132,416,395.94       32,742,594.34                94,108,769.33       22,301,617.95
      Others                         30,339,847.94        7,164,541.66                 6,238,492.18        1,467,765.00

                                    316,272,833.38       76,314,115.37              341,078,872.65        81,961,013.69

(b)   Deferred tax liabilities before offseting
                                            30 June 2019                                 1 January 2019
                                 Taxable temporary      Deferred tax              Taxable temporary        Deferred tax
                                        differences         liabilities                  differences           liabilities

      Fair value adjustment
       for business
       combination not
       involving enterprises
       under common
       control                      221,963,869.66       55,490,967.41               227,900,345.39       56,975,086.34
      Changes in fair value          87,167,599.53       21,791,899.72                75,366,942.99       17,676,879.28

                                    309,131,469.19       77,282,867.13               303,267,288.38       74,651,965.62


(c)     Deferred tax assets and liabilities are presented after being offset against each other:
                                               30 June 2019                               1 January 2019
                                      Deferred tax          Temporary           Deferred tax             Temporary
                                  assets/liabilities -      differences     assets/liabilities -         differences
                                                  Net       after set-off                   Net          after set-off

        Deferred tax assets        10,896,608.36          65,417,507.01        7,046, 803.74          74,914,209.95

        Deferred tax
        liabilities                10,896,608.36          66,386,258.77        7,046, 803.74          67,605,161.88




                                                              79
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                 Notes to financial statements (Continued)
                                   For the six months ended 30 June 2019

                      (All amounts in Renminbi “RMB” unless otherwise stated)


V     Notes to the consolidated financial statements (Continued)

19. Deferred tax assets/liabilities (Continued)


(d)    The deductible temporary differences and deductible losses that were not recognized as
       deferred tax assets are pres ented as follows:

                                                               30 June 2019                   1 January 2019

       Deductible temporary differences                           932,951.17                    1,480,000.00
       Deductible loss (Note)                                  30,894,876.42                   29,391,422.33

                                                               31,827,827.59                   30,871,422.33




      The aforesaid unrecognized deductible losses will due:

                                                            30 June 2019                    1 January 2019

      2019                                                   6,106,580.00                     2,864,062.85
      2020                                                   1,636,825.76                     4,725,707.87
      2021                                                   8,256,680.69                     2,563,056.08
      2022                                                   8,358,197.50                     7,261,117.97
      2023                                                   6,536,592.47                    11,977,477.56

                                                           30,894,876.42                     29,391,422.33



 (Note) As some subsidiaries are still at a loss and it’s uncertain that those subsidiaries can obtain
enough taxable income to offset against the loss in the future. So the Group do not recognise
deferred tax assets which came from the deductible loss of RMB 30,894,876.42 .




                                                     80
                    CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                Notes to financial statements (Continued)
                                  For the six months ended 30 June 2019

                        (All amounts in Renminbi “RMB” unless otherwise stated)


V    Notes to the consolidated financial statements (Continued)

20. Other non-current a ssets

                                                           30 June 2019                                1 January 2019

                                  Carrying                      Carrying          Carrying                      Carrying
                                   balance   Impair ment         amount            balance   Impair ment         amount
    Physical assets
    reserve specif ically
    authorized               44,621,093.48             -   44,621,093.48     47,576,273.75             -   47,576,273.75
    Prepayment for
    project and
    equipment                22,323,493.28             -   22,323,493.28     10,592,645.36             -   10,592,645.36

                             66,944,586.76             -   66,944,586.76     58,168,919.11             -   58,168,919.11



21. Short-term borrowings

                                                                           30 June 2019          1 January 2019

      Credit borrowings                                             3,079, 560,758.24        2,427, 639,275.32
      Discounted notes                                                211,316,836.99           170,013,427.11

                                                                    3,290, 877,595.23        2,597, 652,702.43

      As at 30 June 2019, the annual int erest rate for the above borrowings was 4.55% (31
      December 2018: 4.65% ).

      On June 30, 2019 and December 31 2018, the Group had no short -term loan that were due but
      not yet repaid.




                                                           81
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                               Notes to financial statements (Continued)
                                For the six months ended 30 June 2019

                   (All amounts in Renminbi “RMB” unless otherwise stated)


V    Notes to the consolidated financial statements (Continued)

22. Note s payable

                                                            30 June 2019             1 January 2019

     Commercial accept ance notes                           23,896,465.30              13,843,479.73
     Bank acceptance notes                               3,515, 198,797.04          3,402, 912,202.07

                                                         3,539, 095,262.34          3,416, 755,681.80

     At 30 June 2019,balance of not es payable at maturity was RMB 0.00. (31 December 2018:RMB
     0.00).

23. Accounts payable

                                                            30 June 2019             1 January 2019

     Trade payables                                      8,088, 697,602.94          6,468, 535,961.17

     At 30 June 2019, the total amount of accounts payable aged over one year was
     RMB496,134,298.59(31 December 2018: RMB 467,525,486.03 ).

24. Contract liabilities

                                                            30 June 2019             1 January 2019

    Ad vances from customers                                            -                          -
    Contract liabilities                                  239,739,020.90             255,590,612.37

                                                          239,739,020.90             255,590,612.37




                                                  82
                    CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                   Notes to financial statements (Continued)
                                      For the six months ended 30 June 2019

                         (All amounts in Renminbi “RMB” unless otherwise stated)


V     Notes to the consolidated financial statements (Continued)

25. Employee benefits payable
       2019                               At beginning of the year                Increase           Decrease    At end of the year


       Short-term employee benefits (a)           226,152,409.27           927,118,638.71     1,001,730,616.89     151,540,431.09
       Post-employment benefits
        (defined contribution plan)(b)              5,248,146.99             93,025,372.36       88,529,751.61       9,743,767.74
       Termination benefits (c)                       465,851.14               841,185.81           872,153.00         434,883.95


                                                  231,866,407.40          1,020,985,196.88    1,091,132,521.50     161,719,082.78


(a)    Short-term employee benefits

                                           At beginning of
       2019                                           year                     Increase            Decrease          At end of year

      Salaries, bonuses, allowances
        and grants                         210,723,820.21             810,503,119.74          884,415,868.48       136,811,071.47
      Staff welf are                         1,750,750.89              23,556,598.47           24,295,552.24         1,011,797.12
      Social security contribution           1,622,271.12              47,247,265.73           46,045,452.79         2,824,084.06
      Incl: Medical insurance                1,362,150.59              42,318,821.55           41,333,544.10         2,347,428.04
              Work injury insurance             30,755.69               1,427,211.06            1,394,836.56            63,130.19
              Maternity insurance              229,364.84               3,501,233.12            3,317,072.13           413,525.83
      Housing funds                          1,063,993.02              30,889,248.28           30,946,436.95         1,006,804.35
      Labor union funds and
         employee education funds             9,956,772.12                13,593,217.16        15,024,466.50          8,525,522.78
      Other short-term benefits               1,034,801.91                 1,329,189.33         1,002,839.93          1,361,151.31

      Total                                226,152,409.27             927,118,638.71         1,001,730,616.89      151,540,431.09


(b)    Defined contribution plan


       2019                       At beginning of year                      Increase              Decrease           At end of year

       Basic pension
         insurance                        1,755,160.16               88,463,119.33            86,167,938.13           4,050,341.36
       Unemployment
         insurance                         122,350.65                 2,587,235.09             2,359,308.38             350,277.36
       Contribution to
         pension fund                     3,370,636.18                1,975,017.94                 2,505.10           5,343,149.02

                                          5,248,146.99               93,025,372.36            88,529,751.61           9,743,767.74


Note:For the half year of 2019, the Group provided other termination benefits for severing labor
relations of RMB153,286.50. For the half year of 2018, the Group provided other termination benefits
for severing labor relations of RMB 69,075.00.




                                                                     83
                     CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                     Notes to financial statements (Continued)
                                       For the six months ended 30 June 2019

                        (All amounts in Renminbi “RMB” unless otherwise stated)


V     Notes to the consolidated financial statements (Continued)

    26. Tax payable

                                                                30 June 2019          1 January 2019


      Value-added tax                                           61,484,212.40           90,356,534.09
      Corporate Income taxes                                   121,174,058.74          115,226,820.39
      Individual income tax payable                              4,518,825.00            3,954,139.24
      City maintenance and construction surtax                   4,994,194.58            6,854,426.95
      Educational surcharge payable                              3,593,664.02            4,937,147.17
      Water conservancy fund payable                             5,523,161.32            5,421,280.43
      Stamp duty                                                 4,098,721.21            5,854,355.91
      Property tax                                               1,407,180.81            1,123,276.37
      Land use tax payable                                         241,952.24              209,179.29
      Others                                                     8,543,031.51            8,043,252.88

                                                               215,579,001.83          241,980,412.72


    27. Other payables

                                                                30 June 2019         1 January 2019

      Interest payable                                          29,012,444.93          21,906,660.63
      Dividend payable                                           6,389,320.96           6,389,320.96
      Other payables                                         1,439,124,932.54       1,511,140,990.34

                                                             1,474,526,698.43       1,539,436,971.93


( 1) Interest payable

                                                                 30 June 2019         1 January 2019

    Long-term loans’ (With periodic payments of
      principal and interest charges) interest                       35,440.21              38,984.25
    Interest on short-term borrowings                            10,692,042.51          10,973,397.39
    Trade receiv ables’ factoring interest                      18,284,962.21          10,894,278.99

                                                                 29,012,444.93          21,906,660.63




                                                        84
                    CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                   Notes to financial statements (Continued)
                                     For the six months ended 30 June 2019

                       (All amounts in Renminbi “RMB” unless otherwise stated)


V     Notes to the consolidated financial statements (Continued)

    27. Other payables (Continued)

( 2) Dividend payable

                                                                 30 June 2019                    1 January 2019


      Shanghai Fosun Pharmaceutical (Group) Co., Ltd.             4,835,511.58                      4,835,511.58
      Zhenfang Zhang                                              1,389,639.31                      1,389,639.31
      Meiluo Pharmaceutical Co., Ltd.                               164,170.07                        164,170.07

                                                                  6,389,320.96                      6,389,320.96


As at 30 June 2019, the Group had no significant dividend aged more than one year and not yet paid
(31 December 2018: nil).

( 3) Other payables

                                                                    30 June 2019                 1 January 2019
      Payables for factoring programs                             550,002,940.12                  724,272,060.30
      Deposit                                                     389,299,163.12                  334,821,325.72
      Accrued selling and distribution expenses                   174,163,680.40                  131,493,977.43
      Payables arising from acquis ition of subsidiaries            77,082,980.00                  78,702,980.00
      Payables for construction in progress and
           equipment                                                58,230,154.88                  79,380,923.99
      Payables for rentals                                          40,290,060.94                  29,298,835.46
      Payables to individuals                                       28,207,673.38                  22,730,210.22
      Temparary loan                                                15,800,000.00                  15,800,000.00
      Payables to related parties                                   15,581,702.81                   5,436,532.76
      Payables for land transfer payments                           12,597,500.00                  18,071,000.00
      Equity subscription                                           10,000,000.00                  10,000,000.00
      Collection of others                                           9,067,830.66                   7,525,379.59
      Others                                                        58,801,246.23                  53,607,764.87

                                                                 1,439,124,932.54               1,511,140,990.34


      At 30 June 2019, significant other payables over 1 year are:

                                                           Amount payable               Reason for outstanding

      Non-controlling interests in South
        Pharmaceutial Foreign Trade Fu Yuequn
        and other 11 natural persons                        54,722,980.00           Payment conditions not met
      Shenzhen No.1 Construction Engineering
        Co., Ltd.                                            8,605,625.20           Payment conditions not met
      Liuzhou Shengli Pharmacy                               5,986,288.12           Payment conditions not met

                                                            69,314,893.32




V     Notes to the consolidated financial statements (Continued)
                                                 85
                   CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                 Notes to financial statements (Continued)
                                      For the six months ended 30 June 2019

                       (All amounts in Renminbi “RMB” unless otherwise stated)


 27. Other payables (Continued)

The amount arising from the acquisition of subsidiaries is mainly for the shares acquisition of minorities
of South Pharmaceutial Foreign Trade .
At 30 June 2019, other payables due within 1 year amounting to RMB 137,518,449.47(31 December
2018: RMB 136,286,760.04 ) are mainly consisted of construction cost payable, company borrowings
payable, deposits and etc.

 28. Non-current liabilities due within 1 year

                                                              30 June 2019                   1 January 2019

        Long-term borrowings due within 1 year               31,600,000.00                                -
        Lease liabilities due within 1 year                 526,696,784.75                   495,132,751.96

                                                            558,296,784.75                   495,132,751.96


 29. Other current liabilities

                                                              30 June 2019                   1 January 2019


        Output VAT to be recognized                             445,493.48                       292,465.75


 30. Long-term borrowings

                                                              30 June 2019                    1 January 2019

       Credit borrowings (a)                                             -                    31,600,000.00

                                                                         -                    31,600,000.00


(a)     At 30 June 2019, the Group has no entrusted borrowings(31 December 2018:
        RMB31, 600, 000. 00). The Group's long-term borrowings are loans lent by the China National
        Pharmaceutical Group Corporation. The borrowings due within one year have been reclassified to
        non-current liabilities due within one year.

        At 30 June 2019, the annual interest rate of above -mentioned borrowings was 4.04% (31
        December 2018: 4.04% ).


 31. Lease liabilities

                                                                  30 June 2019                1 January 2019

      lease payables                                          1,713,157,908.71               1,599,733,049.76
      Less: : lease payables due within 1                    (526,696,784.75)               (495,132,751.96)
      year

                                                              1,186,461,123.96               1,104,600,297.80



                                                       86
                   CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                  Notes to financial statements (Continued)
                                      For the six months ended 30 June 2019

                      (All amounts in Renminbi “RMB” unless otherwise stated)

V     Notes to the consolidated financial statements (Continued)

    32. Long-term payables

                                                                       30 June 2019                      1 January 2019

      Payable for specific projects                                      800,000.00                          800,000.00


        Payable for specific projects


                                      At beginning of                                                      Reasons of
                                                 year    Increase            Decrease     At end of year derred income


       Special funds granted by                                                                          Granted by the
                                         800,000.00             -                     -     800,000.00      government
         government


    33. Long-term employee benefits payable

                                                                      30 June 2019                       1 January 2019


      Early retirement benefits payable                             1,915, 000.00                     2,050, 000.00




                                                        87
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                 Notes to financial statements (Continued)
                                   For the six months ended 30 June 2019

                      (All amounts in Renminbi “RMB” unless otherwise stated)


V   Notes to the consolidated financial statements (Continued)

34. Deferred income

                                                                                                           Reasons of derred
     2019                Opening balance               Increase             Decrease     Closing balance             income



     Government
     grants                 91,491,170.40            79,184.44           2,847,536.66      88,722,818.18   Government grants

                            91,491,170.40            79,184.44           2,847,536.66      88,722,818.18


     As at 30 June 2019, deferred income from government grants are as follow:

     Government grants               Opening     Addition in Amount included          Amount Closing balance Asset related/
      program                         balance     the year in non-operating       included in                income related
                                                               income in the    other income
                                                                         year      in the year
     Resettlement
      Compensation (i)           75,555,441.17           -      1,349,204.28               -   74,206,236.89   Asset related
     Guangxi Logistics Project    6,453,426.58           -                  -    230,346.06     6,223,080.52   Asset related
     Guangzhou Logistics
      standardization project     2,815,012.55           -                  -    273,123.42     2,541,889.13   Asset related
     A comprehensive
      experimental modern
      service industry
      subsidies                   1,500,000.00           -                  -    150,000.00     1,350,000.00   Asset related
     Shared Logistics Center       252,058.35            -                  -       9,400.20     242,658.15    Asset related
                                                                                                               Asset/Income
     Other projects               4,915,231.75   79,184.44                       835,462.70     4,158,953.49          related

                                 91,491,170.40   79,184.44      1,349,204.28     1498332.38    88,722,818.18


Due to the implementation of urban planning for old town reconstruction in Nanning, the operating center of
Guangxi Logistics which was located in Longteng Road District, Nanning City, was to be reconstructed in
another place. According to the agreement signed between Guangxi Logistics and the real estate developer,
Guangxi Logistics would obt ain a compensation of RMB120,250,000.00, including cash of RMB50,000,000.00
and property in constructing equaling a value of RMB70,250, 000. 00. Cas h compensation of RMB
50,000,000.00 was received in May 2012. In year 2015, construction properties with a value of
RMB70, 250, 000. 00 were built and delivered, and had been recognized as investment properties (Note V (12)).
The compensation relating the capital expenditure in the reconstruction of the new logistic center in
another place, amounting to RMB93.32 million was recognized as deferred revenue,and would be
amortized and recognized in the income statement within the expected useful lives using the straig ht
line method (Note V(50)), and the other cash compensation.




                                                             88
                      CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                       Notes to financial statements (Continued)
                                           For the six months ended 30 June 2019

                          (All amounts in Renminbi “RMB” unless otherwise stated)


V     Notes to the consolidated financial statements (Continued)

    35. Other non-current liabilities

                                                                              30 June 2019                     1 January 2019


       Contract liabilities                                                      53,375.33                                  -
       Governmental medical reserve funds                                    45,427,343.31                      45,427,343.31
       Product  promotion      accumulative      points                      22,359,977.45                      23,813,832.87
       programme

                                                                             67,840,696.09                      69,241,176.18

        Cert ain medical reserves funds were received by the Group from the PRC government and local
        government for purchasing medical products (including medicines) required to respond to serious
        disasters, epidemics and other emergencies.

    36. Share capital

                                                               Movement during the current year
      2019          At beginning of year        Issue of new share                 Others              Total       At end of year

      Shares                  428,126,983.00                                                                     428,126,983.00



    37. Capital surplus




        2019                                    At beginning of year           Increase           Decrease         At end of year


        Share premium                              2,118,174,787.27                    -                 -      2,118,174,787.27
        Significant reorganization                 1,173,907,763.19                    -                 -      1,173,907,763.19
        Other changes in equity of invested
        units under equity method
                                                    (94,032,514.34)       42,424,747.00                  -       (51,607,767.34)
        Transfer of capital surplus
        recognized under the previous
        accounting system                              2,650,322.00                    -                 -          2,650,322.00
        Business combination involving
        enterprises under common control                           -                   -                 -                      -

        Others                                     1,120,284,623.39                    -                 -      1,120,284,623.39


                                                   4,320,984,981.51       42,424,747.00                  -      4,363,409,728.51


Capit al surplus-others increased by RMB 42,424,747.00 when other changes in equity of Modern
Pharmaceutical resulted in adjustment of long -term equity investment and an inc reas e of capital
surplus by RMB 42, 424, 747.00 .



                                                                   89
                    CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                   Notes to financial statements (Continued)
                                      For the six months ended 30 June 2019

                        (All amounts in Renminbi “RMB” unless otherwise stated)


V     Notes to the consolidated financial statements (Continued)

    38. Surplus re serve

                                              At beginning of year              Increase               Decrease          At end of year

        Surplus reserve                               214,063,491.50                   -                      -         214,063,491.50

                                                      214,063,491.50                   -                      -         214,063,491.50


    39. Retained earnings

                                                                                    30 June 2019                     1 January 2019


     Retained earnings at the end of the prior year                              6,655,257,147.27                    5,572,952,806.39
     Retained earnings at beginning of year after
        retrospective adjustment and restatement                                 6,655,257,147.27                    5,572,952,806.39
     Add: Net profit attributable to the parent                                   650,833,360.40                     1,210,742,435.78
     Cash dividends payable for ordinary shares                                   171,250,793.20                       128,438,094.90
     Others -Business combination involving enterprises under
     common control                                                                                -                                  -

     Retained earnings at end of year                                            7,134,839,714.47                    6,655,257,147.27


    40. Operating revenue and cost


                                                For the six months ended                               For the six months ended
                                                            30 June 2019                                            30 June 2018
                                         Revenue                     Cost                       Revenue                      Cost
       Principal
       operations              25,040,619,938.98            22,398,327,532.43        20,606,027,974.57            18,355,002,752.42
       Other
       operations                  187,527,438.45               17,192,420.44              172,397,627.65            12,640,971.42

                               25,228,147,377.43            22,415,519,952.87        20,778,425,602.22            18,367,643,723.84




                                                                  90
                    CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                    Notes to financial statements (Continued)
                                        For the six months ended 30 June 2019

                           (All amounts in Renminbi “RMB” unless otherwise stated)


V     Notes to the consolidated financial statements (Continued)

    40. Operating revenue and cost (Continued)


      Classification                                                                             Inter-segment
                              Headquarters           Distribution             Retail                                        Total
                                                                                                     offsets
      By product
      Include:
      Medicines                     -             17,951,760,565.22      5,957,083,892.95       (361,359,523.83)       23,547,484,934.34
      Medical appliance                       -    1,345,459,501.68                         -                      -    1,345,459,501.68
      Other                      4,747,314.83        179,640,288.21        150,815,338.37                          -     335,202,941.41


      By area
      Include:
      Domestic sales           4,747,314.83       19,476,860,355.11      6,107,899,231.32       (361,359,523.83)       25,228,147,377.43
      Overseas sales                -                     -                     -                      -                       -


      By contract
      duration
      Include:
      Confirm revenue
      at a certain point
      in time                       -             19,297,220,066.90      5,957,083,892.95       (361,359,523.83)       24,892,944,436.02
      Confirm revenue
      at a certain time
      period                   4,747,314.83        179,640,288.21        150,815,338.37                -                335,202,941.41


      Total                    4,747,314.83       19,476,860,355.11      6,107,899,231.32       (361,359,523.83)       25,228,147,377.43




      Information about the Group’s obligations is as follows:
        The Group recognises revenue when goods are delivered, and will receive payment within 30-210 days.
        The Group recognises revenue after providing services, and will receive payment within 30 -210 days.
        The expected revenue recognition time for the Group’s contract obligations above is in year 2019.
        Information related to the sales price allocated to the remaining obligations:
        The amount of income corresponding to the obligation that has been signed but has not been fulfilled or has
        not yet fulfilled is 239,739,020.90 yuan, of which 239,739,020.90 yuan is expected to be recognized in 2019.




                                                                    91
              CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                         Notes to financial statements (Continued)
                           For the six months ended 30 June 2019

                (All amounts in Renminbi “RMB” unless otherwise stated)


V   Notes to the consolidated financial statements (Continued)

41. Tax and surcharges

                                               For the six month ended   For the six month ended
                                                          30 June 2019              30 June 2018

    City maintenance and construction tax             24,015,771.70              22,352,680.77
    Educational surcharge                             17,051,137.40              16,112,625.97
    Property tax                                       3,182, 784.83              3,075, 856.41
    Land tax                                             310,374.16                 245,070.74
    Vehicle and vessel use tax                            71,880.95                  98,966.20
    Stamp duty                                        17,406,047.59              14,200,426.96
    Others                                               101,229.81                 534,900.20

                                                      62,139,226.44              56,620,527.25

42. Selling expenses

                                               For the six month ended   For the six month ended
                                                          30 June 2019              30 June 2018

    Employees payroll and welfare benefits           751,390,265.97            659,176,548.69
    Rent al expenses                                  85,603,520.94            322,805,173.33
    Trans port ation charges                          42,481,965.66             33,086,676.72
    Depreciation expenses                            313,982,576.03             26,125,384.59
    Promotion and mark eting expenses                 21,130,375.63             18,454,328.54
    Office allowances                                 19,914,617.62             16,283,197.98
    Entertainment expenses                            11,670,679.46             11,357,532.12
    Storage expenses                                  15,216,365.97             14,866,861.14
    Travel allowances                                  3,017, 736.94             3,415, 890.36
    Market development fees                            3,713, 897.19             3,255, 084.76
    Conference expenses                                1,196, 924.88             1,654, 991.62
    Others                                           214,013,574.44            163,107,086.22

                                                   1,483, 332,500.73         1,273, 588,756.07




                                              92
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                             Notes to financial statements (Continued)
                              For the six months ended 30 June 2019

                   (All amounts in Renminbi “RMB” unless otherwise stated)


V    Notes to the consolidated financial statements (Continued)


43. Admini strative expenses

                                                         For the six month ended   For the six month ended
                                                                    30 June 2019              30 June 2018

    Employees payroll and welfare benefits                     265,705,706.25           248,803,724.84
    Rent al expenses                                             9,155, 207.14           18,347,245.83
    Depreciation expenses                                       16,813,385.90            12,732,380.45
    Office allowances                                           11,183,599.31            11,877,499.56
    Amortization of intangible assets                            9,779, 109.11            8,272, 613.85
    Entertainment expenses                                       5,822, 240.83            6,428, 775.38
    Amortization of long-term deferred expens es                 5,532, 926.20            4,518, 905.10
    Vehicle management expenses                                  3,630, 572.81            4,435, 451.82
    Travel allowances                                            3,801, 532.99            4,323, 679.13
    Utilities                                                    3,094, 494.34            2,713, 666.76
    Taxations                                                    1,847, 691.62            2,241, 415.79
    Conference expenses                                          2,586, 044.56            2,059, 875.35
    Repairing fees                                               2,507, 057.40            1,624, 550.73
    Others                                                      35,757,125.67            23,440,279.19

                                                               377,216,694.13           351,820,063.78

44. Finance costs

                                                         For the six month ended   For the six month ended
                                                                    30 June 2019              30 June 2018

     Interest expenses                                        169,529,472.37             83,356,367.18
     Less: Interest income                                    (60,630,036.91)          (23,082,233.56)
           Cash discount                                      (23,190,566.63)          (21,542,580.44)
     Exchanges loss/(gain)                                       (389,882.62)               329,665.40
     Others                                                     18,776,268.03            18,480,325.74

                                                              104,095,254.24             57,541,544.32


45. Other incomes


                                                         For the six month ended   For the six month ended
                                                                    30 June 2019              30 June 2018


    Government grants relat ed to daily operating
    activities                                                 14,974,471.87             10,589,212.57
    Taxation service charge refund                                 16,447.15                741,097.45

                                                               14,990,919.02             11,330,310.02


                                                    93
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                              Notes to financial statements (Continued)
                                For the six months ended 30 June 2019

                   (All amounts in Renminbi “RMB” unless otherwise stated)


V    Notes to the consolidated financial statements (Continued)

46. Investment income

                                                             For the six month ended   For the six month ended
                                                                        30 June 2019              30 June 2018

     Investment income from long-term equity investments
       under the equity method                                      169,142,289.99           162,662,271.35
    Dividend income from other equity instruments invested
      during the holding period                                                    -               31,500.00

                                                                    169,142,289.99           162,693,771.35

47. Impairment loss on financial assets

                                                             For the six month ended   For the six month ended
                                                                        30 June 2019              30 June 2018

     Impairment loss of trade receivables                           (1,666,431.98)            (1,172,127.53)
                                                                    (9,767,669.15)              2,198,829.77
     Impairment loss of other receivables

                                                                   (11,434,101.13)              1,026,702.24

48. Impairment losse s

                                                             For the six month ended   For the six month ended
                                                                        30 June 2019              30 June 2018

     Inventory provision                                              (125,554.34)              (508,849.26)

                                                                      (125,554.34)              (508,849.26)

49. Gain on disposal of a ssets

                                                             For the six month ended   For the six month ended
                                                                        30 June 2019              30 June 2018

    Gain on disposal of fixed assets                                   (29,725.44)              389,144.70
    Gain on disposal of intangible assets                                        -            3,892, 019.91

                                                                       (29,725.44)            4,281, 164.61




                                                      94
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                 Notes to financial statements (Continued)
                                   For the six months ended 30 June 2019

                       (All amounts in Renminbi “RMB” unless otherwise stated)


V     Notes to the consolidated financial statements (Continued)

    50. Non-operating income

                                                           For the six month            For the six month       Amount classif ied as
                                                                       ended                        ended      non-recurring profit or
                                                               30 June 2019                 30 June 2018                         loss

    Government grants                                        1,349,204.28                  1,349,204.28                1,349,204.28
    Gain from writing off the unnecessary
    payment                                                    306,191.87                  2,898,512.62                  306,191.87
    Gain on disposal of non-current assets                     195,336.00                      2,303.00                  195,336.00
    Others                                                   1,816,438.10                  1,248,931.21                1,816,438.10

                                                             3,667,170.25                  5,498,951.11                3,667,170.25

       Government grants included in current period profit or loss:
Project Name    Government      Reasons for   Type                   Affects the Special For the six     For the six    Related to
                Department      Government                           profit or    subsidy months         months         asset/income
                                grants                               loss of this         ended          ended
                                                                                          30 June 2019   30 June
                                                                     year                                2018
Resettlement    Nanning         Subsidy       Subsidies from         Yes        No       1,349,204.28 1,349,204.28 Asset related
Compensation Economic &                       local government
of No. 7        Technological                 for support policies
Zhongyao        Development                   such as attracting
Road            Area                          investment
                Management
                Committee


All non-operating income was wholly classified as non -recurring profit or loss for the six month ended

    51. Non-operating expenses

                                          For the six month ended                      For the six month ended               Amount
                                                     30 June 2019                                 30 June 2018          classified as
                                                                                                                       non-recurring
                                                                                                                        profit or loss

    Donation expenses                                            -                                  60,000.00                     -
    Penalty expenses                                    273,498.60                               1,194,388.28            273,498.60
    Loss on disposal of a non-
    current asset                                       161,292.34                                  28,525.01            161,292.34
    Others                                            1,283,474.62                                 514,379.51          1,283,474.62

                                                      1,718,265.56                               1,797,292.80          1,718,265.56




                                                               95
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                              Notes to financial statements (Continued)
                                For the six months ended 30 June 2019

                      (All amounts in Renminbi “RMB” unless otherwise stated)


V     Notes to the consolidated financial statements (Continued)

    52. Income taxes

                                                             For the six month ended   For the six month ended
                                                                        30 June 2019              30 June 2018

       Current income tax                                            183,966,126.67            163,102,979.73
       Deferred income tax                                             8,277,799.83              1,383,754.59

                                                                     192,243,926.50            164,486,734.32




       The reconciliation from income tax calculated based on applicable tax rates and total profit
       presented in the consolidated financial statements to the income taxes is listed below:

                                                                                       For the six month ended
                                                                                                  30 June 2019

       Total profit                                                                        960,336,481.81

       Income taxes calculated at applicable tax rates                                     240,084,120.45
       Lower tax rates enacted by local authorities                                        (13,265,455.52)
       Adjustment of income tax e xpense of previous years                                   (4,574,884.17)
       Income not subject to tax                                                           (47,995,671.32)
       Expenses not deductible for tax                                                       17,747,992.12
       Deductible loss on unconfirmed deferred tax assets at end of the
         period                                                                                  493,231.44
       Impact of the temporary discrepancy on unconfirmed deductible
         deferred tax assets at end of the period                                             (255,667.65)
       Impact of the temporary discrepancy on unconfirmed deductible
         deferred tax assets of the pervious year                                                 10,261.15

       Income tax                                                                          192,243,926.50




                                                        96
                    CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                   Notes to financial statements (Continued)
                                    For the six months ended 30 June 2019

                      (All amounts in Renminbi “RMB” unless otherwise stated)


V     Notes to the consolidated financial statements (Continued)

    53. Note s to items in the cash flow statement

    (a)    Cash receipts related to other operating activities

                                                            For the six months ended   For the six months ended
                                                                        30 June 2019                30 June 2018

           Government grants except tax return                       16,340,011.49              10,345,223.64
           Rent income                                               37,910,253.81              37,793,728.50
           Received operational restricted bank deposits            123,321,063.70              88,156,799.79
           Interest income                                           60,227,651.15              22,642,258.30
           Others                                                    57,683,231.05             153,046,777.37

                                                                    295,482,211.20             311,984,787.60

     (b)   Cash paid relating to other operating activities

                                                            For the six months ended   For the six months ended
                                                                        30 June 2019                30 June 2018

           Rental expenses                                          94,758,728.08              341,152,419.16
           Entertainment expenses                                   17,492,920.29               17,786,307.50
           Trans port ation charges                                 42,481,965.66               33,086,676.72
           Travel expenses                                           6,819,269.93                7,739,569.49
           Storage expenses                                         15,216,365.97               14,866,861.14
           Office expenses                                          31,098,216.93               28,160,697.54
           Ad vertising expenses                                    21,130,375.63               18,454,328.54
           Others                                                  265,893,688.82              377,222,116.67

                                                                   494,891,531.31              838,468,976.76


     (c)   Cash received relating to other investing activities

                                                           For the six months ended    For the six months ended
                                                                       30 June 2019                 30 June 2018

           Received entrusted loan payments                                                     44,000,000.00
           Received funds of acquiring Sinopharm
                                                                                                 4,680,000.00
           Huadu
           Others                                                                                    86,145.15

                                                                                   -            48,766,145.15




                                                           97
                     CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                  Notes to financial statements (Continued)
                                    For the six months ended 30 June 2019

                        (All amounts in Renminbi “RMB” unless otherwise stated)


V         Notes to the consolidated financial statements (Continued)

    53. Note s to items in ca sh flow statement (Continued)

            Cash paid relating to ot her investing
(d)
            activities

                                                          For the six months ended    For the six months ended
                                                                      30 June 2019                 30 June 2018

            Entrusted borrowings paid to Zhijun Suzhou                          -              43,999,800.00
            Others                                                   1,093,125.00                          -

                                                                     1,093,125.00              43,999,800.00


           Cash received relating          to    other
    (e)
           financing activities

                                                         For the six months ended    For the six months ended
                                                                     30 June 2019                 30 June 2018

           Financing restricted monetary funds                     3,512,659.71               79,825,164.60
           received
           Others                                                               -              3,920,000.00

                                                                   3,512,659.71               83,745,164.60

           Cash payments relating          to   other
    (f)
           financing activities

                                                         For the six months ended    For the six months ended
                                                                     30 June 2019                 30 June 2018

           Bank factoring payable                               174,269,120.18                64,002,739.23
           Lease payment                                        299,173,550.25                            -
           Purchase of equity of minority shareholders                       -                54,722,980.00
           Others                                                36,719,497.31                            -

                                                                510,162,167.74               118,725,719.23




                                                          98
                    CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                               Notes to financial statements (Continued)
                                 For the six months ended 30 June 2019

                     (All amounts in Renminbi “RMB” unless otherwise stated)


 V    Notes to the consolidated financial statements (Continued)

 54. Supplementary information of cash flow statement

(a)    Reconciliation of net profit to cash flows from operating activities

                                                                 For the six month ended   For the six month ended
                                                                            30 June 2019              30 June 2018


       Net profit                                                      768,092,555.31            689,249,009.91
       Adjustments: Provision for asset impairment                       11,559,655.47              (506,814.18)
               Depreciation of fixed assets and investment
                properties                                               48,917,181.72             38,366,126.42
               Amortization of intangible assets                         14,808,363.43             11,832,914.62
               Amortization of long-term prepaid expenses                50,607,272.62             41,638,297.62
               Gains on disposal of fixed assets, and other
                non-current assets                                            131,566.90          (4,254,942.60)
               Finance costs                                           159,266,607.86              82,449,854.36
               Investment income                                      (169,142,289.99)          (162,693,771.35)
               Increase in deferred tax assets                            5,674,224.55              3,402,744.73
               (Increase)/decrease in deferred tax liabilities            2,603,575.28            (2,018,990.14)
               (Increase)/decrease in inventories                     (492,796,771.41)          (463,324,117.97)
               Increase in operating receivables items              (1,983,255,213.04)        (1,298,602,834.11)
               (Decrease)/increase    in operating payable
               items                                                 2,463,112,034.51          1,170,553,090.12
               Others                                                  284,178,818.14            119,267,141.77


       Net cash generated from operating activities                  1,163,757,581.35            225,357,709.20




                                                           99
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                               Notes to financial statements (Continued)
                                 For the six months ended 30 June 2019

                   (All amounts in Renminbi “RMB” unless otherwise stated)


V     Notes to the consolidated financial statements (Continued)

    54. Supplementary information of cashflow statement (Continued)



(b)       Movement of cash

                                                               For the six months ended   For the six months ended
                                                                           30 June 2019                30 June 2018


          Cash at the end of the period                           7,768, 974,878.91          3,592, 715,787.37
          Less: Cash at the beginning of the period               7,632, 117,020.77          3,673, 498,691.48


          Net increase in cash                                      136,857,858.14             (80,782,904.11)


(c)       Cash
                                                               30 June 2019                31 December 2018

          Cash                                              7,768, 974,878.91                7,632, 117,020.77
          Incl: Cash on hand                                    3,415, 085.25                     5,587, 191.18
              Bank deposits on demand                       7,765, 559,793.66                7,626, 529,829.59

          Ending banlance cash and
          cash equivalent                                   7,768, 974,878.91                7,632, 117,020.77


    55.   Note s to changes in shareholders’ equity

The current capital reserve -“Other” increased by RMB 42,424,747.00 when ot her changes in equity of
Shyndec Pharma resulted in adjustment of long-term equity investment and an increase of capital surplus
amounting to RMB 42,424,747.00.




