China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2013
August 2013
1
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.
All directors are attended the Board Meeting for report deliberation.
The Company has no plans of cash dividend distributed, no bonus shares and
has no share converted from capital reserve either.
Yan Zhigang, principal of the Company, Wei Pingxiao, person in charger of
accounting works and Chi Guoguang, person in charge of accounting organ
(accounting principal) hereby confirm that the Financial Report of the
Semi-Annual Report 2013 is authentic, accurate and complete.
There can be risks of industry competition, management & operation, markets
and national policies etc. associated, investors are advised to exercise caution of
the investment risks.
2
Content
Section I Important Notice, Contents and Paraphrase .................................. 4
Section II Company Profile .............................................................................. 5
Section III Accounting data and summary of finnaical indexes .................... 7
Section IV Report of the Board of Directors ................................................... 9
Section V Important Events ........................................................................... 17
Section VI Changes in shares and particular about shareholders .............. 23
Section VII Directors, Supervisors and Senior Executives ........................ 27
Section VIII Financial Report ........................................................................ 28
Section IX Documents Available for Reference ........................................ 195
3
Paraphrase
Items Refers to Definition
The Listed Company, Company, the Company,
Refers to China National Accord Medicines Corporation Ltd.
China National Accord, the Group
Sinopharm Holding Refers to Sinopharm Group Co., Ltd., the controlling shareholder of the
Company
Terminology: Refers to
Direct selling Refers to A sales method that the drug directly sold to the hospital
GMP certification Refers to Good Manufacture Practice of Drugs certification
GSP certification Refers to Good Supplying Practice certification
Namely SCM, the information system of processing workflow, and
Supply Chain Management Refers to
procurement, inventory and sales files
Abbreviation of the company: Refers to
China National Refers to China National Pharmaceutical Group Corporation
China National Corp. Refers to China National Medicines Corporation Ltd.
Sinopharm Holding Guangzhou Refers to Sinopharm Holding Guangzhou Co., Ltd.
Sinopharm Holding Liuzhou Refers to Sinopharm Holding Liuzhou Co., Ltd.
Sinopharm Holding Guangxi Refers to Sinopharm Holding Guangxi Co., Ltd.
Zhijun Pharmaceutical Refers to Shenzhen Zhijun Pharmaceutical Co., Ltd
Main Luck Pharmaceuticals Refers to Shenzhen Main Luck Pharmaceuticals Inc.
Zhijun Medicine Trading Refers to Shenzhen Zhijun Medicine Trading Co., Ltd.
4
Section II Company profile
I. Company Profile
Short form for share Sinopharm Accord, Accord B Code for share 000028, 200028
Listing stock exchange Shenzhen Stock Exchange
Chinese name of the Company 国药集团一致药业股份有限公司
Abbr. of Chinese name of the
国药一致
Company(if applicable)
English name of the
China National Accord Medicines Corporation Ltd.
Company(if applicable)
Abbr. of English name of the
Sinopharm Accord
Company(if applicable)
Legal Representative Yan Zhigang
II. Contact person and ways
Secretary of the Board
Name Chen Changbing
Contact adds. Accord Pharm. Bldg., No. 15, Ba Gua Si Road, Futian District, Shenzhen Guangdong
Tel. +(86)755 25875195
Fax. +(86)755 25875147
E-mail 0028@szaccord.com.cn
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 2012.
2. Information disclosure and preparation place
Whether information disclosure and preparation place changed in reporting period or not
□ Applicable √ Not applicable
5
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 2012.
3. Registration changes of the Company
Whether registration has changed in reporting period or not
□ Applicable √ Not applicable
Date/place for registration of the Company, registration number for enterprise legal license, number of taxation registration and
organization code have no change in reporting period, found more details in Annual Report 2012.
4. Other relevant information
Whether other relevant information has changed in reporting period or not
□ Applicable √ Not applicable
6
Section III. Accounting data and summary of financial indexes
I. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting
error correction or not
□Yes √ No
Increase/decrease in this
Current period Same period of last year
report y-o-y (%)
Operating revenue (RMB) 10,131,712,690.44 8,803,252,346.20 15.09%
Net profit attributable to shareholders of
260,794,678.64 240,033,990.64 8.65%
the listed company(RMB)
Net profit attributable to shareholders of
the listed company after deducting 260,180,187.43 248,307,662.79 4.78%
non-recurring gains and losses(RMB)
Net cash flow arising from operating
238,276,873.08 138,909,868.17 71.53%
activities(RMB)
Basic earnings per share (RMB/Share) 0.905 0.833 8.64%
Diluted earnings per share (RMB/Share) 0.905 0.833 8.64%
Weighted average ROE (%) 13.81% 16.35% -2.54%
Increase/decrease in this
End of current period End of last period report-end over that of last
period-end (%)
Total assets (RMB) 10,120,887,640.81 9,295,839,939.64 8.88%
Net assets attributable to shareholder of
1,985,025,137.87 1,775,943,028.96 11.77%
listed company(RMB)
II. Items and amounts of extraordinary profit (gains)/loss
In RMB
Item Amount Note
Gains/losses from the disposal of non-current asset (including the
3,665.89
write-off that accrued for impairment of assets)
The enterprise supporting fund
Governmental subsidy calculated into current gains and RMB 7.05 million allocated from
losses(while closely related with the normal business of the
12,384,950.86 Nanning Economic and
Company, excluding the fixed-amount or fixed-proportion
governmental subsidy according to the unified national standard) Technological Development
Zone, financial discount RMB
7
650,000, the deferred income
recognized in the Period due to
relocation compensation and
R&D subsidy was amortized
RMB 2.4 million
Transferred back to the previous
Reversal of impairment reserve for account receivable with
469,770.27 single provision of accounts
separate impairment testing
receivable in the period.
The accrual liabilities RMB
22.04 million form the litigation
Other non-operating income and expenditure except for the
-12,371,947.75 recognized and RMB 9.43
aforementioned items
million of long-term losses
written off without payments
Less: impact on income tax -169,935.06
Influenced amount of minority shareholders’ equity (after tax) 41,883.12
Total 614,491.21 --
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
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Section IV. Report of the Board of Directors
I. Summary
(i) Performance of the Company for first half year of 2013
During the reporting period, under the influence of market surroundings and policies, growth of revenue and profit from China
National Accord presents eased, by comparing with historical levels. From January to June of 2013, the Company earned RMB
10074 million of sales revenue with y-o-y growth of 15.10 percent, of which, the distribution business division earned RMB 9190
million, a 18.19 percent up y-o-y; pharmacy division achieved RMB 862 million in sales with y-o-y down of 10.10 percent. the net
profit attributable to parent company amounting to RMB 261 million, up 8.64 percent y-o-y, while distribution division shows a
sharply growing with 45.92 percent up y-o-y; suffered by continual influence from “antibiotic-restriction order” and sales
transformation of ephedrine-contained agent, net profit from pharmacy division fell 17.75 percent y-o-y.
1. As for the operation strategy of gaining benefit from scale, preliminary results were achieved by the distribution division, scale
promotion from network layout further presents, effectively minimized the influence on sales from bidding and drug price reduction,
in composition of revenue for he Company, distribution division representing 91.22 percent, up 2.39 percentage points compared
with corresponding period of last year and achieved a growth of 18.19 percent. Main operation index shows a favorable growth
movement, of which, growth of net profit far above the growth of sales revenue and growth of expenses below the growth of sales
revenue.
2. Under influence of depressed in antibiotic industry as a whole and the sales channel transformation of Compound Codeine
Phosphate Oral Solution, pharmacy division has a y-o-y down in sales. However, in aspect of product structure optimization, Zhijun
Pharmaceutical has more 9 percentage points up from a year earlier in sales of oral solid preparation, gross profit ratio of Zhijun
Pharmaceutical slightly better than industry-level. Internationalization of the industry is breaking new ground, sales revenue from
international export realized rapid increment of 57 percent y-o-y. Sales from Shenzhen Chinese Medicine maintaining a growth,
gains an operational profit, the growth rate of sales and rate of margin exceeds the average level in sub-industry of Chinese patent
medicine. Suffered downstream downturn in preparation market and high fixed assets expenses, sales from Zhijun Suzhou decreased
drastically, improvement of operation deficit still far from the expectation.
(ii) Work focus in first half year from headquarters and business division
1. In the first half year, HQ-level of the Company focusing on management improvement, keeping a firm grasp on benchlearning,
in-depth advance the function transformation and resources integration, upgrade operation efficiency through resentful management
and control, “HQ value” embodied with the quality service. Achieved remarkable results in aspect of strengthen of strategic
orientation, management and control improvement, optimization of resource allocation and creation of harmonious atmosphere etc.
2. In the first half year, distribution division with the establishment of smart supply chain at the core, with support from optimization
of integrated operation system, steadily push forward the network layout, continues to optimize the format structure, energetically
explore new ways and new idea for the transformation of business model, striving to create an extendible management platform of
Guangdong-Guangxi, make a step forward to enhance core competitiveness.
(1) Comprehensively push forward the smart supply chain mode in Guangxi and Guangdong province, coordinating operation of the
foreground/background system boosting the competitiveness of distribution as a whole. Supply chain integration step in a new stage,
coordination of the foreground and background achieved a new results, more warehouse operation in Guangxi and Guangdong
province made new breakthroughs.
(2) Continue to advance network sink, rapid up stationing of DTC pharmacy, supports the growth of distribution scale with
impeccable network coverage. Six new DTC pharmacies opened in first half year of 2013.
(3) Percentage of direct selling format and sales from domestic products growth on a continual basis, constantly optimize distribution
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structure, competitive advantage has been consolidated further. Sales from direct selling format representing over 69.8 percent, up
nearly 2 percentage points from a year earlier; gross profit from direct selling format contributed up to 84 percent, a 3 percentage
points up from a year earlier. Sales from domestic products representing 57.5 percent with 4.7 percentage points up from a year
earlier; growing rate of sales from domestic products come to 30 percent, strongly supported the rapid development of distribution.
(4) A breakthrough was made in value-added services, new business gains a notable growth, speed up the transformation from
distribution to supplier of health and medicine and product service. Hospital logistics carried out smoothly, B2B business of
e-commerce officially begins operation. New business of vaccine and instrument rising greatly.
(5) Continue to deepen the integration operation of Guangxi and Guangdong province
Continue perfecting the integrated operation system with procurement, inventory, sales and logistics at the core; unified operation
nodes and standards in Guangxi and Guangdong province, promote the standardization management of business in Guangxi and
Guangdong province; integral category and quantity purchased up to 2180, the amount from integral purchasing achieved RMB 1564
million; integrated platform strongly supported the rapid expansion of subsidiaries.
(6) The pioneering advantages of market shares of public hospital in Guangxi and Guangdong province continuously consolidated
and expand, and lay the solid foundation for realizing commercial benchmark in Guangxi and Guangdong province. Market shares of
hospital in Guangdong province up to 18.1 percent, a 0.9 percentage points higher than whole year of 2012, the leading edge further
expanded. Market shares of hospital in Guangxi province was 25.9 percent, a 1.8 percentage points up year-on-year.
(7) Continued to speed up the transformation of logistics, improved establishment of logistic network, enhance operation efficiency
and information level of the logistic center constantly.
3. Pharmacy division is guided by concept of outstanding performance, integrate quality resources all the time, promote
substantiation operation for the business platform, quicken structural adjustment and transformation and upgrading all the time, strive
to develop emerging service, constantly improve the differentiation competitiveness in pharmaceutical sector.
(1) Took institutionalization, processes and standardization as core elements, using brand as carrier, constantly upgrading the
integrated operational standards.
(2) Depend on new architecture, strengthen the efforts to R&D and integration of marketing resources, create a dumbbell-shaped
pharmaceutical enterprise, and consolidate the core competence. 1) R&D center: create an integration R&D platform. With support
from “two divisions and three institutes”, implemented management of “four integration”. Eight new projects in total in first half year
of 2013, seven instructions have newly declared. Currently, totally 71 projects still in research the CDE accept No. up to 48. 2)
Marketing center: create an integration marketing platform. Improved the system process according to the united management
platform of Zhijun Medicine Trading, unify resources allocation and business supporting, lay a foundation for transition of united
sales platform operation; POA, thousand county plan and grass-root interview: keep a firm grasp on POA plan and thousand county
plan, emphasizes to terminal cultivation, made the network sink to the third terminal; organize grass-root survey in first half year of
2013, timely adjust the sales strategy, and respond to the market changes effectively.
(3) Product structure adjustment of Zhijun Pharmaceutical has a significant results, product structure of Zhijun Suzhou and Shenzhen
Chinese Medicine still in optimize persistently.
(4) International business growth significantly, great healthy realized a favorable opening, offers strong support for the industrial
strategic transformation.
(5) Unify internal control standards in vary enterprises, strengthen operation supervision and control, minimize operation risk
efficiency while standardized the management.
(6) Zhijun Pharmaceutical standardizes federal distribution channels, Zhijun Suzhou and Shenzhen Chinese Medicine adopt vary
measures to control the deficit and reduce business risks.
(7) The international certification of oral solid gains a breakthrough, new version of GMP certification was implemented smoothly
lay out a foundation for leading in quality. 1) New version of GMP certification was implemented smoothly: the 2nd plant of
cephems powder injection preparation from Zhijun Pharmaceutical, cefuroxime and cefoxitin from Zhijun Suzhou obtained the new
version of GMP certification; three workshops from Shenzhen Chinese Medicine and totally six production lines pass the new
version GMP certificate. 2) International certification achievements: EUGMP certificate of Zhijun Pharmaceutical oral solid passed
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the field audit smoothly; the EUGMP certificate after certification of 2-line and 3-line of powder-needle still in stage of soft and
hardware rectification; international joint project was implemented smoothly.
(iii) Work arrangements for the second half year of 2013
In second half year of 2013, China National Accord will take the opportunity of refinancing promotion, change development strategy,
new ideas and new measurements are made from business divisions in way of development: the distribution speed up mergers and
acquisition, promote the scale through merger, strive to obtaining more upstream product resources by taking advantage of capital;
enlarge the number of verities in terms of exclusive distribution, general agency and regional agency, improve the bid rate and scope
in medicine bidding; as for pharmaceuticals, make use of the plentiful fund guarantee, plan R&D of new products and base
construction as a whole as well as international market development etc., speed up new products to market and introduction of
products with approval obtained, enlarge market development strength, focus on terminal cultivation and brand planning, express
upgrade the sales in volume and growth.
1. In corporate terms, in second half year of 2013, continues to centre on management improvement, carry out management activity
of benchmarking in a deep-going way, continue to strengthen management and control and improved value, seeking a favorable
practice through benchmarking, reinforce core competitiveness by cooperation with industrial and commercial, strive to realize
comprehensive promotion in operating efficiency and basic management.
2. In second half year of 2013, distribution division will comprehensively push forward the construction of smart supply chain, adapt
the transformation of foreground and background, established a operation management system with client oriented; promoted
management sink, continues to improve distribution network and logistic network, deepen united operation in Guangxi and
Guangdong province, enhance market position in distribution as a whole; to explore innovation service mode, deepening business
model, optimize profit mode and improve benefits from the scales all the time, create a business benchmarking enterprise in Guangxi
and Guangdong province. Optimizing supply chain platform system with systematic mind, focus on promotion of operation
efficiency, further to gains more profit from the scale.
3. In second half year, pharmaceutical division continues to focusing on “structure adjustment and transformation promotion”: further
promote grass-roots survey activity from managers of “client-oriented”; deepen integration of industry, continues to promote the
optimization of product and market structures, steadily promoted the core business center on domestic agents through established the
secondary distribution system; speed up the seeded business of cultivation of great healthy and international export, take more efforts
on improving the profitability from Zhijun Suzhou and Shenzhen TCM, effectively raising the systemic competitive advantage in the
pharmaceutical sector.
II. Main business analysis
Summary
In reproting period, the Company achieved RMB 10131.7127 million of operation revenue in total,
a 15.09 percent increase from a year ago; net profit attributable to shareholder of listed company
was RMB 260.7947 milion, up 8.64 percent from a year earlier.
Please found in “Abnormal situation and reasons of changes for items of main accoutning
statement” in “Section VIII. Financial Report” for more details of y-o-y changes in main financial
data.
11
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
The future development and planning extended to reporting period that published in disclosure documents as prospectus, private
placing memorandum and recapitalize statement
□ Applicable √ Not applicable
No future development and planning extended to reporting period that published in disclosure documents as prospectus, private
placing memorandum and recapitalize statement
Review on the previous business plan and its progress during reporting period
In the reporting, more details about the previous business plan and business plan implementation can be found in “I. Summary” in
this Section.
III. Constitution of main business
In RMB
Increase or Increase or Increase or
decrease of decrease of decrease of gross
Gross profit ratio
Operating revenue Operating cost operating revenue operating cost profit ratio over
(%)
over same period over same period same period of
of last year (%) of last year (%) last year (%)
According to industries
Medical business 9,189,991,363.76 8,720,715,328.37 5.11% 18.19% 18.77% -0.46%
Medical
861,761,411.80 515,258,589.23 40.21% -10.10% -12.21% 1.44%
manufacture
Logistics and
warehousing 18,252,493.23 11,687,475.17 35.97% 36.02% 39.33% -1.52%
services
Lease and other
4,486,774.27 1,765,714.99 60.65% -14.83% -8.82% -2.59%
service
According to region
Domestic sales 10,045,244,726.84 9,227,964,048.84 8.14% 14.87% 16.3% -1.13%
Foreign sales 29,247,316.22 21,463,058.92 26.62% 286.42% 306.8% -3.68%
IV. Core competence analysis
1. Impact on product’s price from antibiotic-restriction order: special variety suffered a lot from the antibiotic-restriction order;
however, majority of the antibiotics from Zhijun belong to restriction drugs, level-to-level administration has a limited effects on the
Company in terms of variety; furthermore, under the influence of serial policy together with antibiotic-restriction, mark down and
12
expenses-controlling from hospital etc., cephalosporin products competed intensively.
Countermeasures: the Company always insist on quality priority and reasonable market price, besides adjustment for individual
varieties (Chinese medicine products in particular) , which were greatly affected by production cost, factory price for other verities
has a minor fluctuation or remained unchanged.
2. Impact on the Company from new version GMP certification: the new version GMP certification is double-edged sword. On one
hand, assuring the drugs quality, promoting economic structural adjustment for medicine and upgrade industries, industrial
concentration will improve, more large-scale pharmaceutical enterprise will emerge, further enhance the international
competitiveness for the country’s pharmaceutical industry; on the other hand, development status of the pharmaceutical enterprise in
China was “low, small, fall apart and excessive”, directly influence from new version GMP certification was the soaring cost and
slim profit, for those small enterprises with net profit under ten million Yuan even one million Yuan, they will face closing down or
transform by great enterprise by acquisition due to the GMP transformation expenses, which unable to afford.
Countermeasures: the Company actively carries out the certification of new version GMP, boosting competitiveness in
pharmaceutical industry in later years. Currently, Shenzhen Zhijun Guanlan Base, Sinopharm TCM and China National Zhijun
(Suzhou) Pharmaceutical Co., Ltd. have passed the new version GMP certification. In addition, part of the production line of the
Company has passed the EU certification, international competitiveness enhanced.
3. Impact on business of the Company from GSK (GlaxoSmithKline) affairs: the Company always maintained the compliance
management, the affairs shows no influence on business of the Company. By utilizing quality advantage and the advantage of
obtained EU certification and new version GMP certification, the Company would take the opportunity of the GSK affairs, enlarge
market shares in China for their own products.
V. Investment analysis
1. Main subsidiaries and joint-stock companies analysis
Main subsidiaries and joint-stock companies
In RMB
Main
Company Register Operating Operating
Type Industries products or Total assets Net Assets Net profit
name capital revenue profit
service
Production
for raw
medicine of
chemical
products,
processing
Shenzhen
for Chinese
Zhijun RMB
Subsidiary Manufacture traditional 1,040,452,513.64 420,528,335.53 685,649,615.25 145,759,731.69 124,973,565.66
Pharmaceutical 200,000,000
patent
Co., Ltd.
medicine,
production
of chemical
material of
medicine;
Import and
13
export trade
are treated
by
authorized
certificates.
Chinese
traditional
patent
medicine,
chemical
preparations,
antibiotics,
bio-chemical
medicine,
biological
medicine,
diagnosis
medicine,
biological
medicine
with features
Sinopharm
of treatment
Holding RMB
Subsidiary Commerce and 4,200,973,779.21 525,862,855.59 5,519,324,479.81 80,114,973.32 60,780,446.30
Guangzhou 400,000,000
diagnosis,
Co., Ltd.
shaped
packing
food,
chemical
products,
and various
commodity
and
technique
hold by
self-support
and agency
as well as
import &
export of
technology
14
2. Major project invested by non-raised funds
In ten thousand Yuan
Accumulation of
Total schedule Amount invested in actual investment
Name of the project Progress Earnings of the project
investment amount the Period amount as of the
period-end
Expanded two workshops of
cephalosporin solid,
The 2nd phase project increasing 1 billion pieces of
of Guanlan Base of annual productivity; Newly
25,000 1,427.41 15,779.75 90%
Zhijun built a production line of
Pharmaceutical aseptic injection, increasing
0.2 billion annual
productivity.
Total building area was
76000 square meter as plan.
Production plant of
non-penicillin and
cephalosporin, storehouse
(rack storage), power, public
utility and system, office and
The 1st phase of
living supporting facilities.
construction project 35,000 182.95 1,503.06 0%
(Annual) production output
of Pingshan
designed: 1. non-penicillin
and cephalosporin
powder-needle: 100 million
needles; 2. oral solution: 50
million bottles; 3. oral solid:
1000 million tablets (grains,
packets)
Total 60,000 1,610.36 17,282.81 -- --
Query date for temporary notice disclosed
2011-3-22
on appointed website (if applicable)
Query index for temporary notice disclosed
Juchao website: Notice No.: 2011-02
on appointed website (if applicable)
VI. Prediction of business performance from January – September 2013
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
15
VII. Explanation from the Board and Supervisory Committee for “Qualified Opinion” from
the CPA of this year’s
Nil
VIII. Explanation from the Board for “Qualified Opinion” of last year’s
Nil
IX. Implementation of profit distribution in reporting period
Implementation or adjustment of profit distribution plan in reporting period, cash dividend plan and shares converted from capital
reserve in particular
√Applicable □Not applicable
The profit distribution scheme for year of 2012 was deliberated and approved in the Shareholders General Meeting of 2012 on April
19, 2013, calculating based on the Company’s total shares on December 31, 2012 of 288,149,400 shares, and the Company distribute
RMB 1.80 (including tax) dividend per ten shares to all shareholders in cash. On May 30, 2013, Board of Directors issued
Announcement on Implementation of the 2012 Equity Distribution Plan (published on Securities Times, China Securities Journal,
Hong Kong Commercial Daily and Juchao Website http://www.cninfo.com.cn dated 30 May 2013), the 2012 Annual Profit
Distribution Plan was implemented, and dividend for social public shareholders distributed to shareholders’ account on 7 June 2013
(A shares) and 14 June 2013 (B shares) respectively.
X. In the report period, reception of research, communication and interview
Contents discussed and material
Time Place Way Type Reception
provided
Building of Industrial Visit the company, and know the
Shenzhen Accord Securities, development of the company
2013-03-29 Field research Institution
Pharmaceutical Fullgoal Fund, after disclosure of Annual
Co., Ltd China AMC Report, no files provided.
Visit the company, and know the
Building of CITIC
impacts of the industry
Shenzhen Accord Securities,
2013-05-31 Field research Institution development change by
Pharmaceutical Hongta Hotland
Guangdong Medical Reform
Co., Ltd AMC
Policies, no files provided.
Visit the company, and know the
Building of
impacts of the industry
Shenzhen Accord
2013-06-07 Field research Institution Morgan Stanley development change by
Pharmaceutical
Guangdong Medical Reform
Co., Ltd
Policies, no files provided.
16
Section V. Important Events
I. Corporate governance
In strict accordance with the “Company Law”, “Securities Law” and relevant requirement from laws and regulations of “Governance
Rules for Listed Company”, the Company continues to perfect corporate governance structure, standardize and improve operation of
the Company, reinforce the management in aspect of information disclosure and aims to establish a modern enterprise system.
Currently, the Company owes a perfected management system, a standard operation and a complete corporate governance structure,
which met requirement of Basic Norms of Internal Control for Enterprises and necessary guidelines, jointly issued by five ministries.
During the period, a relatively completed corporate governance structure has been established by the Company, the shareholders’
general meeting, board of directors, supervisory committee and managers of the Company has a clearly defined rights and
responsibilities and subject to the checks and balances; each perform its own functions and operation regularly, exercising voting
rights, decision-making rights, supervision rights and executive power respectively.
The Company bring a closer around on annual target at the same time, constantly adapt vary changes in markets and environment
through continual optimization of the internal control system and operation mechanism; and to do the following in aspect of risk
prevention and control, assuring rationality and efficiency of the operation and design for internal control system.
1. Combined with the needs of new management and control, the Company formulated an “Annual Work Plan of Risk Internal
Control and Process” for year of 2013 based on completion of the structure for team members of the risk control and process of the
Company/business division and their duty adjustment. Vary core requirements and time schedule of risk appraisal, risk prevention
and response, risk management, establishment of internal control system and self-evaluation, on-site examination and risk internal
control knowledge training etc. were well-defined in the “Annual Work Plan of Risk Internal Control and Process”.
2. Completed the “Self-evaluation Report of Internal Control for year of 2012” in line with the annual plan, organized the Company
and business division for completing the self-evaluation work on internal control for first half year of 2013, continues to upgrade the
management standards between subsidiaries.
3. In line with the annual plan, to completed the evaluation and totally analysis for the risks the Company face, updated and improved
risk library, complied the “Comprehensive Risk Management Report for year of 2013”.
4. Revised and improved the file system of system process (internal control) for year of 2013 and self-evaluation manual of internal
control in line with the annual plan, systemative training on the new version of system process and risk internal control knowledge
etc. and organized testing for the system process.
5. At the level of business division, by means of improve and reinforce the integrated operating platform, further to standardize the
rules in aspect of management criteria, system and instrument; supporting development of the subsidiary and strengthen their market
competitiveness in terms of planning and coordination, resource sharing and centralized solution etc.
The constantly improving for the internal control management system and self-evaluation mechanism, guarantee a soundly and
efficiency operation quality of the Company while the ability for risk prevention improved.
II. Significant lawsuits and arbitrations of the Company
□Applicable √Not applicable
The Company has no significant lawsuits and arbitrations in reporting period
17
III. Question from media
□ Applicable √ Not applicable
No universal questioned by media in reporting period
IV. Major related transaction
1. Related transaction with day-to-day operation concerned
(1) Related transaction with day-to-day operation concerned found more details in “6. Related relationship and related transactions”
in “Section VIII. Financial Report”;
(2) The related transaction are settled in cash and by note etc, all disclosed on 21 March 2013 in Juchao Website with Notice No.:
2013-06 carried;
(3) In accordance with the “proposal of day-to-day related transaction with the Company and its subordinate enterprise for year of
2013”, deliberated and approved in shareholders’ general meeting dated 19 April 2013, in the reporting period, related party sales
representing 41.04 percent of the total estimated amount for whole year, related party procurement representing 41.93 percent of the
total estimated amount for whole year, related party loans interest expenses representing 9.95 percent of the total estimated amount
for whole year, related party buyer discount expenses representing 35.53 percent of the total estimated amount for whole year, related
party interest expenses of notes discounted representing 1.47 percent of the total estimated amount for whole year, related party
housing rental income representing 52.66 percent of the total estimated amount for whole year, related party housing and equipment
rental expenses representing 50.95 percent of the total estimated amount for whole year, income of service providing from related
party representing 55.13 percent of the total estimated amount for whole year and expenses of service accepting by related party
representing 6.33 percent of the total estimated amount for whole year.
2. Related transaction from asset acquisition and sales
Nil
3. Significant related transaction from jointly investment outside
Nil
4. Current related claims and obligations
(1) The Company had no non-operating current related claims and obligations;
(2) More details of current related claims and obligations can be found in “6. Relationships of related party and transactions” from
“Section VIII. Financial Report”;
(3) Current related claims and obligations belong to the normal business contact without bad affect on the operation results and
financial status of the Company.
5. Other significant related transaction
Nil
V. Significant contracts and its implementation
1. Guarantees
In RMB
18
External guarantee of the Company (Barring the guarantee for the controlling subsidiaries)
Guarante
Related
Complete e for
Announcem Actual date of
Name of the Actual guarantee Guarantee Guarantee implemen related
ent Guarantee limit happening (Date of
Company guaranteed limit type term tation or party
disclosure signing agreement)
not (Yes or
date
no)
China National
General 2013.6.9-201
Accord Medicines 2013-03-21 250,000,000 2013-06-09 66,000,000 No Yes
guarantee 4.6.9
Corporation Ltd.
China National
General 2012.12.5-20
Accord Medicines 2012-03-16 300,000,000 2012-12-05 99,115,684.75 No Yes
guarantee 13.12.4
Corporation Ltd.
China National
Accord Medicines
Corporation Ltd. and General 2013.5.30-20
2013-03-21 70,000,000 2013-05-30 18,814,400.92 No Yes
Shenzhen Zhijun guarantee 14.5.30
Medicine Trading
Co., Ltd.
China National
General 2013.1.24-20
Accord Medicines 2012-03-16 100,000,000 2013-01-24 48,270,000 No Yes
guarantee 13.12.31
Corporation Ltd.
China National
General 2013.6.27-20
Accord Medicines 2013-03-21 150,000,000 2013-06-27 76,295,141.6 No Yes
guarantee 13.12.27
Corporation Ltd.
Shenzhen Zhijun
General 2012.12.26-2
Medicine Trading 2012-03-16 30,895,000 2012-12-26 0 No Yes
guarantee 013.12.25
Co., Ltd.
Sinopharm Group General 2013.5.29-20
2013-03-21 20,000,000 2013-05-29 0 No Yes
Foshan Co., Ltd. guarantee 14.5.28
Total approving external Total actual occurred external
490,000,000 154,364,186.74
guarantee in report period (A1) guarantee in report period (A2)
Total actual balance of external
Total approved external guarantee
920,895,000 guarantee at the end of report 308,495,227.27
at the end of report period ( A3)
period (A4)
Guarantee of the Company for the subsidiaries
Guarante
Related
Complete e for
Announcem Actual date of
Name of the Actual Guarantee Guarantee implemen related
ent Guarantee limit happening (Date of
Company guaranteed guarantee limit type term tation or party
disclosure signing agreement)
not (Yes or
date
no)
Sinopharm Holding Guarantee
2012.2.28-2
Shenzhen Yanfeng 2011-3-22 30,000,000.00 2012-2-28 7,331,622.36 No Yes
013.2.27
Co., Ltd.
Sinopharm Holding Guarantee
2013.6.26-2
Shenzhen Yanfeng 2013-3-21 50,000,000.00 2013-6-26 29,979,464.32 No Yes
014.6.25
Co., Ltd.
19
Sinopharm Holding Guarantee
2013.6.13-2
Shenzhen Yanfeng 2013-3-21 20,000,000.00 2013-6-13 16,663,854.28 No Yes
013.12.27
Co., Ltd.
