China National Accord Medicines Corporation Ltd.
Semi-Annual Report 2018
August 2018
Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and senior
executives of China National Accord Medicines Corporation Ltd. (hereinafter
referred to as the Company) hereby confirm that there are no any fictitious
statements, misleading statements, or important omissions carried in this report,
and shall take all responsibilities, individual and/or joint, for the reality,
accuracy and completion of the whole contents.
Lin Zhaoxiong, Principal of the Company, Wei Pingxiao, person in charger of
accounting works and Wang Ying, person in charge of accounting organ
(accounting principal) hereby confirm that the Financial Report of Semi -
Annual Report 2018 is authentic, accurate and complete.
All directors are attended the Board Meeting for report deliberation.
The Company plans not to pay cash dividends, bonus and carry out capitalizing
of common reserves.
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Contents
Section I Important Notice and Paraphrase .................................................................................... 1
Section II Company Profile and Main Financial Indexes .............................................................. 5
Section III Summary of Company Business .................................................................................. 8
Section IV Discussion and Analysis of Business ............................................................................ 12
Section V Important Events ............................................................................................................ 28
Section VI Changes in Shares and Shareholders .......................................................................... 49
Section VII Preferred Stock ............................................................................................................ 55
Section VIII Particulars about Directors, Supervisors and Senior Executives .......................... 55
Section IX Corporate Bonds ........................................................................................................... 56
Section X Financial Report ............................................................................................................. 57
Section XI Documents Available for Reference ........................................................................... 223
2
Paraphrase
Items Refers to Contents
Listed Company, Company, the Company,
Refers to China National Accord Medicines Corporation Ltd.
Sinopharm Accord, the Group
Sinopharm Refers to China National Pharmaceutical Group Corporation
Sinopharm Holding Refers to Sinopharm Group Co., Ltd; Controlling shareholder of the Company
Company Law Refers to Company Law of the People’s Republic of China
Securities Law Refers to Securities Law of the People’s Republic of China
Yuan, 10 thousand Yuan, 100 million Yuan Refers to RMB, RMB 10 thousand, RMB 100 million
Terminology: Refers to
The first invoice refers to the invoice from the manufacturer to the
distributor, and the second invoice refers to the invoice from the
Two Invoices System Refers to distributor to the medical service provider. By this way, circulation links
have been greatly reduced and the number of distributors for each
medicine category shall not exceed two.
It is a kind of operation activity that the medical organization has
medicine enterprise with strong management ability and larger risk
appetites to operate and manage their drugstores in the form of contracts
with payment, which has clearly stated the relationship of right and duty
Pharmacy Trust Refers to between hospitals and pharmacy owners and operators, ensuring
preservation and appreciation of hospital and pharmacy property and
creating a kind of management activity with considerable social benefit
and economic benefit, under the condition that there is no change in the
ownership of drugstores
GPO Refers to Group purchasing organizations
Direct selling Refers to A sales method of selling drug to the hospital directly
GSP certificate Refers to Good Supply Practice certificate
That is CMS, and information system processing workflow &
Supply Chain Management Refers to
procurement, inventory & sales documents
Abbreviation: Refers to
Sinopharm Holding Guangzhou Refers to Sinopharm Holding Guangzhou Co., Ltd.
Guoda Drugstore Refers to Sinopharm Holding Guoda Drugstore Co., Ltd.
Sinopharm Holding Guangxi Refers to Sinopharm Holding Guangxi Co., Ltd.
Foshan Nanhai Refers to Foshan Nanhai Pharmaceutical Group Co., Ltd.
3
Southern Pharmaceutical Foreign Trade Refers to Guangdong Southern Pharmaceutical Foreign Trade Co., Ltd.
Zhijun Pharmaceutical Refers to China National Zhijun (Shenzhen) Pharmaceutical Co., Ltd.
Zhijun Pharmacy Trade Refers to Shenzhen Zhijun Pharmacy Trade Co., Ltd.
Pingshan Pharmaceutical Refers to China National Zhijun (Shenzhen) Pingshan Pharmaceutical Co., Ltd.
Main Luck Pharmaceuticals Refers to Shenzhen Main Luck Pharmaceuticals Inc.
4
Section II Company Profile and Main Finnaical Indexes
I. Company profile
Short form of the stock Sinopharm Accord ; Accord B Stock code 000028, 200028
Stock exchange for listing Shenzhen Stock Exchange
Name of the Company (in
国药集团一致药业股份有限公司
Chinese)
Short form of the Company
国药一致
(in Chinese)
Foreign name of the Company
China National Accord Medicines Corporation Ltd.
(if applicable)
Short form of foreign name of
Sinopharm Accord
the Company (if applicable)
Legal representative Lin Zhaoxiong
II. Person/Way to contact
Secretary of the Board Representative of security affairs
Name Chen Changbing Wang Zhaoyu
Accord Pharm. Bldg., No. 15, Ba Gua Si Accord Pharm. Bldg., No. 15, Ba Gua Si
Contact add. Road, Futian District, Shenzhen, Road, Futian District, Shenzhen,
Guangdong Province Guangdong Province
Tel. +(86)755 25875195 +(86)755 25875222
Fax. +(86)755 25195435 +(86)755 25195435
E-mail gyyzinvestor@sinopharm.com gyyz0028@sinopharm.com
III. Others
1. Way of contact
Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or
not
□ Applicable √ Not applicable
Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period,
found more details in Annual Report 2017
2. Information disclosure and preparation place
Whether information disclosure and preparation place changed in reporting period or not
□ Applicable √ Not applicable
The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparation
place for semi-annual report have no change in reporting period, found more details in Annual Report 2017
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IV. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data
□Yes √ No
Increase/decrease in this
Current period Same period of last year
report y-o-y
Operating revenue (RMB) 20,779,166,699.67 20,524,807,669.57 1.24%
Net profit attributable to shareholders of
641,727,034.93 556,125,318.19 15.39%
the listed Company(RMB)
Net profit attributable to shareholders of
the listed Company after deducting non- 623,296,339.34 546,253,390.00 14.10%
recurring gains and losses(RMB)
Net cash flow arising from operating
225,357,709.20 228,337,431.40 -1.30%
activities(RMB)
Basic earnings per share (RMB/Share) 1.50 1.30 15.38%
Diluted earnings per share (RMB/Share) 1.50 1.30 15.38%
Weighted average ROE 6.62% 6.41% 0.21%
Increase/decrease in this
End of current period End of last period report-end over that of last
period-end
Total assets (RMB) 24,013,015,677.32 22,343,643,527.77 7.47%
Net assets attributable to shareholder of
9,910,258,628.12 9,396,572,345.88 5.47%
listed Company(RMB)
V. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under both IAS (International Accounting
Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under both foreign accounting rules and
Chinese GAAP (Generally Accepted Accounting Principles)
VI. Items and amounts of extraordinary profit (gains)/loss
√ Applicable □ Not applicable
In RMB
Item Amount Note
Gains/losses from the disposal of non-current asset (including the The income from disposal of
4,254,942.60 intangible assets by subsidiary
write-off that accrued for impairment of assets)
Sinopharm Holding Guangxi
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Logistic Co., Ltd.
Governmental subsidy calculated into current gains and
The vary taxation subsidiary and
losses(while closely related with the normal business of the
11,938,416.85 financial incentive received in the
Company, excluding the fixed-amount or fixed-proportion
period
governmental subsidy according to the unified national standard)
Income from acquisition of
Investment costs while acquiring subsidiaries, joint ventures and
subsidiary Sinopharm Holding
associated enterprise, less than fair value of the identifiable net 729.29
Guangzhou Huadu Co., Ltd. in
assets from invested enterprise which should be enjoined
the period
The bad debt provision of
Reversal of impairment reserve for account receivable with receivables which has accrual
4,203,173.20
separate impairment testing independently of a prior year was
collected in the period
Gains/losses on entrusted loans 1,549,650.99
Other non-operating income and expenditure except for the
2,377,946.75
aforementioned items
Less: impact on income tax 5,505,057.19
Influenced amount of minority shareholders’ equity (after tax) 389,106.90
Total 18,430,695.59 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to
the Public --- Extraordinary Profit/loss.
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Section III Summary of Company Business
I. Main businesses of the Company in the reporting period
Whether the Company needs to comply with the disclosure requirements of the particular industry
Reference disclosure
Retailing industry
The Company complies with the disclosure requirement of “Information Disclosure Guidelines for the Shenzhen Stock Exchange
No. 8- Listing Company Engaged in Retailing Industry”
In the reporting period, the main business of Sinopharm Accord includes pharmaceutical distribution and
pharmaceutical retail, specifically as follows:
(i) In the pharmaceutical distribution field, the Company continues to integrate the distribution and logistics
business, deeply penetrates into the end markets, improves the multistep distribution network, creates intelligent
supply chain, and devotes to become a provider for pharmaceutical and healthcare products and services with the
strongest influence, the highest share, the most complete variety, the best service, and the fastest delivery in south
district of China.
1. The Company’s pharmaceutical distribution business is established in Guangdong and Guangxi, the network
construction of Guangdong and Guangxi has completed in 2013 with business extended to the county-level
regions, furthermore, we speed up integration of the three tier companies in 2014. In year of 2015, the Company
achieved an operation all over the network, the network has further expansion in first half of 2018, including 1785
A-grade hospitals, 3433 community-oriented primary cares and 1538 retail terminal clients.
2. Pharmaceutical distribution business has achieved the first scale in Guangdong and Guangxi and the leading
position in market segment of Guangdong and Guangxi. In terms of traditional business, relying on the network
layout of distribution, accelerated the optimization of terminal network construction, and ranked top 3 in the
market competition of hospital direct marketing in 31 prefecture-level cities; in terms of logistics network
construction, transformed from the traditional commercial trade services to the professional supply chain services,
established the first third-party logistics in Guangdong and Guangxi.
3. While steadily developing the traditional business, the Company actively carried out innovative business:
comprehensively carried out instrument business, adopted advanced supply chain management methods and
modern technology, possessed professional medical supply chain companies, expanded 4D business, and created
SPD core competitiveness; developed retail diagnosis and treatment business, complied with the general trend of
separating pharmacies from medical institutions, integrated national retail resources, developed a variety of retail
pharmacy models, and provided patients with professional, high-quality, convenient and affordable medicine,
pharmacy and distribution services. By the first half of 2018, the Company has 51 types of pharmacies in social
pharmacies, dispensaries at the grassroots level, pharmacies for chronic disease management, and drug stores.
(ii) In the pharmaceutical retail field, Guoda Drugstore is a pharmaceutical retail enterprise that ranks the first in
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the sales volume throughout the country, and is one of the few enterprises in China with national direct sales drug
retail network. The retail chain network of Guoda Drugstore spreads over 19 provinces, autonomous regions and
municipalities, covers nearly 70 large and medium-sized cities,.
By the end of first half of 2018, Guoda Drugstore has operated 4004 stores, covering 19 provinces, autonomous
regions and municipalities, entering nearly 70 large and medium sized cities, which has formed a drugstore
networks covering eastern and northern China, southern coastal cities, and gradually expanded into northeast,
central plains and inland cities, the sales scale of which has exceeded 10 billions, ranking the first within industry.
Guoda , the business of which were mainly relying on modern retail drugstores, has been putting great attention
on the development of professional service system with medical resources as core competitiveness, building a
group of stores with professional commercial activities, which are able to provide retails and therapy services that
integrating medical service and health-care products sales and cooperate with hospitals; at the same time, the
Company has been vigorously developing new business, exploring and expanding new sales channels, improving
professional services, being dedicated to transit from a traditional medical retail into an innovative service
enterprise. By means of conventional products retail management, improving major brands and exploring business
cooperation with supplier, accelerating the establishment of DTP business and continuous health care service
system, Guoda has built industry-leading professional service ability. Besides, the leading scale of Guoda is
regarded as one of the core competitiveness, for the reason that the advantage in scale has reduced its procurement
cost and enhanced its negotiation advantages.
II. Major changes in main assets
1. Major changes in main assets
Major assets Note of major changes
Increased 106.1159 million Yuan over that of period-begin with 6.38% up, mainly
Equity assets
because the investment income from joint ventures increased
Decreased 1.6079 million Yuan over that of period-begin with 0.29% down, mainly due
Fixed assets
to the depreciation of fixed assets
Decreased 10.9347 million Yuan over that of period-begin with 3.36% down, mainly due
Intangible assets
to the amortization of intangible assets
Increased 7.8586 million Yuan over that of period-begin with 34.25% up, mainly due to
Construction in progress
the ERP system update from headquarter of Guoda Drugstore
2. Main overseas assets
□ Applicable √ Not applicable
III. Core competitiveness analysis
Whether the Company needs to comply with the disclosure requirements of the particular industry
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Reference disclosure
Retailing industry
As an enterprise with both wholesale and retail business, Sinopharm Accord has the following competitive
advantages:
1. Strong network coverage and layout
Take the lead in scale and cover the countrywide retail network: Guoda Drugstore is a pharmaceutical retail
enterprise with sales volume ranking first for five consecutive years throughout the country, established 28
regional chain enterprises, with retail network spreading over 19 provinces and municipalities and autonomous
regions and covering nearly 70 cities.
Leading layout and complete distribution network in Guangdong and Guangxi: the Company has complete
pharmaceutical distribution networks in Guangdong and Guangxi, which comprehensively cover the medical
institutions above second grade and the large-scale chain drugstores in Guangdong and Guangxi, and provide drug
distribution services for numerous drugstores, community health care service networks, clinics and the third
terminals represented by new rural cooperative medical system. The Company is a leading provider of drug
distribution and supply chain services in Southern China.
2. Abundant variety resources
Guoda Drugstore operates nearly 120,000 merchandises. With its relatively comprehensive purchasing network
and years of experience in commodity management, Guoda Drugstore has established a merchandise system with
wide coverage, high professionalization, and rich varieties.
In the pharmaceutical distribution, the Company has established extensive cooperative relations with thousands of
domestic manufacturers and commercial enterprises and established stable business relationships with hundreds of
import and joint venture manufacturers, and has rich variety resources.
3. Complete logistics and distribution system
Guoda Drugstore has a nationwide modern logistics and distribution system, and has established the logistics and
distribution network covering all the stores throughout the country, including Shanghai National Logistics Center
and 23 provincial and municipal distribution centers.
Accord distribution adopts supply chain management and warehouse management solutions system, it has built
large-scale first-grade logistics centers in Guangzhou, Nanning, Shenzhen and other places and established
distribution centers in Guangdong and Guangxi which has formed ladder logistics and distribution networks, it is
the first enterprise in Guangdong and Guangxi that has achieved the third-party logistics qualification and has the
professional pharmaceutical logistics capabilities with the largest scale, the most extensive network, and the most
complete modes in southern China.
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4. The advantages of medical insurance resources
Regarding medicine retails, the subsidiaries of Guoda Drugstore have featured generally higher medical insurance
acquiring ability, with higher medical insurance sales ratio and steady operation.
5. The advantages of Compliance: the Company had a big lead under an increasingly stringent regulatory
environment for the reason that it has kept emphasizing legalization and compliance in the process of operation
and management.
6. Unique-influence Sinopharm brand
Brand of the Company and distribution, industry child-brand and controlling shareholder and actual controller’s
brand come down in one continuous line, depending on powerful force of central enterprises, the Company’s
popularity and influence are prominent day by day in the industry.
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Section IV. Discussion and Analysis of Business
1. Introduction
In the first half of 2018, Sinopharm Accord focused on a clear development strategy and clear goals, transformed
both foreground and background, innovated together, and took serious measures to business landing, and made
steady growth in business performance, and showed potential in business models.
(i) Performance completion in first half of 2018
Sinopharm Accord achieved a revenue from operation amounted as 20.779 billion Yuan with a y-o-y growth
1.24%; the net profit attributable to parent Company comes to 642 million Yuan with 15.39% up on a y-o-y basis.
The pharmaceutical distribution has operation revenue of 15.879 billion Yuan with y-o-y growth of 0.79%; net
profit attributable to parent Company has 333 million Yuan with y-o-y growth of 8.93%. As for the
pharmaceutical retail, the Company gains 5.144 billion Yuan in operation revenue, a y-o-y growth of 5.23% and
the net profit attributable to parent Company amounted as 139 million Yuan, a 40.66% up on a y-o-y basis.
(ii) Analysis of policy environment
2018 is a year of domestic adjustment and increasing international pressure. On the one hand, the domestic
economy has significant resilience characteristics; on the other hand, the advance of the US interest rate hike cycle
has led to a tendency of shock upstream of global capital costs. The evolution of trade friction is accompanied by
unexpected changes in the external environment, and financial deleverage and other complex external
environment have brought more pressure in business operation.
1. Industry growth rate continued to slow down, and the trend of leading concentration ratio remained unchanged
In the first quarter of 2018, the growth of drug distribution and sales increased by 7.9%, a decline of 0.5% on a
year-on-year basis; the growth of drug retail and sales increased by 9.1%, and an increase of 0.1% on a year-on-
year basis. The growth rate of large pharmaceutical wholesale enterprises slowed down noticeably, the main
business income of top 100 wholesale enterprises increased by 8.4% in 2017, a decline of 5.6% on a year-on-year
basis; the top 100 market share was 70.7%, a decline of 0.2% on a year-on-year basis; the market share of 4
leading enterprises was 37.6%, a rise of 0.2 % on a year-on-year basis.
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2. The total number of medical institutions was expanding, and the process of rational allocation of medical
resources was accelerating
Under the policy promoting, more than 19,000 new-level medical and health institutions have been added, and the
growth rate of the number of medical treatments and inpatient number has far exceeded that of class hospitals, and
the medical resources are constantly leaning toward the basic level.
(iii) The main work completed by the Company in the first half of 2018
1. Built new dynamic organizational capability and consolidated the foundation of transformation
In the first half of the year, the Company introduced the third-party organizations, initiated the research work at
headquarters, distribution, and Guoda, and provided research basis for organizational optimization through
research and analysis. Among them, distribution implemented the integration of departments and regions at
different levels through organizational structure optimization and re-design, region penetrated deeply, and
platform concentrated on profession; retail promoted the organizational structure design of Guoda so as to match
with the business internationalization.
2. Integrated wholesale and retail, and dug deep into resource advantages
During the reporting period, the Company’s catalogue management of wholesale and retail integration variety
increased from 33 brands to 77 brands, and the number of articles increased from 255 to 430. Through the
planning for wholesale and retail integration suppliers, seven suppliers were promoted to boost the wholesale and
retail integration project, at the same time, further promoted the wholesale and retail cooperation project of Guoda
Drugstore.
3. Implemented information technology projects, and strengthened new competence of technology
The Company attached great importance to the construction of IT talent team, increased recruitment efforts,
comprehensively strengthened the “informatization” orientation, and established a matching performance
incentive mechanism. During the reporting period, the Company optimized the basic management by information
technology, created a dual information platform of “Hospital Supply Chain Management” and “Retail Professional
Supply Chain Management”, and promoted the new business model through the integration of technology:
(1) In terms of business flow, the retail direct sales mobile order APP popped up online; the self-owned pharmacy
online prescription APP ensured the prescription to be undertaken; the settlement management completed the
third-party payment platform and the medical insurance settlement docking of five regions; the first-level
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inventory management of instrument consumables popped up online.
(2) In terms of logistics, the APP of Android version was developed, and the non-pharmaceutical system online
implementing of six warehouses in Guangzhou, Foshan and Zhuhai were completed; the third-party logistics
construction added six third-party cargo owners.
(3) In terms of the initial introduction of AI intelligence, the AGV machine site investigation has been completed,
and the system flow and docking plan have been initially confirmed; the vending machine has been put into use in
some areas and would be distributed in other parts of the country in succession; the unmanned pharmacy has
completed the prototype test and would be put into operation as soon as possible.
4. Organized the full docking with Walgreens Boots Alliance, and the projects were implemented smoothly
After many times of communication and combining the research on the market, the new term of board of directors
of the joint-ventured Guoda Drugstore reached a consensus on the strategic planning for the next 3-5 years and
formed specific strategic measures.
5. Distribution focused on four major directions, transformation and innovation for development
(1) Primary care:
The Company actively responded to the “two-vote system”, made overall plans, made variety planning, resource
docking and channel merging; improved the supply chain efficiency by building invoice management system,
procurement tax refund process optimization, multi-warehouse operation inventory management, etc.; in order to
meet the business needs, the Company established standardized prepayment and cash deposit operation
procedures to effectively control payment risks.
In response to the “GPO”, various regions and multiple channels actively proposed suggestions for the GPO
program, and signed strategic cooperation framework agreements with Taishan, HeYuan, Maoming and other
places; actively affected the variety catalogue of Foshan implementation plans, and strived to supplement the key
varieties, improved the maximum match between the varieties and the implementation catalog; the GPOs in
Shenzhen and Dongguan entered the implementation stage, and the Company maintained active communication
and responded well.
The Company directly faced the pharmacy custody at various regions, actively participated in the bidding of
various custody projects, strengthened the front-end business management, actively interpreted and responded to
the bidding work, formulated the bidding tools, and formed the standardization process of the universal template +
customized solution; and insisted on the individualized response in the hospitals in trust, integrated the varieties
and business resources, adjusted the cooperation models, and maintained the share and improved the gross profit.
(2) Retail diagnosis and treatment:
During the reporting period, there were 51 retail clinics, including 10 ones newly established in Guangdong and
two ones newly established in Guangxi in the first half of the year. Foshan Pharmacy and Foyi Pharmacy became
the specific pharmacies in Foshan City. Shenzhen Pharmacy and Zhaoqing Pharmacy won the first batch of
“Guangdong Provincial Demonstration Pharmacies”.
1) Integrated management synergy, and improved profitability
The Company continued to improve the pharmacy system process and standard operation, carried through the
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foreground-background integrated management in the operation, procurement, information, quality management,
logistics, and brand; refined and strengthened the daily operation management, carried out more than 60 audits in
the first half of the year; the Company enriched the retail categories through commodity negotiations, reasonably
planned the varieties on the basis of hospital nature and local disease spectrum, and created superior prescription
categories.
2) All regions exerted their strength and innovated the cooperation methods
With the help of the “Internet + Medical” project, the Company joined hands with Tencent and has signed the
“Internet + Smart Hospital” framework agreement with the three-level hospitals in Nanning, Baise and Guilin;
Sinopharm Group Guangxi and Guangxi Fudi Finance Investment Group signed the “Healthy Baise” Project
Cooperation Agreement, and opened a hospital pharmacy.
(3) Retail direct sales:
The B2B platform completed the background upgrade, and the online marketing terminal customers reached 789;
docked to Guoda platform, integrated the marketing resources of Guoda, exported the standardized services, and
carried out deep distribution projects to achieve full coverage of network sales.
(4) Instrument consumables:
All regions promoted in an all-round way, won the bidding of 10 medical projects, newly increased 4 SPD
projects, and promoted the project landing of 3 hospitals in the province; promoted the deployment of 4D
services, established the top three hospitals in the reagent business; and established a medical joint venture model
for instrument maintenance service in Haizhu District; the disinfection supply business actively carried out
business promotion and gradually put into supply.
6. Guoda Drugstore ensured stock and made increment, and elaborately operated new features
(1) Accelerated the distribution speed according to strategic deployment
As of the end of the reporting period, the total number of Guoda Drugstore reached 4,004, and accumulatively had
a net increase of 169 stores in the first half of the year, including 163 direct-sale stores. The distribution points of
advantageous areas were scattered, strengthened the regional management, formulated the implementation plan of
the store transfer shop model, carried out help guidance on the spot, and grasped the local policies through
analysis and continued to follow up. Guoda Drugstore pre-judged the policy changes and market trends, and
increased the expansion speed of stores around hospitals. In the first half of the year, 29 new stores around
hospitals were added, and there were totally 332 stores around hospitals as of the end of the reporting period.
(2) Dug the potential benefits of stock stores and created specialized pharmacies with chronic diseases as the core
1) Optimized store management and managed the loss-making stores
Guoda Drugstore concerned and helped regional companies to improve their marketing capabilities, formulated
assessment plans and budgets, gradually increased the proportion of high-margin sales, took measures to control
retail prices, monitored the rationality of price adjustments and pricing and corrected errors, and carried out daily
monitoring and maintenance to the prices of centralized purchasing varieties throughout the country.
2) Established records and set up warehouses, implemented chronic disease services and membership
management
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Guoda Drugstore focused on promoting chronic disease work in various regions, organized the preparation of
pharmaceutical service manuals, and tried out the chronic disease learning cases at online platforms within 17
companies across the country, meanwhile, the DTP pharmacies upgraded the service models which is centering on
patients.
(3) Implemented the integration strategy of wholesale and retail, and strengthened the fine management of
merchandize purchase
Implemented the provincial-level platform construction of Guoda Drugstore step by step, docked the project of
wholesale and retail integration, implemented the strategic requirements, completed the docking with
manufacturers, and sought a new cooperation mode; carried through the fine management to merchandize
purchase and sales, promoted the application planning guidebook and tapped the potential in inter-regional
benchmarking; focused on the category inside, used the benchmarking method of same type of commodity to find
the superior goods, and increased the sales quota of superior goods.
(4) Accelerate the exploration of e-commerce business new model
Guoda Drugstore has negotiated cooperation with a number of internet hospitals and reached a nationwide
cooperation agreement with Yaofangyun. At present, the cooperation in Ningxia and Xiamen has already been
implemented.
The Company is required to comply with the disclosure requirements of the Industry Information Disclosure
Guide of the Shenzhen Stock Exchange No. 8 - Listed Companies Engaged in Retail-Related Businesses.
1. The entity business operations and the business condition of the stores during the reporting period:
As of the end of June 2018, Guoda had 2,965 direct-operated stores, with sales revenue of 4.04 billion Yuan, a
year-on-year growth of 10.6%, and the same stores had an increase of 5.0% on a year-on-year basis, 1,039
franchise stores with distribution revenue of 580 million Yuan, an increase of 9.7% on a year-on-year basis.
Direct-sale
Region Franchised outlet
store
Dispatching
Numbers Sales income
Numbersof income
of the (in 10 thousand y-o-y y-o-y
the store (10 thousand
store Yuan)
Yuan)
North 1,369 209,772.98 13.52% 305 23,545.05 21.97%
East
China
759 95,094.95 6.06% 580 27,203.89 0.48%
South
China
387 57,263.51 7.14% 60 4,264.78 8.86%
Central
China
241 21,621.69 13.28% 94 2,736.92 17.43%
Northwest 209 21,043.89 10.18% - - 0.00%
Total 2,965 404,797.02 10.57% 1,039 57,750.64 9.73%
Note:
North: Liaoning, Shanxi, Inner Mongolia, Beijing, Tianjin, Hebei;
East China: Shanghai, Jiangsu, Anhui, Shandong, Fujian, Zhejiang;
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South China: Guangdong, Guangxi;
Central China: Henan, Hunan;
Northwest: Ningxia, Xinjiang.
(1) Top 10 stores in sales
Year for Actual
Operating Business Property
Serial Region Name starting operating
mode activity belonging
business area (in M2)
TaiYuan
1 Shanxi Zhongli Branch 2002 Direct-sale 5+X 820.00 Rental
Province
Hohhot Inner
2 Hohhot HQ 2003 Direct-sale 5+X 1,689.26 Rental
Mongolia
TaiYuan
Er Yuan
3 Shanxi 2011 Direct-sale 5+X 600.00 Rental
Branch
Province
Shenzhen Shenzhen
Modern
4 Guangdong Exhibition 2006 Direct-sale 260.00 Rental
pharmacy
Province Hall
TCM
Shijiazhuang Le Ren Tang
5 2010 Direct-sale diagnosis 1,206.00 Rental
Hebei Province HQ
shops
Jinxiang Modern
6 Beijing 1997 Direct-sale 773.16 Rental
Store, Xidang pharmacy
Kangning TCM
Shijiazhuang
7 Store, 2000 Direct-sale diagnosis 280.00 Rental
Hebei Province
Lerentang shops
Yangzhou
Baiyulan Modern
8 Jiangsu 1991 Direct-sale 620.00 Rental
Store, Jiangsu pharmacy
Province
Shenzhen
Zhenxing Modern
9 Guangdong 2002 Direct-sale 200.00 Rental
Store pharmacy
Province
Shenyang TCM
Zhongjie
10 Liaoning 2002 Direct-sale diagnosis 1,300.00 Rental
Store
Province shops
(2) In first half of 2018, new 207 direct-sale shops are operates, and 44 shops closed with 163 shops net increased,
the operating area has 27462 M2 icnreased, and has net increase of almost 200 million Yuan in sales
In M2
Direct-sale store Franchised outlet
Region Number of store Total Number of stores shut Number of store Number of stores shut
increased area down increased down
North 108
15,206.
-17 21 -2
60
East China 36
4,522.2
-13 6 -21
5
South 3,014.7
26 -5 7 -5
China 0
Central 1,964.3
16 -5 13 -13
China 1
Northwest 21
2,754.4
-4 - -
6
17
27,462.
Total 207 -44 47 -41
32
2. In first half of 2018, online sales growth in a steady pace; totally 13 third party platform online one after
another so far. Details are:
In 10 thousand Yuan
Cooperation platform Trading Volume Business revenue
T-Mall (Sinopharm On-line) 10,357.06 10,357.06
Yaofangwang (www.yaofangwang.com) 810.02 810.02
Yiyaowang (www.111.com.cn) 131.13 131.13
JD daojia (http://daojia.jd.com) 222.34 222.34
800FANG.CN
142.21 142.21
(www.800pharm.com)
Meituan Waimai
36.70 36.70
(waimai.meituan.com)
Yaopin Daojia 0.88 0.88
ele.me (www.ele.me/home) 67.90 67.90
Wanda E-business 1.80 1.80
Baidu takeout 13.53 13.53
BAHEAL Pharmaceutical Easy Referral 25.42 25.42
Other B2B E-business 648.03 648.03
We Chat Mall 89.52 89.52
Total 12,546.53 12,546.53
3. procurement, inventory and supplier from the headquarter: headquarter of the Company has total amount of
4.894 billion Yuan (tax included) for procurement for the first half of 2018, and inventory costs amounted as 960
million Yuan, details are:
In 10 thousand Yuan
Category Purchasing Amount (tax included) Inventory cost
Health-care food 20,691 4,690
Convenience food 4,774 763
Kids 11,275 2,214
Gynecology 14,201 2,206
Liver and gall 7,869 1,439
Cold 10,031 2,324
Personal care 4,977 1,265
Orthopedics 16,893 4,895
Respiratory 16,942 3,398
Household conveniences 1,393 329
Family health products 17,834 4,633
Antipyretic analgesicss 4,106 695
Anti-infection 12,321 2,283
Anti-allergic 4,013 779
Temporary coding 818 212
Urination 10,221 2,248
Endocrine 16,970 3,092
18
Other 117,208 8,970
Clearing heat and detoxitating 16,043 3,357
Neurology 17,822 3,151
Drugs for external use 23,450 7,163
Vitamin-mineral 10,500 1,966
Five sense organs 15,252 3,383
Digestion 20,473 4,867
Heart brain 49,824 9,368
Chinese herbal pieces 20,283 4,837
Nourishing food 23,258 11,458
Total 489,441.54 95,981.09
Top 5 suppliers:
In 10 thousand Yuan
Ranks Supplier Procurement amount (tax included) Purchase ratio
1 No. 1 8,577 12%
2 No. 2 6,727 9%
3 No. 3 5,808 8%
4 No. 4 5,134 7%
5 No. 5 4,672 6%
4. Warehousing and logistics:
In the first half of 2018, logistics warehouses of Guoda Drugstore spread over 17 provinces, there were 27 large
and small logistics warehouses and the total warehouse area was over 110,000 square meters. For the inventory
management of Guoda Drugstore, the commodity department is responsible for monitoring the inventory
dynamics of the headquarters and subsidiaries, and managing inventory on a monthly basis, providing inventory
analysis and management reports, and giving suggestions on the optimization of inventory structure, while the
operation department is responsible for the inventory turnover index of the monthly tracking business and
providing business inventory assessment data, and the purchasing department is responsible for rational
replenishment, ensuring smooth and stable supply channels, and effectively controlling the inventory turnover of
commodity while ensuring the satisfaction rate of goods, and handling and resolving the dead stock and
commodity with expiry date every month. .
In M2 (Square Metters)
Province Reginal enterpreise Warehouse area
Liaoning Shenyang 14,200
Guangzhou
5,300
Guangdong Shanzhen
Jiangmen 5,432
Shanxi Wanmin 5,214
Shanxi
Shanxi YiYuan 4,350
Dadesheng 4,840
Jiangsu
Nanjing 1,800
19
Liyang 3,840
Fujian 2,395
Fujian
Quanzhou 1,100
Hebei Hebei 3,772
Shandong Shandong 5,800
Ningxia Ningxia 3,330
Hunan Hunan 3,353
Henan Henan 3,500
Inner Mongolia Inner Mongolia 1,870
Guangxi Guangxi 1,950
Beijing Guoda
Beijing 4,943
Beijing Jinxiang
Tianjin Tianjin 1,700
Anhui Anhui 1,000
Xinjiang Xinjiang 3,842
Shanghai Fumei
20,000
Shanghai Shanghai Guoda
Hangzhou 1,000
Guoda HQ HQ 8,000
Total 112,531
5. The commodity suppliers of Guoda Drugstore are mainly external suppliers, and also assisted by some
Sinopharm affiliated enterprises and private brands. The sale for the first half of 2018 was as follows:
In 10 thousand Yuan
Private brand Property Category Turnover (tax included) Ratio
1 Group-buying OEM Health-care food 1,773 0.31%
2 Group-buying OEM Kids 25 0.00%
3 Group-buying OEM Gynecology 19 0.00%
4 Group-buying OEM Cold 27 0.00%
5 Group-buying OEM Personal care 23 0.00%
6 Group-buying OEM Family health 1,754 0.30%
7 Group-buying OEM Anti-infection 117 0.02%
8 Group-buying OEM Anti-allergic&antidinic 35 0.01%
9 Group-buying OEM Clearing heat and detoxitating 160 0.03%
10 Group-buying OEM External use drugs 137 0.02%
11 Group-buying OEM Five sense organs drugs 162 0.03%
12 Group-buying OEM Chinese herbal pieces 1,515 0.26%
Total 5,745.35 0.99%
II. Main business analysis
Found more in I. Introduction in Discussion and Analysis of Business
Y-o-y changes of main financial data
20
In RMB
Current period Same period of last year Y-o-y increase/decrease Reasons for changes
Operating revenue 20,779,166,699.67 20,524,807,669.57 1.24% No major changes
Operating costs 18,367,643,723.84 18,364,034,450.83 0.02% No major changes
Sales expenses 1,273,588,756.07 1,110,446,938.17 14.69% No major changes
Administration expenses 351,820,063.78 340,636,051.11 3.28% No major changes
Finance expenses 57,541,544.32 44,498,778.76 29.31% No major changes
Income tax expenses 164,486,734.32 160,041,107.63 2.78% No major changes
R&D input 0.00 0.00 0.00% No major changes
Net cash flow arising
225,357,709.20 228,337,431.40 -1.30% No major changes
from operating activities
Increased 80.26% on a y-
o-y basis, mainly because
Net cash flow arising medical industry fund
from investment -18,211,602.74 -92,279,892.06 80.26% subscription at same
activities period of last year while
no such amount occurred
in the period
Net cash flow arising
-288,243,874.04 -262,782,332.86 -9.69% No major changes
from financing activities
Increased 36.25% on a y-
o-y basis, mainly because
Net increase of cash and the net cash flow arising
-80,782,904.11 -126,724,793.52 36.25%
cash equivalent from investment
activities increased from
a year earlier
Major changes on profit composition or profit resources in reporting period
□ Applicable √ Not applicable
No major changes on profit composition or profit resources occurred in reporting period.
Constitution of main business
In RMB
Increase or Increase or Increase or
decrease of decrease of decrease of gross
Operating
Operating cost Gross profit ratio operating revenue operating cost profit ratio over
revenue
over same period over same period same period of
of last year of last year last year
According to industries
Pharmaceutical 15,430,407,519.0 14,487,704,805.4
6.11% -0.69% -1.53% 0.81%
wholesale 5 1
Pharmaceutical
5,153,485,000.11 3,856,696,974.63 25.16% 6.99% 6.25% 0.52%
retail
Logistics and
warehousing 15,527,964.86 9,313,229.39 40.02% 14.36% 21.97% -3.75%
services
Leasing and other 179,746,215.65 13,928,714.41 92.25% 14.36% 3.54% 0.81%
According to products
19,730,368,030.4 17,408,684,324.8
Drugs 11.77% 0.61% -1.34% 1.75%
2 8
Apparatus 922,013,116.87 864,692,352.96 6.22% 68.50% 70.15% -0.91%
Other 126,785,552.38 94,267,046.00 25.65% -65.39% -55.16% -16.97%
According to region
Internal revenue 20,779,166,699.6 18,367,643,723.8 11.61% 1.24% 0.02% 1.08%
21
7 4
III. Analysis of non-main business
□ Applicable √ Not applicable
IV. Assets and liability
1. Major changes of assets composition
In RMB
End of current period End of last period
Ratio
Ratio in total Ratio in total changes Notes of major changes
Amount Amount
assets assets
3,943,595,560. 4,191,655,438.
Monetary fund 16.42% 18.76% -2.34% No major changes
58 51
Account 9,441,542,367. 7,589,412,679.
39.32% 33.97% 5.35% No major changes
receivable 19 88
4,245,354,625. 3,781,858,238.
Inventory 17.68% 16.93% 0.75% No major changes
22 12
Investment 149,409,723.7
0.62% 153,678,339.11 0.69% -0.07% No major changes
property 9
Long-term equity 1,756,735,242. 1,650,619,373.
7.32% 7.39% -0.07% No major changes
investment 44 09
550,102,564.2
Fix assets 2.29% 551,710,434.02 2.47% -0.18% No major changes
9
Construction in Mainly due to the ERP system update
30,805,874.11 0.13% 22,947,258.99 0.10% 0.03%
process from Guoda Drugstore
2,051,139,651. 1,561,354,521. Mainly by increase of short-term loans
Short-term loans 8.54% 6.99% 1.55%
67 64 of Holding Guangzhou
Long-term loans 31,600,000.00 0.13% 31,600,000.00 0.14% -0.01% No major changes
2. Assets and liability measured by fair value
√Applicable □Not applicable
In RMB
Gain/loss of Cumulative fair
Impairment Amount Amount for
Opening changes in fair value changes
Item accrual in the purchased in sold in the Ending amount
amount value in the reckoned into
period the period period
period equity
Financial assets
3. Financial
assets available 13,685,760.00 13,685,760.00
for sale
Total 13,685,760.00 13,685,760.00
Financial
0.00 0.00
liability
Whether the main asset measurement attributes has major changes in the period
√Yes □No
Reasons for major changes in the measurement attributes of the Company’s prime assets during the reporting
22
period and the impact on its operating results and financial status
According to the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of
Financial Instruments and the Accounting Standards for Business Enterprises No. 37 - Presentation of Financial
Instruments, the board of directors of the Company decided to adopt the “financial assets measured at fair value
through other comprehensive income ” to confirm this part of the assets.
This change had no impact on the Company’s operating results and financial status.
3. Assets right restriction till end of reporting period
Nil
V. Investment
1. Overall situation
During the reporting period, the Company paid cash to acquire Sinopharm Holding Guangzhou Huadu Co., Ltd.
(70% shareholding) to achieve the business mergers under non-identical control. The Company has newly
established three-level subsidiaries, including Sinopharm Holding Foshan Supply Chain of Medical Consumables
Co., Ltd. (70% shareholding), Sinopharm Holding Supplier Chain Service (Guangxi) Co., Ltd. (30.6%
shareholding) and Sinopharm Holding Baiyi Drugstore Guangxi Co., Ltd. (51% shareholding), the Company also
has newly established four-level subsidiary Shanghai Guoda Pharmacy Co., Ltd. (51% shareholding). For specific
investment, please refer to Notes (VIII) of the financial report.
2. The major equity investment obtained in the reporting period
□ Applicable √ Not applicable
3. The major non-equity investment doing in the reporting period
□ Applicable √ Not applicable
4. Financial assets investment
(1) Securities investment
□ Applicable √ Not applicable
The Company had no securities investment in the reporting period.
(2) Derivative investment
□ Applicable √ Not applicable
23
The Company has no derivatives investment in the Period
VI. Sales of major assets and equity
1. Sales of major assets
□ Applicable √ Not applicable
There are no major assets sell in the period
2. Sales of major equity
□ Applicable √ Not applicable
VII. Analysis of main holding Company and stock-jointly companies
√Applicable □ Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over 10%
In RMB
Company Register Operating Operating
Type Main business Total assets Net Assets Net profit
name capital revenue profit
Retail and
distribution in
respect of
Sinopharm
pharmaceutical
Holding
Subsidiar products and 1,010,000,00 5,605,478,61 2,098,354,00 5,143,601,63 230,393,41
Guoda 172,985,004.03
y medical apparatus 0.00 8.09 6.83 6.87 7.53
Drugstore
and instruments,
Co., Ltd.
wholesale and
retails of health
products
Chinese traditional
patent medicine,
chemical
preparations,
antibiotics, bio-
chemical
medicine,
biological
medicine,
diagnosis
medicine,
Sinopharm
biological
Holding Subsidiar 1,530,000,00 6,339,988,12 1,787,383,30 7,314,439,69 98,350,491
medicine with 72,732,408.60
Guangzhou y 0.00 3.82 9.36 7.76 .87
features of
Co., Ltd.
treatment and
diagnosis, shaped
packing food,
chemical products,
and various
commodity and
technique hold by
self-support and
agency as well as
import & export of
technology
Sinopharm Subsidiar Sales of drugs, 500,000,000. 2,504,188,78 727,501,084. 2,076,759,81 76,022,896 65,903,710.92
24
Holding y medical apparatus 00 6.77 72 4.93 .58
Guangxi Co., and instruments,
Ltd. freightage, storage,
loading and
unloading, glass
wares, cosmetics
and daily
merchandise;
other business
services, other
professional
consultation,
various goods
agency and for
self-operation,
import & export of
technology, houses
leasing
Particular about subsidiaries obtained or disposed in report period
√Applicable □ Not applicable
The method of obtaining and handling The influence to the whole production and
Company
subsidiaries during the report period performance
Expand local medicine retail business
Shanghai Guoda Pharmacy Co., Ltd. Establishment layout, and without major influence on
performance of the Company
Further expand the distribution business
Sinopharm Holding Foshan Supply Chain for equipment consumables, and without
Establishment
of Medical Consumables Co., Ltd. major influence on performance of the
Company
Further consolidated the pharmaceutical
Sinopharm Holding Guangzhou Huadu distribution business in Guangxi &
Acquisition
Co., Ltd. Guangdong and without major influence
on performance of the Company
Further expand distribution business and
Sinopharm Holding Supplier Chain Sercice
Establishment without major influence on performance of
(Guangxi) Co., Ltd.
the Company
Expand local medicine retail business
Sinopharm Holding Baiyi Drugstore
Establishment layout, and without major influence on
Guangxi Co., Ltd.
performance of the Company
Compressed the management hierarchy
Tangshan Le Ren Tang Drugstore Chain
De-registration and without major influence on
Co., Ltd.
performance of the Company
Notes of main holding Company and stock-jointly companies
VIII. Structured vehicle controlled by the Company
□ Applicable √ Not applicable
IX. Prediction of business performance from January – September 2018
Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the
warning of its material change compared with the corresponding period of the last year and explanation on reason
□ Applicable √ Not applicable
25
X. Risks and countermeasures
1. The management risks in sustainable expansion of marketing network of Guoda Drugstore
The marketing network of Guoda Drugstore has maintained stable growth trend in recent years through newly
opened stores and extended mergers. The expansion of sales area and increase of stores have brought pressure on
the site selection, distribution, cash management, marketing and human resource management of the stores of
Guoda Drugstore. The Company will strengthen the management and construction in merchandise procurement,
logistics and distribution, marketing and other links and establish corresponding management methods for each
link so as to ensure the unified standards and management quality for store expansion.
2. Risks of intensifying market competition
At present, the market concentration ratio of domestic pharmaceutical retail market industry is relatively low, and
the national and regional pharmaceutical retail enterprises have fierce market competition. As the country
continues to introduce corresponding policies to encourage the integration of pharmaceutical retail industry, the
major pharmaceutical retail enterprises in the industry have accelerated the pace of mergers and acquisitions, and
continued to expand the marketing networks, improve the logistics center constructions, and innovate the business
and profit models so that the sales scale and comprehensive strength continuously strengthen. At the same time,
with the upgrading of consumption and the gradual opening of market, the foreign pharmaceutical distribution
enterprises with powerful strength are entering the domestic pharmaceutical distribution markets through a variety
of ways, so the industry competition is further intensifying. Sinopharm Accord will integrate the existing
resources, create a two-wheel drive development model with integration of both wholesale and retail, deeply give
full play to synergistic effect, directly face the end patients and consumers by varieties complementation, capital
cooperation, supply chain collaboration, internationalization promotion and other measures, and achieve brand
globalization through capital operation.
3. Risks of changes in industry policy
The development of pharmaceutical retail industry is regulated and influenced by the relevant national policies.
The state has promulgated a series of documents such as Good Supply Practice and Control System for
Prescription Drug and Over-The-Counter Drug (Pilot), which put forward specific requirements to the industry
operation. Along with the gradual increase of management standards for management standard, the regulations are
constantly being revised and improved and put forward higher requirements to the business operations. In addition,
since the promotion and implementation of the new medical reform in 2009, the state has implemented the
essential medicine system, public hospital reform, and drug centralized procurement bidding system throughout
the country, and repeatedly introduced policies to reduce the drug retail price ceiling in order to reduce the burden
of drug use. If the policies introduced in the process of implementing new medical reform impose restrictions on
the industrial development and the product price of retail drug stores, the operation and profitability of Guoda
Drugstore may have to face some challenges.
4. Risks of facing the horizontal competition
26
In the pharmaceutical retail field, Sinopharm Group’s affiliated distribution subsidiaries have also opened some
social retail pharmacies, which constitute a certain degree of horizontal competition with the subordinate Guoda
Drugstore. Sinopharm Group and Sinopharm have pledged to take effective measures to resolve the possible
horizontal competition.
5. Risk of goodwill impairments
On June 30, 2018, the book value of goodwill in the Group’s consolidated financial statements was RMB
830,729,152.75 and was allocated to the asset groups of distribution branches and retail branches. The Group
conducts impairment test on goodwill annually in accordance with the provisions of the Accounting Standards for
Business Enterprises. Disclosures relating to the impairments of goodwill are set out in Notes V. 22 and 32 and
Notes VII. 27 of the financial statements
27
Section V. Important Events
I. In the report period, the Company held annual shareholders’ general meeting and
extraordinary shareholders’ general meeting
1. Shareholders’ General Meeting in the report period
Ratio of investor
Session of meeting Type Date Date of disclosure Index of disclosure
participation
Juchao Website—
(http://www.cninfo.co
Annual General
AGM 63.00% 2018-04-17 2018-04-18 m.cn) “Resolution
Meeting of 2017
Notice of AGM of
2017 No.: 2018-32
Juchao Website—
(http://www.cninfo.co
First extraordinary m.cn) “Resolution
Extraordinary
general meeting of 62.98% 2018-06-15 2018-06-16 Notice of First
general meeting
2018 extraordinary general
meeting of 2018 No.:
2018-29
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
□ Applicable √ Not applicable
The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for
the semi-annual year.