                                                      100
                      CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                      Notes to financial statements (Continued)
                                          For the six months ended 30 June 2019

                            (All amounts in Renminbi “RMB” unless otherwise stated)


V     Notes to the consolidated financial statements (Continued)

    56.     Assets under restricted ownership or right of use

                                                                 Book value                                         Reas ons

                                                                                   Deposits of bank acceptance notes,
      Cash and cash equivalents                              317,353,629.58        depostis for letter of credit and others.
                                                                                   notes receivable discounted but not
      Notes rec eivables                                     211,316,836.99        due

                                                             528,670,466.57

          Note 1: At 30 June 2019, the Group had deposits of bank acceptance notes and letter of credit deposit
          amounting to RMB317,353,629.58 (31 December 2018: RMB457,664,283.79) (Note V(1)); the deposit of
          bank acceptance bill is RMB317,047,823.58, the letter of credit deposit is RMB305,806.00.


          Note 2: At 30 June 2019, the Group had notes receivable of RMB211,316,836.99, discounted but not due (31
          December 2018: RMB170,013,427.11) (Note V (2)).


          Note 3: At 30 June 2019, the Group had notes receivable of RMB 0, endorsed but not due (31 December
          2018: 301,416.00) (Note V (2)).


    57.     Government grants


             Type                                                                                        Included in current
                                                                       Amount        Account title
                                                                                                       period profit or loss:
             2017 Key enterprise development award funds                              Other incomes
                                                                  3,166,380.00                                  3,166,380.00
             of Liw an Distric t, Guangzhou
             2018 Hundreds of enterpris es reward funds of
                                                                   310,824.00         Other incomes              310,824.00
             Chancheng District, Foshan City
             Third party drug modern logistics public
                                                                       9,400.20       Other incomes                 9,400.20
             information platform
             2013 Guangzhou subsidies for headquarters             264,841.74         Other incomes              264,841.74
             Guangzhou special subsidy for the
             construction of research and development                  44,705.94      Other incomes                44,705.94
             institutions
             Guangzhou special subsidy for commerce and
                                                                   241,440.44         Other incomes              241,440.44
             trade circulation industry




                                                                 101
                    CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                    Notes to financial statements (Continued)
                                     For the six months ended 30 June 2019

                     (All amounts in Renminbi “RMB” unless otherwise stated)

V     Notes to the consolidated financial statements (Continued)

57.      Government grants (Continued)


         Liw an Distric t Sinopharm Supply Chain
         Engineering Technology Research and                      11,598.84    Other incomes     11,598.84
         Development Center
         Medical Smart Supply Chain E-commerce
                                                                  21,884.52    Other incomes     21,884.52
         Service Platform Technology Project
         Input tax 10% deduction                                               Other incomes/
                                                              406,083.20                        369,265.69
                                                                              Deferred income
         Office rent subsidy                                  102,415.76       Other incomes    102,415.76
         Centralized financial subsidy fund for
         comprehensiv e pilot w ork of modern servic e        150,000.00       Other incomes    150,000.00
         industry
         Guangdong Provincial Science and
         Technology Bureau's grant for the "Smart                 17,011.65    Other incomes     17,011.65
         Supply Chain Project"
         Guangzhou Logistic s Standardization Pilot
                                                              273,123.42       Other incomes    273,123.42
         Project
         Industrial application project of pharmaceutical
                                                                  12,499.98    Other incomes     12,499.98
         cold chain patent incubator
         Key enterprises support rewards of Liw an
                                                                  60,800.00    Other incomes     60,800.00
         District, Guangzhou
         Employment subsidy                                   619,679.48       Other incomes    619,679.48
         Statistical work subsidy                                 10,000.00    Other incomes     10,000.00
         Nanning logistics project construction support
                                                                  93,203.22    Other incomes     93,203.22
         fund
         Business bureau award                                    50,000.00    Other incomes     50,000.00
         Business enterprise support reward                   300,000.00       Other incomes    300,000.00
         Modern logistics cold chain integration
                                                                  30,000.00    Other incomes     30,000.00
         monitoring platform project
         Medical w arehousing center logistic s
                                                                  71,428.56    Other incomes     71,428.56
         information platform project
         Modern pharmaceutical logistics remote
                                                                  35,714.28    Other incomes     35,714.28
         location construction project
         Industrial transformation and upgrading special
                                                              179,112.66       Other incomes    179,112.66
         funds




                                                            102
                   CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                  Notes to financial statements (Continued)
                                    For the six months ended 30 June 2019

                     (All amounts in Renminbi “RMB” unless otherwise stated)

V     Notes to the consolidated financial statements (Continued)

57.      Government grants (Continued)


         Quarterly growth award for special funds for
                                                              150,000.00       Other incomes      150,000.00
         industrial development
         Subsidies for the employment of disabled
                                                                  18,257.35    Other incomes       18,257.35
         persons
         Futian district modern servic e industry
                                                              300,000.00       Other incomes      300,000.00
         quarterly growth award
         Special funds for business development                   50,000.00    Other incomes       50,000.00
         2018 finance bureau subsidy of Putuo district       1,430,000.00      Other incomes     1,430,000.00
         Key enterprises support funds of Putuo distric t     483,143.05       Other incomes      483,143.05
         Futian District Industrial Development Special
                                                              700,000.00       Other incomes      700,000.00
         Fund Award
         Gulou District Tax Subsidy                           130,000.00       Other incomes      130,000.00
         Small-scale taxpayers are exempt from VAT           2,310,639.30      Other incomes     2,310,639.30
         Tianjin Heping District Business Committee
                                                                  5,600.00     Other incomes        5,600.00
         Award
         Shenyang City Service Development Special
                                                             2,000,000.00      Other incomes     2,000,000.00
         Fund Subsidy
         tax return form Dalian                               682,221.79       Other incomes      682,221.79
         Weidong District Tax Rew ard                         100,000.00       Other incomes      100,000.00
         Yangpu Distric t SME Development Special
                                                              169,000.00       Other incomes      169,000.00
         Fund
         Tax system servic e fee refund                             280.00     Other incomes          280.00
         Subsidy of electric vehic le                             39,619.95   Deferred income
         Resettlement Compensation of No. 7 Zhongyu                             Non-operating
                                                             1,349,204.28                        1,349,204.28
         Road                                                                         income
         Shenzhen Futian District Development Service
                                                                                     Financial
         Center District Industrial Development Special       133,300.00                          133,300.00
                                                                                    expenses
         Fund Loan Discount




                                                            103
               CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                             For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)


VI.     Changes in scope of consolidation


1.      Changes in scope of consolidation for other reasons

        Establishment of subsidiaries:




                                                                               For the six months ended 30
                                                          30 June 2019                           June 2019
                                                             Net assets                         Net profits

 Sinopharm Holding Guoda Bayannaoer Co., Ltd.(a)          20,071,010.09                        71,010.09
 Inner Mongolia Guoda Pharmaceutical Co., Ltd.(b)         19,435,858.10                      (564,141.90)
 Sinopharm Holding Guoda Yongxingtang Chain
(Chaoyang) Co., Ltd.(c)                                   21,362,985.84                        162,985.84

a.      On 18 November 2018, the Group and Hohhot Manshengyuan Trading Co., Ltd. set up
        Sinopharm Holding Guoda Bayannaoer Co., Ltd. registered capital subscribed RMB
        16,000,000.00 and RMB 4,000,000.00 respctively. In January 2019, the Group and minority
        shareholders completed the capital contribution.The Group holds 80% of its equity after the
        completion。
b.       On 22 October 2018, The Group wholly-owned Inner Mongolia Guoda Pharmaceutical Co., Ltd.,
        with a registered capital of RMB 20 million., and completed capital contribution in February 2019.
c.      On 30 April 2019, the Group and Chaoy ang Bowei Consulting Service Co., Ltd. set up
        Sinopharm Holding Guoda Yongxingtang Chain (Chaoyang) Co., Ltd., registered capital
        subscribed RMB 19, 380,000.00 and RMB 18,620,000.00 respctively. In June 2019, the Group
        and the minority shareholders contributed RMB 6,528,000.00 and RMB 6,272,000.00
        respectively. The Group holds 51% of its equity after the completion。




                                                    104
                     CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                     Notes to financial statements (Continued)
                                        For the six months ended 30 June 2019

                         (All amounts in Renminbi “RMB” unless otherwise stated)


VII Interests in other entities

1. Interests in subsidiaries

(1)   The composition of the Group:

                                Principal place of       Place of             Nature of    Shareholding
      Subsidiaries                                                                                                   Ways of acquisition
                                         business    incorporation            business    Direct          Indirect


      Sinopharm Guilin                      Guilin          Guilin          Commercial         -           100%           Establishment
      Sinopharm Baise                     Baise             Baise           Commercial         -           100%           Establishment
      Sinopharm Holding
         Zhongshan Co.,
         Ltd.(hereafter
         ref ered
         as"Sinopharm
         Zhongshan")                  Zhongshan       Zhongshan             Commercial         -           100%           Establishment
      Sinopharm Guigang                  Guigang         Guigang            Commercial         -           100%           Establishment
      Sinopharm Beihai                     Beihai          Beihai           Commercial         -           100%           Establishment
      Sinopharm Holding
         Guangzhou Medical
         Treatment                   Guangzhou        Guangzhou             Commercial         -             51%          Establishment
      Sinopharm Holding
         Shenzhen Jianmin                                                                                                       Business
         Co., Ltd.(hereafter                                                                                               combinations
         ref ered                                                                                                      inv olving entities
         as"Sinopharm                                                                                                    under common
         Jianmin")                     Shenzhen        Shenzhen            Commercial     100%                   -                control
      Sinopharm Holding
         Shenzhen
         Traditional & Herbal
         Medicine Co., Ltd.                                                                                                     Business
         (hereafter referd as                                                                                              combinations
         “Sinopharm                                                                                                   inv olving entities
         Traditional & Herbal                                                                                            under common
         Medicine")                    Shenzhen        Shenzhen             Commercial    100%                   -                control
      Sinopharm Holding
         Shenzhen Logistics                                                                                                     Business
         Co., Ltd. (hereafter                                                                                              combinations
         ref ered                                                                                                      inv olving entities
         as“Shenzhen                                                                                                    under common
         Logistics")                   Shenzhen        Shenzhen               Serv ices   100%                   -                control
      Sinopharm Holding                                                                                                         Business
         Guangzhou Co., Ltd.                                                                                               combinations
         (hereafter refered                                                                                            inv olving entities
         as“Sinopharm                                                                                                   under common
         Guangzhou")                 Guangzhou        Guangzhou             Commercial    100%                   -                control
      Sinopharm Holding
         Guangdong                                                                                                              Business
         Hengxing Co., Ltd.                                                                                                combinations
         (hereafter refered                                                                                            inv olving entities
         as“Sinopharm                                                                                                   under common
         Hengxing")                  Guangzhou        Guangzhou             Commercial         -           100%                   control
                                                                                                                                Business
                                                                                                                           combinations
                                                                                                                       inv olving entities
                                                                                                                         under common
      Sinopharm Y ulin                      Y ulin          Y ulin          Commercial         -           100%                   control




                                                                     105
                       CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                               Notes to financial statements (Continued)
                                                For the six months ended 30 June 2019

                             (All amounts in Renminbi “RMB” unless otherwise stated)


VII   Interests in other entities (Continued)

1.    Interests in subsidiaries (Continued)

(1)   The composition of the Group (Continued):

                                                                                                       Shareholdi ng
                                                 Principal pl ace        Place of       Nature of
      Subsidi aries                                                                                                                      Ways of acquisition
                                                    of business     incorporation       business      Direct           Indirect
                                                                                                                                      Business combi nations
      Sinophar m Li uzhou                       Liuzhou                 Liuzhou       Commercial           -              51%         involvi ng entiti es under
                                                                                                                                               common control
                                                                                                                                      Business combi nations
      Guangdong Hui xin Investment                                                                                                    involvi ng entiti es under
         Co., Ltd. (“Hui xin Inves tment”)        Guangzhou       Guangzhou            Servic e                 100.00%                      common control
                                                                                                                                      Business combi nations
      Sinophar m Holdi ng Foshan Co.,                                                                                                 involvi ng entiti es under
          Ltd. (“Sinophar m Fos han")                    Foshan        Foshan        Commercial                  100.00%                      common control
      Sinophar m Holdi ng Guangdong                                                                                                   Business combi nations
          Yuexing Co., Ltd. (“Sinophar m                                                                                             involvi ng entiti es under
          Yuexing”)                                Guangzhou       Guangzhou         Commercial                  100.00%                      common control
      Sinophar m Holdi ng Guangdong                                                                                                   Business combi nations
          Logistics Co., Ltd.                                                                                                         involvi ng entiti es under
          (“Guangdong Logistic”)                  Guangzhou       Guangzhou            Servic e                 100.00%                      common control
                                                                                                                                      Business combi nations
                                                                                                                                      involvi ng entiti es under
      Sinophar m Guangxi                               Nanning         Nanning        Commercial    100.00%                                    common control
                                                                                                                                      Business combi nations
                                                                                                                                      involvi ng entiti es under
      Guangxi Logistic                                 Nanning         Nanning           Servic e                 100.00%                      common control
                                                                                                                                      Business combi nations
                                                                                                                                      involvi ng entiti es under
      Sinophar m Wuzhou                                Wuzhou           Wuzhou        Commercial                       99.90%                  common control
                                                                                                                                      Business combi nations
                                                                                                                                      involvi ng entiti es under
      Sinophar m Dongguan                            Dongguan        Dongguan         Commercial                  100.00%                      common control
                                                                                                                                      Business combi nations
                                                                                                                                      involvi ng entiti es under
      Sinophar m Zhanjiang                           Zhanjiang        Zhanjiang       Commercial                  100.00%                      common control
                                                                                                                                      Business combi nations
                                                                                                                                      involvi ng entiti es under
      Sinophar m Yanfeng                             Shenzhen        Shenzhen         Commercial     51.00%                                    common control
                                                                                                                                      Business combi nations
                                                                                                                                      involvi ng entiti es under
      Sinophar m Meizhou                               Meizhou         Meizhou        Commercial                  100.00%                      common control
                                                                                                                                      Business combi nations
                                                                                                                                      involvi ng entiti es under
      Sinophar m Huizhou                               Huizhou          Huizhou       Commercial                  100.00%                      common control
                                                                                                                                      Business combi nations
                                                                                                                                  involvi ng entiti es not under
      Sinophar m Zhaoqing                             Zhaoqing        Zhaoqing        Commercial           -            100%                   common control
                                                                                                                                      Business combi nations
                                                                                                                                  involvi ng entiti es not under
      Sinophar m Jiangmen(a)                       Jiangmen         Jiangmen        Commercial           -            100%                   common control
                                                                                                                                      Business combi nations
                                                                                                                                  involvi ng entiti es not under
      Sinophar m Shaoguan                            Shaoguan        Shaoguan         Commercial           -              70%                  common control
      Sinophar m Holdi ng Shantou C o.,                                                                                               Business combi nations
          Ltd.(hereafter refered                                                                                                  involvi ng entiti es not under
          as"Sinopharm Shantou”)                      Shantou         Shantou        Commercial           -            100%                   common control
                                                                                                                                      Business combi nations
                                                                                                                                      involvi ng entiti es under
      Foshan Nanhai Medicine Co., Ltd.                    Foshan        Foshan        Commercial           -            100%                   common control
                                                                                                                                      Business combi nations
      Foshan Nanhai Uptodate &                                                                                                        involvi ng entiti es under
         Special M edicines Co., Ltd.                     Foshan        Foshan        Commercial           -            100%                   common control
                                                                                                                                      Business combi nations
                                                                                                                                      involvi ng entiti es under
      Foshan Nanhai Medicine Co., Ltd.                    Foshan        Foshan        Commercial           -            100%                   common control
                                                                                                                                      Business combi nations
      Guangdong Uptodate & Special                                                                                                    involvi ng entiti es under
         Medicines                                  Guangzhou       Guangzhou         Commercial           -            100%                   common control
                                                                                                                                      Business combi nations
      Guangdong South Phar mac eutic al                                                                                               involvi ng entiti es under
          Foreign Trade C o., Ltd.                  Guangzhou       Guangzhou         Commercial           -            100%                   common control
      Sinophar m Holdi ng Zhuhai Co.,                                                                                                 Business combi nations
          Ltd. ( (hereafter referd as                                                                                             involvi ng entiti es not under
          “Sinopharm Zhuhai")                            Zhuhai         Zhuhai       Commercial           -            100%                   common control



                                                                                106
                      CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                             Notes to financial statements (Continued)
                                              For the six months ended 30 June 2019

                           (All amounts in Renminbi “RMB” unless otherwise stated)

VII   Interests in other entities (Continued)

1.    Interests in subsidiaries (Continued)

(1)   The composition of the Group (Continued):

                                               Principal pl ace                        Nature of    Shareholdi ng
                                                                        Place of
      Subsidi aries                                                                                                                   Ways of acquisition
                                                  of business      incorporation       business    Direct           Indirect
      Sinophar m Holdi ng Maoming Co.,                                                                                             Business combi nations
          Ltd. ( (hereafter referd as                                                                                          involvi ng entiti es not under
          “Sinopharm Maoming")                     Maoming          Maoming         Commercial         -            100%                  common control
      Sinophar m Holdi ng GZ Medical
          Technology Co., Ltd.                    Guangzhou        Guangzhou         Commercial         -              51%                   Establishment
      Sinophar m Holdi ng GZ Medical
          Supply Chai n Servic e Co., Ltd.        Guangzhou        Guangzhou         Commercial         -              51%                    Establishment
      Sinophar m Holdi ng Heyuan Co.,                                                                                              Business combi nations
          Ltd. ( (hereafter referd as                                                                                          involvi ng entiti es not under
          “Sinopharm Heyuan")                        Heyuan           Heyuan        Commercial         -              70%                  common control
                                                                                                                                   Business combi nations
      Sinophar m Holdi ng Guoda                                                                                                    involvi ng entiti es under
          Phar mac y Co., Ltd.                      Shanghai         Shanghai        Commercial     60%                    -                common control
      Sinophar m Holdi ng Guoda                                                                                                    Business combi nations
          Phar mac y Chain Stor e                                                                                                  involvi ng entiti es under
          Shanghai Co., Ltd.                        Shanghai         Shanghai        Commercial         -            100%                   common control
                                                                                                                                   Business combi nations
      Beijing Guoda Pharmac y Chai n                                                                                               involvi ng entiti es under
          Store C o., Ltd.                             Beijing          Beijing      Commercial         -            100%                   common control
                                                                                                                                   Business combi nations
      Tianjin Guoda Phar mac y C hain                                                                                              involvi ng entiti es under
          Store C o., Ltd.                             Tianjin          Tianjin      Commercial         -              80%                  common control
      Guangxi Guoda Pharmac y                                                                                                      Business combi nations
          Consulting Chain Store Co.,                                                                                              involvi ng entiti es under
          Ltd.                                       Nanning          Nanning        Commercial         -            100%                   common control
      Sinophar m Holdi ng Guoda                                                                                                    Business combi nations
          Phar mac y Guangdong Co.,                                                                                                involvi ng entiti es under
          Ltd.                                     Shenzhen          Shenzhen        Commercial         -            100%                   common control
                                                                                                                                   Business combi nations
      Sinophar m Guoda Phar mac y                                                                                                  involvi ng entiti es under
          Guangxi Chain Co., Ltd.                     Liuzhou          Liuzhou       Commercial         -            100%                   common control
                                                                                                                                   Business combi nations
      Zhejiang Guoda Phar mac y C o.,                                                                                              involvi ng entiti es under
          Ltd.                                     Hangzhou          Hangzhou        Commercial         -            100%                   common control
      Sinophar m Holdi ng Guoda
          Yangzhou D ades heng                                                                                                     Business combi nations
          Phar mac y Chain Stor e Co.,                                                                                             involvi ng entiti es under
          Ltd.                                     Yangzhou          Yangzhou        Commercial         -           93.68%                  common control
                                                                                                                                   Business combi nations
      Ningxia Guoda Phar mac y C hain                                                                                              involvi ng entiti es under
          Store C o., Ltd.                          Yinchuan         Yinchuan        Commercial         -              70%                  common control
      Sinophar m Holdi ng Guoda Nanjing                                                                                            Business combi nations
          Phar mac y Chain Stor e Co.,                                                                                             involvi ng entiti es under
          Ltd.                                        Nanjing          Nanjing       Commercial         -              60%                  common control
      Sinophar m Holdi ng Guoda                                                                                                    Business combi nations
          Shandong Pharmac y Chain                                                                                                 involvi ng entiti es under
          Store C o., Ltd.                               Linyi             Linyi     Commercial         -              55%                  common control
      Sinophar m Holdi ng Guoda                                                                                                    Business combi nations
          Shenyang Pharmac y Chain                                                                                                 involvi ng entiti es under
          Store C o., Ltd.(b)                      Shenyang          Shenyang        Commercial         -              51%                  common control
                                                                                                                                   Business combi nations
      Fujian Guoda Pharmac y Chain                                                                                                 involvi ng entiti es under
          Store C o., Ltd.(c)                         Xiamen           Xiamen        Commercial         -            100%                   common control
                                                                                                                                   Business combi nations
      Anhui Guoda Phar mac y Chain                                                                                                 involvi ng entiti es under
         Store C o., Ltd.                               Hefei             Hefei      Commercial         -              60%                  common control
                                                                                                                                   Business combi nations
      Quanzhou Guoda Pharmac y                                                                                                     involvi ng entiti es under
         Chain Store C o., Ltd.                    Quanzhou         Quanzhou         Commercial         -              51%                  common control
                                                                                                                                   Business combi nations
      Shanxi Guoda Wanmin Pharmac y                                                                                                involvi ng entiti es under
          Chain Store C o., Ltd.                      Taiyuan          Taiyuan       Commercial         -              85%                  common control
      Sinophar m Holdi ng Hunan Guoda                                                                                              Business combi nations
          Minshengtang Pharmac y                                                                                                   involvi ng entiti es under
          Chain Co., Ltd.                          Hengyang          Hengyang        Commercial         -              51%                  common control
                                                                                                                                   Business combi nations
      Liyang Guoda People Phar mac y                                                                                               involvi ng entiti es under
          Chain Store C o., Ltd.                       Liyang           Liyang       Commercial         -              80%                  common control
      Sinophar m Holdi ng Guoda Henan                                                                                              Business combi nations
          Phar mac y Chain Stor e Co.,                                                                                             involvi ng entiti es under
          Ltd.                                 Pingdingshan       Pingdingshan       Commercial         -              60%                  common control



                                                                               107
                      CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                             Notes to financial statements (Continued)
                                              For the six months ended 30 June 2019

                           (All amounts in Renminbi “RMB” unless otherwise stated)

VII   Interests in other entities (Continued)

1.    Interests in subsidiaries (Continued)

(1)   The composition of the Group (Continued):

                                               Principal pl ace                             Nature of     Shareholdi ng
                                                                        Place of
      Subsidi aries                                                                                                                     Ways of acquisition
                                                  of business      incorporation            business     Direct           Indirect
      Sinophar m Holdi ng Guoda Inner                                                                                                Business combi nations
          Mengdia Phar mac y Chain                                                                                                   involvi ng entiti es under
          Store C o., Ltd.                            Hohhot           Hohhot            Commercial           -           96.7%               common control
      Sinophar m Hebei Lerentang                                                                                                     Business combi nations
          Phar mac y Chain Stor e Co.,                                                                                               involvi ng entiti es under
          Ltd.                                  Shijiazhuang      Shijiazhuang           Commercial           -              60%              common control
                                                                                                                                     Business combi nations
      Sinophar m Guoda Phar mac y                                                                                                    involvi ng entiti es under
          Jiangmen Chain Co., Ltd.                 Jiangmen          Jiangmen            Commercial           -              65%              common control
      Sinophar m Holdi ng Guoda Shanxi                                                                                               Business combi nations
          Yiyuan Pharmac y Chain Store                                                                                               involvi ng entiti es under
          Co., Ltd.                                   Taiyuan          Taiyuan           Commercial           -              80%              common control
      Sinophar m Holdi ng Xinjiang New                                                                                               Business combi nations
          & Special Medicines C hain                                                                                                 involvi ng entiti es under
          Store C o., Ltd.                            Urumqi           Urumqi            Commercial           -              51%              common control
                                                                                                                                     Business combi nations
      Sinophar m Holdi ng Guoda ForMe                                                                                                involvi ng entiti es under
          Medicines (Shanghai) Co., Ltd.            Shanghai         Shanghai            Commercial           -              97%              common control
      Sinophar m Holdi ng Guoda ForMe
          Phar mac y Chain Stor e Co.,
          Ltd. (Formerl y “Shanghai                                                                                                 Business combi nations
          ForMe YiXing Pharmac y Chain                                                                                               involvi ng entiti es under
          Store C o., Ltd.”)                       Shanghai         Shanghai            Commercial           -           99.76%              common control
      Beijing Golden Elephant Phar mac y                                                                                             Business combi nations
          Medicine Chain C ompany                                                                                                    involvi ng entiti es under
          Limited                                      Beijing          Beijing          Commercial           -           53.13%              common control
                                                                                                                                     Business combi nations
      Shanxi Tongfeng Pharmac y                                                                                                      involvi ng entiti es under
         Logistics Co., Ltd.                          Taiyuan          Taiyuan           Commercial           -            100%               common control
      Changzhi Guoda Wanmi n                                                                                                         Business combi nations
         Phar mac y Chain Stor e Co.,                                                                                                involvi ng entiti es under
         Ltd.                                       Changzhi         Changzhi            Commercial           -              51%              common control
                                                                                                                                     Business combi nations
      Shanxi Guoda Wanmin Clinic                                                                                                     involvi ng entiti es under
         Management Chain Co., Ltd.                   Taiyuan          Taiyuan       Medical ser vices        -            100%               common control
                                                                                                                                     Business combi nations
      Shanghai Guoda Shanghong                                                                                                       involvi ng entiti es under
         Qibao Pharmac y Co., Ltd.                  Shanghai         Shanghai            Commercial           -              51%              common control
                                                                                                                                     Business combi nations
      Zhejiang Intlmedicine Pharmac y                                                                                                involvi ng entiti es under
         Dongshan Co., Ltd.                        Hangzhou         Hangzhou             Commercial           -              51%              common control
                                                                                                                                     Business combi nations
      Shanghai Guoda D ongsheng                                                                                                      involvi ng entiti es under
         Phar mac y Co., Ltd.                       Shanghai         Shanghai            Commercial           -            100%               common control
                                                                                                                                     Business combi nations
      Sinophar m Guoda Drug Store                                                                                                    involvi ng entiti es under
          (Shenz hen) Chai n Co., Ltd.             Shenzhen         Shenzhen             Commercial           -            100%               common control
      Sinophar m Holdi ng Guoda                                                                                                      Business combi nations
          Phar mac y Guangzhou Chain                                                                                                 involvi ng entiti es under
          Co., Ltd.                               Guangzhou        Guangzhou             Commercial           -            100%               common control
      Shanghai Guodong Chines e                                                                                                      Business combi nations
          Traditional Medicine Clinic Co.,                                                                                           involvi ng entiti es under
          Ltd.                                      Shanghai         Shanghai           Medical clinic        -            100%               common control
      Shanghai Guoda D ongxi n                                                                                                       Business combi nations
          Phar mac y Chain Stor e Co.,                                                                                               involvi ng entiti es under
          Ltd.                                      Shanghai         Shanghai            Commercial           -            100%               common control
      Shanghai Yutaitang Chi nese                                                                                                    Business combi nations
          Traditional Medicine Clinic Co.,                                                                                           involvi ng entiti es under
          Ltd.                                      Shanghai         Shanghai            Commercial           -            100%               common control
                                                                                                                                     Business combi nations
      Sanhe Li yang Golden Elephant                                                                                                  involvi ng entiti es under
         Phar mac y Co., Ltd.                       Langfang         Langfang            Commercial           -            100%               common control
      Xiaoyi Guoda Wanmi n Baicaotang                                                                                                Business combi nations
         Phar mac y Chain Stor e Co.,                                                                                                involvi ng entiti es under
         Ltd.                                           Xiaoyi           Xiaoyi          Commercial           -              70%              common control
                                                                                                                                     Business combi nations
      Sinophar m Holdi ng Guoda                                                                                                      involvi ng entiti es under
          Phar mac y Hul un Buir Co., Ltd.         Hulun Buir       Hulun Buir           Commercial           -              51%              common control
                                                                                                                                     Business combi nations
                                                                                                                                     involvi ng entiti es under
      ForMe Xuhui                                   Shanghai         Shanghai            Commercial           -            100%               common control
      Sinophar m Holdi ng Ulanqab C o.,
          Ltd.                                       Ulanqab          Ulanqab            Commercial           -              60%              Establishment