Shenzhen Zhijun Guarantee
2012.6.20-2
Pharmaceutical Co., 2012-3-16 200,000,000.00 2012-6-20 96,273,694.64 No Yes
013.6.20
Ltd
Shenzhen Zhijun Guarantee
2012.8.17-2
Pharmaceutical Co., 2012-3-16 80,000,000.00 2012-8-17 14,241,933.98 No Yes
013.6.28
Ltd
Shenzhen Zhijun Guarantee
2011.9.30-20
Pharmaceutical Co., 2011-3-22 175,000,000.00 2011-8-25 37,628,131.20 No Yes
16.9.30
Ltd
China National Guarantee
Zhijun (Suzhou) 2012.8.27-2
2012-8-18 80,000,000.00 2012-8-27 20,000,000.00 No Yes
Pharmaceutical Co., 013.8.26
Ltd.
China National Guarantee
Zhijun (Suzhou) 2010.8.1-20
2010-3-20 60,000,000.00 2010-8-1 20,000,000.00 No Yes
Pharmaceutical Co., 13.8.1
Ltd.
China National Guarantee
Zhijun (Suzhou) 2013.3.21-2
2013-3-21 50,000,000.00 2013-3-21 22,000,000.00 No Yes
Pharmaceutical Co., 014.3.21
Ltd.
China National Guarantee
Zhijun (Suzhou) 2012.9.18-2
2012-3-16 100,000,000.00 2012-9-18 10,000,000.00 No Yes
Pharmaceutical Co., 013.9.18
Ltd.
China National Guarantee
Zhijun (Suzhou) 2012.6.14-2
2012-3-16 50,000,000.00 2012-6-14 49,265,809.46 No Yes
Pharmaceutical Co., 013.6.14
Ltd.
China National Guarantee
Zhijun (Suzhou) 2012.7.25-2
2012-3-16 40,000,000.00 2012-7-25 0.00 No Yes
Pharmaceutical Co., 013.7.24
Ltd.
Sinopharm Holding Guarantee 2013.5.29-2
2013-3-21 160,000,000.00 2013-5-29 100,665,754.78 No Yes
Guangxi Co., Ltd. 014.5.29
Sinopharm Holding Guarantee 2013.6.26-2
2013-3-21 200,000,000.00 2013-6-26 131,904,188.69 No Yes
Guangxi Co., Ltd. 014.6.25
Sinopharm Holding Guarantee 2013.4.19-2
2013-3-21 100,000,000.00 2013-4-19 38,701,673.10 No Yes
Guangxi Co., Ltd. 014.4.18
Sinopharm Holding Guarantee 2013.5.27-2
2013-3-21 30,000,000.00 2013-5-27 22,393,291.13 No Yes
Guangxi Co., Ltd. 014.5.26
20
Sinopharm Holding Guarantee 2012.5.15-2
2012-3-16 100,000,000.00 2012-5-15 14,823,413.87 No Yes
Guangxi Co., Ltd. 013.5.15
Sinopharm Holding Guarantee
2011.1.16-20
Guangxi Logistic 2010-12-9 100,000,000.00 2011-1-16 63,918,722.71 No Yes
14.1.16
Co., Ltd.
Sinopharm Holding Guarantee 2013.6.26-2
2013-3-21 60,000,000.00 2013-6-26 40,000,000.00 No Yes
Liuzhou Co., Ltd. 014.6.25
Sinopharm Holding Guarantee 2012.9.17-2
2012-8-18 60,000,000.00 2012-9-17 58,951,340.65 No Yes
Guangzhou Co., Ltd. 013.9.16
Sinopharm Holding Guarantee 2012.10.31-
2012-8-18 100,000,000.00 2012-10-31 0.00 No Yes
Guangzhou Co., Ltd. 2013.10.31
Sinopharm Holding Guarantee 2013.5.17-2
2013-3-21 100,000,000.00 2013-5-17 69,966,066.52 No Yes
Guangzhou Co., Ltd. 014.5.16
Sinopharm Holding Guarantee 2012.10.16-
2012-3-16 350,000,000.00 2012-10-16 306,966,544.49 No Yes
Guangzhou Co., Ltd. 2013.10.16
Sinopharm Holding Guarantee 2013.3.1-20
2012-8-18 100,000,000.00 2013-3-1 67,553,254.74 No Yes
Guangzhou Co., Ltd. 13.12.28
Sinopharm Holding Guarantee 2013.3.4-20
2012-3-16 150,000,000.00 2013-3-4 112,982,060.86 No Yes
Guangzhou Co., Ltd. 14.3.3
Sinopharm Holding Guarantee 2013.6.26-2
2013-3-21 350,000,000.00 2013-6-26 155,439,462.33 No Yes
Guangzhou Co., Ltd. 014.6.25
Sinopharm Holding Guarantee 2013.5.20-2
2013-3-21 350,000,000.00 2013-5-20 84,731,599.01 No Yes
Guangzhou Co., Ltd. 014.5.20
Sinopharm Holding Guarantee 2013.5.7-20
2013-3-21 300,000,000.00 2013-5-7 231,191,856.43 No Yes
Guangzhou Co., Ltd. 14.5.7
Sinopharm Holding Guarantee 2013.5.20-2
2013-3-21 600,000,000.00 2013-5-20 354,876,724.79 No Yes
Guangzhou Co., Ltd. 014.4.23
Sinopharm Holding Guarantee 2012.11.9-20
2012-3-16 50,000,000.00 2012-11-9 49,172,344.96 No Yes
Guangzhou Co., Ltd. 13.11.8
Sinopharm Holding Guarantee
2013.5.20-2
Guangdong Yuexing 2013-3-21 35,000,000.00 2013-5-20 12,891,269.45 No Yes
014.5.20
Co., Ltd.
Sinopharm Holding Guarantee
2012.12.5-2
Guangdong Yuexing 2012-8-18 30,000,000.00 2012-12-5 24,275,408.20 No Yes
013.12.4
Co., Ltd.
Sinopharm Holding Guarantee
2013.6.26-2
Guangdong Yuexing 2013-3-21 50,000,000.00 2013-6-26 0 No Yes
014.6.25
Co., Ltd.
Total amount of actual
Total amount of approving
occurred guarantee for
guarantee for subsidiaries in 2,705,000,000 3,376,517,749.35
subsidiaries in report period
report period (B1)
(B2)
Total amount of approved Total balance of actual
guarantee for subsidiaries at the 4,310,000,000 guarantee for subsidiaries at the 2,264,789,486.95
end of reporting period (B3) end of reporting period (B4)
Total amount of guarantee of the Company( total of two abovementioned guarantee)
21
Total amount of approving Total amount of actual
guarantee in report period 3,195,000,000 occurred guarantee in report 3,530,881,936.09
(A1+B1) period (A2+B2)
Total amount of approved Total balance of actual
guarantee at the end of report 5,230,895,000 guarantee at the end of report 2,573,284,714.22
period (A3+B3) period (A4+B4)
The proportion of the total amount of actually guarantee in the net assets
129.63%
of the Company (that is A4+ B4) (%)
Including:
Amount of guarantee for shareholders, actual controller and its related
0
parties(C)
The debts guarantee amount provided for the guaranteed parties whose
1,941,404,976.71
assets-liability ratio exceed 70% directly or indirectly(D)
Proportion of total amount of guarantee in net assets of the Company
1,580,772,145.29
exceed 50%(E)
Total amount of the aforesaid three guarantees(C+D+E) 3,522,177,122.00
Explanations on possibly bearing joint and several liquidating
N/A
responsibilities for undue guarantees (if applicable)
Explanations on external guarantee against regulated procedures (if
N/A
applicable)
Explanation on guarantee with composite way
Nil
VI. Engagement and non-reappointment of CPA
The semi-annual financial report was unaudited.
22
Section VI. Changes in Shares and Particulars about Shareholders
I.Changes in share capital
Before the Changes Increase/Decrease in the Change (+, -) After the Changes
Public
Newly-
Proportion Bonus reserve-co Subtot Proportio
Amount issued Others Amount
(%) shares nverted al n (%)
shares
shares
I. Restricted shares 3,535 0% -884 -884 2,651 0%
5. Senior executives’
3,535 0% -884 -884 2,651 0%
shares
II. Unrestricted shares 288,145,865 100% 884 884 288,146,749 100%
1. RMB ordinary shares 233,260,265 80.95% 884 884 233,261,149 80.95%
2. Domestically listed
54,885,600 19.05% 54,885,600 19.05%
foreign shares
III. Total shares 288,149,400 100% 288,149,400 100%
Reasons for share changed
√ Applicable □Not applicable
Share reduction of compliance from senior executives
Approval of share changed
□ Applicable √ Not applicable
Ownership transfer of share changes
□ 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
□ Applicable √ Not applicable
Explanation on changes in aspect of total shares, shareholders structures as well as structure of assets and liability of the Company
□ Applicable √ Not applicable
II. Number of shareholders and share-holding
In Share
Total shareholders at period-end 16,771
Shareholders with over 5 percent shares held
Number Amount Number of share pledged/frozen
Amount
of Changes of
of
Nature of Proportion of shares in un-restri
Shareholders restricte
shareholder shares held (%) held at reportin cted State of share Amount
d shares
period-e g period shares
held
nd held
Sinopharm Group State-owned 38.33% 110,459, 0 0 110,459,
23
Co., Ltd. corporate 748 748
ICBC－
HARVEST Domestic non
7,291,7
THEME NEW state-owned 2.53%
98
POWER STOCK corporate
FUND
HTHK/CMG
FSGUFP-CMG
Overseas 7,032,7
FIRST STATE 2.44%
corporate 20
CHINA
GROWTH FD
CCB – China
Domestic non
AMC Advantage 6,940,4
state-owned 2.41%
Growth Stock 24
corporate
Investment Fund
VALUE
Overseas 6,812,6
PARTNERS 2.36%
corporate 22
CLASSIC FUND
ICBC－
Domestic non
GUANGFA 4,900,7
state-owned 1.7%
JUFENG STOCK 10
corporate
FUND
National Council
Domestic non
for Social 4,834,9
state-owned 1.68%
Security 52
corporate
Fund-102
Industrial Bank
Co., Ltd. –
Domestic non
Everbright 3,981,9
state-owned 1.38%
Pramerica Fund 93
corporate
Dividend Stock
Fund
ICBC—Harvest Domestic non
3,293,7
Strategy Growth state-owned 1.14%
55
Mix Stock Fund corporate
National Council
Domestic non
for Social 3,242,4
state-owned 1.13%
Security Fund – 17
corporate
106
Explanation on associated ICBC－HARVEST THEME NEW POWER STOCK FUND and ICBC—Harvest Strategy
relationship among the aforesaid Growth Mix Stock Fund has the same fund manager of Harvest Fund Management Co., Ltd.;
24
shareholders as an investment manager, VALUE PARTNERS is in charging of 19 funds and entrusted
accounts in total. VALUE PARTNERS CLASSIC FUND, one of the top ten shareholders, is
one of the VALUE PARTNERS’s; it is unknown that there exists no associated relationship or
belongs to the consistent actionist among the other tradable shareholders regulated by the
Management Measure of Information Disclosure on Change of Shareholding for Listed
Companies.
Particular about top ten shareholders with un-restrict shares held
Type of shares
Shareholders Amount of un-restrict shares held at period-end
Type Amount
RMB ordinary
Sinopharm Group Co., Ltd. 110,459,748 110,459,748
shares
ICBC－HARVEST THEME NEW RMB ordinary
7,291,798 7,291,798
POWER STOCK FUND shares
Domestically
HTHK/CMG FSGUFP-CMG FIRST
7,032,720 listed foreign 7,032,720
STATE CHINA GROWTH FD
shares
CCB – China AMC Advantage RMB ordinary
6,940,424 6,940,424
Growth Stock Investment Fund shares
Domestically
VALUE PARTNERS CLASSIC
6,812,622 listed foreign 6,812,622
FUND
shares
ICBC－GUANGFA JUFENG RMB ordinary
4,900,710 4,900,710
STOCK FUND shares
National Council for Social Security RMB ordinary
4,834,952 4,834,952
Fund-102 shares
Industrial Bank Co., Ltd. –
RMB ordinary
Everbright Pramerica Fund Dividend 3,981,993 3,981,993
shares
Stock Fund
ICBC—Harvest Strategy Growth RMB ordinary
3,293,755 3,293,755
Mix Stock Fund shares
National Council for Social Security RMB ordinary
3,242,417 3,242,417
Fund – 106 shares
ICBC－HARVEST THEME NEW POWER STOCK FUND and ICBC—Harvest Strategy
Growth Mix Stock Fund has the same fund manager of Harvest Fund Management Co., Ltd.;
Expiation on associated relationship
as an investment manager, VALUE PARTNERS is in charging of 19 funds and entrusted
or consistent actors within the top 10
accounts in total. VALUE PARTNERS CLASSIC FUND, one of the top ten shareholders, is
un-restrict shareholders and between
one of the VALUE PARTNERS’s; it is unknown that there exists no associated relationship or
top 10 un-restrict shareholders and
belongs to the consistent actionist among the other tradable shareholders regulated by the
top 10 shareholders
Management Measure of Information Disclosure on Change of Shareholding for Listed
Companies.
25
Whether has a buy-back agreement dealing in reporting period
□Yes √No
III. Changes of controlling shareholders or actual controller
Changes of controlling shareholders in reporting period
□ Applicable √ Not applicable
Changes of actual controller in reporting period
□ Applicable √ Not applicable
26
Section VII. Directors, Supervisors and Senior Executives
I. Changes of shares held by directors, supervisors and senior executives
√ Applicable □Not applicable
Shares Shares Restricted Restricted Restricted
Shares held Shares held
increased decreased shares shares shares
Serve at at
Name Title for holding for holding awarded at awarded in awarded at
condition period-begi period-end
in Period in Period period-begi the Period period-end
n (Share) (Share)）
(Share) (Share) n (Share) (Share) (Share)
Chan Secretary of Currently in
3,535 0 884 2,651 0 0 0
Changbing the Board office
Total -- -- 3,535 0 884 2,651 0 0 0
27
Section VIII Financial Report
The Tenth Chapter Financial statements
The Second Financial statements
All amounts in Renminbi (RMB) unless otherwise stated
1、Consolidated balance sheet
Prepared by China National Accord Medicines Co., Ltd
Item 30 June 2013 31 December 2012
Current assets
Cash at bank and on hand 892,437,822.56 953,992,070.61
Notes receivable 755,579,086.01 650,860,240.37
Accounts receivable 5,183,848,441.33 4,393,325,300.66
Advances to suppliers 67,720,751.06 89,512,381.34
Dividends receivable 28,152,000.00 -
Other receivables 39,616,931.01 32,985,425.60
Inventories 1,719,167,536.68 1,734,679,063.78
Other current assets 3,728,366.69 8,080,607.66
Total current assets 8,690,250,935.34 7,863,435,090.02
Non-current assets：
Long-term equity investments 111,444,830.84 121,019,845.50
Investment properties 80,783,676.60 88,315,429.63
Fixed assets 665,983,445.31 690,487,633.12
Construction in progress 125,407,628.50 103,955,350.80
Intangible assets 153,104,343.71 155,155,071.20
Development costs 5,313,126.11 5,002,441.27
Goodwill 85,228,833.15 85,228,833.15
Long-term prepaid expenses 18,912,671.64 19,742,990.45
Deferred income tax assets 59,504,805.28 49,509,529.97
Other non-current assets 124,953,344.33 113,987,724.53
Total non-current assets 1,430,636,705.47 1,432,404,849.62
TOTAL ASSETS 10,120,887,640.81 9,295,839,939.64
28
Current liabilities
Short-term borrowings 1,855,381,004.66 1,687,810,294.37
Notes payable 1,263,380,691.48 1,105,275,538.24
Accounts payable 3,503,374,828.56 3,197,354,275.46
Advances from customers 26,505,579.35 35,002,695.02
Employee benefits payable 127,865,265.73 155,994,408.20
Taxes payable 79,707,226.64 51,390,674.43
Interests payable 22,077,246.57 13,035,821.07
Other payables 391,348,734.17 413,831,307.40
Current portion of long-term
68,972,894.00 71,127,275.00
Borrowings
Other current liabilities 399,839,241.05 399,014,838.05
Total current liabilities 7,738,452,712.21 7,129,837,127.24
Non-current liabilities
Long-term borrowings 58,580,578.71 82,205,562.71
Long-term payables - 32,259.60
Payables for specific projects 4,326,000.00 4,487,000.00
Provisions 22,040,000.00 -
Deferred income tax liabilities 25,800,397.35 26,619,273.68
Other non-current liabilities 216,542,465.23 213,607,504.21
Total non-current liabilities 327,289,441.29 326,951,600.20
Total liabilities 8,065,742,153.50 7,456,788,727.44
OWNERS’ EQUITY
Share capital 288,149,400.00 288,149,400.00
Capital surplus 5,711,338.57 5,550,338.57
Surplus reserve 99,360,384.15 99,360,384.15
Undistributed profits 1,591,804,015.15 1,382,882,906.24
Total equity attributable to equity
1,985,025,137.87 1,775,943,028.96
holders of the Company
Minority interest 70,120,349.44 63,108,183.24
Total owners' equity 2,055,145,487.31 1,839,051,212.20
29
TOTAL LIABILITIES AND OWNERS’
10,120,887,640.81 9,295,839,939.64
EQUITY
Principal in charge Head of accounting
Legal representative: Yan Zhigang
of accounting : Wei Pingxiao department: Chi Guoguang
2、Company’s balance sheet
Prepared by China National Accord Medicines Co., Ltd
Item 30 June 2013 31 December 2012
Current assets
Cash at bank and on hand 141,911,747.30 160,633,355.13
Notes receivable 35,344,024.82 376,521.35
Accounts receivable 420,490,946.66 364,688,936.84
Advances to suppliers 4,435,241.40 2,944,282.55
Interest receivable 28,152,000.00 -
Other receivables 981,982,102.63 971,859,991.32
Inventories 151,030,601.42 130,552,057.09
Other current assets 39,482.38 262,096.80
Total current assets 1,763,386,146.61 1,631,317,241.08
Non-current assets：
Long-term equity investments 1,559,474,325.22 1,469,049,339.88
Investment properties 6,080,977.90 7,392,314.49
Fixed assets 26,225,066.34 27,728,901.07
Construction in progress 1,118,029.61 545,247.24
Intangible assets 38,384,741.51 37,903,901.08
Long-term prepaid expenses 7,340,308.92 7,893,858.54
Deferred income tax assets 2,983,278.35 2,929,885.67
Other non-current assets 9,606,722.00 8,350,000.00
Total non-current assets 1,651,213,449.85 1,561,793,447.97
TOTAL ASSETS 3,414,599,596.46 3,193,110,689.05
Current liabilities
Short-term borrowings 408,000,000.00 452,004,475.38
30
Notes payable 214,164,792.74 176,012,796.90
Accounts payable 320,366,474.33 282,426,136.11
Advances from customers 1,814,387.03 477,717.18
Employee benefits payable 19,349,227.30 28,849,468.43
Taxes payable 1,857,890.57 715,642.50
Interests payable 15,038,219.75 7,091,864.58
Other payables 399,374,432.06 575,130,189.97
Other current liabilities 399,839,241.05 399,014,838.05
Total current liabilities 1,779,804,664.83 1,921,723,129.10
Non-current liabilities
Payables for specific projects 839,000.00 1,000,000.00
Deferred income tax liabilities 3,773,319.00 3,773,319.00
Total non-current liabilities 4,612,319.00 4,773,319.00
Total liabilities 1,784,416,983.83 1,926,496,448.10
OWNERS’ EQUITY
Share capital 288,149,400.00 288,149,400.00
Capital surplus 14,509,726.93 14,348,726.93
Surplus reserve 99,360,384.15 99,360,384.15
Undistributed profits 1,228,163,101.55 864,755,729.87
Total owners' equity 1,630,182,612.63 1,266,614,240.95
TOTAL LIABILITIES AND OWNERS’
3,414,599,596.46 3,193,110,689.05
EQUITY
Principal in charge Head of accounting
Legal representative: Yan Zhigang
of accounting : Wei Pingxiao department: Chi Guoguang
3、Consolidated income statements
Prepared by China National Accord Medicines Co., Ltd
Year ended 30 Year ended 30
Item
June 2013 June 2012
Sales 10,131,712,690.44 8,803,252,346.20
Including:Revenues from main operations 10,131,712,690.44 8,803,252,346.20
Cost 9,821,563,932.91 8,501,305,125.54
31
Including:Cost of sales 9,279,455,305.53 7,967,951,745.26
Taxes and surcharges 23,326,231.67 26,649,659.87
Selling and distribution expenses 242,609,042.07 233,599,483.22
Administration expenses 182,897,044.09 176,226,562.15
Financial expenses – net 76,468,650.83 88,489,461.15
Asset impairment losses 16,807,658.72 8,388,213.89
Add:Investment income 18,576,985.34 16,016,159.76
Including:Share of profits of associates 18,576,985.34 16,016,159.76
Operating profit 328,725,742.87 317,963,380.42
Add: Non-operating income 22,135,730.64 19,109,166.93
Less: Non-operating expenses 22,119,061.64 29,914,252.52
Including: Loss on disposal of non-current assets 28,872.00 8,985,832.5
Total profit 328,742,411.87 307,158,294.83
Less:Income taxes expenses 60,942,244.76 63,947,782.17
Net profit 267,800,167.11 243,210,512.66
Attributable to equity holders of the Company 260,794,678.64 240,033,990.64
Minority interest 7,005,488.47 3,176,522.02
Earnings per share
Basic earnings per share 0.905 0.833
Diluted earnings per share 0.905 0.833
Other comprehensive income - -
Total comprehensive income 267,800,167.11 243,210,512.66
Attributable to equity holders of the Company 260,794,678.64 240,033,990.64
Minority interest 7,005,488.47 3,176,522.02
Principal in charge of accounting : Head of accounting department:
Legal representative: Yan Zhigang
Wei Pingxiao Chi Guoguang
4、Company income statement
32
Prepared by China National Accord Medicines Co., Ltd
Year ended 30 Year ended 30
Item
June 2013 June 2012
Sales 1,193,441,273.94 1,061,913,880.58
Less:Cost of sales 1,142,667,141.70 1,009,526,559.83
Taxes and surcharges 2,043,636.20 2,561,289.79
Selling and distribution expenses 21,154,070.92 23,790,432.21
Administration expenses 13,859,583.70 18,789,943.57
Financial expenses – net 5,893,730.35 12,150,824.50
Asset impairment losses 319,855.94 (87,845.57)
Add:Investment income 403,244,931.24 333,088,955.75
Including:Share of profits of associates 18,576,985.34 16,016,159.76
Operating profit 410,748,186.37 328,271,632.00
Add:Non-operating income 4,472,734.63 316,515.21
Less: Non-operating expenses 50.00 270,558.60
Including: Loss on disposal of
- 69,125.07
non-current assets
Total profit 415,220,871.00 328,317,588.61
Less:Income taxes expenses (53,392.68) 2,298,245.25
Net profit 415,274,263.68 326,019,343.36
Other comprehensive income
Total comprehensive income 415,274,263.68 326,019,343.36
Principal in charge of accounting : Head of accounting department: Chi
Legal representative: Yan Zhigang
Wei Pingxiao Guoguang
33
5、Consolidated cash flows statement
Prepared by China National Accord Medicines Co., Ltd
Year ended 30 Year ended 30
Item
June 2013 June 2012
I. Cash flows from operating activities:
Cash received from sales of
10,057,836,735.60 8,154,024,926.29
goods or rendering of services
Refund of taxes and surcharges 7,570,798.77 1,635,046.52
Cash received relating to other operating activities 38,823,223.02 54,219,435.33
Sub-total of cash inflows 10,104,230,757.39 8,209,879,408.14
Cash paid for goods and services 9,208,952,026.05 7,429,617,641.04
Cash paid to and on behalf of employees 261,318,392.72 237,818,197.76
Payments of taxes and surcharges 241,792,269.13 267,522,349.76
Cash paid relating to other operating activities 153,891,196.41 136,011,351.41
Sub-total of cash outflows 9,865,953,884.31 8,070,969,539.97
Net cash flows from operating activities 238,276,873.08 138,909,868.17
II. Cash flows from investing activities
Cash received from disposal of investments - 13,520,461.47
Cash received from returns on investments 76,611.00 1,186,748.27
Cash received relating to other investing activities - 50,000,000.00
Sub-total of cash inflows 76,611.00 64,707,209.74
Cash paid to acquire fixed assets, intangible assets
31,240,049.89 100,816,136.04
and other long-term assets
Net cash paid to acquire subsidiaries
- 24,618,888.24
and other business units
Sub-total of cash outflows 31,240,049.89 125,435,024.28
Net cash flows from investing activities (31,163,438.89) (60,727,814.54)
III. Cash flows from financing activities
Cash received from borrowings 335,703,705.83 542,234,155.37
Cash received relating to other financing Activities - 379,293,299.15
Sub-total of cash inflows 335,703,705.83 921,527,454.52
Cash repayments of borrowings 412,825,109.96 556,539,508.71
34
Cash payments for interest expenses
119,481,742.25 115,134,064.07
and distribution of dividends or profits
Including:Cash payments for dividends or
- 915,144.07
profit to minority shareholders of subsidiaries
Cash payments relating to other financing activities 48,947,088.25 367,370,000.00
Sub-total of cash outflows 581,253,940.46 1,039,043,572.78
Net cash flows from financing activities (245,550,234.63) (117,516,118.26)
IV. Effect of foreign exchange rate changes on cash (1.48) 8,041.08
V. Net increase/(decrease) in cash (38,436,801.92) (39,326,023.55)
Add: Cash at beginning of year 920,748,043.53 907,884,162.14
VI. Cash at end of year 882,311,241.61 868,558,138.59
Principal in charge of accounting: Head of accounting
Legal Reresentative: Yan Zhigang
Wei Pingxiao department：Chi Guoguang
6、Company cashflows statements
Prepared by China National Accord Medicines Co., Ltd
Year ended 30 Year ended 30
Item
June 2013 June 2012
I. Cash flows from operating activities
Cash received from sales of goods or rendering of services 1,214,280,538.38 1,078,704,746.86
Cash received relating to other operating activities 5,237,699.02 8,565,080.02
Sub-total of cash inflows 1,219,518,237.40 1,087,269,826.88
Cash paid for goods and services 1,185,309,308.36 986,191,531.05
Cash paid to and on behalf of employees 24,032,421.42 24,886,316.46
Payments of taxes and surcharges 6,825,494.08 12,845,563.17
Cash paid relating to other operating activities 14,336,903.77 15,390,706.25
Sub-total of cash outflows 1,230,504,127.63 1,039,314,116.93
Net cash flows from operating activities (10,985,890.23) 47,955,709.95
II. Cash flows from investing activities
Cash received from returns on investments 81,042,685.23 113,015,614.75
Net cash received from disposal of fixed assets, intangible assets
- 207,900.00
and other long-term assets
Cash received from disposal of subsidiaries and other business - 5,424,600.00
35
units
Cash received relating to other investing activities 485,718,000.00 184,483,271.97
Sub-total of cash inflows 566,760,685.23 303,131,386.72
Cash paid to acquire fixed assets, intangible assets and other
3,376,519.20 1,241,178.00
long-term assets
Cash paid to acquire Investments 100,000,000.00 -
Net cash paid to acquire subsidiaries and other business units - 44,442,000.00
Cash paid relating to other investing activities 491,200,000.00 233,780,000.00
Sub-total of cash outflows 594,576,519.20 279,463,178.00
Net cash flows from investing activities (27,815,833.97) 23,668,208.72
III. Cash flows from financing activities
Cash received from borrowings 238,000,000.00 70,000,000.00
Cash payments relating to other financing activities 482,924,408.91 480,563,612.79
Sub-total of cash inflows 720,924,408.91 550,563,612.79
Cash repayments of borrowings 292,000,000.00 90,062,726.66
Cash payments for interest expenses and distribution of dividends
75,035,803.29 66,347,376.19
or profits
Cash payments relating to other financing activities 333,808,489.25 485,667,112.42
Sub-total of cash outflows 700,844,292.54 642,077,215.27
Net cash flows from financing activities 20,080,116.37 (91,513,602.48)
IV. Net increase/(decrease) in cash (18,721,607.83) (19,889,683.81)
Add: Cash at beginning of year 160,633,355.13 164,840,499.86
V. Cash at end of year 141,911,747.30 144,950,816.05
Principal in charge of accounting: Wei Head of accounting department：Chi
Legal Reresentative: Yan Zhigang
Pingxiao Guoguang
36
7、Consolidated statements of changes in owners’ equity
Prepared by China National Accord Medicines Co., Ltd
Year ended 30 June 2013
Total owners’
Item Attributable to the shareholders of the Company Minority interest
equity
Paid-in capital Capital surplus Surplus reserves Undistributed profits
Balance at 31 December 2012 288,149,400.00 5,550,338.57 99,360,384.15 1,382,882,906.24 63,108,183.24 1,839,051,212.20
Balance at 1 January 2013 288,149,400.00 5,550,338.57 99,360,384.15 1,382,882,906.24 63,108,183.24 1,839,051,212.20
Movements for the year ended
30 June 2013 161,000.00 208,921,108.91 7,012,166.20 216,094,275.11
Net profit 260,794,678.64 7,005,488.47 267,800,167.11
Other comprehensive income
Capital contribution by owners
and withdrawals 161,000.00 (6,677.73) 6,677.73 161,000.00
- Others 161,000.00 (6,677.73) 6,677.73 161,000.00
Profit distribution (51,866,892.00) (51,866,892.00)
- Profit distribution to equity
(51,866,892.00) (51,866,892.00)
owners
Balance at 30 June 2013 288,149,400.00 5,711,338.57 99,360,384.15 1,591,804,015.15 70,120,349.44 2,055,145,487.31
37
Year ended 31 December 2012
Attributable to the shareholders of the Company Minority interest Total owners’ equity
Item
Undistributed
Paid-in capital Capital surplus Surplus reserves profits
Balance at 31 December 2011 288,149,400.00 8,735,305.04 63,480,745.16 989,727,826.66 76,582,397.01 1,426,675,673.87
Balance at 1 January 2012 288,149,400.00 8,735,305.04 63,480,745.16 989,727,826.66 76,582,397.01 1,426,675,673.87
Movements for the year ended
31 December 2012 (3,184,966.47) 35,879,638.99 393,155,079.58 (13,474,213.77) 412,375,538.33
Net profit 475,792,491.12 7,889,344.40 483,681,835.52
Other comprehensive income
Capital contribution by owners
and withdrawals (3,184,966.47) (9,298,350.55) (18,337,467.32) (30,820,784.34)
-Contribution by owners 5,097,215.66 5,097,215.66
-Others (3,184,966.47) (9,298,350.55) (23,434,682.98) (35,918,000.00)
Profit distribution 35,879,638.99 (73,339,060.99) (3,026,090.85) (40,485,512.85)
- Appropriation to surplus
35,879,638.99 (35,879,638.99)
reserves
- Profit distribution to equity
(37,459,422.00) (3,026,090.85) (40,485,512.85)
owners
Balance at 31 December 2012 288,149,400.00 5,550,338.57 99,360,384.151,382,882,906.24 63,108,183.24 1,839,051,212.20
38
Legal Principal in charge Head of accounting
representative: Yan Zhigang of accounting : Wei Pingxiao department: Chi Guoguang
8、Company statements of changes in owners’ equity
Prepared by China National Accord Medicines Co., Ltd
Year ended 30 June 2013
Items Undistributed
Total owners’ equity
Paid-in capital Capital surplus Surplus reserves profits
Balance at 31 December 2012 288,149,400.00 14,348,726.93 99,360,384.15 864,755,729.87 1,266,614,240.95
Balance at 1 January 2013 288,149,400.00 14,348,726.93 99,360,384.15 864,755,729.87 1,266,614,240.95
Movements for the year ended 30 June 2012 161,000.00 363,407,371.68 363,568,371.68
Net profit 415,274,263.68 415,274,263.68
Other comprehensive income
Capital contribution by owners and withdrawals 161,000.00 161,000.00
-Others 161,000.00 161,000.00
Profit distribution (51,866,892.00) (51,866,892.00)
- Profit distribution to equity owners (51,866,892.00) (51,866,892.00)
Balance at 30 June 2013 288,149,400.00 14,509,726.93 99,360,384.151,228,163,101.55 1,630,182,612.63
39
Year ended 31 December 2012
Items
Paid-in capital Capital surplus Surplus reserves Undistributed profits Total owners’ equity
288,149,400.00 14,116,726.93 63,480,745.16 579,298,401.00 945,045,273.09
Balance at 31 December 2011
Balance at 1 January 2012 288,149,400.00 14,116,726.93 63,480,745.16 579,298,401.00 945,045,273.09
Movements for the year ended 30 June
232,000.00 35,879,638.99 285,457,328.87 321,568,967.86
2012
Net profit 358,796,389.86 358,796,389.86
Other comprehensive income
Capital contribution by owners and
232,000.00 232,000.00
withdrawals
-Others 232,000.00 232,000.00
Profit distribution 35,879,638.99 (73,339,060.99) (37,459,422.00)
- Appropriation to surplus reserves 35,879,638.99 (35,879,638.99) -
- Profit distribution to equity owners (37,459,422.00) (37,459,422.00)
Balance at 31 December 2012 288,149,400.00 14,348,726.93 99,360,384.15 864,755,729.87 1,266,614,240.95
Legal Principal in charge Head of accounting
representative: Yan Zhigang of accounting : Wei Pingxiao department: Chi Guoguang
40
I Profile of company
China National Accord Medicines Co., Ltd. (formerly known as Shenzhen Accord Pharmaceutical
Co.,Ltd, ‘the Company’), formerly known as Shenzhen Health Mineral Water Co., Ltd., was
approved by the People’s Government of Shenzhen with SFBF (1993) No.356 document to
establish on February 1, 1993 through stock restructure as a company limited by shares. 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 transfer of capital surplus to share capital and bonus issues
for years, the share capital of the Company increased to RMB288,149,400 up to December 31,
2012. The employee shares, domestic public shares and foreign public shares have all been listed
on the Shenzhen Stock Exchange.