III. Commitments completed in Period and those without completed till end of the Period from actual
controller, shareholders, related parties, purchaser and companies
√Applicable □ Not applicable
Type of
Commitm Commitm Commitm Implement
Promise commitme Content of commitments
ents ent date ent term ation
nts
As a large pharmaceutical commercial enterprise whose business
Commitm involves pharmaceutical wholesale and retail, Sinopharm Holding
ents in Commitm may overlap with the Company in geographical segmentation Long-term
Normally
Sinopharm
report of ent of during its future business development. To avoid the potential 2005-06- implement
Group
acquisition shareholde peer competition brought by such geographical overlap, 21 effective
Co., Ltd Sinopharm Holding undertakes that, upon the transfer of shares of ing
or equity rs
change Sinopharm Holding Guangzhou it held to Accord Pharma, “1. it
will not newly-establish or broaden within Guangdong any
business operation that actually compete with that of Accord
28
Pharma, or set up any new subsidiaries or subordinate enterprises
who engage in such business. 2. It will enter into business
delineation with Accord Pharma and Sinopharm Holding
Guangzhou, thereby giving the three parties clear geographical
areas to carry out pharmaceutical wholesale and retail businesses,
so as to avoid potential peer competition. Apart from above,
Sinopharm Holding will no longer newly-establish any enterprise
that may compete with Accord Pharma in the production and
R&D of pharmaceutical products.”"
“Sinopharm Group and Sinopharm Foreign Trade made
commitments in the Report about China National Accord
Medicines Corporation Ltd. Purchasing Assets and Raising
Supporting Funds and Related Transactions by Asset Sale, Stock
Issuance and Cash Payment that the non-public offering of shares
of Sinopharm Accord obtained from this transaction shall not be
transferred within 36 months since the finish date of issuance and
Sinopharm
Group shall be unlocked after 36 months since the date of listing. Within
Co.,
6 months after the completion of this transaction, if the closing
Ltd;China
Commitm
National price of the stock of Sinopharm Accord is less than the issue price Normally
ent on 2016-05-
Pharmace 36 months implement
restricted in continuous 20 trading days, or the closing price at the end of 6 31
utical ing
shares
Foreign months after the completion of this transaction is less than the
Trade
issue price, the lockup period of the stock of Sinopharm Group
Corporatio
n and Sinopharm Foreign Trade obtained from Sinopharm Accord
by this transaction will automatically prolong at least 6 months.
The shares derived from stock dividends allocation and capital
reserve increase transferring of Sinopharm Accord based on the
non-public offering of shares of Sinopharm Accord obtained by
Commitm
ents in this transaction should also abide by the above stock restricted
assets arrangements.”
reorganiza
tion "Ping An Asset Management Co., Ltd. made commitments in the
Report about China National Accord Medicines Corporation Ltd.
Purchasing Assets and Raising Supporting Funds and Related
Ping’an Transactions by Asset Sale, Stock Issuance and Cash Payment
Commitm
Assets that the non-public offering of shares of Sinopharm Accord Normally
ent on 2016-05-
Managem obtained from this transaction shall not be transferred within 36 36 months implement
restricted 31
ent Co., months since the finish date of issuance and shall be unlocked ing
shares
Ltd after 36 months since the date of listing. After placement
completed, the shares of the listed Company increased due to
bonus shares and turning to increase capital should pursuit to the
restriction arrangement the above mentioned.
“Sinopharm Group made commitments in the Report about China
National Accord Medicines Corporation Ltd. Purchasing Assets
and Raising Supporting Funds and Related Transactions by Asset
Sale, Stock Issuance and Cash Payment that the 2016 annual net
Performan profits of Foshan Nanhai, Guangdong Uptodate & Special
ce Medicines and Guoda Drug Store should respectively be no less
commitme than RMB 47,385,600.00, RMB 19,167,000.00, and RMB
Sinopharm Normally
Group
nt and 98,466,100.00, while the 2017 annual net profits should 2016-05- 2018-12-
implement
Co., Ltd
compensat respectively be no less than RMB 49,394,500.00, RMB 31 31
ing
ion 20,209,700.00, and RMB 110,998,90.00, and the 2018 annual net
arrangeme profits should respectively be no less than RMB 51,148,200.00,
nt RMB 21,330,100.00, and RMB 131,275,500.00. Net profit refers
to the lower one between the after-tax net profit attributable to the
owners of parent Company planning to invest in the target
Company and the net profit attributable to the owners of parent
Company after deducting the non-recurring gains and losses. If
29
the actual net profit of the target Company doesn’t reach the
committed net profit, Sinopharm Group will need to compensate
according to the stipulations of the "Profit Forecast Compensation
Agreement for the Stock Issuance and Assets Purchase.”
Sinopharm Foreign Trade made commitments in the Report about
China National Accord Medicines Corporation Ltd. Purchasing
Assets and Raising Supporting Funds and Related Transactions
by Asset Sale, Stock Issuance and Cash Payment that the 2016
annual net profits of Southern Pharmaceutical Foreign Trade
China Performan
should be no less than RMB 39,880,700, while the 2017 annual
National ce
net profits should be no less than RMB 47,323,200, and should
Pharmace commitme
not less than RMB 55,364,600 in 2018. Net profit refers to the Normally
utical nt and 2016-05- 2018-12-
lower one between the after-tax net profit attributable to the implement
Foreign compensat 31 31
owners of parent Company planning to invest in the target ing
Trade ion
Company and the net profit attributable to the owners of parent
Corporatio arrangeme
Company after deducting the non-recurring gains and losses. If
n nt
the actual net profit of the Southern Pharmaceutical Foreign
Trade doesn’t reach the committed net profit, Sinopharm Foreign
Trade will need to compensate according to the stipulations of the
"Profit Forecast Compensation Agreement for the Stock Issuance
and Assets Purchase.”
Fu
“Fu Yuequn and other 10 natural person made commitments in
Jiancheng;
the Report about China National Accord Medicines Corporation
Fu Yuequn
Ltd. Purchasing Assets and Raising Supporting Funds and
Gu
Related Transactions by Asset Sale, Stock Issuance and Cash
Chaoqun;
Payment that the 2016 annual net profits of Southern
Guo
Performan Pharmaceutical Foreign Trade should be no less than RMB
Shu’er;
ce 39,880,700, while the 2017 annual net profits should be no less
Huang
commitme than RMB 47,323,200, and should not less than RMB 55,364,600
Qiufang; Normally
nt and in 2018. Net profit refers to the lower one between the after-tax 2016-05- 2018-12-
Li implement
compensat net profit attributable to the owners of parent Company planning 31 31
Hongbing; ing
ion to invest in the target Company and the net profit attributable to
Liao Zhi;
arrangeme the owners of parent Company after deducting the non-recurring
Lin
nt gains and losses. If the actual net profit of the Southern
Wanqun;
Pharmaceutical Foreign Trade doesn’t reach the committed net
SunWei;
profit, Fu Yuequn and other 10 natural person will need to
Zhang
compensate according to the stipulations of the "Profit Forecast
Zhaohua;
Compensation Agreement for the Stock Issuance and Assets
Zhang
Purchase.”
Zhaotang
“Sinopharm Accord made commitments in the Report about
China National Accord Medicines Corporation Ltd. Purchasing
Assets and Raising Supporting Funds and Related Transactions
by Asset Sale, Stock Issuance and Cash Payment that the net
profits attributable to the owners of parent Company after
deducting the non-recurring gains and losses committed by
Zhijun Pharmaceutical in 2016, 2017 and 2018 should be
respectively no less than RMB 222,671,700.00, RMB
Performan 232,561,600.00, and RMB 241,878,700.00; the net profits
China ce attributable to the owners of parent Company after deducting the
National commitme non-recurring gains and losses committed by Zhijun Pharmacy
Trade in 2016, 2017 and 2018 should be respectively no less than 2016-05- Normally
Accord nt and 2018-12-
RMB 2,379,600.00, RMB 2,335,100.00, and RMB 2,345,600.00; 31 implement
Medicines compensat 31
the net profits attributable to the owners of parent Company after ing
Corporatio ion
n Ltd. arrangeme deducting the non-recurring gains and losses committed by
nt Pingshan Pharmaceutical in 2016, 2017 and 2018 should be
respectively no less than RMB 39,716,300.00, RMB
43,033,500.00, and RMB 50,325,500.00. If the actual net profits
attributable to the owners of parent Company after deducting the
non-recurring gains and losses of Zhijun Pharmaceutical / Zhijun
Pharmacy Trade / Pingshan Pharmaceutical don’t reach the
committed net profits attributable to the owners of parent
Company after deducting the non-recurring gains and losses,
Sinopharm Accord should compensate in accordance with the
stipulations of the Profit Forecast Compensation Agreement for
30
the Stock Issuance and Assets Purchase.”
China “The listed Company, controlling shareholders, the actual
National controllers made commitments in the Report about China
Accord National Accord Medicines Corporation Ltd. Purchasing Assets
Medicines and Raising Supporting Funds and Related Transactions by Asset
Corporatio Other Sale, Stock Issuance and Cash Payment that the Company shall Normally
2016-05- Long-term
n Ltd.; commitme not violate the relevant regulations of Article 16 in Securities implement
31 effective
Sinopharm nts Issuance and Underwriting Management Approach, and directly ing
Group or indirectly providing financial assistance or compensation for
Co., the subscription objects and its shareholders / partners / clients (if
Ltd;Sinop any) of this non-public offering does not exist and will not occur
harm in the future.”
“Ping An Asset Management Co., Ltd. has made commitments
that the unit intends to utilize Ping An Asset Xinxiang No.3 asset
management product and Ping An Asset Xinxiang No.7 asset
management product to fund and subscribe some non-public
offering of shares of Sinopharm Accord in this major asset
Ping’an
restructuring process, and has the ability to subscribe the shares,
Assets Other Normally
the relevant capital sources are legitimate, there is no hierarchical 2016-03- Long-term
Managem commitme implement
income and other structured arrangements, and there is no use of 24 effective
ent Co., nts ing
leveraged funds. The unit does not receive financial assistance or
Ltd
compensation from Sinopharm Accord and its controlling
shareholders, or the actual controllers. The investors’ structure of
above-mentioned products does not change from the issue date of
the commitment letter to the end date of the lockup period of the
stock that the unit subscribes from Sinopharm Accord.”
“Sinopharm made commitments in the Report about China
National Accord Medicines Corporation Ltd. Purchasing Assets
and Raising Supporting Funds and Related Transactions by Asset
Sale, Stock Issuance and Cash Payment that 1. if the stock
intraday price of Sinopharm Accord on any trading day of the 30
China Three
trading days after the listing of newly increased shares in this There is
National years from
Increase transaction is less than the issue price of newly increased shares no need
Pharmace the end of
holding in this transaction, Sinopharm will accumulatively invest no more 2017-01- for actual
utical increase
commitme than RMB 150 million in these 30 trading days to increase the 06 controllers
Group holding (if
nt holding by the stock trading system of the Shenzhen Stock to increase
Corporatio applicable
Exchange (this increase of holding) until the earlier one of below holdings
n )
two situations occurs: (1) the above-mentioned funds are use up;
(2) the intraday price of Sinopharm Accord is no less than the
issue price of newly increased shares in this transaction. 2.
Sinopharm shall not sell the shares obtained from this increase of
holding within 3 years after the end of this increase of holding.”
“Sinopharm Group made commitments in the Report about China
National Accord Medicines Corporation Ltd. Purchasing Assets
and Raising Supporting Funds and Related Transactions by Asset
Sale, Stock Issuance and Cash Payment that the Company shall
be the controlling shareholder of China National Accord
Medicines Corporation Ltd. (hereinafter referred to as Sinopharm
Accord) up to the issue date of this commitment letter, after the
Commitm completion of this major assets reorganization (hereinafter
ents on referred to as “this reorganization”), Sinopharm Accord shall no
horizontal longer hold shares or operate relevant businesses of
Sinopharm pharmaceutical industry, the main business will become the 2016-12- Normally
competitio Long-term
Group national pharmaceutical retail and pharmaceutical distribution 28 implement
n, relation effective
Co., Ltd business in Guangdong and Guangxi. In order to support the ing
transaction
and capital business development of Sinopharm Accord and avoid horizontal
occupation competition with Sinopharm Accord and its controlling
enterprises, the Company made following irrevocable
commitments and promises:1, after the completion of this
reorganization, as for the social retail drugstore assets except for
Sinopharm Holding Guoda Drugstore Co., Ltd. and its
subsidiaries and branches owned or controlled by the Company,
the Company promised to take appropriate measures to solve the
horizontal competition problem in the pharmaceutical retail
business between the Company and Sinopharm Accord within 5
31
years since the completion date of this reorganization. 2. The
Company's way of resolving horizontal competition problems
includes and is not limited to purchasing the social retail
drugstore assets subordinated to the Company by Sinopharm
Accord, taking the entrusted operation, leasing or contracting
operation by Sinopharm Accord and its controlling enterprises in
accordance with the methods permitted bu national laws to hold
or control the social retail drugstore assets, or transferring the
controlling stake of the social retail drugstore assets by the
Company. 3. If the shareholders of the social retail drugstore
assets (hereinafter referred to as "the third party") of the
Company or the enterprises controlled by the Company have or
are going to perform the preemptive rights under the same
conditions in accordance with relevant laws and corresponding
Articles of Association, then the above commitment will not be
applicable, but in this case, the Company should try its utmost to
urge the third party to waive its preemptive rights. If the
Company is unable to urge the third party to give up the
preemptive rights, the Company will urge the enterprises
controlled by the Company to transfer the social retail drugstore
assets to the third party to solve the horizontal competition
problem. 4. The pharmaceutical distribution assets currently
owned or controlled by the Company are distributed outside
Guangdong and Guangxi regions, there is no horizontal
competition with Sinopharm Accord, the Company will not
engage in the same or similar operation businesses to Sinopharm
Accord in Guangdong and Guangxi in the future, if the Company
and its holding enterprises obtain the new business opportunities
constituting substantial horizontal competition (hereinafter
referred to as competitive new business) within the
pharmaceutical distribution business scope of Sinopharm Accord
in Guangdong and Guangxi, the Company will send written
notice to Sinopharm Accord and try its utmost to firstly provide
the new business opportunities to Sinopharm Accord or its
holding enterprises according to the reasonable and fair terms and
conditions so as to avoid the horizontal competition with
Sinopharm Accord and its holding enterprises. 5. Since the issue
date of this commitment letter, the Company promises to
indemnify Sinopharm Accord for all actual losses, damages and
expenses caused by the Company in violation of any
commitments under this commitment letter. 6. This commitment
letter terminates when following circumstances occur (subject to
the earlier one): (1) the Company is no longer the controlling
shareholder of Sinopharm Accord; or (2) the shares of Sinopharm
Accord terminate the listing at the stock exchange.”
“Sinopharm made commitments in the Report about China
National Accord Medicines Corporation Ltd. Purchasing Assets
and Raising Supporting Funds and Related Transactions by Asset
Sale, Stock Issuance and Cash Payment that the Company shall
be the actual controller of China National Accord Medicines
Corporation Ltd. (hereinafter referred to as Sinopharm Accord)
Commitm up to the issue date of this commitment letter, after the
China completion of this major assets reorganization (hereinafter
ents on
National referred to as “this reorganization”), Sinopharm Accord shall no
horizontal
Pharmace longer hold shares or operate relevant businesses of 2016-12- Normally
competitio Long-term
utical pharmaceutical industry, the main business will become the 28 implement
n, relation effective
Group national pharmaceutical retail and pharmaceutical distribution ing
transaction
Corporatio business in Guangdong and Guangxi. In order to support the
and capital
n business development of Sinopharm Accord and avoid horizontal
occupation
competition with Sinopharm Accord and its controlling
enterprises, the Company made following irrevocable
commitments and promises:1, after the completion of this
reorganization, as for the social retail drugstore assets except for
Sinopharm Group Guoda Pharmacy Co., Ltd. and its subsidiaries
and branches owned or controlled by the Company, the Company
promised to take appropriate measures to solve the horizontal
32
competition problem in the pharmaceutical retail business
between the Company and Sinopharm Accord within 5 years
since the completion date of this reorganization. 2. The
Company's way of resolving horizontal competition problems
includes and is not limited to purchasing the social retail
drugstore assets subordinated to the Company by Sinopharm
Accord, taking the entrusted operation, leasing or contracting
operation by Sinopharm Accord and its controlling enterprises in
accordance with the methods permitted bu national laws to hold
or control the social retail drugstore assets, or transferring the
controlling stake of the social retail drugstore assets by the
Company. 3. If the shareholders of the social retail drugstore
assets (hereinafter referred to as "the third party") of the
Company or the enterprises controlled by the Company have or
are going to perform the preemptive rights under the same
conditions in accordance with relevant laws and corresponding
Articles of Association, then the above commitment will not be
applicable, but in this case, the Company should try its utmost to
urge the third party to waive its preemptive rights. If the
Company is unable to urge the third party to give up the
preemptive rights, the Company will urge the enterprises
controlled by the Company to transfer the social retail drugstore
assets to the third party to solve the horizontal competition
problem. 4. The pharmaceutical distribution assets currently
owned or controlled by the Company are distributed outside
Guangdong and Guangxi regions, there is no horizontal
competition with Sinopharm Accord, the Company will not
engage in the same or similar operation businesses to Sinopharm
Accord in Guangdong and Guangxi in the future, if the Company
and its holding enterprises obtain the new business opportunities
constituting substantial horizontal competition (hereinafter
referred to as competitive new business) within the
pharmaceutical distribution business scope of Sinopharm Accord
in Guangdong and Guangxi, the Company will send written
notice to Sinopharm Accord and try its utmost to firstly provide
the new business opportunities to Sinopharm Accord or its
holding enterprises according to the reasonable and fair terms and
conditions so as to avoid the horizontal competition with
Sinopharm Accord and its holding enterprises. 5. This
commitment letter terminates when following circumstances
occur (subject to the earlier one): (1) the Company is no longer
the actual controller of Sinopharm Accord; or (2) the shares of
Sinopharm Accord terminate the listing at the stock exchange.”
Sinopharm Holding made commitments in the Commitment
Letter About Sinopharm Group Co., Ltd. to Avoid Horizontal Controllin
g
Competition: “First, the Company and the Company’s wholly- shareholde
owned, controlling or other enterprises with actual control (in r is
implement
addition to Sinopharm Accord and its controlling enterprises, in real
hereinafter the same) don’t have businesses and operations earnest,
Commitm
Sinopharm
ents make
Commitm constituting the substantial horizontal competition to Sinopharm Accord
in initial
Sinopharm ent of Accord and its controlling enterprises. Second, the Company and 2013-09- Long-term will
public
Holding shareholde 05 effective actively
offering or the Company’s wholly-owned, controlling or other enterprises
rs urged the
re-
with actual control shall not engage, participate in or do controlling
financing
shareholde
businesses and activities in Guangdong and Guangxi which r and
constitute substantial competition to Sinopharm Accord and actual
controller
pharmaceutical business services. Third, the Company and the to fulfill
Company’s wholly-owned, controlling or other enterprises with commitme
nts
actual control shall not engage, participate in or do businesses
33
and activities which constitute substantial competition to
Sinopharm Accord and pharmaceutical industry businesses.
Fourth, the Company shall not take advantage of the control to
Sinopharm Accord to damage the legitimate rights and interests
of Sinopharm Accord and other shareholders (especially medium
and small shareholders). This commitment letter takes effect from
the issue date, and remains in effect for the entire period when the
Company acts as the controlling shareholder or its related party of
Sinopharm Accord. Within the effective period of the
commitment, if the Company violates this commitment and
causes a loss to Sinopharm Accord, the Company will timely
make full compensation for Sinopharm Accord.”
Sinopharm Holding made commitments in the Commitment
Letter About Sinopharm Group Co., Ltd. to Regulate the Related
Transactions with China National Accord Medicines Corporation
Ltd.: “First, when the Company is controlling Sinopharm Accord,
the Company and the companies and enterprises directly and
indirectly controlled by the Company (“related party” for short)
will strictly regulate the related transactions with Sinopharm
Accord and its controlling enterprises. Second, for the related
transactions that cannot be avoided or have reasonable reasons to
occur, the Company and related party shall sign normative related
transaction agreement in accordance with relevant laws with
Sinopharm Accord. Sinopharm Accord implements the approval
procedures and fulfills the information disclosure obligations of
Controllin
the related transactions according to relevant laws, regulations,
g
rules, other normative documents and the constitutions of
shareholde
Sinopharm Accord. Third, for the related transactions that cannot
r is
be avoided or have reasonable reasons to occur, the Company and
implement
related party shall abide by the open, fair and just market
in real
principles and confirm the price of related transactions in
earnest,
accordance with the price that the independent third party without
Sinopharm
association sets for the same and similar transactions, and ensure
Commitm Accord
the fairness of the price of the related transactions. Fourth, when
Sinopharm ent of 2013-09- Long-term will
the board of directors and the general meeting of stockholders of
Holding shareholde 05 effective actively
Sinopharm Accord vote on the related transactions involving the
rs urged the
Company and other enterprises controlled by the Company, the
controlling
Company shall fulfill the necessary obligations that the associated
shareholde
directors and associated shareholders abstain from voting in
r and
accordance with the relevant provisions, and abide by the legal
actual
procedures for approving related transactions and the information
controller
disclosure obligations. Fifth, the Company guarantees to
to fulfill
participate in the shareholders' general meeting, equally exercise
commitme
the corresponding rights and take the corresponding obligations
nts
in accordance with the constitutions of Sinopharm Accord, not to
take advantage of controlling shareholder status to seek improper
benefits or utilize related transactions to illegally transfer the
funds and profits of Sinopharm Accord, and not to damage the
legitimate rights and interests of other shareholders (especially
the medium and small shareholders) of Sinopharm Accord. Sixth,
this commitment letter comes into force from the issue date and
remains in effect for the entire period when the Company acts as
the controlling shareholder or its related party of Sinopharm
Accord. Within the effective period of the commitment, if the
Company violates this commitment and causes a loss to
Sinopharm Accord, the Company will timely make full
compensation for Sinopharm Accord.”
China Commitm Sinopharm made commitments in the Commitment Letter About 2013-10- Long-term Controllin
National ent of 16 effective g
34
Pharmace actual China National Pharmaceutical Group Corporation to Avoid shareholde
utical controller r is
Horizontal Competition with China National Accord Medicines
Group implement
Corporatio Corporation Ltd.: “First, in the next five years, Sinopharm plans in real
n earnest,
to take appropriate measures (including assets replacement or
Sinopharm
acquisition, equity reorganization, etc.) to resolve the horizontal Accord
will
competition between Sinopharm Weiqida and Sinopharm Accord.
actively
Second, in addition to the past matters and matters disclosed in urged the
controlling
this commitment letter, the Company and the Company’s wholly-
shareholde
owned, controlling or other enterprises with actual control rights r and
actual
(except for Sinopharm Accord and its controlling enterprises, the
controller
same as below) shall not directly engaged in, participate in or do to fulfill
commitme
the businesses an activities constituting actual competition to the
nts
production and operation of Sinopharm Accord in China. The
relevant commitments about avoiding horizontal competition that
the Company made in the past still remain in effect. Third, the
Company shall not take advantage of the control relationship to
Sinopharm Accord to damage the legitimate rights and interests
of Sinopharm Accord and its shareholders (especially the medium
and small shareholders). Fourth, this commitment letter comes
into force from the issue date and remains in effect for the entire
period when the Company acts as the controlling shareholder or
its related party of Sinopharm Accord."
Sinopharm made commitments in the Commitment Letter About
Sinopharm Group Co., Ltd. to Regulate the Related Transactions
with China National Accord Medicines Corporation Ltd.: “First,
when the Company is controlling Sinopharm Accord, the
Company and the companies and enterprises directly and
indirectly controlled by the Company (“related party” for short)
will strictly regulate the related transactions with Sinopharm Controllin
Accord and its controlling enterprises. Second, for the related g
transactions that can not be avoided or have reasonable reasons to shareholde
occur, the Company and related party shall sign normative related r is
transaction agreement in accordance with relevant laws with implement
Sinopharm Accord. Sinopharm Accord implements the approval in real
procedures and fulfills the information disclosure obligations of earnest,
China the related transactions according to relevant laws, regulations, Sinopharm
National
Commitm rules, other normative documents and the constitutions of Accord
Pharmace Sinopharm Accord. Third, for the related transactions that cannot 2013-09-
ent of Long-term will
utical be avoided or have reasonable reasons to occur, the Company and 22
actual effective actively
Group
controller related party shall abide by the open, fair and just market urged the
Corporatio principles and confirm the price of related transactions in controlling
n accordance with the price that the independent third party without shareholde
association sets for the same and similar transactions, and ensure r and
the fairness of the price of the related transactions. Fourth, when actual
the board of directors and the general meeting of stockholders of controller
Sinopharm Accord vote on the related transactions involving the to fulfill
Company and other enterprises controlled by the Company, the commitme
Company shall fulfill the necessary obligations that the associated nts
directors and associated shareholders abstain from voting in
accordance with the relevant provisions, and abide by the legal
procedures for approving related transactions and the information
disclosure obligations. Fifth, the Company guarantees not to take
advantage of actual controller status to seek improper benefits or
utilize related transactions to illegally transfer the funds and
profits of Sinopharm Accord, and not to damage the legitimate
35
rights and interests of other shareholders (especially the medium
and small shareholders) of Sinopharm Accord. Sixth, this
commitment letter comes into force from the issue date and
remains in effect for the entire period when the Company acts as
the actual controller or its related party of Sinopharm Accord.
Completed
on time Y
(Y/N)
IV. Appointment and non-reappointment (dismissal) of CPA
Financial report has been audit or not
□ Yes √ No
Not been audited.
V. Explanation from Board of Directors, Supervisory Committee for “Qualified Opinion”
that issued by CPA
□ Applicable √ Not applicable
VI. Explanation from the Board for “Qualified Opinion” of last year’s
□ Applicable √ Not applicable
VII. Bankruptcy reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization for the Company in Period.
VIII. Lawsuits
Material lawsuits and arbitration
□ Applicable √ Not applicable
No significant lawsuits and arbitrations occurred in the reporting period.
Other lawsuits
As of the date of disclosing this report, the Company has 23 cases of contract disputes in the daily operation, with total amount of
RMB 16,408,700 involved; one labor dispute, involving a total amount of RMB 322,000; and 4 cases of equity transfer dispute,
involving a total amount of RMB 64,329,000. The total amount involved in the above 28 cases was RMB 81,059,800, which neither
formed the expected liabilities, nor had an effect on normal operation and management of the Company.
IX. Penalty and rectification
□ Applicable √ Not applicable
No penalty and rectification for the Company in Period.
36
X. Integrity of the Company and its controlling shareholders and actual controllers
√Applicable □ Not applicable
In the reporting period, integrity of the Company and its controlling shareholders and actual controllers is good and they do not have
a relatively large amount of due existing debt with court's effective judgments.
XI. Implementation of the Company’s stock incentive plan, employee stock ownership plan or
other employee incentives
□ Applicable √ Not applicable
The Company has no equity incentive plan, employee stock ownership plans or other employee incentives in Period.
XII. Major related transaction
1. Related transaction with routine operation concerned
(1) Related transaction with routine operation concerned can be found in “12. Related party and related transaction” carried in
Section X. Financial Report;
(2) The related transactions are settled in cash and by notes, found more in “Announcement on Expected Routine Related Transaction
for Year of 2018” (Notice No.: 2018-8) released on Juchao Website dated 22 March 2018;
(3) The “Proposal of Expected Routine Related Transactions with Subordinate Enterprise for Year of 2018” was deliberated and
approved by 30th session of 7th BOD held on 21 March 2018. During the reporting period, related sales takes 22.39% in total
expected amount for the whole year, and related procurement takes 40.40% in total expected amount for the whole year.
2. Related transactions by assets acquisition and sold
□ Applicable √ Not applicable
No related transactions by assets acquisition and sold for the Company in reporting period.
3. Related transactions of mutual investment outside
□ Applicable √ Not applicable
No main related transactions of mutual investment outside for the Company in reporting period.
4. Contact of related credit and debt
□ Applicable √ Not applicable
The Company had no contact of related credit and debt in the reporting period.
5. Other related transactions
□ Applicable √ Not applicable
The Company had no other related transaction in the period
37
XIII. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.
XIV. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable √ Not applicable
No trusteeship for the Company in reporting period.
(2) Contract
□ Applicable √ Not applicable
No contract for the Company in reporting period.
(3) Leasing
□ Applicable √ Not applicable
No leasing for the Company in reporting period.
2. Major guarantees
√Applicable □ Not applicable
(1) Guarantees
In 10 thousand Yuan
Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)
Related Guarante
Actual date of
Name of the Announce e for
Guarantee happening (Date Actual Guarantee Guarantee Implemen
Company ment related
limit of signing guarantee limit type term ted (Y/N)
guaranteed disclosure party
agreement)
date (Y/N)
Total actual occurred external
Total approving external
0 guarantee in report period 0
guarantee in report period (A1)
(A2)
Total approved external Total actual balance of
guarantee at the end of report 0 external guarantee at the end 0
period ( A3) of report period (A4)
Guarantee between the Company and the subsidiaries
Related Actual date of Guarante
Name of the
Announce Guarantee happening (Date Actual Guarantee Guarantee Implemen e for
Company
ment limit of signing guarantee limit type term ted (Y/N) related
guaranteed
disclosure agreement) party
38
date (Y/N)
Sinopharm
General 2017.10.12-
Holding Shenzhen 2017-04-19 500 2017-10-12 310 N N
assurance 2018.10.11
Jianmin Co., Ltd.
Sinopharm
General 2017.10.12-
Holding Shenzhen 2017-04-19 500 2017-10-12 33.72 N N
assurance 2018.10.11
Medicine Co., Ltd
China National
General 2017.7.13-
Accord Medicines 2017-04-19 25,000 2017-07-13 18,956.45 N N
assurance 2018.7.13
Corporation Ltd.
China National
General 2017.11.23-
Accord Medicines 2017-04-19 20,000 2017-11-23 10,942.49 N N
assurance 2018.5.22
Corporation Ltd.
Sinopharm
General 2017.10.17-
Holding Shenzhen 2017-04-19 9,000 2017-10-17 3,008.65 N N
assurance 2018.10.11
Yanfeng Co., Ltd.
Sinopharm
General 2018.05.23-
Holding Shenzhen 2018-03-22 5,000 2018-05-23 2,700 N N
assurance 2018.11.22
Yanfeng Co., Ltd.
Sinopharm
General 2018.06.13-
Holding Shenzhen 2018-03-22 7,000 2018-06-13 5,500 N N
assurance 2019.06.12
Yanfeng Co., Ltd.
Sinopharm
General 2017.11.6-
Holding Jiangmen 2017-04-19 1,000 2017-11-06 0 N N
assurance 2018.10.11
Ren Ren Co., Ltd.
Foshan Nanhai General 2017.7.31-
2017-04-19 5,000 2017-07-31 0 N N
Medicine Co., Ltd. assurance 2018.7.31
Foshan Nanhai General 2017.10.16-
2017-04-19 5,000 2017-10-16 95.75 N N
Medicine Co., Ltd. assurance 2018.10.11
Foshan Nanhai General 2017.12.1-
2017-04-19 5,000 2017-12-01 2,061.73 N N
Medicine Co., Ltd. assurance 2018.12.1
Foshan Nanhai
Uptodate & General 2017.7.31-
2017-04-19 5,000 2017-07-31 0 N N
Special Medicines assurance 2018.7.31
Co. Ltd.
Foshan Nanhai
Uptodate & General 2018.5.23-
2018-03-22 5,000 2018-05-23 0 N N
Special Medicines assurance 2019.5.22
Co. Ltd.
Foshan Nanhai
Uptodate & General 2017.10.16-
2017-04-19 6,000 2017-10-16 273.92 N N
Special Medicines assurance 2018.10.11
Co. Ltd.
Foshan Nanhai
Uptodate & General 2017.12.1-
2017-04-19 5,000 2017-12-01 1,155.6 N N
Special Medicines assurance 2018.12.1
Co. Ltd.
Sinopharm
Holding General 2018.5.20-
2018-03-22 35,000 2018-05-20 9,885.95 N N
Guangzhou Co., assurance 2019.5.20
Ltd.
Sinopharm
Holding General 2017.11.28-
2017-04-19 30,000 2017-11-28 14,939.95 N N
Guangzhou Co., assurance 2018.11.28
Ltd.
Sinopharm
Holding General 2017.7.24-
2017-04-19 25,000 2017-07-24 888.51 N N
Guangzhou Co., assurance 2018.7.23
Ltd.
39
Sinopharm
Holding General 2018.6.7-
2018-03-22 60,000 2018-06-07 30,679.04 N N
Guangzhou Co., assurance 2018.9.24
Ltd.
Sinopharm
Holding General 2017.8.16-
2017-04-19 15,000 2017-08-16 0 N N
Guangzhou Co., assurance 2018.8.16
Ltd.
Sinopharm
Holding General 2017.10.13-
2017-04-19 35,000 2017-10-11 3,183.8 N N
Guangzhou Co., assurance 2018.10.11
Ltd.
Sinopharm
Holding General 2018.6.5-
2018-03-22 40,000 2018-06-05 25,841.32 N N
Guangzhou Co., assurance 2019.6.4
Ltd.
Sinopharm
Holding General 2018.5.9-
2018-03-22 40,000 2018-05-09 30,143.62 N N
Guangzhou Co., assurance 2019.5.8
Ltd.
Sinopharm
Holding General 2018.6.22-
2018-03-22 20,000 2018-06-01 15,343.73 N N
Guangzhou Co., assurance 2019.6.21
Ltd.
Sinopharm
Holding General 2018.5.29-
2018-03-22 50,000 2018-05-29 19,018.56 N N
Guangzhou Co., assurance 2019.5.29
Ltd.
Sinopharm
Holding General 2017.5.10-
2017-04-19 20,000 2017-05-10 291.39 N N
Guangzhou Co., assurance 2018.5.9
Ltd.
Sinopharm
Holding General 2018.6.13-
2018-03-22 60,000 2018-06-13 11,470.2 N N
Guangzhou Co., assurance 2019.6-12
Ltd.
Sinopharm
Holding General 2018.4.17-
2018-03-22 80,000 2018-04-17 916.88 N N
Guangzhou Co., assurance 2019.4.16
Ltd.
Sinopharm
Holding General 2018.5.20-
2018-03-22 5,000 2018-05-20 2,905.31 N N
Guangdong assurance 2019.5.20
Yuexing Co., Ltd.
Sinopharm
Holding General 2017.10.13-
2017-04-19 5,000 2017-10-12 4,676.23 N N
Guangdong assurance 2018.10.11
Yuexing Co., Ltd.
Sinopharm
Holding General 2018.1.5-
2017-04-19 5,000 2018-01-05 676.55 N N
Guangdong assurance 2018.10.31
Yuexing Co., Ltd.
Sinopharm
Holding General 2018.6.22-
2018-03-22 5,000 2018-06-22 198.92 N N
Guangdong assurance 2019.6.21
Yuexing Co., Ltd.
Sinopharm
General 2017.10.16-
Holding Foshan 2017-04-19 1,500 2017-10-16 1,086.18 N N
assurance 2018.10.11
Co., Ltd
Sinopharm 2017-04-19 3,000 2017-12-29 936.36 General 2017.12.29- N N
40
Holding assurance 2018.12.29
Guangdong
Hengxing Co., Ltd.
Sinopharm
General 2017.10.26--
Holding Zhaoqing 2017-04-19 2,000 2017-10-26 N N
assurance 2018.10.11
Co., Ltd.
Sinopharm
General 2017.10.13-
Holding Liuzhou 2017-04-19 9,000 2017-10-13 0 N N
assurance 2018.10.11
Co., Ltd.
Sinopharm
General 2018.6.21-
Holding Liuzhou 2018-03-22 5,000 2018-06-21 4,975.99 N N
assurance 2019.6.20
Co., Ltd.
Sinopharm
General 2018.3.14-
Holding Liuzhou 2017-04-19 6,000 2018-03-14 5,169.93 N N
assurance 2019.1.2
Co., Ltd.
Guangdong
Southern
General 2018.7.1-
Pharmaceutical 2018-03-22 15,000 2018-07-01 12,036.45 N N
assurance 2019.6.30
Foreign Trade Co.,
Ltd.
Guangdong
Southern
General 2018.4.17-
Pharmaceutical 2018-03-22 2,500 2018-04-17 184.97 N N
assurance 2019.4.16
Foreign Trade Co.,
Ltd.
Sinopharm
General 2017.11.15-
Holding Guangxi 2017-04-19 20,000 2017-11-15 14,519.25 N N
assurance 2018.11.18
Co., Ltd.
Sinopharm
General 2017.10.13-
Holding Guangxi 2017-04-19 28,000 2017-10-13 4,397.31 N N
assurance 2018.10.11
Co., Ltd.
Sinopharm
General 2017.11.9-
Holding Guangxi 2017-04-19 25,000 2017-11-09 10,447.96 N N
assurance 2018.11.8
Co., Ltd.
Sinopharm
General 2018.5.22-
Holding Guangxi 2018-03-22 10,000 2018-05-22 9,978.85 N N
assurance 2018.11.22
Co., Ltd.
Sinopharm
General 2017.9.4-
Holding Guangxi 2017-04-19 10,000 2017-09-04 0 N N
assurance 2018.9.4
Co., Ltd.
Sinopharm
General 2018.6.5-
Holding Guangxi 2018-03-22 5,000 2018-06-05 2,999.86 N N
assurance 2019.6.5
Co., Ltd.
Sinopharm
General 2018.6.5-
Holding Guangxi 2018-03-22 5,000 2018-06-05 0 N N
assurance 2019.6.5
Co., Ltd.
Sinopharm
General 2017.10.12-
Holding Meizhou 2017-04-19 1,000 2017-10-12 0 N N
assurance 2018.10.11
Co., Ltd.
Sinopharm
Holding General 2017.10.12-
2017-04-19 1,000 2017-10-12 0 N N
Zhongshan Co., assurance 2018.10.11
Ltd.
Sinopharm
Holding General 2018.6.14-
2018-03-22 1,000 2018-06-14 0 N N
Zhongshan Co., assurance 2019.6.13
Ltd.
Sinopharm General 2017.10.12-
2017-04-19 500 2017-10-12 500 N N
Holding Shantou assurance 2018.10.11
41
Co., Ltd.
Sinopharm
General 2017.10.12-
Holding Huizhou 2017-04-19 1,000 2017-10-12 396.45 N N
assurance 2018.10.11
Co., Ltd.
Sinopharm
General 2017.10.12-
Holding Zhanjiang 2017-04-19 1,000 2017-10-12 11.16 N N
assurance 2018.10.11
Co., Ltd.
Sinopharm
General 2017.10.12-
Holding Zhuhai 2017-04-19 1,000 2017-10-12 0 N N
assurance 2018.10.11
Co., Ltd.
Sinopharm
General 2017.10.12-
Holding Dongguan 2017-04-19 2,000 2017-10-12 0 N N
assurance 2018.10.11
Co., Ltd.
Total amount of actual
Total amount of approving
occurred guarantee for
guarantee for subsidiaries in 455,500 523,821.28
subsidiaries in report period
report period (B1)
(B2)
Total balance of actual
Total amount of approved
guarantee for subsidiaries at
guarantee for subsidiaries at the 789,500 283,738.99
the end of reporting period
end of reporting period (B3)
(B4)
Guarantee between the subsidiaries and the subsidiaries
Related Guarante
Actual date of
Name of the Announce e for
Guarantee happening (Date Actual Guarantee Guarantee Implemen
Company ment related
limit of signing guarantee limit type term ted (Y/N)
guaranteed disclosure party
agreement)
date (Y/N)
Sinopharm
Holding Guoda
Drugstore General 2017.11.1-
2017-04-19 1,000 2017-11-01 0 N N
Yangzhou assurance 2018.11.1
Dadesheng Chain
Co., Ltd.
Fujian Guoda
General 2018.4.20-
Drugstore Chain 2018-03-22 2,275 2018-04-20 977.96 N N
assurance 2019.4.19
Co., Ltd.
Sinopharm
HoldingGuoda
General 2017.6.9-
Drugstore 2017-04-19 3,000 2017-06-09 2,503.59 N N
assurance 2019.6.8
Guangdong Co.,
Ltd.
Sinopharm
Holding Guoda
General 2017.6.1-
Drugstore 2017-04-19 3,000 2017-06-01 2,124.69 N N
assurance 2018.6.1
Guangdong Co.,
Ltd.
Taishan Sinopharm
Holding Guoda
General 2018.6.2-
Qunkang 2018-03-22 500 2018-06-02 158 N N
assurance 2019.6.1
Drugstore Chain
Co., Ltd.
Sinopharm
Holding Guoda General 2017.10.10-
2017-04-19 2,000 2017-10-10 1,424.3 N N
Drugstore Guangxi assurance 2018.10.9
Chain Co., Ltd.
Sinopharm
Holding Guoda
General 2017.10.28-
Drugstore 2017-04-19 2,000 2017-10-28 3.6 N N
assurance 2018.10.27
Jiangmen Chain
Co., Ltd.
42
Sinopharm
Holding Guoda General 2017.4.24-
2017-04-19 3,000 2017-04-24 1,329.12 N N
Drugstore Inner assurance 2018.4.23
Mongolia Co., Ltd.
Sinopharm
Holding Guoda General 2018.4.25-
2018-03-22 3,000 2018-04-25 0 N N
Drugstore Inner assurance 2019.4.24
Mongolia Co., Ltd.
Sinopharm
Holding Guoda General 2017.10.10-
2017-04-19 6,000 2017-10-10 5,581.83 N N
Drugstore Inner assurance 2018.10.9
Mongolia Co., Ltd.
Shanxi Guoda
General 2017.5.1-
Wanmin Drugstore 2017-04-19 3,000 2017-05-01 3,000 N N
assurance 2018.5.1
Chain Co., Ltd.
Shanxi Guoda
General 2018.5.16-
Wanmin Drugstore 2018-03-22 5,000 2018-05-16 0 N N
assurance 2019.5.15
Chain Co., Ltd.
Shanxi Guoda
General 2017.6.1-
Wanmin Drugstore 2017-04-19 3,000 2017-06-01 0 N N
assurance 2018.6.1
Chain Co., Ltd.
Sinopharm
Holding Guoda
General 2017.9.1-
Drugstore 2017-04-19 5,000 2017-09-01 4,668.36 N N
assurance 2018.9.1
Shenyang Chain
Co., Ltd.
Sinopharm
Holding Guoda
General 2018.4.23-
Drugstore 2018-03-22 6,000 2018-04-23 1,367.09 N N
assurance 2019.4.22
Shenyang Chain
Co., Ltd.
Sinopharm
Holding Guoda
General 2017.6.1-
Drugstore 2017-04-19 3,000 2017-06-01 0 N N
assurance 2018.6.1
Shenyang Chain
Co., Ltd.
Sinopharm
Holding Guoda
General 2017.6.28-
Drugstore 2017-04-19 6,000 2017-06-28 1,328.76 N N
assurance 2018.6.28
Shenyang Chain
Co., Ltd.
Sinopharm
Holding Guoda
General 2017.8.23-
Drugstore 2017-04-19 6,000 2017-06-29 5,161.54 N N
assurance 2018.8.23
Shenyang Chain
Co., Ltd.
Sinopharm
Holding Guoda
General 2017.10.10-
Drugstore 2017-04-19 15,000 2017-10-10 10,540.16 N N
assurance 2018.10.9
Shenyang Chain
Co., Ltd.
Sinopharm
Holding Guoda
General 2017.5.15-
Drugstore Shanxi 2017-04-19 6,000 2017-05-01 2,204.49 N N
assurance 2018.4.18
YiYuan Chain Co.,
Ltd.
Sinopharm
Holding Guoda
General 2017.9.22-
Drugstore Shanxi 2017-04-19 4,000 2017-09-22 3,516.88 N N
assurance 2018.9.21
YiYuan Chain Co.,
Ltd.
43
Sinopharm
Holding Guoda
General 2017.12.29-
Drugstore Shanxi 2017-04-19 2,800 2017-12-29 2,644.69 N N
assurance 2018.12.28
YiYuan Chain Co.,
Ltd.
Sinopharm
Holding Guoda
General 2018.2.5-
Drugstore Shanxi 2017-04-19 2,800 2018-02-05 2,784.47 N N
assurance 2019.2.4
YiYuan Chain Co.,
Ltd.
Hunan Guoda
Minshentang General 2017.10.20-
2017-04-19 2,000 2017-10-20 1,327.71 N N
Drugstore Chain assurance 2018.10.19
Co., Ltd.
Ningxia Guoda
General 2018.1.12-
Drugstore Chain 2017-04-19 2,000 2018-01-12 1,113 N N
assurance 2019.1.11
Co., Ltd.
Sinopharm
Holding Guoda
Drugstore General 2017.10.10-
2017-04-19 2,000 2017-10-10 963.73 N N
Yangzhou assurance 2018.10.9
Dadesheng Chain
Co., Ltd.
Sinopharm
Holding Guoda
General 2018.4.1-
Drugstore 2018-03-22 2,000 2018-04-01 1,143.22 N N
assurance 2019.4.1
Jiangmen Chain
Co., Ltd.
Sinopharm
Holding Guoda
General 2018.4.1-
Drugstore 2018-03-22 4,000 2018-04-01 3,073.28 N N
assurance 2019.4.1
Shanghai Chain
Co., Ltd.
Sinopharm
Holding Guoda General 2018.5.11-
2018-03-22 3,000 2018-05-11 247.38 N N
Drugstore Henan assurance 2019.5.10
Chain Co., Ltd.
Shanxi Guoda
General 2018.4.28-
Wanmin Drugstore 2018-03-22 5,000 2018-04-28 2,247 N N
assurance 2019.4.27
Chain Co., Ltd.
Sinopharm
Holding Guoda
General 2018.4.23-
Drugstore Shanxi 2018-03-22 3,000 2018-04-23 2,999.57 N N
assurance 2019.4.22
YiYuan Chain Co.,
Ltd.
Sinopharm
Holding Guoda General 2018.4.24-
2018-03-22 2,000 2018-04-24 300.74 N N
Drugstore Inner assurance 2019.4.23
Mongolia Co., Ltd.