                                                                               108
                       CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                            Notes to financial statements (Continued)
                                             For the six months ended 30 June 2019

                            (All amounts in Renminbi “RMB” unless otherwise stated)

VII   Interests in other entities (Continued)

1.    Interests in subsidiaries (Continued)

(1)   The composition of the Group (Continued):

                                              Principal pl ace                        Nature of    Shareholdi ng
                                                                       Place of
      Subsidi aries                                                                                                                  Ways of acquisition
                                                 of business      incorporation       business    Direct           Indirect
                                                                                                                                  Business combi nations
      Sinophar m Guoda Phar mac y                                                                                                 involvi ng entiti es under
          Qinhuangdao C hain C o., Ltd.       Qinhuangdao        Qinhuangdao        Commercial         -              51%                  common control
      Taishan Sinopharm Holding                                                                                                   Business combi nations
          Guoda Qunkang Phar mac y                                                                                                involvi ng entiti es under
          Chain Store C o., Ltd.                     Taishan          Taishan       Commercial         -              70%                  common control
                                                                                                                                  Business combi nations
      Beijing Golden Elephant Fuxi ng                                                                                             involvi ng entiti es under
          Technology Co., Ltd.                        Beijing          Beijing      Commercial         -              80%                  common control
                                                                                                                                  Business combi nations
      Sinophar m Lerentang                                                                                                        involvi ng entiti es under
          Shijiazhuang Phar mac eutical        Shijiazhuang      Shijiazhuang       Commercial         -            100%                   common control
      Sinophar m Holdi ng Guoda Drug
          Store Manchuria Co., Ltd.               Manchuria         Manchuria       Commercial         -              51%                   Establishment
      Sinophar m Guoda Drug Store
          Anshan C hain Co., Ltd.                    Anshan           Anshan        Commercial         -              51%                   Establishment
      Sinophar m Holdi ng Guoda
          Yongsheng Drug Store
          (Shanghai) Co., Ltd.                   Shanghai         Shanghai        Commercial         -              55%                   Establishment
      Sanhe Li xin Golden El ephant
          Drugstore Co., Ltd.                      Langfang          Langfang       Commercial         -            100%                    Establishment
      Sinophar m Holdi ng Foshan
          Medical Cons umables Supply
          Chain Co., Ltd.                            Foshan           Foshan        Commercial         -              70%                   Establishment
      Sinophar m Holdi ng Medical
          Supply Chai n Servic e
          (Guang xi) Co., Ltd.                      Nanning          Nanning        Commercial         -           30.06%                   Establishment
      Shanghai Guoda H aohai
          Phar mac y Co., Ltd.                     Shanghai         Shanghai        Commercial         -              51%                   Establishment
      Sinophar m Holdi ng Bai yi
          Phar mac y Guangxi C o., Ltd.             Nanning          Nanning        Commercial         -              51%                   Establishment
      Sinophar m Holdi ng Hezhou Co.,
          Ltd.                                       Hezhou           Hezhou        Commercial         -            100%                    Establishment
      Sinophar m Holdi ng National
          Phar mac y Z hengzhou Chain
          Co., Ltd.                              Zhengzhou         Zhengzhou        Commercial         -              60%                   Establishment
      Shanghai Guoda R uijing
          Phar mac y Co., Ltd.                     Shanghai         Shanghai        Commercial         -              55%                   Establishment
      Fujian Guoda Pharmac eutic al Co.,
          Ltd.                                       Xiamen           Xiamen        Commercial         -            100%                    Establishment
      Sinophar m Holdi ng Qinzhou C o.,
          Ltd.                                      Qinzhou          Qinzhou        Commercial         -            100%                    Establishment
      Sinophar m Holdi ng Hechi Co., Ltd.              Hechi            Hechi       Commercial         -            100%                     Establishment
                                                                                                                                  Business combi nations
      Sinophar m Holdi ng Guangzhou                                                                                           involvi ng entiti es not under
          Huadu Co., Ltd.                        Guangzhou         Guangzhou        Commercial         -              70%                 common control
                                                                                                                                  Business combi nations
      Sinophar m Holdi ng Guoda Shanxi                                                                                        involvi ng entiti es not under
          Phar maceutical C o., Ltd.(d)              Taiyuan          Taiyuan       Commercial         -            100%                  common control
                                                                                                                                  Business combi nations
      Taiyuan Tong xinli Guoda                                                                                                involvi ng entiti es not under
          Phar mac y Co., Ltd.                       Taiyuan          Taiyuan       Commercial         -            100%                  common control
      Sinophar m Holdi ng Guoda
          Bayannaoer Co., Ltd.(e)             a Bayannaoer       a Bayannaoer       Commercial         -              80%                   Establishment
      Inner Mongolia Guoda
          Phar maceutical C o., Ltd.(f)              Hohhot           Hohhot        Commercial         -            100%                    Establishment
      Sinophar m Holdi ng Guoda
          Yong xingtang Chain
          (Chaoyang) Co., Ltd.(g)                 Chaoyang          Chaoyang        Commercial         -              51%                   Establishment




VII   Interests in other entities(Continued)

                                                                              109
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                               Notes to financial statements (Continued)
                                For the six months ended 30 June 2019

                    (All amounts in Renminbi “RMB” unless otherwise stated)

1. Interests in subsidiaries(Continued)

(1)    The composition of the Group(Continued)

a.    On 13 March 2019, Sinopharm Jiangmen was renamed as “Sinopharm Holding (Jiangmen) Co., Ltd.”.
b.    Sinopharm Holding Guoda Shenyang Pharmacy Chain Store Co., Ltd increased the registered capital by
      RMB32,000,000.00 with undistributed profits. After the capital increased, the registered capital of Shenyang
      Guoda increased from RMB18,000,000.00 to RMB 50,000,000.00, and the shareholding ratio of the original
      shareholders did not change.
c.    On 17 April 2019, the shareholder of Fujian Guoda Pharmacy Chain Store Co., Ltd. Changed from Sinopharm
      Holding Guoda Pharmacy Co., Ltd. to Fujian Guoda Pharmaceutical Co., Ltd. by internal transfer. The 1 00%
      equity of Fujian Guoda Chain held by the original shareholder Sinopharm Holding Guoda Pharmacy Co., Ltd.
      was transferred to Fujian Guoda Pharmaceutical Co., Ltd.
d.    On 1 February 2019, Shanxi Zhongao Pharmaceutical Co., Ltd. was renamed as “Sinopharm Hold ing Guoda
      Shanxi Pharmaceutical Co., Ltd.”.
e.    On 5 November 2018, the Group and Hohhot Manshengyuan Trading Co., Ltd. set up Sinopharm Holding
      Guoda Bayannaoer Co., Ltd. registered capital subscribed RMB 16,000,000.00 and RMB 4,000,000.00
      respctively. In January 2019, the Group and minority shareholders completed the capital contribution.The
      Group holds 80% of its equity after the completion.
f.    On 22 October 2018, the Group wholly-owned Inner Mongolia Guoda Pharmaceutical Co., Ltd., with a
      registered capital of RMB 20 million., and completed capital contribution in February 2019.
g.    On 30 April 2019, the Group and Chaoyang Bowei Consulting Service Co., Ltd. set up Sinopharm Holding
      Guoda Yongxingtang Chain (Chaoyang) Co., Ltd., registered capital subscribed RMB 19,380,000.00 and RMB
      18,620,000.00 respctively. In June 2019, the Group and minority shareholders contributed RMB 6,528,000.00
      and RMB 6,272,000.00 respectively. The Group holds 51% of its equity after the completion 。




                                                       110
                                     CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                                                  Notes to financial statements (Continued)
                                                                       For the six months ended 30 June 2019

                                           (All amounts in Renminbi “RMB” unless otherwise stated)


VII.             Interests in other entities (Continued)

1.               Interests in subsidiaries (Continued)


(1)              Important non-wholly owned subsidiary


Subsidiaries                                                                       Minority                                 Profit or loss                   Dispatch of dividends                             Minority shareholders'
                                                              shareholding ratio                        attributable to minority                                                    to minority                                            equity
                                                                                                             shareholders in the                                 shareholders in the
                                                                                                                        current period                                       current period
Sinopharm Holding Guoda
Pharmacy Co., Ltd.                                                                 40.00%                               60,082,149.76                                                                                 1,743,715,207.60


(2)              Key financial information of important non -wholly owned subsidiaries


                                                                         30 June 2019                                                                                                               31 December 2018
 Subsidiaries                             Non-current                                  Current          Non-current                                                     Non-current                               Current          Non-current
                  Current assets                               T otal assets                                                  T otal liabilities Current assets                               T otal assets                                          T otal liabilities
                                              assets                                  liabilities         liabilities                                                      assets                                 liabilities       liabilities
Sinopharm
Holding Guoda
                      7,637,323,815 .74   3,210,489,588 .58   10,847,813,404 .32    4,642,692,689 .21   1,027,988,905 .69     5,670,681,594 .90    7,467,662,962 .46   1,567,755,313 .41   9,035,418 ,275.87   3,994,471,884 .62     64,729,132.20    4,059,201,016 .82
Pharmacy Co.,
Ltd.




                                                               For the six months ended 30 June 2019                                                                                       For the six months ended 30 June 2018
       Subsidiaries                                                                       T otal comprehensive               Cash flow from                                                                      T otal comprehensive             Cash flow from
                                Operating revenue                  Net profit                                                                           Operating revenue                     Net profit
                                                                                                    income                  operating activities                                                                         income              operating activities
Sinopharm Holding
Guoda Pharmacy Co.,             6,107,899,231.32               186,189,865.75                186,189,865.75                  545,455,740.77              5,143,601,636.87                  172,985,004.03           172,985,004.03                77,797,706.43
Ltd.




                                                                                                                             111
                    CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                    Notes to financial statements (Continued)
                                      For the six months ended 30 June 2019

                      (All amounts in Renminbi “RMB” unless otherwise stated)

VII.     Interests in other entities (Continued)

2.     Interests in a ssociates

                                      Principal place        Place of          Nature of   Shareholding(%)
                                         of business    incorporation          business                           Accounting
                                                                                            Direct     Indirect
       Associates

       Shenzhen Main Luck
          Pharmaceutical Co., Ltd.
          (hereafter referd as"Main
          Luck Pharmaceutical ")           Shenzhen       Shenzhen        Manufacturing    35.19%             -       Equity
       Sinopharm Group
          Zhijun(Suzhou)
          Pharmaceutical Co., Ltd.           Suzhou          Suzhou       Manufacturing    33.00%             -       Equity
       Si nopharm Group
          Zhij un(Shenzhen)
          Pharmaceuti cal Co., Ltd.        Shenzhen       Shenzhen        Manufacturing    49.00%             -       Equity
       Shenzhen Zhij un Pharmaceuti cal
          Trade Co., Ltd.                  Shenzhen       Shenzhen          Commercial     49.00%             -       Equity
       Si nopharm Group
          Zhij un(Shenzhen) Pi ngshan
          Pharmaceuti cal Co., Ltd.        Shenzhen       Shenzhen        Manufacturing    49.00%             -       Equity
       Shanghai Shyndec
          Pharmaceutical Co., Ltd.
          (hereafter referd as
          “Shyndec Pharmaceutical”)      Shanghai        Shanghai       Manufacturing    16.28%             -       Equity
       Shanghai Dingqun Enterprise
          Management Consulting
          Co., Ltd.(hereafter refered                                   Business service
          as “Shanghai Dingqun”)         Shanghai        Shanghai             industry    2.53%             -       Equity
       Shanghai Beiyi Guoda
          pharmaceutical Co. Ltd.          Shanghai        Shanghai         Commercial          -      26.00%         Equity
       Shanghai Liyi Pharmacy Co.,
          Ltd                              Shanghai        Shanghai         Commercial          -      35.00%         Equity
       Sinopharm Jienuo Medical
          Treatment Service
          Guangdong Co., Ltd.             Guangzhou      Guangzhou          Commercial          -      29.00%         Equity




                                                              112
                    CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                               Notes to financial statements (Continued)
                                    For the six months ended 30 June 2019

                     (All amounts in Renminbi “RMB” unless otherwise stated)


VII.    Interests in other entities (Continued)

2.      Interests in associate s (Continued)


                                     Principal
                                                                       Nature of
                                      place of        Place of         business           Shareholding(%)
                                     business    incorporation                                               Accounting
                                                                                       Direct     Indirect
       Associates

       Dongyuan accord
        pharmaceutical chain Co.,
        Ltd.                          Heyuan          Heyuan        Commercial              -     45.00%         Equity
       Guangdong Jianhui
        Construction Investment
        Management Co.,
        Ltd.(hereafter refered as                                 Public-Private-
        “Guangdong Jianhui”)      Zhanjiang       Zhanjiang       Partnership             -     10.00%         Equity
       Shanghai Renbei Pharmacy
        Co., Ltd.                    Shanghai       Shanghai        Commercial              -     30.00%         Equity


Explication of the shareholding ratio of a joint venture differs from the proportion of voting rights:
The basis that holds less than 20% of the voting rights but has a significant impact, or holds 20% or
more of the voting rights but has no significant impact:
(1)     The highest authority of Shanghai Dingqun is the shareholders' meeting, and the shareholders
        exercise their voting rights according to the proportion of capital contribution. At the same time,
        Shanghai Dingqun has set up a board of directors which is responsible for the shareholders'
        meeting. The board consists of three members, of which the company has appointed one
        director. The vote on the board's resolution is                 one vote per person, and all the board
        resolutions should be passed by more than half of all directors.
(2)     The highest authority of Guangdong Jianhui is the shareholders' meeting, and the shareholders
        exercise their voting rights according t o the proportion of the capital contribution. At the same
        time, Guangdong Jianhui set up a board of directors whic h is responsible for the shareholders'
        meeting. The board consists of five members, of which the company has appointed one director.
        The vote on the resolution of the board of directors is one vote per person.




                                                            113
                      CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                   Notes to financial statements (Continued)
                                     For the six months ended 30 June 2019

                           (All amounts in Renminbi “RMB” unless otherwise stated)


VII.      Interests in other entities (Continued)

3.     Summarised financial information of signi ficant associate

                                                 30 June 2019/ For the six months     1 January 2019/ For the six months
                                                             ended 30 June 2019                    ended 30 June 2018
                                                              Shanghai Shyndec        Shanghai Shyndec Pharmaceutical
                                                        Pharmaceutical Co., Ltd.                                 Co., Ltd.


       Current assets                                            10,502,009,120.54                      8,470,191,403.19
       Non-current assets                                         7,879,885,410.94                      7,993,673,189.70
       Total assets                                              18,381,894,531.48                    16,463,864,592.89
       Current liabilities                                        7,111,735,949.12                      6,568,480,863.79
       Non-current liabilities                                    2,323,172,902.37                      1,452,099,931.65
       Total liabilities                                          9,434,908,851.49                      8,020,580,795.44
       Non-controlling interests                                  1,616,396,132.89                      1,637,029,480.44
       Shareholders’ equity attributable to
                                                                  7,330,589,547.10                      6,806,254,317.01
         shareholders of the parent
       Portion of net assets calc ulated by
                                                                  1,189,353,675.16                      1,098,566,852.51
         shareholding ratio
       Carrying value of equity investment in
                                                                  1,189,353,675.16                      1,098,566,852.51
         joint ventures
       Operating revenue                                          6,255,380,073.90                      5,853,255,169.05
       Net profit                                                  525,814,658.05                         575,258,204.58
       Total comprehensive income                                  525,814,658.05                         575,258,204.58
       Dividends receiv ed from joint ventures
                                                                    16,896,427.80                           8,641,853.20
         this period

                                                 30 June 2019/ For the six months     1 January 2019/ For the six months
                                                             ended 30 June 2019                    ended 30 June 2018
                                                                Sinopharm Group
                                                 Zhijun(Shenzhen) Pharmaceutical      Sinopharm Group Zhijun(Shenzhen)
                                                                          Co., Ltd.             Pharmaceutical Co., Ltd.


       Current assets                                             1,288,625,706.65                      1,111,485,098.64
       Non-current assets                                          302,186,939.74                         298,610,691.12
       Total assets                                               1,590,812,646.39                      1,410,095,789.76
       Current liabilities                                         725,207,812.63                         659,931,220.07
       Non-current liabilities                                      20,932,797.22                          24,953,965.28
       Total liabilities                                           746,140,609.85                         684,885,185.35
       Non-controlling interests                                                 -                                      -
       Shareholders’ equity attributable to
         shareholders of the parent                                844,672,036.54                         725,210,604.41
       Portion of net assets calc ulated by
         shareholding ratio                                        413,889,297.90                         355,353,196.15
       Carrying value of equity investment in
         joint ventures                                            413,889,297.90                         355,353,196.15
       Operating revenue                                          1,060,889,164.97                        979,292,309.92
       Net profit                                                  119,461,432.13                         125,252,164.85
       Total comprehensive income                                  119,461,432.13                         125,252,164.85
       Dividends receiv ed from joint ventures
         this period                                                             -                         58,111,254.57


                                                           114
                                                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                                              Notes to financial statements (Continued)
                                                                For the six months ended 30 June 2019

                                                   (All amounts in Renminbi “RMB” unless otherwise stated)


VIIl.      Ri sks related to financial instruments


1.        Classi fication of financial instruments

         The carrying amounts of each category of financial instruments as at the date of financial position are as follows:

         30 June 2019

                                              Financial assets at fair    Financial assets at    Financial assets at fair value through other                 Total
        Financial assets                  value through profit or loss        amortised cost                         comprehensive income
                                                Mandatorily required                                 Mandatorily                   Designation
                                                                                                        required
        Cash and bank balances                                       -     8,086,328,508.49                     -                             -    8,086,328,508.49
        Notes receivable                                             -       790,664,828.26                     -                             -      790,664,828.26
        Accounts receivable                                          -    11,826,440,731.59                     -                             -   11,826,440,731.59

        Receivable financing                                         -                    -      325,439,580.18                               -     325,439,580.18
        Other receivables                                            -       654,086,387.85                   -                               -     654,086,387.85
        Other non-current financial
          assets                                     140,000,000.00                         -                   -                             -     140,000,000.00
        Investment in other equity
          instrument                                                 -                      -                   -              13,685,760.00         13,685,760.00


                                                     140,000,000.00       21,357,520,456.19      325,439,580.18                13,685,760.00      21,836,645,796.37




                                                                                   115
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                             Notes to financial statements (Continued)
                               For the six months ended 30 June 2019

                     (All amounts in Renminbi “RMB” unless otherwise stated)


VIIl.   Ri sks related to financial instruments (Continued)

1.      Classi fication of financial instruments (Continued)

        30 June 2019


     Financial liabilities                                      Financial liabilities at amortised cost


     Short-term borrowings                                                          3,290,877,595.23
     Notes payable                                                                  3,539,095,262.34
     Accounts payable                                                               8,088,697,602.94
     Other payables                                                                 1,474,526,698.43
     Non-current liabilities due within one year                                      558,296,784.75


                                                                                  16,951,493,943.69




                                                   116
                                                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                                              Notes to financial statements (Continued)
                                                                For the six months ended 30 June 2019

                                                   (All amounts in Renminbi “RMB” unless otherwise stated)


VIIl.     Ri sks related to financial instruments (Continued)

1.        Classi fication of financial instruments (Continued)

         The carrying amounts of each category of financial instruments as at the date of financial position are as follows:

         1 January 2019

                                              Financial assets at fair    Financial assets at    Financial assets at fair value through other                 Total
        Financial assets                  value through profit or loss        amortised cost                         comprehensive income
                                                Mandatorily required                                 Mandatorily                   Designation
                                                                                                        required
        Cash and cash equivalents                                    -     8,089,781,304.56                     -                             -    8,089,781,304.56
        Notes receivable                                             -       789,536,654.23                     -                             -      789,536,654.23
        Accounts receivable                                          -     9,336,861,647.92                     -                             -    9,336,861,647.92
        Receivable financing                                         -                    -      567,775,275.40                                      567,775,275.40
        Other receivables                                            -       643,493,359.32                     -                             -      643,493,359.32
        Other non-current financial
          assets                                     140,000,000.00                         -                   -                             -     140,000,000.00
        Investment in other equity
          instrument                                                 -                      -                   -              13,685,760.00         13,685,760.00

                                                     140,000,000.00       18,859,672,966.03       567,775,275.40               13,685,760.00      19,581,134,001.43




                                                                                   117
                    CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                Notes to financial statements (Continued)
                                 For the six months ended 30 June 2019

                       (All amounts in Renminbi “RMB” unless otherwise stated)


VIIl.     Ri sks related to financial instruments (Continued)

1.        Classi fication of financial instruments (Continued)

         1 January 2019

        Financial liabilities                                           Financial liabilities at amortised cost


        Short-term borrowings                                                               2,597, 652,702.43
        Notes payable                                                                       3,416,755,681.80
        Accounts payable                                                                    6,468,535,961.17
        Other payables                                                                      1,539, 436,971.93
        Non-current liabilities due within one year                                             5,861, 324.37
        Long-term borrowings                                                                   31,600,000.00
        Long-term payables                                                                      3,763, 978.52


                                                                                          14,063,606,620.22


2.        Transfer of financial assets

Trans ferred financial assets that are not derec ognized in their entirety

As at 30 June 2019, the Group had endorsed commercial bills receivable (the "Endorsed Bills") to
certain of its suppliers in order to settle trade payables due to such suppliers of RMB5,000,000. 00 (31
December 2018: RMB 301,416.00). During the year, the Group operated a number of discounting
business through several banks in China. At 30 June 2019, the carrying value thereof was
RMB211,316,836.99 (31 December 2018: RMB170,013,427.11). In the opinion of the directors, the
Group has retained the substantial risks and rewards, which include default risks relating to s uch
Endorsed Bills, and accordingly, it continued to recognize the full carrying amounts of the Endorsed
Bills and the associated trade payables settled. Subsequent to the Endorsement, the Group did not
retain any rights of the use of the Endorsed Bills, including the sales, transfer or pledge of the Endorsed
Bills to any other third parties. As at 30 June 2019, the carrying value of trade pay ables settled by the
Group totalled RMB 216, 316,836.99 (31 December 2018: RMB170,314,843.11).




                                                      118
               CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                             For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)



VIIl.   Ri sks related to financial instruments (Continued)

2.      Transfer of financial assets (Continued)

Trans ferred financial assets that are derecognized in their entirety in which continuing involvement
exists

As at 30 June 2019, the Group had endorsed commercial bills receivable (the "Endorsed Bills") to
certain of its suppliers in order to settle trade pay ables due to such suppliers of RMB665,479,757.50
(31 December 2018: RMB568,118,674.84). During the year, the Group operated a number of
discounting business through se veral banks in China. At 30 June 2019, the carrying value thereof was
RMB879,092,916.00 (31 December 2018: RMB705, 143, 849.35). The derecognized bills had a maturity
of 1 to 12 months at the end of the reporting period. In accordanc e with t he Law of Negotia ble
Instruments, the holders of the derecognized bills have a right of recourse against the Group if the
accepting banks default (the “Continuing Involvement ”). In the opinion of the directors, the Group has
transferred substantially all risks and rewards relating to the derecognized bills. Accordingly, it has
derecognized the full carrying amounts of the derecognized bills and the associated trade payables.
The maximum exposure to loss from the Group's Continuing Involvement in the derecognized bills and
the undiscounted cash flows to repurc hase these derecognized bills is equal to their carrying amounts.
In the opinion of the directors, the fair values of the Group’s Continuing Involvement in the
derecognized bills are not significant.

During t he six mont hs ended 30 June 2019, the Group has not recognized any gain or loss on the date
of trans fer. No gain or loss was recognized from derecognized financial assets in which the Continuing
Involvement exists, both during the year or cumulatively.

During t he six mont hs ended 30 June 2019, the Group has not recognized any gain or loss on the date
of transfer of the derec ognized bills. No gains or losses were recognized from the Continuing
Involvement, both during the year or cumulatively.

As part of its normal business, the Group entered into an trade receivable factoring arrangement (the
“Arrangement”) without recourse and trans ferred certain trade receivables to a bank. In the opinion of
the directors, the Group has transferred substantially all risks and rewards under the arrangement.
Accordingly, it has derecognized t he full carrying amounts of the associated trade receivables. The
original carrying value of the derecognized trade receivables transferred under the Arrangement that
have not been settled as at 30 June 2019 amounted to RMB1,299,923,031.76 (31 Dec ember 2018:
RMB827,745,640.19).




                                                   119
               CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                             For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)


VIIl.   Ri sks related to financial instruments (Continued)

3.      Risks of financial instruments


The Group's principal financial instruments comprise bank borrowings and cash and short term deposits.
The main purpose of thes e financial instruments is to raise finance for the Group's operations. The
Group has various other financial assets and liabilities such as trade receivables and trade payabl es,
which arise directly from its operations.

The Company’s board of directors are responsible for planning and establishing the risk management
framework of the Group, formulating risk management policies and related guidelines of the Group and
supervising the implementation of risk management meas ures. The Group has already developed risk
management policies to identify and analyse the risks faced by the Group, which have clearly identified
specific risks, covering a lot of aspects such as market risk, credit risk and liquidity risk management.
The Group regularly assesses the market environment and changes in the Group’s business activities
to determine whether or not to update the risk management policies and systems. The risk
management of the Group shall be conducted by the operations and management department
according to the policy approved by the Company’s management. The operations and management
department identifies, evaluates and avoids related risks by means of close cooperation with o ther
business units of the Group.

To avoid the risk concentrating on a single industry, a specific area or a specific counterparty, the Group
spreads financial instruments risk with diversified investments and business portfolio.

Credit ri sk

The Group only trades with recognised and creditworthy third parties. It is the Group’s policy that all
customers who wish to trade on credit terms are subject to credit verification procedures. In addition,
receivable balances are monit ored on an ongoing basis and the Group’s exposure to bad debts is not
significant. For t ransactions that are not denominated in the functional currency of t he relevant
operating unit, the Group does not offer credit terms without the special approval of t he credit control
department of the Group.

Since cash and bank balances, bank acceptance bills receivable and derivative financial instruments
are placed in the well -establis hed banks with high credit ratings, the credit risk of these financial
instruments is lower.

The other financial instruments of the Group include cash and bank and other receivables. The credit
risk of these financial assets result from default of counterparty. The maximum credit exposure equals
to the book value of these instruments.




                                                   120
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                              Notes to financial statements (Continued)
                                   For the six months ended 30 June 2019

                    (All amounts in Renminbi “RMB” unless otherwise stated)


VIIl.   Ri sks related to financial instruments (Continued)

3.       Risks of financial instruments (Continued)

Credit ri sk (Continued)

The Group applies standard c redit clause for s ale of goods to customers, at the same time purchase
other goods from some of the major customers. Disclosures regarding maximum credit exposure on
trade receivables are as follows:

                                                                   30 June 2019            1 January 2019


        Trade receivable book value                           12,991,845,283.92         10,733,695,012.29
        Less: Bad debt provision                                 (49,300,143.89)           (39,521,434.74)


        Carrying value                                        12,942,545,140.03         10,694,173,577.55


        Amount payable to customer


The Group has agreement with customers stating that only in the circumstances of default in payment
from the c ustomer, can the Group use the payable balance of the same c ustomer t o offset receivables.
Therefore, at every balanc e sheet date, the maximum credit risk expos ure of the Group is the total
amount of trade receivables less bad debt provision. Since payables cannot be offset within the balance
sheet, the maximum credit risk exposure is without deducting the customer payable balance.


Since the Group trades only with recognised and creditworthy third parties, there is no requirement for
collateral. Credit risks are managed by customer/counterparty, by geographical region and by industry
sector. There are no significant concentrations of credit risk within the Group as the customer bases of
the Group’s trade receivables are widely dispersed in different sectors and industries. The Group does
not hold any collateral or ot her credit enhancements over its trade receivable balances.

Determination of significant increase in credit risk

At each reporting date, the group determines whet her the credit risk of a financial asset has increased
significantly since initial recognition. When determining whether the credit risk of a financial asset has
increased significantly since initial recognition, the Group considers reasonable and supportable
information that is relevant and available without undue cost or effort. This includes both quantitative
and qualit ative information analysis, based on the Group’s hist orical experience and informed credit
assessment and including forward-looking information. In order to determine the change of expected
default risk during the financial instrument’s entire lifetime, the Group compares the default risk of
financial instrument on the balance sheet date and on the initial recognition date base on a single
financial instrument or financial instrument port folio with similar default risk.




                                                       121
                    CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                 Notes to financial statements (Continued)
                                  For the six months ended 30 June 2019

                       (All amounts in Renminbi “RMB” unless otherwise stated)


VIIl.       Ri sks related to financial instruments (Continued)

3.           Risks of financial instruments (Continued)

Credit ri sk (Continued)

The Group determines that the credit risk tof financial assets has significantly increased when one or
more quantitative or qualitative criteria are met:
     -  quantitative criteria are mai nly probability of default increasing more t han a given % since
        initial recognition;
     -  qualitative criteria are mainly significant detrimental changes in the borrower’s operating or
        financial conditions and early warning customer lists.
        -      The upper criteria is 30 days the borrowers default.
Definition of credit-impaired financial assets

In assessing whether a financial asset is credit-impaired, the Group considers both quantitative and
qualitative information in line with internal credit risk management. The Group assesses whether a
financial asset is credit-impaired by considering the following factors:
      -    significant financial diffic ulty of the borrower or issuer;
      -    a breach of contract such as a default or past due event;
      -    the lender(s) of t he borrower, for economic or contractual reasons relating to the borrower’s
           financial difficulty, having granted to the borrower concession(s) that the lender(s) would not
           otherwise consider;
      -    it is becoming probable that the borrower will enter bankruptcy or other financial
           reorganisation;
      -    the disappearance of an active market for security because of financial difficulties ;
      -    financial assets purchased or sourc ed at large discounts indicating that credit losses have
           occurred.

            The impairment of financial assets may not be nec essarily due to a single disparat e event. The
            combined effects of multiple events may result in financial assets being credit -impaired.

Parameter of the expected credit loss model

Based on whether there is a significant increas e in credit risk and whether the financial assets are
credit-impaired, the Group recognizes impairment allowance for different assets using either 12 -month
expected credit losses or lifetime expected credit losses. The measurement of the ECL model is a
function of the probability of default, the loss given default (i.e. the magnitude of the loss if there is a
default) and the exposure at default. The Group establishes the model by considering the quantitative
analysis of historical statistics such as counterparty rating, the guarant ee method, collateral category,
repayment method, and also forward -looking information.




                                                        122
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                               For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)


VIIl.   Ri sks related to financial instruments (Continued)

3.      Risks of financial instruments (Continued)

Credit ri sk (Continued)

Definitions:
        -    The probability of default is the probability that the debtor will not be able to meet its
             repayment obligations within the following 12 mont hs or throughout the remaining duration.
             To reflect the macro-economic environment conditions, the Group’s assessment of the
             probability of default is based on the calculation of the ECL model adjusted by forward-
             looking information.
        -    The loss given default (i.e. the magnitude of the loss if there is a default) refers to the
             Group's expectation of the extent of the loss of default risk exposure. The loss given default
             varies depending on the type of counterparty, the way and priority of recourse, and the type
             of collateral. The loss given default is the percentage of the risk exposure loss at the time of
             default, calculated on the basis of the next 12 mont hs or the entire duration.
        -    The exposure at default refers to the amount that the Group should be repaid in the event of
             default in the next 12 months or throughout the remaining period.
Forward-look ing information

The assessment of a significant increas e in credit risk and the calculation of the ECL both involve
forward-looking information. The Group recognizes key economic ratios that influence credit risk and
ECL by historical data analysis.
As at 30 June 2019, there was no evidence of significant increase in credit risk (31 December 2018: nil).