In November 2000, the Company entered into an Assets Exchange Agreement with Shenzhen
Investment Management Company, the original main shareholder of the Company, to exchange all
the assets and liabilities of the Company as of August 31, 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. On
December 29, 2000, the above assets exchange proposal was approved by shareholder’s voting in
the second extraordinary general meeting in 2000. The transaction was completed on January 8,
2001. On 8 January, 2001, the Company changed its name to Shenzhen Accord Pharmaceutical
Co., Ltd., and belongs to the pharmaceutical manufacturing industry.
On February 18, 2004, the Company’s original main shareholder, Shenzhen Investment
Management Company, entered into a Stock Transfer Agreement with Sinopharm Group Co., Ltd.
(formerly known as Sinopharm Group Medicine Holding 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 December 9, 2004. At the same time,
as approved by GZCQ (2004) No.525 document from the State-owned Assets Supervision and
Administration Commission of the State Council and ZJGSZ (2004) No.94 document from the China
Securities Regulatory Commission, the nature of these shares was transferred from state-owned
stock to state-owned legal entity stock and Sinopharm Group became the top shareholder of the
Company.
On April 14, 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 April 27,
2006, the Company issued bonus shares on April 28, 2006 at the ratio of 3 shares to every 10
A-shares to liquidated A-share holders 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 share holdings. The Company issued 288,149,400 shares as at December 31,
2012.
The Company is registered with Shenzhen Administration for Industry & Commerce. Its business
license number is 440301103040048 and the serial number of the license is N24657. The
operation period of the Company is from August 2, 1986 to August 2, 2036. The registered capital
of the Company is RMB288,149,400. The legal representative of the Company is Yan Zhigang.
- 41 -
I Profile of company (continued)
The approved scope of business of the Company and its subsidiaries (together e. Its business
license number is 440301103040048 and the serial number of the license is Nutical 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
(other than special licensing), sale of ambulances; trade of 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; operating various types of goods and import and export of technology (not attached
directory of import and export commodities), but excluded the import and export of goods and
technology the State limits or prohibit the company.
These financial statements were authorized for issue by the board of directors of the Company on
20 August 2013.
II Summary of significant accounting policies and accounting estimates
(1) Basis of preparation
The financial statements were prepared in accordance with the Basic Standard and 38 specific
standards of the Accounting Standards for Business Enterprises issued by the Ministry of Finance
on 15 February 2006, and the Application Guidance for Accounting Standards for Business
Enterprises, Interpretations of Accounting Standards for Business Enterprises and other 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 (2010 revised) issued by the China Securities Regulatory Commission.
(2) Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements of the Company for the year ended 30 June 2013 are in compliance with
the Accounting Standards for Business Enterprises, and truly and completely present the financial
position as of 30 June 2013 and the operating results, cash flows and other information for the year
then ended of the Group and the Company.
(3) Accounting year
The Company’s accounting year starts on 1 January and ends on 31 December.
(4) Recording currency
The recording currency is Renminbi (RMB).
(5) Business combinations
- 42 -
(a) Business combinations involving enterprises under common control
The consideration paid and net assets obtained by the absorbing party in a business combination
are measured at the carrying amount. The difference between the carrying amount of the net assets
obtained from the combination and the carrying amount of the consideration paid for the
combination is treated as an adjustment to capital surplus (share premium). If the capital surplus
(share premium) is not sufficient to absorb the difference, the remaining balance is adjusted against
retained earnings. 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 recognised amounts of the equity
or debt securities.
II Summary of significant accounting policies and accounting estimates (continued)
(5) Business combinations(continued)
(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 recognised 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 recognised 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 recognised amounts of the
equity or debt securities.
(6) 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 realised 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 inter-group balances, transactions and unrealised profits are eliminated in the
consolidated financial statements. The portion of a subsidiary’s equity and the portion of a
subsidiary’s net profits and losses for the period not attributable to Company are recognised as
minority interests and presented separately in the consolidated financial statements within equity
and net profits respectively.
(7) Acquisition of minority interest in controlled subsidiaries
- 43 -
The Company acquires equity from the minority shareholders after taking control of the subsidiary,
in the consolidated financial statement, the subsidiary’s assets, liabilities should be measured from
combination or acquisition date. The difference between the carrying amount of acquisition of
minority interest and the net assets proportion calculated by 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.
(8) Cash
Cash 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 which are
subject to an insignificant risk of changes in value.
- 44 -
II Summary of significant accounting policies and accounting estimates (continued)
(9) Foreign currency translation
Foreign currency transactions are translated into RMB using the exchange rates prevailing at the
dates of the transactions.
At the balance sheet date, monetary items denominated in foreign currencies are translated into
RMB using the spot exchange rates on the balance sheet date. Exchange differences arising from
these translations are recognised 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 capitalised 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.
(10) Financial Instruments
(a) Financial assets
(i) Classification of financial assets
Financial assets are classified into the following categories at initial recognition: financial assets at
fair value through profit or loss, receivables, available-for-sale financial assets and held-to-maturity
investments. The classification of financial assets depends on the Group’s intention and ability to
hold the financial assets. The Group currently holds the financial assets including receivables.
Receivables, including notes receivables, accounts receivable and Other receivables, are
non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market.
(ii) Recognition and measurement
Financial assets are recognised at fair value on the balance sheet when the Group becomes a
party to the contractual provisions of the financial instrument. Receivables are measured at
amortised cost using the effective interest method.
(iii) Impairment of financial assets
The Group assesses the carrying amounts of receivables other than those at fair value through
profit or loss at each balance sheet date. If there is objective evidence that a financial asset is
impaired, an impairment loss is provided for. When an impairment loss on a financial asset carried
at amortised cost has occurred, the amount of loss is provided for at the difference between the
asset’s carrying amount and the present value of its estimated future cash flows (excluding future
credit losses that have not been incurred). If there is objective evidence that the value of the
financial asset recovered and the recovery is related objectively to an event occurring after the
impairment was recognised, the previously recognised impairment loss is reversed and the amount
of reversal is recognised in profit or loss.
(iv) Derecognition of financial assets
- 45 -
A financial asset is derecognised when any of the below 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.
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 recognised
directly in equity, is recognised in profit or loss.
- 46 -
II Summary of significant accounting policies and accounting estimates (continued)
(10) Financial Instruments(continued)
(b) Financial liabilities
Financial liabilities are classified into the following categories at initial recognition: financial liabilities
at fair value through profit or loss and other financial liabilities. The financial liabilities of the Group
mainly comprise other financial liabilities, including payables and borrowings
Payables, including notes payable, accounts payable and other payables, are recognised initially at
fair value and subsequently measured at amortised cost using the effective interest method.
Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently
carried at amortised costs using the effective interest method.
Other financial liabilities with maturities no more than one year are classified as current liabilities.
Other financial liabilities with maturities over one year but are due within one year at the balance
sheet date are classified as the current portion of non-current liabilities. Others are classified as
non-current liabilities.
A financial liability is derecognised or partly derecognised when the current obligation is discharged
or partly discharged. The difference between the carrying amount of the financial liability or the
derecognised part of the financial liability and the consideration paid is recognised in profit or loss.
(11) Receivables
Receivables comprise notes receivable, accounts receivable and Other receivables. Accounts
receivable arising from sale of goods or rendering of services are initially recognised 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 determing “individually significant” amounts is that any individual amount is more
than RMB 5 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
- 47 -
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 aging of receivables at the
following percentage:
Provision ratios used for Provision ratios used for
accounts receivables Other receivables
Within 1 year - -
1 to 2 years 5% 5%
2 to 3 years 10% 10%
More than 3 years 20% 20%
II Summary of significant accounting policies and accounting estimates (continued)
(11) Receivables (continued)
(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.
(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 recognised in profit or loss for the current period.
(12) Inventories
(a) Classification
Inventories include raw materials, work in progress, finished goods and turnover materials, and are
measured at the lower of cost and net realisable 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 labour and an allocation of systematically allocated
overhead expenditures incurred based on normal operating capacity.
(c) Basis for determining net realisable values of inventories and method for making provision for
decline in the value of inventories
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Provisions for declines in the value of inventories are determined at the excess amount of the
carrying value of the inventories over their net realisable value. Net realisable 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) Amortisation methods of low value consumables and packaging materials
Turnover materials include low value consumables and packaging materials, which are expensed
when issued.
(13) 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.
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II Summary of significant accounting policies and accounting estimates (continued)
(13) Long-term equity investments (continued)
(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 owners’ equity of
the party being absorbed at the combination date; for long-term equity investment 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 and 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
recognised as investment income in profit or loss.
For long-term equity investments accounted for using the equity method, where the initial
investment cost of a long-term equity investment exceeds the Group’s share of the fair value of the
investee’s identifiable net assets at the acquisition date, the long-term equity investment is
measured at the initial investment cost; where the initial investment cost is less than the Group’s
share of the fair value of the investee’s identifiable net assets at the acquisition date, the difference
is included in profit or loss and the cost of the long-term equity investment is adjusted upwards
accordingly.
For long-term equity investments accounted for using the equity method, the Group recognises the
investment income according to its share of net profit or loss of the investee. The Group
discontinues recognising 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 recognising the
investment losses and the provisions. For changes in owners’ equity of the investee other than
those arising from its net profit or loss, the Group records its proportionate share directly into capital
surplus, provided that the Group’s proportion of shareholding in the investee remains unchanged.
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 unrealised 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 recognised. For the loss on the intra-group transaction amongst the Group and its investees
attributable to asset impairment, any unrealised loss is not eliminated.
(c) Basis for determing existence of control, jointly 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, etc.
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.
- 50 -
(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 II
(21)).
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II Summary of significant accounting policies and accounting estimates (continued)
(14) 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 property are included in the cost of the investment property 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 recognised in profit or loss in the period in which they
are incurred.
The Group adopts the cost model for subsequent measurement of investment properties. Buildings
and land use rights are depreciated or amortised 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 (amortisation) rates of investment
properties are as follows:
Estimated useful Estimated Annual
lives residual value depreciation (amortisation) rates
Buildings 20-35 years 5% 2.71% to 4.75%
Land use rights 30-50 years - 2.00% to 3.33%
When an investment property is transferred to owner-occupied properties, it is reclassified as 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 investment properties at its carrying amount at the date of the transfer.
The investment property’s estimated useful life, net residual value and depreciation (amortisation)
method applied are reviewed and adjusted as appropriate at each year-end.
An investment property is derecognised on disposal or when the investment property 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 property
after its carrying amount and related taxes and expenses is recognised in profit or loss for the
current period.
The carrying amount of an investment property is reduced to the recoverable amount if the
recoverable amount is below the carrying amount (Note II (21)).
(15) Fixed assets
(a) Recoginition and initial measurement of fixed assets
Fixed assets comprise buildings, machinery and equipment, motor vehicles, other equipment and
leasehold improvements.
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Fixed assets are recognised 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 reorganisation of the Company into a corporation entity are recognised
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 derecognised. All the other
subsequent expenditures are recognised in profit or loss in the period in which they are incurred.
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II Summary of significant accounting policies and accounting estimates (continued)
(15) 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 Estimated Annual
lives residual value depreciation rates
Buildings 20-35 years 5% 2.71% to 4.75%
Machinery and equipment 10-14 years 5% 6.79% to 9.5%
Motor vehicles 5-10 years 5% 9.5% to 19%
Other equipment 5-10 years 5% 9.5% to 19%
Leasehold improvements Within 5 years - Above 20%
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 year-end.
(c) The carrying amount of fixed assets is reduced to the recoverable amount when the recoverable
amount is less than the carrying amount (Note II (21)).
(d) Disposal of fixed assets
A fixed asset is derecognised 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 recognised in profit or
loss for the current period.
(16) Construction in progress
Construction in progress is measured at actual cost. Actual cost comprises construction costs,
installation costs, borrowing costs that are eligible for capitalisation 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 II (21)).
(17) Borrowing costs
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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 capitalised 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 capitalisation of borrowing costs
ceases when the asset under acquisition or construction becomes ready for its intended use and
the borrowing costs incurred thereafter are recognised in profit or loss for the current period.
Capitalisation 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.
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II Summary of significant accounting policies and accounting estimates (continued)
(17) Borrowing costs (continued)
For the specific borrowings obtained for the acquisition or construction of a fixed asset qualifying for
capitalisation, the amount of borrowing costs eligible for capitalisation 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
capitalisation period.
For the general borrowings obtained for the acquisition or construction of a fixed asset qualifying
for capitalisation, the amount of borrowing costs eligible for capitalisation 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 applicable shorter period are discounted to the initial
amount of the borrowings.
(18) Intangible assets
Intangible assets include land use rights, computer softwares, technology patents,trademarks and
distribution network, which initially recognised at cost. Intangible assets contributed by state-owned
shareholders during the company reorganisation were recorded based on the valuation amount
approved by the state-owned assets supervision and management department.
(a) Land use rights
A land use right granted by government with a infinite useful life would not be amortised. Other land
use rights are amortised 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 recognised as fixed
assets.
(b) Computer softwares
Computer softwares purchased by the Group are initially measured at cost, which are amortised on
the straight-line basis over their approved useful period of 3 to 5 years.
(c) Trademarks and Technology Patents
Trademarks are amortised on the straight-line basis over their effective periods as stipulated by law
of 5 to 10 years. Technology Patents are amortised on the straight-line basis over their effective
useful period of 5 years.
(d) Distribution network
Distribution network includes customer relationships and distribution channels, which is amortised
on the straight-line basis over its approved useful lives.
(e) Periodical review of useful life and amortisation method
- 56 -
For an intangible asset with a finite useful life, review of its useful life and amortisation method is
performed at each year-end, with adjustment made as appropriate.
For an intangible asset without a definite useful life, review of its useful life are performed at each
year-end.
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II Summary of significant accounting policies and accounting estimates (continued)
(18) Intangible assets (continued)
(f) Research and development
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 on the research phase is recognised in profit or loss in the period in which it is
incurred. Expenditure on the development phase is capitalised only if all of the following conditions
are satisfied:
it is technically feasible to complete the intangible asset so that it will be available for use;
management intends to complete the intangible asset, and use or sell it;
it can be demonstrated how the intangible asset will generate economic benefits;
adequate technical, financial and other resources to complete the development and the ability
to use or sell the intangible asset; and
the expenditure attributable to the intangible asset during its development phase can be reliably
measured.
Other development expenditures that do not meet the conditions above are recognised in profit or
loss in the period in which they are incurred. Development costs previously recognised as
expenses are not recognised as an asset in a subsequent period. Capitalised 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.
(g) Impairment of intangible assets
The carrying amount of intangible assets is reduced to the recoverable amount when the
recoverable amount is less than the carrying amount (Note II (21)).
(19) 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 recgonised as
expenses over more than one year in the current and subsequent periods. Long-term prepaid
expenses are amortised on the straight-line basis over the expected beneficial period and are
presented at actual expenditure net of accumulated amortisation.
(20) Governmental medical reserve funds and specially approved reserving materials
- 58 -
Appointed by the PRC Government, China National Pharmaceutical Group Corporation (“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 Group,
is responsible for purchasing, allocating and providing the medical reserves, which include the
medical products needed for common disease and emergencies triggered by major disasters,
epidemics and other situations 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
recognised in 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 recognises in other non-current assets.
- 59 -
II Summary of significant accounting policies and accounting estimates (continued)
(21) 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, joint ventures and associates are tested for impairment if there is any
indication that an asset may be impaired at the balance 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 recognised 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 recognised 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.
Goodwill that is separately presented in the financial statements and intangible assets with infinite
useful lives 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 recognised. 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 amounts of other assets within the asset groups or
groups of asset groups in proportion to the carrying amounts of other assets.
Once the above asset impairment loss is recognised, it will not be reversed for the value recovered
in the subsequent periods.
(22) Employee benefits
Employee benefits mainly include wages or salaries, bonuses, allowances and subsidies, staff
welfare, annuity, social security contributions, housing funds, labour union funds, employee
education funds and other expenditures incurred in exchange for service rendered by employees.
Where the Group terminates the employment relationship with employees before the end of the
employment contract or offers compensation for encouraging employees to accept voluntary
redundancy, a provision for termination benefits for the compensation arising from termination of
the employment relationship with employees is recognised, with a corresponding charge to profit or
loss when the Group has made a formal plan for termination of the employment relationship or an
offer for voluntary redundancy which will be implemented immediately and cannot be withdrawn by
the Group unilaterally.
Except for compensation paid for termination of employment, employee benefits are recognised as
salaries and wages payable in the accounting period in which an employee has rendered service,
as costs of assets or expenses to whichever the employee service is attributable.
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II Summary of significant accounting policies and accounting estimates (continued)
(22) Employee benefits (continued)
Certain subsidiaries have the defined benefit plans. The Group recognizes salaries, social
insurance premiums, etc., to be paid for the early retired employees, during the period from the
date when the employees stop rendering service to the normal retirement date, as employee
benefits payable through administrative expenses for the current period, when the above conditions
for the recognition of termination benefit plan are satisfied.
The liability recognised in the balance sheet in respect of defined benefit plans is the present value
of the defined benefit obligation at the balance sheet date, together with adjustments for
unrecognised actuarial gains or losses and past service costs. The defined benefit t obligation is
calculated annually by independent actuaries using the projected unit credit method. The present
value of the defined benefit obligation is determined by discounting the estimated future cash
outflows using interest rates of the RMB denominated (the currency in which the benefits will be
paid) PRC government bonds, and that have terms to maturity approximating to the terms of the
related pension liability.
(23) Dividend distribution
Cash dividends distribution is recognised as a liability in the period in which it is approved by the
annual shareholders’ meeting.
(24) Revenue recognition
The amount of revenue is determined in accordance with the fair value of the consideration
received or receivable for the sale of goods and services in the ordinary course of the Group’s
activities. Revenue is shown net of discounts and returns.
Revenue is recognised when the economic benefits associated with the transaction will flow to the
Group, the related revenue can be reliably measured, and the specific revenue recognition criteria
have been met for each type of the Group’s activities as described below:
(a) Sale of goods
Revenue from the sale of goods is recognized when significant risks and rewards of ownership of
the goods are transferred to the buyer, the Company retains neither continuing managerial
involvement to the degree usually associated with ownership nor effective control over the goods
sold, and it is probable that the economic benefit associated with the transaction will flow to the
Company and the relevant revenue and costs can be measured reliably.
(b) Rendering of services
The Group provides freight service and storage service to external parties. The freights are
recognized as revenue right after the goods are transported to the place of delivery according to
contracts or agreements, received and confirmed by the purchasers. The storage charges are
recognized as revenue on the basis of services provided during the storage period. Other revenue
arising from the rendering of services is determined in accordance with the amount stipulated in the
contract or agreement signed by the enterprise and the party who receives the services.
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II Summary of significant accounting policies and accounting estimates (continued)
(24) Revenue recognition (continued)
(c) Transfer of asset use rights
Interest income is determined by using the effective interest method, based on the length of time for
which the Group’s cash is used by others.
Income from an operating lease is recognised on a straight-line basis over the period of the lease.
(d) Customer Loyalty Programme
The group, offers loyalty points programmes where points earned through the purchase of goods
can only be redeemed for goods provided by Zhijun Pharm 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.
(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 recognised 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 recognised as deferred income, and evenly amortised to
profit or loss over the useful life of the related asset. Government grants measured at nominal
amounts are recognised 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 recognised as
deferred income, and included in profit or loss over the periods in which the related costs are
recognised; where the grant is a compensation for related expenses or losses already incurred by
the Group, the grant is recognised immediately in profit or loss for the current period.
(26) Provisions
Provisions for product warranties, onerous contracts etc. are recognised when the Group has a
present obligation, it is probable that an outflow of economic benefits will be required to settle the
obligation, and the amount of the obligation can be measured reliably.
- 62 -
A provision is initially measured at the best estimate of the expenditure required to settle the related
present obligation. Factors surrounding a contingency, such as the risks, uncertainties and the time
value of money, are taken into account as a whole in reaching the best estimate of a provision.
Where the effect of the time value of money is material, the best estimate is determined by
discounting the related future cash outflows. The increase in the discounted amount of the
provision arising from passage of time is recognised as interest expense.
The carrying amount of provisions is reviewed at each balance sheet date and adjusted to reflect
the current best estimate.
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II Summary of significant accounting policies and accounting estimates (continued)
(27) Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities are calculated and recognised based on the
differences arising between the tax bases of assets and liabilities and their carrying amounts
(temporary differences). Deferred tax asset is recognised 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 recognised for a temporary difference arising from the initial
recognition of goodwill. No deferred tax asset or deferred tax liability is recognised 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 realised or the
liability is settled.
Deferred tax assets are only recognised 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
utilised.
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 recognised 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 utilised, the
corresponding deferred tax assets are recognised.
(28) Operating leases
Leases where a significant portion of the risks and rewards of ownership are retained by the leaser
are classified as operating leases. Lease payments under an operating lease are recognised on a
straight-line basis over the period of the lease, and are either capitalised as part of the cost of
related assets or charged as an expense for the current period.
(29) Segment information
The Group identifies operating segments based on the internal organisation structure,
management requirements and internal reporting system, and discloses segment information of
reportable segments which is determined on the basis of operating segments.
- 64 -
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.
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II Summary of significant accounting policies and accounting estimates (continued)
(30) Changes in significant accounting policies
The Group has no changes in significant accounting policies in 2012.
(31) Critical accounting estimates and judgments
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 use of estimates (Note V (14)).
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 recognise 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
recognise 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) Income taxes
The Group is subject to income taxes in numerous jurisdictions. There are many transactions and
events for which the ultimate tax determination is uncertain during the ordinary course of business.
Significant judgment is required from the Group in determining the provision for income taxes in
each of these jurisdictions. The Group recognises income taxes in each jurisdiction based on
estimates. Where the final tax outcome of these matters is different from the amounts that were
initially recorded, such differences will impact the income tax and deferred tax provisions in the
period in which such determination is made.
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II Summary of significant accounting policies and accounting estimates (continued)
(31) Critical accounting estimates and judgments (continued)
(iii) Accounting estimates on impairment of accounts receivable
In accordance with the Group’s accounting policy (Note II (11)), 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.
(iv) Accounting estimates on impairment of inventories
In accordance with the Group’s accounting policy (Note II (12) (c)), the Group’s management
estimates the net realizable value of the inventory. Net realisable 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.
(v) Accounting estimates on impairment of long-term assets
In accordance with the Group’s accounting policy (Note II (21)), the Group’s management tests
annually whether long term assets with an indication of impairment have suffered any impairment,
including 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. The calculation of present value of projection cash
flows of these long-term assets requires the use of accounting estimate which is similar to the
impairment test of goodwill.
It is reasonably possible that outcomes based on current experience within the next financial year
would be significantly different, which will result in a significant impact on the carrying amount of
those long-term assets described above.
- 67 -
III Taxation
(1) The types and rates of taxes applicable to the Group are set out below:
Type Taxable base Tax rate
Enterprise income Taxable income
tax(“EIT”) 15%、20% or 25%
Value added tax (“VAT”) Taxable value added amount (Tax payable is 0%、3%、4%、6%、
calculated using the taxable sales amount 11%、13% or 17%
multiplied by the effective tax rate less
deductible VAT input of current period)
Business tax Rental income, storage income and etc. 3%、5%
City maintenance and VAT and business tax
construction tax 7%
Education surcharge VAT and business tax 3%
Regional/Local education VAT and business tax
surcharge 2%
Descriptions on corporate income tax rates applicable to different situations
15% ： Shenzhen Zhijun Pharmaceutical Co. Ltd (‘Zhijun Pharm’), Sinopharm Group Zhijun(Suzhou)
Pharmaceutical Co., Ltd.(Zhijun Suzhou) and Sinopharm Holding Shenzhen Chinese Medicines Co.
Ltd(Shenzhen Medicines)have obtained the identification of high-tech enterprises，which are pplicable
corporate income tax rate of 15%.
20%：Sinopharm Holding Guangxi Chinese Herbal pieces Co. Ltd(Sinopharm Chinese Herbal pieces)、
Sinopharm Holding Yulin Co. Ltd(Sinopharm Yulin) are regarded as a small meagre-profit enterprise with an
Enterprise income tax rate of 20%
25%：In addition to above companies,other companies are applicable to the rest of the company's corporate
income tax rate of 25%.
For subsidies including Sinopharm Chinese Herbal pieces and Sinopharm Yulin, as small meagre-profit
enterprises, the taxable income is counted by 50% of profit before tax, and the tax rate is 20%.
(2) Tax preferences
Sinopharm Chinese Herbal pieces and Sinopharm Yulin are regarded as a small meagre-profit enterprise with
an Enterprise income tax rate of 20%,which income has a haircut of 50%.
In 2011,the company’s subsidiary Zhijun Pharm obtained the certificate of High and New Technology
Enterprises with effective period of 3 years from Shenzhen Municipal Science and Technology and Information
Bureau, the Shenzhen Municipal Bureau of Finance, State Administration of Taxation and the Shenzhen Local
Taxation Bureau of Shenzhen .In addition, Zhijun Suzhou obtained the certificate of High and New Technology
Enterprises with effective period of 3 years,from Jiangsu Province Science and Technology and Technology
Department of Jiangsu Provincial Department of Finance, State Administration of Taxation, Jiangsu Province
and Jiangsu Province Local Taxation Bureau.
In 2012, Sinopharm Shenzhen Medicine obtained the certificate of High and New Technology Enterprises with
effective period of 3 years from Shenzhen Municipal Science and Technology and Information Bureau, the
Shenzhen Municipal Bureau of Finance, State Administration of Taxation and the Shenzhen Local Taxation
Bureau of Shenzhen .
Under the relevant regulations of article 28 of the Corporate Income Tax Law, the applicable tax rates for
Zhijun Pharm, Zhijun Suzhou and Shenzhen Medicine in year 2013 are 15% (2012: 15%).
- 68 -
IV Business combinations and consolidated financial statements
(1) Subsidiaries
The company have 33 subsidiaries, including 26 second-stage subsidiaries and 7 third-stage subsidiaries.
- 69 -
IV Business combinations and consolidated financial statements(continued)
(1) Subsidiaries(continued)
(a) Subsidiaries acquired through establishment
The holding Place of Nature of Registered Principal activities Enterprise Type Legal
type of registration business capital Representative
investment ( RMB’000
0)
Sinopharm Holding Indirect Guilin Comercial 1,000.00 Wholesale of Traditional Chinese medicine, Chinese patent Limited Zhou Ruili
Guilin Co., Ltd. company
(Sinopharm Guilin) drugs, raw materials for chemical medicine, chemical material
( Note (i))
drugs, antibiotics, bio-chemical drugs and biological products
(excluding vaccines), narcotic drugs, anabolic agent,
Pericarpium Papaveris,etc
Sinopharm Holding Indirect Baise Comercial 1,000.00 Traditional Chinese medicine, Chinese patent drugs, raw Limited Zhou Ruili
company
Baise Co., Ltd. materials for chemical medicine, chemical material drugs,
(Sinopharm Baise) antibiotics, bio-chemical drugs and biological products
( Note (i))
(excluding vaccines), narcotic drugs, anabolic agent.
Sinopharm Zhongshan Direct Zhongshan Comercial 1,000.00 Wholesale of Traditional Chinese medicine, Chinese patent Limited Yang Yan
company
drugs, raw materials for chemical medicine, chemical material
drugs, antibiotics, bio-chemical drugs and biological products
(excluding vaccines)
- 70 -
Sinopharm Holding Indirect Guigang Comercial 1,000.00 Traditional Chinese medicine, Chinese patent drugs, raw Limited Zhou Ruili
company
Guigang Co., Ltd. materials for chemical medicine, chemical material drugs,
(Sinopharm Guigang) antibiotics, bio-chemical drugs and biological products
( Note (i))
(excluding vaccines), narcotic drugs, anabolic agent.
IV Business combinations and consolidated financial statements(continued)
(1) Subsidiaries(continued)
(a) Subsidiaries acquired through establishment(continued)
Year-end balance of Other assets constitute Equity Voting rights Consolidated or Minority Loss shared by minority interests
investment investment in substance interest held (%) not interests
( RMB’0000) held (%) (RMB’0000)
Sinopharm 1,000.00 - 100 100 Yes - -
Guilin(Note(i))
Sinopharm 1,000.00 - 100 100 Yes - -
Baise(Note(i))
Sinopharm 1,000.00 - 100 100 Yes - -
Zhongshan
Sinopharm 1,000.00 - 100 100 Yes - -
Guigang) (Note
(i))
(i)
Sinopharm Guilin , Sinopharm Guigang and Sinopharm Baise are wholly owned subsidiaries of Sinopharm Guangxi, indirectly held of 100% in equity by the Company
- 71 -
IV Business combinations and consolidated financial statements(continued)
(1) Subsidiaries(continued)
(b) Subsidiaries acquired under common control
The holding Registered
type of Place of Nature of capital Enterprise Legal
investment registration business ( RMB’0000) Principal activities Type Representative
Zhijun Pharm Direct Shenzhen Manufactur 20,000.00 Original chemical medicine manufacture, Chinese patent medicine processing, Limited Yan Zhigang
ing chemical raw material of medicine, the imports and exports business which company
transacted according to examined and approved certificate
Sinopharm Jianmin Direct Shenzhen Comercial 500.00 Wholesale of chemical agent, antibiotics agent, chemical and biological agent, Limited Lin Xinyang
blood products, raw material of chemical product, Chinese medicine and company
diagnosis products
Shenzhen Trade (Note(ii)) Direct Shenzhen Comercial 188.00 Wholesale and retail of drugs and textiles - -
Sinopharm Direct Shenzhen Comercial 600.00 Chinese patent medicine, western medicine, medicine treatment apparatus Limited Zhao Yuhe
Materials company
- 72 -
Zhijun Trade Direct Shenzhen Comercial 189.00 Purchase and sale of Chinese traditional,medicinal materials, Chinese patent Limited Deng Baojun
medicine,chemical raw material for medical treatment,antibiotic company
preparation, chemical medicine preparation etc.