China National
Hebei Lerentang General 2018.4.12-
2018-03-22 2,000 2018-04-12 467.56 N N
Medicine Chain assurance 2019.4.11
Co., Ltd.
Sinopharm
HoldingGuoda
General 2018.5.18-
Drugstore 2018-03-22 3,000 2018-05-18 1,984.87 N N
assurance 2019.5.17
Guangdong Co.,
Ltd.
Total amount of approving Total amount of actual
guarantee for subsidiaries in 40,775 occurred guarantee for 87,203.39
report period (C1) subsidiaries in report period
44
(C2)
Total balance of actual
Total amount of approved
guarantee for subsidiaries at
guarantee for subsidiaries at the 123,375 67,187.59
the end of reporting period
end of reporting period (C3)
(C4)
Total amount of guarantee of the Company( total of three abovementioned guarantee)
Total amount of approving Total amount of actual
guarantee in report period 496,275 occurred guarantee in report 611,024.67
(A1+B1+C1) period (A2+B2+C2)
Total amount of approved Total balance of actual
guarantee at the end of report 912,875 guarantee at the end of report 350,926.58
period (A3+B3+C3) period (A4+B4+C4)
The proportion of the total amount of actually guarantee in the
35.41%
net assets of the Company (that is A4+ B4+C4)
Including:
Explanation on guarantee with composite way
(2) Guarantee outside against the regulation
□ Applicable √ Not applicable
No guarantee outside against the regulation in Period.
3. Other material contracts
□ Applicable √ Not applicable
No other material contracts for the Company in reporting period.
XV. Social responsibility
1. Major environment protection
The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department
voluntary disclosure
Name of
Major Distribution Executed
Quantity of Emission Approved
Pollutants Emission of Pollutant Total Excessive
Company Discharge Concentrati Total
/subsidiary and Method Discharge Discharge Emissions Discharge
Outlet on Emissions
Particular Outlet Standards
Pollutants
“Water
Pollution
Discharge Emission
China Tube Limits” of
Outlet of
National COD 1 21.91 mg/l Guangdong 0.65 6.6 N
Discharge Waste
Zhijun Province
Water
（DB44/26-
2001）
Discharge “Water
China Tube
Outlet of Pollution
National BOD 1 3.32 mg/l 0.099 1.5 N
Discharge Waste Emission
Zhijun
Water Limits” of
45
Guangdong
Province
（DB44/26-
2001）
“Water
Pollution
Discharge Emission
China Limits” of
Tube Outlet of
National SS 1 2.46 mg/l Guangdong 0.073 4.4 N
Discharge Waste
Zhijun Province
Water
（DB44/26-
2001）
“Water
Pollution
Discharge Emission
China Limits” of
Ammonia Tube Outlet of
National 1 2.22 mg/l Guangdong 0.066 0.7 N
Nitrogen Discharge Waste
Zhijun Province
Water
（DB44/26-
2001）
“Water
Pollution
Discharge Emission
China Limits” of
Tube Outlet of
National Phosphate 1 0.02 mg/l Guangdong 0.593 36.9 N
Discharge Waste
Zhijun Province
Water
（DB44/26-
2001）
CLASS
GB3838-
2002IV
Discharge WATER
Zhijun Tube Outlet of QUALITY
COD 1 8mg/L 0.6 2.63 N
Pingshan Discharge Waste STANDAR
Water DS AND
GB21908-
2008 NEW
PROJECT
CLASS
GB3838-
2002IV
Discharge WATER
Zhijun Tube Outlet of QUALITY
BOD 1 2.3mg/L 0.2 0.53 N
Pingshan Discharge Waste STANDAR
Water DS AND
GB21908-
2008 NEW
PROJECT
CLASS
GB3838-
2002IV
Discharge WATER
Zhijun Tube Outlet of QUALITY
SS 1 9mg/L 0.7 2.63 N
Pingshan Discharge Waste STANDAR
Water DS AND
GB21908-
2008 NEW
PROJECT
Discharge CLASS
Zhijun Ammonia Tube Outlet of GB3838-
1 0.3mg/L 2002IV 0.02 0.18 N
Pingshan Nitrogen Discharge Waste
Water WATER
QUALITY
46
STANDAR
DS AND
GB21908-
2008 NEW
PROJECT
Construction and operation of pollution prevention and control facilities
At present, the above-mentioned environmental pollution key monitoring units in which the Company has a
shareholding have established pollution prevention and control facilities for wastewater. In the daily management
process, enterprises establish management procedures and operating instructions for environmental protection
facilities, and ensure the normal and compliant operation of anti-pollution facilities through system
implementation and responsibility implementation. All enterprises are continuously investing funds and stepping
up the transformation and improvement of pollution prevention and control facilities to ensure the stable operation
of pollution prevention facilities and improve the disposal capacity of environmental protection facilities.
Environmental impact assessment of construction projects and other environmental protection administrative
licenses
At present, the projects of all key monitoring units have carried out environmental impact assessments and
obtained approvals. The projects to be built also carry out the relevant administrative review procedures according
to the “three simultaneous” requirements of the environmental protection facilities of the construction project.
Emergency plan for environmental emergencies
At present, the above-mentioned environmental pollution key monitoring units in which the Company has a
shareholding have formulated the Emergency Plan for Environmental Emergencies and reported them according
to the regulatory requirements of the local regulatory authorities. According to the management requirements of
the emergency plan, the key units regularly carry out emergency plan drills to further provide the enterprises’
emergency response capability.
Environmental self-monitoring scheme
At present, the above-mentioned environmental pollution key monitoring units in which the Company has a
shareholding have established environmental self-detection scheme and plan, and implemented self-inspection,
third-party detection and other monitoring methods according to the government requirements. Relevant
monitoring data and reports have been archived and saved.
Other environmental information that should be disclosed
The above two companies are joint stock companies of the Company. The Company and its holding subsidiaries
are not listed as key pollutant discharge units announced by the environmental protection department.
Relevant information on environment protection
Nil
2. Execution of social responsibility of targeted poverty alleviation
The Company temporarily not to carry out a targeted poverty alleviation in the peirod, and there are no follow-up plans either.
47
XVI. Explanation on other significant events
√Applicable □ Not applicable
The proposal on the wholly-owned subsidiary Sinopharm Holding Guoda Drugstore Co.,Ltd., Bringing in
Strategic Investors by Means of Capital Increase and Share Expansion was deliberated and approved on the 25th
meeting of the 7th session of Board of Directors On Sep. 4th, 2017, and the wholly-owned subsidiary Sinopharm
Holding Guoda Drugstore Co., Ltd (hereinafter referred to as “Guoda Drugstore”) has got the approval of bringing
in one strategic investor by means of capital increase and share expansion, taking assets assessment report as the
reference of pricing. The Company was publicly listed on the Shanghai United Assets and Equity Exchange on
September 20, 2017, and collected an intentional investor, Walgreens Boots Alliance (NASDAQ Code: WBA), as
the actual controller, it subscribed for the equity of Guoda Drugstore by taking its wholly-owned subsidiary
established in Hong Kong, Walgreens Boots Alliance (Hong Kong) Investments Limited (hereinafter referred to
as “WBAHKIL”), as the capital increase entity to subscribe the equity of Guoda Drugstore with the capital
increase amount of RMB 2,766,700,000. It holds 40% equity of Guoda Drugstore after the capital increase. At the
beginning of December 2017, in accordance with the equity transaction rules, the Company, Guoda Drugstore and
WBAHKIL jointly signed the Registration Capital Increase and Subscription Agreement.
On March 23, 2018, the Company received the Written Decision on Nonperformance of Further Review
(SFLCSH [2018] No. 104) issued by the Ministry of Commerce of the People’s Republic of China, which was
transferred from Walgreens Boots Alliance Investment Luxembourg Co., Ltd.
At the end of June 2018, Guoda Drugstore obtained the registration receipt for the establishment of a foreign-
invested enterprise from the Commerce Commission of Jing’an District, Shanghai Municipality, and completed
the industrial and commercial registration on June 28, 2018.
Index for annoucement published on
Overview Disclosure date
website
Notice of Progress of the wholly-owned
subsidiary of the Company, Guoda Juchao Website
Drugstore has brought in strategic 2018-03-24
（http://www.cninfo.com.cn）
investors by means of capital increase
and share expansion:
Notice of Progress of the wholly-owned
subsidiary of the Company, Guoda
Juchao Website
Drugstore has brought in strategic 2018-06-30
（http://www.cninfo.com.cn）
investors by means of capital increase
and share expansion:
XVII. Significant event of subsidiary of the Company
√Applicable □ Not applicable
See “XVI. Explanation on other significant events
48
Section VI. Changes in Shares and Particulars about Shareholders
I. Changes in Share Capital
1. Changes in Share Capital
In Share
Before the Change Increase/Decrease in the Change (+, -) After the Change
Capitalizat
New
Bonus ion of Subtot Proportio
Amount Proportion shares Others Amount
shares public al n
issued
reserve
I. Restricted shares 65,497,028 15.30% 65,497,028 15.30%
2. State-owned legal
60,380,743 14.10% 60,380,743 14.10%
person’s shares
3. Other domestic
5,116,285 1.20% 5,116,285 1.20%
shareholding
Including: Domestic
5,114,297 1.19% 5,114,297 1.19%
legal person’s shares
Domestic nature
1,988 0.00% 1,988 0.00%
person shares
II. Unrestricted shares 362,629,955 84.70% 362,629,955 84.70%
1. RMB Ordinary
307,744,355 71.88% 307,744,355 71.88%
shares
2. Domestically listed
54,885,600 12.82% 54,885,600 12.82%
foreign shares
III. Total shares 428,126,983 100.00% 428,126,983 100.00%
Reasons for share changed
□Applicable √Not applicable
Approval of share changed
□Applicable √Not applicable
Ownership transfer of share changed
□ Applicable √ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common
shareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators
49
□ Applicable √ Not applicable
2. Changes of restricted shares
□ Applicable √ Not applicable
II. Securities issuance and listing
□ Applicable √ Not applicable
III. Number of shareholders and share-holding
In Share
Total preference shareholders
Total common shareholders at with voting rights recovered at
19,539 0
period-end end of reporting period (if
applicable) (see Note 8)
Particulars about shares held above 5% by common shareholders or top ten common shareholders
Number Number of share pledged/frozen
Amount
of Amount of
of
Proportion common Changes in un-
Nature of restricted
Shareholders of shares shares reporting restricted
shareholder common State of share Amount
held held at period common
shares
period- shares held
held
end
Sinopharm State-owned 239,999,9 55,057,70 184,942,29
56.06%
Group Co., Ltd corporate 91 0 1
HTHK/CMG
FSGUFP-CMG
10,141,18
FIRST STATE Overseas corporate 2.37% 0 10,141,182
2
CHINA
GROWTH FD
China Life
Insurance Co.,
Ltd. – tradition Domestic non
–general state-owned 2.02% 8,654,592 0 8,654,592
insurance corporate
products -005L-
CT001 Shen
China United
Domestic non
Property
state-owned 1.42% 6,092,905 0 6,092,905
Insurance
corporate
Company
50
Limited –
Traditional
Insurance
Products
China National
Pharmaceutical State-owned
1.24% 5,323,043 5,323,043 0
Foreign Trade corporate
Corp.
GUOTAI
JUNAN
SECURITIES( Overseas corporate 1.19% 5,086,260 0 5,086,260
HONGKONG)
LIMITED
New China Life
Insurance Co.,
Ltd. – Bonus – Domestic non
Individual state-owned 0.98% 4,199,772 0 4,199,772
bonuses - - corporate
018L-FH002
Shen
# Beijing
Haoqing
Fortune
Investment
Domestic non
Management
state-owned 0.96% 4,118,716 0 4,118,716
Co., Ltd. –
corporate
Haoqing Value
Stable No.8
Investment
Fund
UBS AG
LONDON Overseas corporate 0.89% 3,818,884 0 3,818,884
BRANCH
Central Huijin State-owned
0.89% 3,804,400 0 3,804,400
Investment Ltd. corporate
Sinopharm Group Co., Ltd. and China National Pharmaceutical Foreign Trade Corporation
Explanation on associated have the same actual controller, which is China National Pharmaceutical Group Corporation.
relationship among the aforesaid It is unknown that there exists no associated relationship or belongs to the consistent actionist
shareholders among the other tradable shareholders regulated by the Management Measure of Information
Disclosure on Change of Shareholding for Listed Companies.
Particular about top ten common shareholders with un-restrict shares held
Shareholders Amount of un-restrict common shares held at period- Type of shares
51
end Type Amount
RMB ordinary
Sinopharm Group Co., Ltd 184,942,291 184,942,291
shares
HTHK/CMG FSGUFP-CMG Domestically
FIRST STATE CHINA GROWTH 10,141,182 listed foreign 10,141,182
FD shares
China Life Insurance Co., Ltd. –
RMB ordinary
tradition –general insurance 8,654,592 8,654,592
shares
products -005L-CT001 Shen
China United Property Insurance
RMB ordinary
Company Limited – Traditional 6,092,905 6,092,905
shares
Insurance Products
GUOTAI JUNAN
Overseas listed
SECURITIES(HONGKONG) 5,086,260 5,086,260
foreign share
LIMITED
New China Life Insurance Co., Ltd.
RMB ordinary
– Bonus – Individual bonuses - - 4,199,772 4,199,772
shares
018L-FH002 Shen
# Beijing Haoqing Fortune
Investment Management Co., Ltd. – RMB ordinary
4,118,716 4,118,716
Haoqing Value Stable No.8 shares
Investment Fund
Domestically
UBS AG LONDON BRANCH 3,818,884 listed foreign 3,818,884
shares
RMB ordinary
Central Huijin Investment Ltd. 3,804,400 3,804,400
shares
Bank of China – Harvest Medical RMB ordinary
2,943,225 2,943,225
Care Securities Investment Fund shares
Expiation on associated relationship
or consistent actors within the top
It is unknown that there exists no associated relationship or belongs to the consistent actionist
10 un-restrict shareholders and
among the other tradable shareholders regulated by the Management Measure of Information
between top 10 un-restrict
Disclosure on Change of Shareholding for Listed Companies.
shareholders and top 10
shareholders
Explanation on shareholders
involving margin business about top Beijing Haoqing Fortune Investment Management Co., Ltd. – Haoqing Value Stable No.8
ten common stock shareholders Investment Fund holds shares of the Company through margin trading and negotiable
with un-restrict shares held (if securities account that is 4,118,716 shares in total.
applicable) (see note4)
Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back
52
agreement dealing in reporting period
□Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no
buy-back agreement dealing in reporting period.
IV. Changes of controlling shareholders or actual controller
Changes of controlling shareholders in reporting period
□ Applicable √ Not applicable
Changes of controlling shareholders had no change in reporting period.
Changes of actual controller in reporting period
□ Applicable √ Not applicable
Changes of actual controller in reporting period had no change in reporting period.
53
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company has no preferred stock in reporting period.
54
Section VIII. Directors, Supervisors and Senior Executives
I. Changes of shares held by directors, supervisors and senior executives
□ Applicable √ Not applicable
Shares held by directors, supervisors and senior executives have no changes in reporting period, found more details in Annual Report
2017.
II. Resignation and dismissal of directors, supervisors and senior executives
√ Applicable □ Not applicable
Name Title Type Date Reasons
Independent Expiration of the
Xiong Chuxiong 2018-04-17 Expiration of the office term for 7th BOD
director term of office
Independent Expiration of the
Xiao Shengfang 2018-04-17 Expiration of the office term for 7th BOD
director term of office
Expiration of the Expiration of the office term for 7th Supervisory
Wang Huaiqin Staff supervisor 2018-04-17
term of office Committee
Lian Wanyong Director Election 2018-04-17 New director of 8th BOD
Li Dongjiu Director Election 2018-04-17 New director of 8th BOD
Independent
Ou Yongliang Election 2018-04-17 New independent director of 8th BOD
director
Independent
Chen Shengqun Election 2018-04-17 New independent director of 8th BOD
director
Lang Baochun Staff supervisor Election 2018-04-17 New staff supervisor of 8th Supervisory Committee
55
Section IX. Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date
when semi-annual report approved for released or fail to cash in full on due
No
56
Section X Financial Reporting
I.Report of the Auditors
Consolidated financial statements for the six months ended 30 June 2018 haven’t been audited.
57
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED BALANCE SHEET
As at 30 June 2018
(Expressed in Renminbi Yuan)
ASSETS Note V 30 June 2018 31 December 2017
Current assets
Cash and bank balances 1 3,943,595,560.58 4,191,655,438.51
Notes receivable 2 1,021,697,370.21 1,504,194,764.08
Accounts receivable 3 9,441,542,367.19 7,589,412,679.88
Advances to suppliers 4 456,680,224.23 516,778,117.47
Interest receivable 5 47,507.80 61,441.11
Other receivables 6 698,672,023.18 657,871,058.54
Inventories 7 4,245,354,625.22 3,781,858,238.12
Other current assets 8 91,769,652.56 78,947,644.62
Total current assets 19,899,359,330.97 18,320,779,382.33
Non-current assets
Financial assets available-for-sale 9 13,685,760.00 13,685,760.00
Long-term equity investments 10 1,756,735,242.44 1,650,619,373.09
Investment properties 11 149,409,723.79 153,678,339.11
Fixed assets 12 550,102,564.29 551,710,434.02
Construction in progress 13 30,805,874.11 22,947,258.99
Intangible assets 14 314,816,778.00 325,751,430.88
Goodwill 15 830,729,152.75 830,729,152.75
Long-term prepaid expenses 16 261,074,227.40 252,247,050.79
Deferred tax assets 17 76,070,138.33 79,472,883.06
Other non-current assets 18 130,226,885.24 142,022,462.75
Total non-current assets 4,113,656,346.35 4,022,864,145.44
Total assets 24,013,015,677.32 22,343,643,527.77
The accompanying notes form an integral part of these financial statements
58
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED BALANCE SHEET (Continued)
As at 30 June 2018
(Expressed in Renminbi Yuan)
LIABILITIES Note V 30 June 2018 31 December 2017
Current liabilities
Short-term borrowings 19 2,051,139,651.67 1,561,354,521.64
Notes payable 20 2,373,628,140.86 2,732,437,828.42
Accounts payable 21 7,230,024,480.35 6,144,221,000.10
Advances from customers 22 178,425,087.30 216,938,239.32
Employee benefits payable 23 150,685,442.26 215,656,526.54
Tax payable 24 223,351,730.76 223,752,900.24
Interest payable 25 10,378,213.91 7,311,819.65
Dividends payable 26 8,889,443.11 11,889,443.11
Other payables 27 1,024,176,704.11 1,011,128,397.26
Non-current liabilities due within one year 28 5,651,227.56 5,434,770.70
Other current liabilities 29 114,239.45 112,817.65
Total current liabilities 13,256,464,361.34 12,130,238,264.63
Non-current liabilities
Long-term borrowings 30 31,600,000.00 31,600,000.00
Long-term payables 31 6,604,575.84 9,332,537.14
Payable for specific projects 33 800,000.00 800,000.00
Deferred income 34 121,995,380.11 125,082,372.53
Long-term employee benefits payable 32 1,636,000.00 1,777,000.00
Deferred tax liabilities 18 69,864,262.88 71,883,253.02
Other non-current liabilities 35 45,427,343.31 45,427,343.31
Total non-current liabilities 277,927,562.14 285,902,506.00
Total liabilities 13,534,391,923.48 12,416,140,770.63
The accompanying notes form an integral part of these financial statements
59
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED BALANCE SHEET (Continued)
As at 30 June 2018
(Expressed in Renminbi Yuan)
SHAREHOLDERS’ EQUITY Note V 30 June 2018 31 December 2017
Shareholders’ equity
Share capital 36 428,126,983.00 428,126,983.00
Capital surplus 37 3,181,826,407.20 3,181,429,064.99
Other equity instruments - -
Surplus reserve 38 214,063,491.50 214,063,491.50
Retained earnings 39 6,086,241,746.42 5,572,952,806.39
Shareholders’ equity attributable
to shareholders of the parent 9,910,258,628.12 9,396,572,345.88
Non-controlling interests 568,365,125.72 530,930,411.26
Total shareholders’ equity 10,478,623,753.84 9,927,502,757.14
Total liabilities and shareholders’
equity 24,013,015,677.32 22,343,643,527.77
The accompanying notes form an integral part of these financial statements
The financial statements have been signed by:
Legal representative: Financial controller: Head of Accounting Department
60
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
For the six months ended For the six months ended
Note V
30 June 2018 30 June 2017
Operating revenue 40 20,779,166,699.67 20,524,807,669.57
Less: Operating costs 40 18,367,643,723.84 18,364,034,450.83
Tax and surcharge 41 56,620,527.25 63,185,620.86
Selling expenses 42 1,273,588,756.07 1,110,446,938.17
Administrative expenses 43 351,820,063.78 340,636,051.11
Finance costs 44 57,541,544.32 44,498,778.76
Impairment loss 45 (517,852.98) 96,757.16
Add: Investment income 46 162,693,771.35 146,726,039.90
Incl: Investment income from
162,662,271.35 146,676,039.90
associates
Gain on disposal of assets 47 4,281,164.61 485,085.66
Other income 48 10,589,212.57 7,958,493.67
Operating profits 850,034,085.92 757,078,691.91
Add: Non-operating income 49 5,498,951.11 6,056,142.83
Incl: Gain from disposal of non-current
- -
assets
Less: Non-operating expenses 50 1,797,292.80 3,559,988.09
Incl: Loss from disposal of non-current - -
assets
Total profit 853,735,744.23 759,574,846.65
Less: Income taxes 51 164,486,734.32 160,041,107.63
Net profit 689,249,009.91 599,533,739.02
Incl: Net profit of acquiree before business
combinations involving enterprises under
common control - -
Net Profit from continuing operations 689,249,009.91 599,533,739.02
Net profit attributable to shareholders of the parent 641,727,034.93 556,125,318.19
Profit or loss of non-controlling interests 47,521,974.98 43,408,420.83
Total comprehensive income 689,249,009.91 599,533,739.02
Incl: Total comprehensive income for the year
attributable to owners of the parent 641,727,034.93 556,125,318.19
Total comprehensive income for the year
attributable to non-controlling interests 47,521,974.98 43,408,420.83
Earnings per share
Basic earnings per share 1.50 1.30
Diluted earnings per share 1.50 1.30
The accompanying notes form an integral part of these financial statements
61
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
2018 Shareholders’ equity attributable to shareholders of the parent Non-controlling Total equity
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
Business combination involving
enterprises under common control - - - - - - - -
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 comprehensive 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.Capital injection by owners - - - - - - 24,381,200.00 24,381,200.00
2.Business combination involving
enterprises under common control - - - - - - - -
3.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.Distribution 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
62
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For the year ended 31 December 2017
(Expressed in Renminbi Yuan)
Shareholders’ equity attributable to shareholders of the parent
2017 Non-controlling interests Total equity
Other equity
Share capital instruments Capital surplus Surplus reserve Retained earnings Subtotal
Closing balance of the preceding year 362,631,943.00 65,495,040.00 3,151,518,024.92 181,315,971.50 4,689,189,642.51 8,450,150,621.93 463,832,912.18 8,913,983,534.11
Business combination involving enterprises
under common control - - 1,200,000.00 - 1,076,241.59 2,276,241.59 1,517,494.39 3,793,735.98
Opening balance of the current year 362,631,943.00 65,495,040.00 3,152,718,024.92 181,315,971.50 4,690,265,884.10 8,452,426,863.52 465,350,406.57 8,917,777,270.09
Movements in the current year 65,495,040.00 (65,495,040.00) 28,711,040.07 32,747,520.00 882,686,922.29 944,145,482.36 65,580,004.69 1,009,725,487.05
(1) Total comprehensive income - - - - 1,057,791,930.67 1,057,791,930.67 98,946,915.42 1,156,738,846.09
(2) Capital paid and reduced by owners 65,495,040.00 (65,495,040.00) 28,711,040.07 - (1,075,583.99) 27,635,456.08 20,214,810.63 47,850,266.71
1.Capital injection by owners 5,114,297.00 (5,114,297.00) - - - - 14,873,000.00 14,873,000.00
2.Significant reorganization 60,380,743.00 (60,380,743.00) (3,430,029.00) - - (3,430,029.00) - (3,430,029.00)
3.Business combination involving
enterprises under common control - - (1,200,000.00) - (1,075,583.99) (2,275,583.99) (1,517,055.99) (3,792,639.98)
4.Business combination not involving
enterprises under common control - - - - - - 6,858,866.62 6,858,866.62
5.Others - - 33,341,069.07 - - 33,341,069.07 - 33,341,069.07
(3) Profit distribution - - - 32,747,520.00 (174,029,424.39) (141,281,904.39) (53,581,721.36) (194,863,625.75)
1. Withdrawal of statutory surplus
reserve - - - 32,747,520.00 (32,747,520.00) - - -
2.Distribution to equity owners - - - - (141,281,904.39) (141,281,904.39) (53,581,721.36) (194,863,625.75)
Closing 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
The accompanying notes form an integral part of these financial statements
63
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
Note V For the six months ended For the six months ended
30 June 2018 30 June 2017
1.CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from sales of good or rendering of
services 22,055,082,715.59 21,970,884,180.09
Tax refunds 1,593,193.21 5,740,675.89
Cash receipts related to other operating activities 52 311,984,787.60 98,022,828.67
Sub-total of cash inflows from operating activities 22,368,660,696.40 22,074,647,684.65
Cash paid for goods and services 19,799,894,631.80 19,734,413,196.28
Cash paid to and on behalf of employees 956,322,585.28 864,562,267.50
Cash paid for all types of taxes 548,616,793.36 601,078,629.47
Cash payments related to other operating
activities 52 838,468,976.76 646,256,160.00
Sub-total of cash outflows from operating
activities 22,143,302,987.20 21,846,310,253.25
Net cash flows from operating activities 53 225,357,709.20 228,337,431.40
2.CASH FLOWS FROM INVESTING ACTIVITIES
Cash received from recovery of investments - -
Cash received from returns on investments 78,825,446.85 58,647,191.65
Net cash received from disposal of fixed assets,
intangible assets and other long-term assets 6,064,099.87 171,059.95
Net cash received from disposal of subsidiaries
and other business units - -
Cash receipts related to other investing activities 48,766,145.15 87,027,340.19
52
Sub-total of cash inflows from investing activities 133,655,691.87 145,845,591.79
The accompanying notes form an integral part of these financial statements
64
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED CASH FLOW STATEMENT (Continued)
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
For the six months For the six months
Note V ended 30 June ended 30 June
2018 2017
2.CASH FLOWS FROM INVESTING ACTIVITIES(Continued)
Cash paid for acquisition of fixed assets,
97,867,494.61 82,123,615.39
intangible assets and other long-term assets
Cash paid for acquisition of investments 10,000,000.00 71,120,000.00
Net cash paid for acquisition of subsidiaries and
52 - 14,706,789.56
other business units
Net cash paid from disposal of subsidiaries and other
52 - -
business units
Cash payments related to other investing activities 52 43,999,800.00 70,175,078.90
Sub-total of cash outflows from investing activities 151,867,294.61 238,125,483.85
Net cash flows from investing activities (18,211,602.74) (92,279,892.06)
3.CASH FLOWS FROM FINANCING ACTIVITIES
Cash proceeds from investments by others 11,781,200.00 9,075,000.00
Incl: Cash received from capital contributions from
non-controlling shareholders of 11,781,200.00 9,075,000.00
subsidiaries
Cash received from borrowings 40,775,440.04 233,533,871.46
Cash receipts related to other financing activities 53 83,745,164.60 90,932,396.75
Sub-total of cash inflows from financing activities 136,301,804.64 333,541,268.21
Cash repayments for debts 79,670,200.30 201,503,745.30
Cash payments for distribution of dividends or profit
226,149,759.15 215,828,281.10
and interest expenses
Incl: Profit and dividends paid to non-controlling
40,392,215.98 30,408,202.08
shareholders of subsidiaries
Cash payments related to other financing activities 53 118,725,719.23 178,991,574.67
Sub-total of cash outflows from financing activities 424,545,678.68 596,323,601.07
Net cash flows from financing activities (288,243,874.04) (262,782,332.86)
The accompanying notes form an integral part of these financial statements
65
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED CASH FLOW STATEMENT (Continued)
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
Note V For the six months For the six months
ended 30 June 2018 ended 30 June 2017
4.EFFECT OF FOREIGN EXCHANGE RATE CHANGES 314,863.47 -
ON CASH AND CASH EQUIVALENTS
5.NET INCREASE IN CASH AND CASH EQUIVALENTS 53 (80,782,904.11) (126,724,793.52)
Add: Cash and cash equivalents at beginning of the 3,673,498,691.48 3,150,915,425.49
year
6.CASH AND CASH EQUIVALENTS AT END OF YEAR 53 3,592,715,787.37 3,024,190,631.97
The accompanying notes form an integral part of these financial statements
66
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY BALANCE SHEET
As at 30 June 2018
(Expressed in Renminbi Yuan)
ASSETS Note XIV 30 June 2018 31 December 2017
Current assets
Cash and bank balances 1,521,055,158.90 1,776,696,342.87
Notes receivable 63,423,575.48 64,799,618.07
Accounts receivable 1 553,496,096.71 480,467,760.92
Advances to suppliers 1,230,913.18 1,138,312.26
Interest receivable 1,861,132.76 1,844,294.10
Dividends receivable - -
Other receivables 2 1,629,938,110.28 1,516,037,945.71
Inventories 193,931,164.48 172,022,676.96
Other current assets 39,482.38 788,964.90
Total current assets 3,964,975,634.17 4,013,795,915.79
Non-current assets
Long-term equity investments 3 7,297,085,972.70 7,180,306,084.56
Investment properties 2,359,843.19 2,763,831.92
Fixed assets 17,398,259.52 13,831,103.54
Construction in progress - -
Intangible assets 1,501,299.51 1,287,775.78
Long-term deferred expenses 5,003,173.65 5,543,217.86
Deferred tax assets 3,293,246.89 2,764,724.75
Other non-current assets 67,397,698.11 71,808,611.00
Total non-current assets 7,394,039,493.57 7,278,305,349.41
Total assets 11,359,015,127.74 11,292,101,265.20
The accompanying notes form an integral part of these financial statements
67
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY BALANCE SHEET (Continued)
As at 30 June 2018
(Expressed in Renminbi Yuan)
LIABILITIES 30 June 2018 31 December 2017
Current liabilities
Short-term borrowings 694,424,900.71 707,000,000.00
Notes payable 227,485,804.97 239,563,961.30
Accounts payable 462,200,812.82 434,886,685.35
Advances from customers 3,941,540.07 1,912,503.90
Employee benefits payable 24,654,592.33 33,592,851.93
Tax payables 41,130,974.27 42,386,907.00
Interest payable 547,681.64 669,533.78
Other payables 1,056,082,762.67 1,415,053,655.18
Non-current liabilities due within one
- -
year
Other current liabilities 114,239.45 112,817.65
Total current liabilities 2,510,583,308.93 2,875,178,916.09
Non-current liabilities
Long-term borrowings 31,600,000.00 31,600,000.00
Payables for specific projects 800,000.00 800,000.00
Deferred income 1,824,963.62 2,054,250.00
Long-term employee benefits payable - -
Deferred tax liabilities 3,773,319.00 3,773,319.00
Total non-current liabilities 37,998,282.62 38,227,569.00
Total liabilities 2,548,581,591.55 2,913,406,485.09
The accompanying notes form an integral part of these financial statements
68
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY BALANCE SHEET (Continued)
As at 30 June 2018
(Expressed in Renminbi Yuan)
SHAREHOLDERS’ EQUITY 30 June 2018 31 December 2017
Shareholders’ equity
Share capital 428,126,983.00 428,126,983.00
Capital surplus 4,407,488,826.34 4,407,091,484.13
Surplus reserves 214,063,491.50 214,063,491.50
Other equity instruments - -
Retained earnings 3,760,754,235.35 3,329,412,821.48
Total shareholders’ equity 8,810,433,536.19 8,378,694,780.11
Total liabilities and shareholders’ equity 11,359,015,127.74 11,292,101,265.20
The accompanying notes form an integral part of these financial statements
69
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY INCOME STATEMENT
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
Note XIV For the six months For the six months
ended 30 June 2018 ended 30 June 2017
Operating revenue 4 1,687,621,355.83 1,658,600,818.96
Less: Operating costs 4 1,614,717,473.91 1,600,647,589.46
Tax and surcharge 2,016,368.93 5,062,317.16
Selling expenses 25,894,795.45 22,844,614.29
Administrative expenses 33,679,106.75 24,917,988.21
Finance costs (19,369,880.08) (37,042,967.55)
Impairment loss 623,542.31 (32,604.71)
Add: Investment income 5 534,840,744.46 508,360,741.85
Incl: Investment income from associates 173,326,290.14 155,838,740.45
Gain on disposal of assets - 1,087.38
Other income 1,299,345.14 641,300.00
Operating profits 566,200,038.16 551,207,011.33
Add: Non-operating income 33.08 184,531.96
Incl: Gain from disposal of
non-current assets - -
Less: Non-operating expenses 127,688.63 1,011,760.15
Incl: Loss from disposal of
non-current assets - -
Total profit 566,072,382.61 550,379,783.14
Less: Income taxes 6,292,873.84 21,856,015.57
Net profit 559,779,508.77 528,523,767.57
Net Profit from continuing operations 559,779,508.77 528,523,767.57
Total comprehensive income 559,779,508.77 528,523,767.57
The accompanying notes form an integral part of these financial statements
70
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
Other equity
2018 Share capital Capital surplus Surplus reserve Retained earnings Total equity
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 owners - - 397,342.21 - - 397,342.21
1. Capital injection by owners - - - - - -
2. Significant reorganization - - - - - -
3. Others - - 397,342.21 - - 397,342.21
(3) Profit distribution - - - - (128,438,094.90) (128,438,094.90)
1. Distribution to owners - - - - (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
71
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Continued)
For the Year ended 31 December 2017
(Expressed in Renminbi Yuan)
Other equity
2017 Share capital Capital surplus Surplus reserve Retained earnings Total equity
instruments
Closing balance of the preceding year 362,631,943.00 65,495,040.00 4,381,845,619.03 181,315,971.50 2,829,823,727.08 7,821,112,300.61
Others - - - - - -
Opening balance of the current year 362,631,943.00 65,495,040.00 4,381,845,619.03 181,315,971.50 2,829,823,727.08 7,821,112,300.61
Movements in the current year 65,495,040.00 (65,495,040.00) 25,245,865.10 32,747,520.00 499,589,094.40 557,582,479.50
(1) Total comprehensive income - - - - 673,618,518.79 673,618,518.79
(2) Capital paid and reduced by owners 65,495,040.00 (65,495,040.00) 25,245,865.10 - - 25,245,865.10
1. Capital injection by owners 5,114,297.00 (5,114,297.00) - - - -
2. Significant reorganization - - - - - -
3. Others 60,380,743.00 (60,380,743.00) 25,245,865.10 - - 25,245,865.10
(3) Profit distribution - - - 32,747,520.00 (174,029,424.39) (141,281,904.39)
1. Transferred from surplus reserve - - - 32,747,520.00 (32,747,520.00) -
2. Distribution to owners - - - (- (141,281,904.39) (141,281,904.39)
Closing 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
The accompanying notes form an integral part of these financial statements
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY CASH FLOW STATEMENT
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
For the six months For the six months
ended 30 June 2018 ended 30 June 2017
1.CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from sales of good or rendering
of services 1,787,065,555.60 1,691,499,935.88
Cash receipts related to other operating
activities 43,943,301.92 16,864,750.56
Sub-total of cash inflows from operating
activities 1,831,008,857.52 1,708,364,686.44
Cash paid for goods and services 1,655,107,446.18 1,590,317,986.60
Cash paid to and on behalf of employees 44,855,325.83 40,727,189.33
Cash paid for all types of taxes 18,706,775.51 28,888,466.38
Cash payments related to other operating
activities 36,183,479.25 17,091,927.42
Sub-total of cash outflows from operating
activities 1,754,853,026.77 1,677,025,569.73
Net cash flows from operating activities 76,155,830.75 31,339,116.71
2. CASH FLOWS FROM INVESTING ACTIVITIES
Cash received from returns of investments 187,137,437.23 202,011,829.53
Cash receipts related to other investing activities 857,940,000.00 1,979,269,200.00
Sub-total of cash inflows from investing activities 1,045,077,437.23 2,181,281,029.53
Cash paid for acquisition of fixed assets,
intangible assets and other long-term assets 6,044,462.78 3,921,020.07
Cash paid for investment 10,000,000.00 1,019,000,000.00
Net cash paid for purchasing subsidiaries and
other business - 16,840,000.00
Cash payments related to other investing
activities 1,051,642,980.00 1,424,861,720.90
Sub-total of cash outflows from investing
activities 1,067,687,442.78 2,464,622,740.97
Net cash flows from investing activities (22,610,005.55) (283,341,711.44)
The accompanying notes form an integral part of these financial statements
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY CASH FLOW STATEMENT (Continued)
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
For the six months For the six months
ended 30 June 2018 ended 30 June 2017
3. CASH FLOWS FROM FINANCING ACTIVITIES
Cash received from borrowings 10,000,000.00 41,600,000.00
Cash receipts related to other financing 8,065,884,436.80 7,272,687,714.06
activities
Sub-total of cash inflows from financing 8,075,884,436.80 7,314,287,714.06
activities
Cash repayments for debts 10,000,000.00 41,600,000.00
Cash payments for distribution of dividends or
144,898,008.66 143,087,008.08
profit and interest expenses
Cash payments related to other financing
8,230,488,300.78 7,131,182,482.56
activities
Sub-total cash outflows from financing activities 8,385,386,309.44 7,315,869,490.64
Net cash flows from financing activities (309,501,872.64) (1,581,776.58)
4.EFFECT OF FOREIGN EXCHANGE RATE
CHANGES ON CASH AND CASH 314,863.47 -
EQUIVALENTS
5. NET INCREASE IN CASH AND CASH
(255,641,183.97) (253,584,371.31)
EQUIVALENTS
Add: Cash and cash equivalents at beginning of 1,776,696,342.87 1,342,041,409.86
the year
6. CASH AND CASH EQUIVALENTS 1,521,055,158.90 1,088,457,038.55
AT END OF YEAR
The accompanying notes form an integral part of these financial statements
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements
For the Year ended 30 June 2018
(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 Ltd. (hereinafter referred to as the “the Company”), formerly known as Shenzhen
Health 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 2018.
In November 2000, the Company entered into an Assets Exchange Agreement with Shenzhen
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 Shenzhen Investment Management
Company’s 100% equity interests in 11 pharmaceutical companies and certain properties as well as 51%
equity interests in Shenzhen 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 completed on 8 January 2001.
On 18 February 2004, the Company’s original major shareholder, Shenzhen Investment Management
Company, entered into a Stock Transfer 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 (ZJGSZ (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 the 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 the 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 date of issue.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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 RMB65,495,040.00 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 control, 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 Uptodate & Special Medicines”) by issuing
shares and raised supporting funds by issuing shares to Ping An Asset Management Co., Ltd.(“Ping An
Asset Management”) to acquire non-controlling interest of South Pharma & Trade. The relevant shares
were successfully issued and listed on 5 January 2017.
As of 30 June 2018, the total share capital was RMB428,126,983.
The Company is registered with Shenzhen Administration for Industry & Commerce. 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 wholesale of traditional Chinese medicine preparations, bulk pharmaceutical drugs, chemical
preparations, bulk antibiotic drugs, antibiotic preparations, biochemical drugs, biological products
(including vaccines and in vitro diagnostic reagents psychotropic drugs and preparations, narcotic drugs,
toxic drugs for medical use, protein assimilation preparation and peptide hormones; trade of dietary
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 prohibited by the country; limited projects has to be approved before operating).
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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 24 Augustl 2018.
II Basis of preparation
The financial statements were prepared in accordance with the Basic Standard and specific standards
of the Accounting Standards for Business Enterprises issued by the Ministry of Finance 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 requirements 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 with 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 account receivables
(Note Ⅲ (10)), inventory costing methods (Note Ⅲ (11)), depreciation methods for fixed assets and
amortization method for intangible assets (NoteⅢ(14),Note III(17)), judgement basis for capitalization of
development costs (NoteⅢ(17)) , impairment of long-term assets (NoteⅢ(20)), revenue recognition
(NoteⅢ(24)).
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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 Business Enterprises
The financial statements of the Company for the period ended 30 June 2018 are in compliance with the
Accounting Standards for Business Enterprises, and truly and completely present the financial position
of the Group and the Company as of 30 June 2018 and the operating results, cash flows and other
information of the Group and the Company for the year then ended.
(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) Business combinations
(a) Business combinations involving entities under common control
Assets and liabilities (including goodwill arising from ultimate controlling shareholder’s acquisition of the
party being absorbed) that are obtained by the absorbing party in a business combination 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 transaction costs of issuing
equity securities or debt securities for 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 current 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.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(4) Business combinations (Continued)
Where the business combination not involving enterprises 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 between fair value and carrying amount recognized as
investment income for the current period. If the acquirer’s previously held equity interests of the
acquiree involve other comprehensive income (“OCI”) under the equity method, the accounting
treatment 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 charged to profit or loss for the current period on the acquisition
date. For the acquirer’s previously held other equity instruments, the fair value of OCI accumulated
before the acquisition date are transferred into 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 consolidated 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 the 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 enterprises not under common control, the
individual financial statements of the subsidiaries are adjusted based on the 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 attributable to the Company are
recognized as non-controlling interests and presented separately in the consolidated financial
statements within equity, net profits and total comprehensive income respectively. Unrealized gain or
loss from selling assets to subsidiaries fully offsets the net income attributable to equity holders of the
company. 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 the Company and the subsidiary. Unrealized gain or loss from
transaction between subsidiaries offsets the net income attributable to equity holders of the company
and attributable to the non-controlling interest by the distribution proportion regarding the Company and
the selling side of the subsidiaries. If different recognition perspectives for the same transaction arise
within different accounting identities setup, there is an adjustment for the transaction from the Group’s
perspective.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(6) Acquisition of non-controlling interests in controlled subsidiaries
The Company acquires equity from the minority shareholders after taking control of the subsidiary, in
the consolidated financial statements, the subsidiary’s assets, liabilities should be measured from the
combination or acquisition date. The difference between the carrying amount of acquisition of non-
controlling interest and the net assets proportion calculated by the original share percentage since the
acquisition date should be recognized in capital surplus. If the capital surplus is insufficient to dilute, the
retained earnings shall be adjusted.
(7) Cash and cash equivalents
Cash and cash equivalent 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.
(8) Foreign currency translation
Foreign currency transact 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 translated into RMB
using the spot 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 those attributable to foreign
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 costs are translated at the balance
sheet date using the spot exchange rates at the date of the transactions. The effect of exchange rate
changes on cash is presented separately in the cash flow statement.
(9) Financial instruments
(a) Financial assets
(i) Classification of financial assets
Financial assets are classified into the following categories at initial recognition, including: financial
assets measured at amortised cost, financial assets measured at fair value through other
comprehensive income, and financial assets measured at fair value through profit or loss. At initial
recognition, the Group measures a financial assets at its fair value plus, in the case of a financial asset
not at a fair value through profit or loss, transaction costs that are directly attributable to the acquisition
of the financial asset.
Transaction expenses of financial assets measured at fair value through profit or loss are expensed in
profit or loss, and those of others are included in receivables’ original book value.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(9) Financial instruments (Continued)
(a) Financial assets (Continued)
(ii) Recognition and measurement
Subsequent measurement of financial assets depends on the Group’s business model for managing the
asset and the cash flow characterisitics of the asset.
Financial assets measured at amortised cost
Assets that are held for collection of contractual cash flows where those cash flows represent solely
payments of principal and interest are measured at amortised cost. A gain or loss on a debt investment
that is measured at amortised cost and is not part of a hedging relationship is recognized in profit or
loss when the asset is derecognized or impaired. Interest income from thses financial asset is included
in finance income using the effective interest rate method.
Financial assets measured at fair value through other comprehensive income
Where the Group’s management has elected to present fair value gains and losses on equity
investments in other comprehensive income, there is no subsequence reclassification of fair value gains
and losses to profit or loss. Dividends from such investments continue to be recognized in investment
income when the Group’s right to receive payments is established.
Financial assets measured subsequently at fair value through profit or loss
For this kind of fincial asset, it measured subsequently at fair value, and the movement of fair value is
recorded in profit or loss
(iii) Impairment of financial assets
The Group assesses the expected credit losses associated with its financial assets measured at
amortised cost on a forward looking basis. The impairment methodology applied depends on whether
there has been a significant increase in credit risk .
For trade receivables, the Group applies the simplified approach, which requires expected lifetime
losses to be recognized from initial recognition of the receivables.
(iv) Derecognition of financial assets
A financial asset is derecognized when any of the following criteria is met: (i) the contractual rights to
receive the cash flows from the financial asset expire; (ii) the financial asset has been transferred and
the Group transfers substantially all the risks and rewards of ownership of the financial asset to the
transferee; or (iii) the financial asset has been transferred and the Group has not retained control of the
financial asset, although the Group neither transfers nor retains substantially all the risks and rewards of
ownership of the financial asset.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(9) Financial instruments (Continued)
(a) Financial assets (Continued)
(iv) Derecognition of financial assets (Continued)
On derecognition of a financial asset, the difference between the carrying amount and the sum of the
consideration received and the cumulative changes in fair value that had been recognized directly in
equity is recognized in profit or loss.
(b) Financial liabilities
Financial liabilities are classified into the following categories at initial recognition, including financial
liabilities measured at fair value through profit or loss, and other financial liabilities. Transaction
expenses of financial liabilities measured at fair value through profit or loss are expensed in profit or
loss, and those of others are included in receivables’ original book value.
Subsequent measurement of financial liabilities depends on their catagories:
Other financial liabilities
For other fincial liabilities, it measured subsequently at amortized value.
(c) Offset of financial instruments
A financial asset and a financial liability shall be offset and the net amount presented in the balance
sheet when both of the following conditions are satisfied: 1) the enterprise has a legal right to set off the
recognized amounts and the legal right is currently enforceable; 2) the enterprise intends either to settle
on a net basis or to realize the financial asset and settle the financial liability simultaneously.
(d) Transfer of financial assets
A financial asset is derecognized when the Group has transferred substantially all the risks and rewards
of the asset to the referee. A financial asset is not derecognized when the Group retains substantially all
the risks and rewards of the asset.
When the Group has neither transferred nor retained substantially all the risks and rewards of the asset,
it either i) derecognizes the transferred asset when it has transferred control of the asset; or ii)
continues to recognize the transferred asset to the extent of the Group's continuing involvement, in
which case, the Group also recognizes an associated liability.
Continuing involvement that takes the form of a guarantee over the transferred financial asset is
measured at the lower of the original carrying amount of the asset and the guarantee amount. The
guarantee amount is the maximum amount of consideration that the Group could be required to repay.