Currency ri sk

The Group’s major operational activities are carried out in Mainland China and a majority of
thetransactions are denominated in RMB. The Group is exposed to foreign exchange risk arising from
the recognized assets and liabilities, and future transactions denominated in foreign currencies,
primarily with respect to United States dollars and Hong Kong dollars. The Group’s finance department
at its headquarters is responsible for monitoring the amounts of assets and liabilities, and transactions
denominated in foreign currencies. The Group may consider entering into forward exchange contracts
or currency swap contracts to mitigate the foreign exchange risk.




                                                    123
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                               Notes to financial statements (Continued)
                                 For the six months ended 30 June 2019

                        (All amounts in Renminbi “RMB” unless otherwise stated)


VIIl.     Ri sks related to financial instruments (Continued)

4.        Capital management

The Company’s primary objective for managing capital is to ensure that it maintains a strong credit
rating and healthy capital ratio in order to support its business, maximize s hareholders’ value and
benefit relat ed parties. Management als o aims to maintain a capital structure that ensures the lowest
cost of capital available to the entity.

Management adjusts the capital structure through adjusting dividend payments to sharehold ers,
returning capital to shareholders, issuing new shares or selling assets to reduce debts.

The Group’s total capital is the total shareholders’ equity in the balance sheet. The Group does not
adopt an asset ratio as a compulsory factor to govern capital investment.

The gearing ratios of the Group as at 30 June 2019 and 1 January 2019 were as follows:


                                                                30 June 2019         1 January 2019

        Gearing ratio                                                56.59%                  54.44%




                                                   124
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                             Notes to financial statements (Continued)
                              For the six months ended 30 June 2019

                   (All amounts in Renminbi “RMB” unless otherwise stated)


IX.      Di sclosure of fair value

1.       Assets and liabilities at fair value

30 June 2019:


                                       Input applied in the measurement of fair value
                                      Quoted                  Significant     Significant            Total
                                     prices in               observable     unobservable
                                        active                    inputs          inputs
                                     markets
                                      Level 1                    Level 2          Level 3

      Receivable financing                   -          325,439,580.18                   -   325,439,580.18
      Investment in other
        equity instrument                    -    -         13,685,760.00                -    13,685,760.00
      Other non-current
        financial assets                     -                          -   140,000,000.00   140,000,000.00


                                             -          339,125,340.18      140,000,000.00   479,125,340.18



1 January 2019:


                                        Input applied in the measurement of fair value
                                      Quoted                  Significant     Significant            Total
                                     prices in               observable     unobservable
                                        active                    inputs          inputs
                                     markets
                                      Level 1                    Level 2          Level 3

      Receivable financing                   -          567,775,275.40                   -   567,775,275.40
      Investment in other
        equity instrument                    -    -         13,685,760.00                -    13,685,760.00
      Other non-current
        financial assets                     -                          -   140,000,000.00   140,000,000.00


                                             -          581,461,035.40      140,000,000.00   721,461,035.40




                                                      125
                       CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                      Notes to financial statements (Continued)
                                        For the six months ended 30 June 2019

                             (All amounts in Renminbi “RMB” unless otherwise stated)


IX.          Di sclosure of fair value

2.           Assets and liabilities disclosed at fair value

1 January 2019:


                                                   Input applied in the measurement of fair value
                                                 Quoted                 Significant       Significant                 Total
                                                prices in              observable       unobservable
                                                   active                   inputs            inputs
                                                markets
                                                 Level 1                   Level 2              Level 3


         Long-term borrowings                           -             31,600,000.00                   -        31,600,000.00


3.           Estimation of fair value

The following are book value and fair value of financial instruments of the Group excluding those that has
immaterial different in book value and fair value:


                                       30 June 2019                   1 January 2019                31 December 2018
                                Book value        Fair value      Book value       Fair value    Book value      Fair value

     Financial liabilities
     Long-term                                                                                  31,600,000.0
     borrowings                           -                 -   31,600,000.00   31,600,000.00              0    31,600,000.00

Management has assessed that the fair values of cash and cash equivalents, notes receivable, trade receivables,
other receivables, short-term borrowings, notes payable, trade payables, other payables, non -current liabilities due
within one year and other current assets and liabilities, and current liabilities approximate to their carrying amounts
largely due to the short remaining maturities of these instruments.

The financial controller of the Group takes the responsibility to formulate policies and procedures related to
financial instrument fair value measurements and directly reports to the CFO and the audit committee. On each
balance sheet date, the financial department analyses the variation of the fair vule of financial instruments and
determines the inputs applicable to valuation. The valuation is required to be approved by the CFO.

The fair values of financial assets and liabilities are the amount at which the instrument could be exchanged or
debts could be settled in an arm’s length transactio n between knowledgeable and willing parties, other than in a
forced or liquidation sale. The following methods and assumptions were used to estimate the fair values.

The fair values of short-term and long-term borrowings, and long-term payables have been calculated by
discounting the expected future cash flows using market rates of return currently available for other financial
instruments with similar terms, credit risk and remaining maturities. As at 30 June 2019, the Group’s own non -
performance risk for short-term and long-term borrowings was assessed to be insignificant.

For an equity instrument of listed entities, the market price is used to determine fair value. For an equity instrument
of non-listed entities, the market comparable company model is used to estimate fair value. The Group believes
that estimated fair value by the valuation method is rational, and also the most sufficient value at the balance sheet
date.

                                                                126
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

        Notes to financial statements (Continued)
          For the six months ended 30 June 2019

 (All amounts in Renminbi “RMB” unless otherwise stated)




                           127
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                              Notes to financial statements (Continued)
                                For the six months ended 30 June 2019

                    (All amounts in Renminbi “RMB” unless otherwise stated)

IX.      Di sclosure of fair value

4.       Unobservable inputs

A financial instrument that is measured at fair value with measurement of level 3 is insensitive to reasonable
fluctuation of the unobservable inputs.


5.       Transfers between levels of fair value measurement

At 30 June 2019 and 1 January 2019, there were no trans fers of fair value measurement s between
Level 1 and Level 2.




                                                        128
                                                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                                                 Notes to financial statements (Continued)
                                                                   For the six months ended 30 June 2019

                                                    (All amounts in Renminbi “RMB” unless otherwise stated)


X.      Related party relationships and transactions (Continued)

1.   Parent

                                                                                                                 Share capital   Proportion of ownership   Proportion of voting power
                     Registered address                                                  Nature of business      (RMB’0,000)    interest in the Company              in the Company

                                                Industrial investment holding, trustee of a pharmaceutical
     Sinopharm                                  enterprise, assets reorganization, dis tribution and retail of
         Group                Shanghai                        medicines and pharmaceutical products, etc.         297,165.62                    56.06%                       56.06%

The ultimate controlling party of the Company is CNP GC.

2.   Subsidiaries

     Refer to Note V II (1) for details of subsidiaries.




                                                                                               129
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                Notes to financial statements (Continued)
                                  For the six months ended 30 June 2019

                     (All amounts in Renminbi “RMB” unless otherwise stated)


3.   Associates

     Refer to Note V II (2) for details of associates.

     Company name                                                           Related party relationships
     Shenzhen Main Luck Pharmaceutical Co., Ltd.                                              Associate
     Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd.                                Associate
     Shenzhen Zhijun Pharmaceutical Trade Co., Ltd.                                           Associate
     Sinopharm Group Zhijun(Shenzhen) Pingshan Pharmaceutical Co., Ltd.                       Associate
     Shyndec Pharmaceutical                                                                   Associate
     Sinopharm Group Zhijun(Suzhou) Pharmaceutical Co., Ltd.                                  Associate
     Shanghai Dingqun Enterprise Management Consulting Co., Ltd.                              Associate
     Sinopharm Jienuo Medical Treatment Sevice Guangdong Co., Ltd.                            Associate
     Shanghai Beiyi Guoda pharmaceutical Co. Ltd.                                             Associate
     Shanghai Liyi Drug Store Co.,Ltd                                                         Associate
     Dongyuan accord pharmaceutical chain Co., Ltd.                                           Associate
     Shanghai Renbei Pharmacy Co., Ltd.                                                       Associate
     Guangdong Jianhui Construction Investment Management Co., Ltd.                           Associate

4.   Other related parties


     Company name                                                           Related party relationships
     Sinopharm Holding Shanxi Co., Ltd.                                    Controlled by Sinopharm Group

     Sinopharm Group Southw est Medicine Co., Ltd.                         Controlled by Sinopharm Group

     Sinopharm Holding Tianjin Co., Ltd.                                   Controlled by Sinopharm Group

     Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd.     Controlled by Sinopharm Group
     Sinopharm Holding Biopharmaceutical (Tianjin) Co., Ltd.               Controlled by Sinopharm Group
     Sinopharm Holding Zhihuiminsheng (Tianjin) Pharmaceutical Co., Ltd.   Controlled by Sinopharm Group
     Sinopharm Holding Shenyang Co., Ltd.                                  Controlled by Sinopharm Group
     Sinopharm Holding Dalian Co., Ltd.                                    Controlled by Sinopharm Group
     Sinopharm Holding Jinzhou Co., Ltd.                                   Controlled by Sinopharm Group
     Sinopharm Group Shanxi Co., Ltd.                                      Controlled by Sinopharm Group
     Sinopharm Holding Hubei Co., Ltd.                                     Controlled by Sinopharm Group
     Sinopharm Holding Shanxi Co., Ltd.                                    Controlled by Sinopharm Group
     Sinopharm Holding Shanxi Jincheng Co., Ltd.                           Controlled by Sinopharm Group
     Sinopharm Holding Shanxi Mingdikang Medicine Co., Ltd.                Controlled by Sinopharm Group
     Sinopharm Holding Shanxi Zhidekang Medicine Co., Ltd.                 Controlled by Sinopharm Group
     Sinopharm Group Medicine Logistic Co., Ltd.                           Controlled by Sinopharm Group
     Sinopharm Holding Hunan Co., Ltd.                                     Controlled by Sinopharm Group
     Sinopharm Holding Yongzhou Co., Ltd.                                  Controlled by Sinopharm Group

                                                           130
             CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                              For the six months ended 30 June 2019

                (All amounts in Renminbi “RMB” unless otherwise stated)

Company name                                                                 Related party relationships
China National Medicines Co., Ltd.                                          Controlled by Sinopharm Group
Sinopharm Group Guorui Medicine Co., Ltd.                                   Controlled by Sinopharm Group
Sinopharm Prospect Dentech (Beijing) Co., Ltd.                              Controlled by Sinopharm Group
Sinopharm Holding Beijing Kangchen Bio-Pharmaceutical Co., Ltd.             Controlled by Sinopharm Group
Sinopharm Holding Beijing Co., Ltd.                                         Controlled by Sinopharm Group
Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co., Ltd.       Controlled by Sinopharm Group
Sinopharm holdings Beijing huahong co., Ltd                                 Controlled by Sinopharm Group
Sinopharm Holding Zhejiang Co., Ltd.                                        Controlled by Sinopharm Group
Sinopharm Holding Sub Marketing Center Co., Ltd.                            Controlled by Sinopharm Group
Sinopharm Holding Henan Co., Ltd.                                           Controlled by Sinopharm Group
Sinopharm Holding Pingdingshan Co., Ltd.                                    Controlled by Sinopharm Group
Sinopharm Holding Anhui Co., Ltd.                                           Controlled by Sinopharm Group
Sinopharm Holding Fuzhou Co., Ltd.                                          Controlled by Sinopharm Group
Sinopharm Holding Shandong Co., Ltd.                                        Controlled by Sinopharm Group
Sinopharm Holding Lunan Co., Ltd.                                           Controlled by Sinopharm Group
Sinopharm Holding Rizhao Co., Ltd.                                          Controlled by Sinopharm Group
Sinopharm Holding Jinan Co., Ltd.                                           Controlled by Sinopharm Group
Sinopharm Holding Dezhou Co., Ltd.                                          Controlled by Sinopharm Group
Sinopharm Holding Liaocheng Co., Ltd.                                       Controlled by Sinopharm Group
Sinopharm Holding Hainan Co., Ltd.                                          Controlled by Sinopharm Group
Sinopharm Holding Fujian Co., Ltd.                                          Controlled by Sinopharm Group
Sinopharm Holding Putian Co., Ltd.                                          Controlled by Sinopharm Group
Sinopharm Holding Quanzhou Co., Ltd.                                        Controlled by Sinopharm Group
Sinopharm Holding Xiamen Co., Ltd.                                          Controlled by Sinopharm Group
Sinopharm Holding Fuzhou Medical Devices Co., Ltd.                          Controlled by Sinopharm Group
Sinopharm Holding Ningxia Co., Ltd.                                         Controlled by Sinopharm Group
Sinopharm Holding Xinyu Co., Ltd.                                           Controlled by Sinopharm Group
Sinopharm Holding Inner Mongolia Co., Ltd.                                  Controlled by Sinopharm Group
Sinopharm Holding Tongliao Co., Ltd.                                        Controlled by Sinopharm Group
Sinopharm Holding Ulanqab Co., Ltd.                                         Controlled by Sinopharm Group
Sinopharm Holding Bayannaoer Co., Ltd.                                      Controlled by Sinopharm Group
Sinopharm Holding Hulun Buir Co., Ltd.                                      Controlled by Sinopharm Group
Sinopharm Holding Ordos Co., Ltd.                                           Controlled by Sinopharm Group
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd.    Controlled by Sinopharm Group
Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd.           Controlled by Sinopharm Group
Sinopharm Holding Xinjiang Special Drugs Kashgar Pharmaceutical Co., Ltd.   Controlled by Sinopharm Group
Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical Co., Ltd.   Controlled by Sinopharm Group
Sinopharm Holding Shanghai Likang Phar maceutical Co., Ltd.                 Controlled by Sinopharm Group
Sinopharm Holding Jilin Co., Ltd.                                           Controlled by Sinopharm Group
Sinopharm Holding Chongqing Co., Ltd.                                       Controlled by Sinopharm Group
                                                       131
            CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                              For the six months ended 30 June 2019

                (All amounts in Renminbi “RMB” unless otherwise stated)

Company name                                                            Related party relationships
Sinopharm Holding Jiangsu Co., Ltd.                                   Controlled by Sinopharm Group
Sinopharm Holding Yangzhou Co., Ltd.                                  Controlled by Sinopharm Group
Sinopharm Holding Yangzhou Biological Products Co., Ltd.              Controlled by Sinopharm Group
Sinopharm Holding Taizhou Co., Ltd.                                   Controlled by Sinopharm Group
Sinopharm Holding Yangzhou Medical Treatment Equipment Co., Ltd.      Controlled by Sinopharm Group
Sinopharm Holding Suzhou Co., Ltd.                                    Controlled by Sinopharm Group
Sinopharm Holding Wuxi Co., Ltd.                                      Controlled by Sinopharm Group
Sinopharm Holding Lianyungang Co., Ltd.                               Controlled by Sinopharm Group
Sinopharm Holding Nanjing Wende Pharmaceutical Co.,Ltd.               Controlled by Sinopharm Group
Sinopharm Holding Changzhou Co., Ltd.                                 Controlled by Sinopharm Group
Sinopharm Holding Changzhou Medical Logistics Center Co., Ltd.        Controlled by Sinopharm Group
Sinopharm Holding Yancheng Co., Ltd.                                  Controlled by Sinopharm Group
Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd.              Controlled by Sinopharm Group
Sinopharm Holding Heilongjiang Co., Ltd.                              Controlled by Sinopharm Group
Sinopharm Le-Ren-Tang Medicine Co., Ltd.                              Controlled by Sinopharm Group
Sinopharm Lerentang Hebei Medical Instrument Trade Co., Ltd.          Controlled by Sinopharm Group
Sinopharm Holding Lerentang Pharmaceutical Co., Ltd.                  Controlled by Sinopharm Group
Sinopharm Lerentang Shijiazhuang Medicine Co., Ltd.                   Controlled by Sinopharm Group
Sinopharm Holding Donghong Medical (Shanghai) Co., Ltd.               Controlled by Sinopharm Group
Shanghai Merro Pharmaceutical Co., Ltd.                               Controlled by Sinopharm Group
Sinopharm Xingsha Phar maceuticals (Xiamen) Co., Ltd.                 Controlled by Sinopharm Group
Sinopharm Holding Huaideju Pharmaceutical (Xiamen) Co., Ltd.          Controlled by Sinopharm Group
Sinopharm Holding Zhangzhou Pharmaceutical Co., Ltd.                  Controlled by Sinopharm Group
Sinopharm Holding Dalian Hecheng Co., Ltd.                            Controlled by Sinopharm Group
Sinopharm Holding Changsha Co., Ltd.                                  Controlled by Sinopharm Group
Pudong New Area of Shanghai Pharmaceutical Medicine Ltd.              Controlled by Sinopharm Group
Sinopharm Group Anhui Medical Devices Co., Ltd.                       Controlled by Sinopharm Group
China Medical Equipment Shandong Co., Ltd.                            Controlled by Sinopharm Group
Sinopharm Liaoning Medical Equipment Co., Ltd.                        Controlled by Sinopharm Group
Sinopharm Group Shanxi Medical Devices Co., Ltd.                      Controlled by Sinopharm Group
Sinopharm Group Shanghai Medicine Device Co., Ltd.                    Controlled by Sinopharm Group
Sinopharm Holding Hunan Phar maceutical Development Co., Ltd.         Controlled by Sinopharm Group
Sinopharm Holding Shanxi Instrument Branch Co., Ltd.                  Controlled by Sinopharm Group
Sinopharm Holding Tianjin Distribution Center Co., Ltd.               Controlled by Sinopharm Group
Sinopharm Holding Zhangzhou Co., Ltd.                                 Controlled by Sinopharm Group
Sinopharm Sichuan Phar maceutical Co., Ltd.                           Controlled by Sinopharm Group
Sinopharm Holding Gansu Co., Ltd.                                     Controlled by Sinopharm Group
Sinopharm Holding Jiangxi Co., Ltd.                                   Controlled by Sinopharm Group
Sinopharm Holding Chengdu Co., Ltd.                                   Controlled by Sinopharm Group
Sinopharm Group Guangdong Medicine Device Co., Ltd.                   Controlled by Sinopharm Group
                                                          132
            CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                              For the six months ended 30 June 2019

                (All amounts in Renminbi “RMB” unless otherwise stated)

Company name                                                                    Related party relationships
Sinopharm Holding Hunan Weian Phar macy Medicine Chain Company
Limited                                                                        Controlled by Sinopharm Group
Sinopharm Xinxiang Chain Store Co., Ltd.                                       Controlled by Sinopharm Group
Sinopharm Holding Yunnan Co., Ltd.                                             Controlled by Sinopharm Group
Sinopharm Holding Nantong Co., Ltd.                                            Controlled by Sinopharm Group
Sinopharm Medical Instrument Guizhou Qiannan Co., Ltd.                         Controlled by Sinopharm Group
Sinopharm Zhuhai Medical Instrument Co., Ltd.                                  Controlled by Sinopharm Group
Sinopharm Holding Huaian Co., Ltd.                                             Controlled by Sinopharm Group
Sinopharm Group Shanghai Co., Ltd.                                             Controlled by Sinopharm Group
Sinopharm Holding Tianjin Binhai Pharmaceutical Co., Ltd.                      Controlled by Sinopharm Group
China National Pharmaceutical Logistics Co., Ltd.                              Controlled by Sinopharm Group
Xinjiang Baitong Property Service Co., Ltd.                                    Controlled by Sinopharm Group
Sinopharm Group Medicine Logistic Co., Ltd. Guangzhou Branch                   Controlled by Sinopharm Group
China National Scientific Instruments & Materials Imp/Exp Shenzhen Co., Ltd.   Controlled by Sinopharm Group
Guorun Medical Supply Chain Service (Shanghai) Co., Ltd.                       Controlled by Sinopharm Group
Sinopharm Holding (Hubei) Base Pharmaceutical Co., Ltd.                        Controlled by Sinopharm Group
Sinopharm Holding Shanxi Lvliang Co., Ltd.                                     Controlled by Sinopharm Group
Guoyao Lerentang Hebei Medical Device Supply Chain Management Co., Ltd.        Controlled by Sinopharm Group
Sinopharm Lerentang Qinhuangdao Medicine Co., Ltd.                             Controlled by Sinopharm Group
Sinopharm Holding Guizhou Co., Ltd.                                            Controlled by Sinopharm Group
Sinopharm Lerentang Tangshan Medicine Co., Ltd.                                Controlled by Sinopharm Group
Sinopharm Holding Nanping Newforce Co., Ltd.                                   Controlled by Sinopharm Group
Sinopharm Hebei Medical Instrument Co., Ltd.                                   Controlled by Sinopharm Group
Sinopharm Holding Jinhua Co., Ltd.                                             Controlled by Sinopharm Group
Shanghai Tongyu Information Technology Co., Ltd.                               Controlled by Sinopharm Group
Sinopharm Holding Tianjin North Medicine Co., Ltd.                             Controlled by Sinopharm Group
Sinopharm Holding (Hubei) Hankou Pharmacy Co., Ltd.                            Controlled by Sinopharm Group
Sinopharm Holding Hubei Hongyuan Co., Ltd.                                     Controlled by Sinopharm Group
Sinopharm Holding Jiaozuo Co., Ltd.                                            Controlled by Sinopharm Group
Sinopharm Holding Wuhu Co., Ltd.                                               Controlled by Sinopharm Group
Sinopharm Holding Honghe Co., Ltd.                                             Controlled by Sinopharm Group
Sinopharm Holding Chuxiong Co., Ltd.                                           Controlled by Sinopharm Group
Yuxi Sinopharm Medicine Co., Ltd.                                              Controlled by Sinopharm Group
Sinopharm Holding Hainan Hongyi Co., Ltd.                                      Controlled by Sinopharm Group
Sinopharm Guanai Yuankang Pharmacy (Haikou) Co., Ltd.                          Controlled by Sinopharm Group
Sinopharm Holding Longyan Co., Ltd.                                            Controlled by Sinopharm Group
Sinopharm Holding Ningde Co., Ltd.                                             Controlled by Sinopharm Group
Sinopharm Holding Anshun Co., Ltd.                                             Controlled by Sinopharm Group
Sinopharm Holding Tongren Co., Ltd.                                            Controlled by Sinopharm Group
Sinopharm Holding Zunyi Co., Ltd.                                              Controlled by Sinopharm Group

                                                       133
            CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                           Notes to financial statements (Continued)
                             For the six months ended 30 June 2019

                (All amounts in Renminbi “RMB” unless otherwise stated)

Company name                                                                Related party relationships
Sinopharm Holding Guizhou Medical Equiment Co., Ltd.                       Controlled by Sinopharm Group
Sinopharm Holding Jilin Chain Store Co., Ltd.                              Controlled by Sinopharm Group
Sinopharm Holding Siping Co., Ltd.                                         Controlled by Sinopharm Group
Sinopharm Holding Wenzhou Co., Ltd.                                        Controlled by Sinopharm Group
Sinopharm Holding Xuzhou Co., Ltd.                                         Controlled by Sinopharm Group
Guoyao Lerentang Shijiazhuang Medical Management Co., Ltd.                 Controlled by Sinopharm Group
Sinopharm Holding Qinghai Co., Ltd.                                        Controlled by Sinopharm Group
Sinopharm Holding Chongqing Taimin Phar maceutical Co., Ltd.               Controlled by Sinopharm Group
Sinopharm Holding Deyang Co., Ltd.                                         Controlled by Sinopharm Group
Sinopharm Holding Hongrun Medical Business Servic e (Shanghai) Co., Ltd.   Controlled by Sinopharm Group
Sinopharm Guangdong Medical Examination Co., Ltd.                          Controlled by Sinopharm Group
Sinopharm Medical Instrument Foshan Co., Ltd.                              Controlled by Sinopharm Group
Sinopharm Nanping Medical Instrument Co., Ltd.                             Controlled by Sinopharm Group
Sinopharm Group Guangxi Medical Equipment Co., Ltd.                        Controlled by Sinopharm Group
Sinopharm Holding Anhui Pharmaceutical Co., Ltd.                           Controlled by Sinopharm Group
Sinopharm Holding Suzhou Co., Ltd.                                         Controlled by Sinopharm Group
Sinopharm Holding Lu'an Co., Ltd.                                          Controlled by Sinopharm Group
Sinopharm Holding Nanchang Chain Store Co., Ltd.                           Controlled by Sinopharm Group
Sinopharm Holding Xinxiang Co., Ltd.                                       Controlled by Sinopharm Group
Sinopharm Holding Huangshi Co., Ltd.                                       Controlled by Sinopharm Group
Sinopharm Holding Jining Co., Ltd.                                         Controlled by Sinopharm Group
Fujian Sinopharm Medical Instrument Co., Ltd.                              Controlled by Sinopharm Group
Sinopharm Lerentang Baoding Medicine Co., Ltd.                             Controlled by Sinopharm Group
Sinopharm Lerentang Hengshui Medicine Co., Ltd.                            Controlled by Sinopharm Group
Beijing Sinophar m Tianyuan Real Estate & Property Management Co., Ltd.    Controlled by Sinopharm Group
Sinopharm Xinjiang Korla Pharmaceutical Co., Ltd.                          Controlled by Sinopharm Group
Sinopharm Shantou Jinshi Pharmaceutical Co., Ltd.                                  Controlled by CNPGC
Huayi Phar maceutical Co., Ltd.                                                    Controlled by CNPGC
Beijing Huamiao Pharmaceutical Co., Ltd.                                           Controlled by CNPGC
Guizhou Tongjitang Pharmaceutical Co., Ltd.                                        Controlled by CNPGC
Anhui Jingfang Pharmaceutical Co., Ltd.                                            Controlled by CNPGC
Guangdong Medi-World Phar maceutical Co., Ltd.                                     Controlled by CNPGC
Sinopharm Fengliaoxing (Foshan) Medicines Co., Ltd.                                Controlled by CNPGC
Shandong Lu Ya Pharmaceutical Co., Ltd.                                            Controlled by CNPGC
Foshan Fengliaoxing Pharmaceutical Co., Ltd.                                       Controlled by CNPGC
Winteam Phar maceutical Group Ltd.                                                 Controlled by CNPGC
Foshan Dezhong Pharmaceutical Co., Ltd.                                            Controlled by CNPGC
Chengdu Rongsheng Pharmacy Co., Ltd.                                               Controlled by CNPGC
Lanzhou Biotechnology Development Co., Ltd.                                        Controlled by CNPGC
Beijing Huasheng Pharmaceutical Biotechnology Development Co., Ltd.                Controlled by CNPGC
                                                       134
             CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                              For the six months ended 30 June 2019

                (All amounts in Renminbi “RMB” unless otherwise stated)

Company name                                                                Related party relationships
Shantou Jinshi Pow der Injection Co., Ltd.                                         Controlled by CNPGC
Chengdu Institute of Biological Products Co.,Ltd.                                  Controlled by CNPGC
China National Pharmaceutical Industry Co., Ltd.                                   Controlled by CNPGC
Sinopharm Xinjiang Pharmaceutical Co., Ltd.                                        Controlled by CNPGC
Shanghai Modern Hasen (Shangqiu) Pharmaceutical Co., Ltd.                          Controlled by CNPGC
Shanghai Shyndec Pharmaceutical Marketing Co., Ltd.                                Controlled by CNPGC
Sinopharm Group Rongsheng Pharmaceutical Co., Ltd.                                 Controlled by CNPGC
Wuhan Zhonglian Pharmaceutical Group Co., Ltd.                                     Controlled by CNPGC
The Fourth Phar maceutical Co., Ltd. of Zhonglian Group                            Controlled by CNPGC
Sinopharm Chuan Kang Pharmaceutical Co., Ltd.                                      Controlled by CNPGC
China National Pharmaceutical Foreign Trade Corporation                            Controlled by CNPGC
Sinopharm Group Yibin Pharmaceuticals Co., Ltd.                                    Controlled by CNPGC
Sinopharm Yixin Pharmaceutical Co., Ltd.                                           Controlled by CNPGC
Sinopharm Holding Sanyi Medicine (Wuhu) Co., Ltd.                                  Controlled by CNPGC
Guizhou Tongjitang Pharmacy Chain Co., Ltd.                                        Controlled by CNPGC
Sichuan Jiangyouzhongbafuzi Technology Development Co., Ltd.                       Controlled by CNPGC
Lanzhou Institute of Biological Products Co., Ltd.                                 Controlled by CNPGC
Sinopharm Wuhan blood products Co., Ltd.                                           Controlled by CNPGC
Fujian Chentian Jinling Pharmaceutical Co., Ltd.                                   Controlled by CNPGC
Sinopharm Group Guizhou Blood Products Co., Ltd.                                   Controlled by CNPGC
China National of Traditional&Herbal Medicine Co., Ltd.                            Controlled by CNPGC
Sinopharm Chongqing Phar maceutical and Medical Industry Design Institute          Controlled by CNPGC
Group Financial Co.                                                                Controlled by CNPGC
Shanghai Shangsheng Biological Products Co., Ltd.                                  Controlled by CNPGC
Sinopharm Group Chengdu Xinlibang Biological Products Co., Ltd.                    Controlled by CNPGC
Sinopharm Weiqida Phar maceutical Co., Ltd.                                        Controlled by CNPGC
Sinopharm Fengliaoxing Medical Hospital Co., Ltd.                                  Controlled by CNPGC
Sinopharm Group Fengliaoxing Traditional Chinese Medical Center Foshan
Nanhai Co., Ltd.                                                                   Controlled by CNPGC
Sinopharm Group Fengliaoxing Pharmacy (Foshan) Co., Ltd.                           Controlled by CNPGC
Yichang Humanw ell Pharmaceutical Co., Ltd.                                 Associate of Sinopharm Group
Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Co., Ltd.            Associate of Sinopharm Group
Sinopharm Health Online Co., Ltd.                                           Associate of Sinopharm Group
Sinopharm Holding Financing Lease Co., Ltd.                                 Associate of Sinopharm Group
Shanghai Guoda Lingyun Pharmacy Co., Ltd.                                   Associate of Sinopharm Group
Nanchang Sinopharm Holding Guoyaotang Pharmacy Co., Ltd.                    Associate of Sinopharm Group
Changchun Changsheng Gene Pharmaceutical Co., Ltd.                                  Associate of CNPGC
China Otsuka Pharmaceutical Co., Ltd.                                               Associate of CNPGC
Fresenius Kabi Huarui Pharmaceuticals Co., Ltd.                                     Associate of CNPGC
Sinopharm ShanXi Ruifulai Pharmaceutical Co., Ltd.                                  Associate of CNPGC

                                                          135
            CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                           Notes to financial statements (Continued)
                                For the six months ended 30 June 2019

                (All amounts in Renminbi “RMB” unless otherwise stated)