Sinopharm Logistics Direct Shenzhen Service 100.00 Storage service, convey, liquidation of cargo external package and common Limited Ma Jiancong
transportation of road company
Training center Direct Shenzhen Service 3.00 Training service Non-Enter Tan Guoshu
prise
The holding Place of Nature of Registered Principal activities Enterprise Legal
type of registration business capital Type Representative
investment ( RMB’0000)
Sinopharm Direct Guangzhou Comercial 40,000.00 Chinese patent medicine, chemical medicine preparation, antibiotics, biochemical Limited Shi Jinming
Guangzhou medicine, biological products, diagnosis medicine, treatment diagnosis biological company
products, finalized packing food, chemical products, self-support and surrogate
the imports and exports of various merchandise and skills.
Sinopharm Direct Guangzhou Comercial 4,000.00 Drugs, medical apparatus sales Limited Lin Zhaoxiong
Hengxing company
Sinopharm Indirect Yulin Comercial 500.00 Drug sales Limited Zhou Ruili
Yulin(Noteiii) company
Sinopharm Direct Liuzhou Comercial 2,053.10 Chinese traditional medicinal materials, Chinese patent medicine, Chinese Limited Lin Zhaoxiong
liuzhou traditional medicine in pieces, chemical raw material, chemical medicine company
preparation, antibiotics, biochemical drugs, psychotropic drugs, chemical raw
material drug and its preparation. (that involving specific examination and approve
should be operated based on the scope that checked and ratified by the license)
- 73 -
SinopharmChin Indirect Liuzhou Manufactu 200.00 Manufacturing and sales of Chinese herbal pieces Limited Lei Chaotian
ese Herbal ring company
Pieces
(Note(iv))
Huixin Direct Guangzhou Service 500.00 Project investment, property management and leasing, medical information Limited Shi Jinming
Investment consultancy, car park management company
Sinopharm Direct Foshan Comercial 1,000.00 Drug sales Limited Lin Xinyang
Foshan company
The holding Place of Nature of Registered Principal activities Enterprise Legal
type of registration business capital Type Representative
investment ( RMB’0000)
Sinopharm Direct Guangzhou Comercial 3,000.00 Sales of medicine and medical treatment apparatus Limited Luo Qin
Yuexing company
Guangdong Direct Guangzhou Service 500.00 Storage loading and unloading Limited Lin Min
Logistics company
Sinopharm Direct Nanning Comercial 10,000.00 Drug sales Limited Lin Zhaoxiong
Guangxi company
Guangxi Indirect Nanning Service 710.10 Storage loading and unloading, consultation service. Limited Lin Zhaoxiong
Logistic(Note company
v)
- 74 -
Shenzhen Direct Shenzhen Manufactu 5,000.00 Manufacturing of granules, lotion, tablet, capsule, oral liquid and mixture, and syrup; Limited Deng Baojun
Medical ring manufacturing and sale of hair products, bath foam and cosmetics, and detergent company
(antibiosis washing liquid); manufacturing of plastic bottle; manufacturing and sale
of health food.
Sinopharm Indirect Wuzhou Comercial 1,000.00 Traditional Chinese medicine, Chinese patent drugs, raw materials for chemical Limited Zhou Ruili
Wuzhou medicine, chemical material drugs, antibiotics, bio-chemical drugs and biological company
(Note(v)) products, narcotic drugs, anabolic agent, Pericarpium Papaveris,etc.
- 75 -
IV Business combinations and consolidated financial statements (continued)
(1) Subsidiaries (continued)
(b) Subsidiaries acquired under common control (continued)
Year-End Other Equity interest Voting rights Consolidated Minority Loss
assets held (%) held (%) or not interests shared
balance of constitute RMB’0000) by
investment nvestment minority
in interests
(RMB’0000) substance
Zhijun Pharm 23,706.20 - 100 100 Yes - -
Sinopharm 100 100 Yes
Jianmin 5,348.30 - - -
Shenzhen 100 100 Yes
Trade(Note(ii)) 847.90 - - -
Sinopharm 100 100 Yes
Materials 816.70 - - -
Zhijun Trade 373.40 - 100 100 Yes - -
Sinopharm 100 100 Yes
Logistics 101.90 - - -
Training center 3.00 - 100 100 Yes - -
Sinopharm 100 100 Yes
Guangzhou 48,388.80 - - -
Sinopharm 100 100 Yes
Hengxing 3,714.20 - - -
Sinopharm Yulin 542.50 - 100 100 Yes - -
Sinopharm liuzhou 2,220.60 - 51 51 Yes 3,791.14 -
Sinopharmhinese Yes
Herbal Piece
(Note(iii)) 200.00 - 51 51 - -
Huixin Investment 6,441.70 - 100 100 Yes - -
Sinopharm Fosha 1,499.50 - 100 100 Yes - -
Sinopharm 100 100 Yes
Yuexing 4,345.90 - - -
Guangdong 100 100 Yes
Logistics 559.60 - - -
Sinopharm 100 100
Guangxi 10,404.90 - Yes - -
Guangxi 100 100
Logistic(Note(iv)) 710.10 - Yes - -
Shenzhen Medica 4,808.10 - 100 100 Yes - -
Sinopharm
Wuzhou(Note(v)) 999.00 - 99.9 99.9 Yes 1.00 -
(ii) Shenzhen Trade ceased its operation in 2003.
- 76 -
(iii) Sinopharm Hoding Chinese Herbal Pieces, a wholly owned subsidiary of Sinopharm Liuzhou, is
indirectly held of 51% in equity by the Company.
(iv) Sinopharm Guangxi has completed the capital investment to Sinopharm Wuzhou，with Sinopharm
Wuzhou’s capital investment up to ten million ，stock percentage from 99.7% to 99.9%.The
Company Indirectly holds 99.9% stake.
- 77 -
IV Business combinations and consolidated financial statements (continued)
(1) Subsidiaries (continued)
(c) Subsidiaries acquired under common control (continued)
The holding type Place of Nature of Registered Principal activities Enterprise Legal
of investment registration business Type Repres-entative
capital
( RMB’0000)
Zhijun Suzhou Direct Suzhou Manufacturi 18,000.00 Production and sales of general raw materials of medicine, Limited Huang Kai
ng raw medicine and preparation of cephalosporin; do export company
business of production and technology of the Company
Sinopharm holding Dongguan Direct Dongguan Commercial 1,000.00 Wholesales of Chinese traditional medicinal materials, Limited Lin Xinyang
Co.Ltd.(’Sinopharm Chinese patent medicine, Chinese traditional medicine in company
Dongguan’) pieces, chemical raw material; sales of daily general
merchandise and heath protection food
Sinopharm Holding Direct Zhanjiang Commercial 1,500.00 Wholesale of medicine Limited Lin Xinyang
Zhanjiang Co., Ltd.(’Sinopharm company
Zhanjiang’)
Sinopharm Yanfeng Direct Shenzhen Commercial 3,000.00 Wholesale of medicine Limited Lin Zhaoxiong
company
Sinopharm Holding Meizhou Direct Meizhou Commercial 120.00 Wholesale of medicine Limited Yang Yan
Co., Ltd.(’Sinopharm Meizhou’) company
Sinopharm Holding Huizhou Direct Huizhou Commercial 700.00 Wholesale of medicine Limited Yang Yan
Co., Ltd.(’Sinopharm Huizhou’) company
Sinopharm Holding Zhaoqing Direct Zhaoqing Commercial 200.00 wholesale of Chinese patent drugs, raw materials for Limited Yang Yan
Co., Ltd.(’Sinopharm chemical medicine, chemical material drugs, antibiotics, company
Zhaoqing’) bio-chemical drugs and biological products (excluding
vaccines), narcotic drugs, toxic drugs for medical use,
pericarpium papaveris,anabolic agents
- 78 -
Sinopharm Holding Jiangmen Direct Jiangmen Commercial 1,000.00 wholesale of Chinese patent drugs, raw materials for Limited Yang Yan
Co., Ltd.(’Sinopharm chemical medicine, chemical material drugs, antibiotics, company
Jiangmen’) bio-chemical drugs and biological products (excluding
vaccines), narcotic drugs, toxic drugs for medical use,
pericarpium papaveris,anabolic agents
Sinopharm Holding Shaoguan Direct Shaoguan Commercial 360.00 wholesale of Traditional Chinese medicin, raw materials for Limited Yang Yan
Co., Ltd (’Sinopharm chemical medicine and chemical material drugs, ect.; company
shaoguan’)
Year-end Other assets Equity interest Voting rights Consolidate Minority interests Loss shared by minority
constitute held (%) held (%) d or not (RMB’0000) interests
balance of
investment in
investment substance
( RMB’0000)
Zhijun Suzhou(Note(vi)) 26,590.00 - 100 100 Yes - -
Sinopharm Dongguan 994.20 - 100 100 Yes - -
Sinopharm Zhanjiang 1,576.99 - 100 100 Yes - -
Sinopharm Yanfeng 3,820.78 - 51 51 Yes 2,634.22 -
Sinopharm Meizhou 448.19 - 100 100 Yes - -
Sinopharm Huizhou 564.42 - 100 100 Yes - -
Sinopharm Zhaoqing 354.20 - 100 100 Yes - -
Sinopharm Jiangmen 4,090.00 - 100 100 Yes - -
Sinopharm Shaoguan 950.60 - 70 70 Yes 585.98 -
(vi) The Company currently has completed RMB 100 million yuan capital investment to Zhijun Suzhou .
- 79 -
V Notes to the consolidated financial statements
(1) Cash at bank and on hand
Items 30 June 2013 31 December 2012
Cash on hand 45,748.49 73,828.10
Cash at bank 882,265,493.12 920,674,215.43
Other cash balances 10,126,580.95 33,244,027.08
Total 892,437,822.56 953,992,070.61
As at 30 June 2013, except a deposit of USD which was equivalent to RMB 1,305,587.67 (31 December
2012:80.13) all other cash at bank and on hand are in RMB. Other cash balances represent RMB
8,626,580.95 of deposits for the purpose of applying for bank acceptance notes and deposits for letter of
credit RMB 1,500,000.00 (31 December 2012: RMB 17,606,346.59 of deposits for the purpose of applying
for bank acceptance notes，and deposits for letter of credit RMB 8,937,680.49, and 6,700,000.00 of the
temporary capital deposits of Sinopharm Nanning for the establishments of new subsidiaries-Sinopharm
Wuzhou).
(2) Notes receivable
30 June 2013 31 December 2012
Trade acceptance notes 342,326,186.88 293,109,440.31
Bank acceptance notes 413,252,899.13 357,750,800.06
755,579,086.01 650,860,240.37
(a) Endorsed undue notes receivable
As at 30 June 2013, the Group endorsed the undue notes receivable of RMB 443,210,358.26 (31
December 2012：738,797,785.69)，The top five notes receivable are analysed as below:
Issuer Issue date Expiry date Amount
People's Hospital of Dongguan 14 May 2013 14 August 2013 5,466,096.68
Guizhou Provincial Pharmaceutical (Group)
21 May 2013 21 August 2013
Co., Ltd. 3,735,924.12
People's Hospital of Zhongshan 21 June 2013 21 September 2013 3,208,314.28
Guangzhou Geling Kang Pharmaceutical
29 May 2013 29 November 2013
Co., Ltd. 3,000,000.00
Guizhou Provincial Pharmaceutical (Group)
20 June 2013 20 September 2013
Co., Ltd. 2,445,556.18
17,855,891.26
- 80 -
V Notes to the consolidated financial statements(continued)
(2) Notes receivable (continued)
(b) Discounted undue notes receivable
As at 30 June 2013, notes receivable including undue trade acceptance notes of 106,269,434.69 (31
December 2012：39,200,449.89) (Note V(20))，and undue bank acceptance notes of RMB 99,936,082.40
(31 December 2012：161,748,174.98).
(c) As at 30 June 2013, the Group has no notes receivable which need to be reclassified as accounts receivable.
(d) As at 30 June 2013 The Group has notes receivable 14,565,673.92 million (31 December 2012: Nil) pledged
to banks to secure bills payable 14,556,673.92 million (31 December 2012: nil) guarantees.The top five notes
receivable are analysed as below.
Issuer Issue date Expiry date Amount
Sichuan Jin Ren Pharmaceutical Co., Ltd. 22 February 2013 22 August 2013 2,856,287.92
SiChuan jin Li Pharmaceutical Co., Ltd. 26 February 2013 26 August 2013 2,262,712.80
Sinopharm Holding Guizhou Co., Ltd. 16 April 2013 16 October 2013 1,089,720.00
Hainan Huluwa Pharmaceutical Co., Ltd. 23 April 2013 23 October 2013 520,405.00
Chongqing Saili Junan Pharmaceutical Co., Ltd. 9 April 2013 8 October 2013 518,600.00
Others 7,317,948.20
14,565,673.92
(3) Accounts receivable
30 June 2013 31 December 2012
Accounts receivable 5,207,394,188.60 4,415,763,459.61
Less: provision for bad debts (Note V(18)) (23,545,747.27) (22,438,158.95)
5,183,848,441.33 4,393,325,300.66
(a) The aging of accounts receivable and related provision for bad debts are analysed below:
30 June 2013 31 December 2012
Provision for bad
AmountProvision for bad debts Amountdebts
Within 1 year 5,173,296,708.33 (2,150,544.33) 4,383,349,130.24 (733,430.98)
1 to 2 years 12,045,458.09 (602,478.55) 9,935,593.59 (2,373,495.91)
- 81 -
2 to 3 years 12,438,715.81 (12,057,064.05) 12,223,635.68 (10,467,212.99)
Over 3 years 9,613,306.37 (8,735,660.34) 10,255,100.10 (8,864,019.07)
5,207,394,188.60 (23,545,747.27) 4,415,763,459.61 (22,438,158.95)
- 82 -
V Notes to the consolidated financial statements(continued)
(3) Accounts receivable(continued)
(b) The accounts receivable and related provision for bad debts by category are analysed below:
30 June 2013 31 December 2012
Carrying amount Provision for bad debts Carrying amount Provision for bad debts
amount % of amount rate amount % of total amount rate
total balance
balance
individually significant
are subject to
separate impairment
assessment 41,045,417.14 0.79% (18,002,565.32) 43.86% 32,230,166.51 0.73% (17,332,089.17) 53.78%
receivable accounts
within similar credit
risk group 5,157,090,866.04 99.03% (864,295.82) 0.02% 4,371,020,555.42 98.99% (943,122.18) 0.02%
individually not
significant but
individually
evaluated for
impairment 9,257,905.42 0.18% (4,678,886.13) 50.54% 12,512,737.68 0.28% (4,162,947.60) 33.27%
5,207,394,188.60 100.00% (23,545,747.27) 0.45% 4,415,763,459.61 100.00% (22,438,158.95) 0.51%
(c) As at 30 June 2013, impairment provision for accounts receivable individually significant are analysed as below.
Carrying Bad debt
amount provision Rate Assessment for impairment
Guangdong Liyuan
Disputed receivable with higher
Pharmaceutical Co. Ltd. 15,686,460.93 (15,686,460.93) 100.00% risk of recoverability.
LiuZhou LiuTie Central Hospital Disputed receivable with higher risk of
12,247,946.30 (210,838.78) 1.72% recoverability
Peking University Shenzhen
Disputed receivable with higher risk of
Hospital 7,028,116.76 (670,476.15) 9.54% recoverability
The Second People's Hospital of
Disputed receivable with higher risk of
Shenzhen 6,082,893.15 (1,434,789.46) 23.59% recoverability
41,045,417.14 (18,002,565.32)
(d) Provisions for impairment of the receivables which have a similar risk group are analysed below:
30 June 2013 31 December 2012
Carrying amount Bad debt provision Carrying amount Bad debt provision
amount % of total amount rate amount % of total amount rate
balance balance
Within 1
year 5,143,524,292.89 99.74% - - 4,359,367,831.85 99.74% - -
1 to 2 years 12,045,458.09 0.23% (602,478.55) 5.00% 7,962,291.52 0.18% (400,193.84) 5.03%
- 83 -
10.00
2 to 3 years 424,057.51 0.01% (42,405.75) % 1,951,580.77 0.04% (195,158.08) 10.00%
Over 3 20.00
years 1,097,057.55 0.02% (219,411.52) % 1,738,851.28 0.04% (347,770.26) 20.00%
5,157,090,866.04 100.00% (864,295.82) 0.02% 4,371,020,555.42 100.00% (943,122.18) 0.02%
- 84 -
V Notes to the consolidated financial statements(continued)
(3) Accounts receivable(continued)
(e) As 30 June 2013, accounts receivable individually not significant but individually evaluated for impairment are analysed
below:：
Carrying amount Bad debt provision Rate Assessment for impairment
Difference of balance account cannot
The First People’s Hospital of Hechi 2,707,360.66 (7,177.72) 0.27% be verified
Shandong pharmer Biological Uncertainty in recoverability
Pharmaceutical Co., Ltd. 2,271,691.95 (1,685,587.95) 74.20%
Difference of balance account cannot
Shenzhen Maternal and Children Care
be verified
Service
Centre 954,637.74 (412,992.00) 43.26%
Uncertainty in recoverability
Guangzhou Da Shenlin Pharmaceutical Co.,
Ltd 773,956.27 (773,956.27) 100.00%
Difference of balance account cannot
The Red Cross Hospital of Liuzhou 763,768.78 (12,682.17) 1.66% be verified
Uncertainty in recoverability
Guangzhou Da Shenlin Pharmaceutical
Chain
Co., Ltd 506,835.82 (506,835.82) 100.00%
HuiZhou QuanYi Pharmaceutical Franchise Uncertainty in recoverability
Co.,Ltd 443,692.12 (443,692.12) 100.00%
Chinese’s People Liberty Army of 62101 Uncertainty in recoverability
Troops 370,621.81 (370,621.81) 100.00%
Wuhan General Hospital of Guangzhou Uncertainty in recoverability
Military Region 337,701.85 (337,701.85) 100.00%
Liuzhou Chengzhong District Wantang Uncertainty in recoverability
Community Sanitary Service Station 127,638.42 (127,638.42) 100.00%
9,257,905.42 (4,678,886.13)
(f) Accounts receivable, which have been fully or partly made impairment provision, recovered in current year are listed below:
Reason for Original assessment for providing Recovered bad Recovered
recoverability impairment debt provisions amount
Shantou Chuangmei Verification for Difference of balance account cannot
Medicine Co.Ltd Difference of be verified
balance
account 249,407.80 249,407.80
- 85 -
Foshan Chuangmei Verification for Difference of balance account cannot
Medicine Co.Ltd Difference of be verified
balance
account 151,671.40 151,671.40
Guangdong Jointown Verification for Difference of balance account cannot
Pharmaceutical Co.Ltd Difference of be verified
balance
account 50,170.08 50,170.08
451,249.28 451,249.28
- 86 -
V Notes to the consolidated financial statements(continued)
(3) Accounts receivable(continued)
(g) In current year, there is no accounts receivable written off.
(h) Accounts receivable due from shareholders with more than 5% (including 5%) of the Company’s equity interest are
analysed as below:
30 June 2013 31 December 2012
Sinopharm Group(Note VI (5)) 3,387,799.72 2,863,144.40
(i) As at 30 June 2013, the top five accounts receivable by customer are analysed as below:
% of the total
Relationship accounts
with the Group Amount Aging receivable
Center for Disease Control and
Prevention of Guangdong Province Third party 192,858,821.00 Within 1 year 3.70%
The Third Affiliated Hospital of
ZhongShan University Third party 82,972,402.77 Within 1 year 1.59%
The First Affiliated Hospital of GuangXi
Medical University Third party 73,365,135.80 Within 1 year 1.41%
Zhujiang Hospital of Southern Medical
University Third party 63,761,721.23 Within 1 year 1.22%
Zhujiang Hospital of Southern Medical
University Third party 50,492,400.25 Within 1 year 0.97%
463,450,481.05 8.89%
(j) Accounts receivable due from related party
As at 30 June 2013, there are accounts receivable of RMB 252,439,831.72 due from related party (31
December 2012：227,117,446.69)，which is 4.85% of the total accounts receivable (31 December 2012：
5.14%) (Note VI(5)).
(k) This period accounts receivable of RMB 397,348,933.07, are derecognized given that irrevocable factoring
contracts agreed with financial institute.
(l) On 30 June 2013, the Group has totally RMB 43,397,415.16 accounts receivable pledged to bank as
warrant of gaining short-term loan amounting to RMB 34,717,932.13 (Note V (20(iii))).
(m) Accounts receivable denominated in foreign currencies are as follows:
- 87 -
30 June 2013 31 December 2012
Foreign Exchang Foreign Exchange
Currency e Rate RMB Currency Rate RMB
USD 237,193.59 6.1787 1,465,548.03 1,647,256.71 6.2855 10,353,832.05
EUR - - - 325,000.00 8.3176 2,703,220.00
GBP - - - 102,600.00 10.1611 1,042,528.86
HKD 12,232.54 0.7966 9,744.44 60,338.00 0.8108 48,922.05
1,475,292.47 14,148,502.96
- 88 -
V Notes to the consolidated financial statements(continued)
(4) Advances to suppliers
(a) The aging of advances to suppliers is analysed below:
30 June 2013 31 December 2012
amount % of total amount % of total
balance balance
Within 1 year 66,123,507.86 97.64% 88,614,241.91 99.00%
1 to 2 years 1,402,645.20 2.07% 579,455.00 0.65%
2 to 3 years 40,985.70 0.06% 209,787.70 0.23%
Above 3 years 153,612.30 0.23% 108,896.73 0.12%
67,720,751.06 100.00% 89,512,381.34 100.00%
(b) As at 30 June 2013, the top five advances to suppliers by customer are analysed below:
Relationship Reason for
with the Group Amount Proportion Aging unsettlement
Guangdong Jian Ze Advances for
Pharmaceutical Co., Ltd., Third party 10,980,741.67 16.22% Within 1 year procurement
Yunnan Baiyao Group Advances for
Co., Ltd. Third party 8,156,861.69 12.04% Within 1 year procurement
Seiko Eiyo Yakuhin Co. Advances for
Ltd. Third party 7,276,665.19 10.75% Within 1 year procurement
Huadong Medicine Co., Advances for
Ltd.Branch Third party 6,997,200.00 10.33% Within 1 year procurement
Shineway
Pharmaceutical (Hainan) Advances for
Co., Ltd. Third party 3,637,090.37 5.37% Within 1 year procurement
37,048,558.92 54.71%
(c) Advances due from related party
As at 30 June 2013, there are advances of RMB 4,104,654.46(31 December 2012：8,315,884.21)，
which is 6.06% of the total advances to suppliers (31 December 2012：9.29%) and no provision for bad
debts(Note VI(5)).
- 89 -
(d) Advances due from shareholders with more than 5% (including 5%) of the Company’s equity interest are analysed
as below:
30 June 2013 31 December 2012
bad debt
Carrying amont Carrying amont bad debt provision
provision
Sinopharm Group(Note VI (5)) - - 742.14 -
Total - - 742.14 -
V Notes to the consolidated financial statements(continued)
(5) Dividends Receivable
30 June 2013 31 December 2012
Shenzhen Wanle Medicine (Wanle
Medicine) 28,152,000.00 -
(6) Other receivables
30 June 2013 31 December 2012
. Petty cash advance to employees 15,500,807.02 8,118,858.69
Receivable due from related
party(Note(c)) 8,980,000.00 8,980,000.00
Deposit 8,075,988.11 10,436,780.98
Receivable due from related party
(Note(j)) 1,215,000.00 1,215,000.00
Others 19,161,225.39 17,356,156.64
52,933,020.52 46,106,796.31
Less: provision for bad debts (Note
V(18)) (13,316,089.51) (13,121,370.71)
39,616,931.01 32,985,425.60
(a) The aging of Other receivables and related provision for bad debts are analysed below:
30 June 2013 31 December 2012
Within 1 year 27,346,265.28 24,400,128.34
1 to 2 years 6,397,566.23 3,598,448.64
2 to 3 years 2,436,843.38 2,594,617.98
Over 3 years 16,752,345.63 15,513,601.35
- 90 -
52,933,020.52 46,106,796.31
(b) Other receivables and related provision for bad debts by category are analysed below:
30 June 2013 31 December 2012
Carrying amount Bad debt provision Carrying amount Bad debt provision
% of total % of total
amount amount amount rate amount amount amount rate
Individually
significant are
subject to
separate
impairment
assessment 8,980,000.00 16.96% (8,980,000.00) 100.00% 8,980,000.00 19.48% (8,980,000.00) 100.00%
Receivable
accounts within
similar credit risk
group 32,392,120.05 61.19% (515,191.16) 1.59% 28,877,007.59 62.63% (452,946.84) 1.57%
Individually not
significant but
individually
evaluated for
impairment 11,560,900.47 21.85% (3,820,898.35) 33.05% 8,249,788.72 17.89% (3,688,423.87) 44.71%
52,933,020.52 100.00% (13,316,089.51) 25.16% 46,106,796.31 100.00% (13,121,370.71) 28.46%
- 91 -
V Notes to the consolidated financial statements (continued)
(6) Other receivables (continued)
(c) As at 30 June 2013, impairment provision for Other receivables individually significant are analysed as below.
Assessment for
Amount Bad debt provision Rate impairment
Shenzhen Yinghai Technology Uncertainty in
investment Co., Ltd. 8,980,000.00 (8,980,000.00) 100.00% recoverability
(d) Provisions for impairment of the receivables which have a similar risk group are analysed below:
30 June 2013 31 December 2012
Carrying amount Bad debt provision Carrying amount Bad debt provision
% of total % of total
amount amount amount rate amount amount amount rate
Within 1 year 27,107,296.07 83.68% - - 24,181,262.27 83.74% - -
1 to 2 years 2,543,629.64 7.85% (126,568.47) 4.98% 2,279,422.77 7.89% (113,357.72) 4.97%
2 to 3 years 1,596,161.84 4.93% (159,616.19) 10.00% 1,436,757.98 4.98% (143,675.80) 10.00%
Over 3 years 1,145,032.50 3.54% (229,006.50) 20.00% 979,564.57 3.39% (195,913.32) 20.00%
32,392,120.05 100.00% (515,191.16) 1.59% 28,877,007.59 100.00% (452,946.84) 1.57%
(e) As at 30 June 2013, Other receivables individually not significant but individually evaluated for impairment
are analysed below:
Amount Bad debt provision Rate Assessment for impairment
ShenZhen Health Food I&E Co. Ltd. 1,157,860.00 (1,157,860.00) 100.00% Uncertainty in recoverability
Service fee etc. 10,403,040.47 (2,663,038.35) 25.60% Uncertainty in recoverability
11,560,900.47 (3,820,898.35) 33.05%
(f) Other receivables previous years have full provision for bad debts, or a larger percentage of provision for
bad debts, but fully recovered, or a larger proportion of the year to recover other receivables is analysed
below:
Original assessment for Recovered bad debt p Recovered
Reason providing impairment rovisions amounts
Huang Daoying Repayment Difficult to recover 18,520.99 18,520.99
- 92 -
(g) There is no other receivables written off in current year
(h) As at 30 June 2013, there is no other receivables due from shareholders with more than 5% (including) of
the Company’s equity interest (31 December 2012: Nil).
- 93 -
V Notes to the consolidated financial statements (continued)
(6) Other receivables (continued)
(i) As at 30 June 2013, the top five Other receivables by customer are analysed below:
Relationship Aging % of total Other
Entity Amount Nature
with the group receivable
ShenZhenShi YingHai Third party Above 5 years Equity transfer
Technology&Investment Co. Ltd. 8,980,000.00 receivable 16.96%
Receivables of Physical assets Third party Within 1 year Compensation
specifically approved reserving materials 2,061,351.38 receivable 3.89%
GuangXi Autonomous Region Housing Third party Above 5 years
system Reformed Department 1,910,917.74 Housing reform funds 3.61%
LiuZhouShi Housing Provident Fund Third party Above 5 years
Management Center- Specific Account
for Housing Fund 1,379,224.34 Housing Fund 2.61%
Shenzhen Tianzhongda Industrial Co., Third party Within 1 year
Ltd. 960,456.16 Rental deposits 1.81%
Total 15,291,949.62 -- 28.88%
(j) Other receivables due from related party
Entity Relationship with the Group Amount % of the total Other receivable
Controlled by Sinopharm
Sinopharm Logistics Co., Ltd. 1,215,000.00 2.30%
Group
Total -- 1,215,000.00 2.30%
As at 30 June 2013, there are Other receivables of RMB 1,215,000.00 due from related party(31 December
2012：1,215,000.00)，which is 2.30%of the total Other receivables(31 December 2012:2.64%)，without bad
debt provided (31 December 2012: Nil).(NoteVI (5)).
(7) Inventories
30 June 2013 31 December 2012
Net book Net book
Book value Provision Book value Provision
Value Value
Raw
materials 128,563,456.71 (4,164,518.66) 124,398,938.05 118,474,602.02 (3,689,458.00) 114,785,144.02
- 94 -
Work in
progress 15,751,368.36 - 15,751,368.36 28,048,150.68 - 28,048,150.68
Finished
goods 1,586,442,042.50 (9,672,166.31) 1,576,769,876.19 1,603,544,644.54 (13,615,739.67) 1,589,928,904.87
Packaging
materials 725,904.78 (36,406.53) 689,498.25 586,659.80 (1,790.66) 584,869.14
Consigned
processing
materials 1,242,121.20 - 1,242,121.20 665,881.85 - 665,881.85
Low cost
consumables 365,223.87 (49,489.24) 315,734.63 666,113.22 - 666,113.22
1,733,090,117.42 (13,922,580.74) 1,719,167,536.68 1,751,986,052.11 (17,306,988.33) 1,734,679,063.78
- 95 -
V Notes to the consolidated financial statements (continued)
(7) Inventories(continued)
(a) Provision for declines in value of inventories is analysed as below:
Decreases
Inventory category 31 December 2012 Increases 30 June 2013
Reversal Written off
Raw materials 3,689,458.00 485,859.17 (9,585.16) (1,213.35) 4,164,518.66
Finished goods 13,615,739.67 15,169,465.99 (312,312.84) (18,800,726.51) 9,672,166.31
Packaging materials 1,790.66 63,894.99 - (29,279.12) 36,406.53
Low cost
- 148,029.45 - (98,540.21) 49,489.24
consumables
Total 17,306,988.33 15,867,249.60 (321,898.00) (18,929,759.19) 13,922,580.74
(8) Other non-current assets
30 June 2013 31 December 2012
Corporate income tax to be deducted 227,606.01 226,501.90
VAT to be deducted 3,500,760.68 7,854,105.76
3,728,366.69 8,080,607.66
(9) Long-term equity investments
30 June 2013 31 December 2012
Associates - Without quoted price (a) 111,444,830.84 121,019,845.50
The Group has no liquidity restriction on its long-term equity investments.