III Summary of significant accounting policies and accounting estimates (Continued)
(10) Receivables
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Receivables comprise notes receivable, accounts receivable and other receivables. Accounts
receivable arising from the sale of goods or rendering of services are initially recognized at fair value of
the contractual payments from the buyers or service recipients.
(a) Receivables with amounts that are individually significant and subject to separate assessment
for provision for bad debts
Receivables with amounts that are individually significant are subject to assessment for
impairment on the individual basis. If there exists objective evidence that the Group will not be
able to collect the amount under the original terms, a provision for impairment of that receivable
is made.
The criterion for determining individually significant amounts is that any individual amount is
more than RMB5 million.
The method of providing for bad debts for those individually significant amounts is as follows:
the amount of the present value of the future cash flows expected to be derived from the
receivable below its carrying amount.
(b) Receivables that are subject to provision for bad debts on the grouping basis
Receivables with amounts that are not individually significant and those receivables that have
been individually assessed for impairment and have not been found impaired are classified into
certain groupings based on their credit risk characteristics. The provision for bad debts is
determined based on the historical loss experience for the groupings of receivables with similar
credit risk characteristics, taking into consideration of the current circumstances.
A provision for impairment of the receivables is made based on the ageing of receivables at the
following percentage:
Provision ratios used for accounts Provision ratios used for
receivable other receivables
Within 1 year 0-5% 0-5%
1 to 2 years 5-10% 5-10%
2 to 3 years 10-30% 10-30%
3 to 4 years 20-50% 20-50%
4 to 5 years 20-80% 20-80%
More than 5 years 20-100% 20-100%
(c) Receivables with amounts that are not individually significant but subject to separate
assessment for provision for bad debts
The reason for making separate assessment for provision for bad debts is that there exists
objective evidence that the Group will not be able to collect the amount under the original terms
of the receivable.
The provision for bad debts is determined based on the amount of the present value of the
future cash flows expected to be derived from the receivable below its carrying amount.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(10) Receivables (Continued)
(d) When the Group transfers the accounts receivable to the financial institutions without recourse,
the difference between the proceeds received from the transaction and their carrying amounts
and the related taxes is recognized in profit or loss for the current period.
(11) Inventories
(a) Classification
Inventories include raw materials, work in progress, finished goods, delegate processing
supplies and turnover materials, and are measured at the lower of cost and net realizable
value.
(b) Costing of inventories
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.
(c) Basis for determining net realizable values of inventories and method for making provisions for
decline in the value of inventories
Provisions for declines in the value of inventories are determined at the excess amount of the
carrying value of the inventories 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.
(d) The Group adopts the perpetual inventory system.
(e) Amortization methods of low value consumables and packaging materials
Turnover materials include low value consumables and packaging materials, which are
expensed when issued.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(12) Long-term equity investments
Long-term equity investments comprise the Company’s long-term equity investments in its subsidiaries
and the Group’s long-term equity investments in its associates.
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.
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.
(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.
86
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(12) Long-term equity investments (Continued)
For long-term equity investments accounted for using the equity method, the Group recognizes the
investment income according to its share of net profit or loss of the investee. The Group discontinues
recognizing 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 respect to recognition of provisions under the accounting standards on
contingencies are satisfied, the Group continues recognizing the investment losses and the provisions.
For changes in shareholders’ equity of the investee other 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 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.
The unrealized profits or losses arising from the intra-group transactions amongst the Group and its
investees are eliminated in proportion to the Group’s equity interest in the investees, and then based on
which the investment gains or losses are recognized. For the loss on the intra-group transaction
amongst the Group and its investees attributable to asset impairment, any unrealized loss is not
eliminated.
(c) Basis for determining existence of control, joint control or significant influence over investees
Control is the power to govern the financial and operating policies of the investee so as to obtain
benefits from its operating activities. In determining whether 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 those policies.
(d) Impairment of long-term equity investments
The carrying amount of long-term equity investments in subsidiaries and associates is reduced to the
recoverable amount when the recoverable amount is less than the carrying amount (Note III (21)).
(13) 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 measured initially at cost. Subsequent expenditures incurred in relation to an
Investment properties are included in the cost of the 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.
87
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(13) Investment properties (Continued)
The Group adopts the cost model for subsequent measurement of investment properties. Buildings and
land use rights are depreciated or amortized to their estimated net residual values over their estimated
useful lives. The estimated useful lives, the estimated net residual values that are expressed as a
percentage of cost and the annual depreciation (amortization) rates of investment properties are as
follows:
Estimated useful life 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 properties is transferred to owner-occupied properties, it is reclassified as a fixed
asset or intangible asset at the date of the 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 the transfer.
The Investment properties’ estimated useful life, net residual value and depreciation (amortization)
method applied are reviewed and adjusted as appropriate at each end of year.
An Investment properties is derecognized on disposal or when the Investment properties is permanently
withdrawn from use and no future economic benefits are expected from its disposal. The net amount of
proceeds from sale, transfer, retirement or damage of an Investment properties after its carrying
amount and related taxes and expenses is recognized in profit or loss for the current period.
The carrying amount of an Investment properties is reduced to the recoverable amount if the
recoverable amount is below the carrying amount (Note III (20)).
(14) Fixed assets
(a) Recognition and initial measurement of fixed assets
Fixed assets comprise buildings, machinery and equipment, motor vehicles, other equipment and
leasehold improvements.
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. Fixed assets purchased or constructed by the Group
are initially measured at cost at the acquisition date. The fixed assets contributed by the State
shareholders at the reorganization of the Company into a corporation entity are recognized based on
the revaluated amounts approved by the State-owned Assets Administration Department.
Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is
probable that the associated economic 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.
88
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(14) Fixed assets (Continued)
(b) Depreciation methods of fixed assets
Fixed assets are depreciated using the straight-line method 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 determined based upon the
adjusted carrying amounts over their remaining useful lives.
The estimated useful lives, the estimated residual values expressed as a percentage of cost and the
annual depreciation rates are as follows:
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
The estimated useful life, the estimated net residual value of a fixed asset and the depreciation method
applied to the asset are reviewed, and adjusted as appropriate at least at each end of year.
(c) The carrying amount of fixed assets is reduced to the recoverable amount when the
recoverable amount is less than the carrying amount (Note III (20)).
(d) Recognition basis and measurement method for financing leased fixed assets.
Finance leases are leases with the whole risks and rewards related to the asset substantially
transferred. Fixed assets leased under finance lease are recognized with at smaller value of the fair
value and minimum lease payments. The difference between the book value and the minimum lease
payments should be recognized as unrecognized financing charges (Note III (27) (b)).
Fixed assets leased under finance lease are depreciated using the same policy as that those fixed
assets owned by the company. For those leased assets that the ownership of the assets can be
ascertained by the expiration date, the assets should be depreciated within estimated useful lives.
Otherwise, the assets should be depreciated within the shorter period of the leasing period and
estimated useful lives.
(e) Disposal of fixed assets
A fixed asset is derecognized on disposal or when no future economic benefits are expected from its
use or disposal. The amount of proceeds 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 or loss for
the current period.
89
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(15) Construction in progress
Construction in progress is measured at actual cost. Actual cost comprises construction costs,
installation costs, borrowing costs that are eligible for capitalization and other costs necessary to bring
the fixed assets ready for their intended use. Construction in progress is transferred to fixed assets
when the assets are ready for their intended use, and depreciation begins from the following month.
The carrying amount of construction in progress is reduced to the recoverable amount when the
recoverable amount is less than the carrying amount (Note III (20)).
(16) Borrowing costs
The borrowing costs that are directly attributable to the acquisition and construction of a fixed asset that
needs a substantially long period of time for its intended use commence to be capitalized and recorded
as part of the cost of the asset when expenditures for the asset and borrowing costs have been
incurred, and the activities relating to the acquisition and construction that are necessary to prepare the
asset for its intended use have commenced. The capitalization of borrowing costs ceases when the
asset under acquisition or construction becomes ready for its intended use and the borrowing costs
incurred thereafter are recognized in profit or loss for the current period. Capitalization of borrowing
costs is suspended during periods in which the acquisition or construction of a fixed asset is interrupted
abnormally and the interruption lasts for more than 3 months, until the acquisition or construction is
resumed.
For the specific borrowings obtained for the acquisition or construction of a fixed asset qualifying for
capitalization, the amount of borrowing costs eligible for capitalization is determined by deducting any
interest income earned from depositing the unused specific borrowings in the banks or any investment
income arising on the temporary investment of those borrowings during the capitalization period.
For the general borrowings obtained for the acquisition or construction of a fixed asset qualifying for
capitalization, the amount of borrowing costs eligible for capitalization is determined by applying the
weighted average effective interest rate of general borrowings, to the weighted average of the excess
amount of cumulative expenditures on the asset over the amount of specific borrowings. The effective
interest rate is the rate at which the estimated future cash flows during the period of expected duration
of the borrowings or an applicable shorter period are discounted to the initial amount of the borrowings.
(17) Intangible assets
Intangible assets include land use rights, computer software, technology patents, trademarks and
distribution network, which are initially recognized at cost. Intangible assets contributed by state-owned
shareholders during the Company reorganization were recorded based on the valuation amount
approved by the State-owned Assets Supervision and Management Department.
90
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(17) Intangible assets (Continued)
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 network 20 years
Franchising rights 10 years
Favorable leases 17-20 years
A land use right granted by 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 thereon cannot be reliably allocated between the land
use rights and the buildings, all of the acquisition costs are recognized as fixed assets.
For an intangible asset with a finite useful life, review of its useful life and amortization method is
performed at each end of year, with adjustments made as appropriate. For an intangible asset without a
definite useful life, review of its useful life is performed at each end of year.
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 end of
the project.
Expenditure for investigation, evaluation and selection of production process and new drugs researches
is recognized in profit or loss in the period in which it is incurred. Expenditure 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.
91
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(17) Intangible assets (Continued)
Other development costs that do not meet the conditions above are recognized in profit or loss in the
period in which they are incurred. Development costs previously recognized as expenses are not
recognized as an asset in a subsequent period. Capitalized expenditure on the development phase is
presented as development costs in the balance sheet and transferred to intangible assets at the date
that the asset is ready for its intended use.
The carrying amount of intangible assets is reduced to the recoverable amount when the recoverable
amount is less than the carrying amount (Note III (20)).
(18) Long-term prepaid expenses
Long-term prepaid expenses 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.
(19) Governmental medical reserve funds and specially approved reserving materials
Appointed by the PRC Government, CNPGC is responsible for purchasing, allocating and providing the
governmental medical reserves, which include the medical products, traditional Chinese medicine and
medical appliances for nation-wide emergency rescue and disaster relief. Appointed by the Government
of Guangxi Province, Sinopharm Medicine Holding Guangxi Co., Ltd. (“Sinopharm Guangxi”), a
subsidiary of the Company, is responsible for purchasing, allocating and providing the medical
reserves, which include the medical products needed for serious disasters, epidemics and other
emergencies as well as endemic diseases in Guangxi Province. In accordance with the regulation of
CNPGC, as being the enterprise who bears the obligation for specially approved medical reserving
materials, the medical reserve funds received from the PRC Government or local government are
recognized as other non-current liabilities. The Group reserves the specially approved medical
reserving materials according to the reserve program (by category and by quantity), applies dynamic
management and recognizes as other non-current assets.
(20) 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 asset 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 impairment is
determined and recognized 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 to generate independent
cash inflows.
92
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(20) Impairment of long-term assets (Continued)
Goodwill that is separately presented in the financial statements，intangible assets with infinite useful
lives and capitalized development costs are tested at least annually for impairment, irrespective of
whether 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 the result of the test indicates that the recoverable
amount of an asset group or 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 other assets.
Once the above Impairment loss is recognized, it will not be reversed for the value recovered in the
subsequent periods.
(21) Employee benefits
Employee benefits mainly include short-term employee benefits, post-employment benefits, termination
benefits and other long-term employee benefits incurred in exchange for service rendered by
employees or various forms of rewards or compensation due to severance of labor relation.
(a) Short-term employee benefits
Short-term employee benefits include wages or salaries, bonuses, allowances and subsidies, staff
welfare, medical insurance, work injury insurance, maternity insurance, housing funds, and labor union
funds and employee education funds. The employee benefits are recognized in the accounting period in
which the service has been rendered by the employees, and as costs of assets or expenses to
whichever the employee service is attributable.
(b) Post-employment benefits (defined contribution plans)
The Company classifies post-employment benefit plans into either defined contribution plans or defined
benefit plans. Defined contribution plans are post-employment benefit plans under which the Company
pays fixed contributions into a separate fund and will have no obligation to pay further contributions; and
defined benefit plans are post-employment benefit plans other than defined contribution plans. During
the reporting period, the Company's post-employment benefits mainly include basic pensions,
unemployment insurance and enterprise annuity, both of which belong to the defined contribution plans.
Basic pensions
The Company’s employees participate in the defined basic pension insurance plan set up and
administered by local labor and social protection authorities. Basic pensions are provided monthly
according to stipulated bases and proportions to local labor and social security contribution. When
employees retire, local labor and social security institutions have a duty to pay the basic pension
insurance to them. The amounts payable are recognized as liabilities based on the above provisions in
the accounting period in which the service has been rendered by the employees, and as costs of assets
or expenses to whichever the employee service is attributable.
93
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(21) Employee benefits (Continued)
(c) Termination benefits
The Group recognizes the debt and the gain or loss, when offering compensation for terminating the
labor contract before the due date, or encouraging the staff to resign voluntarily, at the earlier of when
the Group cannot unilaterally withdraw the labor relation plan and when the Group recognizes the cost
relating to recombinant involving the payment of termination benefits.
(d) Retirement benefits
The Group provides retirement benefits to employees who accept the internal retirement arrangements.
Retirement benefits refer to the salary and social security contribution provided to those staff who
voluntarily quit the job with approval from the management team, before the retirement age.
The group offers retirement benefits from the date when the arrangement begins, to the date when the
staff reaches the retirement age. The liability including salary and security contribution funds is
recognized when conditions for recognition are meet, regarding to the period from the staff leaves the
position to the normal retirement date. Difference arising from the changes in actuarial assumptions for
retirement benefits and adjustments in welfare standard, will be accounted for in the current profits and
losses.
Retirement benefits that are expected to be paid within one year from the balance sheet date are
disclosed as current liabilities.
(22) Provisions
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 common control:
(1) The obligation is a present obligation of the Group;
(2) It is probable that an outflow of economic benefits from the Group will be required to settle the
obligation; 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 pertaining 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 date. 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.
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.
94
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(23) Dividend distribution
Cash dividend distribution is recognized as a liability in the period in which it is approved by shareholder
at the annual shareholders’ meeting.
(24) Revenue recognition
Revenue is recognized when control of the goods or services has been transferred to customers.
Revenue from the sale of products directly to customers, is recognized when control the goods
transferred, being when the products are accepted by customers. The customers have full dicretion
over the products, and there is no un-fufilled obligation that could affect the cutomers’ acceptance of the
products.
The Group provides freight, storage and other services to external parties. The freights are recognized
on a percentage-of-completion basis, and determined on the time propotion method. Other revenue is
determined in accordance with the amount provided in the service period stipulated in the contract.
The Group shall recognise a refund liability if the Group receives consideration from a customer and
expects to refund some or all of that consideration to the customer. A refund liability is measured at the
amount of consideration received (or receivable) for which the entity does not expect to be entitled (ie
amounts not included in the transaction price). The refund liability (and corresponding change in the
transaction price and, therefore, the contract liability) shall be updated at the end of each reporting
period for changes in circumstances.
The Group, offers a customer loyalty programme where points earned through the purchase of goods
can only be redeemed for goods provided by Sinopharm Group Zhijun (Shenzhen) Pharmaceutical Co.,
Ltd. or other free goods. The fair value of the consideration received or receivable in respect of the
initial sale is allocated between the award credits and the other components of the sale. Fair value of
award points is measured on the basis of the value of the awards (that is, goods or services) for which
they could be redeemed, the fair value of the award credits should take account of expected forfeitures
as well as the discounts or incentives that would otherwise be offered to customers who have not
earned award credits from an initial sale.
Determing whether revenue of the Group should be reported gross or net is based on a continuing
assessment of various factors. Since the Group has sole discretion in determing the pricing, takes full
responsibility of a good or service provided to the customers, and also is responsible for the risk
associated with the goods before change of control over the goods, and the customers’ complaints and
requests, the Group considers it controls the specified goods or services before their delivery to its
customers and is a principal in the transactions. Accordingly, the Group recognizes revenue in the
gross basis. Otherwise, the Group records the net amount earned as commissions from products sold
or services provided.
95
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(24) Revenue recognition (Continued)
When another party is involved in providing goods or services to a customer, the Group determines
whether the nature of its promise is a performance obligation to provide the specified goods or services
itself as a principal or to arrange for those goods or services to be provided by the other party as an
agent. The Group determines whether it is a principal or an agent for each specified good or service
promised to the customer. A specified good or service is a distinct good or service (or a distinct bundle
of goods or services) to be provided to the customer. If a contract with a customer includes more than
one specified good or service, an entity could be a principal for some specified goods or services and
an agent for others.
Interest income is recognized and measured based on the loan period and the actual interest rate.
Rental income is recognized and measured based to the straight-line method during the rental period.
(25) Government grants
Government grants are transfers of monetary or non-monetary assets from the government to the
Group at nil consideration, including refund of taxes and financial subsidies, etc.
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 transfer of monetary assets,
the grant is measured at the amount received or receivable. For a government grant in the form of
transfer of
non-monetary assets, it is measured at fair value; if the fair value is not reliably determinable, the grant
is measured at nominal amount.
A government grant related to an asset is a grant received aimed to create a long-term asset by
contracting or other methods. A government grant related to income is any grant other than government
grants related to assets.
A government grant related to an asset is recognized as deferred income, and evenly amortized to
profit or loss over the useful life of the related asset. Government grants measured at nominal amounts
are recognized immediately in profit or loss for the current period.
For government grants related to income, where the grant is a compensation for related expenses or
losses to be incurred by the Group in the subsequent periods, the grant is recognized as deferred
income, and included in profit or loss over the periods in which the related costs are recognized; where
the grant is a compensation for related expenses or losses already incurred by the Group, the grant is
recognized immediately in profit or loss for the current period.
96
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(26) 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 period based on
the amount of income tax expected to be paid by the Group or returned by tax authority calculated
according to related tax laws.
Deferred tax assets and deferred tax liabilities are calculated and recognized based on the differences
arising between the tax bases of assets and liabilities and their carrying amounts (temporary
differences). Deferred tax asset is recognized for the deductible losses that can be carried forward to
subsequent years for deduction of the 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 differences 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.
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 taxes are related to the same tax payer within the Group and the same taxation
authority; and,
that tax payer has a legally enforceable right to offset current tax assets against current tax
liabilities.
Deferred tax liabilities are recognized for temporary differences arising from investments in subsidiaries
and associates, except where the Group is able to control the timing of the reversal of the temporary
difference, 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 future and that the taxable profit will be available in the
future against which the temporary differences can be utilized, the corresponding deferred tax assets
are recognized.
97
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(27) Leases
Finance leases are leases with the whole risks and rewards related to the asset substantially
transferred. The other kinds of leases are nominated operating leases.
(a) Operating leases
Lease payments under an operating lease are recognized on a straight-line basis over the period of the
lease, and are either capitalized as part of the cost of related assets or charged as an expense for the
current period.
Lease income under an operating lease is recognized on a straight-line basis over the period of the
lease.
(b) Finance leases
Fixed assets leased under finance leases are recognized at the smaller value of the fair value and
present value of the minimum lease payments. The difference between the book value and the
minimum lease payments should be recognized as unrecognized financing charges, and amortized
within the leasing period. The minimum lease payments net off the unrecognized financing charges
should be classified as long-term payables.
(28) Discontinued operations
A discontinued operation is a component of an enterprise that either has been disposed of or is
classified as held for sale, and is separately identifiable operationally and for financial reporting purpose,
and satisfies one of the following conditions:
(1) Represents a separate major line of business or geographical area of operations;
(2) Is part of a single coordinated plan to dispose of a separate major line of business or
geographical area of operation;
(3) Is a subsidiary acquired exclusively with a view to resale.
(29) Segment information
The Group identifies operating segments based on the internal organization structure, management
requirements and internal reporting system, and discloses segment information of reportable segments
which is determined on the basis of operating segments.
An operating segment is a component of the Group that satisfies all of the following conditions: (1) the
component is able to earn revenues and incur expenses from its ordinary activities; (2) whose operating
results are regularly reviewed by the Group’s management to make decisions about resources to be
allocated to the segment and to assess its performance, and (3) for which the information on financial
position, operating results and cash flows is available to the Group. If two or more operating segments
have similar economic characteristics and satisfy certain conditions, they are aggregated into one single
operating segment.
98
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(30) Critical accounting estimates
The Group continually evaluates the critical accounting estimates and key judgments applied based on
historical experience and other factors, including expectations of future events that are believed to be
reasonable.
(a) Critical accounting estimates and key assumptions
The critical accounting estimates and key assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next accounting year are outlined
below:
(i) Accounting estimates on impairment of goodwill
The Group tests annually whether goodwill has suffered any impairment. The recoverable amount of
asset groups and groups of asset groups is the present value of the future cash flows expected to be
derived from them. These calculations require the use of estimates (Note V (16)).
If management revises the gross margin that is used in the calculation of the future cash flows of asset
groups and groups of asset groups, and the revised gross margin is lower than the one currently used,
the Group would need to recognize further impairment against goodwill and fixed assets.
If management revises the pre-tax discount rate applied to the discounted cash flows, and the revised
pre-tax discount rate is higher than the one currently applied, the Group would need to recognize further
impairment against goodwill and fixed assets.
If the actual gross margin/pre-tax discount rate is higher/lower than management’s estimates, the
impairment loss of goodwill previously provided for is not allowed to be reversed by the Group.
(ii) Accounting estimates on impairment of accounts receivable
In accordance with the Group’s accounting policy (Note III (10)), the Group’s management tests
annually whether receivables have suffered any impairment. Impairment of receivables has been
assessed by taking into account the customers’ credit history and financial position together with the
current market conditions. Even if the Group’s management has made bad debt provision for the
expected loss at its best estimate, there is a possibility that changes in customers’ financial position or
market conditions will alter the result.
(iii) Accounting estimates on impairment of inventories
In accordance with the Group’s accounting policy (Note III (11) (c)), the Group’s management estimates
the net realizable value of the inventory. 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. Even if the Group’s management has made stock
provision for the expected impairment at its best estimate, there is a possibility that changes in market
conditions will alter the result.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(30) Critical accounting estimates (Continued)
(a) Critical accounting estimates and key assumptions (Continued)
(iv) Sales return
A refund liability is measured at the amount of consideration received (or receivable) for which the entity
does not expect to be entitled (ie amounts not included in the transaction price). The refund liability (and
corresponding change in the transaction price and, therefore, the contract liability) shall be updated at the
end of each reporting period for changes in circumstances.
(v) Customer loyalty programme
The fair value of the consideration received or receivable in respect of the initial sale is allocated
between the award credits and the other components of the sale. Fair value of award points is
measured on the basis of the value of the awards (that is, goods or services) for which they could be
redeemed, the fair value of the award credits should take account of expected forfeitures as well as the
discounts or incentives that would otherwise be offered to customers who have not earned award
credits from an initial sale.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(30) Critical accounting estimates (Continued)
(b) Changes in accounting policies
Accounting policies of revenue were altered in accordance with the requirement of Notice on Issuing
and Revising Accounting Standard No. 14 – Revenue by Ministry of Finance. And those of financial
instruments were also altered in accordance with the requirement of Notice on Issuing and Revising
Accounting Standard No. 22 – Recognization and Measurement of Financial Instruments, No. 23 –
Transfer of Financial Instruments, No. 24 – Hedging Instruments, and No.37 – Disclosures of Financial
Instruments. The Group adopted these standards since January 1, 2018. The alteration of these
accounting policies had no effect on the net profit of the Group as well as the stockholders’ equity of the
Group.
The content and reasons of
Procedures Remarks
changes in accounting policies
In 5th July 2017, Notice on Issuing
and Revising Accounting Standard
No. 14 – Revenue was announced Agreed in the
st
by Ministry of Finance. The meeting of board The Group adopted this new standard since 1
January 2018. The adoption of this standard did not
enterprises listed in Mainland and of directors held lead to the significant changes in revenue
abroad simultaneously should in 22nd August recognition. It had no effect on the net profit, total
assets and total liabilities of the Group.
adopt the standard since 1st 2018. 。
January 2018, while others should
adopt it since 1st January 2020.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(30) Critical accounting estimates (Continued)
(b) Changes in accounting policies (Continued)
The content and reasons of
Procedures Remarks
changes in accounting policies
(1) The percentages of voting interests held by
the Group in Shanghai Guoda Shuguang
Pharmacy Co., Ltd, Shanghai Guoren
Pharmacy Co., Ltd., Sinopharm Holding Hubei
Guoda Pharmacy Co., Ltd., Hunan Zhongbai
pharmaceutical investment Co., Ltd. and
Sinopharm Health Online Co., Ltd. are 25%,
Notice on Issuing and Revising 10%, 10%, 6.31% and 8.06%, respectively.
Accounting Standard No. 22 – However, the Group neither appoint the
directors and key management for those 5
Recognization and Measurement companies, nor involve in or affect the financial
of Financial Instruments, No. 23 – or operating decision-making process or
ordinary course of business of those
Transfer of Financial Instruments, Agreed in the companies. Therefore, the Group had no
No. 24 – Hedging Instruments, and meeting of board significant influence over the above companies
and recognized its investments in those
No.37 – Disclosures of Financial of directors held companies as available-for-sale equity
Instruments were announced by in 22nd August instruments. The Group recorded these assets
as available-for-sale financial assets. After
Ministry of Finance in 2017. The 2018. adopting new standard, these assets were
enterprises listed in Mainland and recorded in financial assets measured at fair
value through other comprehensive income.
abroad simultaneously should The alteration had no effect on the retained
adopt the standard since 1st earnings, other comprehensive income and
other data in comparative period.
January 2018, while others should (2) According to the new standard, the Group
adopt it since 1st January 2019. should assess the expected credit losses
associated with its financial assets measured at
amortized cost on a forward looking basis. The
impairment methodology applied depends on
whether there has been a significant increase in
credit risk. The management considered that
although the Group adopted new standard, it
could still assess the provision of bad debt on
the grouping basis. And it had no significant
effect on the financial statements of the Group.
102
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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
using the taxable sales amount multiplied by the effective
Value added tax (“VAT”) tax rate less deductible VAT input of the current period) 0%,3%,5%,6%,10%,11%,16% or 17%
Revenue from rental income, interest income and etc.
Business tax (from 1 January 2016 to 30 April 2016) 5%
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 2014, the Group’s subsidiary Sinopharm Holding Guangxi Logistics Co., Ltd. (“Sinopharm
Guangxi Logistics”) was approved by the Guangxi Local Tax Bureau to enjoy a tax discount
applicable to corporations in the region of Western Development to pay income tax at a tax rate of
15%. In 2016，due to the real estate relocation income, the operating revenue’s proportion is
below 70%, which does not meet the requirements of the preferential tax rate, so Sinopharm
Guangxi Logistics was subject to a corporate income tax rate of 25% during the year.
From May to December of 2015, eight subsidiaries in Guangxi Province of the Group, including
Sinopharm Guangxi, Sinopharm Holding Liuzhou Co., Ltd. (“Sinopharm Liuzhou”) , Sinopharm
Holding Beihai 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 Baise”)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 rate 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.
103
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
IV Taxation (Continued)
2. Tax preferences (Continued)
(b) The Urumqi Head Office, Changji Branch and Karamay Branch of Sinopharm Holding Xinjiang New
& Special Medicines Chain Store Co., Ltd. (“Xinjiang New & Special Medicines”), a subsidiary of
the Group, shall pay tax at a rate of 15% by jurisdictions According to the Circular 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 reduced
CIT rate of 15% from 1 January 2011 to 31 December 2020. According to the reply to Registration
Form for Items Enjoying Preferential Treatments in Corporate Income Tax by local tax authorities,
in 2016 and 2017, the Urumqi Head Office, Changji Branch and Karamay Branch of Xinjiang New
& Special Medicines were subject to a reduced CIT rate of 15%.
According to Ning cai (shui) fa [2012] No.957, Ningxia Guoda Pharmacy Chain Store Co., Ltd., a
subsidiary of the Group, was qualified for the enterprise from encouraged industries of Western
Development. Therefore, in 2016 and 2017, the company was exempt from the local retained
portion of the corporate income tax (40%), and therefore subject to a CIT rate of 15%.
According to Cai shui [2011] No.58 and Notices on Tax Reduction and Exemption (Hu shi hui guo
shui deng zi [2014] No. 37), Sinopharm Holding Guoda Neimenggu Pharmacy Chain Store Co.,
Ltd., a subsidiary of the Group, was entitled to the preferential tax rate for the further development
of the Western Regions. Therefore the company is entitled to a preferential CIT rate of 15%.
According to the tax reduction and exemption conditions under the Circular of Local Taxation
Bureau of the Autonomous Region on Printing and Distributing the Administration and
Implementation Measures for Preferential Corporate Income Tax (Gui di shui fa [2009] No. 150),
Sinopharm Holding Guoda Guangxi Pharmacy Chain Store Co., Ltd., received the Written Decision
on Approval and Confirmation of Preferential Tax from local taxation bureau of Liuzhou city on 21
May 2015, which approved that the company was subject to a CIT rate of 15% in 2016 and 2017.
(c) The Corporate Income Tax Law of the People's Republic of China stipulates in Article 28 that,
small low-profit enterprises are subject to corporate income tax at a rate of 20%. The
Implementation Rules for the Corporate Income Tax Law of the People's Republic of China
stipulate in Article 92 that, small low-profit enterprises refer to enterprises operating in industries
not restricted or prohibited by the State and satisfying following conditions: 1. For industrial
enterprises, the annual taxable income does not exceed RMB300,000; the number of employees
does not exceed 100 and the total assets does not exceed RMB30 million; 2. for other industries,
the annual taxable income does not exceed RMB300,000; the number of employees does not
exceed 80 and the total assets does not exceed RMB10 million.
In addition, according to the Circular on Issues Concerning the Preferential Policies for Corporate
Income Tax for Small Low-profit Enterprises (Cai shui [2015] No. 34), Announcement of the State
Administration of Taxation on Issues concerning the Implementation of the Further Expansion of
the Scope of Small Low-profit Enterprises (Cai shui [2015] No.99), small low-profit enterprises with
annual taxable income of RMB300,000 or less enjoy a tax reduction of 50% of the income and
pays income tax at a rate of 20%. That is, the applicable corporate income tax rate is 10%.
104
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements
1. Cash and bank balances
30 June 2018 31 December 2017
Cash on hand 3,721,460.75 6,208,674.32
Cash at banks 3,588,994,326.62 3,667,290,017.16
Other cash balances 350,879,773.21 518,156,747.03
3,943,595,560.58 4,191,655,438.51
At 30 June 2018, other cash balances were consisted of letter credit deposits amounting to
RMB228,116.00 (31 December 2017: RMB258,800.00), bank acceptance notes deposits amounting to
RMB350,651,657.21 (31 December 2017: RMB514,638,979.04). At the peiod end, there was no pledge
loans deposits (31 December 2017: RMB3,258,967.99).
2. Notes receivable
30 June 2018 31 December 2017
Trade acceptance notes 750,395,988.43 584,211,909.22
Bank acceptance notes 271,301,381.78 919,982,854.86
1,021,697,370.21 1,504,194,764.08
At 30 June 2018 and 31 December 2017, there were no notes receivable that were pledged
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
2. Notes receivable (Continued)
Notes receivable endorsed or discounted by the Group to other parties which were not yet due at
30 June 2018 and 31 December 2017 are as follows:
30 June 2018
Derecognized Not derecognized
Trade acceptance notes - 209,881,899.63
Bank acceptance notes 706,198,208.44 -
706,198,208.44 209,881,899.63
As at 30 June 2018 and 31 December 2017, notes that were converted into accounts receivable
due to the drawer’s inability to settle the note on maturity date are as follows:
30 June 2018
Bank acceptance notes 868,060.00
Trade acceptance notes 14,804,431.01
15,672,491.01
3. Accounts receivable
The accounts receivable by category are analyzed below:
30 June 2018 31 December 2017
Gross carrying amount Provision for bad debt Gross carrying amount Provision for bad debt
Amount Proportion Amount Proportion Amount Proportion Amount Proportion
Individually
significant
items for
which
provision for
bad debt is
recognized
separately 575,496,544.28 6.07% 11,858,368.75 2.06% 497,346,019.41 6.52% 11,968,509.21 2.41%
Items for
which
provision for
bad debt is
recognized by
group 8,860,337,753.97 93.43% 28,158,497.05 0.32% 7,106,178,799.93 93.09% 26,069,970.29 0.37%
Not
individually
significant
Items for
which
provision for
bad debt is
recognized
separately 47,417,171.54 0.50% 1,692,236.80 3.57% 29,813,325.95 0.39% 5,886,985.91 19.75%
9,483,251,469.79 100.00% 41,709,102.60 0.44% 7,633,338,145.29 100.00% 43,925,465.41 0.58%
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
3. Accounts receivable (Continued)
At 30 June 2018, accounts receivable that are individually significant and individually assessed for
provisions are as follows:
Accounts receivable(by Carrying Bad debt
company) amount provision Rate Assessment for impairment
Receivable of medical Part of the medical insurance
insurance receivable takes longer to
425,708,736.16 282,897.53 0.07% collect, and has risk of default
Receivable of E-Business Receivable of E-Business with no
47,432,657.88 - 0.00% risk of recoverability
Receivable of Franchises Receivable of Franchises with no
43,303,952.30 16,292.93 0.04% risk of recoverability
Sinopharm Group Co., Ltd. Receivable due from a related
party with low risk of
30,140,408.15 - 0.00% recoverability
Daton Xin Jian Kang Receivable due from a fixed
Hospital cooperative hospital with no
17,351,611.50 - 0.00% risk of recoverability
Receivable of medical Part of the medical insurance
insurance receivable takes longer to
11,559,178.29 11,559,178.29 100.00% collect, and has risk of default
Total 575,496,544.28 11,858,368.75 - -
The accounts receivable for which the Group recognized provision for bad debt using the aging
analysis method are presented as follows
30 June 2018
Carrying amount Bad debt provision
Amount Amount Proportion
Within 1 year 8,817,097,861.51 24,372,754.71 0.28%
1 to 2 years 33,418,766.48 1,918,465.80 5.74%
2 to 3 years 5,871,978.85 660,521.64 11.25%
Over 3 years 3,949,147.13 1,206,754.90 30.56%
8,860,337,753.97 28,158,497.05 0.32%
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
3. Accounts receivable (Continued)
The provision for bad debt was RMB7,628,609.34 in 30 June 2018, including RMB9,827,439.11
recovered or reversed. Important recovered or reversed bad debt items are listed below:
Recovered or Way of
reversed amount recovery
Guangdong Tasly Yue Jian Pharmaceutical Co., 4,083,065.20 Amount
Ltd. received due
to the lawsuit
Tianjin Social Security Fund Management Centre 200,000.00 Amount
reversed
Yunfu People’s Hospital 172,831.60 Amount
received
People’s Hospital of Deqing County 96,757.20 Amount
received
Zhaoqing Chinese Medical Hospital 84,623.81 Amount
received
Health Centre of Heshan City Yayao Town 54,698.00 Amount
received
Others 140,430.23 Amount
received
4,832,406.04
Accounts receivable written off in 30 June 2018 are analysed below:
Company Amount
Shenzhen Bainian Out-patient Department
28,571.84
Nature of the Procedure performed Related party transaction or
Company receivable Amount Reason not
Shenzhen Bainian Out- Receivables Written off according to
patient Department of goods sold 28,571.84 Non-recoverable company policy No
As at 30 June 2018, 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 648,539,647.93 1,806,641.25 6.84%
In 30 June 2018, accounts receivable of RMB1,703,007,115.68 have been factored to a
financial institute.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
4. Advances to suppliers
(a) The aging of advances to suppliers is analyzed below:
30 June 2018 31 December 2017
Amount % of total balance Amount % of total balance
Within 1 year 451,853,929.99 98.95% 507,613,407.19 98.23%
1 to 2 years 3,573,044.24 0.78% 7,410,774.78 1.43%
2 to 3 years 1,253,250.00 0.27% 1,753,935.50 0.34%
Above 3 years - 0.00% - 0.00%
456,680,224.23 - 516,778,117.47 -
The prepayment aged for more than a year is mainly the advance made by South Pharma &
Trade to suppliers for equipment to be resold to the hospitals amounting to RMB4,826,294.24 (31
December 2017: RMB9,164,710.28) as the hospital equipment procurement is a large project and
takes a long time to complete.
(b) As at 30 June 2018, the top five advances to suppliers by customer are summarized below:
Amount Proportion of total balance
Total amount of top five advances to suppliers 47,114,151.95 10.32%
5. Interest receivable
30 June 2018 31 December 2017
Fixed deposits - -
Entrusted Loans 47,507.80 61,441.11
47,507.80 61,441.11
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
6. Other receivables
(a) Other receivables and related provision for bad debts by category are analyzed below:
30 June 2018 31 December 2017
Bad debt Bad debt
Carrying amount provision Carrying amount provision
Amount % Amount % Amount % Amount %
Individually significant
and subject to
separate
impairment
assessment 217,091,197.85 30.37% 9,268,199.70 4.27% 355,636,071.62 52.84% 8,980,000.00 2.53%
Receivable accounts
with similar credit
risk 485,835,323.29 67.95% 4,122,008.68 0.85% 282,169,420.65 41.93% 2,782,712.61 0.99%
Individually not
significant but
individually
evaluated for
impairment 12,028,679.44 1.68% 2,892,969.02 24.05% 35,176,616.14 5.23% 3,348,337.26 9.52%
714,955,200.58 100.00% 16,283,177.40 2.28% 672,982,108.41 100.00% 15,111,049.87 2.25%
(b) As at 30 June 2018, impairment provision for other receivables individually significant are
analyzed as below:
Bad debt
Amount provision Rate Assessment for impairment
Shanghai Shyndec Receivable due from a related party with low
Pharmaceutical Co., Ltd. risk of recoverability
(“Morden Pharma”) 101,166,758.92 - -
Deposit Cash deposit, no risk of recoverable, no
95,782,045.77 288,199.70 0.30% provision
Shanghai Roche Price reduction compensation for DTP
Pharmaceutical Co., Ltd. 11,162,393.16 - - medicine
Shenzhen YinghaiTechnology The ageing is over 5 years
Investment Co., Ltd 8,980,000.00 8,980,000.00 100.00%
217,091,197.85 9,268,199.70 -
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
6. Other receivables (Continued)
(c) Provisions for impairment of the receivables which are within a similar risk group are analyzed
below:
30 June 2018
Carrying amount Bad debt provision
amount Amount Rate
Within 1 year 456,116,259.07 2,147,110.50 0.47%
1 to 2 years 10,122,384.98 152,153.35 1.50%
2 to 3 years 4,810,948.33 436,170.53 9.07%
Above 3 years 14,785,730.91 1,386,574.30 9.38%
485,835,323.29 4,122,008.68 0.85%
(d)
Nature 30 June 2018 31 December 2017
Deposits 271,993,381.60 226,111,186.83
Receivable due from related parties 114,539,922.50 127,922,489.88
Petty cash advance to employees 16,905,695.03 13,392,873.34
Entrusted borrowings 44,000,000.00 44,000,000.00
Receivable of equity transactions 8,980,000.00 8,980,000.00
Others 258,536,201.45 252,575,558.36
714,955,200.58 672,982,108.41
(e) Bad debt provision of other receivables in 2018 was RMB2,284,955.11 (2017: RMB747,448.78),
with the recovered or reversed amount of RMB1,112,827.58 (2017: 929,511.16 ).
(f) There were no other receivables written off in the current year.
(g) As at 30 June 2018，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
Within 2
Morden Pharma Recivables of merge 101,166,758.92 year 14.15% -
Guangdong Pharmaceutical Pharmaceutical trading platform Within 1
electronic trading platform repayment not yet cleared 90,619,946.24 year 12.67% -
Sinopharm Group Zhijun (Suzhou) Entrusted borrowings
Pharmaceutical Co., Ltd. Within 1
(“Zhijun Suzhou”) 44,000,000.00 year 6.15% -
TCM-Integrated Cancer Center of Deposit of logistics extension Within 1
Southern Medical University services project 30,000,000.00 year 4.20% -
Shenyang Social Security Within 1
Administration Medical insurance deposi 26,870,049.18 year 3.76% -
292,656,754.34 40.93% -
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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 2018 31 December 2017
Book value Provision Net book value Book value Provision Net book value
Raw materials 1,526,166.46 - 1,526,166.46 1,181,095.08 - 1,181,095.08
Work in progress 1,252,296.05 - 1,252,296.05 129,098.02 - 129,098.02
Finished goods 4,243,417,987.75 6,667,841.42 4,236,750,146.33 3,785,146,957.42 6,840,110.55 3,778,306,846.87
Low cost consumables 5,826,016.38 - 5,826,016.38 2,241,198.15 - 2,241,198.15
4,252,022,466.64 6,667,841.42 4,245,354,625.22 3,788,698,348.67 6,840,110.55 3,781,858,238.12
(b) Provision for declines in value of inventories is analysed below:
Increases Decreases
1 January 2018 Reversal or 30 June 2018
charge Other Other
Written off
Finished goods 6,840,110.55 2,390,647.06 2,562,916.19 - 6,667,841.42
6,840,110.55 2,390,647.06 2,562,916.19 - 6,667,841.42
(c) Provision of inventories is determined according to the gap between the net realizable value and
the inventory book value.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
8. Other current assets
30 June 2018 31 December 2017
Input VAT to be credited 91,576,950.50 78,014,460.84
Corporate income tax to be deducted 192,702.06 933,183.78
Others - -
91,769,652.56 78,947,644.62
9. Financial assets available-for-sale
（1） Financial assets available-for-sale
30 June 2018 31 December 2017
Book value Provision Net book value Book value Provision Net book value
Available-for-sale
equity instruments 13,685,760.00 - 13,685,760.00 13,865,760.00 180,000.00 13,685,760.00
- Measured at cost - - - 13,865,760.00 180,000.00 13,685,760.00
- Measured at fair
value through other
comprehensive
income 13,685,760.00 - 13,685,760.00 - - -
13,685,760.00 - 13,685,760.00 13,865,760.00 180,000.00 13,685,760.00
（2） Financial assets available-for-sale measured at fair value
Equity investments Debt instrument
Classificantion Total
available for sale available for sale
Fair value 13,685,760.00 - 13,685,760.00
Notice:
According to “CSA No.22- Financial Instrument Measurement and Recognition” and “CSA No.37- Financial
Instrument Disclosure”, the boarder regonized the assets as financial assets measured at fair value
through other comprehensive income
113
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
9. Financial assets available-for-sale
（3） Financial assets available-for-sale measured at cost
Carrying amount Impairment provision Shareholding
Investee
Opening Increase Decrease Closing Opening Increase Decrease Closing (%) received for the year
Sinopharm Health Online
Co., Ltd. 12,000,000.00 - (12,000,000.00) - - - - - 8.06 -
Sinopharm Holding Hubei
Guoda Pharmacy Co., Ltd. 1,000,000.00 - (1,000,000.00) - - - - - 10.00 -
Hunan Zhongbai
pharmaceutical investment
Co., Ltd. 315,000.00 - (315,000.00) - - - 6.31 31,500.00
Shanghai Guoda Shuguang
Pharmacy Co., Ltd. 270,760.00 - (270,760.00) - - - - - 25.00 -
Xinxiang Golden Elephant. 180,000.00 - (180,000.00) - (180,000.00) - 180,000.00 - 18.00 -
Shanghai Guoren Pharmacy
Co., Ltd. 100,000.00 - (100,000.00) - - - - - 10.00 -
13,865,760.00 - 13,865,760.00 - (180,000.00) - 180,000.00 - - 31,500.00
114
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
10. Long-term equity investments
Associates in 2018
Changes in the year
Provision for
Investee 1 January 2018 Cash dividend 30 June 2018
Additional Profit of loss under Other changes in impairment
declared by Other
Investment equity method equity
investee
Associates
Shenzhen Main Luck Pharmaceutical Inc. 239,046,738.14 - 29,983,887.32 - - - 269,030,625.46 -
(“Main Luck Pharmaceutical”).
Zhijun Medicine 291,042,921.20 - 61,373,560.78 - (58,111,254.57) - 294,305,227.41 -
Zhijun Trade 7,676,142.69 - 853,674.01 - (664,795.03) - 7,865,021.67 -
Zhijun Suzhou 46,199,728.91 - (10,671,086.78) - - - 35,528,642.13 -
Pingshan Medicine 68,686,804.33 - 15,453,485.62 - (9,719,480.71) - 74,420,809.24 -
Morden Pharma 979,174,050.62 - 65,661,682.41 397,342.21 (8,641,853.20) 193,639.30 1,036,784,861.34 -
Shanghai Beiyi Guoda Pharmaceutical Co. Ltd. 9,518,694.65 - 659,783.20 - - - 10,178,477.85 -
Shanghai Liyi Pharmacy Co., Ltd. 771,408.05 - - - - - 771,408.05 -
Sinopharm Jienuo Medical Treatment Service
8,502,884.50 - (652,715.21) - - - 7,850,169.29 -
Guangdong Co., Ltd. (“Guangdong Jie nuo”)
Shanghai Dingqun Management & Consulting
- 20,000,000.00 - - - - 20,000,000.00 -
Co. , Ltd
Dongyuan Accord Pharmaceutical Chain Co., 396,638.32 - - - - - 396,638.32 396,638.32
Ltd.
1,651,016,011.41 20,000,000.00 162,662,271.35 397,342.21 (77,137,383.51) 193,639.30 1,757,131,880.76 396,638.32
115
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
11. Investment properties
Subsequent measurement under the cost model:
2018 Buildings and
constructions Land use right Total
Original cost
Opening balance 245,932,518.64 23,370,084.72 269,302,603.36
Purchase 45,481.13 - 45,481.13
Transfer from fixed assets 4,605,965.69 - 4,605,965.69
Transfer to fixed assets 6,209,855.73 - 6,209,855.73
Transfer to intangible assets 470,783.88 - 470,783.88
Closing balance 243,903,325.85 23,370,084.72 267,273,410.57
Accumulated
depreciation and
amortization
Opening balance 106,139,314.25 8,184,950.00 114,324,264.25
Provision 4,506,346.47 249,314.66 4,755,661.13
Transfer from fixed assets 1,192,262.29 - 1,192,262.29
Transfer to fixed assets 3,420,626.15 - 3,420,626.15
Transfer to intangible assets 287,874.74 - 287,874.74
Closing balance 108,129,422.12 8,434,264.66 116,563,686.78
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 year 134,473,903.73 14,935,820.06 149,409,723.79
At beginning of the year 138,493,204.39 15,185,134.72 153,678,339.11
（2）The fixed asset failing to accomplish certification of title
Carrying amount Reason for outstanding property right
Items
certificates
Sinopharm Guangxi Logistics leased the
property. As at 30 June 2018, the original cost
is RMB70,085,820.00 and the Accumulated
depreciation and amortization is
Reconstruction of old RMB4,756,023.60. The certification of title is in
town 65,329,796.40 progress.