Company name                                                                         Related party relationships
Chongqing Yaoyou Pharmaceutical Co., Ltd.                                               Subsidiary of Fosun Pharm
Sichuan Hexin Pharmaceutical Co., Ltd.                                                  Subsidiary of Fosun Pharm
Guilin South pharmaceutical Co., Ltd.                                                   Subsidiary of Fosun Pharm
Shanghai Chaohui Pharmaceutical Co., Ltd.                                               Subsidiary of Fosun Pharm
Tibet Yaoyou Medicines Co.,Ltd.                                                         Subsidiary of Fosun Pharm
Shenyang Hongqi Pharmaceutical Co., Ltd.                                                Subsidiary of Fosun Pharm
Shanghai Transfusion Technology Co., Ltd.                                               Subsidiary of Fosun Pharm
Jiangsu Wanbang Pharmacy Marketing Co., Ltd.                                            Subsidiary of Fosun Pharm
Chongqing Haisiman Pharmaceutical Co., Ltd.                                             Subsidiary of Fosun Pharm
Jinzhou AoHong Pharmaceuticals Co., Ltd.                                                Subsidiary of Fosun Pharm
Hunan Dongting Phar maceutical Co., Ltd.                                                Subsidiary of Fosun Pharm
Jiangsu Huanghe Pharmaceutical Co., Ltd.                                                Subsidiary of Fosun Pharm
Suzhou Erye Pharmaceutical Limited Company                                              Subsidiary of Fosun Pharm
Jiangsu Fuxing Pharmaceutical Trading Co., Ltd                                          Subsidiary of Fosun Pharm
Jiangxi Erye Medicine Marketing Co., Ltd.                                               Subsidiary of Fosun Pharm
Shanghai Compound Technology Medical Devices Co., Ltd.                                  Subsidiary of Fosun Pharm
Foshan Chancheng District Central Hospital                                              Subsidiary of Fosun Pharm
Foshan Chanyixing Medicine Development Co Ltd.                                          Subsidiary of Fosun Pharm
Foshan Chancheng Pharmaceutical Co., Ltd.                                               Subsidiary of Fosun Pharm
Shenzhen Qianda Medical Beauty Clinic                                                   Subsidiary of Fosun Pharm
Shenzhen Heng Sheng Hosital                                                             Subsidiary of Fosun Pharm
                                                                                          Subsidiary of Main Luck
Shenzhen Wanwei Medicine Trading Co., Ltd.                                                         Pharmaceutical
Linyi Medical Group Co., Ltd.                                                Non-controlling interest of a subsidiary
Beijing Golden Elephant Fosun Phar maceutical Co., Ltd.                      Non-controlling interest of a subsidiary
Henan Wanxitang Pharmacy Co., Ltd.                                           Non-controlling interest of a subsidiary
Heyuan Mairui Trading Co., Ltd.                                              Non-controlling interest of a subsidiary
Shenyang Pharmaceutical Co., Ltd.                                            Non-controlling interest of a subsidiary
Zhang Zhenfang                                                               Non-controlling interest of a subsidiary
Pingdingshan Pusheng Pharmaceutical Co., Ltd.                                Non-controlling interest of a subsidiary
Lerentang Investment Group Co., Ltd.                                         Non-controlling interest of a subsidiary
Shenzhen Jiufeng Investment Co., Ltd.                                        Non-controlling interest of a subsidiary
Hunan Minshengtang Investment Co., Ltd.                                      Non-controlling interest of a subsidiary
Taishan Qunkang Phar macy Co., Ltd.                                          Non-controlling interest of a subsidiary
Gu Haiqun                                                                    Non-controlling interest of a subsidiary
Guangdong Jiyuantang Development Co., Ltd.                                   Non-controlling interest of a subsidiary
Hangzhou Xihu Business Group Corporation                                     Non-controlling interest of a subsidiary
                                                                              Controlled by non-controlling interest
Nanjing Yuanguang Trading Co., Ltd.                                                                   of a subsidiary
                                                                              Controlled by non-controlling interest
Taishan Xiangranhui Trade Co., Ltd                                                                    of a subsidiary
Shaoguan Wujiang District Muyang Medicine Information Consultant Co., Ltd.    Controlled by non-controlling interest
                                                      136
            CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                    Notes to financial statements (Continued)
                      For the six months ended 30 June 2019

             (All amounts in Renminbi “RMB” unless otherwise stated)

Company name                                                    Related party relationships
                                                                                 of a subsidiary
                                                        Family member of the non-controlling
Gu Jinhua                                                           shareholder of a subsidiary
                                                        Controller of non-controlling interest of
Wang Yang                                                                           a subsidiary




                                       137
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                               Notes to financial statements (Continued)
                                 For the six months ended 30 June 2019

                   (All amounts in Renminbi “RMB” unless otherwise stated)


X. Related party relationships and transactions (Continued)

5. Major transactions between the Group and its related parties

   (1)     Relat ed party transactions –goods and services

    Purchase of goods and receiving of services from related parties
                                                                             For the six months    For the six months
                    Related party                     Type of transaction   ended 30 June 2019    ended 30 June 2018
    Sinopharm Holding Sub Marketing Center Co.,
    Ltd.                                              Purchase of goods         583,923,608.63        515,167,083.81
    China National Medicines Co., Ltd.                Purchase of goods         263,718,638.49        237,636,101.58
    Sinopharm Holding Shanxi Co., Ltd.
                                                      Purchase of goods         165,125,264.60        156,466,334.83
    Sinopharm Holding Shanxi Co., Ltd.                Purchase of goods         117,012,541.61         83,517,976.15
    Sinopharm Group                                   Purchase of goods          92,577,206.95         95,150,353.69
    Jiangsu Wanbang Pharmacy Marketing Co., Ltd.      Purchase of goods          84,007,944.24         33,623,739.18
    Sinopharm Holding Shenyang Co., Ltd.              Purchase of goods          63,745,181.47         63,689,297.73
    Sinopharm Le-Ren-Tang Medicine Co., Ltd.
                                                      Purchase of goods          58,690,396.26         79,259,083.01
    Lanzhou Biotechnology Development Co., Ltd.       Purchase of goods          55,500,000.00                      -
    Fresenius Kabi Huarui Pharmaceuticals Co., Ltd.   Purchase of goods          54,227,928.18         90,145,795.30
    Sinopharm Group Xinjiang Special Drugs
    National Phar maceutical Co., Ltd.                Purchase of goods          46,674,234.45         39,872,567.55
    Sinopharm Lingyun Biopharmaceutical
    (Shanghai) Co., Ltd.                              Purchase of goods          45,672,377.13        127,271,627.94
    Sinopharm Holding Inner Mongolia Co., Ltd.        Purchase of goods          34,523,083.38         18,984,953.29
    Sinopharm Holding Lunan Co., Ltd.                 Purchase of goods          32,561,603.45         39,298,409.81
    Sinopharm Holding Yangzhou Co., Ltd.              Purchase of goods          29,671,574.81         23,005,232.97
    Jinzhou AoHong Pharmaceuticals Co., Ltd.          Purchase of goods          28,182,818.68         23,749,213.17
    Chongqing Yaoyou Pharmaceutical Co., Ltd.
                                                      Purchase of goods          27,810,842.74         21,508,305.23
    Tibet Yaoyou Medicines Co.,Ltd.
                                                      Purchase of goods          22,100,470.84          2,761,512.07
    Sinopharm Holding Beijing Co., Ltd.               Purchase of goods          20,533,829.97         23,822,442.41
    Shenzhen Main Luck Pharmaceutical Co., Ltd.       Purchase of goods          19,919,483.19         14,173,934.35
    Winteam Phar maceutical Group Ltd.
                                                      Purchase of goods          19,827,909.28         15,331,219.12
    Jiangxi Erye Medicine Marketing Co., Ltd.         Purchase of goods          17,959,707.56                      -
    Sinopharm Holding Fujian Co., Ltd.                Purchase of goods          16,041,870.46          9,171,420.33
    Sinopharm Holding Lerentang Pharmaceutical
    Co., Ltd.                                         Purchase of goods          15,458,862.78         16,967,826.05
    Sinopharm Group Zhijun(Shenzhen) Pingshan
    Pharmaceutical Co., Ltd.                          Purchase of goods          14,856,080.60          5,519,530.03




                                                        138
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                               Notes to financial statements (Continued)
                                 For the six months ended 30 June 2019

                    (All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

5. Major transactions between the Group and its related parties (Continued)

     (1)     Relat ed party transactions –goods and services (Continued)
     Purchase of goods and receiving of services from related parties
                                                                           For the six months    For the six months
                      Related party                  Type of ransaction   ended 30 June 2019    ended 30 June 2018

     Sinopharm Holding Pingdingshan Co., Ltd.        Purchase of goods         14,429,720.75         14,446,097.55
     Sinopharm Group Zhijun(Shenzhen)
     Pharmaceutical Co., Ltd.                        Purchase of goods         14,255,875.26          4,670,243.13

     Chengdu Rongsheng Pharmacy Co., Ltd.            Purchase of goods         13,746,664.10          8,958,139.00

     Sinopharm Holding Jiangsu Co., Ltd.             Purchase of goods         12,867,682.99         12,276,533.11

     Sinopharm Holding Henan Co., Ltd.               Purchase of goods         12,814,208.20          6,575,293.46

     Shenzhen Wanwei Medicine Trading Co., Ltd.      Purchase of goods         10,936,219.06         10,428,796.93

     Sinopharm Holding Xiamen Co., Ltd.              Purchase of goods         10,273,616.32          9,246,131.91
     Sinopharm Holding Xinjiang Special Drugs
     Western Pharmaceutical Co., Ltd.                Purchase of goods         10,193,725.00          3,614,733.64

     Sinopharm Holding Hubei Co., Ltd.               Purchase of goods          9,071,305.78                      -
     Sinopharm Lerentang Shijiazhuang Medicine
     Co., Ltd.                                       Purchase of goods          8,677,802.26         10,465,965.70

     Sinopharm Holding Shandong Co., Ltd.            Purchase of goods          7,306,060.58            718,163.95

     Sinopharm Holding Ningxia Co., Ltd.             Purchase of goods          7,213,084.95          6,113,483.50
     Sinopharm Xingsha Phar maceuticals (Xiamen)
     Co., Ltd.                                       Purchase of goods          7,161,067.43          3,676,515.83

     Yichang Humanw ell Pharmaceutical Co., Ltd.     Purchase of goods          6,711,635.43          4,513,583.78

     Sinopharm Holding Changzhou Co., Ltd.           Purchase of goods          6,705,005.60          2,900,395.11

     China Otsuka Pharmaceutical Co., Ltd.           Purchase of goods          6,697,508.52            241,236.29
     Shanghai Modern Phar maceutical Co., Ltd.
     (Modern Pharmaceutical)                         Purchase of goods          6,577,712.26            142,521.39

     Sinopharm Yixin Pharmaceutical Co., Ltd.        Purchase of goods          6,463,202.79                      -

     Sinopharm Holding Hunan Co., Ltd.               Purchase of goods          5,496,202.17         22,435,971.65

     Sichuan Hexin Pharmaceutical Co., Ltd.          Purchase of goods          5,339,761.19          1,094,458.11
     Sinopharm Holding Shanghai Likang
     Pharmaceutical Co., Ltd.                        Purchase of goods          5,189,668.17          2,003,690.59

     Suzhou Erye Pharmaceutical Limited Company      Purchase of goods          4,729,210.71          9,554,764.03
     Beijing Huasheng Pharmaceutical Biotechnology
     Development Co., Ltd.                           Purchase of goods          4,541,480.00                      -
     Sinopharm Chuan Kang Pharmaceutical Co.,
     Ltd.                                            Purchase of goods          4,521,905.90          5,794,907.91

     Sinopharm Holding Shanxi Lvliang Co., Ltd.      Purchase of goods          4,369,021.12                      -

                                                        139
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                Notes to financial statements (Continued)
                                  For the six months ended 30 June 2019

                    (All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

5. Major transactions between the Group and its related parties (Continued)

     (1)     Relat ed party transactions –goods and services (Continued)
     Purchase of goods and receiving of services from related parties
                                                                              For the six months    For the six months
                      Related party                     Type of ransaction   ended 30 June 2019    ended 30 June 2018
     Sinopharm Holding Changzhou Medical Logistics
     Center Co., Ltd.                                   Purchase of goods          3,824,818.27          4,530,675.45

     Sinopharm Group Guorui Medicine Co., Ltd.          Purchase of goods          3,219,200.90          3,735,052.72
     Sinopharm Group Rongsheng Pharmaceutical
     Co., Ltd.                                          Purchase of goods          3,158,018.27          1,574,958.10

     Sinopharm Holding Jinan Co., Ltd.                  Purchase of goods          3,031,490.28          3,621,583.69

     Sinopharm Holding Tongliao Co., Ltd.               Purchase of goods          2,906,482.17            584,726.70

     Sinopharm Holding Fuzhou Co., Ltd.                 Purchase of goods          2,676,398.89          4,703,935.11
     Pudong New Area of Shanghai Pharmaceutical
     Medicine Ltd.                                      Purchase of goods          2,652,028.86          2,298,554.23

     Sinopharm Holding Heilongjiang Co., Ltd.           Purchase of goods          2,603,286.79                      -
     Shanghai Shangsheng Biological Products Co.,
     Ltd.                                               Purchase of goods          2,478,155.34                      -

     Sinopharm Holding Wuxi Co., Ltd.                   Purchase of goods          2,456,981.90          2,453,393.36
     Sinopharm Lerentang Hebei Medical Instrument
     Trade Co., Ltd.                                    Purchase of goods          2,326,076.00          1,889,376.44

     Sinopharm holdings Beijing huahong co., Ltd        Purchase of goods          2,143,025.16          3,550,261.18

     Sinopharm Holding Jinzhou Co., Ltd.                Purchase of goods          2,050,823.42          2,249,516.98

     Shanghai Chaohui Pharmaceutical Co., Ltd.          Purchase of goods          1,967,905.09            330,363.62

     Guizhou Tongjitang Pharmaceutical Co., Ltd.        Purchase of goods          1,947,122.98          1,536,282.82
     Beijing Golden Elephant Fosun Phar maceutical
     Co., Ltd.                                          Purchase of goods          1,673,805.68          1,799,439.15
     Sinopharm Holding Beijing Kangchen Bio-
     Pharmaceutical Co., Ltd.                           Purchase of goods          1,672,471.40          2,240,460.54

     Jiangsu Fuxing Pharmaceutical Trading Co., Ltd     Purchase of goods          1,647,132.50                      -
     Sinopharm Holding Xinjiang Xinte Karamay
     Pharmaceutical Co., Ltd.                           Purchase of goods          1,634,592.42          1,451,522.48
     Sinopharm Holding Donghong Medical
     (Shanghai) Co., Ltd.                               Purchase of goods          1,634,371.49            615,989.84

     Shantou Jinshi Pow der Injection Co., Ltd.         Purchase of goods          1,575,114.81            330,119.93

     Sinopharm Weiqida Phar maceutical Co., Ltd.        Purchase of goods          1,396,321.58             31,965.52

     Shenyang Hongqi Pharmaceutical Co., Ltd.           Purchase of goods          1,395,942.72          1,058,670.33
     Sinopharm Holding Zhihuiminsheng (Tianjin)
     Pharmaceutical Co., Ltd.                           Purchase of goods          1,374,403.26             80,410.58

     China National Pharmaceutical Industry Co., Ltd.   Purchase of goods          1,237,603.17            188,275.39

                                                           140
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                Notes to financial statements (Continued)
                                  For the six months ended 30 June 2019

                    (All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

5. Major transactions between the Group and its related parties (Continued)

     (1)     Relat ed party transactions –goods and services (Continued)
     Purchase of goods and receiving of services from related parties
                                                                               For the six months    For the six months
                       Related party                     Type of ransaction   ended 30 June 2019    ended 30 June 2018

     Hunan Dongting Phar maceutical Co., Ltd.            Purchase of goods          1,221,714.73            340,441.92

     Sinopharm Holding Yancheng Co., Ltd.                Purchase of goods          1,174,557.52          1,402,672.48

     Sinopharm Holding Changsha Co., Ltd.                Purchase of goods          1,166,442.94            414,897.11
     Sinopharm Group (Tianjin) Eastern Bokang
     Pharmaceutical Co., Ltd.                            Purchase of goods          1,115,619.67            921,863.31
     Sinopharm Fengliaoxing (Foshan) Medicines
     Co., Ltd.                                           Purchase of goods          1,047,564.70                      -

     Sinopharm Group Southw est Medicine Co., Ltd.       Purchase of goods            942,169.90            153,389.66
     Sinopharm Holding Xinjiang Special Drugs
     Kashgar Pharmaceutical Co., Ltd.                    Purchase of goods            904,775.75            400,421.76
     Shanghai Modern Hasen (Shangqiu)
     Pharmaceutical Co., Ltd.                            Purchase of goods            853,055.98            200,544.82
     Sinopharm Group Yibin Pharmaceuticals Co.,
     Ltd.                                                Purchase of goods            825,452.16            121,618.26

     Sinopharm Holding Suzhou Co., Ltd.                  Purchase of goods            821,818.78          6,247,553.79

     Chengdu Institute of Biological Products Co.,Ltd.   Purchase of goods            821,518.40                      -

     Sinopharm Holding Lianyungang Co., Ltd.             Purchase of goods            815,620.38            153,111.27

     Sinopharm Holding Hulun Buir Co., Ltd.              Purchase of goods            813,318.59            713,341.49

     Guangdong Medi-World Phar maceutical Co., Ltd.      Purchase of goods            778,815.71            584,223.16

     Sinopharm Holding Dalian Co., Ltd.                  Purchase of goods            708,136.87            769,041.46

     Sinopharm Holding Tianjin Co., Ltd.                 Purchase of goods            706,163.71          1,598,345.37
     Sinopharm Holding Biopharmaceutical (Tianjin)
     Co., Ltd.                                           Purchase of goods            627,257.64             63,648.72

     Sinopharm Holding Putian Co., Ltd.                  Purchase of goods            602,182.39            895,532.89

     Sinopharm Holding Anhui Co., Ltd.                   Purchase of goods            558,299.15            539,726.50

     Sinopharm Holding Hainan Co., Ltd.                  Purchase of goods            556,396.59             97,450.60
     Hutchison Whampoa Sinopharm
     Pharmaceuticals (Shanghai) Co., Ltd.                Purchase of goods            551,162.81            763,625.20

     Anhui Jingfang Pharmaceutical Co., Ltd.             Purchase of goods            537,444.48            (13,269.30)
     Sinopharm Group Guizhou Blood Products Co.,
     Ltd.                                                Purchase of goods            536,000.00                      -

     Shanghai Merro Pharmaceutical Co., Ltd.             Purchase of goods            513,712.42          2,016,321.47

     Sinopharm Holding Quanzhou Co., Ltd.                Purchase of goods            509,096.37            509,662.25

                                                            141
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                Notes to financial statements (Continued)
                                  For the six months ended 30 June 2019

                    (All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

5. Major transactions between the Group and its related parties (Continued)

     (1)     Relat ed party transactions –goods and services (Continued)
     Purchase of goods and receiving of services from related parties
                                                                              For the six months    For the six months
                      Related party                     Type of ransaction   ended 30 June 2019    ended 30 June 2018

     Guilin South pharmaceutical Co., Ltd.              Purchase of goods            491,705.68                      -

     Shanghai Transfusion Technology Co., Ltd.          Purchase of goods            444,825.76                      -
     Sinopharm Holding Yangzhou Medical Treatment
     Equipment Co., Ltd.                                Purchase of goods            434,284.50                      -

     Sinopharm Holding Zhejiang Co., Ltd.               Purchase of goods            383,036.87            289,516.54
     Wuhan Zhonglian Pharmaceutical Group Co.,
     Ltd.                                               Purchase of goods            357,980.82            435,887.39

     Fujian Chentian Jinling Pharmaceutical Co., Ltd.   Purchase of goods            328,557.99                      -
     Sinopharm Shantou Jinshi Pharmaceutical Co.,
     Ltd.                                               Purchase of goods            257,629.73            109,039.96

     Sinopharm Wuhan blood products Co., Ltd.           Purchase of goods            248,000.00                      -
     Sinopharm Holding Shanxi Zhidekang Medicine
     Co., Ltd.                                          Purchase of goods            189,064.65                      -

     Sinopharm Holding Dalian Hecheng Co., Ltd.         Purchase of goods            175,327.42            262,027.99
     Sinopharm Holding Yangzhou Biological
     Products Co., Ltd.                                 Purchase of goods            166,268.35            444,000.00

     Foshan Fengliaoxing Pharmaceutical Co., Ltd.       Purchase of goods            160,792.59          2,015,702.90
     Sinopharm Holding (Hubei) Base Pharmaceutical
     Co., Ltd.                                          Purchase of goods            152,076.28                      -

     Sinopharm Holding Dezhou Co., Ltd.                 Purchase of goods            148,796.05            228,731.52
     Sinopharm Holding Hunan Phar maceutical
     Development Co., Ltd.                              Purchase of goods            142,539.15                      -

     Jiangsu Huanghe Pharmaceutical Co., Ltd.           Purchase of goods            133,968.48                      -

     Sinopharm Holding Bayannaoer Co., Ltd.             Purchase of goods            120,003.15                      -

     China Medical Equipment Shandong Co., Ltd.         Purchase of goods            116,013.65                      -

     Sinopharm Group Shanxi Co., Ltd.                   Purchase of goods            111,864.77             87,596.90

     Foshan Dezhong Pharmaceutical Co., Ltd.            Purchase of goods             95,965.53                      -

     Sinopharm Liaoning Medical Equipment Co., Ltd.     Purchase of goods             90,783.71                      -

     Sinopharm Xinjiang Pharmaceutical Co., Ltd.        Purchase of goods             73,542.96                 12.82
     Sinopharm Holding Fuzhou Medical Devices Co.,
     Ltd.                                               Purchase of goods             40,707.96                      -
     Sinopharm Holding Sanyi Medicine (Wuhu) Co.,
     Ltd.                                               Purchase of goods             39,203.47             58,952.78
     The Fourth Phar maceutical Co., Ltd. of
     Zhonglian Group                                    Purchase of goods             35,353.29             24,295.86

                                                           142
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                Notes to financial statements (Continued)
                                   For the six months ended 30 June 2019

                     (All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

5. Major transactions between the Group and its related parties (Continued)

     (1)     Relat ed party transactions –goods and services (Continued)
     Purchase of goods and receiving of services from related parties
                                                                                For the six months    For the six months
                       Related party                      Type of ransaction   ended 30 June 2019    ended 30 June 2018

     Sinopharm Holding Taizhou Co., Ltd.                  Purchase of goods             34,438.88             73,304.23
     Sichuan Jiangyouzhongbafuzi Technology
     Development Co., Ltd.                                Purchase of goods             29,090.91             49,297.30

     Sinopharm Holding Rizhao Co., Ltd.                   Purchase of goods             19,834.99            586,905.03
     Sinopharm Holding Nanjing Wende
     Pharmaceutical Co.,Ltd.                              Purchase of goods             19,401.89             27,310.34
     Guoyao Lerentang Hebei Medical Device Supply
     Chain Management Co., Ltd.                           Purchase of goods             17,131.04                      -

     Sinopharm Holding Ulanqab Co., Ltd.                  Purchase of goods             17,027.43            308,191.79
     Sinopharm Holding Shanxi Mingdikang Medicine
     Co., Ltd.                                            Purchase of goods             14,185.41                      -

     Sinopharm Holding Jilin Co., Ltd.                    Purchase of goods             13,152.13                      -

     Sinopharm Group Medicine Logistic Co., Ltd.          Purchase of goods             10,445.10                      -
     Sinopharm Holding Zhangzhou Pharmaceutical
     Co., Ltd.                                            Purchase of goods             10,137.93                      -

     Sinopharm Holding Shanxi Jincheng Co., Ltd.          Purchase of goods              8,408.74             11,481.46
     Sinopharm Holding Beijing Tianxing Puxin
     Biological Medical Co., Ltd.                         Purchase of goods              6,891.48            335,484.62

     Lanzhou Institute of Biological Products Co., Ltd.   Purchase of goods                      -        52,860,000.00
     China National Pharmaceutical Foreign Trade
     Corporation                                          Purchase of goods                      -        13,645,110.09
     Sinopharm Holding Shanxi Instrument Branch
     Co., Ltd.                                            Purchase of goods                      -         7,410,730.23
     Shanghai Shyndec Pharmaceutical Marketing
     Co., Ltd.                                            Purchase of goods                      -           995,510.64
     Sinopharm Lerentang Qinhuangdao Medicine
     Co., Ltd.                                            Purchase of goods                      -           193,277.45
     Sinopharm Group Zhijun(Suzhou)
     Pharmaceutical Co., Ltd.                             Purchase of goods                      -           173,484.94

     Sinopharm Holding Guizhou Co., Ltd.                  Purchase of goods                      -            73,729.75

     Chongqing Haisiman Pharmaceutical Co., Ltd.          Purchase of goods                      -            33,895.38
     Sinopharm Lerentang Tangshan Medicine Co.,
     Ltd.                                                 Purchase of goods                      -            20,598.94

     Sinopharm Holding Nanping Newforce Co., Ltd.         Purchase of goods                      -            15,315.32

     Sinopharm Zhuhai Medical Instrument Co., Ltd.        Purchase of goods                      -             9,564.95

     Sinopharm Hebei Medical Instrument Co., Ltd.         Purchase of goods                      -             6,533.84

     Beijing Huamiao Pharmaceutical Co., Ltd.             Purchase of goods                      -             2,649.79

                                                             143
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                Notes to financial statements (Continued)
                                  For the six months ended 30 June 2019

                    (All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

5. Major transactions between the Group and its related parties (Continued)

     (1)     Relat ed party transactions –goods and services (Continued)
     Purchase of goods and receiving of services from related parties
                                                                             For the six months    For the six months
                    Related party                     Type of ransaction    ended 30 June 2019    ended 30 June 2018
     Sinopharm Group Guangdong Medicine Device
     Co., Ltd.                                        Purchase of goods                       -             1,770.86

     Sinopharm Holding Jinhua Co., Ltd.               Purchase of goods                       -                38.80

     Sinopharm Holding Ordos Co., Ltd.                Purchase of goods                       -           (10,667.01)

     Sinopharm Holding Yongzhou Co., Ltd.             Purchase of goods                 (49.36)            38,141.67

     Sinopharm Prospect Dentech (Beijing) Co., Ltd.   Purchase of goods                 (63.80)             4,073.48
     Sinopharm Group Chengdu Xinlibang Biological
     Products Co., Ltd.                               Purchase of goods              (9,500.00)                     -

     Shandong Lu Ya Pharmaceutical Co., Ltd.          Purchase of goods             (23,551.03)         2,909,280.05

     Huayi Phar maceutical Co., Ltd.                  Purchase of goods           (191,940.52)            695,732.52
                                                      Storage and
     Sinopharm Group Medicine Logistic Co., Ltd.      transport                   7,275,965.45          6,666,668.71
                                                      cost;Consulting c e
                                                      Consulting servi
     Sinopharm Health Online Co., Ltd.                service fee
                                                      fee                         6,298,404.97          6,085,895.22
                                                      Consulting servic e
     Shanghai Beiyi Guoda pharmaceutical Co. Ltd.     fee                         1,229,716.93          1,263,962.22
     Shanghai Tongyu Information Technology Co.,      Information
     Ltd.                                             system access fee             142,764.15             98,113.21

     Pingdingshan Pusheng Pharmaceutical Co., Ltd.    Others                        109,458.10                      -
     China National Pharmaceutical Logistics Co.,     Storage and
     Ltd.                                             transport cost                 54,651.59             44,030.65
     Sinopharm Holding Tianjin Binhai                 Information
     Pharmaceutical Co., Ltd.                         system access fee                       -             7,075.47




                                                         144
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                Notes to financial statements (Continued)
                                  For the six months ended 30 June 2019

                      (All amounts in Renminbi “RMB” unless otherwise stated)


X.    Related party relationships and transactions (Continued)

5.    Major transactions between the Group and its related parties (Continued)

     (1) Relat ed party transactions –goods and services (Continued)
      Sale of goods and rendering of services
                                                        Type of      For the six months ended 30    For the six months
      Related party                                  transaction                       June 2019   ended 30 June 2018
      Sinopharm Group                                Sale of goods               113,329,103.30         54,514,170.65
      Foshan Chancheng Pharmaceutical Co., Ltd.      Sale of goods                59,004,606.02         42,375,781.14
      Shanghai Beiyi Guoda pharmaceutical Co. Ltd.   Sale of goods                55,645,701.04         49,727,338.63
      Sinopharm Holding Hainan Co., Ltd.             Sale of goods                48,570,645.00         29,338,160.25
      Sinopharm Holding Hainan Hongyi Co., Ltd.      Sale of goods                17,357,873.16         24,127,524.50
      Sinopharm Holding Wenzhou Co., Ltd.            Sale of goods                14,754,017.76         10,830,194.79
      Sinopharm holdings Beijing huahong co., Ltd    Sale of goods                13,727,246.49          4,816,641.92
      Sinopharm Lingyun Biopharmaceutical
                                                                                                         7,489,471.75
      (Shanghai) Co., Ltd.                           Sale of goods                12,079,800.79
      Sinopharm Holding Sub Marketing Center Co.,
                                                                                                         8,970,804.72
      Ltd.                                           Sale of goods                12,022,683.32
      Beijing Golden Elephant Fosun
                                                                                                         9,738,902.57
      Pharmaceutical Co., Ltd.                       Sale of goods                11,241,528.41
      Sinopharm Holding Beijing Co., Ltd.            Sale of goods                10,806,898.05          5,770,691.44

      Shenzhen Heng Sheng Hosital                    Sale of goods                10,482,252.70          8,215,885.93

      Sinopharm Le-Ren-Tang Medicine Co., Ltd.       Sale of goods                 9,207,801.66          7,728,482.84
      Pudong New Area of Shanghai Pharmaceutical
                                                                                                        10,524,551.98
      Medicine Ltd.                                  Sale of goods                 9,123,984.75
      Sinopharm Holding Henan Co., Ltd.              Sale of goods                 8,408,084.97          8,736,054.45

      Sinopharm Sichuan Phar maceutical Co., Ltd.    Sale of goods                 7,749,468.18          9,061,104.38

      Sinopharm Holding Nantong Co., Ltd.            Sale of goods                 7,649,412.43          8,717,338.95

      Sinopharm Holding Shandong Co., Ltd.           Sale of goods                 7,547,654.37          4,577,546.05
      Sinopharm Group (Tianjin) Eastern Bokang
      Pharmaceutical Co., Ltd.                       Sale of goods                 7,346,892.05          6,837,559.00
      Foshan Chancheng District Central Hospital     Sale of goods                 5,456,346.95          4,504,644.96
      Sinopharm Holding Hubei Co., Ltd.              Sale of goods                 5,366,299.13          3,772,162.27

      Sinopharm Holding Shanxi Co., Ltd.             Sale of goods                 5,246,365.87            917,123.69
      Sinopharm Holding Shanghai Likang
      Pharmaceutical Co., Ltd.                       Sale of goods                 4,369,980.09            673,847.93
      Sinopharm Holding Yangzhou Co., Ltd.           Sale of goods                 4,293,371.83          5,144,530.81
      Shanghai Merro Pharmaceutical Co., Ltd.        Sale of goods                 4,068,584.00          1,223,626.19
      Sinopharm Group Xinjiang Special Drugs
      National Phar maceutical Co., Ltd.             Sale of goods                 3,423,834.39         17,376,808.71




                                                        145
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                Notes to financial statements (Continued)
                                  For the six months ended 30 June 2019

                    (All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

5. Major transactions between the Group and its related parties (Continued)

     (1)     Relat ed party transactions –goods and services (Continued)
     Sale of goods and rendering of services
                                                                           For the six months    For the six months
                       Related party                 Type of ransaction   ended 30 June 2019    ended 30 June 2018

     Sinopharm Holding Yunnan Co., Ltd.              Sale of goods              3,291,886.51          5,713,012.18
     Foshan Chanyixing Medicine Development Co
     Ltd.                                            Sale of goods              3,252,324.63          1,450,198.02

     Sinopharm Holding Anhui Co., Ltd.               Sale of goods              2,691,014.38          1,168,187.29

     Sinopharm Holding Jinzhou Co., Ltd.             Sale of goods              2,509,334.67                      -

     Sinopharm Holding Xuzhou Co., Ltd.              Sale of goods              2,496,791.90                      -

     Sinopharm Holding Tianjin Co., Ltd.             Sale of goods              2,043,046.86          1,029,758.40

     China National Medicines Co., Ltd.              Sale of goods              1,932,350.56          1,740,716.75

     Sinopharm Holding Shanxi Co., Ltd.              Sale of goods              1,927,565.82          2,577,305.96

     Sinopharm Holding Jilin Co., Ltd.               Sale of goods              1,861,781.97          1,172,196.27

     Sinopharm Holding Dalian Co., Ltd.              Sale of goods              1,833,913.00          1,263,047.36
     Sinopharm Holding Xinjiang Special Drugs
     Western Pharmaceutical Co., Ltd.                Sale of goods              1,828,562.25          4,409,528.78

     Sinopharm Holding Fujian Co., Ltd.              Sale of goods              1,731,691.96            979,220.98

     Sinopharm Group Southw est Medicine Co., Ltd.   Sale of goods              1,580,662.42          1,006,172.43

     Sinopharm Holding Hunan Co., Ltd.               Sale of goods              1,476,158.08          1,308,950.82
     Sinopharm Holding Anhui Pharmaceutical Co.,
     Ltd.                                            Sale of goods              1,436,139.10                      -

     Shanghai Liyi Drug Store Co.,Ltd                Sale of goods              1,432,059.22                      -
     Hutchison Whampoa Sinopharm
     Pharmaceuticals (Shanghai) Co., Ltd.            Sale of goods              1,283,881.89                      -

     Yuxi Sinopharm Medicine Co., Ltd.               Sale of goods                956,668.77            625,927.21

     Sinopharm Holding Ningxia Co., Ltd.             Sale of goods                772,293.60            240,539.93

     Sinopharm Holding Dalian Hecheng Co., Ltd.      Sale of goods                743,390.17            301,982.46

     Sinopharm Holding Shenyang Co., Ltd.            Sale of goods                608,363.96            103,846.57

     Sinopharm Holding Gansu Co., Ltd.               Sale of goods                505,887.62          1,353,030.00

     Sinopharm Holding Wuxi Co., Ltd.                Sale of goods                484,790.17            349,203.27