- 96 -
V Notes to the consolidated financial statements (continued)
(9) Long-term equity investments (continued)
Increases/(Decreases)
Equity Voting
interest rights Explanation for the
inconsistence between
held held
Accounting Original 31 December Share of profit of Cash dividends equity interest held
method investment cost 2012 associate declared by associate 30 June 2013 (%) (%) and voting rights held
Note V(42)
Board of the directors is
the highest decision
making organization,
which is formed by 3
shareholders of Wanle
Medical evenly, each
shareholder appoints 2
Equity directors set up the
Wanle Medical method 4,457,400.00 121,019,845.50 18,576,985.34 (28,152,000.00) 111,444,830.84 35.19 33.33 borad
(10) Investment in associates
Equity interest 30 June 2013 For the year ended 30 June 2013
held Voting rights held
Total assets Total liabilities Net assets Revenues Net profit
(%) (%)
- 97 -
Wanle Medical 35.19 33.33 711,908,879.96 398,164,617.76 313,744,262.20 306,451,866.74 52,790,523.84
- 98 -
V Notes to the consolidated financial statements (continued)
(11) Investment properties
31 December Increase in Decrease in 30 June 2013
2012 Current year Current year
Cost 182,895,666.22 153,567.85 (14,586,008.64) 168,463,225.43
Buildings 162,739,072.21 153,567.85 (13,612,280.85) 149,280,359.21
Land use rights 20,156,594.01 - (973,727.79) 19,182,866.22
Accumulated
depreciation/
amortisation (93,280,236.59) (3,110,407.34) 10,011,095.10 (86,379,548.83)
Buildings (91,200,873.61) (3,107,574.21) 9,923,784.06 (84,384,663.76)
Land use rights (2,079,362.98) (2,833.13) 87,311.04 (1,994,885.07)
Net book value 89,615,429.63 82,083,676.60
Buildings 71,538,198.60 64,895,695.45
Land use rights 18,077,231.03 17,187,981.15
Provision for
impairment loss (1,300,000.00) - - (1,300,000.00)
Buildings (1,300,000.00) - - (1,300,000.00)
Land use rights - - - -
Carrying amount 88,315,429.63 80,783,676.60
Buildings 70,238,198.60 63,595,695.45
Land use rights 18,077,231.03 17,187,981.15
For the year ended 30 June 2013,the amount of depreciation and amortization were 3,109,987.30 (the
year ended 30 June 2012：3,220,900.39).
In 2012, the Group changed the use of buildings with a carrying amount of RMB3,071,034.51 (cost of
RMB7,771,972.48, accumulated depreciation RMB4,700,937.97),and therefore,such assets were
transferred from investment properties to fixed assets and Intangible assets at the dates of change in
use.
The Group changed the use of buildings with a carrying amount of RMB3,269.26 (cost of
RMB3,689.30, accumulated depreciation RMB420.04) to lease-out properties.
The Group disposed a building with a carrying amount of RMB617,462.28 (cost of RMB5,840,308.37,
accumulated depreciation RMB5,222,846.09), and the diposal loss worth 617,462.28.
The Group has transferred from construction in progress to investment properties at the original price
of 149,878.55 yuan.
- 99 -
V Notes to the consolidated financial statements (continued)
(12) Fixed assets
Transfer from
investment Current year other Current year
31 December 2012 properties additions other decreases 30 June 2013
Cost 1,090,165,781.29 7,771,972.48 14,923,023.75 (1,567,435.11) 1,111,293,342.41
Buildings 430,504,407.95 7,771,972.48 6,546,793.92 (3,689.30) 444,819,485.05
Machinery
and
equipment 433,908,817.29 - 3,702,569.76 (159,453.93) 437,451,933.12
Motor
vehicles 56,362,679.72 - 975,429.52 (48,000.00) 57,290,109.24
Other 144,294,679.20 - 3,603,426.99 (1,356,291.88) 146,541,814.31
Leasehold
improvements 25,095,197.13 - 94,803.56 - 25,190,000.69
Transfer from
investment Current year Current year
31 December 2012 properties additions decreases 30 June 2013
Accumulated
depreciation (399,678,148.17) (4,700,937.97) (42,340,284.87) 1,409,473.91 (445,309,897.10)
Buildings (100,053,162.74) (4,700,937.97) (8,970,045.90) 420.04 (113,723,726.57)
Machinery
and
equipment (158,389,377.86) - (20,811,990.03) 156,178.35 (179,045,189.54)
Motor
vehicles (29,050,984.46) - (3,119,999.47) 45,600.00 (32,125,383.93)
Other (100,399,801.69) - (7,689,414.18) - 1,207,275.52 (106,881,940.35)
Leasehold
improvements (11,784,821.42) - (1,748,835.29) - - (13,533,656.71)
Net book value 690,487,633.12 665,983,445.31
Buildings 330,451,245.21 331,095,758.48
Machinery
and
equipment 275,519,439.43 258,406,743.58
Motor
vehicles 27,311,695.26 25,164,725.31
Other 43,894,877.51 39,659,873.96
Leasehold
improvements 13,310,375.71 11,656,343.98
Carrying amount 690,487,633.12 665,983,445.31
Buildings 330,451,245.21 331,095,758.48
Machinery
and
equipment 275,519,439.43 258,406,743.58
- 100 -
Motor
vehicles 27,311,695.26 25,164,725.31
Other 43,894,877.51 39,659,873.96
Leasehold
improvements 13,310,375.71 11,656,343.98
For the year ended 30 June 2013,the amount of depreciation and amortization were 42,340,284.87(the year
ended 30 June 2012：36,867,919.01yuan）.
For the year ended 30 June 2013, fixed assets transferred from construction in progress are
RMB5,585,774.91.
V Notes to the consolidated financial statements (continued)
(13) Construction in progress
30 June 2013 31 December 2012
Zhijun Zhiyao Guanglan Stage II Project 81,986,307.64 71,032,092.95
Zhijun production workshop Technological
transformation project 19,568,125.01 11,269,919.29
Peinan Project 11,438,747.84 11,438,747.84
Chebei Project 8,515,595.20 8,515,595.20
Sewage transformation project etc 2,413,283.79 570,000.00
Pingshan Stage I project 864,143.37 291,361.00
Other projects 621,425.65 837,634.52
125,407,628.50 103,955,350.80
- 101 -
V Notes to the consolidated financial statements (continued)
(13) Construction in progress (continued)
Including:Borro
Construc Accumulated Weighted
Transfer out Cost up to wing
Current year Other tion capitalized average Financed
Name of project Budget of project 31 December 2012 during current date out of cost 30 June 2013
additions decreases progress borrowing interest by
year budget (%) capitalized
(%) cost rate (%)
in 2013
Zhijun Zhiyao
Guanglan Stage II Working capital
Project 250,000,000.00 71,032,092.95 11,094,214.69 140,000.00 - 63% 90% 2,434,375.93 1,284,575.23 6.72% and borrowings 81,986,307.64
Zhijun production Working capital
workshop Technological
transformation project 100,707,000.00 11,269,919.29 10,710,137.45 2,411,931.73 - 38% 55% 0.00 - - 19,568,125.01
Peinan Project 40,000,000.00 11,438,747.84 - - - 28% 28% 0.00 - - Working capital 11,438,747.84
Chebei Project 204,113,000.00 8,515,595.20 - - - 4% 4% 0.00 - - Working capital 8,515,595.20
Sewage transformation
project etc 350,000,000.00 291,361.00 572,782.37 - - 4% 0% 0.00 - - Working capital 864,143.37
Pingshan Stage I Working capital
project 154,667,633.00 - 2,588,238.45 2,438,359.90 149,878.55 100% 100% 6,307,006.43 - - and borrowings -
Other projects 6,300,000.00 570,000.00 1,843,283.79 - - 38% 85% - - - Working capital 2,413,283.79
Zhijun Zhiyao Guanglan - 837,634.52 379,274.41 595,483.28 - - - - - - Working capital 621,425.65
- 102 -
Stage II Project
Total 1,105,787,633.00 103,955,350.80 27,187,931.16 5,585,774.91 149,878.55 -- -- 8,741,382.36 1,284,575.23 -- -- 125,407,628.50
- 103 -
V Notes to the consolidated financial statements (continued)
(14) Intangible assets
Current year Current year
31 December 2012 additions decreases 30 June 2013
Cost 250,346,106.81 2,638,003.54 - 252,984,110.35
Land use rights 144,876,761.43 973,727.79 - 145,850,489.22
Computer software 18,531,419.19 1,664,275.75 - 20,195,694.94
Proprietary
technology 53,083,933.33 - - 53,083,933.33
Trademarks 196,850.00 - - 196,850.00
Sales Network 33,657,142.86 - - 33,657,142.86
Accumulated
amortization (92,191,035.61) (4,688,731.03) - (96,879,766.64)
Land use rights (30,815,831.14) (1,714,944.13) - (32,530,775.27)
Computer software (12,213,237.12) (1,052,356.71) - (13,265,593.83)
Proprietary
technology (47,953,926.87) (1,080,001.62) - (49,033,928.49)
Trademarks (196,850.00) - - (196,850.00)
Sales Network (1,011,190.48) (841,428.57) - (1,852,619.05)
Net book value 158,155,071.20 156,104,343.71
Land use rights 114,060,930.29 113,319,713.95
Computer software 6,318,182.07 6,930,101.11
Proprietary
technology 5,130,006.46 4,050,004.84
Trademarks - -
Sales Network 32,645,952.38 31,804,523.81
Provision for
impairment loss (3,000,000.00) (3,000,000.00)
Land use rights - -
Computer software - -
Proprietary
technology (3,000,000.00) (3,000,000.00)
Trademarks - -
Sales Network - -
Carrying amount 155,155,071.20 153,104,343.71
Land use rights 114,060,930.29 113,319,713.95
- 104 -
Computer software 6,318,182.07 6,930,101.11
Proprietary
technology 2,130,006.46 1,050,004.84
Trademarks - -
Sales Network 32,645,952.38 31,804,523.81
For the year ended 30 June 2013 amortisation of intangible assets that are recognised in profit or loss
for the current period amount to RMB 4,601,419.99 (the year ended 30 June 2012：4,071,832.86).
The company changed the land use right RMB 886,416.75 (cost: RMB 973,727.79 , accumulated
amortization:RMB 87,311.04) from lease to personal use, from the date of change in use, the
corresponding investment real estate changed into intangible assets.for accounting.
V Notes to the consolidated financial statements (continued)
(14) Intangible assets(continued)
Expenditures on research and development incurred are listed as below:
31 December 2012 Current year additions 30 June 2013
Development costs 5,002,441.27 310,684.84 5,313,126.11
Expenditures on research and development incurred in 2013 amount to RMB 34,523,641.48(the year ended 30
June 2012：36,422,584.78)；of which RMB 34,212,956.64(the year ended 30 June 2012：36,054,514.95) is
recognised in profit or loss for the current period) is recognised in profit or loss for the current period，
310,684.84(the year ended 30 June 2012：368,069.83)is recognised as development costs.No research and
development costs are capitialized.
Current development of project expenditures for the period attributable proportion of 0.90% of total
expenditures.
Intangible assets formed from internal research composes 0% of the intangible assets book value in
the period end.
(15) Goodwill
30 June 2013 31 December 2012
Goodwill 85,228,833.15 85,228,833.15
Less: provision for impairment - -
85,228,833.15 85,228,833.15
The goodwill allocated to the asset groups and groups of asset groups are summarised by operating segments as
follows:
current year Current year
Name of investees 31 December 2012 30 June 2013
addition decreases
- 105 -
Sinopharm Yanfeng 16,868,644.87 - - 16,868,644.87
Sinopharm Jiangmen 27,392,317.73 - - 27,392,317.73
Sinopharm Shaoguan 1,686,496.80 - - 1,686,496.80
Sinopharm Zhaoqing 2,594,341.53 - - 2,594,341.53
Sinopharm Meizhou 1,610,819.66 - - 1,610,819.66
Sinopharm Huizhou 923,184.67 - - 923,184.67
Sinopharm Zhanjiang 282,135.55 - - 282,135.55
Sinopharm Dongguan 1,499.02 - - 1,499.02
Suzhou Wanqing 33,869,393.32 - - 33,869,393.32
Total 85,228,833.15 - - 85,228,833.15
As at 30 June 2013, management of the Group considered there was no impairment to goodwill recognised
according to the impairment assessment.
- 106 -
V Notes to the consolidated financial statements (continued)
(16) Long-term prepaid expenses
31 December 2012 Current year Current year 30 June 2013
additions amortisation
Leasehold
improvements 17,804,416.48 1,558,749.23 (2,165,259.71) 17,197,906.00
Others 1,938,573.97 320,200.08 (544,008.41) 1,714,765.64
19,742,990.45 1,878,949.31 (2,709,268.12) 18,912,671.64
(17) Deferred income tax assets and deferred income tax liabilities
(a) Deferred income tax assets
30 June 2013 31 December 2012
Deferred income Deductible temporary Deferred income tax Deductible temporary
tax assets differences assets differences
Provision for
accounts
receivable 5,712,710.87 23,545,747.27 5,546,717.33 22,438,158.95
Provision for other
receivables 3,123,667.33 13,316,089.51 3,093,982.75 13,121,370.71
Provision for declines in
value of inventories 2,372,513.00 13,922,580.74 2,775,337.75 17,306,988.33
Provision for fixed
assets impairment 157,622.95 630,491.80 161,012.70 644,050.78
Accrued expenses 12,588,142.33 75,197,956.18 6,724,770.78 43,761,198.02
Accrued payroll 10,050,323.09 52,993,627.95 12,339,208.94 62,680,920.93
Deferred revenue 10,819,130.75 72,126,669.53 10,590,957.10 70,603,980.67
Deductible losses 5,411,703.50 35,280,071.71 4,523,540.07 29,125,619.28
Provisions 5,510,000.00 22,040,000.00 - -
Others 3,758,991.46 16,644,223.14 3,754,002.55 16,539,607.42
59,504,805.28 325,697,457.83 49,509,529.97 276,221,895.09
(b) Deferred income tax liabilities
30 June 2013 31 December 2012
Deferred income tax Deductible temporary Deferred income Deductible temporary
liabilities differences tax liabilities differences
- 107 -
Business
combination
involving entities
not under
common control 9,867,222.28 44,578,466.13 10,275,178.70 46,737,223.16
Changes in fair value 12,010,784.14 48,043,136.53 12,409,124.61 49,636,498.44
Others 3,922,390.93 16,087,088.85 3,934,970.37 16,170,951.78
25,800,397.35 108,708,691.51 26,619,273.68 112,544,673.38
(c) As at 30 June 2013, the Group has not recognised deferred tax assets in respect of deductible losses and other deductible
temporary differences are listed as below.
30 June 2013 31 December 2012
Deductible losses(Note(i)) 29,682,560.70 30,362,355.73
V Notes to the consolidated financial statements (continued)
(17) Deferred income tax assets and deferred income tax liabilities (continued)
(i) For those loss making subsidiaries, the Group does not recognize deferred tax assets arising from
accumulated losses amounting to RMB 29,682,560.70 which are tax deductible under the tax law within 2013
to 2017.
As at 30 June 2013, the unrecognised deferred tax assets in respect of deductible losses will be expired as
follows
30 June 2013 31 December 2012
2013 173,556.90 173,556.90
2014 - -
2015 8,370,800.97 9,050,596.00
2016 16,478,931.41 16,478,931.41
2017 4,659,271.42 4,659,271.42
29,682,560.70 30,362,355.73
(18) Provision for asset impairment
Reversal of Decrease
written off
31 December amount in
2012 2012 Increases Reversal Written off 30 June 2013
Bad debt provision 35,559,529.66 40,000.00 2,225,690.30 (963,383.18) - 36,861,836.78
Including:
Provision for ccounts
receivable 22,438,158.95 40,000.00 1,962,489.51 (894,901.19) - 23,545,747.27
Provision for other
receivables 13,121,370.71 - 263,200.79 (68,481.99) - 13,316,089.51
- 108 -
Provision for declines in
value of inventories 17,306,988.33 - 15,867,249.60 (321,898.00) (18,929,759.19) 13,922,580.74
Provision for investment
property impairment 1,300,000.00 - - - - 1,300,000.00
Provision for intangible
assets impairment 3,000,000.00 - - - - 3,000,000.00
57,166,517.99 40,000.00 18,092,939.90 (1,285,281.18) (18,929,759.19) 55,084,417.52
- 109 -
V Notes to the consolidated financial statements (continued)
(19) Other non-current assets
30 June 2013 31 December 2012
Medical reserve fund 45,185,639.33 40,053,062.53
Prepayment for equipment 9,517,705.00 3,684,662.00
Non-monetary compensation of resettlement 70,250,000.00 70,250,000.00
124,953,344.33 113,987,724.53
(20) Short-term borrowings
(a) Category
Currency 30 June 2013 31 December 2012
Unsecured
borrowings(Note(i)) RMB 1,390,542,746.89 1,281,821,210.14
Guaranteed
borrowings(Note(ii)) RMB 323,850,890.95 332,513,702.21
Pledged borrowings
(Note(iii)) RMB 34,717,932.13 34,274,932.13
Discounted notes RMB 106,269,434.69 39,200,449.89
1,855,381,004.66 1,687,810,294.37
(i) As at 30 June 2013, unsecured borrowings of 1,192,542,746.89yuan(31 December 20112:：1,019,821,210.14) are
guaranteed by the Company and its subsidiaries. Unsecured borrowings of RMB 198,000,000.00(31 December 2012：
RMB 262,000,000.00) are lent by Sinopharm Group Financial Co.,Ltd (‘Group Financial Co.’)
(ii)
As at 30 June 2013, bank borrowings of 323,850,890.95 RMB (31 December 2012: RMB332,513,702.21) are guaranteed
by Sinopharm Group.
(iii) As at 30 June 2013, accounts receivables with an amount of RMB 43,397,415.16 are pledged(Note V(3)(1)) as collateral
for short-term borrowings of RMB 34,717,932.13.
(iv) As at 30 June 2013, the weighted average interest rate of short-term borrowings is 5.47% per annum (31 December 2012:
5.42%).
(b) As at 30 June 2013, there were no expired bank borrowings(31 December 2012: Nil).
(21) Notes payable
30 June 2013 31 December 2012
Trade acceptance notes 403,691,190.73 336,196,648.99
Bank acceptance notes 859,689,500.75 769,078,889.25
1,263,380,691.48 1,105,275,538.24
- 110 -
As at 30 June 2013, notes receivable of RMB 1,263,380,691.48 would be expired within 1 year (31 December 2012:
RMB1,105,275,538.24).
(a) Notes payable due to shareholders who holds more than 5% (including 5%) shares of the Company
30 June 2013 31 December 2012
Sinopharm Group (Note VI(5)) 68,008,027.90 32,434,104.02
- 111 -
V Notes to the consolidated financial statements (continued)
(21) Notes payable(continued)
(b) Notes payable due to related parties
As at 30 June 2013, there are notes payable of RMB279,405,446.37 due from related party (31 December
2012: RMB214,685,824.71), which is 22.12% of the total accounts receivable (31 December 2012:19.42%),
refer to Note VI (5).
(22) Accounts payable
30 June 2013 31 December 2012
Trade payable 3,503,374,828.56 3,197,354,275.46
(a) Accounts payable due from shareholders with more than 5% (including 5%) of the Company’s equity interest are analysed as
below:
30 June 2013 31 December 2012
Sinopharm Group(Note VI(5)) 48,799,589.62 55,869,134.08
(b) Accounts payable due to related party
As at 30 June 2013, there are accounts payable of RMB 340,084,074.24 due to related party (31 December 2012:
RMB352,949,570.25), which accounts for 9.71% of the total accounts payable(31 December 2012: 11.04%).(Note VI(5)).
(c)
As at 30 June 2013, accounts payable of RMB 86,367,295.35 (31 December 2012: RMB 75,430,864.69) were aged over 1
year, which were mainly for quality deposit. Before the financial statement is approved, no such long aged accounts payable
have been settled.
(d) Accounts payable denominated in foreign currency as belows：
30 June 2013 31 December 2012
Foreign Currency Exchange RMB Foreign Currency Exchange RMB
rate rate
USD 2,403,917.00 6.1787 14,853,081.97 1,674,700.00 6.2855 10,526,326.85
(23) Advances from customers
30 June 2013 31 December 2012
Sales received in advance 26,505,579.35 35,002,695.02
As at 30 June 2013, there are RMB 5,785,910.96 of advances due to related party (31 December 2012: 450,782.23), which
accounts for 21.83% of the total accounts payable(31 December 2012: 1.29%). (Note VI(5)).
As at 30 June 2013, advances from customers of RMB 1,590,853.99 (31 December 2012: RMB1,687,040.75) were aged
over 1 year. Before the financial statement is approved, no such long aged advances have been settled.
- 112 -
V Notes to the consolidated financial statements (continued)
(24) Employee benefits payable
31 December 2012 Current year Current year 30 June 2013
additions reductions
Wages and salaries,
bonuses, allowances
and subsidies 130,864,940.58 176,387,913.10 (205,899,708.76) 101,353,144.92
Staff welfare 142,310.00 13,021,539.42 (13,159,489.42) 4,360.00
Social security
contributions 1,214,727.89 24,117,814.24 (24,129,961.00) 1,202,581.13
Including:
Medical insurance 228,365.34 6,479,151.93 (6,473,245.61) 234,271.66
Basic pensions 859,408.80 15,471,198.17 (15,474,278.40) 856,328.57
Unemployment
insurance 77,427.95 1,082,736.25 (1,094,101.82) 66,062.38
Work injury
insurance 23,237.80 568,458.51 (567,328.65) 24,367.66
Maternity
insurance 26,288.00 516,269.38 (521,006.52) 21,550.86
Housing funds 869,640.45 7,997,211.63 (7,732,511.17) 1,134,340.91
Supplemental pensions 718,519.21 1,992,943.56 (2,029,570.58) 681,892.19
Labor union funds and
employee education
funds 11,479,089.40 6,150,283.36 (4,285,395.37) 13,343,977.39
Compensation for
employee
dismission 2,637,073.09 203,170.99 290,928.86 3,131,172.94
Early retirement benefits 6,949,127.27 77,450.16 (1,199,578.21) 5,826,999.22
Others 1,118,980.31 4,227,707.42 (4,159,890.70) 1,186,797.03
155,994,408.20 234,176,033.88 (262,305,176.35) 127,865,265.73
As at 30 June 2013, there are no payroll payables in arrears. Most part of the payroll payables would be paid out in the coming
year 2013.
(25) Taxes payable
30 June 2013 31 December 2012
Enterprise income tax payable 39,814,454.81 27,804,706.06
Value-added-tax payable 22,203,694.46 9,283,848.26
Business tax payable 4,784,815.29 4,782,099.19
City maintenance and construction tax payable 4,562,454.53 4,217,729.73
Real estate tax payable 2,748,920.69 989,594.53
Stamp duty tax payable 1,287,580.16 719,058.90
Land use tax payable 1,049,607.25 855,659.63
Individual income tax payable 1,017,552.50 1,046,033.24
Educational surcharge payable 1,002,410.71 1,172,199.70
- 113 -
Rivers management fee payable 912,657.98 518,694.99
Anti-flood fund payable 318,855.76 1,050.20
Water conservancy fund payable 4,222.50 -
79,707,226.64 51,390,674.43
(26) Interests payable
Item Balance in 30 June 2013 Balance in 31 December 2012
Short term borrowing interests payable 107,142.12 148,115.50
Short-term financing bond interest 7,583,437.78 6,561,038.88
Long-term borrowing interests payable 14,386,666.67 6,326,666.69
Total 22,077,246.57 13,035,821.07
- 114 -
V Notes to the consolidated financial statements (continued)
(27) Other payables
30 June 2013 31 December 2012
Accrued selling and distribution expenses 193,297,496.20 159,665,190.99
Payables for construction in progress and
equipment 27,914,428.58 33,092,434.64
Amount collected on behalf of third party 20,057,671.54 69,004,759.79
Deposit 11,641,924.24 13,243,877.98
Equity transaction payable 23,524,217.03 23,524,217.03
Compensation payment for suspension of
chebei project(Note(i)) 12,620,000.00 12,620,000.00
Others 102,292,996.58 102,680,826.97
391,348,734.17 413,831,307.40
(a) Other payables due to shareholders with more than 5% (including 5%) of the Company’s equity interest are
analysed as below:
30 June 2013 31 December 2012
Sinopharm Group(Note
VI (5)) 5,650,696.87 3,930,696.87
(b) Other payables due to related party
As at 30 June 2013, there are other payables of RMB18,611,660.22 due to related party (31 December 2012:
RMB12,988,560.64), which accounts for 4.76% of the total other payables (31 December 2012: 3.14%). (Note
VI(5)).
(c) As at 30 June 2013, there are other payables of aging more than one year RMB 128,506,389.37 (31
December 2012: RMB86,616,880.71), which are mainly sales fee. As of the approval date of the financial
report, the amount has not yet been finally liquidated.
(28) Provisions
31 December 2012 Increases 30 June 2013
pending lawsuits (Nore(a)) - 22,040,000.00 22,040,000.00
- 115 -
(a) In March, 2010, the Group signed a "Real estate transfer and corporation agreement"(hereinafter referred to
as the "agreement") with a Real Estate Development Company, and aimed to develop real estate on the land
together which the Group had use right. While the project has not been started then. In June, 2012, the Group
determined to terminate the agreement due to the long-term development of the group.
As at December 2012, the Group made compensation provision amounting to Rmb17.6M with best estimate,
Less 4.98M which has been paid for terminated the contact, others is recognised as other payable. And till
now, the amount is not paid out.
The Group received a court decision of paying remaining amount above and also extra compensation of
Rmb22.04M by Guangzhou Tianhe Court. The Group made a provision according to the court decision
although they are not satisfied with result and already made a appeal to a higher court, The amount was also
booked in non-operating expenses.
- 116 -
V Notes to the consolidated financial statements (continued)
(29) Current portion of long-term borrowings
30 June 2013 31 December 2012
Promotion rewards program
- due within one year 6,210,400.00 9,000,000.00
Current portion of long term borrowings (Note(a)) 62,762,494.00 62,127,275.00
68,972,894.00 71,127,275.00
(a) Current portion of long term borrowings
30 June 2013 31 December 2012
Unsecured borrowings 62,762,494.00 62,127,275.00
Details of top five current portion of long term borrowings are as below:
Interest
rate per 30 June 31 December
Borrowing date Repayment date Currency annual(%) 2013 2012
Agricultural Bank
of China 13 October 2010 5 September 2013 RMB 5.54% 10,000,000.00 10,000,000.00
Agricultural Bank 16 December
of China 2010 5 September 2013 RMB 5.54% 10,000,000.00 10,000,000.00
Bank of
Communications 28 February 2012 20 December 2013 RMB 6.77% 6,900,000.00 6,900,000.00
Bank of
Communications 28 November 2011 20 June 2014 RMB 6.77% 3,624,984.00 -
Bank of China 25 April 2012 28 December 2013 RMB 6.72% 3,490,500.00 3,490,500.00
34,015,484.00 30,390,500.00
(30) Other non-current liabilities
30 June 2013 31 December 2012
Short-term financing
bond (Note(a)) 399,839,241.05 399,014,838.05
(a) In August 2012, the Company issued short-term bonds with a total face value of RMB 0.4 billion with 1-year
terms for working capital purposes. The fixed annual coupon and effective interest rates of these bonds were
4.03% and 4.45%,respectively.
(31) Long-term borrowings
Currency 30 June 2013 31 December 2012
- 117 -
Unsecured
borrowings RMB 58,580,578.71 82,205,562.71
As at 30 June 2013, Bank unsecured borrowings of RMB51,156,228.71 (31 December 2012: 54,781,212.71),
borrowed by Guangxi Logistic, a subsidiary, are guaranteed by the Company. Interest is paid every month and
the principal is due for repayment on 20 December 2015; Bank unsecured borrowings of RMB 7,424,350.00 (31
December 2012: 27,424,350.00) borrowed by Zhijun Pharm, a subsidiary, are guaranted by the Company.
Interest is paid every month and the principle will be repaid at the end of each quarter since 28 September,
2014.
As at 30 June 2013, the weighted average interest rate of long term borrowings is 6.45% per annum(31
December 2012：6. 54%).
- 118 -
V Notes to the consolidated financial statements (continued)
(31) Long-term borrowings(continued)
(a) Details for top five long-term borrowings are as followings.
Borrowing date Repayment date Currency Interest 30 June 2013 31 December
rate per 2012
annum
(%)
Bank of
Communications 20 December
Guangxi Branch 31 March 2011 2015 RMB 6.400% 7,000,000.00 7,000,000.00
Bank of
Communications
Guangxi Branch 21 June 2011 20 December 2015 RMB 6.400% 5,640,882.00 5,640,882.00
Bank of
Communications
Guangxi Branch 10 October 2011 20 December 2014 RMB 6.400% 5,096,368.60 5,096,368.60
Bank of
Communications
Guangxi Branch 28 January 2011 20 December 2015 RMB 6.400% 4,000,000.00 4,000,000.00
Bank of
Communications
Guangxi Branch 23 February 2011 20 December 2015 RMB 6.400% 4,000,000.00 4,000,000.00
25,737,250.60 25,737,250.60
(32) Payables for specific projects
31 December 2012 Reduction 30 June 2013
Sepecial Funds granted by Government 852,000.00 - 852,000.00
Government grants for ERP system construction 435,000.00 - 435,000.00
Industrial technology funds 3,200,000.00 (161,000.00) 3,039,000.00
4,487,000.00 (161,000.00) 4,326,000.00
(33) Other non-current liabilities
30 June 2013 31 December 2012
Deferred income(Note(a)) 171,115,121.92 168,180,160.90
Medical reserve funds (Note(b)) 45,427,343.31 45,427,343.31
216,542,465.23 213,607,504.21
- 119 -
V Notes to the consolidated financial statements (continued)
(33) Other non-current liabilities(continued)
(a) Deferred income
30 June 2013 31 December 2012
Government grants related to assets
- R&D library (in progress) 5,000,000.00 5,000,000.00
- Medical R&D center II (in progress) 5,000,000.00 5,000,000.00
- Medication for Stomach disease R&D project 5,000,000.00 5,000,000.00
-New Cephalosporin R&D Project 2,135,134.18 2,440,380.94
-Nanning Logistics Project (completed) 6,141,898.23 6,277,100.67
Cefpirome Sulfate R&D Project 2,759,102.71 2,879,967.43
Shared logistics center(completed) (completed) 2,632,908.50 3,034,277.40
-Resettlement compansation 90,396,688.25 91,745,892.53
Cephalosporin solid preparations development
project 15,000,000.00 15,000,000.00
Cephalosporin powder injection passing EU-GMP
authentication 5,000,000.00 5,000,000.00
Other projects(in progress) 5,450,285.38 3,993,037.26
144,516,017.25 145,370,656.23
Promotion rewards program 26,599,104.67 22,809,504.67
171,115,121.92 168,180,160.90
(b) Certain medical reserves funds were received by the Group from the PRC government for it to purchase
medical products (including medicines) required to respond to major disasters, epidemics and other
emergencies.
(34) Share capital
30 June 2013 31 December 2012
Listed shares with
restriction of trading:
A shares, listed 233,263,800.00 233,263,800.00
B shares, listed 54,885,600.00 54,885,600.00
288,149,400.00 288,149,400.00
As at 30 June 2013 and 31 December 2012,there is no change with share capital.