116
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
12. Fixed assets
2018
Fixed asset
Buildings Machinery Vehicles Other equipment Total
improvements
Original cost
Opening balance 456,161,611.21 183,752,571.14 87,999,790.56 259,281,585.41 30,111,198.47 1,017,306,756.79
Purchase 11,609,004.98 7,511,943.05 2,537,492.46 8,854,897.18 6,106,795.57 36,620,133.24
Transfer from construction in progress - 2,066,324.80 - - - 2,066,324.80
Transfer from Investment properties 6,209,855.73 - - - - 6,209,855.73
Business combination not involving enterprises under
- - - - - -
common control
Transfer to Investment properties 4,605,965.69 - - - - 4,605,965.69
Disposal of subsidiaries - - - - - -
Disposal or retirement - 1,176,437.95 3,672,293.82 1,263,162.39 1,110,799.64 7,222,693.80
Closing balance 469,374,506.23 192,154,401.04 86,864,989.20 266,873,320.20 35,107,194.40 1,050,374,411.07
Accumulated depreciation
Opening balance 149,119,755.22 73,601,067.33 59,221,772.87 154,689,144.23 28,964,583.12 465,596,322.77
Provision 6,394,173.54 11,961,644.96 3,796,763.45 9,720,011.38 6,493,533.09 38,366,126.42
Transfer from Investment properties 3,420,626.15 - - - - 3,420,626.15
Transfer to Investment properties 1,192,262.29 - - - - 1,192,262.29
Disposal of subsidiaries - - - - - -
Disposal or retirement - 1,037,763.79 3,142,894.82 979,173.35 759,134.31 5,918,966.27
Closing balance 157,742,292.62 84,524,948.50 59,875,641.50 163,429,982.26 34,698,981.90 500,271,846.78
117
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
12. Fixed assets (Continued)
2018(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 year 311,632,213.61 107,629,452.54 26,989,347.70 103,443,337.94 408,212.50 550,102,564.29
At beginning of the year 307,041,855.99 110,151,503.81 28,778,017.69 104,592,441.18 1,146,615.35 551,710,434.02
118
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
12. Fixed assets (Continued)
(a) Fixed assets held under finance leases are presented as follows:
2018
Original cost Accumulated depreciation Provision for impairment Carrying amount
Machinery 25,065,579.83 8,994,037.20 - 16,071,542.63
(b) Fixed assets without official property right certificates
Items Carrying amount Reason for outstanding property right certificates
Buildings 27,867,743.48 In the process
(c) As at 30 June 2018, there were no fixed assets that were leased under operating leases.
119
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
13. Construction in progress
30 June 2018 31 December 2017
Carrying Provision for Provision for
balance impairment Carrying amount Carrying balance impairment Carrying amount
Warehouse improvement project 3,563,091.66 - 3,563,091.66 1,009,314.93 - 1,009,314.93
New office building project 1,056,812.98 - 1,056,812.98 765,882.63 - 765,882.63
Supply chain extension project 8,234,723.40 - 8,234,723.40 8,193,935.70 - 8,193,935.70
Software project 8,038,066.18 - 8,038,066.18 3,926,271.33 - 3,926,271.33
Other projects 9,913,179.89 - 9,913,179.89 9,051,854.40 - 9,051,854.40
30,805,874.11 - 30,805,874.11 22,947,258.99 - 22,947,258.99
120
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
13. Construction in progress (Continued)
(a) Changes of significant construction in progress
Changes of significant construction in progress in 2018 are presented as follows:
Decrease
Proportion of
At beginning of Source of
Project name Budget Increase Transfer to long At end of year investment to
the year Disposal of funds
Transferred to fixed Transferred to term prepaid Others budget (%)
subsidiaries
assets intangible assets expense
Warehouse improvement
project 6,808,651.57 1,009,314.93 3,919,831.35 - - - - 1,366,054.62 3,563,091.66 Other 70.65%
New office building Project 1,410,920.18 765,882.63 290,930.35 - - - - - 1,056,812.98 Other 86.80%
Supply chain extension
project 32,144,615.39 8,193,935.70 2,107,112.50 2,066,324.80 - - - - 8,234,723.40 Other 87.41%
Software project 10,880,000.00 3,926,271.33 4,111,794.85 - - - - - 8,038,066.18 Other 30.00%
Other construction projects 207,890,962.32 9,051,854.40 1,939,425.82 - - - - 1,078,100.33 9,913,179.89 Other 5.21%
259,135,149.46 22,947,258.99 12,369,094.87 2,066,324.80 - - - 2,444,154.95 30,805,874.11 - -
121
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
13. Construction in progress (Continued)
(a) Changes of significant construction in progress（Continued）
Accumulated amount of Incl: interest capitalized Capitalization
Project name Budget Progress（%）
interest capitalized in current year rate (%)
Warehouse improvement project 6,808,651.57 70.65% - - -
New office building project 1,410,920.18 86.80% - - -
Supply chain extension project 32,144,615.39 87.41% - - -
Software project 10,880,000.00 30.00% - - -
Other construction projects 207,890,962.32 5.21% - - -
259,135,149.46 - - - -
For the six month ended 30 June 2018, the original cost of construction in progress transferred to fixed assets amounted to RMB2,066,324.80 (For the six month
ended 30 June 2017: RMB1,687,272.11), the original cost of construction in progress transferred to long term prepaid expense amounted to RMB2,444,154.95
(For the six month ended 30 June 2017: RMB14,725,268.66) and there is no construction in progress transferred to intangible assets (For the six month ended 30
June 2017: RMB15,395,443.32).
122
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
14. Intangible assets
2018 Land use right Software Sales network Trademarks Franchise Total
Original cost
Opening balance 60,481,989.28 126,128,809.36 112,117,142.86 159,219,850.00 710,000.00 458,657,791.50
Purchase - 1,925,352.60 - - - 1,925,352.60
Transfer from construction in
progress - - - - - -
Transfer from investment properties 470,783.88 - - - - 470,783.88
Disposal of subsidiaries - - - - - -
Transfer to investment properties - - - - - -
Transfer to long term prepaid expense - - - - - -
Disposal or retirement 1,210,000.00 1,210,000.00
Closing balance 59,742,773.16 128,054,161.96 112,117,142.86 159,219,850.00 710,000.00 459,843,927.98
Accumulated amortization
Opening balance 26,667,841.47 55,408,075.33 35,086,476.18 15,033,967.64 710,000.00 132,906,360.62
Provision 288,177.06 6,268,956.05 2,802,928.57 2,472,852.94 - 11,832,914.62
Transfer from investment properties 287,874.74 - - - - 287,874.74
Disposal of subsidiaries - - - - - -
Transfer to investment properties - - - - - -
Transfer to long term prepaid expense - - - - - -
Disposal or retirement - - - - - -
Closing balance 27,243,893.27 61,677,031.38 37,889,404.75 17,506,820.58 710,000.00 145,027,149.98
221
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
14. Intangible assets (Continued)
2018 (Continued) Land use right Software Sales network Trademarks Franchise Total
Provision for impairment
Opening balance - - - - - -
Disposal of subsidiaries - - - - - -
Closing balance - - - - - -
Carrying amount
At end of the year 32,498,879.89 66,377,130.58 74,227,738.11 141,713,029.42 - 314,816,778.00
At beginning of the year 33,814,147.81 70,720,734.03 77,030,666.68 144,185,882.36 - 325,751,430.88
124
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
14. Intangible assets (Continued)
As at 30 June 2018, there were no intangible assets arising from internal research and
development (30 June 2017: none)
As at30 June 2018, intangible assets without the right certificates as below,
Items Carrying amount Reason for outstanding property right certificates
Land use 4,000,000.00 In the process
right
221
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
15. Goodwill
(1) Goodwill cost
30 June 2018 Opening balance Increase Decrease Closing balance
Jiangmen Renren Medical Co., Ltd.
(“Sinopharm Jiangmen”) 27,392,317.73 - - 27,392,317.73
Sinopharm Holding Shenzhen
Yanfeng Co., Ltd. (“Sinopharm
Yanfeng”) 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 ForMe
Pharmacy Chain Store Co., Ltd.
(“ForMe Pharmacy Chain Store”) 19,405,450.23 - - 19,405,450.23
Sinopharm Holding Guoda Shanxi
Yiyuan Pharmacy Chain Store Co.,
Ltd. 9,080,100.00 - - 9,080,100.00
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
Guoda Shenyang Tianyitang
Pharmacy Chain 1,687,942.92 - - 1,687,942.92
Sinopharm Holding Guoda Shenyang
Pharmacy Chain Store Co., Ltd. 39,360,015.16 - - 39,360,015.16
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
Shanxi Guoda Wanmin Pharmacy
Chain Store Co., Ltd. 65,025,000.00 - - 65,025,000.00
Sinopharm Holding Hunan Guoda
Minshengtang Pharmacy Chain
Co., Ltd. 41,165,574.64 - - 41,165,574.64
Liyang Guoda People Pharmacy
Chain Store Co., Ltd. 107,275,095.74 - - 107,275,095.74
126
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
15. Goodwill (Continued)
(1)Goodwill cost (Continued)
Increase Decrease
30 June 2018 (Continued) Opening balance Business combination not Closing balance
involving enterprises under
common control Disposal
Sinopharm Holding Guoda Henan
Pharmacy Chain Store Co., Ltd. 22,666,179.77 - - 22,666,179.77
Sinopharm Holding Guoda
Neimenggu Pharmacy Chain Store
Co., Ltd. 70,485,777.00 - - 70,485,777.00
Sinopharm Guoda Pharmacy
Jiangmen Chain Co., Ltd. 77,350,000.00 - - 77,350,000.00
Fujian Guoda Pharmacy Chain Store
Co., Ltd. 1,567,250.76 - - 1,567,250.76
Sinopharm Holding Guoda Pharmacy
Chain Store Shanghai Co., Ltd. 5,028,638.00 - - 5,028,638.00
Beijing Golden Elephant Pharmacy
Medicine Chain Company Limited
(“Beijing Golden Elephant”) 63,546,507.81 - - 63,546,507.81
Beijing Yangqiao Rongzhi Golden
Elephant Pharmacy Company
Limited 593,616.55 - - 593,616.55
Xiaoyi Guoda Wanmin Baicaotang
Pharmacy Chain Store Co., Ltd.
(“Xiaoyi Wanmin”) 15,866,680.00 - - 15,866,680.00
Shijiazhuang Lerentang Yikang
Pharmacy Chain Store Co., Ltd.
(“Hebei Yikang”) 29,482,149.57 - - 29,482,149.57
Shenzhen Guanganli Pharmacy Chain
Store Co., Ltd. store acquisition 13,420,000.00 - - 13,420,000.00
Guoda Taishan 26,826,120.55 - - 26,826,120.55
855,729,152.75 - - 855,729,152.75
127
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
15. Goodwill (Continued)
(2)Provision of impairment loss
Changes in provision for impairment of goodwill are presented as follows:
2018 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 asset groups and groups of asset groups is calculated by using the
estimated cash flows according to the five-year budget approved by management. Management
determines budgeted gross margin based on historical experience and forecast on market
development. The discount rates determined by management are the pre-tax interest rates which
reflect the risks specific to the related asset groups and groups of asset groups. The above
assumptions are used to assess the recoverable amount of each asset group and group of asset
groups within the corresponding operating segment.
16. Long-term prepaid expenses
2018 Opening balance Additions Amortization Other decrease Closing balance
Fixed asset improvement
expenditure 199,209,837.80 47,172,150.82 37,044,188.47 1,059,643.27 208,278,156.88
Acquisition expenditure to
obtain the right to operate 49,013,331.48 4,191,488.00 3,801,140.68 - 49,403,678.80
Others 4,023,881.51 161,478.68 792,968.47 - 3,392,391.72
252,247,050.79 51,525,117.50 41,638,297.62 1,059,643.27 261,074,227.40
128
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
17. Deferred tax assets/liabilities
(a) Deferred tax assets before offseting
30 June 2018 31 December 2017
Deductible temporary Deductible temporary
differences Deferred tax assets differences Deferred tax assets
Provision for
impairment of assets 65,649,831.79 15,142,434.13 66,273,264.14 16,274,860.36
Deductible tax loss 92,143,605.37 22,824,595.10 115,556,647.93 28,705,915.53
Accrued payroll 38,401,349.70 9,046,959.71 60,250,524.89 14,540,506.81
Accrued expenses 83,904,219.01 20,394,682.93 47,994,796.55 11,141,862.66
Deferred revenue 29,041,585.51 7,198,990.94 30,837,426.91 7,540,824.20
Others 6,946,672.66 1,462,475.52 5,424,788.24 1,268,913.50
316,087,264.04 76,070,138.33 326,337,448.66 79,472,883.06
(b) Deferred tax liabilities before offseting
30 June 2018 31 December 2017
Taxable temporary Taxable temporary
differences Deferred tax liabilities differences Deferred tax liabilities
Fair value adjustment
for business
combination not
involving enterprises
under common
control 233,836,821.08 58,459,205.27 239,773,296.84 59,943,324.20
Changes in fair value 45,620,230.45 11,405,057.61 53,300,601.31 11,939,928.82
279,457,051.53 69,864,262.88 293,073,898.15 71,883,253.02
Deferred tax assets and liabilities are presented after being offset against each other:
30 June 2018 31 December 2017
Deferred tax Temporary Deferred tax Temporary
assets/liabilities - differences assets/liabilities - differences
Net after set-off Net after set-off
Deferred tax assets 76,070,138.33 79,472,883.06
Deferred tax liabilities 69,864,262.88 71,883,253.02
129
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
17. Deferred tax assets/liabilities (Continued)
(c) The deductible temporary differences and deductible losses that were not recognized as
deferred tax assets are presented as follows:
30 June 2018 31 December 2017
Deductible temporary differences 886,927.95 1,480,000.00
Deductible loss (i) 21,759,547.45 21,759,547.45
22,646,475.40 23,239,547.45
(i) For those loss-making subsidiaries, as it is not considered probable that taxable profit will be
available against which the tax losses can be utilized, the Group has not recognized deferred
tax assets arising from accumulated losses amounting to RMB21,759,547.45 which are tax
deductible under the tax law.
The aforesaid unrecognized deductible losses will due:
30 June 2018 31 December 2017
2018 2,970,715.21 2,970,715.21
2019 3,159,690.78 3,159,690.78
2020 4,835,260.23 4,835,260.23
2021 2,641,220.49 2,641,220.49
2022 8,152,660.74 8,152,660.74
21,759,547.45 21,759,547.45
(note) As some subsidiaries are still making loss, and it’s uncertainty that the loss-making subsidiarie
can obtain enough taxable income to offset against the loss in the future. So the group do not
recognised deferred tax assets which came from the deductible loss of RMB 21,759,547.45 .
130
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
18. Other non-current assets
30 June 2018 31 December 2017
Prepayment for investment (Note 1) 60,000,000.00 60,000,000.00
Physical assets reserve specifically
authorized 43,002,651.70 45,074,249.27
Prepayment for a rental fee (Note 2) 13,728,510.39 17,506,780.28
Prepayment for project and equipment 13,495,723.15 19,441,433.20
130,226,885.24 142,022,462.75
Note 1 On March 2017, the Group subscribed to Sinopharm Zhongjin medical industry fund, as
its limited partner. The total investment which amounted to RMB200 million, will be paid within 3
years gradually. The total amount paid unitl now was 30% of the total investment which was
RMB60 million. The amount which should be paid in current year have not been settled.
Note 2: The prepayment for a rental fee which is over one year is recognized at other non-
current assets for the Group.
19. Short-term borrowings
30 June 2018 31 December 2017
Credit borrowings 1,841,257,752.04 1,413,638,993.97
Discounted notes 209,881,899.63 147,715,527.67
2,051,139,651.67 1,561,354,521.64
As at 30 June 2018, the annual interest rate for the above borrowings was 4.65% (31
December 2017: 4.34%).
As at 30 June 2018, credit borrowings of RMB1,423,611,601.11 were guaranteed by the
Company and its subsidiaries (31 December 2017: credit borrowings of RMB1,156,302,581.02
were guaranteed by the Company and its subsidiaries.), guaranteed borrowings of
RMB122,986,581.52 (31 December 2017: RMB147,715,527.67) were guaranteed by
Sinopharm Group.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
20. Notes payable
30 June 2018 31 December 2017
Commercial acceptance notes 40,893,576.65 60,129,565.95
Bank acceptance notes 2,332,734,564.21 2,672,308,262.47
2,373,628,140.86 2,732,437,828.42
At 30 June 2018，balance of notes payable at maturity was RMB0.00. (31 December 2017：RMB
19,900.00).
21. Accounts payable
30 June 2018 31 December 2017
Trade payables 7,230,024,480.35 6,144,221,000.10
At 30 June 2018, the total amount of accounts payable aged over one year was
RMB391,213,598.73(31 December 2017: RMB269,295,585.18 ), and the payment has not yet
been cleared.
22. Advances from customers
30 June 2018 31 December 2017
Sales received in advance 178,425,087.30 216,938,239.32
At 30 June 2018, the total amount of accounts payable aged over one year was
RMB3,598,442.48(31 December 2017: RMB16,618,324.72).
23. Employee benefits payable
At beginning of At end of the
2018 the year Increase Decrease year
Short-term employee
benefits (a) 209,320,163.70 828,379,586.12 897,398,633.92 140,301,115.90
Post-employment
benefits (defined
contribution plan)(b) 5,596,277.12 83,185,725.88 78,979,669.66 9,802,333.34
Termination benefits (c) 740,085.72 587,663.14 745,755.84 581,993.02
215,656,526.54 912,152,975.14 977,124,059.42 150,685,442.26
132
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
23. Employee benefits payable (Continued)
(a) Short-term employee benefits
At beginning of
2018 year Increase Decrease At end of year
Salaries, bonuses, allowances
and grants 193,078,506.49 721,571,753.11 790,541,221.26 124,109,038.34
Staff welfare 2,602,805.92 21,451,963.99 22,876,399.30 1,178,370.61
Social security contribution 1,363,649.32 41,911,740.91 40,873,381.07 2,402,009.16
Incl: Medical insurance 1,130,984.41 37,059,846.24 36,185,027.55 2,005,803.10
Work injury insurance 10,541.55 1,788,839.75 1,680,745.39 118,635.91
Maternity insurance 222,123.36 3,063,054.92 3,007,608.13 277,570.15
Housing funds 929,089.33 28,300,167.29 28,485,275.01 743,981.61
Labor union funds and
employee education funds 10,178,562.87 14,254,035.42 13,705,147.37 10,727,450.92
Other short-term benefits 1,167,549.77 889,925.40 917,209.91 1,140,265.26
Total 209,320,163.70 828,379,586.12 897,398,633.92 140,301,115.90
(b) Defined contribution plan
At beginning of
2018 year Increase Decrease At end of year
Basic pension
insurance 1,739,623.34 79,178,966.66 76,578,569.12 4,340,020.88
Unemployment
insurance 221,831.21 2,274,056.40 2,062,541.82 433,345.79
Contribution to
pension fund 3,634,822.57 1,732,702.82 338,558.72 5,028,966.67
5,596,277.12 83,185,725.88 78,979,669.66 9,802,333.34
Note：
For half year of 2018, the Group provided other termination benefits for severing labor relations of
RMB69,075.00 (2017: RMB117,149.03).
133
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
24. Tax payable
30 June 2018 31 December 2017
Value-added tax 82,014,625.51 85,843,903.33
Corporate Income taxes 100,059,775.47 102,947,883.38
Individual income tax payable 11,467,041.74 3,921,305.41
City maintenance and construction surtax 7,179,360.17 6,691,713.89
Educational surcharge payable 5,219,506.77 4,862,588.43
Water conservancy fund payable 5,216,011.64 5,356,119.89
Stamp duty 3,350,847.10 4,166,596.91
Property tax 811,622.69 971,268.99
Land use tax payable 187,073.98 513,790.48
Others 7,845,865.69 8,477,729.53
223,351,730.76 223,752,900.24
25. Interest payable
30 June 2018 31 December 2017
Interest payable
- interest on long-term borrowings 35,440.24 38,984.28
- interest on short-term borrowings 10,316,727.99 6,968,878.69
Factoring interest paybale 10,856.93 -
Interest payable to former shareholder 15,188.75 303,956.68
10,378,213.91 7,311,819.65
26. Dividend payable
30 June 2018 31 December 2017
Shanghai Fosun Pharmaceutical (Group) Co., Ltd. 4,835,511.58 4,835,511.58
Luqi Zhong 1,853,188.06 4,103,188.06
Lunan Zhong 345,928.44 765,928.44
Xiangjun Zhong 271,800.92 601,800.92
Meiluo Pharmaceutical Co., Ltd. 164,170.07 164,170.07
Ganyin Bai 29,204.73 29,204.73
Zhenfang Zhang 1,389,639.31 1,389,639.31
8,889,443.11 11,889,443.11
134
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
27. Other payables
30 June 2018 31 December 2017
Payables for factoring programs 305,380,394.63 388,729,758.59
Deposit 231,443,810.46 129,662,851.39
Payables arising from acquisition of
subsidiaries 80,432,813.17 109,445,960.00
Payables for construction in progress and
equipment 50,543,206.13 98,293,860.11
Accrued selling and distribution expenses 128,398,461.81 96,065,832.84
Payables to individuals 49,879,370.07 34,316,089.64
Payables for rentals 13,320,632.62 27,766,119.66
Payables for land transfer payments 18,071,000.00 18,071,000.00
Payables to related parties 20,450,723.24 15,817,669.33
Temparary loan 15,800,000.00 15,800,000.00
Collection of others 18,182,500.61 8,430,347.08
Others 92,273,791.37 68,728,908.62
1,024,176,704.11 1,011,128,397.26
At 30 June 2018, other payables due within 1 year amounted to RMB 184,112,776.75(31 December
2017: RMB 136,676,639.91 ). It is mainly consisted of construction cost payable, company
borrowings payable, deposits and etc.
28. Non-current liabilities due within 1 year
30 June 2018 31 December 2017
Finance lease payables 5,651,227.56 5,434,770.70
5,651,227.56 5,434,770.70
135
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
29. Other current liabilities
30 June 2018 31 December 2017
Output VAT to be recognized 114,239.45 112,817.65
30. Long-term borrowings
30 June 2018 31 December 2017
Credit borrowings (a) 31,600,000.00 31,600,000.00
31,600,000.00 31,600,000.00
(a) At 30 June 2018, the entrusted borrowings of RMB31,600,000.00 were provided by Sinopharm
Group through Group Financial Co.
At 30 June 2018, the annual interest rate of above-mentioned borrowings was 4.04% (31 December
2017: 4.40%).
31. Long-term payables
30 June 2018 31 December 2017
Finance lease payables 12,255,803.40 14,767,307.84
Less: due within one year (5,651,227.56) (5,434,770.70)
6,604,575.84 9,332,537.14
32. Long-term employee benefits payable
30 June 2018 31 December 2017
Early retirement benefits payable 1,636,000.00 1,777,000.00
Less: Retirement benefits payable –
- -
within 1 year (Note V (24)(c))
1,636,000.00 1,777,000.00
33. Payable for specific projects
2018
At beginning of year Increase Decrease At end of year
Special funds granted by
government 800,000.00 - - 800,000.00
136
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
34. Deferred income
Reasons of derred
2018 Opening balance Increase Decrease Closing balance income
Government
Government grants
grants 96,725,183.34 - 2,663,153.60 94,062,029.74
Promotion
The fair value of
Rewards
28,357,189.19 1,189,038.59 1,612,877.41 27,933,350.37 promotion rewards
Program
125,082,372.53 1,189,038.59 4,276,031.01 121,995,380.11
As at 30 June 2018, 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) 78,253,849.73 - 1,349,204.28 - 76,904,645.45 Asset related
Guangxi Logistics Project 6,949,832.98 - - 248,203.20 6,701,629.78 Asset related
Logistics standardization
project 3,361,259.39 - - 273,123.42 3,088,135.97 Asset related
A comprehensive
experimental modern
service industry
subsidies 1,800,000.00 - - 150,000.00 1,650,000.00 Asset related
Shared Logistics Center
(completed) 270,858.75 - - 9,400.20 261,458.55 Asset related
Other projects 6,089,382.49 - - 633,222.50 5,456,159.99 income related
96,725,183.34 - 1,349,204.28 1,313,949.32 94,062,029.74
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 obtain 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. Cash 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 (18)).
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 straight
line method (Note V(71)), and the other cash compensation, which amount approximates to RMB26.93
million, was recognized in the income statement in 2012.
137
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
35. Other non-current liabilities
30 June 2018 31 December 2017
Governmental medical reserve
funds 45,427,343.31 45,427,343.31
Certain 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
2018 At beginning of year At end of year
Shares 428,126,983.00 428,126,983.00
37. Capital surplus
2018 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
Transition reserves from
investments in associates
reclassified from capital surplus to
other comprehensive income 2,020,250.22 - - 2,020,250.22
Transfer of capital surplus
recognized under the previous
accounting system 2,650,322.00 - - 2,650,322.00
Others (115,324,057.69) 397,342.21 - (114,926,715.48)
3,181,429,064.99 397,342.21 - 3,181,826,407.20
Capital surplus-others increased by RMB397,342.21 when other changes in equity of Modern
Pharmaceutical resulted in adjustment of long-term equity investment and an increase of capital
surplus by RMB397,342.21.
138
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
38. Surplus reserve
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 2018 31 December 2017
Retained earnings at the end of the prior year 5,572,952,806.39 4,689,189,642.51
A business combination involving enterprises under
common control - 1,076,241.59
Retained earnings at beginning of year after
retrospective adjustment and restatement 5,572,952,806.39 4,690,265,884.10
Add: Net profit attributable to the parent 641,727,034.93 1,057,791,930.67
Deduct: Withdrew surplus reserve - (32,747,520.00)
Ordinary share cash dividends payable (128,438,094.90) (141,281,904.39)
Others - (1,075,583.99)
Retained earnings at end of year 6,086,241,746.42 5,572,952,806.39
40. Operating revenue and cost
For the six months ended For the six months ended
30 June 2018 30 June 2017
Revenue Cost Revenue Cost
main operations 20,606,027,974.57 18,355,002,752.42 20,372,097,755.35 18,352,591,276.82
Other operating 173,138,725.10 12,640,971.42 152,709,914.22 11,443,174.01
20,779,166,699.67 18,367,643,723.84 20,524,807,669.57 18,364,034,450.83
139
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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 2018 30 June 2017
City maintenance and construction tax 22,352,680.77 24,931,171.70
Educational surcharge 16,112,625.97 18,243,233.02
Property tax 3,075,856.41 3,345,273.43
Land tax 245,070.74 172,937.56
Vehicle and vessel use tax 98,966.20 98,180.93
Stamp duty 14,200,426.96 14,569,034.12
Others 534,900.20 1,825,790.10
56,620,527.25 63,185,620.86
42. Selling expenses
For the six month ended For the six month ended 30 June
30 June 2018 2017
Employees payroll and welfare
benefits 659,176,548.69 582,798,944.53
Rental expenses 322,805,173.33 285,053,247.11
Transportation charges 33,086,676.72 29,416,679.32
Depreciation expenses 26,125,384.59 21,860,957.80
Promotion and marketing expenses 18,454,328.54 16,881,877.36
Office allowances 16,283,197.98 15,153,489.34
Entertainment expenses 11,357,532.12 11,158,406.02
Storage expenses 14,866,861.14 23,155,581.32
Travel allowances 3,415,890.36 3,425,411.69
Market development fees 3,255,084.76 250,938.26
Conference expenses 1,654,991.62 2,800,521.29
Others 163,107,086.22 118,490,884.13
1,273,588,756.07 1,110,446,938.17
140
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
43. Administrative expenses
For the six month ended For the six month ended
30 June 2018 30 June 2017
Employees payroll and welfare benefits 248,803,724.84 237,320,475.09
Rental expenses 18,347,245.83 17,030,347.32
Depreciation expenses 12,732,380.45 14,130,107.15
Office allowances 11,877,499.56 13,498,455.92
Amortization of intangible assets 8,272,613.85 7,873,617.35
Entertainment expenses 6,428,775.38 5,878,571.05
Amortization of long-term deferred
expenses 4,518,905.10 4,478,646.05
Vehicle management expenses 4,435,451.82 4,100,271.65
Travel allowances 4,323,679.13 3,538,432.83
Utilities 2,713,666.76 3,714,057.62
Taxations 2,241,415.79 4,087,147.80
Conference expenses 2,059,875.35 718,993.59
Repairing fees 1,624,550.73 1,665,071.14
Others 23,440,279.19 22,601,856.55
351,820,063.78 340,636,051.11
44. Finance costs
For the six month ended For the six month ended
30 June 2018 30 June 2017
Interest expenses 83,356,367.18 59,569,071.77
Less: Interest income (23,082,233.56) (17,460,371.42)
Cash discount (21,542,580.44) (13,655,314.59)
Exchanges loss/(gain) 329,665.40 (283,622.22)
Others 18,480,325.74 16,329,015.22
57,541,544.32 44,498,778.76
141
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
45. Impairment loss
For the six month ended For the six month ended
30 June 2018 30 June 2017
Inventories provision 508,849.26 (836,741.23)
Bad debt allowance (1,026,702.24) 933,498.39
Impairment in fixed assets - -
Impairment in goodwill - -
(517,852.98) 96,757.16
46. Investment income
For the six month ended For the six month ended
30 June 2018 30 June 2017
Investment income from long-term equity investments
162,662,271.35 146,775,417.29
under the equity method
Investment income from disposal of subsidiaries - -
Gain from remeasurement of fair value of remaining
equity interest upon loss of control - -
Investment income from available-for-sale financial
31,500.00 50,000.00
assets
Remeasurement loss of fair value when achieved
subsidary in stages - (99,377.39)
162,693,771.35 146,726,039.90
47. Gain on disposal of assets
For the six month ended For the six month ended
30 June 2018 30 June 2017
Gain on disposal of fixed assets 389,144.70 554,192.50
Gain on disposal of intangible assets 3,892,019.91 -
Gain on disposal of other non-current assets - (69,106.84)
4,281,164.61 485,085.66
48. Other income
For the six month ended For the six month ended
30 June 2018 30 June 2017
Government grants related to 10,589,212.57 7,958,493.67
daily activities
142
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
49. Non-operating income
For the six month For the six month Amount classified as
ended ended non-recurring profit or
30 June 2018 30 June 2017 loss
Government grants (Note a) 1,349,204.28 1,349,204.28 1,349,204.28
Gain on disposal of non-current assets 2,303.00 1,363.70 2,303.00
Incl: Gain on disposal of fixed assets - - -
Gain from writing off the unnecessary
payment 2,898,512.62 2,249,156.84 2,898,512.62
Gain arising from donation - - -
Others 1,248,931.21 2,456,418.01 1,248,931.21
5,498,951.11 6,056,142.83 5,498,951.11
All non-operating income was wholly classified as non-recurring profit or loss for the six month ended
Note a:
Government grants which was recorded in profit or loss are as follow：
For the six month For the six month Related to asset/income
ended ended
30 June 2018 30 June 2017
Resettlement Compensation of Guangxi Asset related
Logistics 1,349,204.28 1,349,204.28
50. Non-operating expenses
For the six month ended For the six month ended Amount
30 June 2018 30 June 2017 classified as
non-recurring
profit or loss
Donation expenses 60,000.00 59,900.00 60,000.00
Losses on disposal of non-current
assets 28,525.01 284,142.93 28,525.01
Incl: Losses on disposal of fixed
assets 8,300.35 284,142.93 8,300.35
Penalty expenses 1,194,388.28 1,925,449.66 1,194,388.28
Others 514,379.51 1,290,495.50 514,379.51
1,797,292.80 3,559,988.09 1,797,292.80
Non-operating cost was wholly classified as non-recurring profit or loss for the six month ended
30 June 2018.
143
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
51. Income taxes
For the six month ended For the six month ended
30 June 2018 30 June 2017
Current income tax 163,102,979.73 162,853,639.57
Deferred income tax 1,383,754.59 (2,812,531.94)
164,486,734.32 160,041,107.63
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 2018
Total profit 853,735,744.23
Income taxes calculated at applicable tax rates 213,433,936.06
Lower tax rates enacted by local authorities (12,404,268.99)
Adjustment of income tax expense of previous year (799,186.91)
Income not subject to tax (40,673,442.84)
Expenses not deductible for tax 4,061,292.94
Utilization of previously unrecognized tax losses 16,701.91
Deductible loss on unconfirmed deferred tax assets at end
of the year 951,711.58
Impact of the temporary discrepancy on unconfirmed
deductible deferred tax assets at end of the year (100,009.43)
Income tax 164,486,734.32
144
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
52. Notes to items in the cash flow statement
(a) Cash receipts related to other operating activities
2018 2017
Government grants except tax return 10,345,223.64 1,349,204.28
Rent income 37,793,728.50 28,140,527.98
Operational restricted bank deposits received 88,156,799.79 4,067,748.35
Interest income 22,642,258.30 17,412,415.01
Others 153,046,777.37 47,052,933.05
311,984,787.60 98,022,828.67
(b) Cash paid relating to other operating activities
2018 2017
Rental expenses 341,152,419.16 302,083,594.43
Entertainment expenses 17,786,307.50 17,036,977.07
Shipping expenses 33,086,676.72 29,416,679.32
Travel expenses 7,739,569.49 6,963,844.52
Storage expenses 14,866,861.14 23,155,581.32
Office expenses 28,160,697.54 28,651,945.26
Advertising expenses 18,454,328.54 16,881,877.36
Others 377,222,116.67 222,065,660.72
838,468,976.76 646,256,160.00
(c) Cash received relating to other investing activities
2018 2017
Received Entrusted loan payments
44,000,000.00 -
from Zhijun Suzhou
Received funds of acquiring
4,680,000.00 -
Sinopharm Guangzhou Huadu
Received deposits returned by
- 75,259,200.00
Shyndec
Others 86,145.15 11,768,140.19
48,766,145.15 87,027,340.19
145
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
52. Notes to items in cash flow statement (Continued)
Cash paid relating to other
(d)
investing activities
2018 2017
Entrusted loan payments to Zhijun
43,999,800.00 44,000,000.00
Suzhou
Others - 26,175,078.90
43,999,800.00 70,175,078.90
Cash received relating to other
(e)
financing activities
2018 2017
Received bank factoring money - 59,676,813.84
Received security deposit of pledged
79,825,164.60 31,255,582.91
borrowings
Others 3,920,000.00 -
83,745,164.60 90,932,396.75
Cash payments relating to other
(f)
financing activities
2018 2017
Repayment of bank factoring 64,002,739.23 -
Cash paid for acquisition of non-controlling
54,722,980.00 158,996,642.00
interests
Repayment of entrusted borrowings
- 13,415,363.07
provided by Sinopharm Group
Others - 6,579,569.60
118,725,719.23 178,991,574.67
146
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
53. 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 2018 30 June 2017
Net profit 689,249,009.91 599,533,739.02
Adjustments: Provision for asset impairment (506,814.18) 422,321.11
Depreciation of fixed assets and investment
38,366,126.42 35,222,304.68
properties
Amortization of intangible assets 11,832,914.62 12,273,709.34
Amortization of long-term prepaid expenses 41,638,297.62 31,374,523.14
Gains on disposal of fixed assets, and other
(4,254,942.60) (202,306.43)
non-current assets
Financial expenses 82,449,854.36 28,528,443.16
Investment income (162,693,771.35) (146,726,039.90)
Decrease/(increase) of deferred tax assets 3,402,744.73 (1,641,139.11)
Decrease of deferred tax liabilities (2,018,990.14) (2,666,680.74)
Decrease/(increase) of inventory (463,324,117.97) 113,733,297.36
(Increase)/decrease in operating receivables
(1,298,602,834.11) (1,127,697,064.94)
items
Increase/(decrease) in operating payables
1,170,553,090.12 596,195,867.27
items
Others 119,267,141.77 89,986,457.44
Net cash generated from operating activities 225,357,709.20 228,337,431.40
147
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
53. Supplementary information of cashflow statement (Continued)
(c) Movement of cash
For the six month ended For the six month ended
30 June 2018 30 June 2017
Cash at end of year 3,592,715,787.37 3,024,190,631.97
Less: cash at beginning of year 3,673,498,691.48 3,150,915,425.49
Net increase in cash (80,782,904.11) (126,724,793.52)
(d) Acquisition of subsidiaries and operating units
For the six month ended
30 June 2018
Cash and cash equivalents paid for acquisitions
of subsidiaries and other business units 16,380,000.00
Incl: Sinopharm Zhuhai -
Sinopharm Guangzhou Huadu 16,380,000.00
Maoming Yongsheng Medicines Co., Ltd.
（Maoming Yongsheng） -
Less: Cash held by subsidiaries at the acquisition
date 21,146,145.15
Incl: Sinopharm Zhuhai -
Sinopharm Guangzhou Huadu 21,146,145.15 -
Maoming Yongsheng -
Net cash outflow on acquisition of the subsidiaries
and business units (4,766,145.15)
(e) Cash
30 June 2018 31 December 2017
Cash 3,592,715,787.37 3,673,498,691.48
Incl: Cash on hand 3,721,460.75 6,208,674.32
Bank deposits on demand 3,588,994,326.62 3,667,290,017.16
Ending banlance cash and
cash equivalent 3,592,715,787.37 3,673,498,691.48
148
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
54. Notes to changes in shareholders’ equity
Capital surplus-others increased by RMB397,342.21 when other changes in equity of Modern
Pharmaceutical resulted in adjustment of long-term equity investment and an increase of capital
surplus by RMB397,342.21.
55. Assets under restricted ownership or right to use
Book value Reasons
Deposits of bank acceptance notes,
Cash and cash equivalents 350,879,773.21 depostis for letter of credit
Notes receivable endorsed but not
due, notes receivable discounted but
Notes receivables 209,881,899.63 not due.
560,761,672.84
56. Foreign monetary items
30 June 2018
Original currency Exchange rate Equivalent to RMB
Short-term borrowings 10,000.00 6.3978 63,978.00
US dollar 10,000.00 6.3978 63,978.00
149
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VI. Changes in the scope of consolidation
1. Business combination not involving enterprises under common control
(1) Business combination not involving enterprises under common control during the current
period
Revenue of the Net income of the
Name of Equity Equity Equity Basis for entity acquired from entity acquired from
the entity acquisition Equity acquisition acquisition acquisition Date of determining the the acquisition date the acquisition date to
acquired date cost ratio method acquisition acquisition date to the end of period the end of period
Sinopharm
Holding
Guangzhou Acquisition of
Huadu Co., Apr.26th Apr.30th controlling
Ltd. 2018 16,380,000.00 70.00% Cash 2018 interest 0.00 (415,654.72)
Other information：
In April 2018, the Group increased capital in Guangzhou Honoka red Pharmaceutical Co., Ltd.
to 70% for RMB 16,380,000.00 to constitue a business combination involving enterprises not
under common control. After the increase of capital, Guangzhou Honoka red Pharmaceutical
Co., Ltd. changed it’s name to Sinopharm Holding Guangzhou Huadu Co., Ltd..The acquisition
was completed on April 30th 2018 and included in the consolidation scope of the company.
(2) Cost of combination and Goodwill
Sinopharm Holding
Cost of combination Guangzhou Huadu Co., Ltd.
Cash 16,380,000.00
Total cost of combination 16,380,000.00
Less: Fair value shares of identifiable net assets obtained 16,380,729.29
The amount of Goodwill / Cost of combination less than fair
value shares of identifiable net assets obtained (729.29)
Illustration for the method of determining fair value of the cost of combination and for contingent
consideration and its variation:
Fair value of the cost of combination is determined by the consideration actually paid.
(3) Identifiable assets and liabilities of the acquired entity on the acquisition date
Sinopharm Holding Guangzhou Huadu Co., Ltd.
Fair value Carrying amount
Cash and bank balances 16,466,145.15 16,466,145.15
Accounts receivable 8,111,461.42 8,111,461.42
Advances to suppliers 2,140,000.00 2,140,000.00
Other receivables 1,751,932.93 1,751,932.93
Accounts payable 244,940.00 244,940.00
Tax payables 1,341,300.52 1,341,300.52
Other payables 24,587,265.45 24,587,265.45
Net assets 2,296,033.53 2,296,033.53
Method of determining fair value of the identifiable assets and liabilities:
Determined by valuation price.
150
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VI. Changes in scope of consolidation (Continued)
2. Changes in scope of consolidation for other reasons
Establishment of subsidiaries:
30 June 2018 30 June 2018
Net assets Net profits Remarks
Sinopharm Holding Guoda Haohai New
Pharmacy Co., Ltd. (a) - - establishment
Sinopharm Holding Foshan Medical New
Consumables Supply Chain Co., Ltd. (b) 7,994,832.20 (5,167.80) establishment
Sinopharm Holding Medical Supply Chain New
Services (Guangxi) Co., Ltd. (c) 19,583,025.78 (416,974.22) establishment
Sinopharm Holding Baiyi Pharmacy New
Guangxi Co., Ltd. (d) 1,938,956.56 (61,043.44) establishment
a. On 18 January 2018, the Group and Shanghai Linhong Medical Equipment Co., Ltd. set up
Sinopharm Holding Guoda Haohai Pharmacy Co., Ltd. registered capital subscribed RMB
408,000.00 and RMB 392,000.00 respctively. As of 30 June 2018, funding has not yet been
completed.
b. On 30 January 2018, the Group and Shenzhen Qingniu Medical Investment Co., Ltd. set
upSinopharm Holding Foshan Medical Consumables Supply Chain Co., Ltd., subscription of
registered capital of RMB 8,000,000.00 for which the Group has indirect holding of 70%.
c. On 4 January 2018, the Group, Guorun Medical Supply Chain Service (Shanghai) Co., Ltd. and
Guangxi Deyiyuan Medical Investment Center (Limited Partnership) set upSinopharm Holding
Medical Supply Chain Services (Guangxi) Co., Ltd., registered capital subscribed
RMB6,120,000.00, RMB5,880,000.00 and RMB8,000,000.00 respectively. As of 30 June 2018,
fundings of RMB3,060,000.00, RMB2,940,000.00 and RMB4,000,000.00 has been completed
respectively.
d. On 24 April 2018, the Group and Baise Jian’an Medical Chain Co., Ltd. set upSinopharm
Holding Baiyi Pharmacy Guangxi Co., Ltd., registered capital subscribed RMB1,020,000.00 and
RMB980,000.00 respectively. As of 30 June 2018, funding has not yet been completed.
3. Cancellation of subsidiary
Registered Shareholding
Principal place Place of Nature of Reason for no longer
Subsidiaries capital (RMB
of business incorporation business Direct Indirect being a subsidiary
0.000)
Tangshan Wholesale
Lerentang and sales of
Pharmacy medicines
Chain Store and health
Co., Ltd.e Tangshan Tangshan 300 products - 100% Absorption merger
e. In March 2018, Tangshan Lerentang Pharmacy Chain Store Co., Ltd. completed industrial and
commercial cancellation procedures, and cancelled corporate body.
151
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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 - 100.00% Establishment
Sinopharm Baise Baise Baise Commercial - 100.00% Establishment
Sinopharm Holding
Zhongshan Co., Ltd.