     Shanghai Guoda Lingyun Pharmacy Co., Ltd.       Sale of goods                425,714.65            540,476.78

     Sinopharm Holding Wuhu Co., Ltd.                Sale of goods                419,826.51            127,195.59

                                                        146
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                               Notes to financial statements (Continued)
                                 For the six months ended 30 June 2019

                    (All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

5. Major transactions between the Group and its related parties (Continued)

     (1)     Relat ed party transactions –goods and services (Continued)
     Sale of goods and rendering of services
                                                                           For the six months    For the six months
                      Related party                  Type of ransaction   ended 30 June 2019    ended 30 June 2018

     Sinopharm Holding Jiaozuo Co., Ltd.             Sale of goods                406,784.27                      -

     Sinopharm Holding Yancheng Co., Ltd.            Sale of goods                382,851.04                      -

     Sinopharm Holding Honghe Co., Ltd.              Sale of goods                377,186.11              9,595.25
     Sinopharm Holding Tianjin North Medicine Co.,
     Ltd.                                            Sale of goods                363,748.93             58,775.86

     Sinopharm Holding Inner Mongolia Co., Ltd.      Sale of goods                326,327.82            239,130.68
     Sinopharm Group Guangdong Medicine Device
     Co., Ltd.                                       Sale of goods                296,825.53                      -

     Sinopharm Group Shanxi Co., Ltd.                Sale of goods                266,895.84            486,510.78

     Sinopharm Holding Chengdu Co., Ltd.             Sale of goods                252,754.20            215,685.18

     Sinopharm Holding Qinghai Co., Ltd.             Sale of goods                250,674.21            168,653.68
     Sinopharm Holding Donghong Medical
     (Shanghai) Co., Ltd.                            Sale of goods                225,250.43            448,887.64

     Sinopharm Holding Tongren Co., Ltd.             Sale of goods                197,968.78             21,011.20
     Sinopharm Holding (Hubei) Hankou Pharmacy
     Co., Ltd.                                       Sale of goods                195,295.22                      -
     Nanchang Sinopharm Holding Guoyaotang
     Pharmacy Co., Ltd.                              Sale of goods                173,403.11                      -

     Sinopharm Holding Guizhou Co., Ltd.             Sale of goods                158,213.27          1,042,466.52
     Sinopharm Holding Chongqing Taimin
     Pharmaceutical Co., Ltd.                        Sale of goods                155,771.69                      -

     Sinopharm Holding Zunyi Co., Ltd.               Sale of goods                146,542.78             35,054.94

     Sinopharm Holding Taizhou Co., Ltd.             Sale of goods                141,236.61                      -

     Shenzhen Qianda Medical Beauty Clinic           Sale of goods                140,970.86                      -

     Sinopharm Holding Chongqing Co., Ltd.           Sale of goods                138,748.70            145,147.69

     Sinopharm Holding Hubei Hongyuan Co., Ltd.      Sale of goods                132,556.02             97,162.40

     Sinopharm Holding Fuzhou Co., Ltd.              Sale of goods                131,753.26              6,927.14
     Sinopharm Group Fengliaoxing Pharmacy
     (Foshan) Co., Ltd.                              Sale of goods                128,687.69                      -

     Sinopharm Holding Jiangxi Co., Ltd.             Sale of goods                123,135.25            371,671.87
     Sinopharm Medical Instrument Guizhou Qiannan
     Co., Ltd.                                       Sale of goods                114,833.43             12,712.58
     Sinopharm Fengliaoxing Medical Hospital Co.,
     Ltd.                                            Sale of goods                101,588.59             16,804.60

                                                        147
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                Notes to financial statements (Continued)
                                  For the six months ended 30 June 2019

                    (All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

5. Major transactions between the Group and its related parties (Continued)

     (1)     Relat ed party transactions –goods and services (Continued)
     Sale of goods and rendering of services
                                                                               For the six months    For the six months
                      Related party                      Type of ransaction   ended 30 June 2019    ended 30 June 2018
     Sinopharm Holding Changzhou Medical Logistics
     Center Co., Ltd.                                    Sale of goods                 86,668.69            175,352.41

     Sinopharm Holding Jiangsu Co., Ltd.                 Sale of goods                 76,013.68                      -
     Sinopharm Guangdong Medical Examination
     Co., Ltd.                                           Sale of goods                 73,203.54                      -
     Sinopharm Holding Guizhou Medical Equiment
     Co., Ltd.                                           Sale of goods                 70,073.94            133,404.19
     Sinopharm Group Guangxi Medical Equipment
     Co., Ltd.                                           Sale of goods                 66,013.12                      -
     Shanghai Compound Technology Medical
     Devices Co., Ltd.                                   Sale of goods                 59,482.76                      -

     Sinopharm Medical Instrument Foshan Co., Ltd.       Sale of goods                 58,330.19                      -
     Sinopharm Guanai Yuankang Pharmacy
     (Haikou) Co., Ltd.                                  Sale of goods                 55,763.79                      -

     Sinopharm Holding Changzhou Co., Ltd.               Sale of goods                 50,185.70            435,840.01

     Sinopharm Holding Ulanqab Co., Ltd.                 Sale of goods                 47,434.77            175,775.17

     Sinopharm Holding Longyan Co., Ltd.                 Sale of goods                 44,963.97             58,172.99

     Sinopharm Holding Chuxiong Co., Ltd.                Sale of goods                 41,712.99                      -

     Sinopharm Holding Jilin Chain Store Co., Ltd.       Sale of goods                 38,234.48             91,435.98

     Sinopharm Holding Deyang Co., Ltd.                  Sale of goods                 36,771.21                      -

     Dongyuan accord pharmaceutical chain Co., Ltd.      Sale of goods                 30,868.27             39,393.65

     Sinopharm Holding Anshun Co., Ltd.                  Sale of goods                 21,688.95                      -

     Sinopharm Nanping Medical Instrument Co., Ltd.      Sale of goods                 19,993.91                      -

     Sinopharm Holding Ningde Co., Ltd.                  Sale of goods                 19,818.67             23,864.90

     Sinopharm Holding Liaocheng Co., Ltd.               Sale of goods                 15,779.79             15,596.82
     Sinopharm Group Zhijun(Shenzhen)
     Pharmaceutical Co., Ltd.                            Sale of goods                 14,949.89              7,617.49

     Sinopharm Zhuhai Medical Instrument Co., Ltd.       Sale of goods                 13,939.15              9,119.70

     Sinopharm Holding Shanxi Jincheng Co., Ltd.         Sale of goods                 11,204.59                      -

     Sinopharm Holding Siping Co., Ltd.                  Sale of goods                  9,998.28             26,548.13
     Sinopharm Holding Hongrun Medical Business
     Service (Shanghai) Co., Ltd.                        Sale of goods                  9,884.46             19,240.32
     China National Scientific Instruments & Materials
     Imp/Exp Shenzhen Co., Ltd.                          Sale of goods                  6,320.71                      -

                                                            148
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                               Notes to financial statements (Continued)
                                 For the six months ended 30 June 2019

                    (All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

5. Major transactions between the Group and its related parties (Continued)

     (1)     Relat ed party transactions –goods and services (Continued)
     Sale of goods and rendering of services
                                                                            For the six months    For the six months
                     Related party                    Type of ransaction   ended 30 June 2019    ended 30 June 2018
     Sinopharm Group Fengliaoxing Traditional
     Chinese Medical Center Foshan Nanhai Co., Ltd.   Sale of goods                  6,233.90                      -
     Sinopharm Jienuo Medical Treatment Sevice
     Guangdong Co., Ltd.                              Sale of goods                  3,590.16                      -
     Guoyao Lerentang Shijiazhuang Medical
     Management Co., Ltd.                             Sale of goods                  2,663.79                      -

     Sinopharm Holding Zhejiang Co., Ltd.             Sale of goods                          -           921,282.05

     Hubei Pharmaceutical Group Co., Ltd.             Sale of goods                          -           853,130.68

     Sinopharm Holding Heilongjiang Co., Ltd.         Sale of goods                          -           324,789.98

     Sinopharm Holding Yongzhou Co., Ltd.             Sale of goods                          -           203,544.77

     Sinopharm Holding Huaian Co., Ltd.               Sale of goods                          -           128,653.00

     Sinopharm Holding Suzhou Co., Ltd.               Sale of goods                          -           103,840.63
     Sinopharm Group Zhijun(Shenzhen) Pingshan
     Pharmaceutical Co., Ltd.                         Sale of goods                          -            79,279.28

     Sinopharm Holding Lu'an Co., Ltd.                Sale of goods                          -            66,987.18
     Sinopharm Holding Nanchang Chain Store Co.,
     Ltd.                                             Sale of goods                          -            54,017.59

     Sinopharm Holding Xinxiang Co., Ltd.             Sale of goods                          -            34,164.62

     Sinopharm Holding Huangshi Co., Ltd.             Sale of goods                          -            34,025.78

     Sinopharm Holding Jining Co., Ltd.               Sale of goods                          -            19,035.54

     Fujian Sinopharm Medical Instrument Co., Ltd.    Sale of goods                          -            13,988.00
     Sinopharm Lerentang Baoding Medicine Co.,
     Ltd.                                             Sale of goods                          -            12,991.45
     Sinopharm Lerentang Hengshui Medicine Co.,
     Ltd.                                             Sale of goods                          -            12,108.38

     Sinopharm Holding Hulun Buir Co., Ltd.           Sale of goods                          -             4,570.00

     Sinopharm Holding Putian Co., Ltd.               Sale of goods                (33,809.91)            64,610.68

     Sinopharm Holding Quanzhou Co., Ltd.             Sale of goods                (87,055.63)                     -
                                                      Transport and
     China National Medicines Co., Ltd.               storage income             4,430,727.40          3,580,698.30
                                                      Transport and
     Sinopharm Group Medicine Logistic Co., Ltd.      storage income               401,376.93            294,804.62
     Sinopharm Group Zhijun(Shenzhen)
     Pharmaceutical Co., Ltd.                         Meal fee                     308,882.00            294,180.00
     Sinopharm Group Zhijun(Shenzhen) Pingshan        Transport and
     Pharmaceutical Co., Ltd.                         storage income               123,995.03            122,242.00

                                                         149
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                               Notes to financial statements (Continued)
                                 For the six months ended 30 June 2019

                    (All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

5. Major transactions between the Group and its related parties (Continued)

     (1)     Relat ed party transactions –goods and services (Continued)
     Sale of goods and rendering of services
                                                                            For the six months    For the six months
                      Related party                  Type of ransaction    ended 30 June 2019    ended 30 June 2018
                                                     Transport and
     Sinopharm Group Southw est Medicine Co., Ltd.   storage income                 82,001.72                      -
     Sinopharm Holding Biopharmaceutical (Tianjin)   Consulting servic e
     Co., Ltd.                                       income                          2,792.45                      -
                                                     Consulting servic e
     Sinopharm Holding Shanxi Co., Ltd.              income                          1,688.12              9,433.96
                                                     Consulting servic e
     Guizhou Tongjitang Pharmaceutical Co., Ltd.     income                                  -             8,285.71
                                                     Consulting servic e
     Winteam Phar maceutical Group Ltd.              income                                  -             2,023.58
     Sinopharm Holding Shanxi Instrument Branch
     Co., Ltd.                                       Other income                            -             1,132.08




                                                        150
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                 Notes to financial statements (Continued)
                                      For the six months ended 30 June 2019

                     (All amounts in Renminbi “RMB” unless otherwise stated)


X.    Related party relationships and transactions (Continued)

5.    Major transactions between the Group and its related parties (Continued)

     (2) Relat ed party transactions - leases

      (a) As the lessor

                                                                         Income from leases      Income from leases
                                                       Type of assets
                                                                           For the six months      For the six months
                                                         under leases
                                                                        ended 30 June 2019      ended 30 June 2018

      Sinopharm Group Zhijun(Shenzhen)
        Pharmaceutical Co., Ltd.                             Building            957,142.86              351,428.58
      Shenzhen Zhijun Pharmaceutical Trade Co.,
        Ltd.                                                 Building            285,714.30              285,714.30

      China National Medicines Co., Ltd.                     Building             24,000.00               45,714.29


      (b) As the lessee
                                                                        Expense from leases     Expense from leases
                                                      Type of assets
                                                                          For the six months      For the six months
                                                        under leases
                                                                         ended 30 June 2019      ended 30 June 2018

      Beijing Golden Elephant Fosun Phar maceutical         Building            6,670,660.92           5,461,904.76
        Co., Ltd.
      Sinopharm Group Medicine Logistic Co., Ltd.        Equipment              3,750,000.00           3,750,000.00
      Sinopharm Group Shanghai Co., Ltd.                    Building            3,721,698.57           3,790,426.48
      Sinopharm Group Medicine Logistic Co., Ltd.           Building            3,539,999.98           3,539,999.98
      Lerentang Investment Group Co., Ltd.                  Building            3,354,162.22           2,277,892.99
      Pingdingshan Pusheng Pharmaceutical Co.,              Building            2,405,696.37           1,277,732.57
         Ltd.
      Sinopharm Group Xinjiang Special Drugs                Building            2,234,982.50           3,914,124.76
         National Phar maceutical Co., Ltd.
      Sinopharm Holding Yangzhou Co., Ltd.                  Building            1,902,091.52           1,862,857.14
      Hunan Minshengtang Investment Co., Ltd.               Building            1,838,716.70           2,027,673.99
      Linyi Medical Group Co., Ltd.                         Building            1,482,764.04           2,036,376.45
      Guangdong Jiyuantang Development Co., Ltd.            Building            1,088,752.31           1,192,864.11
      Nanjing Yuanguang Trading Co., Ltd.                   Building              855,468.84             866,794.89
      Shaoguan Wujiang District Muyang Medicine             Building              476,713.98             470,161.86
        Information Consultant Co., Ltd.
      Taishan Xiangranhui Trade Co., Ltd                    Building              456,054.17             451,963.88
      Sinopharm Holding Xinjiang Xinte Karamay              Building              277,303.54             184,253.18
        Pharmaceutical Co., Ltd.
      Sinopharm Group                                       Building              267,553.06             259,915.02
      Wang Yang                                             Building              262,857.12             262,857.12
      Sinopharm Holding Beijing Co., Ltd.                   Building              260,870.74             235,714.29
      Shenyang Pharmaceutical Co., Ltd.                     Building              253,564.15           3,548,219.75
      Zhang Zhenfang                                        Building              214,062.49             402,499.98



                                                         151
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                               Notes to financial statements (Continued)
                                 For the six months ended 30 June 2019

                     (All amounts in Renminbi “RMB” unless otherwise stated)


X.     Related party relationships and transactions (Continued)

5.     Major transactions between the Group and its related parties (Continued)

(2)    Relat ed party transactions – leases (Continued)

(b) As the lessee (continued)

                                                                     Expense from leases    Expense from leases
                                                    Type of assets     For the six months     For the six months
                                                      under leases    ended 30 June 2019     ended 30 June 2018


      Gu Jinhua                                          Building            207,084.48             178,800.00
      Beijing Sinopharm Tianyuan Real Estate &
      Property Management Co., Ltd.                      Building            173,068.27             173,523.81
      Hangzhou Xihu Business Group
      Corporation                                        Building            145,986.38             132,823.81
      China National Medicines Co., Ltd.                 Building            145,865.91             153,750.00
      Sinopharm Xinjiang Pharmaceutical Co.,
      Ltd.                                               Building            136,369.86             130,208.30
      Gu Haiqun                                          Building            108,277.61                    0.00
      Shenzhen Jiufeng Investment Co., Ltd.              Building            100,414.19              89,260.15
      Taishan Qunkang Pharmacy Co., Ltd.                 Building             70,864.95              74,170.32
      Sinopharm Holding Xinjiang Special Drugs
      Kashgar Pharmaceutical Co., Ltd.                   Building             47,990.56             236,051.50
      Sinopharm Holding Fujian Co., Ltd.                 Building              6,571.39               6,571.38
      Sinopharm Holding Shanxi Co., Ltd.                 Building                   0.00            234,017.16
      Xinjiang Baitong Property Service Co., Ltd.        Building                   0.00             44,581.16
      Sinopharm Group Zhijun(Shenzhen)
      Pingshan Pharmaceutical Co., Ltd.                     Park                    0.00             35,428.57




                                                      152
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                Notes to financial statements (Continued)
                                 For the six months ended 30 June 2019

                      (All amounts in Renminbi “RMB” unless otherwise stated)


X.     Related party relationships and transactions (Continued)

5.     Major transactions between the Group and its related parties (Continued)

(3)   Relat ed party transactions – Financing

            Related party                Amount             Inception           Maturity                     Note
      Borrowed from
                                                                                           Discount on commercial
      Group Financial Co.           43,428,873.45      22 April 2019        31 May 2019          acceptance notes
          Group Financial Co.       40,197,120.84      17 April 2019        17 July 2019     Short-term borrowings
                                                                                           Discount on commercial
      Group Financial Co.           38,384,946.67   24 January 2019     28 February 2019         acceptance notes
      Group Financial Co.           37,311,327.27      22 May 2019       22 August 2019      Short-term borrowings
                                                                                           Discount on commercial
      Group Financial Co.           33,815,106.08    18 March 2019         30 April 2019         acceptance notes
      CNPGC                         31,600,000.00      24 May 2017          24 May 2020      Long-term borrow ings
                                                                                           Discount on commercial
      Group Financial Co.           27,852,641.75   30 January 2019        30 April 2019         acceptance notes
                                                                                           Discount on commercial
      Group Financial Co.           27,408,812.83      21 May 2019         30 June 2019          acceptance notes
                                                                                           Discount on commercial
      Group Financial Co.           23,148,716.55    18 March 2019          25 May 2019          acceptance notes
                                                                                           Discount on commercial
      Group Financial Co.           21,601,820.90    18 March 2019          31 May 2019          acceptance notes
                                                                                           Discount on commercial
      Group Financial Co.           20,902,069.23   30 January 2019       28 March 2019          acceptance notes
                                                                                           Discount on commercial
      Group Financial Co.           18,680,669.14      21 May 2019          31 July 2019         acceptance notes
                                                                                           Discount on commercial
      Group Financial Co.           18,309,493.19   30 January 2019       29 March 2019          acceptance notes
                                                                                           Discount on commercial
      Group Financial Co.           14,997,301.99   30 January 2019         09 May 2019          acceptance notes
                                                                                           Discount on commercial
      Group Financial Co.           14,442,689.98   30 January 2019       25 March 2019          acceptance notes
                                                                                           Discount on commercial
      Group Financial Co.           11,932,011.37   30 January 2019        26 April 2019         acceptance notes
                                                                                           Discount on commercial
      Group Financial Co.            9,827,139.59      22 April 2019     09 August 2019          acceptance notes
                                                                                           Discount on commercial
      Group Financial Co.            9,776,155.18      22 April 2019       25 June 2019          acceptance notes
                                                                                           Discount on commercial
      Group Financial Co.            2,227,866.60   30 January 2019        28 June 2019          acceptance notes
                                                                           26 September    Discount on commercial
      Group Financial Co.            2,115,440.26      22 April 2019               2019          acceptance notes
                                                                                           Discount on commercial
      Group Financial Co.            2,037,126.50   30 January 2019         28 May 2019          acceptance notes
                                                                                           Discount on commercial
      Group Financial Co.            1,628,019.46    18 March 2019       27 August 2019          acceptance notes
                                                                                           Discount on commercial
      Group Financial Co.            1,188,450.22   30 January 2019        26 June 2019          acceptance notes
      Group Financial Co.              859,454.60       21 May 2019      26 August 2019    Discount on commercial
                                                                                                 acceptance notes
      Group Financial Co.             798,997.80       22 April 2019        26 July 2019   Discount on commercial
                                                                                                 acceptance notes
      Group Financial Co.             729,054.60     18 March 2019         26 June 2019    Discount on commercial
                                                                                                 acceptance notes



                                                      153
                       CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                        Notes to financial statements (Continued)
                                          For the six months ended 30 June 2019

                            (All amounts in Renminbi “RMB” unless otherwise stated)

X.        Related party relationships and transactions (Continued)

 5.      Major transactions between the Group and its related parties (Continued)


(4)       Relat ed party asset transfer

                                                                        Ty pe of transaction     For the six months     For the six months
                                                                                               ended 30 June 2019     ended 30 June 2018

       Sinopharm Holding Tianji n Binhai Pharmaceutical Co.,                   Purchase of
       Ltd.                                                        construction in progress                       -              21,794.87


 (5)       Other related party transactions
                                                                                                 For the six months      For the six months
                                                                                               ended 30 June 2019      ended 30 June 2018


            (a) Remuneration for key management personnel                                           3,843,750.00             2,981,250.00

            (b) Interest expense
                                                                                                 For the six months      For the six months
            Related party                                                      Category        ended 30 June 2019      ended 30 June 2018

                                                                 Payment of notes
            Group Financial Co.                                    discount interest                  2,615,234.17            3,411,652.84
            China National Phar maceutical Group          Payment of entrusted loan
              Corporation                                                   interest                    641,469.02              641,469.02
            Group Financial Co.                             Payment of loan interest                    473,516.87                           -
            Sinopharm Holding Financing Lease                  Payment of financing
              Co., Ltd.                                                 lease interest                  177,850.56              623,402.17
                                                           Payment of non-recourse
            Sinopharm Holding Financing Lease                    receiv able factored
              Co., Ltd.                                             interest expense                     63,750.00                           -
            Guorun Medical Supply Chain Serv ices              Pay ment of related parties
            (Shangha i) Co., Ltd.                                            loan interest                       -                1,778.67
                                                                                                      3,971,820.62            4,678,302.70


            (c) Int erest income
                                                                                                 For the six months      For the six months
            Related party                                                      Category        ended 30 June 2019      ended 30 June 2018

                Sinopharm Group Zhijun (Suzhou)
                        Pharmaceutical Co., Ltd.               Entrusted loan interest                1,669,601.71            1,549,650.99
                                Group Financial Co.                    Deposit interest                 145,659.27              387,479.46

                                                                                                      1,815,260.98            1,937,130.45




                                                                         154
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                 Notes to financial statements (Continued)
                                      For the six months ended 30 June 2019

                       (All amounts in Renminbi “RMB” unless otherwise stated)


X. Related party relationships and transactions (Continued)

6. Amounts due from related parties

Accounts receiv able                                   30 June 2019                       1 January 2019
                                                Gross carrying      Provision for   Gross carrying     Provision for
Related party                                         amount           bad debt           amount          bad debt
Foshan Chancheng Pharmaceutical Co.,
Ltd.                                            45,958,521.41         276,165.34    39,888,094.43        235,040.74
Sinopharm Group                                 40,401,102.06                   -   32,263,115.51                  -
Sinopharm Holding Hainan Co., Ltd.               9,869,915.19                   -    6,607,589.69                  -
Shanghai Beiyi Guoda pharmaceutical Co.
Ltd.                                             9,772,467.43                   -   11,966,548.05                  -
Sinopharm Health Online Co., Ltd.                7,991,221.08                   -    6,543,624.21                  -
Sinopharm Holding Sub Marketing Center
Co., Ltd.                                        4,943,166.98                   -                -                 -
Sinopharm holdings Beijing huahong co.,
Ltd                                              4,491,263.20                   -    4,009,562.41                  -
Shenzhen Heng Sheng Hosital                      4,350,627.94                   -    2,674,948.35                  -
Beijing Golden Elephant Fosun
Pharmaceutical Co., Ltd.                         4,350,308.37                   -    5,372,873.84                  -
Pudong New Area of Shanghai
Pharmaceutical Medicine Ltd.                     4,175,729.23                   -    3,839,268.45                  -
Sinopharm Le-Ren-Tang Medicine Co., Ltd.         4,123,874.57                   -    3,143,231.13                  -
Sinopharm Lingyun Biopharmaceutical
(Shanghai) Co., Ltd.                             4,092,864.80                   -    3,986,543.21                  -
Sinopharm Holding Beijing Co., Ltd.              3,345,842.50                   -      888,815.16                  -
Sinopharm Holding Hainan Hongyi Co., Ltd.        3,314,718.28                   -    5,370,089.88                  -

Foshan Chancheng District Central Hospital       3,160,081.13          44,928.58     2,440,447.52         12,753.61
Sinopharm Group (Tianjin) Eastern Bokang
Pharmaceutical Co., Ltd.                         2,539,969.75                   -      986,526.05                  -

Sinopharm Holding Henan Co., Ltd.                2,447,128.74                   -    1,036,327.62                  -
Sinopharm Holding Shanghai Likang
Pharmaceutical Co., Ltd.                         2,196,272.00                   -    1,178,605.80                  -
Sinopharm Holding Shandong Co., Ltd.             2,037,494.51                   -      210,969.36                  -
Foshan Chanyixing Medicine Development
Co Ltd.                                          1,865,947.36           6,667.32     1,743,775.57          9,377.72

Sinopharm Holding Wenzhou Co., Ltd.              1,710,031.20                   -    1,261,643.94                  -

China National Medicines Co., Ltd.               1,604,941.84                   -    1,454,237.32                  -
Sinopharm Sichuan Phar maceutical Co.,
Ltd.                                             1,424,513.17                   -    1,081,909.20                  -
Sinopharm Holding Yangzhou Co., Ltd.             1,366,338.68                   -      540,349.73                  -
Shanghai Merro Pharmaceutical Co., Ltd.          1,348,428.86                   -      884,486.53                  -
Sinopharm Holding Xuzhou Co., Ltd.               1,272,626.48                   -       34,941.30                  -
Sinopharm Holding Anhui Pharmaceutical
Co., Ltd.                                        1,095,210.16                   -                -                 -
Sinopharm Holding Shanxi Co., Ltd.               1,044,424.48                   -    1,028,660.04                  -

Sinopharm Holding Yunnan Co., Ltd.                 852,406.76                   -       27,737.44                  -




                                                         155
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                    Notes to financial statements (Continued)
                                      For the six months ended 30 June 2019

                      (All amounts in Renminbi “RMB” unless otherwise stated)


X. Related party relationships and transactions (Continued)

6. Amounts due from related parties (Continued)
Accounts receiv able (Continued)                       30 June 2019                       1 January 2019
                                                Gross carrying      Provision for   Gross carrying     Provision for
Related party                                         amount           bad debt           amount          bad debt
Sinopharm Holding Tianjin Co., Ltd.                736,401.04                   -      200,407.20                  -
Sinopharm Holding Jilin Co., Ltd.                  638,937.96                   -    1,499,742.50                  -
Sinopharm Holding Nantong Co., Ltd.                637,245.24                   -       66,541.32                  -
Sinopharm Holding Fujian Co., Ltd.                 602,589.12                   -                -                 -
Sinopharm Group Xinjiang Special Drugs
National Phar maceutical Co., Ltd.                 599,179.84                   -      772,488.31                  -
Sinopharm Holding Donghong Medical
(Shanghai) Co., Ltd.                               596,543.86                   -      164,566.12                  -
Sinopharm Holding Anhui Co., Ltd.                  583,647.00                   -      221,425.72                  -
Sinopharm Holding Xinjiang Special Drugs
Western Pharmaceutical Co., Ltd.                   552,496.16                   -    1,704,316.57                  -
Sinopharm Holding Hunan Co., Ltd.                  537,470.30                   -      569,264.26                  -
Sinopharm Holding Hubei Co., Ltd.                  457,991.94                   -       68,314.16                  -
Sinopharm Holding Shanxi Co., Ltd.                 368,536.28                   -       68,361.75                  -
Yuxi Sinopharm Medicine Co., Ltd.                  365,065.92                   -      182,532.96                  -
Sinopharm Holding Dalian Co., Ltd.                 357,662.16                   -      144,334.03                  -
Shanghai Guoda Lingyun Pharmacy Co.,
Ltd.                                               357,524.59                   -       17,535.13                  -
Sinopharm Holding Dalian Hecheng Co.,
Ltd.                                               286,270.00                   -      126,684.00                  -
Sinopharm Holding Chengdu Co., Ltd.                280,800.00                   -                -                 -
Sinopharm Group Southw est Medicine Co.,
Ltd.                                               248,554.12                   -    5,090,863.70                  -
Sinopharm Group Medicine Logistic Co.,
Ltd.                                               209,724.91                   -      139,697.93                  -
Sinopharm Holding (Hubei) Hankou
Pharmacy Co., Ltd.                                 201,154.08                   -                -                 -
Sinopharm Jienuo Medical Treatment
Sevice Guangdong Co., Ltd.                         124,568.18                   -      120,403.60                  -
Sinopharm Holding Qinghai Co., Ltd.                110,520.40                   -       96,319.48                  -
Sinopharm Holding Yancheng Co., Ltd.               108,561.80                   -                -                 -
Sinopharm Holding Ningxia Co., Ltd.                100,896.00                   -                -                 -
Sinopharm Holding Gansu Co., Ltd.                   94,147.34                   -      176,910.34                  -
Sinopharm Holding Shenyang Co., Ltd.                84,504.52                   -      123,126.34                  -
Sinopharm Holding Tianjin North Medicine
Co., Ltd.                                           78,465.54                   -       91,390.41                  -
Sinopharm Group Fengliaoxing Pharmacy
(Foshan) Co., Ltd.                                  69,005.33             453.65                 -                 -
Sinopharm Holding Inner Mongolia Co., Ltd.          63,160.96                   -       90,159.36                  -
Sinopharm Group Zhijun(Shenzhen)
Pingshan Pharmaceutical Co., Ltd.                   59,076.00                   -       39,618.00                  -
Sinopharm Holding Honghe Co., Ltd.                  58,831.14                   -                -                 -
Sinopharm Holding Heilongjiang Co., Ltd.            50,000.00          50,000.00        50,000.00                  -
Sinopharm Guangdong Medical
Examination Co., Ltd.                               41,360.00                   -                -                 -
                                                         156
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                   Notes to financial statements (Continued)
                                    For the six months ended 30 June 2019

                     (All amounts in Renminbi “RMB” unless otherwise stated)


X. Related party relationships and transactions (Continued)

6. Amounts due from related parties (Continued)
Accounts receiv able (Continued)                      30 June 2019                       1 January 2019
                                               Gross carrying      Provision for   Gross carrying     Provision for
Related party                                        amount           bad debt           amount          bad debt
Sinopharm Holding Jiangxi Co., Ltd.                22,606.08                   -                -                 -
Shanghai Liyi Drug Store Co.,Ltd                   19,278.81                   -       76,366.48                  -
Sinopharm Holding Zunyi Co., Ltd.                  18,358.20                   -                -                 -
Sinopharm Holding Changzhou Co., Ltd.              15,557.40                   -                -                 -
Sinopharm Holding Fuzhou Co., Ltd.                 15,195.60                   -                -                 -
Sinopharm Holding Chuxiong Co., Ltd.               13,132.80                   -                -                 -
Sinopharm Fengliaoxing Medical Hospital
Co., Ltd.                                          12,020.26              74.54        16,836.25            136.35
Nanchang Sinopharm Holding Guoyaotang
Pharmacy Co., Ltd.                                 11,448.00                   -                -                 -
Sinopharm Holding Guizhou Co., Ltd.                 8,307.00                   -       16,026.00                  -
Sinopharm Holding Wuxi Co., Ltd.                    6,818.00                   -      157,614.80                  -
Sinopharm Group Zhijun(Shenzhen)
Pharmaceutical Co., Ltd.                            6,669.00                   -        1,070.60                  -
Sinopharm Holding Hongrun Medical
Business Service (Shanghai) Co., Ltd.               5,900.96                   -        1,300.54                  -
Sinopharm Holding Ulanqab Co., Ltd.                 3,933.10                   -                -                 -
Sinopharm Guanai Yuankang Pharmacy
(Haikou) Co., Ltd.                                  3,366.10                   -        1,488.00                  -
Sinopharm Group Fengliaoxing Traditional
Chinese Medical Center Foshan Nanhai
Co., Ltd.                                           1,526.02               4.78           695.70              0.94
Sinopharm Group Shanxi Co., Ltd.                        1.60                   -       58,518.00                  -
Sinopharm Xinxiang Chain Store Co., Ltd.                    -                  -        2,064.20                  -
Sinopharm Holding Changzhou Medical                         -                  -      144,600.00                  -
Logistics Center Co., Ltd.
Sinopharm Medical Instrument Foshan Co.,                    -                  -       11,904.00                  -
Ltd.
Hubei Pharmaceutical Group Co., Ltd.                        -                  -       61,959.91                  -




                                                        157
                     CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                     Notes to financial statements (Continued)
                                      For the six months ended 30 June 2019

                      (All amounts in Renminbi “RMB” unless otherwise stated)