- 120 -
V Notes to the consolidated financial statements (continued)
(35) Capital surplus
Current year Current year
31 December 2012 addition reductions 30 June 2013
Capital surplus--
Share of changes in
equity other than
profits of investees 2,380,016.57 - - 2,380,016.57
Transfer of capital surplus
recognised under the
previous accounting system 2,650,322.00 - - 2,650,322.00
Other 520,000.00 161,000.00 - 681,000.00
5,550,338.57 161,000.00 - 5,711,338.57
Current year Current year
31 December 2011 addition reductions 31 December 2012
Capital surplus--
Business combination
under common control 3,416,966.47 - (3,416,966.47) -
Share of changes in
equity other than
profits of investees 2,380,016.57 - - 2,380,016.57
Transfer of capital surplus
recognised under the
previous accounting system 2,650,322.00 - - 2,650,322.00
Other 288,000.00 232,000.00 - 520,000.00
8,735,305.04 232,000.00 (3,416,966.47) 5,550,338.57
(36) Surplus reserve
31 December 2012 Current year Current year 30 June 2013
addition reductions
Statutory surplus reserve 99,360,384.15 - - 99,360,384.15
31 December 2011 Current year Current year 31 December 2012
addition reductions
Statutory surplus reserve 63,480,745.16 35,879,638.99 - 99,360,384.15
- 121 -
V Notes to the consolidated financial statements (continued)
(37) Undistributed profits
Year 2013.Jannuary to June Year 2012.Jannuary to December
Appropriation Appropriation
Amount rate Amount rate
Opening balance of retained
earnings(after adjusted) 1,382,882,906.24 989,727,826.66
Add:net profit attributable to the
shareholders of the company 260,794,678.64 475,792,491.12
Less:appropriation of statutory
surplus reserve (NoteV(35)) - (35,879,638.99) 10%
Dividends (a) (51,866,892.00) (37,459,422.00)
Other outflow (6,677.73) (9,298,350.55)
Ending balance of retained
earnings 1,591,804,015.15 1,382,882,906.24
(a) Pursuant to the resolution of General Meeting on 19 April 2013, cash dividends of RMB51,866,892.00
(RMB1.8 per 10 shares) was paid based on the issued shares of 288,149,400.
(b) As on January 2013,the subsidiary of the Company, Sinopharm Guangzi have a capital increase of RMB6.7
million to Sinopharm Wuzhou when the minority shareholder’s percentage decreases from 0.3% to 0.1%.
(38) Minority Interest
Minority interests are analysed as below:
30 June 2013 31 December 2012
Sinopharm Liuzhou 37,911,403.51 33,861,951.95
Yanfeng Medical 26,342,231.95 23,859,797.47
Sinopharm Shaoguan 5,859,789.71 5,386,400.42
Sinopharm Wuzhou 6,924.27 33.40
70,120,349.44 63,108,183.24
(39) Sales and cost of sales
Year 2013.Jannuary to June Year 2012.Jannuary to June
Revenue of main operations 10,074,492,043.06 8,752,759,527.58
Other operating income 57,220,647.38 50,492,818.62
10,131,712,690.44 8,803,252,346.20
- 122 -
Year 2013.Jannuary to June Year 2012.Jannuary to June
Cost of main operations 9,249,427,107.76 7,939,928,339.40
Other operating expenses 30,028,197.77 28,023,405.86
9,279,455,305.53 7,967,951,745.26
- 123 -
V Notes to the consolidated financial statements (continued)
(39)
Sales and cost of sales(continued)
Revenue and cost of main operations
(a) Revenue and cost of main operations analysed by industries are set out below:
Year 2013.Jannuary to June Year 2012.Jannuary to June
Revenue of Cost of main Revenue of Cost of main
main operations operations main operations operations
Pharmaceutical
distribution 9,189,991,363.76 (8,720,715,328.37) 7,775,485,229.27 (7,342,662,624.94)
Pharmaceutical
manufacturing 861,761,411.80 (515,258,589.23) 958,587,821.60 (586,940,582.21)
Logistics and
freights 18,252,493.23 (11,687,475.17) 13,418,721.21 (8,388,634.09)
Rental and
training income 4,486,774.27 (1,765,714.99) 5,267,755.50 (1,936,498.16)
10,074,492,043.06 (9,249,427,107.76) 8,752,759,527.58 (7,939,928,339.40)
(b) Top five customers are analysed as follows:
The sales to top five customers of the Group amounted to RMB646,585,934.42, which accounted for
6.38% of the total revenue from main operations. Details are set out below:
Revenue % of total sales of the Group
GuangDong Province People's Hospital 162,065,961.76 1.60%
Center for Disease Control and Prevention of
Guangdong Province 146,213,856.38 1.44%
The First Affiliated Hospital of GuangXi Medical
University 139,430,274.97 1.38%
Nanfang Hospital of Southern Medical University 101,778,019.38 1.00%
Guangxi Zhuang Autonomous Region People's
Hospital 97,097,821.93 0.96%
646,585,934.42 6.38%
- 124 -
V Notes to the consolidated financial statements (continued)
(40) Tax and surcharges
Item Year 2013.Jannuary to June Year 2012.Jannuary to June
Business tax 3,062,195.30 6,025,659.72
City maintenance and construction tax 11,003,775.72 11,284,952.83
Educational surcharge 7,858,049.22 7,966,077.69
Others 1,402,211.43 1,372,969.63
Total 23,326,231.67 26,649,659.87
(41) Financial expenses – net
Year 2013.Jannuary Year 2012.Jannuary
to June to June
Interest expenses 82,720,265.02 82,357,280.41
Less: interest income (2,292,175.64) (2,112,748.84)
Exchange losses/(gains) 45,433.64 276,539.58
Others (4,004,872.19) 7,968,390.00
76,468,650.83 88,489,461.15
(42) Assets impairment losses
Year 2013.Jannuary Year 2012.Jannuary
to June to June
Bad debts 1,262,307.12 2,065,816.30
Declines in values of inventories 15,545,351.60 6,322,397.59
16,807,658.72 8,388,213.89
(43) Investment income
Year 2013.Jannuary Year 2012.Jannuary
to June to June
Share of profit of investees under equity method (Note
a) 18,576,985.34 16,016,159.76
(a) The investment income from long-term investment under equity method represented the profit from Wanle Medical.
There is no significant restriction on the remittance of investment income to the Group.
- 125 -
V Notes to the consolidated financial statements (continued)
(44) Non-operating income
Year 2013.Jannuary to Year 2012.Jannuary
June to June
Gain on disposal of fixed assets 32,537.89 172,051.62
Government grants (Note a) 12,384,950.86 17,984,705.34
Payment written off 9,425,827.28 -
Others 292,414.61 952,409.97
22,135,730.64 19,109,166.93
Non-operating income is wholly classified as non-recurring profit and loss.
(a) Government grants
Year 2013.Jannuary Year Note
to June 2012.Jannuary to
June
Government grants related to
assets
Resettlement compensation- 1,412,978.16 - Transfer from deferred
amortization of assets amortization income
Transfer from deferred
Others 990,380.90 451,761.95 amortization income
Government grants related to
income
Resettlement compansation - 11,771,909.83 Resettlement compansation
Tax Return 7,052,996.58 - Tax Return
Government-funded Fiscal interest discount
interest discount 647,930.50 3,000,000.00
Government grants for Subsidy for medical
medicine reserve reserve
expenses - 419,146.56
Other 2,280,664.72 2,341,887.00 Subsidy for contribution
12,384,950.86 17,984,705.34
(45) Non-operating expenses
Year 2013.Jannuary to Year 2012.Jannuary
June to June
- 126 -
Losses on disposal of non-current assets 28,872.00 8,985,832.50
Donation - 202,000.00
Compensation payment for suspension of
cooperation project 22,040,000.00 17,600,000.00
Others 50,189.64 3,126,420.02
22,119,061.64 29,914,252.52
Non-operating cost is wholly classified as non-recurring profit and loss.
- 127 -
V Notes to the consolidated financial statements (continued)
(46) Income taxes expenses
Year 2013.Jannuary Year 2012.Jannuary
to June to June
Current income tax 71,756,396.40 71,306,851.26
Deferred income tax (10,814,151.64) (7,359,069.09)
60,942,244.76 63,947,782.17
(47) Earnings per share
(a) Basic earnings per share
Basic earnings per share is calculated by consolidated net profit attributable to shareholders of the Company dividing
by the weighted average number of ordinary shares in issue:
Year 2013.Jannuary Year 2012.Jannuary
to June to June
Consolidated net profit attributable to shareholders of
the Company 260,794,678.64 240,033,990.64
Weighted average number of ordinary shares in issue 288,149,400.00 288,149,400.00
Basic earnings per share 0.905 0.833
Including:
Basic earnings per share on going 0.905 0.833
(b) Diluted earnings per share
Diluted earnings per share is calculated by dividing the consolidated net profit attributable to shareholders of the
Company by the weighted average number of ordinary shares in issue, which both should be adjusted for the effects of
all potential dilutive factors. The Company has no potential outstanding ordinary shares (2012: nil), the diluted earnings
per share equals the basic earnings per share.
(48) Notes on statement of cash flow items
(a) Cash received relating to other operating activities
Year 2013.Jannuary to June Year 2012.Jannuary
to June
- 128 -
Government grants 4,603,595.22 9,266,182.51
Interest income 2,292,175.64 2,112,748.84
Others 31,927,452.16 42,840,503.98
38,823,223.02 54,219,435.33
- 129 -
V Notes to the consolidated financial statements (continued)
(48) Notes on statement of cash flow items (Continued)
(b) Cash paid relating to other operating activities
Year 2013.Jannuary to Year 2012.Jannuary
June to June
R&D expenses 34,212,956.64 36,054,514.95
Entertainment expenses 15,495,391.10 12,651,427.09
Advertising expenses 8,876,379.11 5,462,304.88
Rental expenses 6,541,396.42 5,414,283.78
Bank charges 4,928,733.17 7,967,890.00
Others 83,836,339.97 68,460,930.71
153,891,196.41 136,011,351.41
(c) Cash received relating to other investing activities
Year 2013.Jannuary to Year 2012.Jannuary
June to June
Resettlement compensation (Note
V(32)) - 50,000,000.00
(d) Cash received relating to other financing activities
Year 2013.Jannuary Year 2012.Jannuary
to June to June
Entrusted borrowings borrowed from Sinopharm
Group - 232,630,000.00
Other - 146,663,299.15
- 379,293,299.15
(e) Cash payments relating to other financing activities
Year 2013.Jannuary Year 2012.Jannuary
to June to June
Repayment of entrusted borrowings lent by
Sinopharm
Group - 367,370,000.00
Others 48,947,088.25 -
- 130 -
48,947,088.25 367,370,000.00
- 131 -
V Notes to the consolidated financial statements (continued)
(49) Supplementary information of cash flow statements
(a) Supplementary information of cash flow statements
Supplementary information Current Period Amount Last Period Amount
1．Reconciliation of net profit to cash flows from
-- --
operating activities
Net profit 267,800,167.11 243,210,512.66
Add: Provision for assets impairment 16,807,658.72 8,388,213.89
Depreciation of fixed assets and investment
45,450,272.17 40,088,819.40
propertie
Amortisation of intangible assets 4,601,419.99 4,071,832.86
Amortisation of long-term prepaid
2,709,268.12 2,386,602.74
expenses
Losses/(Gains) on disposal of fixed assets,
(3,665.89) 8,813,780.88
intangible assets and other non-current assets
Financial expenses 82,765,700.14 82,634,319.99
Investment income (18,576,985.34) (16,016,159.76)
Increase of deferred tax assets (9,995,275.31) (4,050,396.74)
Decrease of deferred tax liabilities (818,876.33) (2,834,957.31)
(Increase)/ decrease of inventory (5,166,401.30) 24,862,393.79
Increase in operating receivables (902,816,610.27) (751,703,629.02)
Increase in operating payables 732,402,755.13 480,460,939.36
Decrease in restricted cash 23,117,446.14 18,597,595.43
Net cash flow from operating activities 238,276,873.08 138,909,868.17
2． Movement of cash
Cash at end of year 882,311,241.61 868,558,138.59
Less: cash at beginning of year 920,748,043.53 907,884,162.14
Less: cash at beginning of year (38,436,801.92) (39,326,023.55)
- 132 -
V Notes to the consolidated financial statements (continued)
(49) Notes to cash flow statement (continued)
(b) Acquisition of subsidiaries and operating unit
Current Period
Supplimentary Information Last Period Amount
Amount
Information on acquired subsidiaries and other operating unit -- --
1．Price paied for acquiring subsidiaries and other operating unit - 65,560,000.00
2．Consideration settled in cash - 47,592,000.00
Less: cash and cash equivalents in the
- 22,973,111.76
subsidiaries and business acquired
3．Net cash outflow of acquiring subsidiaries and other operating unit - 24,618,888.24
4．Net asset of acquiring subsidiaries - 12,473,340.74
Current asset - 209,109,746.10
Non-current asset - 661,710.01
Current liabilities - 197,298,115.37
(c) Cash
Year 2013.Jannuary Year 2012.Jannuary
to June to June
Cash at end of year 882,311,241.61 868,558,138.59
Including: Cash on hand 45,748.49 67,571.77
Call deposits with banks 882,265,493.12 868,490,566.82
Restricted cash 10,126,580.95 26,468,409.99
Cash at bank and on hand 892,437,822.56 895,026,548.58
- 133 -
VI Related party relationships and significant related party transactions
(1) General information of the parent company:
Holding share
Voting Ultimate
Name of (%) from
Related Registered proportion (%) Controlling
the parent parent
Relation Capital from parent party of this
company company to
Enterpris Place of Legal Principal enterprise
this enterprise company to
e Type registration representative business this enterprise
Company
Controlling limited by Sinopharm
240,262,529.90 38.33% 38.33%
Sinopharm shareholder shares Group
Group (listed) Shanghai Wei Yulin Business
(2) Associates
Name of the Enterprise Place of Legal Principal Register % interest % voting
Relationship
Investee Type Registration Representative business capital held rights
Wanle Foreign Medicine USD
Shenzhen 35.19% 33.33% Associates
Medical capital Yan Zhigang manufacture 19,544,550
(3) Other related parties
Names of other related parties Relationship with the Company
Sinopharm Holding Sub Marketing Center Co., Ltd. Controlled by Sinopharm Group
China National Medicines Co.,Ltd. Controlled by Sinopharm Group
Sinopharm Holding Hunan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Jiangsu Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Beijing Co., Ltd. Controlled by Sinopharm Group
Guangdong Dong Fang Uptodate & Special Medicines Co.Ltd Controlled by Sinopharm Group
Foshan Nanhai Uptodate & Special Medicines Co.,Ltd. Controlled by Sinopharm Group
Sinopharm Holding Guizhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Zhangzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Beijing Huahong Co.Ltd Controlled by Sinopharm Group
Sinopharm Group Chemical Reagent Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Hainan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Yixin Medicine Co.,Ltd. Controlled by Sinopharm Group
Sinopharm Holding Fuzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Suzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Fujian Co., Ltd. Controlled by Sinopharm Group
Foshan Nanhai Medicine Co.,Ltd. Controlled by Sinopharm Group
Sinopharm Group Guorui Medicine Co.,Ltd. Controlled by Sinopharm Group
Sinopharm Group Chemical Reagent Suzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Hainan Hongyi Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Hubei Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Sanyi Medicine (Wuhu) Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Guoda Drug Store Guangdong Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Putian Co., Ltd. Controlled by Sinopharm Group
- 134 -
Sinopharm Group Medicine Logistic Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Yunnan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Pharmaceutical Chain Co., Ltd Controlled by Sinopharm Group
Names of other related parties Relationship with the Company
Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical
Co.,Ltd. Controlled by Sinopharm Group
Sinopharm Holding Ningxia Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Tianjin Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group Southwest Medicine Co., Ltd Controlled by Sinopharm Group
Sinopharm Guoda Drug Store Guangxi Chain Co.,Ltd Controlled by Sinopharm Group
Sinopharm Holding Shandong Co., Ltd. Controlled by Sinopharm Group
Sinopharm Le -Ren-Tang Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Zhejiang Co.Ltd Controlled by Sinopharm Group
Sinopharm Holding Nantong Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Gansu Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shenyang Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical
Co.,Ltd. Controlled by Sinopharm Group
Sinopharm Holding Wenzhou Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Chongqing Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Jinzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shanxi Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Yangzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shanxi Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Henan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Heilongjiang Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Xuzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shanxi Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Linyi Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Jilin Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Guoda Pharmaceutical Chain Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Yangzhou Co., Ltd. Western Medicine Branch
Company Controlled by Sinopharm Group
Sinopharm Holding Wuxi Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Guoda Pharmacy Co.,Ltd Controlled by Sinopharm Group
Sinopharm Holding Inner Mongolia Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Taizhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Yancheng Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Tianjin North Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Dalian Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Changzhou Medical logistics center Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Longyan Co., Ltd. Controlled by Sinopharm Group
Shanghai Yunnuo Marketing Consulting Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Ningde Co., Ltd. Controlled by Sinopharm Group
- 135 -
Sinopharm Holding Qinghai Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Jiangxi Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Changde Co., Ltd. Controlled by Sinopharm Group
- 136 -
Related party Relationship with the Company
Sinopharm Holding Wuhu Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Yantai Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Anqing Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Huaian Co.,Ltd Controlled by Sinopharm Group
Sinopharm Holding Changzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Xinjiang New Kashi Pharmaceutical Co.,Ltd Controlled by Sinopharm Group
Sinopharm Holding Anhui Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Sanming Co., Ltd Controlled by Sinopharm Group
Heilongjiang Sinopharm Medical Herbs Co.,Ltd. Controlled by Sinopharm Group
Sinopharm Holding Jinan Co., Ltd. Controlled by Sinopharm Group
Shanghai Wanli Medical Beauty Clinic Co., Ltd. Controlled by Sinopharm Group
Shanxi Guoyi Pharmacy Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Chifeng Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding HongKong Co.,Ltd Controlled by Sinopharm Group
Sinopharm Jiankun(Beijing) Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Jiayuan International Trade Company Controlled by Sinopharm Group
Sinopharm Holding Shiyan Co.,Ltd Controlled by Sinopharm Group
Sinopharm Xinjiang Korla Pharmaceutical Co.,Ltd Controlled by Sinopharm Group
Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Jingmen Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Anyang Co.,Ltd Controlled by Sinopharm Group
Sinopharm Holding Zhoukou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Lishui Co., Ltd Controlled by Sinopharm Group
Sinopharm Jiankang Industry(Shanghai) Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Kaifeng Co.,Ltd Controlled by Sinopharm Group
Sinopharm Holding Jingzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Medical Devices Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Qian Southwest Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Siping Co., Ltd Controlled by Sinopharm Group
Shanghai Donghong Pharmaceutical Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Huyong Pharmaceutical(Shanghai)Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Xinyu Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Hebei Medcine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Nanjing Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Guoda Pharmacy Guangzhou Chain Co., Ltd. in Controlled by Sinopharm Group
Sinopharm Holding Shenyang Co., Ltd. Dalian Branch Controlled by Sinopharm Group
Sinopharm Holding Xinjiang Hami Pharmaceutical Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Xinjiang Special Ginsheng and Pilose
Pharmaceutical Co.,Ltd. Controlled by Sinopharm Group
Sinopharm Holding Qujing Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Xinjiang Yili Tongde Pharmaceutical Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Jiangsu Co., Ltd. Taizhou Branch Controlled by Sinopharm Group
Sinopharm Holding Nanyang Co., Ltd. Controlled by Sinopharm Group
- 137 -
Related party Relationship with the Company
Sinopharm Holding Guoda Drugstore Shenyang Chain Co.,Ltd Controlled by Sinopharm Group
Sinopharm Holding Xiangxi Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co.,Ltd Controlled by Sinopharm Group
Sinopharm Holding Qingyang Co.,Ltd Controlled by Sinopharm Group
Sinopharm Holding Shangluo Co.,Ltd Controlled by Sinopharm Group
Sinopharm Holding Meitai Medical Equipment (Shanghai) Co.,Ltd Controlled by Sinopharm Group
Wuhu Sanyi Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Liaocheng Co., Ltd. Controlled by Sinopharm Group
Chengdu Rongsheng Pharmacy Co., Ltd. Controlled by CNPGC
Guang dong South National Pharmaceutical Foreign Trade Co.,Ltd. Controlled by CNPGC
Foshan Yingtian Pharmaceutical trading Co., Ltd Controlled by CNPGC
Wuhan Institute of Biological Products Co. Ltd Controlled by CNPGC
Yingtian Pharmaceutical Group Co., Ltd. Controlled by CNPGC
Lanzhou Institute of Biological Products Co., Ltd. Controlled by CNPGC
Sinopharm Group Wei qida Medicine Co., Ltd Controlled by CNPGC
China National Pharmaceutical Foreign Trade Corporation Controlled by CNPGC
Shanghai Shyndec Pharmaceutical Co., Ltd. Controlled by CNPGC
Shanghai Institute of Biological Products Co. Ltd Controlled by CNPGC
Sinopharm Group Rongsheng Pharmaceutical Co.,Ltd Controlled by CNPGC
Shandong Luya Pharmaceutical Co., Ltd Controlled by CNPGC
Shanghai Modern Hasen (Shangqiu) Pharmacertical Co.Ltd Controlled by CNPGC
Hunan Dongting Pharmaceutical Co., Ltd. Controlled by CNPGC
Sinopharm Group Shanghai Medicine Device Co., Ltd. Controlled by CNPGC
Guangdong Global Pharmaceutical Co., Ltd. Controlled by CNPGC
Qinghai Pharmaceutical Factory Co.,Ltd Controlled by CNPGC
Sichuan Jiang You Zhong Ba Science and Technology Development
Co.,Ltd. Controlled by CNPGC
Qinghai Medical Materials Corporation Controlled by CNPGC
China National Scientific Instruments & Materials Corporation Controlled by CNPGC
Sinopharm Group Financial Co.,Ltd Controlled by CNPGC
Reed Sinopharm Exhibitions Co., Ltd. Controlled by CNPGC
Beijing Fusheng Tiandi Property Management Ltd. Controlled by CNPGC
Sinopharm Group Financial Co.,Ltd Controlled by CNPGC
Sinopharm Chongqing Pharmaceutical and Medical Industry Design
Institute Controlled by CNPGC
Shanghai Pharmaceutial Industry Research Institute Controlled by CNPGC
Guilin Huagui Sinopharm associate company Controlled by CNPGC
Foshan Dezhong Pharmaceutical Co., Ltd Controlled by CNPGC
Wuhan Zhonglian Pharmaceutical Group Co. LtD Controlled by CNPGC
Sinopharm Group Beijing Medical equipment Co.,Ltd Controlled by CNPGC
Wuhan Zhonglian Pharmaceutical Group Co. LtD Controlled by CNPGC
Foshan Fengliaoxing Pharmaceutical Co., Ltd Controlled by CNPGC
China National Pharmaceutical Group Shanghai Co.,Ltd Controlled by CNPGC
China National Corp of Traditional and Herbal Medicine Controlled by CNPGC
- 138 -
Sinopharm United Engineering Corporation Controlled by CNPGC
Related party Relationship with the Company
Jiangsu Wanbang Pharmacy Marketing Co., Ltd. Subsdiary of Fosun Pharm
Chongqing Yaoyou Pharmaceutical Co.,Ltd. Subsdiary of Fosun Pharm
Chongqing Haisiman Pharmaceutical Co.,Ltd. Subsdiary of Fosun Pharm
Guilin South pharmaceutical Co., Ltd Subsdiary of Fosun Pharm
Handan Pharmaceutical Co.,Ltd Subsdiary of Fosun Pharm
Shanghai Chaohui Pharmecurical Co., Ltd. Subsdiary of Fosun Pharm
Sichuan Hexin Pharmaceutical Co.,Ltd. Subsdiary of Fosun Pharm
Shanghai Fosun Pharmaceutical Co., Ltd. Subsdiary of Fosun Pharm
Shenyang Hongqi Pharmaceutical Co.,Ltd. Subsdiary of Fosun Pharm
Yang Wenjie Minority interest of subsidiary
Tan Min Minority interest of subsidiary
Jiang Jianmin Minority interest of subsidiary
Zhou Weilin Minority interest of subsidiary
Fang Zhongqing Minority interest of subsidiary
Kang Liting Minority interest of subsidiary
Family member of Minority interest of
Wang Yang
subsidiary
Sino-Swed Pharmaceutical Corp.Ltd. Associate of Sinopharm Group
China Otsuka Pharmaceutical Co.,Ltd. Associate of Sinopharm Group
Yichang Humanwell Pharmaceutical Co.,Ltd. Associate of Sinopharm Group
Shanghai Sailun Biological Technology Co.,Ltd. Associate of Sinopharm Group
Xiamen Xingsha Huaideju Pharmaceutical Co.,Ltd Subsidiary of associate of Sinopharm Group
China Pharmaceutical Group Corporation Ultimate benefit owner
Changchun Changsheng Gene Pharmaceutical Co., Ltd Ultimate Associate of Sinopharm Group
Sinopharm Group The Parent company
Wanle Medical Associate of Sinopharm Group
Sinopharm Holding Dezhou Co., Ltd. Controlled by Sinopharm Group
Lanzhou Institute of Biological Technology Development Co., Ltd. Controlled by CNPGC
Sinopharm Holding Shangqiu Co., Ltd. Controlled by Sinopharm Group
Foshan Nanhai Pharmaceutical Group Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group United Medical Equipment Co.,Ltd Controlled by CNPGC
Shenzhen Wanwei Medicine trading Co., Ltd Controlled by Wanle
JIang Meng Renren Medical instrument Co., ltd Controlled by subsidiary's key management
Shaoguan Wujiang Muyang Medicine information cousulting Co.,Ltd Controlled by Minority interest of subsidiary
- 139 -
VI Related party transactions (continued)
(4) Related party transactions
(a) Purchase of goods
Year 2013 January to June Year 2012 January to June
Pricing Amount % of same Amount % of same
Related party policies (RMB’0000) transaction (RMB’0000) transaction
Sinopharm Holding Sub Marketing
Market price
Center Co., Ltd. 47,304.67 5.09% 42,918.64 5.57%
Sinopharm Group Market price 24,151.00 2.60% 18,916.30 2.45%
China National Medicines Co.,Ltd. Market price 12,882.76 1.38% 10,912.70 1.42%
Sino-Swed Pharmaceutical Corp.Ltd. Market price 4,180.62 0.45% 3,939.17 0.51%
Chengdu Rongsheng Pharmacy Co., Ltd. Market price 3,133.32 0.34% - 0.00%
Wanle Medical Market price 2,069.99 0.22% 1,951.11 0.25%
Guang dong South National
Market price
Pharmaceutical Foreign Trade Co.,Ltd. 1,942.21 0.21% 715.87 0.09%
Foshan Yingtian Pharmaceutical trading
Market price
Co., Ltd 1,174.29 0.13% - 0.00%
Jiangsu Wanbang Pharmacy Marketing
Market price
Co., Ltd. 1,112.72 0.12% 725.77 0.09%
Wuhan Institute of Biological Products
Market price
Co. Ltd 1,043.50 0.11% - 0.00%
Shenzhen Wanwei Medicine trading Co.,
Market price
Ltd 981.19 0.11% 407.92 0.05%
Lanzhou Institute of Biological Products
Market price
Co., Ltd. 835.22 0.09% - 0.00%