(“Sinopharm
Zhongshan") Zhongshan Zhongshan Commercial 100.00% - Establishment
Sinopharm Guigang Guigang Guigang Commercial - 100.00% Establishment
Sinopharm Beihai Beihai Beihai Commercial - 100.00% Establishment
Guangzhou Medical
Treatment Guangzhou Guangzhou Commercial - 51.00% Establishment
Business
Shenzhen Jianmin combinations
Pharmaceutical Co., involving entities
Ltd. (“Sinopharm under common
Jianmin") Shenzhen Shenzhen Commercial 100.00% - control
Sinopharm Holding
Shenzhen Traditional & Business
Herbal Medicine Co., combinations
Ltd. (“Sinopharm involving entities
Traditional & Herbal under common
Medicine") Shenzhen Shenzhen Commercial 100.00% - control
Business
Sinopharm Holding combinations
Shenzhen Logistics involving entities
Co., Ltd. (“Shenzhen under common
Logistics") Shenzhen Shenzhen Services 100.00% - control
Business
Sinopharm Holding combinations
Guangzhou Co., Ltd. involving entities
(“Sinopharm under common
Guangzhou") Guangzhou Guangzhou Commercial 100.00% - control
Business
Sinopharm Holding combinations
Guangdong Hengxing involving entities
Co., Ltd. (“Sinopharm under common
Hengxing") Guangzhou Guangzhou Commercial 100.00% - control
Business
combinations
involving entities
under common
Sinopharm Yulin Yulin Yulin Commercial - 100.00% control
152
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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 place Place of Shareholding
Subsidiaries incorporation
Nature of business Ways of acquisition
of business Direct Indirect
Business combinations
involving entities under
Sinopharm Liuzhou Liuzhou Liuzhou Commercial 51.00% - common control
Business combinations
Guangdong Huixin Investment Co., involving entities under
Ltd. (“Huixin Investment”) Guangzhou Guangzhou Service 100.00% - common control
Business combinations
Sinopharm Holding Foshan Co., involving entities under
Ltd. (“Sinopharm Foshan") Foshan Foshan Commercial 100.00% - common control
Sinopharm Holding Guangdong Business combinations
Yuexing Co., Ltd. (“Sinopharm involving entities under
Yuexing”) Guangzhou Guangzhou Commercial 100.00% - common control
Sinopharm Holding Guangdong Business combinations
Logistics Co., Ltd. involving entities under
(“Guangdong Logistic”) Guangzhou Guangzhou Service 100.00% - common control
Business combinations
involving entities under
Sinopharm Guangxi Nanning Nanning Commercial 100.00% - common control
Business combinations
involving entities under
Guangxi Logistic Nanning Nanning Service - 100.00% common control
Business combinations
involving entities under
Sinopharm Wuzhou Wuzhou Wuzhou Commercial - 99.90% common control
Business combinations
Sinopharm Holding Dongguan Co., involving entities not under
Ltd. (“Sinopharm Dongguan") Dongguan Dongguan Commercial 100.00% - common control
Business combinations
Sinopharm Holding Zhanjiang Co., involving entities not under
Ltd. (“Sinopharm Zhanjiang") Zhanjiang Zhanjiang Commercial 100.00% - common control
Business combinations
Sinopharm Holding Yanfeng Co., involving entities not under
Ltd. (“Sinopharm Yanfeng ") Shenzhen Shenzhen Commercial 51.00% - common control
Business combinations
Sinopharm Holding Meizhou Co., involving entities not under
Ltd. (“Sinopharm Meizhou") Meizhou Meizhou Commercial 100.00% - common control
153
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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):
Shareholding
Principal place of Place of Nature of
Subsidiaries Ways of acquisition
business incorporation business Direct Indirect
Business combinations
Sinopharm Holding Huizhou Co., involving entities not under
Ltd.("Sinopharm Huizhou") Huizhou Huizhou Commercial 100.00% - common control
Business combinations
Sinopharm Holding Zhaoqing Co., involving entities not under
Ltd.("Sinopharm Zhaoqing") Zhaoqing Zhaoqing Commercial 100.00% - common control
Sinopharm Holding Jiangmeng Business combinations
Renren Medical Co., involving entities not under
Ltd.(“Sinopharm Jiangmen”) Jiangmen Jiangmen Commercial 100.00% - common control
Business combinations
Sinopharm Holding Shaoguan Co., involving entities not under
Ltd.("Sinopharm Shaoguan") Shaoguan Shaoguan Commercial 70.00% - common control
Business combinations
involving entities not under
Sinopharm Shantou Shantou Shantou Commercial 100.00% - common control
Business combinations
involving entities under
Foshan Nanhai Medicine Co., Ltd. Foshan Foshan Commercial 100.00% - common control
Business combinations
Foshan Nanhai Uptodate & Special involving entities under
Medicines Co., Ltd. Foshan Foshan Commercial - 100.00% common control
Business combinations
involving entities under
Foshan Nanhai Medicine Co., Ltd. Foshan Foshan Commercial - 100.00% common control
Business combinations
Guangdong Uptodate & Special involving entities under
Medicines Guangzhou Guangzhou Commercial 100.00% - common control
Business combinations
Guangdong South Pharmaceutical involving entities under
Foreign Trade Co., Ltd. Guangzhou Guangzhou Commercial 100.00% - common control
Business combination not
involving enterprises under
Sinopharm Zhuhai Zhuhai Zhuahai Commercial 100.00% - common control
Business combination not
involving enterprises under
Sinopharm Maoming Maoming Maoming Commercial 100.00% - common control
Sinopharm Holding Guangzhou
Medical Treatment Technology
Co., Ltd. Guangzhou Guangzhou Commercial - 51.00% Establishment
Sinopharm Holding Guangzhou
Medical Supply Chain Co., Ltd. Guangzhou Guangzhou Commercial - 51.00% Establishment
Business combination not
involving enterprises under
Sinopharm Heyuan Heyuan Heyuan Commercial - 70.00% common control
Sinopharm Holding Foshan Medical
Consumables Supply Chain
Co., Ltd. Foshan Foshan Commercial - 70.00% Establishment
Sinopharm Holding Medical Supply
Chain Services (Guangxi) Co.,
Ltd. Nanning Nanning Commercial - 30.60% Establishment
Sinopharm Holding Guoda Haohai
Pharmacy Co., Ltd. Shanghai Shanghai Commercial - 51.00% Establishment
Business combination not
Sinopharm Holding Guangzhou involving enterprises under
Huadu Co., Ltd. Guangzhou Guangzhou Commercial - 70.00% common control
Sinopharm Holding Baiyi Pharmacy
Guangxi Co., Ltd. Nanning Nanning Commercial - 51.00% Establishment
Business combinations
Sinopharm Holding Guoda involving entities under
Pharmacy Co., Ltd. Shanghai Shanghai Commercial - 100.00% common control
Sinopharm Holding Guoda Business combinations
Pharmacy Chain Store involving entities under
Shanghai Co., Ltd. Shanghai Shanghai Commercial - 100.00% common control
154
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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)
Subsidiaries Principal place Place of Nature of business Shareholding Ways of acquisition
of business incorporation
Direct Indirect
Beijing Guoda Pharmacy Business combinations involving
Chain Store Co., Ltd. Beijing Beijing Commercial - 100.00% entities under common control
Tianjin Guoda Pharmacy Business combinations involving
Chain Store Co., Ltd. Tianjin Tianjin Commercial - 80.00% entities under common control
Guangxi Guoda Pharmacy
Consulting Chain Store Business combinations involving
Co., Ltd. Nanning Nanning Commercial - 100.00% entities under common control
Sinopharm Holding Guoda
Pharmacy Guangdong Business combinations involving
Co., Ltd. Shenzhen Shenzhen Commercial - 100.00% entities under common control
Sinopharm Guoda
Pharmacy Guangxi Business combinations involving
Chain Co., Ltd. Liuzhou Liuzhou Commercial - 100.00% entities under common control
Zhejiang Guoda Pharmacy Business combinations involving
Co., Ltd. Hangzhou Hangzhou Commercial - 100.00% entities under common control
Sinopharm Holding Guoda
Yangzhou Dadesheng
Pharmacy Chain Store Business combinations involving
Co., Ltd. Yangzhou Yangzhou Commercial - 93.68% entities under common control
Ningxia Guoda Pharmacy Business combinations involving
Chain Store Co., Ltd. Yinchuan Yinchuan Commercial - 70.00% entities under common control
Sinopharm Holding Guoda
Nanjing Pharmacy Chain Business combinations involving
Store Co., Ltd. Nanjing Nanjing Commercial - 60.00% entities under common control
Sinopharm Holding Guoda
Shandong Pharmacy Business combinations involving
Chain Store Co., Ltd. Linyi Linyi Commercial - 55.00% entities under common control
Sinopharm Holding Guoda
Shenyang Pharmacy Business combinations involving
Chain Store Co., Ltd. Shenyang Shenyang Commercial - 51.00% entities under common control
Fujian Guoda Pharmacy Business combinations involving
Chain Store Co., Ltd. Xiamen Xiamen Commercial - 100.00% entities under common control
155
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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)
Subsidiaries Principal place Place of Nature of Shareholding Ways of acquisition
of business incorporation business
Direct Indirect
Business combinations
Anhui Guoda Pharmacy Chain involving entities under
Store Co., Ltd. Hefei Hefei Commercial - 60.00% common control
Business combinations
Quanzhou Guoda Pharmacy involving entities under
Chain Store Co., Ltd. Quanzhou Quanzhou Commercial - 51.00% common control
Business combinations
Shanxi Guoda Wanmin Pharmacy involving entities under
Chain Store Co., Ltd. Taiyuan Taiyuan Commercial - 85.00% common control
Sinopharm Holding Hunan Guoda Business combinations
Minshengtang Pharmacy involving entities under
Chain Co., Ltd. Hengyang Hengyang Commercial - 51.00% common control
Business combinations
Liyang Guoda People Pharmacy involving entities under
Chain Store Co., Ltd. Liyang Liyang Commercial - 80.00% common control
Sinopharm Holding Guoda Henan Business combinations
Pharmacy Chain Store Co., involving entities under
Ltd. Pingdingshan Pingdingshan Commercial - 60.00% common control
Sinopharm Holding Guoda Business combinations
Neimenggu Pharmacy Chain involving entities under
Store Co., Ltd. Hohhot Hohhot Commercial - 96.70% common control
Sinopharm Hebei Lerentang Business combinations
Pharmacy Chain Store Co., involving entities under
Ltd. Shijiazhuang Shijiazhuang Commercial - 60.00% common control
Business combinations
Sinopharm Guoda Pharmacy involving entities under
Jiangmen Chain Co., Ltd. Jiangmen Jiangmen Commercial - 65.00% common control
Sinopharm Holding Guoda Shanxi Business combinations
Yiyuan Pharmacy Chain Store involving entities under
Co., Ltd. Taiyuan Taiyuan Commercial - 80.00% common control
Sinopharm Holding Xinjiang New Business combinations
& Special Medicines Chain involving entities under
Store Co., Ltd. Urumqi Urumqi Commercial - 51.00% common control
Sinopharm Holding Guoda ForMe Business combinations
Medicines (Shanghai) Co., involving entities under
Ltd. Shanghai Shanghai Commercial - 97.00% common control
Sinopharm Holding Guoda ForMe
Pharmacy Chain Store Co.,
Ltd. (Formerly “Shanghai Business combinations
ForMe YiXing Pharmacy involving entities under
Chain Store Co., Ltd.”) Shanghai Shanghai Commercial - 99.76% common control
156
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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)
Subsidiaries Principal place Place of Nature of Shareholding Ways of acquisition
of business incorporation business
Direct Indirect
Beijing Golden Elephant Business combinations
Pharmacy Medicine Chain involving entities under
Company Limited Beijing Beijing Commercial - 53.13% common control
Business combinations
Shanxi Tongfeng Pharmacy involving entities under
Logistics Co., Ltd. Taiyuan Taiyuan Commercial - 100.00% common control
Datong Guoda Wanmin Business combinations
Pharmacy Chain Store involving entities under
Co., Ltd. Datong Datong Commercial - 100.00% common control
Changzhi Guoda Wanmin Business combinations
Pharmacy Chain Store involving entities under
Co., Ltd. Changzhi Changzhi Commercial - 51.00% common control
Shanxi Guoda Wanmin Clinic Business combinations
Management Chain Co., involving entities under
Ltd. Taiyuan Taiyuan Medical services - 100.00% common control
Business combinations
Shanghai Guoda Shanghong involving entities under
Qibao Pharmacy Co., Ltd. Shanghai Shanghai Commercial - 51.00% common control
Zhejiang Intlmedicine Business combinations
Pharmacy Dongshan Co., involving entities under
Ltd. Hangzhou Hangzhou Commercial - 51.00% common control
Business combinations
Shanghai Guoda Dongsheng involving entities under
Pharmacy Co., Ltd. Shanghai Shanghai Commercial - 100.00% common control
Sinopharm Guoda Drug Store Business combinations
(Shenzhen) Chain Co., involving entities under
Ltd. Shenzhen Shenzhen Commercial - 100.00% common control
Sinopharm Holding Guoda Business combinations
Pharmacy Guangzhou involving entities under
Chain Co., Ltd. Guangzhou Guangzhou Commercial - 100.00% common control
Business combinations
Shanghai Guoda Changxin involving entities under
Pharmacy Co., Ltd. Shanghai Shanghai Commercial - 100.00% common control
Shanghai Guodong Chinese Business combinations
Traditional Medicine Clinic involving entities under
Co., Ltd. Shanghai Shanghai Medical clinic - 100.00% common control
Shanghai Guoda Dongxin Business combinations
Pharmacy Chain Store involving entities under
Co., Ltd. Shanghai Shanghai Commercial - 100.00% common control
157
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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)
Subsidiaries Principal place of Place of Nature of business Shareholding Ways of acquisition
business incorporation
Direct Indirect
Shanghai Yutaitang Chinese Business combinations
Traditional Medicine involving entities under
Clinic Co., Ltd. Shanghai Shanghai Commercial - 100.00% common control
Beijing Yangqiao Rongzhi
Golden Elephant Business combinations
Pharmacy Company involving entities under
Limited Beijing Beijing Commercial - 50.79% common control
Sanhe Liyang Golden Business combinations
Elephant Pharmacy Co., involving entities under
Ltd. Langfang Langfang Commercial - 100.00% common control
Xiaoyi Guoda Wanmin Business combinations
Baicaotang Pharmacy involving entities under
Chain Store Co., Ltd. Xiaoyi Xiaoyi Commercial - 70.00% common control
Sinopharm Holding Guoda Business combinations
Pharmacy Hulun Buir involving entities under
Co., Ltd. Hulun Buir Hulun Buir Commercial - 51.00% common control
Shijiazhuang Lerentang Business combinations
Yikang Pharmacy Chain involving entities under
Store Co., Ltd. Shijiazhuang Shijiazhuang Commercial - 100.00% common control
Business combinations
Shanghai ForMe Pharmacy involving entities under
Co., Ltd. Shanghai Shanghai Commercial - 100.00% common control
Sinopharm Holding Ulanqab
Co., Ltd. Ulanqab Ulanqab Commercial - 60.00% Establishment
Sinopharm Guoda Business combinations
Pharmacy Qinhuangdao involving entities under
Chain Co., Ltd. Qinhuangdao Qinhuangdao Commercial - 51.00% common control
Taishan Sinopharm Holding
Guoda Qunkang Business combinations
Pharmacy Chain Store involving entities under
Co., Ltd. Taishan Taishan Commercial - 70.00% common control
Beijing Golden Elephant Business combinations
Fuxing Technology Co., involving entities under
Ltd. Beijing Beijing Commercial - 80.00% common control
mbinations involving
entities under common
Sinopharm Lerentang Shijiazhuang Shijiazhuang Commercia - 100% control
GuoDa Drugstore Manzhouli
Co., Ltd Manzhouli Manzhouli Commercial - 51.00% Establishment
Sinopharm Guoda
Pharmacy Maanshan
Chain Store Co., Ltd. Anshan Anshan Commercial - 51.00% Establishment
Sinopharm Guoda
Pharmacy Yongsheng
(Shanghai) Co., Ltd. Shanghai Shanghai Commercial - 55.00% Establishment
Sanhe Lixin Golden
Elephant Pharmacy Co.,
Ltd. Langfang Langfang Commercial - 100.00% Establishment
158
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VII. Interests in other entities (Continued)
2. Interests in associates
Principal place Place of Nature of
Shareholding(%)
of business incorporation business Accounting
Direct Indirect
Associates
Shenzhen Main Luck
Pharmaceutical Co., Ltd.
("Main Luck
Pharmaceutical ") Shenzhen Shenzhen Manufacturing 35.19% - Equity
Sinopharm Group
Zhijun(Suzhou)
Pharmaceutical Co., Ltd. Suzhou Suzhou Manufacturing 33.00% - Equity
Sinopharm Group
Zhijun(Shenzhen)
Pharmaceutical Co., Ltd. Shenzhen Shenzhen Manufacturing 49.00% - Equity
Shenzhen Zhijun
Pharmaceutical Trade Co.,
Ltd. Shenzhen Shenzhen Commercial 49.00% - Equity
Sinopharm Group
Zhijun(Shenzhen) Pingshan
Pharmaceutical Co., Ltd. Shenzhen Shenzhen Manufacturing 49.00% - Equity
Shanghai Shyndec
Pharmaceutical Co., Ltd.
(“Shyndec
Pharmaceutical”) Shanghai Shanghai Manufacturing 16.00% - Equity
上海鼎群企业管理咨询有限公
Shanghai Shanghai 2.53% Equity
司 商务服务业
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
Dongyuan accord
pharmaceutical chain
Co., Ltd. Heyuan Heyuan Commercial - 45.00% Equity
Accoding to the Articles of Association and investment aggrement, the board of directors of Shanghai
Dingqun Enterprise Management Consulting consisted of three directors, in which one were appointed by
the Group, accounting for 33.33% of voting rights.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VII. Interests in other entities (Continued)
3. Summarised financial information of significant associate
30 June 2018 30 June 2017
Shanghai Shyndec Shanghai Shyndec
Pharmaceutical Co., Ltd. Pharmaceutical Co., Ltd.
Current assets 8,210,661,752.98 6,919,923,607.58
Non-current assets 8,136,876,492.43 8,250,667,440.18
Total assets 16,347,538,245.41 15,170,591,047.76
Current liabilities 6,124,167,753.55 5,390,426,266.96
Non-current liabilities 2,190,226,473.72 2,132,391,027.26
Total liabilities 8,314,394,227.27 7,522,817,294.22
Non-controlling interests 1,502,385,107.44 1,474,395,375.11
Shareholders’ equity attributable
to shareholders of the parent 6,530,758,910.70 6,173,378,378.43
Portion of net assets calculated
by shareholding ratio 1,036,784,861.34 979,174,050.63
Carrying value of equity
investment in joint ventures 1,036,784,861.34 979,174,050.63
Operating revenue 5,853,255,169.05 4,579,660,856.59
Net profit 575,258,204.58 524,753,028.55
Total comprehensive income 575,258,204.58 524,753,028.55
Dividends received from joint
ventures this year 8,641,853.20 22,468,818.32
VIIl. Risks related to financial instruments
1. Classification of financial instruments
The fair values of each category of financial instruments that reasonably approximate to their
carrying amounts at the end of the reporting period are as follows:
30 June 2018
Borrowings and Available-for-sale Total
Financial assets receivables financial assets
Cash and bank balances 3,943,595,560.58 - 3,943,595,560.58
Notes receivable 1,021,697,370.21 - 1,021,697,370.21
Accounts receivable 9,441,542,367.19 - 9,441,542,367.19
Interest receivable 47,507.80 - 47,507.80
Other receivables 698,672,023.18 - 698,672,023.18
Available-for-sale financial 13,685,760.00
assets - 13,685,760.00
15,105,554,828.96 13,685,760.00 15,119,240,588.96
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VIIl. Risks related to financial instruments (Continued)
1. Classification of financial instruments (Continued)
31 December 2017
Borrowings and Available-for-sale Total
Financial assets receivables financial assets
Cash and bank balances 4,191,655,438.51 - 4,191,655,438.51
Notes receivable 1,504,194,764.08 - 1,504,194,764.08
Accounts receivable 7,589,412,679.88 - 7,589,412,679.88
Interest receivable 61,441.11 - 61,441.11
Other receivables 657,871,058.54 - 657,871,058.54
Available-for-sale financial 13,685,760.00
assets - 13,685,760.00
13,943,195,382.12 13,685,760.00 13,956,881,142.12
Financial liabilities 30 June 2018 31 December 2017
Short-term borrowings 2,051,139,651.67 1,561,354,521.64
Notes payable 2,373,628,140.86 2,732,437,828.42
Accounts payable 7,230,024,480.35 6,144,221,000.10
Dividends payable 8,889,443.11 11,889,443.11
Other payables 1,024,176,704.11 1,011,128,397.26
Non-current liabilities due within one year 5,651,227.56 5,434,770.70
Interest payable 10,378,213.91 7,311,819.65
Long-term borrowings 31,600,000.00 31,600,000.00
Long-term payables 6,604,575.84 9,332,537.14
12,742,092,437.41 11,514,710,318.02
2. Transfer of financial assets
Transferred financial assets that are not derecognized in their entirety
As at 30 June 2018, the Group had endorsed commercial bills receivable (the "Endorsed Bills")
to certain of its suppliers in order to settle accounts payable due to such suppliers of RMB0 (31
December 2017: RMB0 ). During the year, the Group operated a number of discounting business
through several banks in China. At 30 June 2018, the carrying value thereof was
RMB209,881,899.63 (31 December 2017: RMB147,715,527.67). In the opinion of the directors,
the Group has retained the substantial risks and rewards, which include default risks relating to
such Endorsed Bills, and accordingly, it continued to recognize the full carrying amounts of the
Endorsed Bills and the associated accounts payable settled. Subsequent to the Endorsement,
the Group did not retain any rights on 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 2018, the carrying value
of accounts payable settled by the Group totalled RMB209,881,899.63 (31 December 2017:
RMB147,715,527.67).
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VIIl. Risks related to financial instruments (Continued)
2. Transfer of financial assets (Continued)
Transferred financial assets that are derecognized in their entirety in which continuing
involvement exists
As at 30 June 2018, the Group had endorsed commercial bills receivable (the "Endorsed Bills")
to certain of its suppliers in order to settle accounts payable due to such suppliers of
RMB706,198,208.44(31 December 2017: RMB667,900,939.97). During the year, the Group
operated a number of discounting business through several banks in China. At 30 June 2018,
the carrying value thereof was RMB361,130,021.33 (31 December 2016: RMB367,011,030.59).
The Derecognized Bills had a maturity of 1 to 12 months at the end of the reporting period. In
accordance with the Law of Negotiable 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 accounts payable. The
maximum exposure to loss from the Group's Continuing Involvement in the Derecognized Bills
and the undiscounted cash flows to repurchase 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.
As part of its normal business, the Group entered into an accounts receivable factoring
arrangement (the “Arrangement”) without recourse and transferred certain accounts receivable
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 the full carrying amounts of
the associated accounts receivable. The original carrying value of the derecognized accounts
receivable transferred under the Arrangement that have not been settled as at 30 June 2018
amounted to RMB761,574,518.74 (31 December 2017: RMB525,614,331.67).
As of 30 June 2018, the Group has not recognized any gain or loss on the date of transfer. No
gain or loss were recognized from derecognized financial assets in which Continuing
Involvement exists, both during the year or cumulatively.
As of 30 June 2018, the Group has not recognized any gain or loss on the date of transfer of
the Derecognized Bills. No gains or losses were recognized from the Continuing Involvement,
both during the year or cumulatively.
162
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VIIl. Risks related to financial instruments (Continued)
3. Risks of financial instruments
The main purpose and policies of financial risk management
The Group's principal financial instruments comprise bank borrowings and cash and short term
deposits. The main purpose of these financial instruments is to raise finance for the Group's
operations. The Group has various other financial assets and liabilities such as accounts
receivable and accounts payable, which arise directly from its operations.
The main risks arising from the Group's financial instruments are interest rate risk, liquidity risk,
foreign currency risk and credit risk.
Credit risk
Credit risk is managed on the basis of the Group. Credit risk mainly arises from cash at banks
and on hand, accounts receivable, other receivables and notes receivable, etc.
The Group expects that there is no significant credit risk associated with cash at banks since it is
deposited with state-owned banks and other medium or large sized listed banks. Management
does not expect that there will be any significant losses from non-performance by these
counterparties.
In addition, the Group has policies to limit the credit exposure on accounts receivable, other
receivables and notes receivable. The Group assesses the credit quality of and sets credit limits
on its customers by taking into account their financial position, the availability of guarantees from
third parties, their credit history and other factors such as current market conditions. The Group
will confirm the balances with its clients regarding the accounts receivable semi-annually, and
assess the recoverability of each account receivable, by using individual evaluation and similar
credit risk group methods. The credit history of the customers is regularly monitored by the
Group. In respect of customers with a poor credit history, the Group will use written payment
reminders, or shorten or cancel credit periods, to ensure the overall credit risk of the Group is
limited to a controllable extent.
Liquidity risk
Cash flow forecasting is performed by each subsidiary of the Group and aggregated by the
Group’s finance department in its headquarter. The Group’s finance department at its
headquarter monitors rolling forecasts of the Group's short-term and long-term liquidity
requirements to ensure it has sufficient cash and securities that are readily convertible to cash to
meet operational needs. In the meanwhile, the Group continually monitors the terms of the debt
covenants in the loan agreements, ensuring that sufficient unutilized commitments from major
financial institutions, in order to meet the short-term and long-term liquidity requirements.
163
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VIII Risks related to financial instruments (Continued)
3. Risks of financial instruments (Continued)
Liquidity risk (Continued)
The maturity analysis of the Group's financial liabilities as at the end of the reporting period, based on the contractual undiscounted cash flows, is as follows:
30 June 2018
Within 1 year 1 to 2 years 2 to 5 years Above 5 years Total
Short-term borrowings 2,070,582,956.14 - - - 2,070,582,956.14
Notes payable 2,373,628,140.86 - - - 2,373,628,140.86
Accounts payable 7,230,024,480.35 - - - 7,230,024,480.35
Interest payables 10,378,213.91 - - - 10,378,213.91
Dividend payables 8,889,443.11 - - - 8,889,443.11
Other payables 1,024,176,704.11 - - - 1,024,176,704.11
Current portion of non-current 5,651,227.56 - - - 5,651,227.56
liabilities payables
Long-term - 3,716,803.49 2,887,772.35 - 6,604,575.84
Long-term borrowings 1,293,570.14 32,695,104.58 33,988,674.72
12,724,624,736.18 36,411,908.07 2,887,772.35 12,763,924,416.60
164
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VIII Risks related to financial instruments (Continued)
3. Risks of financial instruments (Continued)
Liquidity risk (Continued)
31 December 2017
Within 1 year 1 to 2 years 2 to 5 years Above 5 years Total
Short-term borrowings 1,574,233,015.06 - - - 1,574,233,015.06
Notes payable 2,732,437,828.42 - - - 2,732,437,828.42
Accounts payable 6,144,221,000.10 - - - 6,144,221,000.10
Interest payables 7,311,819.65 - - - 7,311,819.65
Dividend payables 11,889,443.11 - - - 11,889,443.11
Other payables 1,011,128,397.26 - - - 1,011,128,397.26
Current portion of non-current 7,304,197.88 - - - 7,304,197.88
Long-term payables
liabilities - 7,304,197.88 4,987,438.87 - 12,291,636.75
Long-term borrowings 1,293,570.14 1,293,570.14 32,043,003.47 - 34,630,143.75
11,489,819,271.62 8,597,768.02 37,030,442.34 - 11,535,447,481.98
165
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VIII Risks related to financial instruments (Continued)
4. Market risk
Interest rate risk
The Group's interest rate risk arises from long-term borrowings from banks. Financial liabilities
issued at floating rates expose the Group to cash flow interest rate risk. Financial liabilities issued
at fixed rates expose the Group to fair value interest rate risk. The Group determines the relative
proportions of its fixed rate and floating rate contracts depending on the prevailing market
conditions. As at 30 June 2018, if the floating interest rates of the long-term interest-bearing
borrowings increases or decreases by 50 base points, while other factors does not change, the
Group’s net income will decrease or increase by RMB118,500 (31 December 2017: RMB118,500).
Increases in interest rates will increase the cost of new borrowings and the interest expenses with
respect to the Group’s outstanding floating rate borrowings, and therefore could have a material
adverse effect on the Group’s financial position. The Group’s finance department at its headquarter
continuously monitors the interest rate position of the Group and makes decisions with reference to
the latest market conditions. The Group may enter into interest rate swap agreements to mitigate its
exposure to interest rate risk. During first half of 2018 and 2017, the Group did not enter into any
interest rate swap agreements.
For the year ended 30 June 2018, the Group has long-term interest-bearing borrowings with
floating interest rates amounted to RMB31,600,000.00 (31 December 2017: RMB31,600,000.00).
Currency risk
The Group’s major operational activities are carried out in Mainland China and a majority of the
transactions 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 headquarter 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.
As at 30 June 2018, if the currency had weakened/strengthened by 5% against the United States
dollar while all other variables had been held constant, the Group’s net profit for the year would
increase/decrease by RMB0 (2017: RMB0).
As at 30 June 2018, if the currency had weakened/strengthened by 5% against the Hong Kong
Dollar while all other variables had been held constant, the Group’s net profit for the year would
increase/decrease by RMB0 (2017: RMB0 ).
166
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VIII Risks related to financial instruments (Continued)
5. 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 shareholders’ value and
benefit related parties. Management also 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 shareholders,
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 the end of the reporting periods were as follows:
30 June 2018 31 December 2017
Gearing ratio 56.36% 55.57%
167
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
IX Disclosure of fair value
1. The fair value of financial assets and liabilities recorded in fair value
Fair value at period end
Level 1 Level 2 Level 3 Total
Financial assets
available-for-sale
- - 13,685,760.00 13,685,760.00
（1）Debt investment - - - -
（2）Equity investment - - 13,685,760.00 13,685,760.00
（3）Others - - - -
The results of fair value measurement are categorized within the fair value hierarchy, described as
follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair
value are observable, either directly or indirectly; and
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that
are not based on observable market data.
(1) Assets that are measured at fair value on a recurring basis
The Group has no assets that are measured at fair value on a recurring basis.
(2) Assets that are measured at fair value on a non-recurring basis
The Group has no assets that are measured at fair value on a non-recurring basis.
168
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
1. Parent
Proportion of Proportion of
Share ownership voting power
Registered capital interest in the in the
address Nature of business (RMB’0,000) Company Company
Industrial investment holding, trustee of a
pharmaceutical enterprise, assets
Sinopharm reorganization, distribution and retail of
Group Shanghai medicines and pharmaceutical products, etc. 276,709.51 56.06% 56.06%
The ultimate controlling party of the Company is CNPGC.
2. Subsidiaries
Refer to Note VII (1) for details of subsidiaries.
3. Associates
Refer to Note VII (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
Shanghai Modern Pharmaceutical Co., Ltd. (Modern 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
4. Other related parties
Company name Related party relationships
China Otsuka Pharmaceutical Co., Ltd. Associate of CNPGC
Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. Associate of CNPGC
Changchun Changsheng Gene Pharmaceutical Co., Ltd. Associate of CNPGC
Subsidiary of Main Luck
Shenzhen Wanwei Medicine trading Co., Ltd. Pharmaceutical
Sinopharm Holding Financing Lease Co., Ltd. Associate of Sinopharm Group
169
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Company name Related party relationships
China Otsuka Pharmaceutical Co., Ltd. Associate of CNPGC
Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. Associate of CNPGC
Changchun Changsheng Gene Pharmaceutical Co., Ltd. Associate of CNPGC
Subsidiary of Main Luck
Shenzhen Wanwei Medicine trading Co., Ltd. Pharmaceutical
Yichang Humanwell 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
Shanghai Guoda Lingyun Pharmacy Co., Ltd. Associate of Sinopharm Group
Sichuan Kang Daxin Pharmaceutical Co., Ltd Associate of Sinopharm Group
Hubei Medical Group Co., Ltd. Associate of Sinopharm Group
Shareholder who has significant
Shanghai Fosun Pharmaceutical (Group) Co., Ltd.("Fosun Pharm") influence over Sinopharm Group
Chongqing Yaoyou Pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm
Sichuan Hexin Pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm
Shanghai Chaohui Pharmecurical Co., Ltd. Subsidiary of Fosun Pharm
Tibet Yaopharma Co., Ltd. Subsidiary of Fosun Pharm
Shenyang Hongqi Pharmaceutical 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 Pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm
Suzhou Erye Pharmaceutical Limited Company 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 Hengsheng Hospital Subsidiary of Fosun Pharm
Guilin South pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm
Shanghai Transfusion Technology Co., Ltd. Subsidiary of Fosun Pharm
Jiangsu Huanghe Pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm
Jiangsu Fuxing Pharmaceutical Trading Co., Ltd. Subsidiary of Fosun Pharm
Group Financial Co.Group Financial Co. Controlled by CNPGC
Sinopharm Group Guangdong Medicine Device Co., Ltd. Controlled by CNPGC
Huayi Pharmaceutical Co., Ltd. Controlled by CNPGC
Sichuan Jiangyouzhongbafuzi Technology Development Co., Ltd. Controlled by CNPGC
Guizhou Tongjitang Pharmaceutical Co., Ltd. Controlled by CNPGC
Anhui Jingfang Pharmaceutical Co., Ltd. Controlled by CNPGC
Guangdong Medi-World Pharmaceutical Co., Ltd. Controlled by CNPGC
Shandong Lu Ya Pharmaceutical Co., Ltd. Controlled by CNPGC
Foshan Fengliaoxing Pharmaceutical Co., Ltd. Controlled by CNPGC
170
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Company name Related party relationships
China Otsuka Pharmaceutical Co., Ltd. Associate of CNPGC
Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. Associate of CNPGC
Changchun Changsheng Gene Pharmaceutical Co., Ltd. Associate of CNPGC
Subsidiary of Main Luck
Shenzhen Wanwei Medicine trading Co., Ltd. Pharmaceutical
Winteam Pharmaceutical Group Ltd. Controlled by CNPGC
Chengdu Rongsheng Pharmacy Co., Ltd. Controlled by CNPGC
Lanzhou Institute of Biological Products Co., Ltd. Controlled by CNPGC
Shantou Jinshi Powder Injection Co., Ltd. Controlled by CNPGC
China National Pharmaceutical Industry Co., Ltd. Controlled by CNPGC
Sinopharm Group Weiqida Medicine 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 Pharmaceutical 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 Zhuhai Medical Instrument Co., Ltd. Controlled by CNPGC
Sinopharm Fujian Medical Examination Co., Ltd. Controlled by CNPGC
Beijing Huasheng Pharmaceutical Biotechnology Development Co., Ltd. Controlled by CNPGC
Beijing Huamiao Pharmaceutical Co., Ltd. Controlled by CNPGC
Sinopharm Xinjiang Pharmaceutical Co., Ltd. Controlled by CNPGC
Sinopharm Holding Sanyi Medicine (Wuhu) Co., Ltd. Controlled by CNPGC
Sinopharm Shantou Jinshi Pharmaceutical Co., Ltd. Controlled by CNPGC
Sinopharm Hebei Medical Instrument Co., Ltd. Controlled by CNPGC
Sinopharm Fengliaoxing (Foshan) Medicines Co., Ltd. Controlled by CNPGC
China National Scientific Instruments & Materials Imp/Exp Shenzhen Co., Ltd. Controlled by CNPGC
CMDC Guizhou Qiannan Co., Ltd. Controlled by CNPGC
Fujian CMDC Co., Ltd. Controlled by CNPGC
Sinopharm Fengliaoxing Medical Hospital Co., Ltd. Controlled by CNPGC
Beijing Tiantan Biological Products Co., Ltd. Controlled by CNPGC
Sinopharm Guangdong Medical Examination Co., Ltd. Controlled by CNPGC
Sinopharm Group Shanghai Medicine Device Co., Ltd. Controlled by CNPGC
Foshan Dezhong Pharmaceutical Co., Ltd. Controlled by CNPGC
Chengdu Institute of Biological Products Co., Ltd. Controlled by CNPGC
China National of Traditional&Herbal Medicine Co., Ltd. Controlled by CNPGC
Sinopharm Chongqing Pharmaceutical and Medical Industry Design Institute Controlled by CNPGC
171
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Company name Related party relationships
China Otsuka Pharmaceutical Co., Ltd. Associate of CNPGC
Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. Associate of CNPGC
Changchun Changsheng Gene Pharmaceutical Co., Ltd. Associate of CNPGC
Subsidiary of Main Luck
Shenzhen Wanwei Medicine trading Co., Ltd. Pharmaceutical
Sinopharm (Guangzhou) Medical Equipment Co., Ltd. Controlled by CNPGC
China Sinopharm International Corporation Controlled by CNPGC
Shanghai Shangsheng Biological Products Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Tianjin Binhai Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Shanghai Tongyu Information Technology Co., Ltd. Controlled by Sinopharm Group
Guorun Medical Supply Chain Services (Shanghai) Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group Southwest Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Tianjin Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Hunan Co., Ltd. Controlled by Sinopharm Group
China National Medicines Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group Guorui Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Beijing Huahong 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 Fuzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shandong Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Dezhou 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 Guizhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Lianyungang Co., Ltd. Controlled by Sinopharm Group
Sinopharm Lingyun Biopharmaceutical (Shanghai) 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 Xingsha Pharmaceuticals (Xiamen) Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shanxi Co., Ltd. Controlled by Sinopharm Group
Sinopharm Le-Ren-Tang Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shanxi Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shenyang Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Yangzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Lunan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Beijing Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Hulun Buir Co., Ltd. Controlled by Sinopharm Group
172
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Company name Related party relationships
China Otsuka Pharmaceutical Co., Ltd. Associate of CNPGC
Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. Associate of CNPGC
Changchun Changsheng Gene Pharmaceutical Co., Ltd. Associate of CNPGC
Subsidiary of Main Luck
Shenzhen Wanwei Medicine trading Co., Ltd. Pharmaceutical
Sinopharm Holding Inner Mongolia Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Pingdingshan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Jiangsu Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Xiamen Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Suzhou Co., Ltd. Controlled by Sinopharm Group
Shanghai Merro Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Changzhou Medical Logistics Center Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Changzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Ningxia Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shanxi Instrument Branch Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Beijing Kangchen Bio-Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Wuxi Co., Ltd. Controlled by Sinopharm Group
Sinopharm Lerentang Hebei Medical Instrument Trade Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Dalian Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Jinan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Tianjin Distribution Center Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Donghong Medical (Shanghai) Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Yancheng Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Jinzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Rizhao Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Putian Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group Shanxi Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Chengdu Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Quanzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Kashi New & Special Drugs Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Anhui Co., Ltd. Controlled by Sinopharm Group
Beijing Tongyu Information Technology Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Ulanqab Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Hubei Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Zhihui Minsheng (Tianjin) Medicine Co., Ltd. Controlled by Sinopharm Group
173
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Company name Related party relationships
China Otsuka Pharmaceutical Co., Ltd. Associate of CNPGC
Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. Associate of CNPGC
Changchun Changsheng Gene Pharmaceutical Co., Ltd. Associate of CNPGC
Subsidiary of Main Luck
Shenzhen Wanwei Medicine trading Co., Ltd. Pharmaceutical
Sinopharm Holding Shanxi Jincheng Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Zhejiang Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Changsha Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Nanping Newforce Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Yangzhou Biological Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Taizhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Wende Medicine Nanjing Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Dalian Hecheng Co., Ltd. Controlled by Sinopharm Group
Sinopharm Lerentang Qinhuangdao Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Tongliao Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Jiangxi Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group Chemical Reagent Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Ordos Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Tianjin North Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Yongzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Jinhua Co., Ltd. Controlled by Sinopharm Group
Sinopharm Lerentang Tangshan Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Chongqing Co., Ltd. Controlled by Sinopharm Group
Sinopharm Prospect Dentech (Beijing) Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Biopharmaceutical (Tianjin) Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group Medicine Logistic Co., Ltd. Controlled by Sinopharm Group
China National Pharmaceutical Logistics Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Hubei Hongyuan Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Wuhu Co., Ltd.. Controlled by Sinopharm Group
Sinopharm Holding Lu'an Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Suzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Jiling Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Liaocheng Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Yunnan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Honghe 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 Holding Gansu Co., Ltd. Controlled by Sinopharm Group
174
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Company name Related party relationships
China Otsuka Pharmaceutical Co., Ltd. Associate of CNPGC
Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. Associate of CNPGC
Changchun Changsheng Gene Pharmaceutical Co., Ltd. Associate of CNPGC
Subsidiary of Main Luck
Shenzhen Wanwei Medicine trading Co., Ltd. Pharmaceutical
Sinopharm Holding Longyan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Ningde Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Nanchang Pharmacy Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Tongren Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Zunyi Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Guizhou Medical Equiment Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Jilin Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Jilin Pharmacy 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 Nantong Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Heilongjiang Co., Ltd. Controlled by Sinopharm Group
Sinopharm Lerentang Hengshui Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Lerentang Baoding Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Qinghai Co., Ltd. Controlled by Sinopharm Group
Sinopharm Sichuan Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Zhangzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Huaian Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Xiangyang Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Xinxiang Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Hongrun Medical Business Service (Shanghai) Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Huangshi Co., Ltd. Controlled by Sinopharm Group
Sinopharm Xinxiang Chain Store Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Qianxinan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group Shanghai Co., Ltd. Controlled by Sinopharm Group
Beijing Sinopharm Tianyuan Real Estate & Property Management Co., Ltd. Controlled by Sinopharm Group
Xinjiang Baitong Property Service Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group Shanghai Management Consulting Branch Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Huaideju Pharmaceutical (Xiamen) Co., Ltd. Controlled by Sinopharm Group
Pudong New Area of Shanghai Pharmaceutical Medicine Ltd. Controlled by Sinopharm Group
Sinopharm Holding Xinyu Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Hunan Weian Pharmacy Medicine Chain Company
Ltimited. Controlled by Sinopharm Group
Sinopharm Holding Jiaozuo Co., Ltd. Controlled by Sinopharm Group
Sinopharm Xinjiang Korla Pharmaceutical Co., Ltd. Sinopharm Xinjiang Korla Controlled by Sinopharm Group
175
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Company name Related party relationships
China Otsuka Pharmaceutical Co., Ltd. Associate of CNPGC
Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. Associate of CNPGC
Changchun Changsheng Gene Pharmaceutical Co., Ltd. Associate of CNPGC
Subsidiary of Main Luck
Shenzhen Wanwei Medicine trading Co., Ltd. Pharmaceutical
Pharmaceutical Co., Ltd.
Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd Non-controlling interest of a subsidiary
Hunan Minshengtang Investment Co., Ltd. Non-controlling interest of a subsidiary
Shenyang Pharmaceutical Co., Ltd Non-controlling interest of a subsidiary
Lerentang Investment Group Co., Ltd. Non-controlling interest of a subsidiary
Pingdingshan Pusheng Pharmaceutical Co., Ltd. Non-controlling interest of a subsidiary
Linyi Medical Group Co., Ltd. Non-controlling interest of a subsidiary
Huang Lijin Huang Lijin Non-controlling interest of a subsidiary
Guangdong Jiyuantang Development Co., Ltd. Non-controlling interest of a subsidiary
Shenzhen Jiufeng Investment Co., Ltd. Non-controlling interest of a subsidiary
Taishan Qunkang Pharmacy Co., Ltd. Non-controlling interest of a subsidiary
Zhang Zhenfang Zhang Zhenfang Non-controlling interest of a subsidiary
Hangzhou Xihu Business Group Corporation Non-controlling interest of a subsidiary
Guangxi Deyiyuan Medical Investment Center (Limited Partnership) Non-controlling interest of a subsidiary
Baise Jianan Medicine Chain Co., Ltd. Non-controlling interest of a subsidiary
Heyuan Mairui Trading Co., Ltd. Non-controlling interest of a subsidiary
Family member of the non-controlling
Wang Yang Wang Yang shareholder of a subsidiary
Controller of non-controlling interest of
Gu Jinfang Gu Jinfang 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
Controlled by non-controlling interest
Shaoguan Wujiang District Muyang Medicine Information Consultant Co., Ltd. of a subsidiary
176
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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) Related party transactions –goods and services
Purchase of goods and receiving of services from related parties
Related party Type of transaction 2018 2017
Sinopharm Holding Sub Marketing Center Co.,
Ltd. Purchase of goods 515,167,083.81 503,647,182.73
China National Medicines Co., Ltd. Purchase of goods 237,636,101.58 192,328,445.40
Sinopharm Holding Shanxi Co., Ltd. Purchase of goods 156,466,334.83 105,080,688.10
Sinopharm Lingyun Biopharmaceutical
(Shanghai) Co., Ltd. Purchase of goods 127,271,627.94 100,523,284.41
Sinopharm Group Co., Ltd. Purchase of goods 95,150,353.69 246,228,882.09
Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. Purchase of goods 90,145,795.30 86,204,005.23
Sinopharm Holding Shanxi Co., Ltd. Purchase of goods 83,517,976.15 75,921,179.25
Sinopharm Le-Ren-Tang Medicine Co., Ltd. Purchase of goods 79,259,083.01 79,720,630.75
Sinopharm Holding Shenyang Co., Ltd. Purchase of goods 63,689,297.73 48,659,442.34
Lanzhou Institute of Biological Products Co., Ltd. Purchase of goods 52,860,000.00 30,600,000.00
Sinopharm Group Xinjiang Special Drugs
National Pharmaceutical Co., Ltd. Purchase of goods 39,872,567.55 31,547,957.86
Sinopharm Holding Lunan Co., Ltd. Purchase of goods 39,298,409.81 22,663,023.60
Jiangsu Wanbang Pharmacy Marketing Co., Ltd. Purchase of goods 33,623,739.18 34,629,877.72
Sinopharm Holding Beijing Co., Ltd. Purchase of goods 23,822,442.41 21,094,588.81
Jinzhou AoHong Pharmaceuticals Co., Ltd. Purchase of goods 23,749,213.17 -
Sinopharm Holding Yangzhou Co., Ltd. Purchase of goods 23,005,232.97 25,252,127.28
Sinopharm Holding Hunan Co., Ltd.
Purchase of goods 22,435,971.65 9,503,424.67
Chongqing Yaoyou Pharmaceutical Co., Ltd. Purchase of goods 21,508,305.23 16,356,695.13
Sinopharm Holding Inner Mongolia Co., Ltd. Purchase of goods 18,984,953.29 17,911,878.26
Sinopharm Holding Lerentang Pharmaceutical
Co., Ltd. Purchase of goods 16,967,826.05 14,552,984.64
Winteam Pharmaceutical Group Ltd. Purchase of goods 15,331,219.12 4,095,720.68
Sinopharm Holding Pingdingshan Co., Ltd. Purchase of goods 14,446,097.55 17,629,734.37
Shenzhen Main Luck Pharmaceutical Co., Ltd. Purchase of goods 14,173,934.35 18,163,682.64
China National Pharmaceutical Foreign Trade
Corporation Purchase of goods 13,645,110.09 2,074,302.37
Sinopharm Holding Jiangsu Co., Ltd. Purchase of goods 12,276,533.11 13,721,003.83
177
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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) Related party transactions –goods and services (Continued)
Purchase of goods and receiving of services from related parties (Continued)
Related party Type of transaction 2018 2017
Sinopharm Lerentang Shijiazhuang Medicine Co.,
Ltd. Purchase of goods 10,465,965.70 14,140,996.60
Shenzhen Wanwei Medicine Trading Co., Ltd. Purchase of goods 10,428,796.93 12,411,303.09
Suzhou Erye Pharmaceutical Limited Company Purchase of goods 9,554,764.03 -
Sinopharm Holding Xiamen Co., Ltd. Purchase of goods 9,246,131.91 9,257,962.72
Sinopharm Holding Fujian Co., Ltd. Purchase of goods 9,171,420.33 11,822,333.08
Chengdu Rongsheng Pharmacy Co., Ltd. Purchase of goods 8,958,139.00 10,163,100.00
Sinopharm Holding Shanxi Instrument Branch
Co., Ltd. Purchase of goods 7,410,730.23 3,895,843.72
Sinopharm Holding Henan Co., Ltd. Purchase of goods 6,575,293.46 2,394,853.44
Sinopharm Holding Suzhou Co., Ltd. Purchase of goods 6,247,553.79 8,828,494.63
Sinopharm Holding Ningxia Co., Ltd. Purchase of goods 6,113,483.50 5,691,842.49
Sinopharm Chuan Kang Pharmaceutical Co., Ltd. Purchase of goods 5,794,907.91 -
Sinopharm Group Zhijun (Shenzhen) PingShan
Pharmaceutical Co., Ltd. Purchase of goods 5,519,530.03 4,251,111.59
Sinopharm Holding Fuzhou Co., Ltd. Purchase of goods 4,703,935.11 3,003,163.81
Sinopharm Group Zhijun(Shenzhen)
Pharmaceutical Co., Ltd. Purchase of goods 4,670,243.13 2,222,406.63
Sinopharm Holding Changzhou Medical Logistics
Center Co., Ltd. Purchase of goods 4,530,675.45 7,317,867.44
Yichang Humanwell Pharmaceutical Co., Ltd. Purchase of goods 4,513,583.78 4,109,780.72
Sinopharm Xingsha Pharmaceuticals (Xiamen)
Co., Ltd. Purchase of goods 3,676,515.83 933,727.04
Sinopharm Holding Jinan Co., Ltd. Purchase of goods 3,621,583.69 1,832,235.96
Sinopharm Holding Xinjiang Special Drugs
Western Pharmaceutical Co., Ltd. Purchase of goods 3,614,733.64 4,544,410.21
Sinopharm Holding Beijing Huahong Co., Ltd. Purchase of goods 3,550,261.18 3,843,243.29
Sinopharm Group Guorui Medicine Co., Ltd. Purchase of goods 3,735,052.72 65,812.60
Shandong Lu Ya Pharmaceutical Co., Ltd. Purchase of goods 2,909,280.05 -
Sinopharm Holding Changzhou Co., Ltd. Purchase of goods 2,900,395.11 7,051,762.45
Tibet Yaopharma Co., Ltd. Purchase of goods 2,761,512.07 -
Sinopharm Holding Wuxi Co., Ltd. Purchase of goods 2,453,393.36 2,736,138.04
Pudong New Area of Shanghai Pharmaceutical
Medicine Ltd. Purchase of goods 2,298,554.23 -
Sinopharm Holding Jinzhou Co., Ltd. Purchase of goods 2,249,516.98 1,199,028.41
Sinopharm Holding Beijing Kangchen Bio-
Pharmaceutical Co., Ltd. Purchase of goods 2,240,460.54 3,179,370.11
178
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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) Related party transactions –goods and services (Continued)
Purchase of goods and receiving of services from related parties (Continued)
Related party Type of transaction 2018 2017
Shanghai Merro Pharmaceutical Co., Ltd. Purchase of goods 2,016,321.47 8,681,736.93
Foshan Fengliaoxing Pharmaceutical Co., Ltd. Purchase of goods 2,015,702.90 320,789.59
Sinopharm Holding Shanghai Likang
Pharmaceutical Co., Ltd. Purchase of goods 2,003,690.59 1,111,214.17
Sinopharm Lerentang Hebei Medical Instrument
Trade Co., Ltd. Purchase of goods 1,889,376.44 2,446,393.63
Beijing Golden Elephant Fosun Pharmaceutical
Co., Ltd. Purchase of goods 1,799,439.15 2,203,729.99
Sinopharm Holding Tianjin Co., Ltd. Purchase of goods 1,598,345.37 1,531,041.56
Sinopharm Group Rongsheng Pharmaceutical
Co., Ltd. Purchase of goods 1,574,958.10 367,123.16
Guizhou Tongjitang Pharmaceutical Co., Ltd. Purchase of goods 1,536,282.82 783,375.17
Sinopharm Holding Xinjiang Xinte Karamay
Pharmaceutical Co., Ltd. Purchase of goods 1,451,522.48 866,286.88
Sinopharm Holding Yancheng Co., Ltd. Purchase of goods 1,402,672.48 1,321,450.59
Sichuan Hexin Pharmaceutical Co., Ltd. Purchase of goods 1,094,458.11 (288.55)
Shenyang Hongqi Pharmaceutical Co., Ltd. Purchase of goods 1,058,670.33 509,884.44
Shanghai Shyndec Pharmaceutical Marketing
Co., Ltd. Purchase of goods 995,510.64 1,019,792.18
Sinopharm Group (Tianjin) Eastern Bokang
Pharmaceutical Co., Ltd. Purchase of goods 921,863.31 1,117,427.20
Sinopharm Holding Putian Co., Ltd. Purchase of goods 895,532.89 1,060,202.09
Sinopharm Holding Dalian Co., Ltd. Purchase of goods 769,041.46 1,933,096.74
Hutchison Whampoa Sinopharm Pharmaceuticals
(Shanghai) Co., Ltd. Purchase of goods 763,625.20 321,124.91
Sinopharm Holding Shandong Co., Ltd. Purchase of goods 718,163.95 -
Sinopharm Holding Hulun Buir Co., Ltd. Purchase of goods 713,341.49 18,397,145.25
Huayi Pharmaceutical Co., Ltd. Purchase of goods 695,732.52 -
Sinopharm Holding Donghong Medical
(Shanghai) Co., Ltd. Purchase of goods 615,989.84 1,398,400.16
Sinopharm Holding Rizhao Co., Ltd. Purchase of goods 586,905.03 1,070,541.55
Sinopharm Holding Tongliao Co., Ltd. Purchase of goods 584,726.70 74,569.23
Guangdong Medi-World Pharmaceutical Co., Ltd. Purchase of goods 584,223.16 -
Sinopharm Holding Anhui Co., Ltd. Purchase of goods 539,726.50 251,374.86
Sinopharm Holding Quanzhou Co., Ltd. Purchase of goods 509,662.25 693,843.09
Sinopharm Holding Yangzhou Biological Medicine
Co., Ltd. Purchase of goods 444,000.00 -
Wuhan Zhonglian Pharmaceutical Group Co., Ltd.