X.     Related party relationships and transactions (Continued)

6.     Amounts due from related parties (Continued)

Notes receiv able                                     30 June 2019                         1 January 2019
                                                  Gross carrying   Provision for    Gross carrying Provision for bad
 Related party                                          amount        bad debt            amount                debt
 Sinopharm Holding Financing Lease Co.,
 Ltd.                                             13,210,232.00                 -   202,456,075.93                 -
 Sinopharm Holding Hainan Co., Ltd.                3,896,828.51                 -    12,035,409.02                 -
 Sinopharm Le-Ren-Tang Medicine Co.,
 Ltd.                                              2,500,000.00                 -     1,148,409.56                 -
 Sinopharm Holding Hainan Hongyi Co.,
 Ltd.                                              1,528,421.30                 -    10,234,483.82                 -
 Sinopharm Holding Hubei Co., Ltd.                 1,008,876.24                 -                -                 -
 Sinopharm Holding Nantong Co., Ltd.                 750,000.00                 -                -                 -
 Sinopharm Holding Xinjiang Special Drugs
 Western Pharmaceutical Co., Ltd.                    472,387.20                 -                -                 -
 Sinopharm Holding Gansu Co., Ltd.                   239,670.00                 -      163,198.80                  -
 Sinopharm Holding Shanxi Co., Ltd.                            -                -     1,077,861.97                 -
 Sinopharm Holding Shenyang Co., Ltd.                          -                -      422,520.00                  -
 Sinopharm Holding Shanxi Co., Ltd.                            -                -      359,459.04                  -
 Sinopharm Holding Sub Marketing Center
 Co., Ltd.                                                     -                -     3,144,392.00                 -
 Sinopharm Holding Henan Co., Ltd.                             -                -     1,032,584.76                 -
 Sinopharm Holding Anhui Co., Ltd.                             -                -      390,062.21                  -
 Sinopharm Holding Shandong Co., Ltd.                          -                -     1,241,661.12                 -
 Sinopharm Holding Fujian Co., Ltd.                            -                -      400,000.00                  -
 Sinopharm Holding Ningxia Co., Ltd.                           -                -      176,568.00                  -
 Sinopharm Holding Jilin Co., Ltd.                             -                -      274,058.00                  -
 Sinopharm Holding Chengdu Co., Ltd.                           -                -      201,332.00                  -


 Other receivables                                     30 June 2019                        1 January 2019
                                                  Gross carrying    Provision for   Gross carrying Provision for bad
 Related party                                          amount         bad debt           amount                debt
 Sinopharm Group Zhijun(Suzhou)
 Pharmaceutical Co., Ltd.                         44,000,000.00     2,200,000.00     44,000,000.00                 -
 Sinopharm Group Medicine Logistic Co.,
 Ltd.                                              6,226,734.36                 -     2,494,174.31                 -
 Shyndec Pharmaceutical                            5,624,940.00                 -     7,913,430.00                 -
 Sinopharm Group Xinjiang Special Drugs
 National Phar maceutical Co., Ltd.                  385,381.65                 -      100,000.00                  -
 Sinopharm Group Zhijun(Shenzhen)
 Pharmaceutical Co., Ltd.                            234,693.89           600.00       109,774.26            600.00
 Sinopharm Lerentang Hebei Medical
 Instrument Trade Co., Ltd.                           48,493.16                 -        48,493.16                 -
 Sinopharm Holding Tianjin Co., Ltd.                  41,100.00                 -                -                 -
 Sinopharm Group                                      13,416.00                 -                -                 -




                                                         158
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                Notes to financial statements (Continued)
                                     For the six months ended 30 June 2019

                     (All amounts in Renminbi “RMB” unless otherwise stated)


X.     Related party relationships and transactions (Continued)

6.    Amounts due from related parties (Continued)

Other receivables (Continued)                        30 June 2019                        1 January 2019
                                               Gross carrying     Provision for   Gross carrying Provision for bad
Related party                                        amount          bad debt           amount                debt
Sinopharm Holding Sub Marketing Center
Co., Ltd.                                          10,990.00                  -               -                  -
Wuhan Zhonglian Pharmaceutical Group
Co., Ltd.                                           5,000.00          1,000.00         5,000.00          1,000.00
Sinopharm Holding Fujian Co., Ltd.                  3,476.39                  -        5,476.34                  -
Sinopharm Holding Jiaozuo Co., Ltd.                          -                -       30,171.00                  -
Henan Wanxitang Pharmacy Co., Ltd.                           -                -    1,098,981.30                  -
Sinopharm Health Online Co., Ltd.                            -                -       81,755.36                  -
Sinopharm Group Medicine Logistic Co.,
Ltd. Guangzhou Branch                                        -                -       18,650.00                  -


Advances to suppliers                                30 June 2019                        1 January 2019
                                               Gross carrying     Provision for   Gross carrying Provision for bad
Related party                                        amount          bad debt           amount                debt
Sinopharm Group Xinjiang Special Drugs
National Phar maceutical Co., Ltd.               1,628,396.28                 -    1,643,251.42                  -
Chongqing Yaoyou Pharmaceutical Co.,
Ltd.                                             1,097,717.47                 -      931,286.48                  -
Sinopharm Group                                   760,415.14                  -    2,308,319.33                  -
Guizhou Tongjitang Pharmaceutical Co.,
Ltd.                                              446,109.64                  -      227,175.58                  -
Sinopharm Holding Xinjiang Special Drugs
Kashgar Pharmaceutical Co., Ltd.                  242,701.50                  -               -                  -
Sinopharm Holding Xinjiang Xinte
Karamay Pharmaceutical Co., Ltd.                  230,666.79                  -               -                  -
Sichuan Hexin Pharmaceutical Co., Ltd.            174,960.00                  -               -                  -
Anhui Jingfang Pharmaceutical Co., Ltd.           146,744.67                  -       45,611.47                  -
Sinopharm Weiqida Phar maceutical Co.,
Ltd.                                              140,382.00                  -               -                  -
Chengdu Rongsheng Pharmacy Co., Ltd.              122,000.00                  -    1,416,622.63                  -
Beijing Sinophar m Tianyuan Real Estate &
Property Management Co., Ltd.                      82,800.00                  -       78,857.14                  -
Sinopharm Yixin Pharmaceutical Co., Ltd.           81,152.00                  -               -                  -
China National Medicines Co., Ltd.                 78,750.00                  -       78,750.00                  -
Chengdu Institute of Biological Products
Co.,Ltd.                                           64,979.60                  -       48,734.70                  -
Sinopharm Group Guorui Medicine Co.,
Ltd.                                               63,310.27                  -               -                  -
Shyndec Pharmaceutical                             56,281.48                  -       57,838.35                  -
Shenzhen Wanwei Medicine Trading Co.,
Ltd.                                               50,658.00                  -               -                  -
Jinzhou AoHong Pharmaceuticals Co.,
Ltd.                                               33,040.00                  -       16,520.00                  -
Sinopharm Group Yibin Pharmaceuticals
Co., Ltd.                                          27,085.38                  -       15,655.31                  -




                                                       159
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                 Notes to financial statements (Continued)
                                     For the six months ended 30 June 2019

                     (All amounts in Renminbi “RMB” unless otherwise stated)


X.      Related party relationships and transactions (Continued)

6.     Amounts due from related parties (Continued)

Advances to suppliers(Continued)                                 30 June 2019                       1 January 2019
                                               Gross carrying     Provision for   Gross carrying   Provision for bad
Related party                                        amount          bad debt           amount                  debt
Guilin South pharmaceutical Co., Ltd.              26,524.88                  -       10,989.56                    -
Shanghai Chaohui Pharmaceutical Co.,               21,646.80                 -                 -                  -
Ltd.
Sinopharm Xinjiang Korla Pharmaceutical            20,279.70                 -       282,467.38                   -
Co., Ltd.
Jiangxi Erye Medicine Marketing Co., Ltd.          16,726.80                 -       729,789.16                   -
Shantou Jinshi Pow der Injection Co., Ltd.         14,889.93                 -                 -                  -
Sinopharm Holding Sub Marketing Center             14,885.06                 -                 -                  -
Co., Ltd.
Taishan Qunkang Phar macy Co., Ltd.                13,150.07                 -                 -                  -
Shandong Lu Ya Pharmaceutical Co., Ltd.            11,436.42                 -         1,412.52                   -
Sinopharm Xingsha Phar maceuticals                  9,560.00                 -         1,846.55                   -
(Xiamen) Co., Ltd.
Suzhou Erye Pharmaceutical Limited                  9,242.76                 -                 -                  -
Company
Winteam Phar maceutical Group Ltd.                  8,877.09                 -         9,346.82                   -
Sinopharm Group Zhijun(Shenzhen)                    5,812.50                 -       139,392.00                   -
Pharmaceutical Co., Ltd.
Sinopharm Holding Jilin Co., Ltd.                   4,267.77                 -                 -                  -
Sinopharm Group Zhijun(Shenzhen)                      778.62                 -                 -                  -
Pingshan Pharmaceutical Co., Ltd.
Jiangsu Fuxing Pharmaceutical Trading                  81.08                 -            81.08                   -
Co., Ltd
Sinopharm Holding Shanxi Co., Ltd.                           -               -     3,890,993.71                   -
Sinopharm Holding Shanxi Co., Ltd.                           -               -     3,330,287.42                   -
Sinopharm Holding Shanxi Lvliang Co.,                        -               -       660,000.00                   -
Ltd.
Sinopharm Holding Beijing Co., Ltd.                          -               -       123,809.52                   -
Sinopharm Holding Fujian Co., Ltd.                           -               -           225.81                   -
Xinjiang Baitong Property Service Co.,                       -               -        16,856.89                   -
Ltd.
Sinopharm Group Guizhou Blood                                -               -       536,000.00                   -
Products Co., Ltd.
Sinopharm Xinjiang Pharmaceutical Co.,                       -               -        45,432.69                   -
Ltd.
Shanghai Modern Hasen (Shangqiu)                             -               -       103,503.41                   -
Pharmaceutical Co., Ltd.
Shanghai Shyndec Pharmaceutical                              -               -       609,418.22                   -
Marketing Co., Ltd.
Sinopharm Chuan Kang Pharmaceutical                          -               -       346,772.59                   -
Co., Ltd.
Fresenius Kabi Huarui Pharmaceuticals                        -               -         1,231.58                   -
Co., Ltd.
Shenyang Hongqi Pharmaceutical Co.,                          -               -       237,150.00                   -
Ltd.
Linyi Medical Group Co., Ltd.                                -               -       775,396.82                   -
Hunan Minshengtang Investment Co., Ltd.                      -               -     3,349,268.77                   -
Taishan Xiangranhui Trade Co., Ltd                           -               -        39,450.05                   -

                                                       160
                   CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                  Notes to financial statements (Continued)
                                     For the six months ended 30 June 2019

                    (All amounts in Renminbi “RMB” unless otherwise stated)


X.      Related party relationships and transactions (Continued)

6.    Amounts due from related parties (Continued)

Advances to suppliers(Continued)                                 30 June 2019                       1 January 2019
                                               Gross carrying     Provision for   Gross carrying   Provision for bad
Related party                                        amount          bad debt           amount                  debt
Nanjing Yuanguang Trading Co., Ltd.                         -                 -      169,697.02                    -


7. Amounts due to related parties

Related party                                                    30 June 2019                       1 January 2019
Accounts payable
Sinopharm Holding Sub Marketing Center                          195,937,772.42                      104,262,822.63
Co., Ltd.
China National Medicines Co., Ltd.                               62,209,906.16                       48,352,935.82
Sinopharm Holding Shanxi Co., Ltd.                               51,758,102.97                          945,054.21
Sinopharm Holding Shanxi Co., Ltd.                               31,832,547.24                                    -
Sinopharm Group Xinjiang Special Drugs                           28,675,206.92                       18,259,929.53
National Phar maceutical Co., Ltd.
Fresenius Kabi Huarui Pharmaceuticals                            24,077,737.27                       10,470,003.68
Co., Ltd.
Sinopharm Le-Ren-Tang Medicine Co.,                              21,572,062.09                                    -
Ltd.
Sinopharm Group                                                  21,374,852.12                       13,732,261.69
Jiangsu Wanbang Pharmacy Marketing                               21,363,008.26                       15,038,618.86
Co., Ltd.
Lanzhou Biotechnology Development Co.,                           20,100,000.00                                    -
Ltd.
Sinopharm Holding Lunan Co., Ltd.                                16,885,035.59                            71,599.97
Sinopharm Holding Shenyang Co., Ltd.                             11,151,742.57                        4,015,953.59
Sinopharm Holding Inner Mongolia Co.,                            10,342,153.14                        2,225,947.78
Ltd.
Shenzhen Main Luck Pharmaceutical Co.,                            9,804,573.26                        8,565,744.21
Ltd.
Sinopharm Holding Yangzhou Co., Ltd.                              9,362,416.32                        7,630,403.88
Sinopharm Holding Lerentang                                       8,517,232.26                        8,402,288.43
Pharmaceutical Co., Ltd.
Tibet Yaoyou Medicines Co.,Ltd.                                   8,066,785.64                        8,346,619.80
Sinopharm Holding Hubei Co., Ltd.                                 7,380,255.63                                    -
Jinzhou AoHong Pharmaceuticals Co.,                               7,121,913.42                        2,422,868.00
Ltd.
Sinopharm Holding Beijing Co., Ltd.                               6,747,587.35                        7,478,006.36
Sinopharm Lerentang Shijiazhuang                                  6,179,335.72                          183,737.13
Medicine Co., Ltd.
Winteam Phar maceutical Group Ltd.                                6,143,556.76                        6,294,519.81
Sinopharm Holding Fujian Co., Ltd.                                5,942,354.78                        4,484,641.23




                                                       161
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                Notes to financial statements (Continued)
                                    For the six months ended 30 June 2019

                     (All amounts in Renminbi “RMB” unless otherwise stated)


X. Related party relationships and transactions (Continued)

7. Amounts due to related parties (Continued)

Related party                                               30 June 2019         1 January 2019
Accounts payable (Continued)
Sinopharm Group Zhijun(Shenzhen)                            5,480,684.06           3,550,454.25
Pingshan Pharmaceutical Co., Ltd.
Sinopharm Group Zhijun(Shenzhen)                            4,903,616.19           2,922,052.73
Pharmaceutical Co., Ltd.
Sinopharm Holding Jiangsu Co., Ltd.                         4,884,948.33           6,745,253.51
Shenzhen Wanwei Medicine Trading Co.,                       4,704,357.80           4,219,138.81
Ltd.
Chongqing Yaoyou Pharmaceutical Co.,                        4,440,477.23           3,506,823.08
Ltd.
Sinopharm Holding Shandong Co., Ltd.                        3,795,662.54              10,865.00
Sinopharm Holding Pingdingshan Co.,                         3,638,807.19           3,603,335.66
Ltd.
Sinopharm Holding Xinjiang Special Drugs                    3,182,288.62            795,448.03
Western Pharmaceutical Co., Ltd.
Yichang Humanw ell Pharmaceutical Co.,                      3,022,607.79           1,936,090.54
Ltd.
Sinopharm Holding Xiamen Co., Ltd.                          2,812,274.62           1,710,756.72
Sinopharm Holding Changzhou Co., Ltd.                       2,732,668.55           1,484,634.49
Beijing Huasheng Pharmaceutical                             2,630,700.01                637.01
Biotechnology Development Co., Ltd.
Sinopharm Holding Shanghai Likang                           2,493,666.00           1,755,209.60
Pharmaceutical Co., Ltd.
Sinopharm Holding Ningxia Co., Ltd.                         2,423,060.64           3,007,737.39
Sinopharm Lerentang Hebei Medical                           2,265,517.01           1,519,045.91
Instrument Trade Co., Ltd.
Sinopharm Xingsha Phar maceuticals                          2,257,975.91            966,925.12
(Xiamen) Co., Ltd.
Henan Wanxitang Pharmacy Co., Ltd.                          2,041,958.50           2,053,637.44
China Otsuka Pharmaceutical Co., Ltd.                       1,959,904.38           1,571,696.86
Sinopharm Holding Tongliao Co., Ltd.                        1,758,793.98            872,644.61
Sichuan Hexin Pharmaceutical Co., Ltd.                      1,685,255.64            454,536.00
Jiangxi Erye Medicine Marketing Co., Ltd.                   1,673,658.34            262,590.49
Sinopharm Holding Heilongjiang Co., Ltd.                    1,478,359.09            922,059.45
Sinopharm holdings Beijing huahong co.,                     1,373,387.43           1,498,601.00
Ltd
Sinopharm Yixin Pharmaceutical Co., Ltd.                    1,339,719.99            175,855.31
Jiangsu Fuxing Pharmaceutical Trading                       1,274,138.60            549,104.40
Co., Ltd
Sinopharm Holding Henan Co., Ltd.                           1,265,401.40           1,441,223.83
Sinopharm Holding Jinan Co., Ltd.                           1,251,027.35            189,250.47
Sinopharm Group Rongsheng                                   1,225,702.70            398,911.58
Pharmaceutical Co., Ltd.
Shenyang Hongqi Pharmaceutical Co.,                         1,162,650.62           1,191,792.10
Ltd.
Sinopharm Holding Wuxi Co., Ltd.                              971,301.75            492,702.04
Sinopharm Holding Fuzhou Co., Ltd.                            955,698.95            328,729.69
Sinopharm Holding Beijing Kangchen Bio-                       926,405.95            917,154.80

                                                    162
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                  Notes to financial statements (Continued)
                                   For the six months ended 30 June 2019

                     (All amounts in Renminbi “RMB” unless otherwise stated)


X. Related party relationships and transactions (Continued)

7. Amounts due to related parties (Continued)

Related party                                               30 June 2019         1 January 2019
Accounts payable (Continued)
Pharmaceutical Co., Ltd.
Beijing Golden Elephant Fosun                                 891,429.22           1,050,690.44
Pharmaceutical Co., Ltd.
Sinopharm Holding Changzhou Medical                           853,893.17           3,080,381.47
Logistics Center Co., Ltd.
Hunan Dongting Phar maceutical Co., Ltd.                      795,952.06            265,365.25
Shyndec Pharmaceutical                                        696,904.24            511,528.32
Shanghai Chaohui Pharmaceutical Co.,                          694,598.86            311,797.36
Ltd.
Sinopharm Holding Hulun Buir Co., Ltd.                        661,633.04            364,441.22
Chengdu Rongsheng Pharmacy Co., Ltd.                          657,794.89           1,947,271.88
Chengdu Institute of Biological Products                      655,200.00            370,800.00
Co.,Ltd.
Sinopharm Holding Suzhou Co., Ltd.                            644,244.31           1,871,807.98
Sinopharm Holding Xinjiang Xinte                              611,742.48           1,133,803.05
Karamay Pharmaceutical Co., Ltd.
China National Pharmaceutical Industry                        588,962.54            363,778.78
Co., Ltd.
Sinopharm Holding Hainan Co., Ltd.                            558,876.10              72,738.00
Guizhou Tongjitang Pharmaceutical Co.,                        558,859.22            342,846.28
Ltd.
Sinopharm Holding Donghong Medical                            498,790.10            213,020.90
(Shanghai) Co., Ltd.
Sinopharm Holding Changsha Co., Ltd.                          481,119.66                      -
Huayi Phar maceutical Co., Ltd.                               473,024.00            961,440.00
Suzhou Erye Pharmaceutical Limited                            446,987.01            278,341.97
Company
Sinopharm Holding Xinjiang Special Drugs                      445,108.34            350,668.16
Kashgar Pharmaceutical Co., Ltd.
Sinopharm Group Yibin Pharmaceuticals                         431,253.60            150,034.94
Co., Ltd.
Foshan Fengliaoxing Pharmaceutical Co.,                       424,687.33           1,254,306.67
Ltd.
Sinopharm Group Southw est Medicine                           401,710.17            194,982.00
Co., Ltd.
Wuhan Zhonglian Pharmaceutical Group                          385,312.50            560,483.58
Co., Ltd.
Sinopharm Holding Hunan Co., Ltd.                             362,310.86              7,718.24
Sinopharm Holding Lianyungang Co., Ltd.                       353,590.00            276,118.64
Sinopharm Fengliaoxing (Foshan)                               326,508.24                149.02
Medicines Co., Ltd.
Sinopharm Lingyun Biopharmaceutical                           318,353.90            165,476.77
(Shanghai) Co., Ltd.
Shanghai Transfusion Technology Co.,                          311,860.00            352,100.00
Ltd.
Sinopharm Chuan Kang Pharmaceutical                           310,881.30            472,481.64
Co., Ltd.
Sinopharm Holding Jinzhou Co., Ltd.                           304,289.19            530,995.29
Jiangsu Huanghe Pharmaceutical Co.,                           284,275.55            261,207.05

                                                    163
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                               Notes to financial statements (Continued)
                                    For the six months ended 30 June 2019

                    (All amounts in Renminbi “RMB” unless otherwise stated)


X. Related party relationships and transactions (Continued)

7. Amounts due to related parties (Continued)

Related party                                               30 June 2019        1 January 2019
Accounts payable (Continued)
Ltd.
Sinopharm Holding Yangzhou Medical                            282,295.93             55,877.68
Treatment Equipment Co., Ltd.
Sinopharm Holding Putian Co., Ltd.                            274,267.65             7,144.64
Sinopharm Group Medicine Logistic Co.,                        267,956.64                     -
Ltd.
Sinopharm Holding Zhihuiminsheng                              266,517.35                     -
(Tianjin) Pharmaceutical Co., Ltd.
Sinopharm Holding Dezhou Co., Ltd.                            251,966.42           233,602.84
Sinopharm Group Guorui Medicine Co.,                          241,407.19          1,057,129.20
Ltd.
Sinopharm Holding Tianjin Co., Ltd.                           233,292.17             15,615.31
Sinopharm Group (Tianjin) Eastern                             231,523.37                     -
Bokang Phar maceutical Co., Ltd.
Sinopharm Holding Yancheng Co., Ltd.                          201,484.85           190,168.37
Sinopharm Holding Shanxi Zhidekang                            165,906.67           139,969.67
Medicine Co., Ltd.
Shanghai Merro Pharmaceutical Co., Ltd.                       161,072.33             90,275.31
Sinopharm Holding Hunan Phar maceutical                       160,457.71                     -
Development Co., Ltd.
Anhui Jingfang Pharmaceutical Co., Ltd.                       148,041.15           165,171.12
Sinopharm Holding Anhui Co., Ltd.                             139,702.67             18,589.18
Foshan Dezhong Pharmaceutical Co., Ltd.                       139,274.51             98,835.01
Sinopharm Holding Dalian Co., Ltd.                            136,272.27           182,516.75
Sinopharm Holding Bayannaoer Co., Ltd.                        131,992.42                     -
China National Pharmaceutical Foreign                         122,930.63           122,930.63
Trade Corporation
Sinopharm Shantou Jinshi Pharmaceutical                       120,579.21           102,693.04
Co., Ltd.
Sinopharm Holding Biopharmaceutical                           108,541.17             20,509.50
(Tianjin) Co., Ltd.
Pudong New Area of Shanghai                                   106,921.13             91,493.10
Pharmaceutical Medicine Ltd.
China Medical Equipment Shandong Co.,                         106,382.80                     -
Ltd.
Sinopharm Liaoning Medical Equipment                          102,585.59                     -
Co., Ltd.
The Fourth Phar maceutical Co., Ltd. of                        92,151.64             97,099.70
Zhonglian Group
Sinopharm Holding Taizhou Co., Ltd.                            76,424.00             99,508.00
Sinopharm Group Shanxi Medical Devices                         75,016.66                     -
Co., Ltd.
Sinopharm Holding Zhejiang Co., Ltd.                           72,393.66             58,508.35
Shanghai Modern Hasen (Shangqiu)                               67,745.54             57,148.85
Pharmaceutical Co., Ltd.
Sinopharm Holding Yangzhou Biological                          64,687.73             50,162.16
Products Co., Ltd.
Shandong Lu Ya Pharmaceutical Co., Ltd.                        52,819.07             52,819.07

                                                    164
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                 Notes to financial statements (Continued)
                                   For the six months ended 30 June 2019

                     (All amounts in Renminbi “RMB” unless otherwise stated)


X. Related party relationships and transactions (Continued)

7. Amounts due to related parties (Continued)

Related party                                              30 June 2019          1 January 2019
Accounts payable (Continued)
Sinopharm Xinjiang Pharmaceutical Co.,                        49,772.38               9,720.00
Ltd.
Sinopharm Holding Fuzhou Medical                              46,000.00                       -
Devices Co., Ltd.
Sinopharm Holding Nanjing Wende                               44,682.80             102,437.80
Pharmaceutical Co.,Ltd.
Sinopharm Holding Ulanqab Co., Ltd.                           44,330.00               61,246.80
Shantou Jinshi Pow der Injection Co., Ltd.                    39,838.05             245,352.00
Sinopharm Holding Sanyi Medicine                              33,085.44               25,483.57
(Wuhu) Co., Ltd.
Sinopharm Holding Rizhao Co., Ltd.                            32,873.67               10,236.15
Beijing Huamiao Pharmaceutical Co., Ltd.                      29,912.02             372,103.86
Sinopharm Holding Dalian Hecheng Co.,                         28,687.56                       -
Ltd.
Guangdong Medi-World Phar maceutical                          27,719.91             297,576.35
Co., Ltd.
Sinopharm Holding Quanzhou Co., Ltd.                          26,085.88               62,947.60
Sinopharm Holding Shanxi Mingdikang                           24,871.11               27,215.64
Medicine Co., Ltd.
Sinopharm Group Zhijun(Suzhou)                                22,800.00                       -
Pharmaceutical Co., Ltd.
Sinopharm Holding Yongzhou Co., Ltd.                          19,809.36               19,858.72
Sinopharm Group Shanghai Medicine                             16,603.02               16,603.02
Device Co., Ltd.
Sinopharm Holding Liaocheng Co., Ltd.                         16,197.93               16,197.93
Sinopharm Holding Beijing Tianxing Puxin                      13,891.78               84,524.54
Biological Medical Co., Ltd.
Sinopharm Holding Zhangzhou                                   11,760.00                       -
Pharmaceutical Co., Ltd.
Sinopharm Group Shanxi Co., Ltd.                              10,144.80                       -
Sinopharm Group Anhui Medical Devices                          5,200.00                       -
Co., Ltd.
Changchun Changsheng Gene                                      3,017.20               1,492.91
Pharmaceutical Co., Ltd.
Sinopharm Holding Ordos Co., Ltd.                              1,771.20               1,771.20
Sinopharm Holding Shanxi Jincheng Co.,                         1,659.94               3,846.13
Ltd.
Sinopharm Prospect Dentech (Beijing)                           1,461.99               1,536.00
Co., Ltd.
Guilin South pharmaceutical Co., Ltd.                          1,210.43               1,210.80
Sinopharm Holding Huaideju                                     1,113.85               1,113.85
Pharmaceutical (Xiamen) Co., Ltd.
Guizhou Tongjitang Pharmacy Chain Co.,                          991.50                        -
Ltd.
Shenzhen Zhijun Pharmaceutical Trade                            534.20                  534.20
Co., Ltd.
Shanghai Shyndec Pharmaceutical                                 106.76                  106.76
Marketing Co., Ltd.
Chongqing Haisiman Pharmaceutical Co.,                          101.91                  101.91
Ltd.
                                                   165
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                    Notes to financial statements (Continued)
                                     For the six months ended 30 June 2019

                     (All amounts in Renminbi “RMB” unless otherwise stated)


X. Related party relationships and transactions (Continued)

7. Amounts due to related parties (Continued)

Related party                                                 30 June 2019       1 January 2019
Accounts payable (Continued)
Sinopharm Holding Chongqing Co., Ltd.                                45.00               45.00
Linyi Medical Group Co., Ltd.                                        10.47               10.47
Sinopharm Holding Xinyu Co., Ltd.                                     0.01                0.01
Sinopharm Holding Jilin Co., Ltd.                                         -                   -
Sinopharm Holding Shanxi Instrument                                       -        6,309,208.47
Branch Co., Ltd.
Sinopharm Holding Tianjin Distribution                                    -              35.32
Center Co., Ltd.
Sinopharm Holding Zhangzhou Co., Ltd.                                     -           5,472.50
Sinopharm Sichuan Phar maceutical Co.,                                    -           2,741.40
Ltd.
Sichuan Jiangyouzhongbafuzi Technology                                    -           80,000.00
Development Co., Ltd.
Lanzhou Institute of Biological Products                                  -         180,000.00
Co., Ltd.
Sinopharm Wuhan blood products Co.,                                       -         170,387.93
Ltd.
Hutchison Whampoa Sinopharm                                               -         255,089.90
Pharmaceuticals (Shanghai) Co., Ltd.
Sinopharm ShanXi Ruifulai                                                 -           63,081.60
Pharmaceutical Co., Ltd.
Jiangsu Lianhuan Pharmaceutical Co.,                                      -        1,321,298.26
Ltd.
Qinghai Pharmaceutical Factory Co., Ltd.                                  -           32,970.00
Jingfukang Pharmaceutical Group Co.,                                      -         184,438.44
Ltd.
Shanghai Sinopharm Pharmaceutical Co.,                                    -           92,610.00
Ltd.
Fujian Chentian Jinling Pharmaceutical                                    -         505,555.00
Co., Ltd.

Related party                                                 30 June 2019       1 January 2019
Notes payable
Sinopharm Holding Sub Marketing Center                       116,044,638.24      230,067,443.17
Co., Ltd.
Sinopharm Holding Shenyang Co., Ltd.                          65,065,373.01       76,894,045.21
Sinopharm Holding Inner Mongolia Co.,                         25,122,678.38       20,459,755.01
Ltd.
Sinopharm Group Xinjiang Special Drugs                        18,119,677.13       13,887,657.53
National Phar maceutical Co., Ltd.
Sinopharm Holding Shanxi Co., Ltd.                             7,725,000.00       67,926,610.30




                                                      166
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                Notes to financial statements (Continued)
                                     For the six months ended 30 June 2019

                    (All amounts in Renminbi “RMB” unless otherwise stated)


X. Related party relationships and transactions (Continued)

7. Amounts due to related parties (Continued)

Related party                                                30 June 2019       1 January 2019
Notes payable (Continued)
Sinopharm Holding Fujian Co., Ltd.                           7,114,576.43         7,011,034.30
Sinopharm Holding Lerentang                                  6,824,078.95        14,650,495.82
Pharmaceutical Co., Ltd.
Chongqing Yaoyou Pharmaceutical Co.,                         6,503,471.90         5,538,258.30
Ltd.
China National Medicines Co., Ltd.                           5,851,346.28        26,654,608.10
Sinopharm Holding Xiamen Co., Ltd.                           5,423,216.11         5,361,959.66
Chengdu Rongsheng Pharmacy Co., Ltd.                         5,041,000.00         2,673,500.00
Lanzhou Biotechnology Development Co.,                       4,860,000.00         3,000,000.00
Ltd.
Sinopharm Lerentang Shijiazhuang                             4,185,619.88         8,148,267.06
Medicine Co., Ltd.
Sinopharm Holding Jinzhou Co., Ltd.                          2,493,839.62         1,611,340.65
Jiangsu Wanbang Pharmacy Marketing                           2,439,745.89         4,817,408.42
Co., Ltd.
Sinopharm Holding Shanxi Co., Ltd.                           2,082,000.00        18,340,013.80
Sinopharm Holding Hunan Co., Ltd.                            2,043,558.46         3,114,143.15
Sinopharm Group Zhijun(Shenzhen)                             1,856,344.00          325,741.92
Pharmaceutical Co., Ltd.
Shenzhen Wanwei Medicine Trading Co.,                        1,802,808.00         2,402,393.40
Ltd.
Shenzhen Main Luck Pharmaceutical Co.,                       1,769,052.60         2,877,350.00
Ltd.
Sinopharm Holding Ningxia Co., Ltd.                          1,538,808.00         1,413,847.22
Sinopharm Holding Jinan Co., Ltd.                            1,240,000.00         1,880,000.00
Sinopharm Xingsha Phar maceuticals                           1,145,486.98          356,554.16
(Xiamen) Co., Ltd.
Sinopharm Group Shanxi Medical Devices                         949,700.00                    -
Co., Ltd.
Sinopharm Holding Dalian Co., Ltd.                             857,791.87          950,169.80
Guangdong Medi-World Phar maceutical                           755,306.20                    -
Co., Ltd.
Guizhou Tongjitang Pharmaceutical Co.,                         632,834.40                    -
Ltd.
Sinopharm Holding Changsha Co., Ltd.                           632,325.90                    -
Anhui Jingfang Pharmaceutical Co., Ltd.                        409,923.80                    -
Sinopharm Holding Changzhou Medical                            400,000.00         1,000,000.00
Logistics Center Co., Ltd.
Shanghai Transfusion Technology Co.,                           301,800.00          503,000.00
Ltd.
Sinopharm Group Zhijun(Shenzhen)                               262,800.00                    -
Pingshan Pharmaceutical Co., Ltd.
Shyndec Pharmaceutical                                         255,516.40          475,780.40
Sinopharm Group Rongsheng                                      213,037.00          223,333.00
Pharmaceutical Co., Ltd.
Sinopharm Holding Quanzhou Co., Ltd.                           205,791.15          170,891.70
Sinopharm Holding Putian Co., Ltd.                             160,980.86          614,504.48


                                                     167
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                Notes to financial statements (Continued)
                                  For the six months ended 30 June 2019

                    (All amounts in Renminbi “RMB” unless otherwise stated)


X. Related party relationships and transactions (Continued)

7. Amounts due to related parties (Continued)

Related party                                             30 June 2019          1 January 2019
Notes payable (Continued)
Sinopharm Holding Yancheng Co., Ltd.                        160,000.00                       -
Winteam Phar maceutical Group Ltd.                          154,417.60             111,322.50
Sinopharm Yixin Pharmaceutical Co., Ltd.                    107,472.00             394,064.00
Sinopharm Group                                                      -            1,183,604.16
Sinopharm Holding Shanxi Instrument                                  -            1,981,189.60
Branch Co., Ltd.
Sinopharm Holding Lunan Co., Ltd.                                    -            8,596,290.47
Sinopharm Holding Yangzhou Co., Ltd.                                 -             626,534.40
Sinopharm Holding Heilongjiang Co., Ltd.                             -               31,320.00
Sinopharm Le-Ren-Tang Medicine Co.,                                  -           22,076,249.59
Ltd.
Foshan Fengliaoxing Pharmaceutical Co.,                              -             320,310.10
Ltd.
Sinopharm Group Guizhou Blood                                        -             536,000.00
Products Co., Ltd.
Lanzhou Institute of Biological Products                             -            6,236,153.40
Co., Ltd.
Shenyang Hongqi Pharmaceutical Co.,                                  -             602,172.00
Ltd.
Chongqing Haisiman Pharmaceutical Co.,                               -             275,652.00
Ltd.
China Otsuka Pharmaceutical Co., Ltd.                                -            1,793,583.51
Jiangsu Lianhuan Pharmaceutical Co.,                                 -             522,071.08
Ltd.
Jingfukang Pharmaceutical Group Co.,                                 -             151,120.00
Ltd.
Fujian Chentian Jinling Pharmaceutical                               -             100,600.00
Co., Ltd.