Sinopharm Holding Hunan Co., Ltd. Market price 784.74 0.08% 6.77 0.00%
Chongqing Yaoyou Pharmaceutical
Market price
Co.,Ltd. 710.32 0.08% 494.00 0.06%
Chongqing Haisiman Pharmaceutical
Market price
Co.,Ltd. 507.81 0.05% 508.17 0.07%
Sinopharm Group Wei qida Medicine
Market price
Co., Ltd 428.11 0.05% 672.00 0.09%
Sinopharm Holding Jiangsu Co., Ltd. Market price 198.06 0.02% - 0.00%
Sinopharm Holding Beijing Co., Ltd. Market price 158.89 0.02% 244.05 0.03%
China National Pharmaceutical Foreign
Market price
Trade Corporation 123.84 0.01% - 0.00%
Shanghai Shyndec Pharmaceutical Co.,
Market price
Ltd. 121.90 0.01% 29.97 0.00%
Guangdong Dong Fang Uptodate &
Market price
Special Medicines Co. 105.96 0.01% 222.69 0.03%
Foshan Nanhai Uptodate & Special
Market price
Medicines Co.,Ltd. 94.87 0.01% 82.18 0.01%
Sinopharm Holding Guizhou Co., Ltd. Market price 93.34 0.01% 578.15 0.07%
Sinopharm Holding Zhangzhou Co., Ltd. Market price 93.16 0.01% 0.35 0.00%
Sinopharm Holding Beijing Huahong
Market price
Co.Ltd 77.20 0.01% - 0.00%
Shanghai Institute of Biological Products
Market price
Co. Ltd 67.55 0.01% - 0.00%
Sinopharm Group Rongsheng
Market price
Pharmaceutical Co.,Ltd 62.95 0.01% - 0.00%
Sinopharm Group Chemical Reagent
Market price
Co., Ltd. 57.48 0.01% 48.14 0.01%
- 140 -
Sinopharm Holding Hainan Co., Ltd. Market price 42.65 0.00% 29.44 0.00%
Shandong Luya Pharmaceutical Co., Ltd Market price 41.79 0.00% - 0.00%
Sinopharm Yixin Medicine Co.,Ltd. Market price 29.02 0.00% 12.23 0.00%
Sinopharm Holding Fuzhou Co., Ltd. Market price 27.39 0.00% - 0.00%
Next page 104,638.52 11.25% 83,415.62 10.80%
- 141 -
VI Related party transactions (continued)
(4) Related party transactions (continued)
(a) Purchase of goods (continued)
Year 2013 January to June Year 2012 January to June
Pricing Amount % of same Amount % of same
Related party policies (RMB’0000) transaction (RMB’0000) transaction
continued 104,638.52 11.25% 83,415.62 10.80%
China Otsuka Pharmaceutical Co.,Ltd. Market price 24.97 0.00% 9.73 0.00%
Sinopharm Holding Suzhou Co., Ltd. Market price 21.80 0.00% 1.28 0.00%
Yingtian Pharmaceutical Group Co.,
Ltd. Market price 21.00 0.00% - 0.00%
Guilin South pharmaceutical Co., Ltd Market price 20.25 0.00% 15.28 0.00%
Sinopharm Holding Fujian Co., Ltd. Market price 18.64 0.00% 354.48 0.05%
Foshan Nanhai Medicine Co.,Ltd. Market price 18.11 0.00% 15.79 0.00%
Handan Pharmaceutical Co.,Ltd Market price 13.66 0.00% 2.56 0.00%
Sinopharm Group Guorui Medicine
Co.,Ltd. Market price 12.25 0.00% 1.24 0.00%
Shanghai Modern Hasen (Shangqiu)
Pharmacertical Co.Ltd Market price 9.09 0.00% 8.04 0.00%
Sinopharm Holding Dezhou Co., Ltd. Market price 5.87 0.00% - 0.00%
Sinopharm Group Chemical Reagent
Suzhou Co., Ltd. Market price 4.52 0.00% 19.35 0.00%
Hunan Dongting Pharmaceutical Co.,
Ltd. Market price 3.97 0.00% - 0.00%
Sinopharm Holding Hainan Hongyi
Co., Ltd. Market price 3.49 0.00% - 0.00%
Shenyang Hongqi Pharmaceutical
Co.,Ltd. Market price 3.24 0.00% 2.70 0.00%
Yichang Humanwell Pharmaceutical
Co.,Ltd. Market price 2.87 0.00% 3.31 0.00%
Sinopharm Group Shanghai Medicine
Device Co., Ltd. Market price 1.79 0.00% 2.16 0.00%
Sinopharm Holding Pharmaceutical
Chain Co., Ltd Market price 1.33 0.00% 1.19 0.00%
Sinopharm Holding Hubei Co., Ltd. Market price 0.79 0.00% - 0.00%
Shanghai Sailun Biological Technology
Co.,Ltd. Market price 0.27 0.00% - 0.00%
Sinopharm Holding Sanyi Medicine
(Wuhu) Co., Ltd. Market price 0.17 0.00% - 0.00%
Shanghai Chaohui Pharmecurical Co.,
Ltd. Market price - 0.00% (0.11) 0.00%
Guangdong Global Pharmaceutical
Co., Ltd. Market price (0.01) 0.00% - 0.00%
Sinopharm Holding Guoda Drug Store
Guangdong Co., Ltd. Market price (0.03) 0.00% 8.18 0.00%
Qinghai Pharmaceutical Factory
Co.,Ltd Market price - 0.00% 410.89 0.05%
Sinopharm Holding Putian Co., Ltd. Market price - 0.00% 79.81 0.01%
Sinopharm Group Medicine Logistic
Co., Ltd. Market price - 0.00% 74.62 0.01%
Lanzhou Institute of Biological
Technology Development Co., Ltd. Market price - 0.00% 26.51 0.00%
- 142 -
Sinopharm Holding Yunnan Co., Ltd. Market price - 0.00% 12.53 0.00%
Sichuan Jiang You Zhong Ba Science
and Technology Development Co.,Ltd. Market price - 0.00% 2.08 0.00%
Sinopharm Group United Medical
Equipment Co.,Ltd Market price - 0.00% (0.36) 0.00%
Total 104,826.56 11.25% 84,466.88 10.92%
- 143 -
VI Related party transactions (continued)
(4) Related party transactions (continued)
(b) Sales of goods
Year 2013 January to June Year 2012 January to June
Pricing Amount % of same Amount % of same
Related party policies (RMB’0000) transaction (RMB’0000) transaction
Sinopharm Holding Hunan Co., Ltd. Market price 6,897.20 0.68% 5,524.88 0.63%
Foshan Nanhai Uptodate & Special
Medicines Co.,Ltd. Market price 6,723.28 0.67% 5,104.10 0.58%
Sinopharm Holding Hubei Co., Ltd. Market price 3,428.67 0.34% 4,221.10 0.48%
Sinopharm Holding Guoda Drug
Store Guangdong Co., Ltd. Market price 3,382.18 0.34% 4,114.39 0.47%
Sinopharm Holding Beijing Huahong
Co.Ltd Market price 3,259.54 0.32% 2,363.66 0.27%
Sinopharm Holding Hainan Co., Ltd. Market price 2,911.68 0.29% 2,150.16 0.25%
Chongqing Yaoyou Pharmaceutical
Co.,Ltd. Market price 2,625.23 0.26% 4,012.31 0.46%
Sinopharm Holding Beijing Co., Ltd. Market price 2,618.69 0.26% 4,260.17 0.49%
Foshan Nanhai Medicine Co.,Ltd. Market price 2,485.62 0.25% 1,543.60 0.18%
Sinopharm Group (Tianjin) Eastern
Bokang Pharmaceutical Co., Ltd. Market price 2,451.50 0.24% 2,431.56 0.28%
Sinopharm Group Xinjiang Special
Drugs National Pharmaceutical
Co.,Ltd. Market price 2,171.71 0.22% 1,241.23 0.14%
Sinopharm Holding Ningxia Co., Ltd. Market price 1,950.19 0.19% 1,526.55 0.17%
Sinopharm Holding Tianjin Co., Ltd. Market price 1,936.98 0.19% 1,305.30 0.15%
Sinopharm Group Southwest
Medicine Co., Ltd Market price 1,909.04 0.19% 4,196.39 0.48%
Sinopharm Guoda Drug Store
Guangxi Chain Co.,Ltd Market price 1,720.06 0.17% 1,524.92 0.17%
Sinopharm Holding Shandong Co.,
Ltd. Market price 1,653.61 0.16% 1,159.86 0.13%
Sinopharm Le -Ren-Tang Medicine
Co., Ltd. Market price 1,532.53 0.15% 1,240.94 0.14%
Sinopharm Holding Zhejiang Co.Ltd Market price 1,461.43 0.15% 1,434.26 0.16%
Sinopharm Holding Sub Marketing
Center Co., Ltd. Market price 1,354.53 0.13% 1,351.38 0.15%
Sinopharm Holding Nantong Co., Ltd. Market price 1,349.61 0.13% 842.78 0.10%
Sinopharm Holding Hainan Hongyi
Co., Ltd. Market price 1,321.37 0.13% 1,045.83 0.12%
Sinopharm Holding Gansu Co., Ltd. Market price 1,018.11 0.10% 900.12 0.10%
Sinopharm Holding Shenyang Co.,
Ltd. Market price 985.36 0.10% 1,824.09 0.21%
Sinopharm Holding Xinjiang Special
Drugs Western Pharmaceutical
Co.,Ltd. Market price 941.24 0.09% 1,420.46 0.16%
Sinopharm Group Market price 928.88 0.09% 1,245.75 0.14%
Sinopharm Holding Wenzhou Co.,
Ltd Market price 818.87 0.08% 711.26 0.08%
Sinopharm Holding Yunnan Co., Ltd. Market price 778.36 0.08% 1,184.37 0.14%
Sinopharm Holding Chongqing Co.,
Ltd. Market price 765.58 0.08% 672.75 0.08%
- 144 -
Sinopharm Holding Jinzhou Co., Ltd. Market price 736.32 0.07% 545.92 0.06%
Sinopharm Holding Fuzhou Co., Ltd. Market price 717.26 0.07% 561.17 0.06%
Guangdong Dong Fang Uptodate &
Special Medicines Co. Market price 585.90 0.06% 686.29 0.08%
Sinopharm Group Wei qida Medicine
Co., Ltd Market price 547.04 0.05% 72.38 0.01%
Sinopharm Holding Shanxi Co., Ltd. Market price 442.36 0.04% 1,118.79 0.13%
China National Medicines Co.,Ltd. Market price 435.01 0.04% 439.78 0.05%
Sinopharm Holding Yangzhou Co.,
Ltd. Market price 417.94 0.04% 589.20 0.07%
Next page 65,262.88 6.45% 64,567.70 7.37%
- 145 -
VI Related party transactions (continued)
(4) Related party transactions (continued)
(b) Sales of goods (continued)
Year 2013 January to June Year 2012 January to June
Pricing Amount % of same Amount % of same
Related party policies (RMB’0000) transaction (RMB’0000) transaction
continued 65,262.88 6.45% 64,567.70 7.37%
Sinopharm Holding Shanxi Co., Ltd Market price 402.75 0.04% - 0.00%
Sinopharm Holding Henan Co., Ltd. Market price 373.18 0.04% 378.72 0.04%
Sinopharm Holding Heilongjiang Co.,
Ltd. Market price 334.99 0.03% 263.64 0.03%
Sinopharm Holding Xuzhou Co.,
Ltd. Market price 313.37 0.03% 179.22 0.02%
Sinopharm Holding Shanxi Co., Ltd. Market price 263.93 0.03% 297.52 0.03%
Shanghai Chaohui Pharmecurical
Co., Ltd. Market price 247.95 0.02% 157.18 0.02%
Sinopharm Holding Linyi Co., Ltd Market price 180.02 0.02% - 0.00%
Sinopharm Holding Jilin Co., Ltd. Market price 179.49 0.02% 254.26 0.03%
Sinopharm Holding Guizhou Co., Ltd. Market price 174.72 0.02% 128.81 0.01%
Sinopharm Holding Guoda
133.93 0.01%
Pharmaceutical Chain Co., Ltd Market price - 0.00%
Sinopharm Holding Yangzhou Co.,
Ltd. Western Medicine Branch 126.82 0.01%
Company Market price 141.25 0.02%
Sinopharm Holding Wuxi Co., Ltd. Market price 110.38 0.01% 92.42 0.01%
Sinopharm Holding Fujian Co., Ltd. Market price 105.72 0.01% 622.80 0.07%
Sinopharm Holding Suzhou Co., Ltd. Market price 103.12 0.01% 118.11 0.01%
Sinopharm Holding Guoda Pharmacy
Co.,Ltd Market price 101.96 0.01% 121.68 0.01%
Sinopharm Holding Inner Mongolia
Co., Ltd. Market price 101.42 0.01% 207.85 0.02%
Sinopharm Holding Taizhou Co., Ltd. Market price 99.50 0.01% 116.38 0.01%
Sinopharm Holding Yancheng Co.,
Ltd. Market price 97.64 0.01% 92.51 0.01%
Sinopharm Holding Tianjin North
Medicine Co., Ltd. Market price 95.87 0.01% 104.60 0.01%
Sinopharm Holding Dalian Co., Ltd. Market price 85.47 0.01% 86.86 0.01%
Guang dong South National
Pharmaceutical Foreign Trade
Co.,Ltd. Market price 83.21 0.01% 121.77 0.01%
Sinopharm Holding Jiangsu Co., Ltd. Market price 96.81 0.01% 78.81 0.01%
Sinopharm Holding Shanghai Likang
Pharmaceutical Co., Ltd. Market price 76.52 0.01% 12.67 0.00%
Sinopharm Holding Changzhou
Medical logistics center Co., Ltd. Market price 64.21 0.01% 22.26 0.00%
Sinopharm Holding Longyan Co., Ltd. Market price 63.89 0.01% 135.66 0.02%
Shanghai Yunnuo Marketing
Consulting Co., Ltd. Market price 63.26 0.01% - 0.00%
Sinopharm Holding Ningde Co., Ltd. Market price 63.05 0.01% 155.43 0.02%
Sinopharm Holding Qinghai Co., Ltd. Market price 44.70 0.00% 0.98 0.00%
Sinopharm Holding Jiangxi Co., Ltd. Market price 38.31 0.00% 31.64 0.00%
- 146 -
JIang Meng Renren Medical
instrument Co., ltd Market price 34.07 0.00% 16.88 0.00%
Sinopharm Holding Changde Co., Ltd. Market price 59.28 0.01% 83.51 0.01%
Sinopharm Holding Wuhu Co., Ltd Market price 22.05 0.00% 27.29 0.00%
Sinopharm Holding Putian Co., Ltd. Market price 19.63 0.00% 34.50 0.00%
Sinopharm Holding Yantai Co., Ltd Market price 16.13 0.00% 35.10 0.00%
Sinopharm Holding Anqing Co., Ltd. Market price 14.32 0.00% 11.77 0.00%
Sinopharm Holding Huaian Co.,Ltd Market price 10.30 0.00% - 0.00%
Next page 69,664.85 6.89% 68,699.78 7.80%
- 147 -
VI Related party transactions (continued)
(4) Related party transactions (continued)
(b) Sales of goods (continued)
Year 2013 January to June Year 2012 January to June
Pricing Amount % of same Amount % of same
Related party policies (RMB’0000) transaction (RMB’0000) transaction
continued 69,664.85 6.89% 68,699.78 7.80%
Sinopharm Holding Changzhou
Co., Ltd. Market price 9.62 0.00% 7.30 0.00%
China Pharmaceutical Group
Corporation Market price 8.94 0.00% - 0.00%
Sinopharm Holding Guoda Pharmacy
Guangzhou Chain Co., Ltd. in Market price 8.35 0.00% 37.74 0.00%
Sinopharm Holding Xinjiang New
Kashi Pharmaceutical Co.,Ltd Market price 7.30 0.00% 22.33 0.00%
Sinopharm Holding Anhui Co., Ltd. Market price 7.18 0.00% 186.20 0.02%
Sinopharm Holding Sanming Co., Ltd Market price 7.11 0.00% 4.46 0.00%
Heilongjiang Sinopharm Medical
Herbs Co.,Ltd. Market price 6.86 0.00% 9.44 0.00%
Sinopharm Holding Jinan Co., Ltd. Market price 4.82 0.00% 17.15 0.00%
Shanghai Wanli Medical Beauty
Clinic Co., Ltd. Market price 4.10 0.00% - 0.00%
Shanxi Guoyi Pharmacy Co., Ltd. Market price 3.88 0.00% - 0.00%
China National Scientific Instruments
& Materials Corporation Market price 3.81 0.00% 4.44 0.00%
Sinopharm Holding Zhangzhou Co.,
Ltd. Market price 2.90 0.00% 78.26 0.01%
Sinopharm Holding Chifeng Co., Ltd. Market price 2.60 0.00% - 0.00%
Sinopharm Group Financial Co.,Ltd Market price 2.47 0.00% - 0.00%
Sinopharm Holding HongKong
Co.,Ltd Market price 2.25 0.00% - 0.00%
Sinopharm Jiankun(Beijing) Medicine
Co., Ltd. Market price 4.58 0.00% - 0.00%
Reed Sinopharm Exhibitions Co., Ltd. Market price 1.86 0.00% - 0.00%
Sinopharm Jiayuan International
Trade Company Market price 1.54 0.00% - 0.00%
Beijing Fusheng Tiandi Property
Management Ltd. Market price 1.54 0.00% - 0.00%
Sinopharm Holding Shiyan Co.,Ltd Market price 1.36 0.00% - 0.00%
China National Pharmaceutical
Foreign Trade Corporation Market price 1.13 0.00% - 0.00%
Sinopharm Xinjiang Korla
Pharmaceutical Co.,Ltd Market price 0.80 0.00% 0.30 0.00%
Sinopharm Holding Xinjiang Xinte
Karamay Pharmaceutical Co., Ltd Market price 0.75 0.00% 3.27 0.00%
Sinopharm Holding Jingmen Co., Ltd. Market price 0.69 0.00% - 0.00%
Sinopharm Holding Anyang Co.,Ltd Market price 0.60 0.00% - 0.00%
Sinopharm Holding Zhoukou Co.,
Ltd. Market price 0.60 0.00% - 0.00%
Sinopharm Holding Shangqiu Co.,
Ltd. Market price 0.56 0.00% - 0.00%
Sinopharm Holding Lishui Co., Ltd Market price 0.48 0.00% 3.78 0.00%
- 148 -
Sinopharm Jiankang
Industry(Shanghai) Co., Ltd. Market price 0.38 0.00% - 0.00%
Sinopharm Holding Kaifeng Co.,Ltd Market price 0.30 0.00% - 0.00%
Sinopharm Holding Jingzhou Co.,
Ltd. Market price 0.24 0.00% 0.83 0.00%
Sinopharm Holding Medical Devices
Co., Ltd. Market price 0.22 0.00% - 0.00%
Sinopharm Holding Qian Southwest
Co., Ltd. Market price 0.21 0.00% - 0.00%
Sinopharm Holding Siping Co., Ltd Market price 0.14 0.00% 0.14 0.00%
Shanghai Donghong Pharmaceutical
Co., Ltd Market price 0.10 0.00% - 0.00%
Next page 69,765.12 6.89% 69,075.42 7.83%
- 149 -
VI Related party transactions (continued)
(4) Related party transactions (continued)
(b) Sales of goods (continued)
Year 2013 January to June Year 2012 January to June
Pricing Amount % of same Amount % of same
Related party policies (RMB’0000) transaction (RMB’0000) transaction
continued 69,765.12 6.89% 69,075.42 7.83%
Sinopharm Holding Huyong
Pharmaceutical(Shanghai)Co., Ltd. Market price 0.09 0.00% - 0.00%
Sinopharm Holding Xinyu Co., Ltd. Market price (4.09) 0.00% - 0.00%
Sinopharm Holding Hebei Medcine
Co., Ltd. Market price - 0.00% 1,420.59 0.16%
Sichuan Hexin Pharmaceutical
Co.,Ltd. Market price - 0.00% 137.51 0.02%
Sinopharm Holding Shenyang Co.,
Ltd. Dalian Branch Market price - 0.00% 15.47 0.00%
Sinopharm Holding Xinjiang Hami
Pharmaceutical Co., Ltd Market price - 0.00% 5.82 0.00%
Sinopharm Holding Xinjiang Special
Ginsheng and Pilose Pharmaceutical
Co.,Ltd. Market price - 0.00% 5.79 0.00%
Sinopharm Holding Qujing Co., Ltd. Market price - 0.00% 1.91 0.00%
Sinopharm Holding Xinjiang Yili
Tongde Pharmaceutical Co., Ltd Market price - 0.00% 1.71 0.00%
Sinopharm Holding Jiangsu Co.,
Ltd.Taizhou Branch Market price - 0.00% 0.14 0.00%
Total 69,761.12 6.89% 70,664.36 8.01%
(c) Lease
The Group as leaser:
Type of Contract Contract
Rental income
Leasers Lessees assets beginning terminated
(RMB’0000)
use for date date
The 1 January 31 December
Sinopharm Holding Pharmaceutical Chain Co., Ltd Building 4.98
Company 2013 2015
Sinopharm 10 March 31 December
Sinopharm Guoda Drug Store Guangxi Chain Co.,Ltd Building 8.53
liuzhou 2011 2015
Sinopharm 31 December
Sinopharm Guoda Drug Store Guangxi Chain Co.,Ltd Building 1 July 2009 78.91
liuzhou 2015
Huixin 1 June 31 December
Sinopharm Holding Pharmaceutical Chain Co., Ltd Building 4.64
Investment 2013 2013
Huixin Sinopharm Holding Guoda Pharmacy Guangzhou 1 January
Building 31 May 2013 23.18
Investment Chain Co., Ltd. in 2013
Huixin 1 January 31 December
China National Medicines Co.,Ltd. Building 4.32
Investment 2013 2013
Huixin Sinopharm Group Shanghai Medicine Device Co., 1 January 31 December
Building 11.79
Investment Ltd. 2012 2013
Guangxi 31 December
Sinopharm Guoda Drug Store Guangxi Chain Co.,Ltd Building 1 July 2009 18.94
Logistic 2015
Sinopharm 1 January 31 December
Sinopharm Holding Pharmaceutical Chain Co., Ltd Building 2.70
Materials 2013 2013
- 150 -
157.99
- 151 -
VI Related party transactions (continued)
(4) Related party transactions (continued)
(c) Lease(continued)
The Group as lessee
Type of assets Contract Contract Lease expenses
Lessees Leasers
use for beginning date terminated date (RMB’0000)
Sinopharm Foshan Nanhai Pharmaceutical Group
Building 1 May 2013 28 February 2015 3.70
Foshan Co., Ltd.
Sinopharm
Building 1 January 2013 31 December 2013 34.50
Yanfeng Wang Yang
Sinopharm Shaoguan Wujiang Muyang Medicine 1 Auguest
Building 31 July 2020 48.05
Shaoguan information cousulting Co.,Ltd 2012
Sinopharm Sinopharm Group Medicine Logistic
Building 1 January 2013 31 December 2013 354.00
Guangzhou Co., Ltd.
Sinopharm Sinopharm Group Medicine Logistic
Equipment 1 January 2013 31 December 2013 375.00
Guangzhou Co., Ltd.
815.25
(d) Guarantees provided
Guarantees Guarantee Amount Beginning date of Maturity date of Guarantee
provided (RMB’0,000) guarantee contract guarantee contract obligation expired
Sinopharm Group The Company 40,000.00 10 August 2012 10 August 2013 No
Sinopharm
20 May 2013 23 April 2014
The Company Guangzhou 35,487.67 No
Sinopharm
03 June 2013 03 June 2014
Sinopharm Group Guangzhou 32,385.09 No
Sinopharm
16 October 2012 16 October 2013
The Company Guangzhou 30,696.65 No
Sinopharm
07 May 2013 07 May 2014
The Company Guangzhou 23,119.19 No
Sinopharm
26 June 2013 25 June 2014
The Company Guangzhou 15,543.95 No
Sinopharm
26 June 2013 25 June 2014
The Company Guangxi 13,190.42 No
Sinopharm
04 March 2013 03 March 2014
The Company Guangzhou 11,298.21 No
Sinopharm
29 May 2013 29 May 2014
The Company Guangxi 10,066.58 No
Zhijun Pharm and
Sinopharm 05 December 2012 04 December 2013
Guangzhou The Company 9,911.57 No
The Company Zhijun Pharm 9,627.37 20 June 2012 20 June 2013 No
Sinopharm
20 May 2013 20 May 2014
The Company Guangzhou 8,473.16 No
Zhijun Pharm The Company 7,629.51 27 June 2013 27 December 2013 No
Sinopharm
31 October 2012 31 October 2013
Sinopharm Group Guangzhou 7,018.89 No
Sinopharm
17 May 2013 16 May 2014
The Company Guangzhou 6,996.61 No
Sinopharm
01 March 2013 28 December 2013
The Company Guangzhou 6,755.33 No
- 152 -
Zhijun Pharm The Company 6,600.00 09 June 2013 09 June 2014 No
The Company Guangxi Logistic 6,391.87 16 January 2011 16 January 2014 No
Sinopharm 17 September
16 September 2013
The Company liuzhou 5,895.13 2012 No
The Company Zhijun Suzhou 4,926.58 14 June 2012 14 June 2013 No
Sinopharm
09 November 2012 08 November 2013
The Company Guangzhou 4,917.23 No
Zhijun Pharm The Company 4,827.00 24 January 2013 31 December 2013 No
Sinopharm
26 June 2013 25 June 2014
The Company liuzhou 4,000.00 No
Next page 305,758.01
- 153 -
VI Related party transactions (continued)
(4) Related party transactions (continued)
(d) Guarantees provided(continued)
Guarantees Guarantee Amount Beginning date of Maturity date of Guarantee
provided (RMB’0,000) guarantee contract guarantee contract obligation expired
continued 305,758.01
Sinopharm
19 April 2013 18 April 2014
The Company Guangxi 3,870.17 No
30 September
30 September 2016
The Company Zhijun Pharm 3,762.81 2011 No
Sinopharm
26 June 2013 25 June 2014
The Company Yanfeng 2,997.95 No
Sinopharm
05 December 2012 04 December 2013
The Company Yuexing 2,427.54 No
Sinopharm
27 May 2013 26 May 2014
The Company Guangxi 2,239.33 No
The Company Zhijun Suzhou 2,200.00 21 March 2013 21 March 2014 No
The Company Zhijun Suzhou 2,000.00 27 August 2012 26 August 2013 No
The Company Zhijun Suzhou 2,000.00 01 August 2010 01 August 2013 No
Zhijun Pharm and Zhijun Pharm and
30 May 2013 30 May 2014
The Company The Company 1,881.44 No
Sinopharm
13 June 2013 27 December 2013
The Company Yanfeng 1,666.39 No
Sinopharm
15 May 2012 15 May 2013
The Company Guangxi 1,482.34 No
The Company Zhijun Pharm 1,424.19 17 August 2012 28 June 2013 No
Sinopharm
20 May 2013 20 May 2014
The Company Yuexing 1,289.13 No
18 September
18 September 2013
The Company Zhijun Suzhou 1,000.00 2012 No
Sinopharm
28 February 2012 27 February 2013
The Company Yanfeng 733.16 No
Total 336,732.46
(e) Financing
Category Amount(RMB’0000) Effective date Maturity date
Year 2013 January to June
Borrowed from-
Sinopharm Group Financial Short-term
Co.,Ltd borrowings 3,000.00
04 March 2013 04 March 2014
Sinopharm Group Financial Short-term
Co.,Ltd borrowings 7,000.00
02 April 2013 02 April 2014
Sinopharm Group Financial Short-term
Co.,Ltd borrowings 4,300.00
27 May 2013 27 May 2014
Sinopharm Group Financial Short-term
Co.,Ltd borrowings 2,500.00
29 May 2013 29 May 2014
Sinopharm Group Financial Discount on bank
Co.,Ltd acceptance notes 100.00
28 June 2013 22 August 2013
Sinopharm Group Financial Discount on bank
Co.,Ltd acceptance notes 100.00
28 June 2013 22 August 2013
Sinopharm Group Financial Discount on bank
Co.,Ltd acceptance notes 100.00
28 June 2013 22 August 2013
- 154 -
Sinopharm Group Financial Discount on bank
Co.,Ltd acceptance notes 50.00
28 June 2013 22 August 2013
Sinopharm Group Financial Discount on bank
Co.,Ltd acceptance notes 50.00
28 June 2013 22 August 2013
Sinopharm Group Financial Discount on bank
Co.,Ltd acceptance notes 50.00
28 June 2013 22 August 2013
Sinopharm Group Financial Discount on bank
Co.,Ltd acceptance notes 50.00
28 June 2013 22 August 2013
Sinopharm Group Financial Discount on bank
Co.,Ltd acceptance notes 100.00
28 June 2013 30 August 2013
Next page 17,400.00
- 155 -
VI Related party transactions (continued)
(4) Related party transactions (continued)
(e) Financing(continued)
Category Amount(RMB’0000) Effective date Maturity date
continued 17,400.00
Sinopharm Group Financial Discount on bank
Co.,Ltd acceptance notes 100.00
28 June 2013 30 August 2013
Sinopharm Group Financial Discount on bank
Co.,Ltd acceptance notes 100.00
28 June 2013 30 August 2013
Sinopharm Group Financial Discount on bank
Co.,Ltd acceptance notes 100.00
28 June 2013 30 August 2013
Sinopharm Group Financial Discount on bank
Co.,Ltd acceptance notes 100.00
28 June 2013 30 August 2013
Sinopharm Group Financial Discount on bank
Co.,Ltd acceptance notes 50.00
28 June 2013 04 September 2013
Sinopharm Group Financial Discount on bank
Co.,Ltd acceptance notes 50.00
28 June 2013 04 September 2013
Sinopharm Group Financial Discount on bank
Co.,Ltd acceptance notes 50.00
28 June 2013 04 September 2013
Sinopharm Group Financial Discount on bank
Co.,Ltd acceptance notes 50.00
28 June 2013 04 September 2013
Sinopharm Group Financial Discount on bank
Co.,Ltd acceptance notes 50.00
28 June 2013 04 September 2013
Sinopharm Group Financial Discount on bank
Co.,Ltd acceptance notes 50.00
28 June 2013 04 September 2013
Sinopharm Group Financial Discount on bank
Co.,Ltd acceptance notes 50.00
28 June 2013 04 September 2013
Sinopharm Group Financial Discount on bank
Co.,Ltd acceptance notes 60.16
28 June 2013 07 September 2013
18,210.16
Year 2012 January to June
Borrowed from-
Entrusted
Sinopharm Group borrowings 5,000.00 12 January 2012 11 July 2012
Entrusted
Sinopharm Group borrowings 801.00 22 May 2012 21 November 2012
Entrusted
Sinopharm Group borrowings 4,199.00 22 May 2012 21 November 2012
Entrusted
Sinopharm Group borrowings 5,000.00 7 March 2012 6 September 2012
Entrusted
Sinopharm Group borrowings 4,263.00 9 January 2012 8 July 2012
Entrusted
Sinopharm Group borrowings 4,000.00 14 March 2012 13 September 2012
23,263.00
(f) Interest expenses
Related party Related party transactionsType Year 2013 Year 2012 January
January to June to June
(RMB’0000) (RMB’0000)
- 156 -
Sinopharm Group Interest paid for the loans from
The Company Financial Co.,Ltd Group Financial Co. 607.30 -
Sinopharm Sinopharm Group Interest paid for the loans from
Guangxi Financial Co.,Ltd Group Financial Co. 14.73 -
Sinopharm Sinopharm Holding Sub Charges of discounted notes
Guangzhou Marketing Center Co., Ltd. payable 468.16 171.35
Sinopharm Charges of discounted notes
Guangzhou Sinopharm Group payable 29.30 111.33
The Company Sinopharm Group Interest paid for the entrusted loans - 539.06
Sinopharm
Guangzhou Sinopharm Group Interest paid for the entrusted loans - 456.09
Sinopharm
liuzhou Sinopharm Group Interest paid for the entrusted loans - 50.37
1,119.49 1,328.20
VI Related party transactions (continued)
(4) Related party transactions (continued)
(g) Interest income
Related party Related party transactionsType Year 2013
January to Year 2012 January
June to June
(RMB’0000) (RMB’0000)
Sinopharm Group
The Company Financial Co.,Ltd Deposit interest 0.32 -
(h) Rendering of service
Related party Related party Year 2013 Year 2012
transactions 类型 January to January to
June June
(RMB’0000) (RMB’0000)
Guangdong Sinopharm Group Medicine Logistic Co., Dispatching and
Logistics Ltd. transportation charges 715.89 511.05
Guangdong Dispatching and
Logistics China National Medicines Co.,Ltd. transportation charges 199.35 90.35
Guangdong Sinopharm Holding Guoda Drug Store Dispatching and
Logistics Guangdong Co., Ltd. transportation charges 140.52 123.67
Sinopharm Dispatching and
Guangxi China National Medicines Co.,Ltd. transportation charges 114.85 -
Sinopharm Sinopharm Holding Guoda Drug Store Dispatching and
Logistics Guangdong Co., Ltd. transportation charges 26.23 25.23
Sinopharm
Guangzhou Wanle Medical Consultation fees 10.88 13.56
Sinopharm Shenzhen Wanwei Medicine trading Co.,
Guangzhou Ltd Consultation fees 5.15 -
1,212.87 763.86
(i) Receiving of service
Related party Related party Year 2013 Year 2012
transactionsType January to January to
June June
(RMB’0000) (RMB’0000)
- 157 -
Guangdong Sinopharm Group Medicine Logistic Co., Logistics and
Logistics Ltd. warehousing 57.93 -
Zhijun Pharm Sinopharm Holding Shenyang Co., Ltd. other service 31.05 -
Logistics and
Zhijun Pharm Sinopharm Holding Shenyang Co., Ltd. warehousing 17.05 -
Guangxi Sinopharm Group Medicine Logistic Co.,
Logistic Ltd. Information system fee 15.00 -
Zhijun Pharm Reed Sinopharm Exhibitions Co., Ltd. Participation Fee 4.20 1.92
Sinopharm Holding Guoda Drug Store Business promotion
Zhijun Trade Guangdong Co., Ltd. expenses 1.44 -
126.67 1.92
- 158 -
VI Related party transactions (continued)
(5) Accounts receivable from and payables to related parties
30 June 2013 31 December 2012
(RMB’0000) (RMB’0000)
Notes receivable Chongqing Yaoyou Pharmaceutical Co.,Ltd. 1,435.94 -
Sinopharm Holding Hunan Co., Ltd. 743.22 339.33
Sinopharm Holding Hainan Co., Ltd. 590.82 8.69
Sinopharm Holding Guoda Drug Store
Guangdong Co., Ltd. 530.18 130.72
Sinopharm Holding Tianjin Co., Ltd. 208.72 188.14
Sinopharm Holding Hubei Co., Ltd. 165.93 142.16
Shanghai Chaohui Pharmecurical Co., Ltd. 149.44 -
Sinopharm Holding Shanxi Co., Ltd. 130.90 97.58
Sinopharm Guoda Drug Store Guangxi Chain
Co.,Ltd 102.24 146.06
Sinopharm Holding Beijing Huahong Co.Ltd 89.40 46.31
Sinopharm Group Xinjiang Special Drugs
National Pharmaceutical Co.,Ltd. 80.00 -
Sinopharm Holding Fuzhou Co., Ltd. 72.08 -
Sinopharm Holding Jinzhou Co., Ltd. 53.00 -
Sinopharm Holding Xuzhou Co., Ltd. 42.24 10.00
Sinopharm Holding Guizhou Co., Ltd. 41.76 160.21
Sinopharm Le -Ren-Tang Medicine Co., Ltd. 38.46 -
Sinopharm Holding Yancheng Co., Ltd. 37.39 10.00
Sinopharm Holding Yangzhou Co., Ltd.