Purchase of goods 435,887.39 583,749.71
179
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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) Related party transactions –goods and services (Continued)
Purchase of goods and receiving of services from related parties (Continued)
Related party Type of transaction 2018 2017
Sinopharm Holding Changsha Co., Ltd. Purchase of goods 414,897.11 -
Sinopharm Holding Kashi New & Special Drugs
Co., Ltd. Purchase of goods 400,421.76 488,097.76
Hunan Dongting Pharmaceutical Co., Ltd. Purchase of goods 340,441.92 135,686.75
Sinopharm Holding Beijing Tianxing Puxin
Biological Medical Co., Ltd. Purchase of goods 335,484.62 72,490.93
Shanghai Chaohui Pharmaceutical Co., Ltd. Purchase of goods 330,363.62 -
Shantou Jinshi Powder Injection Co., Ltd. Purchase of goods 330,119.93 -
Sinopharm Holding Ulanqab Co., Ltd. Purchase of goods 308,191.79 142,060.09
Sinopharm Holding Zhejiang Co., Ltd. Purchase of goods 289,516.54 -
Sinopharm Holding Dalian Hecheng Co., Ltd. Purchase of goods 262,027.99 -
China Otsuka Pharmaceutical Co., Ltd. Purchase of goods 241,236.29 2,811,496.30
Sinopharm Holding Dezhou Co., Ltd. Purchase of goods 228,731.52 228,117.43
Shanghai Modern Hasen (Shangqiu)
Pharmaceutical Co., Ltd. Purchase of goods 200,544.82 -
Sinopharm Lerentang Qinhuangdao Medicine
Co., Ltd. Purchase of goods 193,277.45 116,087.32
China National Pharmaceutical Industry Co., Ltd. Purchase of goods 188,275.39 80,821.92
Sinopharm Group Zhijun(Shenzhen)
Pharmaceutical Co., Ltd. Purchase of goods 173,484.94 923.08
Sinopharm Group Southwest Medicine Co., Ltd. Purchase of goods 153,389.66 -
Sinopharm Holding Lianyungang Co., Ltd.
Purchase of goods 153,111.27 -
Shanghai Modern Pharmaceutical Co., Ltd.
(Modern Pharmaceutical) Purchase of goods 142,521.39 -
Sinopharm Group Yibin Pharmaceuticals Co., Ltd. Purchase of goods 121,618.26 4,666.51
Sinopharm Shantou Jinshi Pharmaceutical Co.,
Ltd. Purchase of goods 109,039.96 55,299.53
Sinopharm Holding Hainan Co., Ltd. Purchase of goods 97,450.60 -
Sinopharm Group Shanxi Co., Ltd. Purchase of goods 87,596.90 862,803.50
Sinopharm Holding Zhihui Minsheng (Tianjin)
Medicine Co., Ltd. Purchase of goods 80,410.58 -
Sinopharm Holding Guizhou Co., Ltd. Purchase of goods 73,729.75 -
Sinopharm Holding Taizhou Co., Ltd. Purchase of goods 73,304.23 -
Sinopharm Holding Biopharmaceutical (Tianjin)
Co., Ltd. Purchase of goods 63,648.72 (1,108.71)
Sinopharm Holding Sanyi Medicine (Wuhu) Co.,
Purchase of goods 58,952.78 102,930.09
Ltd.
Sichuan Jiangyouzhongbafuzi Technology
Development Co., Ltd. Purchase of goods 49,297.30 22,300.88
180
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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) Related party transactions –goods and services (Continued)
Purchase of goods and receiving of services from related parties (Continued)
Related party Type of transaction 2018 2017
Sinopharm Holding Yongzhou Co., Ltd. Purchase of goods 38,141.67 22,688.00
Chongqing Haisiman Pharmaceutical Co., Ltd. Purchase of goods 33,895.38 22,055,921.01
Sinopharm Group Weiqida Medicine Co., Ltd.
Purchase of goods 31,965.52 -
Sinopharm Holding Wende Medicine Nanjing
Co., Ltd. Purchase of goods 27,310.34 -
The Fourth Pharmaceutical Co., Ltd. of
Zhonglian Group Purchase of goods 24,295.86 112,080.00
Sinopharm Lerentang Tangshan Medicine Co.,
Ltd. Purchase of goods 20,598.94 14,862.40
Sinopharm Holding Nanping Newforce Co., Ltd.
Purchase of goods 15,315.32 -
Sinopharm Holding Shanxi Jincheng Co., Ltd. 11,481.46 -
Purchase of goods
Sinopharm Zhuhai Medical Instrument Co., Ltd. 9,564.95 -
Purchase of goods
Sinopharm Hebei Medical Instrument Co., Ltd. Purchase of goods 6,533.84 29,467.36
Sinopharm Prospect Dentech (Beijing) Co., Ltd.
Purchase of goods 4,073.48 2,101.14
Beijing Huamiao Pharmaceutical Co., Ltd. 2,649.79 -
Purchase of goods
Sinopharm Group Guangdong Medicine Device
Co., Ltd. Purchase of goods 1,770.86 -
Sinopharm Holding Jinhua Co., Ltd. 38.80 15,569.23
Purchase of goods
Sinopharm Xinjiang Pharmaceutical Co., Ltd. 12.82 -
Purchase of goods
Sinopharm Holding Tianjin Distribution Center
Co., Ltd. Purchase of goods - 1,452,364.83
Sinopharm Holding Chengdu Co., Ltd. Purchase of goods - 809,743.62
Sinopharm Fujian Medical Examination Co.,
Ltd. Purchase of goods - 680,423.93
Beijing Huasheng Pharmaceutical
Biotechnology Development Co., Ltd. Purchase of goods - 219,374.28
Guizhou Longlife Pharmacertical Co., Ltd. - 188,738.84
Purchase of goods
Beijing Tongyu Information Technology Co.,
Ltd. Purchase of goods - 175,351.00
Sinopharm Holding Hubei Co., Ltd. Purchase of goods - 137,617.16
Sinopharm Holding Jiangxi Co., Ltd. Purchase of goods - 69,941.45
Sinopharm Group Chemical Reagent Co., Ltd. Purchase of goods - 46,153.84
Sinopharm Holding Tianjin North Medicine Co.,
Ltd. Purchase of goods - 23,066.70
Sinopharm Holding Chongqing Co., Ltd. - 9,230.76
Purchase of goods
Sinopharm Fengliaoxing (Foshan) Medicines
Co., Ltd. Purchase of goods - 2,332.96
181
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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) Related party transactions –goods and services (Continued)
Purchase of goods and receiving of services from related parties (Continued)
Related party Type of transaction 2018 2017
China National Scientific Instruments &
Materials Imp/Exp Shenzhen Co., Ltd. Purchase of goods - (1,598,611.60)
Sinopharm Holding Ordos Co., Ltd. Purchase of goods (10,667.01) 35,826.67
Anhui Jingfang Pharmaceutical Co., Ltd.
Purchase of goods (13,269.30) 460,506.20
Sinopharm Group Medicine Logistic Co., Ltd.
Storage and transport cost 6,666,668.71 7,395,406.16
Sinopharm Health Online Co., Ltd. Consulting service fee 6,085,895.22 3,071,581.63
Shanghai Beiyi Guoda pharmaceutical Co.
Ltd. Consulting service fee 1,263,962.22 589,442.86
Shanghai Tongyu Information Technology Co., Information system access
Ltd. fee 98,113.21 98,113.21
China National Pharmaceutical Logistics Co.,
Ltd. Storage and transport cost 44,030.65 28,856.97
Sinopharm Holding Tianjin Binhai Information system access
Pharmaceutical Co., Ltd. fee 7,075.47 -
Sinopharm Group Co., Ltd.
Consulting service fee - 5,982.51
182
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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) Related party transactions –goods and services (Continued)
Sale of goods and rendering of services
Type of
Related party transaction 2018 2017
Sinopharm Group Co., Ltd. Sale of goods 54,514,170.65 5,593,686.39
Shanghai Beiyi Guoda pharmaceutical Co. Ltd. Sale of goods 49,727,338.63 51,483,490.91
Foshan Chancheng Pharmaceutical Co., Ltd. Sale of goods 42,375,781.14 33,011,056.01
Sinopharm Holding Hainan Co., Ltd. Sale of goods 29,338,160.25 36,385,390.99
Sinopharm Holding Hainan Hongyi Co., Ltd. Sale of goods 24,127,524.50 25,628,473.91
Sinopharm Group Xinjiang Special Drugs
National Pharmaceutical Co., Ltd. Sale of goods 17,376,808.71 13,060,212.97
Sinopharm Holding Wenzhou Co., Ltd. Sale of goods 10,830,194.79 16,144,827.68
Pudong New Area of Shanghai Pharmaceutical
Medicine Ltd. Sale of goods 10,524,551.98
Beijing Golden Elephant Fosun
Pharmaceutical Co., Ltd. Sale of goods 9,738,902.57
9,566,003.52
Sinopharm Sichuan Pharmaceutical Co., Ltd. Sale of goods 9,061,104.38 37,145,400.72
Sinopharm Holding Sub Marketing Center Co.,
Ltd. Sale of goods 8,970,804.72
12,124,282.34
Sinopharm Holding Henan Co., Ltd. Sale of goods 8,736,054.45 15,920,365.63
Sinopharm Holding Nantong Co., Ltd. Sale of goods 8,717,338.95 10,668,342.56
Shenzhen Hengsheng Hospital Sale of goods 8,215,885.93
Sinopharm Le-Ren-Tang Medicine Co., Ltd. Sale of goods 7,728,482.84 29,700,260.69
Sinopharm Lingyun Biopharmaceutical
(Shanghai) Co., Ltd. Sale of goods 7,489,471.75
137,615.38
Sinopharm Group (Tianjin) Eastern Bokang
Pharmaceutical Co., Ltd. Sale of goods 6,837,559.00
28,222,286.50
Sinopharm Holding Beijing Co., Ltd. Sale of goods 5,770,691.44 46,330,723.11
Sinopharm Holding Yunnan Co., Ltd. Sale of goods 5,713,012.18 13,882,513.85
Sinopharm Holding Yangzhou Co., Ltd. Sale of goods 5,144,530.81 4,983,173.28
Sinopharm Holding Beijing Huahong Co., Ltd. Sale of goods 4,816,641.92 18,809,022.65
Sinopharm Holding Shandong Co., Ltd. Sale of goods 4,577,546.05 54,609,405.93
Foshan Chancheng District Central Hospital Sale of goods 4,504,644.96 4,152,584.46
Sinopharm Holding Xinjiang Special Drugs
Western Pharmaceutical Co., Ltd. Sale of goods 4,409,528.78 2,315,354.12
Sinopharm Holding Hubei Co., Ltd. Sale of goods 3,772,162.27 36,728,642.88
Sinopharm Holding Shanxi Co., Ltd. Sale of goods 2,577,305.96 1,347,127.61
183
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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) Related party transactions –goods and services (Continued)
Sale of goods and rendering of services
Type of
Related party transaction 2018 2017
China National Medicines Co., Ltd. Sale of goods 1,740,716.75 2,063,573.21
Foshan Chanyixing Medicine Development Co
Ltd. Sale of goods 1,450,198.02 1,405,871.30
Sinopharm Holding Gansu Co., Ltd. Sale of goods 1,353,030.00 2,884,856.13
Sinopharm Holding Hunan Co., Ltd. Sale of goods 1,308,950.82 5,020,059.72
Sinopharm Holding Dalian Co., Ltd. Sale of goods 1,263,047.36 486,071.84
Shanghai Merro Pharmaceutical Co., Ltd. Sale of goods 1,223,626.19 3,234,923.55
Sinopharm Holding Jilin Co., Ltd. Sale of goods 1,172,196.27 3,009,786.08
Sinopharm Holding Anhui Co., Ltd. Sale of goods 1,168,187.29 366,059.49
Sinopharm Holding Guizhou Co., Ltd. Sale of goods 1,042,466.52 5,972,815.92
Sinopharm Holding Tianjin Co., Ltd. Sale of goods 1,029,758.40 8,825,649.05
Sinopharm Group Southwest Medicine Co.,
Ltd. Sale of goods 1,006,172.43 15,591,867.75
Sinopharm Holding Fujian Co., Ltd. Sale of goods 979,220.98 6,048,503.32
Sinopharm Holding Zhejiang Co., Ltd. Sale of goods 921,282.05 6,829,401.70
Sinopharm Holding Shanxi Co., Ltd. Sale of goods 917,123.69 6,299,521.58
Hubei Medical Group Co., Ltd. Sale of goods 853,130.68 -
Sinopharm Holding Shanghai Likang
Pharmaceutical Co., Ltd. Sale of goods 673,847.93 4,235.90
Yuxi Sinopharm Medicine Co., Ltd. Sale of goods 625,927.21 -
Shanghai Guoda Lingyun Pharmacy Co., Ltd. Sale of goods 540,476.78 713,931.05
Sinopharm Group Shanxi Co., Ltd. Sale of goods 486,510.78 844,560.30
Sinopharm Holding Donghong Medical
(Shanghai) Co., Ltd. Sale of goods 448,887.64 201,902.45
Sinopharm Holding Changzhou Co., Ltd. Sale of goods 435,840.01 -
Sinopharm Holding Jiangxi Co., Ltd. Sale of goods 371,671.87 647,485.30
Sinopharm Holding Wuxi Co., Ltd. Sale of goods 349,203.27 215,010.22
Sinopharm Holding Heilongjiang Co., Ltd. Sale of goods 324,789.98 2,720,546.27
Sinopharm Holding Dalian Hecheng Co., Ltd. Sale of goods 301,982.46 366,975.51
Sinopharm Holding Ningxia Co., Ltd. Sale of goods 240,539.93 6,303,526.27
Sinopharm Holding Inner Mongolia Co., Ltd. Sale of goods 239,130.68 366,510.94
Sinopharm Holding Chengdu Co., Ltd. Sale of goods 215,685.18 1,227,783.73
Sinopharm Holding Yongzhou Co., Ltd. Sale of goods 203,544.77 -
184
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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) Related party transactions –goods and services (Continued)
Sale of goods and rendering of services
Type of
Related party transaction 2018 2017
Sinopharm Holding Ulanqab Co., Ltd. Sale of goods 175,775.17 92,908.28
Sinopharm Holding Changzhou Medical
Logistics Center Co., Ltd. Sale of goods 175,352.41 291,901.64
Sinopharm Holding Qinghai Co., Ltd. Sale of goods 168,653.68 1,759,644.99
Sinopharm Holding Chongqing Co., Ltd. Sale of goods 145,147.69 125,938.47
Sinopharm Holding Guizhou Medical Equiment
Co., Ltd. Sale of goods 133,404.19 -
Sinopharm Holding Huaian Co., Ltd. Sale of goods 128,653.00 440,133.12
Sinopharm Holding Wuhu Co., Ltd. Sale of goods 127,195.59 -
Sinopharm Holding Shenyang Co., Ltd. Sale of goods 103,846.57 3,907,366.12
Sinopharm Holding Suzhou Co., Ltd. Sale of goods 103,840.63 -
Sinopharm Holding Hubei Hongyuan Co., Ltd. Sale of goods 97,162.40 -
Sinopharm Holding Jilin Pharmacy Co., Ltd. Sale of goods 91,435.98 -
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 Putian Co., Ltd. Sale of goods 64,610.68 637,366.11
Sinopharm Holding Tianjin North Medicine Co.,
Ltd. Sale of goods 58,775.86 -
Sinopharm Holding Longyan Co., Ltd. Sale of goods 58,172.99 114,780.52
Sinopharm Holding Nanchang Pharmacy Co.,
Ltd. Sale of goods 54,017.59 -
Dongyuan accord pharmaceutical chain
Co., Ltd. Sale of goods 39,393.65 -
Sinopharm Holding Zunyi Co., Ltd. Sale of goods 35,054.94 -
Sinopharm Holding Xinxiang Co., Ltd. Sale of goods 34,164.62 -
Sinopharm Holding Huangshi Co., Ltd. Sale of goods 34,025.78 87,938.08
Sinopharm Holding Siping Co., Ltd. Sale of goods 26,548.13 -
Sinopharm Holding Ningde Co., Ltd. Sale of goods 23,864.90 603,115.39
Sinopharm Holding Tongren Co., Ltd. Sale of goods 21,011.20 -
Sinopharm Holding Hongrun Medical Business
Service (Shanghai) Co., Ltd. Sale of goods 19,240.32 -
Sinopharm Holding Jiling Co., Ltd. Sale of goods 19,035.54 -
Sinopharm Fengliaoxing Medical Hospital Co.,
Ltd. Sale of goods 16,804.60 2,175.11
Sinopharm Holding Liaocheng Co., Ltd. Sale of goods 15,596.82 -
Fujian CMDC Co., Ltd. Sale of goods 13,988.00 -
185
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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) Related party transactions –goods and services (Continued)
Sale of goods and rendering of services
Type of
Related party transaction 2018 2017
Sinopharm Lerentang Baoding Medicine Co.,
Ltd. Sale of goods 12,991.45 -
CMDC Guizhou Qiannan Co., Ltd. Sale of goods 12,712.58 -
Sinopharm Lerentang Hengshui Medicine Co.,
Ltd. Sale of goods 12,108.38 -
Sinopharm Holding Honghe Co., Ltd. Sale of goods 9,595.25 -
Sinopharm Zhuhai Medical Instrument Co.,
Ltd. Sale of goods 9,119.70 -
Sinopharm Group Zhijun(Shenzhen)
Pharmaceutical Co., Ltd. Sale of goods 7,617.49 -
Sinopharm Holding Fuzhou Co., Ltd. Sale of goods 6,927.14 6,073,301.78
Sinopharm Holding Hulun Buir Co., Ltd. Sale of goods 4,570.00 5,955,618.61
Hunan Minshengtang Investment Co., Ltd. Sale of goods - 4,378,542.02
Sinopharm Holding Quanzhou Co., Ltd. Sale of goods - 2,300,292.62
Sinopharm Holding Lunan Co., Ltd. Sale of goods - 1,004,572.65
Sinopharm Holding Zhangzhou Co., Ltd. Sale of goods - 750,514.60
Sinopharm Holding Beijing Tianxing Puxin
Biological Medical Co., Ltd. Sale of goods - 598,153.85
Sinopharm Group Guangdong Medicine
Device Co., Ltd. Sale of goods - 557,307.70
Hutchison Whampoa Sinopharm
Pharmaceuticals (Shanghai) Co., Ltd. Sale of goods - 409,246.96
China Otsuka Pharmaceutical Co., Ltd. Sale of goods - 153,846.15
China National Scientific Instruments &
Materials Imp/Exp Shenzhen Co., Ltd. Sale of goods - 121,846.14
Sinopharm Holding Xiangyang Co., Ltd. Sale of goods - 109,542.99
Sinopharm Xinxiang Chain Store Co., Ltd. Sale of goods - 66,445.13
Sichuan Kang Daxin Pharmaceutical Co., Ltd. Sale of goods - 33,230.76
Beijing Tiantan Biological Products Co., Ltd. Sale of goods - 7,692.31
Sinopharm Holding Qianxinan Co., Ltd. Sale of goods - 7,478.63
Sinopharm Guangdong Medical Examination
Co., Ltd. Sale of goods - 802.05
Transport and
storage
China National Medicines Co., Ltd. income 3,580,698.30 3,785,126.52
Transport and
storage
Sinopharm Group Medicine Logistic Co., Ltd. income 294,804.62 1,133,089.80
Sinopharm Group Zhijun(Shenzhen)
Pharmaceutical Co., Ltd. Meal fee 294,180.00 266,360.00
Transport and
Sinopharm Group Zhijun (Shenzhen) storage
PingShan Pharmaceutical Co., Ltd. income 122,242.00 110,434.27
186
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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) Related party transactions –goods and services (Continued)
Sale of goods and rendering of services
Related party Type of transaction 2018 2017
Consulting service
Sinopharm Holding Shanxi Co., Ltd. income 9,433.96 28,301.88
Consulting service
Guizhou Tongjitang Pharmaceutical Co., Ltd. income 8,285.71 -
Consulting service
Winteam Pharmaceutical Group Ltd. income 2,023.58 6,580.11
Sinopharm Holding Shanxi Instrument Branch
Co., Ltd. Other income 1,132.08 22,830.19
Sinopharm Holding Sub Marketing Center Co., Consulting service
Ltd. income - 51,379.25
Transport and
Shenzhen Wanwei Medicine Trading Co., Ltd. storage income - 38,808.71
Sinopharm Holding Shanxi Co., Ltd. Other income - 19,433.96
Transport and
Shenzhen Main Luck Pharmaceutical Co., Ltd. storage income - 18,277.71
Shenzhen Zhijun Pharmaceutical Trade Co.,
Ltd. Meal fee - 17,461.63
Sinopharm Group (Tianjin) Eastern Bokang
Pharmaceutical Co., Ltd. Other income - 13,650.94
Consulting service
Sinopharm Health Online Co., Ltd. income - 10,697.08
187
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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) Related party transactions - leases
(a) As the lessor
Type of assets under Income from Income from leases in
leases leases in 2018 2017
Sinopharm Group Zhijun (Shenzhen) Building
Pharmaceutical Co., Ltd. 351,428.58 637,142.88
Shenzhen Zhijun Pharmaceutical Trade Co., Building
Ltd. 285,714.30 -
Building
China National Medicines Co., Ltd. 45,714.29 45,714.29
Sinopharm Holding Sub Marketing Center Co., Building
Ltd. - 22,857.14
(b) As the lessee
Type of assets under Expenses from Expenses from leases
leases leases in 2018 in 2017
Beijing Golden Elephant Fosun Pharmaceutical
Co., Ltd. Building 5,461,904.76 4,780,000.00
Sinopharm Group Xinjiang Special Drugs
National Pharmaceutical Co., Ltd. Building 3,914,124.76 4,239,560.37
Sinopharm Group Shanghai Co., Ltd. Building 3,790,426.48 3,574,131.14
Beijing Sinopharm Tianyuan Real Estate &
Property Management Co., Ltd. Equipment 3,750,000.00 3,750,000.00
Shenyang Pharmaceutical Co., Ltd. Building 3,548,219.75 3,263,809.62
Sinopharm Group Medicine Logistic Co., Ltd. Building 3,539,999.98 3,539,999.98
Lerentang Investment Group Co., Ltd. Building 2,277,892.99 2,700,000.00
Hunan Minshengtang Investment Co., Ltd. Building 2,027,673.99 1,548,351.84
Sinopharm Holding Yangzhou Co., Ltd. Building 1,862,857.14 1,862,857.14
Linyi Medical Group Co., Ltd. Building (Store) 1,329,859.65 -
Pingdingshan Pusheng Pharmaceutical Co., Ltd. Building 1,277,732.57 2,402,965.82
Guangdong Jiyuantang Development Co., Ltd. Building 1,192,864.11 611,398.72
Nanjing Yuanguang Trading Co., Ltd. Building 866,794.89 -
Building (Warehouse,
Linyi Medical Group Co., Ltd. Office) 706,516.80 -
Shaoguan Wujiang District Muyang Medicine
Information Consultant Co., Ltd. Building 470,161.86 470,161.86
Taishan Xiangranhui Trade Co., Ltd Building 451,963.88 -
Zhang Zhenfang Building 402,499.98 402,499.98
Wang Yang Building 262,857.12 262,857.12
Sinopharm Group Co., Ltd. Building 259,915.02 259,915.04
Sinopharm Holding Kashi New & Special Drugs
Co., Ltd. Building 236,051.50 212,179.81
188
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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) Related party transactions – leases (Continued)
(b) As the lessee (continued)
Type of assets Expenses from Expenses from
under leases leases in 2018 leases in 2017
Sinopharm Holding Beijing Co., Ltd. Building 235,714.29 221,944.46
Sinopharm Holding Shanxi Co., Ltd. Building 234,017.16 297,653.30
Sinopharm Holding Xinjiang Xinte Karamay
Pharmaceutical Co., Ltd. Building 184,253.18 184,253.33
Gu Jinhua Building 178,800.00 596,654.10
Beijing Sinopharm Tianyuan Real Estate &
Property Management Co., Ltd. Building 173,523.81 254,544.44
China National Medicines Co., Ltd. Building 153,750.00 199,563.50
Hangzhou Xihu Business Group Corporation Building 132,823.81 126,500.00
Sinopharm Xinjiang Pharmaceutical Co.,
Ltd. Building 130,208.30 125,000.04
Shenzhen Jiufeng Investment Co., Ltd. Building 89,260.15 -
Taishan Qunkang Pharmacy Co., Ltd. Building 74,170.32 -
Xinjiang Baitong Property Service Co., Ltd. Building 44,581.16 34,551.74
Sinopharm Group Zhijun (Shenzhen)
PingShan Pharmaceutical Co., Ltd. Park 35,428.57 -
Sinopharm Holding Fujian Co., Ltd. Building 6,571.38 1,999.98
Huang Lijin Building - 819,144.15
Taishan Qunkang Pharmacy Co., Ltd. Building - 81,271.80
Linyi Medical Group Co., Ltd. Building - 2,010,483.23
Sinopharm Group Xinjiang Pharmaceutical
Co., Ltd. Building - 27,000.00
189
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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) Related party transactions – Financing
Related party Amount Inception Maturity Note
Borrowed from
Group Financial Co. Discount on commercial
28,864,324.33 6.February.2018 31.March.2018 acceptance notes
Group Financial Co. Discount on commercial
17,745,523.36 8.June.2018 31.July.2018 acceptance notes
Group Financial Co. Discount on commercial
16,989,310.72 8.June.2018 2.July.2018 acceptance notes
Group Financial Co. Discount on commercial
15,000,000.00 6.February.2018 9.May.2018 acceptance notes
Group Financial Co. Discount on commercial
15,000,000.00 8.June.2018 9.July.2018 acceptance notes
Group Financial Co. Discount on commercial
14,421,033.37 8.June.2018 31.July.2018 acceptance notes
Group Financial Co. Discount on commercial
13,299,616.90 6.February.2018 9.June.2018 acceptance notes
Group Financial Co. Discount on commercial
10,427,104.57 8.June.2018 9.August.2018 acceptance notes
Group Financial Co. Discount on commercial
10,000,000.00 8.June.2018 25.July.2018 acceptance notes
Group Financial Co. Discount on commercial
10,000,000.00 8.June.2018 25.August.2018 acceptance notes
Group Financial Co. Discount on commercial
9,154,974.69 6.February.2018 31.March.2018 acceptance notes
Group Financial Co. Discount on commercial
8,492,564.70 6.February.2018 31.March.2018 acceptance notes
Group Financial Co. Discount on commercial
6,533,003.82 23.May.2018 27.June.2018 acceptance notes
Group Financial Co. Discount on commercial
5,824,599.68 8.June.2018 31.July.2018 acceptance notes
Group Financial Co. Discount on bank
5,494,215.57 29.January.2018 25.July.2018 acceptance notes
Group Financial Co. Discount on commercial
5,397,269.57 8.June.2018 25.August.2018 acceptance notes
Group Financial Co. Discount on commercial
4,829,908.00 6.February.2018 25.April.2018 acceptance notes
Group Financial Co. Discount on bank
3,500,231.10 23.May.2018 28.September.2018 acceptance notes
Group Financial Co. Discount on commercial
3,203,901.98 8.June.2018 25.July.2018 acceptance notes
Guorun Medical Supply
Chain Services
(Shanghai) Co., Ltd. 3,200,000.00 27.June.2018 26.June.2018 Short-term borrowings
Group Financial Co. Discount on commercial
2,985,850.00 8.June.2018 25.July.2018 acceptance notes
Group Financial Co. Discount on commercial
2,586,003.25 6.February.2018 9.April.2018 acceptance notes
Group Financial Co. Discount on commercial
2,500,661.99 8.June.2018 9.July.2018 acceptance notes
Group Financial Co. Discount on bank
2,000,000.00 23.May.2018 28.June.2018 acceptance notes
Group Financial Co. Discount on bank
2,000,000.00 23.May.2018 19.October.2018 acceptance notes
190
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Related party Amount Inception Maturity Note
Borrowed from
Group Financial Co. Discount on bank
1,819,472.43 29.January.2018 25.July.2018 acceptance notes
Group Financial Co. Discount on commercial
1,782,632.39 6.February.2018 31.May.2018 acceptance notes
Group Financial Co. Discount on commercial
1,727,218.03 8.June.2018 31.August.2018 acceptance notes
Group Financial Co. Discount on bank
1,721,826.42 29.January.2018 26. August.2018 acceptance notes
Group Financial Co. Discount on bank
1,614,923.40 29.January.2018 25.June.2018 acceptance notes
Group Financial Co. Discount on commercial
1,567,611.66 8.June.2018 31.July.2018 acceptance notes
Group Financial Co. Discount on commercial
1,424,501.98 8.June.2018 3.November.2018 acceptance notes
Discount on bank
Group Financial Co. 1,350,000.00 29.January.2018 27.June.2018 acceptance notes
Discount on commercial
Group Financial Co. 1,020,299.50 6.February.2018 26.April.2018 acceptance notes
Discount on commercial
Group Financial Co. 1,009,120.49 8.June.2018 30.September.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 23.May.2018 30.July.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 23.May.2018 17.October.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 25.July.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 25.July.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 25.July.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 25.July.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 25.July.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 25.July.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 26.August.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 26.August.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 26.August.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 26.August.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 26.August.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 26.August.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 28.June.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 28.June.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 28.June.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 28.June.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 28.June.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 28.June.2018 acceptance notes
191
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Related party Amount Inception Maturity Note
Borrowed from
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 28.June.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 28.June.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 27.March.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 27.March.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 27.March.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 27.March.2018 acceptance notes
Discount on bank
Group Financial Co. 1,000,000.00 29.January.2018 27.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 30.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 30.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 27.April.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 27.April.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 27.April.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 31.May.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 31.May.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes
192
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Related party Amount Inception Maturity Note
Borrowed from
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes
Discount on commercial
Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes
Discount on bank
Group Financial Co. 965,711.76 29.January.2018 27.March.2018 acceptance notes
Discount on bank
Group Financial Co. 960,382.84 23.May.2018 30.June.2018 acceptance notes
Discount on bank
Group Financial Co. 881,196.30 23.May.2018 13.July.2018 acceptance notes
Discount on commercial
Group Financial Co. 866,989.11 11.February.2018 25.March.2018 acceptance notes
Discount on bank
Group Financial Co. 832,908.92 23.May.2018 20.October.2018 acceptance notes
Discount on commercial
Group Financial Co. 773,422.00 8.June.2018 26.July.2018 acceptance notes
Discount on commercial
Group Financial Co. 762,190.80 6.February.2018 26.May.2018 acceptance notes
Discount on bank
Group Financial Co. 726,717.56 23.May.2018 26.July.2018 acceptance notes
Discount on bank
Group Financial Co. 725,482.85 23.May.2018 8.September.2018 acceptance notes
Discount on commercial
Group Financial Co. 705,466.20 6.February.2018 30.June.2018 acceptance notes
Discount on bank
Group Financial Co. 700,894.97 23.May.2018 7.September.2018 acceptance notes
Discount on bank
Group Financial Co. 700,000.00 23.May.2018 26.September.2018 acceptance notes
Discount on bank
Group Financial Co. 682,963.15 29.January.2018 28.June.2018 acceptance notes
Discount on commercial
Group Financial Co. 663,946.00 8.June.2018 26.August.2018 acceptance notes
193
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Related party Amount Inception Maturity Note
Borrowed from
Discount on bank
Group Financial Co. 662,209.60 23.May.2018 26.July.2018 acceptance notes
Discount on commercial
Group Financial Co. 644,139.50 11.February.2018 25.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 637,825.05 11.February.2018 25.April.2018 acceptance notes
Discount on bank
Group Financial Co. 630,654.72 23.May.2018 12.June.2018 acceptance notes
Discount on bank
Group Financial Co. 626,307.92 23.May.2018 27.July.2018 acceptance notes
Discount on commercial
Group Financial Co. 605,037.40 8.June.2018 26.September.2018 acceptance notes
Discount on commercial
Group Financial Co. 603,985.26 11.February.2018 30.March.2018 acceptance notes
Discount on bank
Group Financial Co. 579,670.29 23.May.2018 23.July.2018 acceptance notes
Discount on commercial
Group Financial Co. 572,565.64 8.June.2018 31.October.2018 acceptance notes
Discount on bank
Group Financial Co. 509,183.55 23.May.2018 23.August.2018 acceptance notes
Discount on commercial
Group Financial Co. 483,944.32 6.February.2018 25.March.2018 acceptance notes
Discount on commercial
Group Financial Co. 448,347.26 11.February.2018 27.April.2018 acceptance notes
Discount on bank
Group Financial Co. 234,565.32 23.May.2018 28.July.2018 acceptance notes
Discount on commercial
Group Financial Co. 217,124.56 11.February.2018 31.May.2018 acceptance notes
Discount on commercial
Group Financial Co. 147,903.08 8.June.2018 25.July.2018 acceptance notes
Lend to
Sinopharm Group
Zhijun(Suzhou)
Pharmaceutical Co., Ltd. 44,000,000.00 26.January.2018 25. January.2019 Entrusted loan
(4) Related party asset transfer
Type of transaction 2018 2017
Sinopharm Holding Tianjin Binhai Pharmaceutical Co., Purchase of construction
Ltd. in progress 21,794.87
Purchase of intangible
Shanghai Tongyu Information Technology Co., Ltd. asset 46,153.85
194
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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)
(5) Other related party transactions
2018 2017
(a) Remuneration for key management personnel 2,981,250.00 2,507,458.00
(b) Interest expense
Related party Category 2018 2017
Payment of notes
Group Financial Co. discount interest 3,411,652.84 3,150,834.52
China National Pharmaceutical Group Payment of entrusted loan
Corporation interest 641,469.02 134,673.05
Sinopharm Holding Financing Lease Payment of financing
Co., Ltd. lease interest 623,402.17 837,111.29
Guorun Medical Supply Chain Payment of related parties
Services (Shanghai) Co., Ltd. loan interest 1,778.67 -
Group Financial Co.. Payment of loan interest - 688,598.96
4,678,302.70 4,811,217.82
(c) Interest income
Related party Category 2018 2017
Sinopharm Group Zhijun (Suzhou)
Pharmaceutical Co., Ltd. Entrusted loan interest 1,549,650.99 937,951.77
Group Financial Co. Deposit interest 387,479.46 129,656.35
Shanghai Shyndec Pharmaceutical
Co., Ltd. Other interest - 47,628.66
1,937,130.45 1,115,236.78
195
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
6. Commitments between the Group and related parties
2018 2017
RMB‘0,000 RMB‘0,000
Leases
Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd. 3,439.50 2,580.00
Shenyang Pharmaceutical Co., Ltd. 3,000.00 700.00
Sinopharm Holding Yangzhou Co., Ltd. 978.00 1,173.60
Linyi Medical Group Co., Ltd. 959.42 429.97
Sinopharm Group Medicine Logistic Co., Ltd. 806.70 -
Guangdong Jiyuantang Development Co., Ltd. 685.50 -
Nanjing Yuanguang Trading Co., Ltd. 672.00 463.09
Taishan Xiangranhui Trade Co., Ltd 551.18 527.54
Pingdingshan Pusheng Pharmaceutical Co., Ltd. 512.85 162.11
Sinopharm Group Shanghai Co., Ltd. 488.79 4,032.80
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd. 352.45 877.80
Lerentang Investment Group Co., Ltd. 263.50 527.00
Shaoguan Wujiang District Muyang Medicine Information Consultant Co., Ltd. 216.08 263.09
Gu Jinhua 213.96 289.06
Sinopharm Group Co., Ltd. 147.29 173.28
Sinopharm Holding Beijing Co., Ltd. 146.00 166.42
Taishan Qunkang Pharmacy Co., Ltd. 93.01 53.36
Beijing Sinopharm Tianyuan Real Estate & Property Management Co., Ltd. 86.90 -
Wang Yang 82.80 110.40
China National Medicines Co., Ltd. 75.00 94.50
Hangzhou Xihu Business Group Corporation 73.99 87.93
Shenzhen Jiufeng Investment Co., Ltd. 58.00 -
Sinopharm Holding Kashi New & Special Drugs Co., Ltd. 48.54 52.89
Sinopharm Xinjiang Pharmaceutical Co., Ltd. 27.56 40.69
Sinopharm Holding Fujian Co., Ltd. 1.96 2.65
Hunan Minshengtang Investment Co., Ltd. - 841.86
Sinopharm Group Zhijun (Shenzhen) PingShan Pharmaceutical Co., Ltd. - -
Xinjiang Baitong Property Service Co., Ltd. - -
Zhang Zhenfang - 80.50
Shenzhen Jiufeng Investment Co., Ltd. - 78.00
Sinopharm Holding Shanxi Co., Ltd. - 49.14
Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd. - 45.31
13,980.97 13,902.99
Lease out
Sinopharm Group Zhijun (Shenzhen) Pharmaceutical Co., Ltd. - 35.14
Shenzhen Zhijun Pharmaceutical Trade Co., Ltd. - 28.57
Sinopharm Group Medicine Logistic Co., Ltd. - 16.94
- 80.65
196
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
7. Amounts due from related parties
Accounts receivable 2018 2017
Gross carrying Provision for Gross carrying Provision for
Related party amount bad debt amount bad debt
Foshan Chancheng Pharmaceutical Co.,
Ltd. 36,703,959.69 207,364.54 21,934,107.53 175,357.55
Sinopharm Group Co., Ltd. 30,140,408.15 - 15,369,464.29 -
Shanghai Beiyi Guoda pharmaceutical Co.
Ltd. 18,617,164.50 - 17,897,203.42 -
Sinopharm Holding Hainan Co., Ltd. 10,514,385.94 - 14,215,247.85 -
Sinopharm Holding Hainan Hongyi Co., Ltd. 8,529,182.80 - 8,091,971.32 -
Sinopharm Lingyun Biopharmaceutical
(Shanghai) Co., Ltd. 4,589,946.00 - 2,157,970.20 -
Sinopharm Health Online Co., Ltd. 4,525,649.68 - 9,422,294.03 -
Sinopharm Holding Sub Marketing Center
Co., Ltd. 4,190,027.84 - 2,804,530.25 -
Beijing Golden Elephant Fosun
Pharmaceutical Co., Ltd. 4,124,312.92 - 8,809,915.50 -
Sinopharm Sichuan Pharmaceutical Co.,
Ltd. 3,976,185.33 - 662,971.38 -
Foshan Chancheng District Central Hospital 3,576,265.62 20,670.88 2,529,205.51 12,659.85
China National Medicines Co., Ltd. 3,501,874.71 - 2,676,276.13 -
Shenzhen Hengsheng Hospital 3,490,867.82 - - -
Sinopharm Le-Ren-Tang Medicine Co., Ltd. 3,339,262.36 - 3,637,345.22 -
Pudong New Area of Shanghai
Pharmaceutical Medicine Ltd. 2,854,404.51 - 7,370,859.93 -
Sinopharm Holding Nantong Co., Ltd. 2,722,425.92 - 1,704,073.87 -
Sinopharm Group (Tianjin) Eastern Bokang
Pharmaceutical Co., Ltd. 2,635,080.55 - 1,005,726.44 -
Sinopharm Holding Yunnan Co., Ltd. 2,532,060.95 - 1,035,424.32 -
Sinopharm Holding Henan Co., Ltd. 1,557,141.42 - 1,154,757.68 -
Sinopharm Holding Beijing Huahong Co.,
Ltd. 1,375,881.06 - 506,804.30 -
Sinopharm Holding Hubei Co., Ltd. 1,339,756.44 - 2,748,951.80 -
Sinopharm Holding Beijing Co., Ltd. 1,296,500.16 - 90,046.08 -
Sinopharm Holding Shanxi Co., Ltd. 1,265,918.60 - 1,200,884.28 -
Sinopharm Holding Wenzhou Co., Ltd. 1,230,357.78 - 1,158,304.46 -
Sinopharm Holding Shandong Co., Ltd. 1,225,393.60 - 588,056.32 -
Sinopharm Group Xinjiang Special Drugs
National Pharmaceutical Co., Ltd. 1,148,175.69 - 4,323,084.16 -
Foshan Chanyixing Medicine Development
Co Ltd. 987,490.80 3,943.78 673,746.17 2,421.30
Sinopharm Holding Yangzhou Co., Ltd. 935,414.27 - 1,296,112.24 -
Sinopharm Holding Shanghai Likang
Pharmaceutical Co., Ltd. 675,756.00 - 130,704.00 -
X. Related party relationships and transactions (Continued)
197
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
7. Amounts due from related parties (Continued)
Accounts receivable(continued) 2018 2017
Gross carrying Provision for Gross carrying Provision for
Related party amount bad debt amount bad debt
Sinopharm Holding Guizhou Co., Ltd. 639,918.78 - 170,986.79 -
Sinopharm Holding Hunan Co., Ltd. 595,452.08 - 43,981.92 -
Sinopharm Holding Jilin Co., Ltd. 492,849.62 - 565,721.74 -
Sinopharm Holding Tianjin Co., Ltd. 416,379.20 - 135,626.56 -
Sinopharm Holding Anhui Co., Ltd. 391,641.84 - 33,633.20 -
Sinopharm Holding Xinjiang Special Drugs
Western Pharmaceutical Co., Ltd. 329,296.00 - 380,649.04 -
Shanghai Merro Pharmaceutical Co., Ltd. 249,999.26 - 612,664.66 -
Sinopharm Holding Fujian Co., Ltd. 235,092.24 - 180,055.08 -
Sinopharm Holding Shanxi Co., Ltd. 229,324.80 - 36,481.28 -
Sinopharm Holding Ningxia Co., Ltd. 227,560.68 - 1,104,953.59 -
Sinopharm Group Southwest Medicine
Co., Ltd. 224,193.04 - 16,558.20 -
Sinopharm Holding Dalian Co., Ltd. 214,854.56 - 541,531.52 -
Shanghai Guoda Lingyun Pharmacy Co.,
Ltd. 209,212.66 - 270,164.54 -
Sinopharm Holding Donghong Medical
(Shanghai) Co., Ltd. 179,629.32 - 124,991.20 -
Sinopharm Group Medicine Logistic Co.,
Ltd. 155,588.33 - 189,151.95 -
Yuxi Sinopharm Medicine Co., Ltd. 146,026.37 - 146,026.37 -
Sinopharm Holding Qinghai Co., Ltd. 108,180.98 - 27,315.00 -
Sinopharm Holding Gansu Co., Ltd. 98,794.08 - - -
Sinopharm Holding Ulanqab Co., Ltd. 97,118.11 - - -
Hubei Medical Group Co., Ltd. 85,653.12 - 113,688.23 -
Sinopharm Holding Heilongjiang Co., Ltd. 76,328.00 - 50,000.00 -
Sinopharm Holding Tianjin North Medicine
Co., Ltd. 68,180.00 - - -
Sinopharm Holding Nanchang Pharmacy
Co., Ltd. 62,660.40 - - -
Sinopharm Holding Dalian Hecheng Co.,
Ltd. 62,495.50 - 168,912.00 -
Sinopharm Group Shanxi Co., Ltd. 52,792.80 - 127,541.80 -
Sinopharm Holding Changzhou Medical
Logistics Center Co., Ltd. 44,066.56 - 67,701.92 -
Sinopharm Holding Huangshi Co., Ltd. 39,317.00 - - -
Sinopharm Group Zhijun (Shenzhen)
PingShan Pharmaceutical Co., Ltd. 39,204.00 - 19,980.00 -
Sinopharm Holding Chengdu Co., Ltd. 35,908.41 - 144,788.41 -
X. Related party relationships and transactions (Continued)
198
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
7. Amounts due from related parties (Continued)
Accounts receivable(continued) 2018 2017
Gross carrying Provision for Gross carrying Provision for bad
Related party amount bad debt amount debt
Sinopharm Holding Wuxi Co., Ltd. 30,260.00 - 61,247.00 -
Sinopharm Holding Fuzhou Co., Ltd. 15,192.00 - - -
Sinopharm Holding Putian Co., Ltd. 15,192.00 - - -
Sinopharm Holding Longyan Co., Ltd. 15,192.00 - - -
Sinopharm Holding Zunyi Co., Ltd. 12,238.80 - - -
Sinopharm Holding Jiangxi Co., Ltd. 11,188.52 - 129,605.63 -
Sinopharm Holding Honghe Co., Ltd. 11,130.50 - - -
Sinopharm Holding Xinxiang Co., Ltd. 9,789.00 - - -
Sinopharm Holding Ningde Co., Ltd. 7,596.00 - - -
Sinopharm Group Zhijun(Shenzhen)
Pharmaceutical Co., Ltd. 3,534.90 - 6,780.30 -
Sinopharm Holding Hongrun Medical
Business Service (Shanghai) Co., Ltd. 2,316.62 - - -
Sinopharm Fengliaoxing Medical Hospital
Co., Ltd. 2,278.20 - 4,611.25 14.56
Sinopharm Holding Beijing Tianxing Puxin
Biological Medical Co., Ltd. - - 155,520.00 -
Sinopharm Holding Zhejiang Co., Ltd. - - 716,400.00 -
Sinopharm Xinxiang Chain Store Co., Ltd. - - 20,066.29 -
Sinopharm Holding Changzhou Co., Ltd. - - 483,328.40 -
China National Pharmaceutical Foreign
Trade Corporation - - 1,327.42 -
Hutchison Whampoa Sinopharm
Pharmaceuticals (Shanghai) Co., Ltd. - - 72,992.40 -
Shanghai Liyi Drug Store Co.,Ltd - - 35,579.55 -
Linyi Medical Group Co., Ltd. - - 2,538.80 -
Sinopharm Holding Huaian Co., Ltd. (19.40) - - -
Sinopharm Holding Hulun Buir Co., Ltd. (33,295.45) - 982,776.96 -
199
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
7. Amounts due from related parties (Continued)
Notes receivable 2018 2017
Gross carrying Provision for Gross carrying Provision for
Related party amount bad debt amount bad debt
Sinopharm (Guangzhou) Medical
Equipment Co., Ltd. 20,000,000.00 - - -
Sinopharm Holding Hainan Co., Ltd. 6,160,961.40 - 3,650,933.87 -
Sinopharm Le-Ren-Tang Medicine Co.,
Ltd. 900,000.00 - - -
Sinopharm Holding Hubei Co., Ltd. 243,000.00 - - -
Sinopharm Group Zhijun (Shenzhen)
PingShan Pharmaceutical Co., Ltd. 80,000.00 - - -
Sinopharm Group (Tianjin) Eastern
Bokang Pharmaceutical Co., Ltd. - - 161,555.40 -
Sinopharm Holding Shanxi Co., Ltd. - - 500,000.00 -
Sinopharm Holding Henan Co., Ltd. - - 1,500,000.00 -
Sinopharm Holding Inner Mongolia Co.,
Ltd. - - 136,172.00 -
Sinopharm Holding Nantong Co., Ltd. - - 2,240,000.00 -
Sinopharm Holding Dalian Hecheng Co.,
Ltd. - - 116,885.00 -
Foshan Chancheng Pharmaceutical Co.,
Ltd. - - 8,149,623.63 -
200
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
7. Amounts due from related parties (Continued)
Other receivables 2018 2017
Gross carrying Provision for Gross carrying Provision for bad
Related party amount bad debt amount debt
Sinopharm Group Medicine Logistic Co.,
Ltd. 5,001,939.98 - 1,398,849.53 -
Sinopharm Group Zhijun(Suzhou)
Pharmaceutical Co., Ltd. 44,000,000.00 - 44,000,000.00 -
Guorun Medical Supply Chain Services
(Shanghai) Co., Ltd. 2,940,000.00 - - -
Sinopharm Holding Sub Marketing Center
Co., Ltd. 8,120.00 - - -
Sinopharm Holding Henan Co., Ltd. 67,526.20 - - -
Sinopharm Holding Jiaozuo Co., Ltd. 21,476.00 - - -
Sinopharm Holding Fujian Co., Ltd. 5,476.29 - - -
Shanghai Modern Pharmaceutical Co., Ltd.