                                                  168
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                Notes to financial statements (Continued)
                                  For the six months ended 30 June 2019

                     (All amounts in Renminbi “RMB” unless otherwise stated)


X. Related party relationships and transactions (Continued)

7. Amounts due to related parties (Continued)

Related party                                             30 June 2019           1 January 2019
Other payables
Sinopharm Group Medicine Logistic Co.,                    11,518,140.63            2,278,301.79
Ltd.
Shanghai Dingqun Enterprise                               10,000,000.00           10,000,000.00
Management Consulting Co., Ltd.
Sinopharm Chongqing Phar maceutical                        5,173,229.10            5,943,030.80
and Medical Industry Design Institute
Sinopharm Group                                            3,842,067.59            3,706,406.59
Sinopharm Group Shanghai Co., Ltd.                         1,690,992.16            1,660,431.38
China National of Traditional&Herbal                       1,300,000.00            1,300,000.00
Medicine Co., Ltd.
Sinopharm Holding Tianjin Binhai                            387,617.70              339,760.00
Pharmaceutical Co., Ltd.
Shyndec Pharmaceutical                                      327,973.63              327,973.63
Shanghai Beiyi Guoda pharmaceutical Co.                     195,898.04              566,180.09
Ltd.
Sinopharm Holding Hunan Weian                                97,305.00                30,000.00
Pharmacy Medicine Chain Company
Limited
Sinopharm Group Xinjiang Special Drugs                       76,540.19                41,794.27
National Phar maceutical Co., Ltd.
Sinopharm Holding Sub Marketing Center                       37,782.33                37,782.33
Co., Ltd.
Xinjiang Baitong Property Service Co.,                       33,713.74                        -
Ltd.
China National Pharmaceutical Logistics                      10,349.70                10,349.70
Co., Ltd.
Sinopharm Group Medicine Logistic Co.,                                -               18,650.00
Ltd. Guangzhou Branch
Sinopharm Holding Financing Lease Co.,                                -            4,424,970.21
Ltd.
Heyuan Mairui Trading Co., Ltd.                                       -             672,396.36
Shenyang Pharmaceutical Co., Ltd.                                     -            4,419,166.69
Linyi Medical Group Co., Ltd.                                         -               51,398.45
Zhang Zhenfang                                                        -            2,309,999.96
Pingdingshan Pusheng Pharmaceutical                                   -            1,246,412.02
Co., Ltd.




                                                  169
                     CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                               Notes to financial statements (Continued)
                                 For the six months ended 30 June 2019

                      (All amounts in Renminbi “RMB” unless otherwise stated)


X. Related party relationships and transactions (Continued)

7. Amounts due to related parties (Continued)

Related party                                            30 June 2019             1 January 2019
Contract liability
Sinopharm Holding Quanzhou Co., Ltd.                       111,943.09                  10,088.00
Sinopharm Holding Inner Mongolia Co.,                       23,021.80                  23,021.80
Ltd.
Sinopharm Holding Jiangxi Co., Ltd.                         22,924.91                  34,334.51
Sinopharm Holding Gansu Co., Ltd.                           21,960.00                          -
China Otsuka Pharmaceutical Co., Ltd.                       20,475.00                          -
China National Pharmaceutical Foreign                        2,727.23                  1,495.33
Trade Corporation
Sinopharm Holding Chengdu Co., Ltd.                           851.59                     851.59
Sinopharm Holding Chongqing Co., Ltd.                         755.62                     755.62
Sinopharm Group Guangdong Medicine                            639.92                   1,599.80
Device Co., Ltd.
Sinopharm Holding Taizhou Co., Ltd.                             24.80                          -
Sinopharm Holding Jinzhou Co., Ltd.                              0.19                          -
Sinopharm Holding Hunan Co., Ltd.                                   -                  87,764.97
Sinopharm Holding Hunan Weian                                       -                  67,305.00
Pharmacy Medicine Chain Company
Limited
Sinopharm Xinxiang Chain Store Co., Ltd.                            -                      0.01
Sinopharm Holding Yunnan Co., Ltd.                                  -                  11,900.19
Sinopharm Holding Nantong Co., Ltd.                                 -                143,177.12
Sinopharm Sichuan Phar maceutical Co.,                              -               1,123,087.93
Ltd.
Sinopharm Medical Instrument Guizhou                                -                     93.60
Qiannan Co., Ltd.
Sinopharm Zhuhai Medical Instrument                                 -                  3,719.00
Co., Ltd.
Sinopharm Health Online Co., Ltd.                                   -                416,056.44
Sinopharm Holding Hulun Buir Co., Ltd.                              -                  21,177.25
Sinopharm Holding Huaian Co., Ltd.                                  -                     19.40




                                                 170
                     CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                   Notes to financial statements (Continued)
                                    For the six months ended 30 June 2019

                      (All amounts in Renminbi “RMB” unless otherwise stated)


X. Related party relationships and transactions (Continued)

8. Amounts due to related parties (Continued)

   Related party                                                    30 June 2019   1 January 2019
   Interest receivable
   Sinopharm Group Zhijun(Suzhou) Pharmaceutical Co., Ltd.          1,484,841.22     1,846,618.96


   Interest payable
   Group Financial Co.                                                 98,338.84                -
   CNPGC                                                               35,440.21        38,984.25


   Other non-current assets

   Hunan Minshengtang Investment Co., Ltd.                                     -    3,519,217.54



   Lease liability

   Beijing Golden Elephant Fosun Phar maceutical Co., Ltd.         51,477,662.49               -

   Lerentang Investment Group Co., Ltd.                            15,361,691.91               -

   Linyi Medical Group Co., Ltd.                                    7,333,666.98    2,214,094.34

   Sinopharm Holding Financing Lease Co., Ltd.                      6,824,613.01    9,625,302.89

   Guangdong Jiyuantang Development Co., Ltd.                       5,895,887.17    6,679,233.35

   Sinopharm Holding Yangzhou Co., Ltd.                             5,440,115.48    7,178,262.00

   Taishan Xiangranhui Trade Co., Ltd                               2,506,316.51    2,834,391.56

   Gu Jinhua                                                        2,091,695.72    2,224,810.30

   Nanjing Yuanguang Trading Co., Ltd.                              1,979,076.07    2,675,365.64

   Shenyang Pharmaceutical Co., Ltd.                                1,685,513.08    1,885,957.03
   Shaoguan Wujiang District Muyang Medicine Information
   Consultant Co., Ltd.                                              996,884.75     1,441,844.49

   Sinopharm Group                                                   917,838.40     1,156,090.31

   Sinopharm Holding Beijing Co., Ltd.                               866,374.99     1,094,397.22

   Gu Haiqun                                                         686,419.59       766,279.30
   Beijing Sinophar m Tianyuan Real Estate & Property
   Management Co., Ltd.                                              506,243.41       652,436.66

   Hangzhou Xihu Business Group Corporation                          422,980.77       553,514.61

   China National Medicines Co., Ltd.                                417,186.76       550,480.20

   Shenzhen Jiufeng Investment Co., Ltd.                             385,892.93       377,758.33




                                                             171
                    CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                   Notes to financial statements (Continued)
                                     For the six months ended 30 June 2019

                      (All amounts in Renminbi “RMB” unless otherwise stated)


X. Related party relationships and transactions (Continued)

8. Amounts due to related parties (Continued)

   Related party                                                    30 June 2019    1 January 2019
   Entrusted loan
   CNPGC                                                                        -    31,600,000.00


   Other non-current liabilities
   Sinopharm Group                                                              -    35,061,743.31


   short-term loan
   Group Financial Co.                                             111,418,168.96   122,426,393.33


   Long-term payables
   Sinopharm Holding Financing Lease Co., Ltd.                                  -     3,763,978.52


   Non-current liabilities due w ithin one year
   CNPGC                                                            31,600,000.00                -
   Beijing Golden Elephant Fosun Phar maceutical Co., Ltd.           9,673,454.33     9,206,427.16
   Lerentang Investment Group Co., Ltd.                              8,032,346.40     5,822,550.02
   Sinopharm Holding Financing Lease Co., Ltd.                       6,157,645.87     5,861,324.37
   Sinopharm Holding Yangzhou Co., Ltd.                              3,587,508.60     3,512,206.10
   Guangdong Jiyuantang Development Co., Ltd.                        1,752,116.60     1,649,377.54
   Linyi Medical Group Co., Ltd.                                     1,450,117.00     1,549,099.93
   Nanjing Yuanguang Trading Co., Ltd.                               1,407,714.78     1,163,845.57
   Shaoguan Wujiang District Muyang Medicine Information
   Consultant Co., Ltd.                                               918,533.66       899,216.52
   Taishan Xiangranhui Trade Co., Ltd                                 657,171.76       660,453.69
   Sinopharm Group                                                    491,639.09       481,344.63
   Sinopharm Holding Beijing Co., Ltd.                                477,779.78       460,701.48
   Shenyang Pharmaceutical Co., Ltd.                                  428,258.20       404,634.11
   Beijing Sinophar m Tianyuan Real Estate & Property
   Management Co., Ltd.                                               325,813.14       295,389.79
   Hangzhou Xihu Business Group Corporation                           276,559.91       263,776.29
   China National Medicines Co., Ltd.                                 275,115.69       269,340.95
   Gu Jinhua                                                          273,920.39       268,369.48
   Shenzhen Jiufeng Investment Co., Ltd.                              188,790.90       184,833.91
   Gu Haiqun                                                          168,618.03       161,206.64


   Cash deposite with a related party
   Group Financial Co.                                              11,759,504.84     2,125,351.39



                                                             172
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                            Notes to financial statements (Continued)
                              For the six months ended 30 June 2019

                   (All amounts in Renminbi “RMB” unless otherwise stated)


 XI Commitments and contingencie s

 1.     Commitments

(1)    Capital commitments


       Capit al expenditures contracted for at the balance sheet date but not recognized in balance sheet
       are analyzed as follows:
                                                               30 June 2019           31 December 2018
                                                                 RMB‘0,000                  RMB‘0,000


       Buildings, machinery and equipment                            2,196.50                         42.16
       Investment commitments (Not e)                                6,000.00                    6,000.00


                                                                     8,196.50                    6,042.16


 Note: The Group subscribed to Sinopharm Zhongjin medical industry fund as its limited partner,and the
 total investment amounted to RMB200 million. The investors contribute year by year in batch. The fund
 manager will send out payment notification to investors according to the actual progress of the project
 and the investors will commit to complete the payment in 3 year. The investors have paid 30% of the
 amount of contribution during 2017, namely RMB60 million, and 40% in 2018, amounting to RMB80
 million. The remaining payment amount is RMB60 million. .

 2.      Contingencie s

 As of the balance sheet date, there were no contingencies that the Group was required to disclose.




                                                   173
            CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                       Notes to financial statements (Continued)
                          For the six months ended 30 June 2019

               (All amounts in Renminbi “RMB” unless otherwise stated)


XII   Other significant events

1.    Segment reporting

      Operating segments




      For management purpose, the Group is organized into business units based on its
      product and service and has four reportable operating segments as follows:

      a)     The Head Office, which is mainly engaged in investing and managing business;
      b)     Pharmaceutical distribution segment, which is mainly engaged in the
             distribution of medicine and pharmaceutical products to customers;
      c)     Retail pharmacy segment, which is the managing the operation of Guoda
             Pharmacy;

      Management monitors the results of the Group’s operating segments separately for the
      purpose of making decisions about resource allocation and performance assessment.
      Segment performance is evaluated based on reportable segment profit, which is a
      measure of adjusted profit before tax. The adjusted profit before tax is measured
      consistently with the Group’s profit before tax except that finance costs, dividend
      income, non-operating income, non-operating expense, investment income, as well as
      head office and corporate expenses are excluded from such measurement.

      Inter-segment sales and transfers are transacted with reference to the selling prices
      used in the transactions carried out with third parties at the then prevailing market
      prices.




                                           174
                                             CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                                              Notes to financial statements (Continued)
                                                                For the six months ended 30 June 2019

                                                (All amounts in Renminbi “RMB” unless otherwise stated)


XII   Other significant events (Continued)

2.    Segment reporting (Continued)

       Operating segments (Continued)

       Operating segment information as at and for the semi year ended

                                                                           Pharmaceutical                                     Elimination between
                                                  Head Office                                                      Ret ail                                                 Tot al
                                                                               distribution                                             segments

       Revenue of main operat ions                               -         19, 442, 945, 442. 54      5, 957, 083, 892. 95          (359, 409, 396. 51)     25, 040, 619, 938. 98
       Cost of main operations                                   -        (18, 238, 282, 841. 05)    (4, 518, 680, 260. 83)          358, 635, 569. 45     (22, 398, 327, 532. 43)
       Investment income                         169, 889, 995. 08                (995, 293. 58)              247, 588. 49                            -         169, 142, 289. 99
       Net profit                                607, 413, 658. 42             403, 231, 513. 97         186, 189, 865. 75          (428, 742, 482. 83)         768, 092, 555. 31
       Total assets                         11, 863, 959, 776. 81          20, 784, 963, 352. 57    10, 847, 813, 404. 32        (9, 957, 137, 850. 76)     33, 539, 598, 682. 94
       Total liabilities                    (2, 406, 658, 554. 25)       (15, 349, 630, 522. 38)    (5, 670, 681, 594. 90)        4, 445, 868, 231. 85    (18, 981, 102, 439. 68)




                                                                                        175
                            CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.


                                              Notes to financial statements (Continued)
                                               For the six months ended 30 June 2019


                             (All amounts in Renminbi “RMB” unless otherwise stated)


XIII Notes to key item s of the company financial statements

1.           Accounts receivable

     The accounts receivable by category are analyzed below:


                                                          30 J une 2019                                                                 1 Januar y 2019
                                 Gross carryi ng amount                   Provision for bad debt                    Gross carryi ng amount            Provision for bad debt

                               Amount           Proportion                Amount          Proportion                Amount         Proportion             Amount   Proportion


     Items for which
      provision for bad
      debt is recognis ed
      separatel y             19,207,761.36           3.15%                161,522.25         0.84%                17,846,941.30       2.83%                   -                -
     Items for which
      provision for bad
      debt is recogniz ed
      by the company
      (credit risk
      characteristics)       591,029,383.80          96.85%                          -                 -          613,389,652.64      97.17%                   -                -


                             610,237,145.16        100.00%                 161,522.25         0.03%               631,236,593.94    100.00%                    -                -



        At 30 June 2019, accounts receivable that are individually signif icant and individually assessed for provisions are as
        follows:

        Accounts receiv able(by                                                      Bad debt
        company)                                          Carrying amount            provis ion                     Rate                     Assessment for impairment

                                                                                                                               Receivable due from a related party
        Receivable of related party                          18,884,716.86                         -              0.00%              with low risk of recoverability
                                                                                                                              The customer has poor management
        Shenzhen Dongtai                                                                                                         and bad financial situation with hi
          Pharmaceutical Co., Ltd.                              323,044.50          161,522.25                  50.00%                     gh risk of recoverability


        Total                                                19,207,761.36          161,522.25


        Provision for bad debts of accounts receivable according to the general model of expected credit
        loss:

                                                                                                                 30 June 2019
                                                                                                           Expected credit loss in entire
                                                            Estimated def ault amount                                              lif etime       Expected credit loss rate

        Within 1 year                                               591,029,383.80                                                        -                                     -


                                                                    591,029,383.80                                                        -                                     -




                                                                                   183
                     CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.


                                   Notes to financial statements (Continued)
                                    For the six months ended 30 June 2019


                         (All amounts in Renminbi “RMB” unless otherwise stated)


XIII Notes to key items of the company financial statements (Continued)

1.          Accounts receivable (Continued)

     The aging analysis of accounts receivables was as follows:


                                                                                                                 30 June 2019


         Within 1 year                                                                                         610,237,145.16


         Total
                                                                                                               610,237,145.16

      Bad debt provision for the current period as follows:
                                     Reversal of write-
                         Opening                                                      Reversal in the       Written off        Closing
                                        off in previous       Increases in the year
                         balance                                                                   year     in the year        balance
                                                 years
 Bad debts                     -                          -              161,522.25                     -             -      161,522.25

 Total                         -                          -              161,522.25                     -             -      161,522.25



      On 30 June 2019, the top five accounts receivable by customer are summarised below:

                                                                             Bad debt provision      % of the total accounts
                                                              Amount                   amount                      receivable


     The top five accounts
         receivable total                            117,550,911.53                            -                          19.26%


      On 30 June 2019, the Company's accounts receivable that were terminated due to the
      cooperation on accounts receivable factoring with financial institutions without recourse were RMB
      183,988,184.79.




                                                              177
                CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.


                             Notes to financial statements (Continued)
                               For the six months ended 30 June 2019


                   (All amounts in Renminbi “RMB” unless otherwise stated)

XIII Notes to key items of the company financial statements (Continued)

2.      Other receivables

                                                                30 June 2019       1 January 2019


      Interest receivable                                    14,926,690.76            7,550,877.07
      Dividend rec eivable                                  106,074,898.00                       -
      Other receivables                                   1,737,482,983.84        1,534,430,006.43

                                                          1,858,484,572.60        1,541,980,883.50


     ( 1) Interest receivable

                                                                   30 June 2019       1 January 2019

      Fixed deposits                                              11,411,000.00         3,697,083.33
      Entrusted Loans                                              3,515,690.76         3,853,793.74

                                                                  14,926,690.76         7,550,877.07


     ( 2) Dividend receivable

                                                                  30 June 2019        1 January 2019

       Sinopharm Holding Shenzhen Logistics
       Co., Ltd.                                                  1,332,303.75                       -
       Sinopharm Holding Shenzhen Traditional
       & Herbal Medicine Co., Ltd                                   245,732.05                       -
       Shenzhen Jianmin Pharmaceutical Co.,
       Ltd.                                                       2,260,593.51                       -
       Sinopharm Holding Guangzhou Co., Ltd                      71,642,571.23                       -
       Sinopharm Holding Guangxi Co., Ltd                        30,593,697.46                       -

                                                                106,074,898.00                       -

     ( 3) Other receivables
     Category of other receivables by nature is as follows:

     Nature                                                      30 June 2019         1 January 2019

     Receivable due from related parties                      1,721,317,102.80      1,469,192,387.91
     Receivable of equity transactions                            8,980,000.00          8,980,000.00

     Deposits                                                      436,311.09           1,449,978.94

     Others                                                     17,964,114.36          63,817,941.16


     Total                                                    1,748,697,528.25      1,543,440,308.01


                                                   178
                    CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.


                                    Notes to financial statements (Continued)
                                     For the six months ended 30 June 2019


                      (All amounts in Renminbi “RMB” unless otherwise stated)


XIII Notes to key item s of the company financial statements (Continued)

2.       Other receivables (Continued)

     The changes in bad debt provision for other receivables based on the entire lifetime expected
     credit losses are as follows:
                                               Stage 1                  Stage 2                     Stage 3
     Bad debt                           Expected credit           Entire lifetime   Entire lifetime expected               Total
                                        losses over the         expected credit         credit losses(Credit
                                        next 12 months          losses(No credit      impairment occurred)
                                                          impairment occurred)


     Balance at 1 January 2019                        -            9,010,301.58                            -        9,010,301.58
     Balance at 1 January 2019
     during the period
     Provisions      during   the
      period                                          -            2,204,412.83                            -        2,204,412.83

     Reversal during the period                       -                (170.00)                            -            (170.00)



     Balance at 30 June 2019                          -          11,214,544.41                             -       11,214,544.41


      The aging analysis of other receivables was as follows:

                                                                                                                 30 June 2019


     Within 1 year                                                                                       1,689,730,979.74
     1 to 2 years                                                                                              49,856,902.50
     2 to 3 years                                                                                                  29,829.20
     Over 3 years                                                                                               9,079,816.81

     Total                                                                                               1,748,697,528.25

Bad debt provision of ot her receivables in 2019 was RMB2,204,412.83, with the recovered or reversed
amount of RMB170.00.




                                                          179
                      CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.


                                    Notes to financial statements (Continued)
                                       For the six months ended 30 June 2019


                       (All amounts in Renminbi “RMB” unless otherwise stated)

XIII Notes to key items of the company financial statements (Continued)

2.         Other receivables (Continued)


     As at 30 June 2019,the top 5 parties that owed the largest amounts of other rec eivable balances
     are analyzed below:
                                                                                                              % of total     Provision of bad
                                                    Nature                 Amount                Age
                                                                                                               amount                    debt

     Sinopharm Guangxi              Entrusted borrow ings         343,000,000.00      Within 1 year             19.61%
     Sinopharm Yuexing              Entrusted borrow ings         190,700,000.00      Within 1 year             10.91%
     Sinopharm Holding
         Dongguan Co., Ltd.         Entrusted borrow ings         161,000,000.00      Within 1 year               9.21%
     Sinopharm Holdings
         Zhanjiang Co., Ltd.        Entrusted borrow ings         117,000,000.00      Within 1 year               6.69%
     Sinopharm Holding
         Meizhou Co., Ltd.          Entrusted borrow ings           76,700,000.00     Within 1 year               4.39%

                                                                  888,400,000.00                                50.81%



3.         Long-term equity inve stments



                                             30 June 2019                                                1 January 2019
                                                   Bad debt                                                     Bad debt
                           Original v alue         prov ision   Carry ing amount       Original v alue          prov ision    Carry ing amount
      Inv estments
      in
      subsidiaries      5,594,679,427.58                    -   5,594,679,427.58    5,594,679,427.58                    -    5,594,679,427.58
      Inv estments
         in
         associates     2,084,966,116.97      39,930,000.00     2,045,036,116.97    1,878,157,264.66       39,930,000.00     1,838,227,264.66



                        7,679,645,544.55      39,930,000.00     7,639,715,544.55    7,472,836,692.24       39,930,000.00     7,432,906,692.24




                                                                   180
                         CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.


                                               Notes to financial statements (Continued)
                                                  For the six months ended 30 June 2019


                             (All amounts in Renminbi “RMB” unless otherwise stated)

XIII Notes to key items of the company financial statements (Continued)


3.          Long-term equity inve stments (Continued)
(a)     Subsidiaries
                                                                                                                                                     Provision for             Ending value of
                                                                                                                                                impairment in the                  impairment
                                           1 Januar y 2019             Increas es                   decreas e                30 J une 2019         current period                    provision


        Sinophar m Jianmi ng                60,054,911.04                       -                              -            60,054,911.04                            -                       -
        Sinophar m Traditi onal &
                                                                                                                                                                     -                       -
           Herbal Medicine                  15,450,875.93                       -                              -            15,450,875.93
        Shenzhen Logistics                   5,019,062.68                       -                              -             5,019,062.68                            -                       -

        Sinophar m Guangzhou           3,588,689,716.80                         -                              -         3,588,689,716.80                            -                       -

        Sinophar m Guangxi                525,456,951.07                        -                              -           525,456,951.07                            -                       -

        Sinophar m Yanfeng                  38,207,800.00                       -                              -            38,207,800.00                            -                       -
        Sinophar m Holdi ng
        Guoda Phar mac y Co.,
        Ltd.                           1,361,800,110.06                         -                              -         1,361,800,110.06                            -                       -


                                       5,594,679,427.58                         -                              -         5,594,679,427.58                            -                       -



(b)    Associates

                                                                                                                      Mo vement
                                                                                        Profit or loss under       Other changes in          Dividend                                            Provision of
                                                     1 January 20 19   Investment        the equity method                   equity          declared    Other              30 June 2019         impairment

      Sinopharm Group Z hijun (Suzhou )
         Pharmaceutical Co., Ltd.                     39,930,000.00                 -                      -                      -                  -        -            39,930,000.00    39,930,000.00
      Shenzhen Main Luc k Pharmaceutical
      Co., Ltd                                       265,316,653.68                 -       33,592,995.70                         -                  -        -           298,909,649.38
      Sinopharm Group Z hijun (Shenzhen )
         Pharmaceutical Co., Ltd.                    355,353,196.15                 -       58,536,101.74                         -                  -        -           413,889,297.89                    -
      Shenzhen Zhijun Pharmaceutical
      T rade Co., Ltd.
                                                        8,730,994.87                -        1,467,031.77                         -                  -        -            10,198,026.64                    -
      Sinopharm Group Z hijun(Shenzhen )
         Pingshan Pharmaceutical Co.,
         Ltd.                                         86,292,927.33                 -       22,425,900.45                         -                  -        -           108,718,827.78                    -
      Shanghai Shyndec Pharmaceutical
        Co., Ltd.                                   1,098,566,852.51                -       65,258,503.45            42,424,747.00    (16,896,427.80 )        -          1,189,353,675.16                   -
      Shanghai Dingqun Enterprise
        Manag ement Consulting Co., Ltd.              23,966,640.12                 -                      -                      -                  -        -            23,966,640.12                    -

                                                    1,878,157,264.66                -      181,280,533.11            42,424,747.00    (16,896,427.80 )        -          2,084,966,116.97   39,930,000.00




                                                                                        181
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.


                                  Notes to financial statements (Continued)
                                    For the six months ended 30 June 2019


                      (All amounts in Renminbi “RMB” unless otherwise stated)

XIII Notes to key items of the company financial statements (Continued)

4.       Sales and cost of sales


                                              For the six months ended                    For the six months ended
                                                          30 June 2019                                 30 June 2018
                                       Revenue                     Cost           Revenue                       Cost

     Principal
     operations                 1,997,575,365.19        1,915,240,571.14    1,681,220,169.43            1,612,710,688.13
     Other
     operations                    10,429,198.11            6,031,823.62        6,401,186.40                2,006,785.78


                                2,008,004,563.30        1,921,272,394.76    1,687,621,355.83            1,614,717,473.91




     Classification                                                                            For the six months ended
                                                                                                            30 June 2019
     By product
     Include:
     Medicines                                                                                         1,919,165,623.70
     Medical appliance                                                                                    78,409,741.49
     Other                                                                                                10,429,198.11


     By area
     Include:
     Domestic                                                                                          2,008,004,563.30
     Overseas


     By contract duration
     Include:
     Confirm revenue at a certain point in time                                                        1,997,575,365.19
     Confirm revenue at a certain time period
                                                                                                          10,429,198.11


     Total                                                                                             2,008,004,563.30

     Information about the Company’s obligations is as follows:
     The Company recognises revenue when goods are delivered, and will receive payment within 30-210 days.
     The Company recognises revenue after providing services, and will receive payment within 30 -210 days.
     The expected revenue recognition time for the Company’s contract obligations above is in year 20 19.
     Information related to the sales price allocated to the remaining obligations:
     The amount of income corresponding to the obligation that has been signed but has not been fulfilled or has
     not yet fulfilled is9,058,538.51 yuan, of which 9,058,538.51 yua n is expected to be recognized in 2019.

                                                            182
                  CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.


                              Notes to financial statements (Continued)
                                   For the six months ended 30 June 2019


                     (All amounts in Renminbi “RMB” unless otherwise stated)



XIII Notes to key items of the company financial statements (Continued)

5.        Investment income

                                                 For the six months ended   For the six months ended
                                                             30 June 2019                30 June 2018


     Long-term equity investment
   income calculated by cost method                      427,007,887.36             361,514,454.32
 Long-term equity investment income
                                                         181,280,533.11             173,326,290.14
     calculated by equity method


                                                         608,288,420.47             534,840,744.46




                                                   183
                 CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                          Supplementary information to financial statements
                                  For the six months ended 30 June 2019

                     (All amounts in Renminbi “RMB” unless otherwise stated)


XIV Supplementary information to financial statements

1.      Schedule of non-recurring profi t or loss


                                                                     Amount for 30 June 2019                   Illustration


Gains and losses from disposal of non-current assets,
  including write off of accrued asset impairment                                   4,318.22                              .
Government grants recognized in income statement for the
  current year, except for those closely related to the ordinary                                   Mainly contains tax
  operation of the Company which the Group enjoyed constantly                                  subsidies and financial
  according to the allotment standards or quantitative criteria of                          incentives received during
  the country                                                                 16,456,976.15              current period
Reversal of bad debt provision for accounts receivable that were
tested for impairment individually                                              1,076,222.62
                                                                                                 The interest income from
                                                                                             the entrusted loan provided
                                                                                              to Sinopharm Group Zhijun
                                                                                                (Suzhou) Pharmaceutical
Profit or loss from outward entrusted borrowings                                1,715,338.06                      Co., Ltd.
 Non-operating income and expenses other than the aforesaid
items                                                                            519,920.40
Other                                                                              16,447.15

Less:Impact on income tax                                                       4,668,084.55
     Impact on non-controlling interests after tax                              3,988,225.60

                                                                              11,132,912.45



Basis for preparation of det ailed list of non-rec urring profit or loss items:

Under t he requirements in Explanatory announcement No. 1 on information disclosure by companies
offering securities to the public – non-recurring profit or loss (2008) (“Explanatory announc ement
No.1”) from CS RC, nonrecurring profit or loss refer to t hose arising from transactions and events that
are not directly relevant to ordinary business, or that are relevant to ordinary business, but are so
extraordinary that would have an influence on users of fin ancial statements making proper judgments
on the performance and profitability of an enterpris e.




                                                              183
               CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

                                         Appendix(Continued)
                              For the six months ended 30 June 2019

                  (All amounts in Renminbi “RMB” unless otherwise stated)


XIV Supplementary information to financial statements (Continued)

 2.    Return on equity (“ROE”) and earnings per share (“EPS”)



                                                       Weighted        Basic EPS (RMB/Share)
                                                        average
                                                       ROE (%)             Basic           Diluted
                                                                  EPS(RMB/Share)   EPS(RMB/Share)


  Net profit attributable to ordinary
      shareholders of the parent                         5.44%              1.52               1.52
  Net profit after deducting non-recurring
      profit or loss attributable to the
      Company’s ordinary shareholders of the
      parent                                             5.35%              1.49               1.49




                                                  China National Accord Medicines Corporation Ltd.
                                                           Legal representative: Lin Zhaoxiong
                                                                            24 August 2019




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