(Modern Pharmaceutical) 101,166,758.92 - 125,181,658.92 -
Wuhan Zhonglian Pharmaceutical Group
Co., Ltd. 5,000.00 500.00 5,000.00 500.00
Sinopharm Group Zhijun(Shenzhen)
Pharmaceutical Co., Ltd. 79,791.10 600.00 17,060.30 300.00
Guangxi Deyiyuan Medical Investment
Center (Limited Partnership) 4,000,000.00 - - -
China National Medicines Co., Ltd. 115,340.85 - - -
Sinopharm Holding Shanxi Co., Ltd. - - 100,000.00
Baise Jianan Medicine Chain Co., Ltd. 980,000.00 - - -
Sinopharm Group Xinjiang Special Drugs
National Pharmaceutical Co., Ltd. 100,000.00 - 100,000.00 -
Sinopharm Lerentang Hebei Medical
Instrument Trade Co., Ltd. 48,493.16 - 48,493.16 -
Sinopharm Health Online Co., Ltd. - - 1,071,427.97 -
Advances to suppliers 2018 2017
Gross carrying Provision for Gross carrying Provision for bad
Related party amount bad debt amount debt
Hunan Minshengtang Investment Co., Ltd. 4,466,242.71 - 2,670,438.92 -
Sinopharm Holding Shanxi Co., Ltd. 3,119,762.79 - 287,996.37 -
Sinopharm Group Xinjiang Special Drugs
National Pharmaceutical Co., Ltd. 1,532,954.29 - 2,025,021.70 -
Sinopharm Group Co., Ltd. 1,327,141.31 - 1,963,516.79 -
Sinopharm Chuan Kang Pharmaceutical
Co., Ltd. 717,145.38 - -
Linyi Medical Group Co., Ltd. 596,733.21 - -
Nanjing Yuanguang Trading Co., Ltd. 395,816.01 - 168,168.19 -
Sinopharm Xinjiang Korla Pharmaceutical
Co., Ltd. 264,360.50 - 264,360.50 -
Sinopharm Holding Kashi New & Special
Drugs Co., Ltd. 241,371.50 - 25,200.00 -
Sinopharm Holding Shanxi Co., Ltd. 234,017.13 - 5,502,363.26 -
201
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
7. Amounts due from related parties (Continued)
Advances to suppliers (continued) 2018 2017
Gross carrying Provision for Gross carrying Provision for bad
Related party amount bad debt amount debt
Sinopharm Holding Xinjiang Xinte Karamay
Pharmaceutical Co., Ltd. 213,574.68 - - -
Chongqing Yaoyou Pharmaceutical Co.,
Ltd. 211,092.00 - - -
Guizhou Tongjitang Pharmaceutical Co.,
Ltd. 154,778.29 - - -
Anhui Jingfang Pharmaceutical Co., Ltd. 150,708.40 - - -
Chengdu Rongsheng Pharmacy Co., Ltd. 143,348.00 - 633.13 -
Sinopharm Holding Beijing Co., Ltd. 130,000.00 - 117,500.00 -
Sinopharm Group Yibin Pharmaceuticals
Co., Ltd. 112,426.00 - - -
Shanghai Modern Hasen (Shangqiu)
Pharmaceutical Co., Ltd. 88,685.38 - - -
China National Medicines Co., Ltd. 78,750.00 - 183,033.71 -
Beijing Sinopharm Tianyuan Real Estate &
Property Management Co., Ltd. 72,000.00 - - -
Xinjiang Baitong Property Service Co., Ltd. 67,427.65 - 10,867.40 -
Suzhou Erye Pharmaceutical Limited
Company 50,220.00 - - -
Sinopharm Holding Sub Marketing Center
Co., Ltd. 35,181.20 - 1,025.86 -
Taishan Qunkang Pharmacy Co., Ltd. 26,140.03 - - -
Sinopharm Holding Lerentang
Pharmaceutical Co., Ltd. 7,960.00 - - -
Sinopharm Holding Tianjin Co., Ltd. 7,705.88 - - -
China Sinopharm International Corporation 7,314.00 - - -
Winteam Pharmaceutical Group Ltd. 1,927.17 - 19,160.00 -
Sinopharm Holding Hunan Co., Ltd. - - 3,136.32 -
Sinopharm Group Guorui Medicine Co.,
Ltd. - - 279,120.00 -
Sinopharm Holding Fujian Co., Ltd. - - 5,476.24 -
Sinopharm Holding Yangzhou Co., Ltd. - - 4,127.79 -
Sinopharm Holding Suzhou Co., Ltd. - - 7,676.52 -
Guilin South pharmaceutical Co., Ltd. - - 20,000.00 -
Jinzhou AoHong Pharmaceuticals Co., Ltd. - - 20,136,997.60 -
Shanghai Shangsheng Biological Products
Co., Ltd. - - 1,271,300.00 -
Sinopharm Xinjiang Pharmaceutical Co.,
Ltd. - - 42,708.30 -
Sinopharm Group Zhijun (Shenzhen)
PingShan Pharmaceutical Co., Ltd. - - 158.49 -
Gu Jihua - - 78,420.01 -
Sinopharm Holding Jinhua Co., Ltd. - - 38.80 -
Sinopharm Holding Tianjin Distribution
Center Co., Ltd. - - 1,735.14 -
Sinopharm Holding Shenyang Co., Ltd. - - 1,334,883.98 -
202
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties
Related party 2018 2017
Accounts payable
Sinopharm Holding Sub Marketing Center Co., Ltd. 185,434,546.68 143,908,467.08
China National Medicines Co., Ltd. 50,999,852.95 28,362,452.88
Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd. 38,736,408.80 37,504,845.76
Sinopharm Holding Shanxi Co., Ltd. 37,706,274.33 244,476.98
Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. 35,753,944.33 16,003,934.07
Sinopharm Le-Ren-Tang Medicine Co., Ltd. 28,095,649.43 -
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co.,
Ltd. 19,956,249.97 19,742,833.00
Sinopharm Group Co., Ltd. 19,380,143.87 45,203,988.04
Lanzhou Institute of Biological Products Co., Ltd. 18,300,000.00 -
Jiangsu Wanbang Pharmacy Marketing Co., Ltd. 18,191,902.38 10,003,320.16
Sinopharm Holding Shenyang Co., Ltd. 11,775,646.40 -
Sinopharm Holding Lerentang Pharmaceutical Co., Ltd. 11,678,984.58 7,796,905.93
Sinopharm Holding Lunan Co., Ltd. 11,599,866.46 152,924.30
Sinopharm Holding Beijing Co., Ltd. 10,395,045.63 1,148,947.27
Sinopharm Holding Inner Mongolia Co., Ltd. 10,291,898.39 2,664,468.46
Chongqing Yaoyou Pharmaceutical Co., Ltd. 10,162,662.09 5,449,975.66
Winteam Pharmaceutical Group Ltd. 8,836,641.73 1,291,002.80
Sinopharm Holding Fujian Co., Ltd. 8,523,446.87 3,717,579.24
Sinopharm Holding Jiangsu Co., Ltd. 6,712,929.75 7,730,787.92
Sinopharm Holding Shanxi Instrument Branch Co., Ltd. 6,108,785.26 4,089,563.14
Suzhou Erye Pharmaceutical Limited Company 6,043,499.78 -
Shenzhen Wanwei Medicine Trading Co., Ltd. 4,844,806.71 4,240,123.65
Shenzhen Main Luck Pharmaceutical Co., Ltd. 4,827,911.78 6,520,471.48
Sinopharm Holding Yangzhou Co., Ltd. 4,754,359.23 5,987,057.82
Jinzhou AoHong Pharmaceuticals Co., Ltd. 4,663,433.10 -
Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd. 4,540,260.42 1,141,702.25
Sinopharm Lerentang Shijiazhuang Medicine Co., Ltd. 4,086,875.36 2,106,607.37
Sinopharm Holding Pingdingshan Co., Ltd. 3,648,364.61 8,178,253.43
Tibet Yaopharma Co., Ltd. 3,148,580.21 -
Sinopharm Holding Ningxia Co., Ltd. 2,799,537.02 2,809,371.28
Sinopharm Group Zhijun (Shenzhen) PingShan Pharmaceutical Co.,
Ltd. 2,714,815.09 1,350,614.09
203
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Related party 2018 2017
Accounts payable (Continued)
Sinopharm Holding Shanxi Co., Ltd. 2,652,903.44 -
Sinopharm Holding Xiamen Co., Ltd. 2,630,865.97 4,006,491.37
Sinopharm Holding Changzhou Medical Logistics Center Co., Ltd. 2,131,769.27 2,792,663.08
Yichang Humanwell Pharmaceutical Co., Ltd. 2,073,807.37 2,620,139.37
Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd. 2,057,833.38 803,559.06
Sinopharm Holding Beijing Huahong Co., Ltd. 1,874,216.57 1,277,513.68
Sinopharm Holding Fuzhou Co., Ltd. 1,616,691.28 996,015.17
Sinopharm Holding Hulun Buir Co., Ltd. 1,600,453.94 2,902,181.03
Sinopharm Lerentang Hebei Medical Instrument Trade Co., Ltd. 1,582,888.55 1,708,132.21
Sinopharm Holding Jinan Co., Ltd. 1,374,865.44 71,695.99
Sinopharm Holding Hunan Co., Ltd. 1,364,062.66 148,565.65
Foshan Fengliaoxing Pharmaceutical Co., Ltd. 1,358,827.63 1,380,114.57
China Otsuka Pharmaceutical Co., Ltd. 1,352,547.35 1,073,847.85
Sinopharm Holding Beijing Kangchen Bio-Pharmaceutical Co., Ltd. 1,297,375.21 1,095,793.12
Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical Co.,
Ltd. 1,074,129.27 321,836.11
Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd. 935,712.46 482,357.79
Sinopharm Holding Henan Co., Ltd. 875,000.19 1,526,472.33
Shanghai Transfusion Technology Co., Ltd. 779,650.00 251,500.00
Sinopharm Group Rongsheng Pharmaceutical Co., Ltd. 773,028.14 197,304.23
Sinopharm Holding Changzhou Co., Ltd. 762,677.30 156,301.06
Sinopharm Holding Wuxi Co., Ltd. 744,575.65 234,944.25
Sinopharm Holding Shandong Co., Ltd. 718,163.95 -
Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd. 713,718.67 495,022.50
Sinopharm Holding Suzhou Co., Ltd. 710,094.01 656,992.49
Shenyang Hongqi Pharmaceutical Co., Ltd. 588,503.90 394,762.85
Huayi Pharmaceutical Co., Ltd. 532,096.11 -
Pudong New Area of Shanghai Pharmaceutical Medicine Ltd. 521,871.90 798,390.65
Wuhan Zhonglian Pharmaceutical Group Co., Ltd. 503,372.84 526,750.40
Hunan Dongting Pharmaceutical Co., Ltd. 488,665.79 110,111.27
Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Co., Ltd. 456,155.01 363,937.65
Sinopharm Holding Yangzhou Biological Medicine Co., Ltd. 444,000.00 24,852.45
Sinopharm Holding Dalian Co., Ltd. 437,980.07 80,166.00
Sinopharm Group Guorui Medicine Co., Ltd. 366,991.38 34,649.98
X. Related party relationships and transactions (Continued)
204
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
8. Amounts due to related parties (Continued)
Related party 2018 2017
Accounts payable (Continued)
Sinopharm Holding Donghong Medical (Shanghai) Co., Ltd. 363,060.90 46,098.20
Sichuan Hexin Pharmaceutical Co., Ltd. 350,457.93 -
China National Pharmaceutical Foreign Trade Corporation 341,551.34 2,035,108.96
Shantou Jinshi Powder Injection Co., Ltd. 319,759.20 -
Sinopharm Holding Jinzhou Co., Ltd. 306,370.88 520,194.75
Chongqing Haisiman Pharmaceutical Co., Ltd. 275,753.91 438,368.99
Guizhou Tongjitang Pharmaceutical Co., Ltd. 240,306.88 557,491.17
Chengdu Rongsheng Pharmacy Co., Ltd. 235,668.87 -
Shanghai Merro Pharmaceutical Co., Ltd. 232,663.76 311,639.09
Anhui Jingfang Pharmaceutical Co., Ltd. 226,349.94 275,317.28
Sinopharm Holding Dezhou Co., Ltd. 209,815.57 239,430.02
Sinopharm Group Shanxi Co., Ltd. 206,588.00 -
Chengdu Institute of Biological Products Co., Ltd. 183,600.00 -
Sinopharm Group Southwest Medicine Co., Ltd. 177,932.00 -
Sinopharm Holding Anhui Co., Ltd. 171,254.00 -
Sinopharm Holding Tongliao Co., Ltd. 165,592.89 440,884.70
Shanghai Modern Pharmaceutical Co., Ltd. (Modern Pharmaceutical) 163,448.94 12,807.61
Sinopharm Holding Putian Co., Ltd. 161,557.66 149,819.81
Sinopharm Holding Lianyungang Co., Ltd. 155,264.40 -
Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co., Ltd. 155,194.84 42,425.80
Shanghai Chaohui Pharmaceutical Co., Ltd. 152,724.16 8,938.82
Jiangsu Fuxing Pharmaceutical Trading Co., Ltd 139,480.00 183,799.20
Sinopharm Holding Yancheng Co., Ltd. 122,112.27 960.10
Sinopharm Holding Kashi New & Special Drugs Co., Ltd. 105,211.32 155,512.79
Sinopharm Shantou Jinshi Pharmaceutical Co., Ltd. 96,434.97 55,307.67
Sinopharm Holding Changsha Co., Ltd. 92,749.70 -
Guangdong Medi-World Pharmaceutical Co., Ltd. 87,519.32 248,787.32
Sinopharm Holding Taizhou Co., Ltd. 86,054.00 94,976.03
Sinopharm Holding Dalian Hecheng Co., Ltd. 84,645.00 -
The Fourth Pharmaceutical Co., Ltd. of Zhonglian Group 82,099.79 77,147.00
Sinopharm Holding Ulanqab Co., Ltd. 80,963.40 133,641.00
Sinopharm Holding Zhihui Minsheng (Tianjin) Medicine Co., Ltd. 80,410.58 -
Sinopharm Holding Quanzhou Co., Ltd. 77,881.33 106,979.43
Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd. 75,814.60 150,269.45
205
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Related party 2018 2017
Accounts payable (Continued)
Foshan Dezhong Pharmaceutical Co., Ltd. 58,320.10 98,779.60
Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd. 55,598.69 -
China National Pharmaceutical Industry Co., Ltd. 54,841.86 52,320.00
Sinopharm Holding Tianjin Co., Ltd. 52,844.12 88,599.65
Shandong Lu Ya Pharmaceutical Co., Ltd. 52,819.07 1,507,459.07
Sinopharm Holding Zhejiang Co., Ltd. 46,789.67 55,459.28
Sinopharm Holding Sanyi Medicine (Wuhu) Co., Ltd. 45,404.17 74,439.47
Sinopharm Holding Wende Medicine Nanjing Co., Ltd. 42,760.80 -
Jiangsu Huanghe Pharmaceutical Co., Ltd. 35,363.79 53,331.64
Sichuan Jiangyouzhongbafuzi Technology Development Co., Ltd. 33,454.55 8,648.65
Sinopharm Holding Ordos Co., Ltd. 33,195.00 55,635.00
Sinopharm Holding Yongzhou Co., Ltd. 30,907.44 30,163.49
Sinopharm Holding Biopharmaceutical (Tianjin) Co., Ltd. 30,235.86 20,509.50
Shanghai Modern Hasen (Shangqiu) Pharmaceutical Co., Ltd. 29,921.40 30,918.42
Sinopharm Group Yibin Pharmaceuticals Co., Ltd. 29,603.90 23,030.00
Sinopharm Group Shanghai Medicine Device Co., Ltd. 16,603.02 16,603.02
Sinopharm Holding Liaocheng Co., Ltd. 16,197.93 16,197.93
Sinopharm Holding Shanxi Jincheng Co., Ltd 13,110.09 -
Sinopharm Lerentang Qinhuangdao Medicine Co., Ltd. 11,086.50 -
Sinopharm Hebei Medical Instrument Co., Ltd. 7,644.60 3,564.00
Sinopharm Group Zhijun(Suzhou) Pharmaceutical Co., Ltd. 6,408.00 -
Sinopharm Holding Rizhao Co., Ltd. 5,292.81 -
Sinopharm Prospect Dentech (Beijing) Co., Ltd. 2,548.01 1,206.00
Changchun Changsheng Gene Pharmaceutical Co., Ltd. 1,492.91 14,232.00
Guilin South pharmaceutical Co., Ltd. 1,211.92 1,201.12
Sinopharm Holding Huaideju Pharmaceutical (Xiamen) Co., Ltd. 1,113.85 1,113.85
Sinopharm Fengliaoxing (Foshan) Medicines Co., Ltd. 767.28 149.02
Beijing Huasheng Pharmaceutical Biotechnology Development Co., Ltd. 637.01 637.01
Shenzhen Zhijun Pharmaceutical Trade Co., Ltd. 534.20 534.20
Sinopharm Holding Chongqing Co., Ltd. 117.64 117.64
Sinopharm Zhuhai Medical Instrument Co., Ltd. 104.31 -
Shanghai Shyndec Pharmaceutical Marketing Co., Ltd. 77.76 566,354.26
Sinopharm Holding Tianjin Distribution Center Co., Ltd. 35.32 -
Sinopharm Group Weiqida Medicine Co., Ltd. 28.93 28.93
206
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Related party 2018 2017
Accounts payable (Continued)
Linyi Medical Group Co., Ltd. 10.47 10.47
Sinopharm Holding Xinyu Co., Ltd. 0.01 0.01
Sinopharm Group Shanghai Management Consulting Branch Co., Ltd. - -
Beijing Huamiao Pharmaceutical Co., Ltd. - 339,889.47
Sinopharm Holding Chengdu Co., Ltd. - 104,102.57
Guizhou Longlife Pharmacertical Co., Ltd. - 103,560.00
Sinopharm ShanXi Ruifulai Pharmaceutical Co., Ltd. - 63,081.60
Sinopharm Holding Jiangxi Co., Ltd. - 30,372.00
Sinopharm Xinjiang Pharmaceutical Co., Ltd. - 27,692.31
Sinopharm Holding Tianjin North Medicine Co., Ltd. - 19,275.46
Related party 2018 2017
Notes payable
Sinopharm Holding Shanxi Co., Ltd. 96,633,609.80 96,829,230.00
Sinopharm Holding Shenyang Co., Ltd. 77,441,965.84 40,215,446.25
Sinopharm Holding Sub Marketing Center Co., Ltd. 74,535,975.61 91,320,346.11
Sinopharm Holding Shanxi Co., Ltd. 43,255,070.00 29,931,650.00
Sinopharm Holding Inner Mongolia Co., Ltd. 8,725,011.77 -
Sinopharm Lerentang Shijiazhuang Medicine Co., Ltd. 6,146,830.73 4,180,000.97
Lanzhou Institute of Biological Products Co., Ltd. 3,760,000.00 21,600,000.00
Sinopharm Holding Lerentang Pharmaceutical Co., Ltd. 3,646,912.36 2,669,407.85
Sinopharm Holding Xiamen Co., Ltd. 3,589,479.22 8,573,712.86
Sinopharm Holding Fujian Co., Ltd. 3,582,375.49 6,294,466.11
Sinopharm Holding Hunan Co., Ltd. 3,525,946.06 -
Sinopharm Holding Jinzhou Co., Ltd. 2,823,753.72 647,386.99
Sinopharm Holding Shanxi Instrument Branch Co., Ltd. 2,508,000.00 2,051,364.70
China National Medicines Co., Ltd. 1,776,402.01 8,223,431.95
Shenzhen Main Luck Pharmaceutical Co., Ltd. 1,052,377.40 -
Shenzhen Wanwei Medicine Trading Co., Ltd. 995,346.00 1,495,728.00
Chengdu Rongsheng Pharmacy Co., Ltd. 953,756.00 1,760,000.00
Sinopharm Holding Dalian Co., Ltd. 645,404.90 295,145.94
Sinopharm Holding Ningxia Co., Ltd. 500,000.00 1,700,000.00
Shanghai Shyndec Pharmaceutical Marketing Co., Ltd. 369,006.80 -
Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd. 341,833.60 123,292.80
207
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Related party 2018 2017
Notes payable (Continued)
Sinopharm Holding Putian Co., Ltd. 327,255.56 594,085.45
Sinopharm Group Zhijun (Shenzhen) PingShan Pharmaceutical Co.,
Ltd. 318,324.00 157,760.00
Sinopharm Holding Quanzhou Co., Ltd. 290,051.32 457,039.40
Foshan Fengliaoxing Pharmaceutical Co., Ltd. 201,891.16 -
Sinopharm Holding Changsha Co., Ltd. 110,056.00 -
Sinopharm Group Rongsheng Pharmaceutical Co., Ltd. 104,417.00 170,130.00
Sinopharm Group Co., Ltd. - 60,681,897.22
Chongqing Haisiman Pharmaceutical Co., Ltd. - 3,556,905.12
Chongqing Yaoyou Pharmaceutical Co., Ltd. - 6,722,293.66
Winteam Pharmaceutical Group Ltd. - 68,542.00
Shenyang Hongqi Pharmaceutical Co., Ltd. - 780,010.90
Sinopharm Holding Jinan Co., Ltd. - 240,000.00
Sinopharm Le-Ren-Tang Medicine Co., Ltd. - 20,376,118.04
Jiangsu Wanbang Pharmacy Marketing Co., Ltd. - 2,207,677.30
Anhui Jingfang Pharmaceutical Co., Ltd. - 348,304.76
Guizhou Tongjitang Pharmaceutical Co., Ltd. - 980,303.96
208
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Related party 2018 2017
Other payables
Sinopharm Group Co., Ltd. 3,414,612.73 584,000.84
Sinopharm Group Shanghai Co., Ltd. 1,660,431.38 -
Sinopharm Group Chemical Reagent Co., Ltd. 175,700.00 -
Sinopharm Holding Tianjin Binhai Pharmaceutical Co., Ltd. 1,162,820.00 1,137,319.99
Sinopharm Group Medicine Logistic Co., Ltd. 9,106,938.25 4,128,793.99
Guorun Medical Supply Chain Services (Shanghai) Co., Ltd. 3,200,000.00 -
China National Scientific Instruments & Materials Imp/Exp
Shenzhen Co., Ltd. 37,450.00 37,450.00
China National of Traditional&Herbal Medicine Co., Ltd. 1,300,000.00 1,300,000.00
Sinopharm Chongqing Pharmaceutical and Medical Industry
Design Institute 6,712,832.46 -
Shanghai Modern Pharmaceutical Co., Ltd. (Modern
Pharmaceutical) 503,462.18 503,462.18
China National Pharmaceutical Foreign Trade Corporation 6,437,142.44 -
Shenzhen Wanwei Medicine Trading Co., Ltd. 103,269.08 -
Shenyang Pharmaceutical Co., Ltd. 842,544.29 6,092,544.00
Zhang Zhenfang 1,907,499.98 1,505,000.00
Pingdingshan Pusheng Pharmaceutical Co., Ltd. 1,277,732.57 1,235,779.46
Lerentang Investment Group Co., Ltd. - 3,027,759.85
Shanghai Beiyi Guoda pharmaceutical Co. Ltd. 855,341.63 496,651.75
Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd. - 200,000.00
Sinopharm Holding Sub Marketing Center Co., Ltd. 37,782.33 37,782.33
Sinopharm Group Xinjiang Special Drugs National
Pharmaceutical Co., Ltd. 546,753.39 466,443.39
China National Pharmaceutical Logistics Co., Ltd. 8,445.56 7,424.97
Sinopharm Health Online Co., Ltd. 50,005.79 -
Heyuan Mairui Trading Co., Ltd. 672,396.36 -
Sinopharm Holding Hunan Weian Pharmacy Medicine Chain
Company Limited 95,100.00 6,900.00
Shenzhen Jiufeng Investment Co., Ltd. - 180,000.00
Linyi Medical Group Co., Ltd. - 862,063.20
209
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Related party 2018 2017
Advances from customers
Sinopharm Holding Beijing Huahong Co., Ltd. 976,210.65 -
Sinopharm Holding Guizhou Medical Equiment Co., Ltd. 275,090.49 -
Sinopharm Holding Shenyang Co., Ltd. 60,059.47 10,114.48
Sinopharm Holding Wuhu Co., Ltd. 45,576.00 -
China National Pharmaceutical Foreign Trade
Corporation 24,941.19 12,505,381.84
Sinopharm Holding Suzhou Co., Ltd. 13,800.00 -
Sinopharm Holding Lu'an Co., Ltd. 4,750.00 -
Sinopharm Zhuhai Medical Instrument Co., Ltd. 4,074.00 11,512.00
Fujian CMDC Co., Ltd. 1,510.32 -
Sinopharm Holding Chongqing Co., Ltd. 755.62 755.62
Dongyuan accord pharmaceutical chain Co., Ltd. 62.00 -
Sinopharm Holding Inner Mongolia Co., Ltd. 41.80 -
Sinopharm Xinxiang Chain Store Co., Ltd. 0.01 -
Sinopharm Holding Gansu Co., Ltd. - 28,914.27
Sinopharm Holding Chengdu Co., Ltd. - 1,270.20
Sinopharm Sichuan Pharmaceutical Co., Ltd. - 739,603.08
Sinopharm Group Southwest Medicine Co., Ltd. - 676,734.09
Sinopharm Group Co., Ltd. - 21,346.83
Sinopharm Holding Hunan Co., Ltd. - 77,403.51
Sinopharm Holding Beijing Co., Ltd. - 2,349,113.58
Sinopharm Holding Shandong Co., Ltd. - 2,515,702.87
Sinopharm Holding Lunan Co., Ltd. - 62,787.26
Sinopharm Holding Nanping Newforce Co., Ltd. - 295,818.24
Sinopharm Holding Suzhou Co., Ltd. - 7,676.52
Sinopharm Holding Qinghai Co., Ltd. - 3,545.67
210
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(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 2018 31December 2017
Interest payable
China National Pharmaceutical Group Corporation 35,440.24 38,984.38
Guorun Medical Supply Chain Services (Shanghai) Co., Ltd. 1,778.67 -
Entrusted borrowings
China National Pharmaceutical Group Corporation 31,600,000.00 31,600,000.00
Other non-current liabilities
35,061,743.31 35,061,743.31
Sinopharm Group Co., Ltd.
Short-term borrowings
122,986,581.52 147,715,527.67
Group Financial Co.
Long-term payables
7,557,432.82 9,332,537.14
Sinopharm Holding Financing Lease Co., Ltd.
Non-current liabilities due within one year
5,651,227.56 5,434,770.70
Sinopharm Holding Financing Lease Co., Ltd.
Cash deposite with a related party
29,919,274.53 156,740,929.50
Group Financial Co.
Amounts due to related parties were interest-free and unsecured, with no fixed terms of repayment.
211
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XI Commitments and contingencies
1. Commitments
(1) Capital commitments
Capital expenditures contracted for at the balance sheet date but not recognized in balance sheet
are analyzed as follows:
30 June 2018 31December 2017
RMB‘0,000 RMB‘0,000
Buildings, machinery and equipment 223.92 600.45
Investment commitments (Note) 14,000.00 14,000.00
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 RMB 60 million,
and the rest is RMB 140 million.
(2) Operating lease commitments
The future minimum lease payments due under the signed irrevocable operating leases contracts
are summarized as follows:
30 June 2018 31 December 2017
RMB‘0,000 RMB‘0,000
Within one year 51,747.87 49,860.66
Between 1 and 2 years 41,329.26 39,575.48
Between 2 and 3 years 30,422.97 29,537.37
Over 3 years 43,819.79 51,138.78
167,319.89 170,112.29
2. Contingencies
As of the balance sheet date, there were no contingencies that the Group was required to
disclose.
212
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XII Events after the balance sheet date
Guoda Pharmacy, a subsidiary of the Group, acquired a strategic investor which named
Walgreens Boots Alliance (Hong Kong) Investments Limited (“WBA”) through capital increase
amounting to RMB2.77 billion. Guoda Pharmacy became a sino-foreign joint enterprise since
business registration finished in June 28, 2018. The registered capital is RMB1.68 billion,
including RMB1.01 billion from the Group (60% of all shares) and RMB0.67 billion from WBA
(40% of all shares). In July 4 2018, all related procedures have been finished.
XIII 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.
213
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XIII Other significant events (Continued)
3. Segment reporting (Continued)
Operating segments (Continued)
Operating segment information as at and for the semi year ended
Elimination between
Head Office Pharmaceutical distribution Retail Total
segments
Revenue of main operations - 15,858,317,084.75 4,993,130,188.24 (245,419,298.42) 20,606,027,974.57
Cost of main operations - (14,879,713,386.35) (3,721,948,448.31) 246,659,082.25 (18,355,002,752.42)
Investment income 162,655,203.36 (652,715.21) 659,783.20 - 162,662,271.35
Net profit 529,974,276.77 347,154,169.85 172,985,004.03 (360,864,440.74) 689,249,009.91
Total assets 10,680,924,970.49 16,539,616,967.79 5,605,478,618.09 (8,813,004,879.05) 24,013,015,677.32
Total liabilities (1,891,354,344.87) (11,593,180,303.89) (3,507,124,611.26) 3,457,267,336.54 (13,534,391,923.48)
214
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XIV Notes to key items of the company financial statements
1. Accounts receivable
(a) The aging of accounts receivable and the related provision for bad debts is analyzed below:
30 June 2018
Amount Provision for bad debts
Within 1 year 553,496,096.71 -
1 to 2 years - -
2 to 3 years - -
553,496,096.71 -
(b) There were no increase, no reversal and no write-off of provision for bad for the six month ended
30 June 2018.
(c) The accounts receivable and related provision for bad debts by category are analyzed below:
30 June 2018 31 December 2017
Amount Provision for bad debts Amount Provision for bad debts
% of total % of total
amount rate amount rate
amount balance balance amount
Accounts
receivable
with similar
credit risk 553,496,096.71 99.98% - - 480,467,760.92 99.98% - -
individually not
significant but
individually
evaluated for
impairment 116,855.40 0.02% 116,855.40 100.00% 117,320.70 0.02% 117,320.70 100.00%
553,612,952.11 - 116,855.40 - 480,585,081.62 - 117,320.70 -
As at 30 June 2018，there were no accounts receivable which were individually significant and for which the provision for bad debt was
separately recognized.
As at 30 June 2018, accounts receivable which is actually written off:
Amount
Shenzhen Centennial Clinic
465.30
215
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XIV Notes to key items of the company financial statements (Continued)
1. Accounts receivable (Continued)
(d) the accumulated top five Accounts receivables by customer are analysed below:
% of the total
Amount other receivable Bad debt provision
Shenzhen Hospital of Southern Medical
University 55,567,087.27 3.41% -
Shenzhen People's Hospital 34,490,479.76 2.12% -
Peking University Shenzhen Hospital 29,293,468.53 1.80% -
The university of Hong Kong – Shenzhen
hospital 21,317,591.27 1.31% -
The Second People's Hospital of Shenzhen 19,580,436.19 1.20% -
9.84% -
2. Other receivables
(a) Other receivables and related provision for bad debts by category are analyzed below:
30 June 2018 31 December 2017
Carrying amount Bad debt provision Carrying amount Bad debt provision
% of % of
total total
amount amount amount rate amount amount amount rate
Individually
significant and
subject to
separate
impairment
assessment 110,146,758.92 6.72% 8,980,000.00 8.15% 134,161,658.92 8.79% 8,980,000.00 6.69%
Receivable
accounts with
similar credit
risk 1,528,788,306.69 93.22% 16,955.33 - 1,390,860,253.14 91.14% 20,286.35 -
Individually not
significant but
individually
evaluated for
impairment 989,623.95 0.06% 989,623.95 100.00% 1,010,023.95 0.07% 993,703.95 98.38%
1,639,924,689.56 100.00% 9,986,579.28 0.61% 1,526,031,936.01 100.00% 9,993,990.30 0.65%
216
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XIV Notes to key items of the company financial statements (Continued)
2. Other receivables (Continued)
(b) As at 30 June 2018, impairment provision for other receivables individually significant is analyzed as follows:
Assessment for
Amount Bad debt provision Rate impairment
Other receivable from
related party, no
uncertainty in
Modern Pharmaceutical 101,166,758.92 - - recoverability
Shenzhen Yinghai Technology Uncertainty in
Investment Co., Ltd. 8,980,000.00 8,980,000.00 100.00% recoverability
110,146,758.92 8,980,000.00 -
(c) Provisions for impairment of the receivables which have similar credit risk are analyzed below:
30 June 2018
Carrying amount Bad debt provision
Amount Amount Rate
Within 1 year 1,528,612,874.88 - -
1 to 2 years 53,815.00 2,690.75 5.00%
2 to 3 years 100,587.85 10,058.79 10.00%
Over 3 years 21,028.96 4,205.79 20.00%
1,528,788,306.69 16,955.33 -
(d) The other receivables by category are listed below:
30 June 2018 31 December 2017
Amounts due from subsidiaries and
related party 1,459,816,430.56 1,324,203,206.47
Receivable from equity transaction 8,980,000.00 8,980,000.00
Deposit 1,840,914.63 1,864,394.68
Others 169,287,344.37 190,984,334.86
1,639,924,689.56 1,526,031,936.01
217
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XIV Notes to key items of the company financial statements (Continued)
2. Other receivables (Continued)
(e) As at 30 June 2018, the accumulated top five other receivables by customer are analysed below:
% of the total Bad debt
Nature Amount Aging other receivable provision
Entrusted
Sinopharm Guangxi borrowings 252,900,000.00 Within 1 year 15.42% -
Entrusted
Sinopharm Yuexing borrowings 162,700,000.00 Within 1 year 9.92% -
Entrusted
Sinopharm Zhanjiang borrowings 145,000,000.00 Within 1 year 8.84% -
Entrusted
Sinopharm Dongguan borrowings 121,000,000.00 Within 1 year 7.38% -
Restructuring
consideration
Modern Pharmaceutical receivable 101,166,758.92 Within 2 year 6.17% -
782,766,758.92 47.73% -
3. Long-term equity investments
30 June 2018 31 December 2017
Bad debt Bad debt
Original value provision Carrying amount Original value provision Carrying amount
Investments in
subsidiaries 5,594,679,427.58 - 5,594,679,427.58 5,594,679,427.58 - 5,594,679,427.58
Investments in
associates 1,742,336,545.12 39,930,000.00 1,702,406,545.12 1,625,556,656.98 39,930,000.00 1,585,626,656.98
7,337,015,972.70 39,930,000.00 7,297,085,972.70 7,220,236,084.56 39,930,000.00 7,180,306,084.56
The long-term equity investments of the Company are not subject to restriction on conversion into cash.
218
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XIV Notes to key items of the company financial statements (Continued)
3. Long-term equity investments (Continued)
(a) Subsidiaries
Provision for Ending value of
impairment in the impairment
31 December 2017 Increases decrease 30 June 2018 current period provision
Sinopharm Jianming 60,054,911.04 - - 60,054,911.04 - -
Sinopharm Shenzhen
15,450,875.93 - - 15,450,875.93 - -
Material
Shenzhen Logistics 5,019,062.68 - - 5,019,062.68 - -
Sinopharm Guangzhou 1,565,440,323.63 - - 1,565,440,323.63 - -
Sinopharm Hengxing 91,763,288.00 - - 91,763,288.00 - -
Sinopharm Liuzhou 21,407,965.79 - - 21,407,965.79 - -
Sinopharm Dongguan 72,942,000.00 - - 72,942,000.00 - -
Huixin Investment 64,416,937.72 - - 64,416,937.72 - -
Guangdong Logistics 13,596,006.21 - - 13,596,006.21 - -
Sinopharm Yuexing 243,459,326.27 - - 243,459,326.27 - -
Sinopharm Foshan 45,995,065.51 - - 45,995,065.51 - -
Sinopharm Guangxi 504,048,985.28 - - 504,048,985.28 - -
Sinopharm Zhanjiang 131,769,864.65 - - 131,769,864.65 - -
Sinopharm Yanfeng 38,207,800.00 - - 38,207,800.00 - -
Sinopharm Meizhou 51,281,900.00 - - 51,281,900.00 - -
Sinopharm Huizhou 36,644,200.00 - - 36,644,200.00 - -
Sinopharm Zhaoqing 43,060,000.00 - - 43,060,000.00 - -
Sinopharm Jiangmen 106,000,000.00 - - 106,000,000.00 - -
Sinopharm Zhongshan 30,000,000.00 - - 30,000,000.00 - -
Sinopharm Shaoguan 13,580,000.00 - - 13,580,000.00 - -
Sinopharm Shantou 23,990,000.00 - - 23,990,000.00 - -
Guangdong South
Pharmaceutical Foreign
Trade Co., Ltd. 401,922,987.18 - - 401,922,987.18 - -
Guangdong Uptodate &
Special Medicines 144,682,822.34 - - 144,682,822.34 - -
Guoda Pharmacy 1,361,800,110.06 - - 1,361,800,110.06 - -
Foshan Nanhai Medicine
Co., Ltd. 462,682,298.01 - - 462,682,298.01 - -
Maoming Yogshen 8,300,000.00 - - 8,300,000.00 - -
Sinopharm Zhuhai 37,162,697.28 - - 37,162,697.28 - -
5,594,679,427.58 - - 5,594,679,427.58 - -
219
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XIV Notes to key items of the company financial statements (Continued)
3. Long-term equity investments (Continued)
(b)
Movement
31 December Profit or loss under Other changes in Dividend Provision of
2017 Investment the equity method equity declared Other 30 June 2018 impairment
Main Luck
Pharmaceutical 239,046,738.14 - 29,983,887.32 - - - 269,030,625.46 -
Zhijun Suzhou 39,930,000.00 - - - - - 39,930,000.00 39,930,000.00
Zhijun Medicine 291,042,921.20 - 61,373,560.78 - (58,111,254.57) - 294,305,227.41 -
Zhijun Trade 7,676,142.69 - 853,674.01 - (664,795.03) - 7,865,021.67 -
Pingshan Medicine 68,686,804.33 - 15,453,485.62 - (9,719,480.71) - 74,420,809.24 -
Shanghai Shyndec
Pharmaceutical
Co., Ltd. 979,174,050.62 - 65,661,682.41 397,342.21 (8,641,853.20) 193,639.30 1,036,784,861.34 -
Shanghai Dingqun
Enterprise
Management
Consulting Co.,
Ltd. - 20,000,000.00 - - - - 20,000,000.00 -
1,625,556,656.98 20,000,000.00 173,326,290.14 397,342.21 (77,137,383.51) 193,639.30 1,742,336,545.12 39,930,000.00
220
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 31 December 2016
(All amounts in Renminbi “RMB” unless otherwise stated)
XIV 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 2018 30 June 2017
Revenue Cost Revenue Cost
main 1,652,563,177.90 1,597,779,406.09
operations 1,681,220,169.43 1,612,710,688.13
Other 6,037,641.06 2,868,183.37
operating 6,401,186.40 2,006,785.78
1,687,621,355.83 1,614,717,473.91 1,658,600,818.96 1,600,647,589.46
5. Investment income
For the six month ended For the six month ended
30 June 2018 30 June 2017
Gain on long-term equity investment
under cost method 361,514,454.32 352,522,001.40
Gain on long-term equity investment
under equity method (Note
XIV(3)(b)) 173,326,290.14 155,838,740.45
Investment income from disposal of
other long-term equity investments - -
534,840,744.46 508,360,741.85
There is no major restriction on the collection of the gains on investments.
221
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Appendix(Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Supplementary information to financial statements
1. Schedule of non-recurring profit or loss
Amount for 30 June 2018 Illustration
Mainly contains income
from disposal of intangible
Gains and losses from disposal of non-current assets, assets of Sinopharm
including write off of accrued asset impairment 4,254,942.60 Guangxi Logistics.
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 11,938,416.85 current period
Mainly contains income
Net profit and loss arising from the subsidiaries acquired in the arising from the acquisition
business combinations involving enterprises under common of Sinopharm Holding
control for the period from the beginning of the reporting period Guangzhou Huadu Co.,
to the combination date 729.29 Ltd.
Mainly contains the
recovery of impairment
provision for receivables
Reversal of bad debt provision for accounts receivable that were individually significat during the
tested for impairment individually 4,203,173.20 current period
Profit or loss from outward entrusted borrowings 1,549,650.99
Income from entrusted management services 2,377,946.75
Less:Impact on income tax 5,505,057.19
Impact on non-controlling interests after tax 389,106.90
18,430,695.59
Basis for preparation of detailed list of non-recurring profit or loss items:
Under the requirements in Explanatory announcement No. 1 on information disclosure by companies
offering securities to the public – non-recurring profit or loss (2008) (“Explanatory announcement
No.1”) from CSRC, nonrecurring profit or loss refer to those 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 financial statements making proper judgments
on the performance and profitability of an enterprise.
222
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Appendix(Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
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 6.64% 1.50 1.50
shareholders of the parent
Net profit after deducting non-recurring
profit or loss attributable to the 6.45% 1.46 1.46
Company’s ordinary shareholders of the
parent
The above-mentioned return on net assets and earnings per share were calculated according to the
Information Disclosure and Presentation Rules for Companies Making Public Offering of Securities No.9
– Calculation and Disclosure of Return on Net Assets and Earnings Per Share (revision 2010) issued by
the CSRC.
Note 1: There were no potential dilutive ordinary shares for the six months ended 30 June 2018 hence
no presentation of diluted EPS were provided.
Section XI. Documents Available for Reference
1. Accounting Statements carried with the signature and seals of legal representative, chief financial officer
and person in charge of accounting;
2. Original text of all documents of the Company as well as manuscript of the announcement disclosed in
reporting period on Securities Times, China Securities Journal and Hong Kong Commercial Daily appointed
by the CSRC;
3. The Place Where the document placed: Office of Secretariat of the Board of Directors, Accord Pharm
Bldg., No. 15, Ba Gua Si Road, Futian District, Shenzhen
223