Western Medicine Branch Company 20.00 -
Sinopharm Holding Linyi Co., Ltd 20.00 -
Sinopharm Holding Chongqing Co., Ltd. 19.34 63.35
Sinopharm Holding Nanyang Co., Ltd. 18.90 -
Sinopharm Holding Guoda Drugstore
Shenyang Chain Co.,Ltd 13.38 -
Sinopharm Holding Guoda Pharmacy Co.,Ltd 10.37 -
Sinopharm Holding Changzhou Co., Ltd. 10.00 -
Sinopharm Holding Yantai Co., Ltd 5.07 1.80
Sinopharm Holding Taizhou Co., Ltd. 3.06 4.37
Sinopharm Holding Wuhu Co., Ltd 2.22 7.17
Sinopharm Holding Huaian Co.,Ltd 2.10 3.91
Sinopharm Holding Xiangxi Co., Ltd. 1.75 -
Sinopharm Holding Shenyang Co., Ltd. 1.69 2.84
Sinopharm Holding Yangzhou Co., Ltd. 1.15 -
Sinopharm Holding Gansu Co., Ltd. - 163.34
Sinopharm Holding Henan Co., Ltd. - 736.42
Sinopharm Holding Zhangzhou Co., Ltd. - 108.77
Sinopharm Group (Tianjin) Eastern Bokang
Pharmaceutical Co., Ltd. - 89.72
Sinopharm Holding Changde Co.,Ltd 46.00
Sinopharm Holding Beijing Tianxing Puxin
Biological Medical Co.,Ltd - 18.85
Sinopharm Holding Qingyang Co.,Ltd - 10.88
Sinopharm Holding Longyan Co., Ltd. - 6.00
Sinopharm Holding Heilongjiang Co., Ltd. - 6.32
- 159 -
4,640.75 2,548.94
- 160 -
VI Related party transactions (continued)
(5) Accounts receivable from and payables to related parties (continued)
30 June 2013 31 December 2012
(RMB’0000) (RMB’0000)
Accounts
Sinopharm Holding Hunan Co., Ltd.
receivable 2,895.89 1,720.03
Foshan Nanhai Uptodate & Special Medicines
Co.,Ltd. 2,317.49 1,827.63
Sinopharm Holding Guoda Drug Store
Guangdong Co., Ltd. 1,428.69 1,019.10
Sinopharm Holding Hubei Co., Ltd. 1,403.87 698.00
Sinopharm Holding Beijing Huahong Co.Ltd 1,047.66 942.30
Sinopharm Holding Beijing Co., Ltd. 1,035.28 950.87
Sinopharm Holding Shandong Co., Ltd. 1,022.69 267.35
Sinopharm Holding Hainan Co., Ltd. 1,000.59 860.91
Sinopharm Holding Tianjin Co., Ltd. 752.60 552.46
Sinopharm Group (Tianjin) Eastern Bokang
Pharmaceutical Co., Ltd. 722.92 626.75
Sinopharm Group Southwest Medicine Co., Ltd 694.27 1,451.10
Sinopharm Group Xinjiang Special Drugs
National Pharmaceutical Co.,Ltd. 686.98 1,323.44
Sinopharm Group Medicine Logistic Co., Ltd. 677.85 445.96
Sinopharm Holding Zhejiang Co.Ltd 669.05 692.43
Foshan Nanhai Medicine Co.,Ltd. 665.49 447.41
Sinopharm Le -Ren-Tang Medicine Co., Ltd. 629.13 604.94
Sinopharm Holding Sub Marketing Center Co.,
Ltd. 595.05 438.38
Sinopharm Holding Nantong Co., Ltd. 557.11 250.37
Sinopharm Holding Ningxia Co., Ltd. 547.86 482.16
Sinopharm Guoda Drug Store Guangxi Chain
Co.,Ltd 531.47 688.36
Sinopharm Holding Hainan Hongyi Co., Ltd. 501.28 395.11
Sinopharm Holding Shenyang Co., Ltd. 441.83 479.55
Sinopharm Holding Chongqing Co., Ltd. 383.41 807.28
Sinopharm Group 338.78 286.31
Sinopharm Holding Wenzhou Co., Ltd 280.58 204.36
Sinopharm Holding Yunnan Co., Ltd. 271.66 212.85
Sinopharm Holding Shanxi Co., Ltd. 259.97 143.89
Sinopharm Holding Xinjiang Special Drugs
Western Pharmaceutical Co.,Ltd. 234.80 395.01
Guangdong Dong Fang Uptodate & Special
Medicines Co. 224.42 365.45
Sinopharm Holding Fuzhou Co., Ltd. 187.42 133.50
Sinopharm Holding Yangzhou Co., Ltd. 183.86 138.01
Sinopharm Holding Gansu Co., Ltd. 151.93 277.31
China National Medicines Co.,Ltd. 150.66 148.57
Sinopharm Holding Shanxi Co., Ltd 150.60 128.53
Sinopharm Holding Jinzhou Co., Ltd. 150.25 268.06
Sinopharm Holding Henan Co., Ltd. 135.34 85.69
Sinopharm Holding Heilongjiang Co., Ltd. 131.12 73.12
Sinopharm Holding Shanxi Co., Ltd. 106.24 46.94
- 161 -
Shanghai Chaohui Pharmecurical Co., Ltd. 105.99 55.33
Sinopharm Group Wei qida Medicine Co., Ltd 95.19 104.81
Sinopharm Holding Xuzhou Co., Ltd. 72.43 31.75
Sinopharm Holding Jilin Co., Ltd. 70.59 22.91
Shanghai Yunnuo Marketing Consulting Co.,
Ltd. 68.55 -
Sinopharm Holding Guoda Pharmaceutical
Chain Co., Ltd 32.73 -
Sinopharm Holding Dalian Co., Ltd. 55.02 48.34
Next page 24,666.59 21,142.63
- 162 -
VI Related party transactions (continued)
(5) Accounts receivable from and payables to related parties (continued)
30 June 2013 31 December 2012
(RMB’0000) (RMB’0000)
Accounts continued
receivable 24,666.59 21,142.63
Sinopharm Holding Guoda Pharmacy Co.,Ltd 40.10 52.46
Sinopharm Holding Shanghai Likang
Pharmaceutical Co., Ltd. 45.04 15.96
Sinopharm Holding Suzhou Co., Ltd. 41.79 43.53
Sinopharm Holding Taizhou Co., Ltd. 36.70 20.40
Sinopharm Holding Yancheng Co., Ltd. 35.76 31.72
Guang dong South National Pharmaceutical
Foreign Trade Co.,Ltd. 32.42 61.92
Sinopharm Holding Jiangsu Co., Ltd. 29.67 21.83
Sinopharm Holding Tianjin North Medicine Co.,
Ltd. 28.66 34.77
Sinopharm Holding Guizhou Co., Ltd. 28.24 40.45
Sinopharm Holding Fujian Co., Ltd. 26.61 27.42
Sinopharm Holding Inner Mongolia Co., Ltd. 25.88 58.79
Sinopharm Holding Qinghai Co., Ltd. 25.24 14.03
Sinopharm Holding Changzhou Medical
logistics center Co., Ltd. 24.82 18.95
Sinopharm Holding Wuxi Co., Ltd. 23.50 33.68
Sinopharm Holding Jiangxi Co., Ltd. 23.32 0.59
Sinopharm Holding Putian Co., Ltd. 21.08 6.20
Sinopharm Holding Changde Co., Ltd. 19.28 11.71
Sinopharm Holding Ningde Co., Ltd. 18.22 11.70
Sinopharm Holding Longyan Co., Ltd. 16.66 18.98
Sinopharm Holding Yangzhou Co., Ltd.
Western Medicine Branch Company 7.25 19.24
Sinopharm Holding Changzhou Co., Ltd. 6.34 5.26
Sinopharm Holding Guoda Pharmacy
Guangzhou Chain Co., Ltd. in 3.52 14.26
Sinopharm Holding Sanming Co., Ltd 3.41 0.52
Sinopharm Holding Huaian Co.,Ltd 3.06 4.76
Sinopharm Holding Yantai Co., Ltd 2.66 12.53
Shanxi Guoyi Pharmacy Co., Ltd. 1.82 -
Sinopharm Holding Anqing Co., Ltd. 1.57 4.25
Sinopharm Jiankun(Beijing) Medicine Co., Ltd. 1.37 -
Sinopharm Holding Jingmen Co., Ltd. 0.80 -
Sinopharm Holding Zhoukou Co., Ltd. 0.70 -
Sinopharm Holding Linyi Co., Ltd 0.62 -
Heilongjiang Sinopharm Medical Herbs
Co.,Ltd. 0.60 -
Sinopharm Jiankang Industry(Shanghai) Co.,
Ltd. 0.44 -
Sinopharm Holding Qian Southwest Co., Ltd. 0.24 -
Sinopharm Holding Hebei Medcine Co., Ltd. - 56.49
Sinopharm Holding Jinan Co., Ltd. - 6.05
Sinopharm Holding HongKong Co.,Ltd - 4.89
- 163 -
Sinopharm Holding Lishui Co., Ltd - 0.50
Chongqing Yaoyou Pharmaceutical Co.,Ltd. - 910.08
Sinopharm Holding Xinjiang New Kashi
Pharmaceutical Co.,Ltd - 2.78
Sinopharm Holding Shangluo Co.,Ltd - 1.28
Sinopharm Holding Shiyan Co.,Ltd - 1.13
Total 25,243.98 22,711.74
- 164 -
VI Related party transactions (continued)
(5) Accounts receivable from and payables to related parties (continued)
30 June 2013 31 December 2012
(RMB’0000) (RMB’0000)
Other
Sinopharm Group Medicine Logistic Co., Ltd.
receivable 121.50 121.50
30 June 2013 31 December 2012
(RMB’0000) (RMB’0000)
Advances to Sinopharm Chongqing Pharmaceutical and
suppliers Medical Industry Design Institute 236.80 125.00
Sinopharm Group Chemical Reagent Suzhou
Co., Ltd. 132.75 -
China National Scientific Instruments &
Materials Corporation 25.38 8.46
Shanghai Pharmaceutial Industry Research
Institute 10.00 -
China National Medicines Co.,Ltd. 1.45 -
Sinopharm Holding Guoda Drug Store
Guangdong Co., Ltd. 1.44 -
Sinopharm Group Wei qida Medicine Co., Ltd 1.33 -
Reed Sinopharm Exhibitions Co., Ltd. 1.00 -
Shanghai Sailun Biological Technology
Co.,Ltd. 0.32 -
Chengdu Rongsheng Pharmacy Co., Ltd. - 383.40
Wuhan Institute of Biological Products Co. Ltd - 235.50
Qinghai Pharmaceutical Factory Co.,Ltd - 74.99
Sinopharm Holding Sub Marketing Center Co.,
Ltd. - 3.99
Sinopharm Group Meitai Medical Equipment
(Shanghai) Co., Ltd. - 0.18
Sinopharm Group - 0.07
410.47 831.59
30 June 2013 31 December 2012
(RMB’0000) (RMB’0000)
Sinopharm Holding Sub Marketing Center Co.,
Notes payable Ltd. 18,378.39 17,575.76
Sinopharm Group 6,800.80 3,243.41
China National Medicines Co.,Ltd. 1,578.63 -
Chongqing Haisiman Pharmaceutical Co.,Ltd. 521.65 241.24
Wanle Medical 210.31 87.20
Chongqing Yaoyou Pharmaceutical Co.,Ltd. 176.95 109.18
Jiangsu Wanbang Pharmacy Marketing Co.,
Ltd. 164.79 -
Sinopharm Holding Beijing Co., Ltd. 50.98 -
Sinopharm Group Rongsheng Pharmaceutical
Co.,Ltd 41.29 17.69
Shanghai Shyndec Pharmaceutical Co., Ltd. 11.47 10.77
- 165 -
Sinopharm Group Chemical Reagent Suzhou
Co., Ltd. 5.28 17.76
Sinopharm Group Wei qida Medicine Co., Ltd - 165.57
27,940.54 21,468.58
- 166 -
VI Related party transactions (continued)
(5) Accounts receivable from and payables to related parties (continued)
30 June 2013 31 December 2012
(RMB’0000) (RMB’0000)
Accounts Sinopharm Holding Sub Marketing Center
payable Co., Ltd. 20,918.23 22,066.69
Sinopharm Group 4,879.96 5,586.91
China National Medicines Co.,Ltd. 3,540.15 2,504.04
Sino-Swed Pharmaceutical Corp.Ltd. 924.45 964.64
Guang dong South National Pharmaceutical
Foreign Trade Co.,Ltd. 628.90 467.66
Wanle Medical 586.23 674.82
Foshan Yingtian Pharmaceutical trading Co.,
Ltd 345.83 -
Shenzhen Wanwei Medicine trading Co., Ltd 309.92 276.87
Chongqing Yaoyou Pharmaceutical Co.,Ltd. 296.16 167.12
Jiangsu Wanbang Pharmacy Marketing Co.,
Ltd. 288.65 309.78
Sinopharm Holding Jiangsu Co., Ltd. 230.53 -
Sinopharm Holding Hunan Co., Ltd. 130.52 -
Lanzhou Institute of Biological Products Co.,
Ltd. 125.14 -
Chongqing Haisiman Pharmaceutical
Co.,Ltd. 102.23 295.93
Sinopharm Holding Beijing Huahong Co.Ltd 86.50 -
China National Pharmaceutical Foreign
Trade Corporation 66.95 1,173.76
Sinopharm Group Medicine Logistic Co., Ltd. 55.74 30.05
Shanghai Shyndec Pharmaceutical Co., Ltd. 53.12 24.60
Shanghai Institute of Biological Products Co.
Ltd 46.23 -
Sinopharm Holding Beijing Co., Ltd. 39.88 10.55
Sinopharm Group Rongsheng
Pharmaceutical Co.,Ltd 38.19 -
Sinopharm Holding Guizhou Co., Ltd. 37.54 142.27
Foshan Nanhai Uptodate & Special
Medicines Co.,Ltd. 32.91 5.59
Sinopharm Holding Fuzhou Co., Ltd. 32.05 -
Shandong Luya Pharmaceutical Co., Ltd 30.06 -
Guangdong Dong Fang Uptodate & Special
Medicines Co. 24.46 31.77
Yingtian Pharmaceutical Group Co., Ltd. 23.96 -
Qinghai Pharmaceutical Factory Co.,Ltd 17.20 -
Sinopharm Group Chemical Reagent Co.,
Ltd. 15.66 0.08
Handan Pharmaceutical Co.,Ltd 15.59 3.40
Guilin South pharmaceutical Co., Ltd 12.20 11.24
Sinopharm Holding Hainan Co., Ltd. 12.07 9.05
China Otsuka Pharmaceutical Co.,Ltd. 11.68 15.24
Sinopharm Holding Fujian Co., Ltd. 9.51 260.90
Foshan Dezhong Pharmaceutical Co., Ltd 5.36 -
Sinopharm Holding Dezhou Co., Ltd. 4.72 -
- 167 -
Hunan Dongting Pharmaceutical Co., Ltd. 4.41 -
Sinopharm Holding Hainan Hongyi Co., Ltd. 3.49 -
Wuhan Zhonglian Pharmaceutical Group
Co. LtD 2.71 2.70
Shenyang Hongqi Pharmaceutical Co.,Ltd. 2.63 1.26
Foshan Nanhai Medicine Co.,Ltd. 2.51 3.88
Yichang Humanwell Pharmaceutical Co.,Ltd. 2.44 3.69
Guangdong Global Pharmaceutical Co., Ltd. 2.28 -
Wuhu Sanyi Pharmaceutical Co., Ltd. 1.79 -
Sinopharm Group Shanghai Medicine
Device Co., Ltd. 1.66 3.16
Next page 34,002.40 35,047.65
- 168 -
VI Related party transactions (continued)
(5) Accounts receivable from and payables to related parties (continued)
30 June 2013 31 December 2012
(RMB’0000) (RMB’0000)
Accounts
continued
payable 34,002.40 35,047.65
Sinopharm Holding Liaocheng Co., Ltd. 1.62 -
Sinopharm Holding Hubei Co., Ltd. 0.92 10.00
Sinopharm Group Beijing Medical equipment
Co.,Ltd 0.88 0.88
Shanghai Chaohui Pharmecurical Co., Ltd. 0.75 0.75
Shanghai Sailun Biological Technology
Co.,Ltd. 0.56 0.29
Sinopharm Holding Zhangzhou Co., Ltd. 0.50 -
Wuhan Zhonglian Pharmaceutical Group Co.
LtD 0.26 0.26
Shanghai Modern Hasen (Shangqiu)
Pharmacertical Co.Ltd 0.21 0.99
Sinopharm Holding Sanyi Medicine (Wuhu)
Co., Ltd. 0.17 -
Xiamen Xingsha Huaideju Pharmaceutical
Co.,Ltd 0.11 0.11
Chengdu Rongsheng Pharmacy Co., Ltd. 0.08 1.84
Shanghai Fosun Pharmaceutical Co., Ltd. 0.02 0.02
Sinopharm Group Wei qida Medicine Co., Ltd 0.02 152.66
Foshan Fengliaoxing Pharmaceutical Co.,
Ltd 0.01 -
Sichuan Jiang You Zhong Ba Science and
Technology Development Co.,Ltd. - 1.65
Sinopharm Holding Pharmaceutical Chain
Co., Ltd - 0.39
Sinopharm Yixin Medicine Co.,Ltd. - 40.24
Sinopharm Holding Suzhou Co., Ltd. - 36.50
Sinopharm Group Guorui Medicine Co.,Ltd. (0.10) 0.72
Total 34,008.41 35,294.95
30 June 2013 31 December 2012
(RMB’0000) (RMB’0000)
Other payables Sinopharm Group 565.07 393.07
Sinopharm Group Medicine Logistic Co., Ltd. 354.00 -
Yang Wenjie 203.70 203.70
China National Pharmaceutical Group
Shanghai Co.,Ltd 166.04 166.04
China National Corp of Traditional and Herbal
Medicine 150.00 150.00
Guangdong Dong Fang Uptodate & Special
Medicines Co. 56.76 56.76
Shanghai Pharmaceutial Industry Research
Institute 75.00 75.00
Sinopharm Holding Guoda Pharmacy
Guangzhou Chain Co., Ltd. in 45.00 -
- 169 -
Tan Min 40.74 40.74
Jiang Jianmin 40.74 40.74
Zhou Weilin 40.74 40.74
Fang Zhongqing 40.74 40.74
Kang Liting 40.74 40.74
Sinopharm United Engineering Corporation 16.00 16.00
China National Medicines Co.,Ltd. 14.49 14.49
Sinopharm Group Shanghai Medicine Device
Co., Ltd. 4.40 3.00
Sinopharm Holding Shanxi Co., Ltd. 1.50 1.50
Sinopharm Holding Tianjin Co., Ltd. 1.00 1.00
Next page 1,856.66 1,284.26
- 170 -
VI Related party transactions (continued)
(5) Accounts receivable from and payables to related parties (continued)
30 June 2013 31 December 2012
(RMB’0000) (RMB’0000)
Other payables continued 1,856.66 1,284.26
Sinopharm Group (Tianjin) Eastern Bokang
Pharmaceutical Co., Ltd. 1.00 1.00
Sinopharm Group Southwest Medicine Co.,
Ltd 0.50 0.50
Sinopharm Holding Hubei Co., Ltd. 0.50 0.50
Sinopharm Holding Yangzhou Co., Ltd.
Western Medicine Branch Company 0.50 0.50
Sinopharm Holding Taizhou Co., Ltd. 0.50 0.50
Sinopharm Holding Wuxi Co., Ltd. 0.50 0.50
Sinopharm Le -Ren-Tang Medicine Co., Ltd. 0.50 0.50
Sinopharm Holding Sub Marketing Center
Co., Ltd. 0.50 0.50
China National Scientific Instruments &
Materials Corporation - 10.10
1,861.16 1,298.86
30 June 2013 31 December 2012
(RMB’0000) (RMB’0000)
Advances from
customers Chongqing Yaoyou Pharmaceutical Co.,Ltd. 568.80 -
Sinopharm Guoda Drug Store Guangxi
Chain Co.,Ltd 9.47 9.47
Sinopharm Group Xinjiang Special Drugs
National Pharmaceutical Co.,Ltd. 0.21 -
Sinopharm Holding Chongqing Co., Ltd. 0.11 -
Sinopharm Holding Zhangzhou Co., Ltd. - 3.08
Sinopharm Le -Ren-Tang Medicine Co., Ltd. - 1.34
Sinopharm Holding Nanjing Co., Ltd. - 0.29
Guangdong Dong Fang Uptodate & Special
Medicines Co. - 30.27
Sinopharm Holding Henan Co., Ltd. - 0.63
578.59 45.08
30 June 2013 31 December 2012
(RMB’0000) (RMB’0000)
Interests
payable Sinopharm Group Financial Co.,Ltd 29.70 47.12
30 June 2013 31 December 2012
(RMB’0000) (RMB’0000)
Other non-current
liabilities Sinopharm Group 3,506.18 3,506.18
- 171 -
30 June 2013 31 December 2012
(RMB’0000) (RMB’0000)
Short-term borrowings Sinopharm Group Financial Co.,Ltd 19,800.00 26,200.00
30 June 2013 31 December 2012
(RMB’0000) (RMB’0000)
Cash at related party Sinopharm Group Financial Co.,Ltd 3,403.42 12.38
VII Contingencies
As at 30 June 2013, there is no material contingency of the Group
VIII Commitments
(1) Capital commitments
Capital expenditures contracted for at the balance sheet date but not recognised in balance sheet are
anaylsed as follows:
30 June 2013 31 December 2012
(RMB’0,000) (RMB’0,000)
Buildings, machinery and equipment 9,304.20 7,129.45
(2) Operating lease commitments
The future minimum lease payments due under the signed irrevocable operating leases contracts are
summarised as follows:
30 June 2013 31 December 2012
(RMB’0,000) (RMB’0,000)
Within one year 2,992.31 1,605.68
Between 1 and 2 years 1,861.80 1,389.87
Between 2 and 3 years 1,871.44 1,287.97
Over 3 years 16,422.63 9,282.60
23,148.18 13,566.12
(3) Execution of commitments of prior years
The Group has fulfilled the commitments as of 31 December 2012 according to the relevant contracts.
IX Subsequent events after the balance sheet date
- 172 -
Major subsequent events after the balance sheet date
(1) The Company intends to have a non-public offering of 74,482,543 A shares to the holding company
Sinopharm Group at the price of Rmb26.07 per share, which was priced by 90% of the average trading
price of 20 trading days before the pricing benchmark. Till the report date, the offering still needs the
approval of the Issuance of State-owned Assets Supervision and Administration department and the
China Securities Regulatory Commission.
(2) The Company already settled the payment of short-term bond of RMB400
million in due date on 10 August 2013. Application for the second
offering of the short-term bond of RMB400 million would be submitted to
National Association of Financial Market Institutional Investors for
approval.
(3) Plan of the Pingshan Project is in revision, management of the Company
estimates that total budget would exceed RMB350 million as originally
planned. Proposal for Pingshan project revision will be effective after
approved by directors and shareholders of the Company.
- 173 -
X Notes to the main items of financial statement of the Company
(1) Accounts receivable
30 June 2013 31 December 2012
Accounts receivable 421,660,032.59 365,858,022.77
less：provision for bad debts (1,169,085.93) (1,169,085.93)
420,490,946.66 364,688,936.84
(a) The aging of accounts receivable is analysed below:
30 June 2013 31 December 2012
Balance Balance
aging provision for bad provision for bad
Percentage( debts Percent debts
Amount Amount
%) age(%)
Within 1
year
420,490,946.66 99.72% - 364,688,936.84 99.68% -
1 to 2 years - - - - - -
2 to 3 years - - - - - -
Over 3 years 1,169,085.93 0.28% (1,169,085.93) 1,169,085.93 0.32% (1,169,085.93)
Total 421,660,032.59 100.00% (1,169,085.93) 365,858,022.77 100.00% (1,169,085.93)
(b) The accounts receivable and related provision for bad debts by category are analysed below:：
30 June 2013 31 September 2012
Balance provision for bad debts Balance provision for bad debts
Amount % of total Amount rate Amount % of total Amount rate
balance balance
Receivable accounts
within similar credit
risk group 420,490,946.66 99.72% - - 364,688,936.84 99.68% - -
Individually not
significant but
individually
evaluated for
impairment 1,169,085.93 0.28% (1,169,085.93) 100.00% 1,169,085.93 0.32% (1,169,085.93) 100.00%
421,660,032.59 100.00% (1,169,085.93) 0.28% 365,858,022.77 100.00% (1,169,085.93) 0.32%
- 174 -
X Notes to the main items of financial statement of the Company (continued)
(1) Accounts receivable (continued)
(c) As at 30 June 2013，accounts receivable individually not significant but individually evaluated for
impairment are analysed below:
provision for % of
Per book bad debts provision Reason
Guangdong Liyuan
Pharmaceutical Disputed receivables with
Co., Ltd. 1,169,085.93 (1,169,085.93) 100% uncertainty in recoverability
(d) As at 30 June 2013, there is no accounts receivable due from shareholders who holds more than 5%
(including 5%) shares of the Company (31 December 2012: Nil).
(e) As at 30 June 2013，the top five accounts receivable by customer are analysed as below:
Relationship Aging % of the total accounts
Entity with the Amount receivable
Company
Shenzhen People’s Hospital The third party 31,369,340.37 Within 1 year 7.44%
Shenzhen Second People’s Within 1 year
The third party 27,168,501.03 6.44%
Hospital
Peking University Shenzhen Within 1 year
The third party 22,689,364.07 5.38%
Hospital
Shenzhen Baoan People’s Within 1 year
The third party 19,587,100.05 4.65%
Hospital
Shenzhen Traditional Chinese Within 1 year
The third party 18,427,379.34 4.37%
Medicine Hospital
Total -- 119,241,684.86 -- 28.28%
(f) Accounts receivable due from related party:
As at 30 June 2013，there are accounts receivable of RMB27,030,108.36 due from related party (31
December 2012: RMB23,963,914.86), which is 6.41% of the total accounts receivable (31 December
2012: 6.55%), without any bad debt provided.
(g) In 30 June 2013, accounts receivable of RMB115,552,613.39 are derecognized given that irrevocable
factoring contracts agreed with financial institute (2012: RMB189,149,295.62).
(2) Other receivables
30 June 2013 31 December 2012
- 175 -
Amounts due from subsidiaries(Note h) 976,801,366.57 967,467,455.73
Receivable from equity transaction 8,980,000.00 8,980,000.00
Margin receivables and deposits 162,848.64 144,348.64
Others 6,246,052.02 5,476,351.55
992,190,267.23 982,068,155.92
less：provision for bad debts (10,208,164.60) (10,208,164.60)
981,982,102.63 971,859,991.32
- 176 -
X Notes to the main items of financial statement of the Company (continued)
(2) Other receivable (continued)
(a) Other receivable aging is analysed as follows:：
30 June 2013 31 December 2012
Within 1 year 980,441,524.91 971,856,835.49
1 to 2 years 1,537,421.89 69,953.95
2 to 3 years 73,460.43 1,161,366.48
Over 3 years 10,137,860.00 8,980,000.00
992,190,267.23 982,068,155.92
(b) The aging of other receivables is analysed as follows:：
30 June 2013 31 September 2012
Balance provision for bad debts Balance provision for bad debts
Amount % of Amount rate Amount % of Amount rate
total total
amount amount
Individually significant 8,980,000.00 0.91% (8,980,000.00) 100.00% 8,980,000.00 0.91% (8,980,000.00) 100.00%
are subject to
separate
impairment
assessment
Receivable accounts 980,445,031.39 98.82% (350.65) 0.00% 971,860,341.97 98.96% (350.65) 0.00%
within similar
credit risk group
Individually not 2,765,235.84 0.27% (1,227,813.95) 44.40% 1,227,813.95 0.13% (1,227,813.95) 100.00%
significant but
individually
evaluated for
impairment
992,190,267.23 100.00% (10,208,164.60) 1.03% 982,068,155.92 100.00% (10,208,164.60) 1.04%
(c) As at 30 June 2013，impairment provision for other receivables individually significant is analysed as
below.
provision for bad Assessment for
Per book debts Rate impairment
Shenzhen Yinghai
Technology Investment Uncertainty in
Co., Ltd. 8,980,000.00 (8,980,000.00) 100.00% recoverability
(d) Provisions for impairment of the receivables which have a similar risk group are analysed below:
30 June 2013 31 December 2012
Balance Balance
provision for bad debts provision for bad debts
Amount Percentage Amount rate Amount Percentage Amount rate
- 177 -
Within 1 year 980,441,524.91 100.00% - - 971,856,835.49 100.00% - -
2 to 3 years 3,506.48 0.00% (350.65) 10.00% 3,506.48 0.00% (350.65) 10.00%
980,445,031.39 100.00% (350.65) 0.00% 971,860,341.97 100.00% (350.65) 0.00%
- 178 -
X Notes to the main items of financial statement of the Company (continued)
(2) Other receivable (continued)
(e) As at 30 June 2013，other receivables individually not significant but individually evaluated for
impairment are analysed below:
provision for Assessment for
Balance bad debts Rate impairment
Shenzhen Health Food I&E Uncertainty in
Co. Ltd. 1,157,860.00 (1,157,860.00) 100.00% recoverability
Uncertainty in
Other 1,607,375.84 (69,953.95) 4.35% recoverability
2,765,235.84 (1,227,813.95) 44.40%
(f) As at 30 June 2013，there is no amount due from shareholders who holds more than 5% (including
5%) shares of the Company (31 December 2012: Nil).
(g) As at 30 June 2013，the top five other receivables by customer are analysed below:
Relationship % of the total
with the other
Company Amount Aging receivable
Sinopharm Guangxi Subsidiary 213,204,721.36 Within 1 year 21.49%
Sinopharm Yuexing Subsidiary 150,628,901.20 Within 1 year 15.18%
Sinopharm Zhanjiang Subsidiary 130,155,555.55 Within 1 year 13.12%
Sinopharm Hengxing Subsidiary 85,373,694.43 Within 1 year 8.60%
Sinopharm Foshan Subsidiary 51,568,222.23 Within 1 year 5.20%
630,931,094.77 63.59%
(h) Other receivables due from related parties are analysed as below:
As at 30 June 2013, there are other receivables of RMB976,801,366.57 due from related party (31
December 2012: RMB967,467,455.73), which is 98.45% of the total other receivables (31 December
2011: 98.51%), without any bad debt provided (31 December 2012: Nil).
(3) Long-term equity investments
30 June 2013 31 September 2012
Investments in subsidiaries (a) 1,455,718,721.07 1,355,718,721.07
Investments in associates (b) 111,444,830.84 121,019,845.50
1,567,163,551.91 1,476,738,566.57
- 179 -
less：provision for impairment of long-term
equity investments (Note(c)) (7,689,226.69) (7,689,226.69)
1,559,474,325.22 1,469,049,339.88
The long-term equity investments of the Company are not subject to restriction on conversion into
cash.
- 180 -
X Notes to the main items of financial statement of the Company (continued)
(3) Long-term equity investments (continued)
(a) Subsidiaries
Increases/(decreases) Equity interest Voting rights held
Accounting method Original investment cos 31 December 2012 in investment cost 30 June 2013 held (%) (%)
Zhijun Pharm Cost method 73,903,284.87 204,903,284.87 - 204,903,284.87 100 100
Sinopharm
Jianmin Cost method 45,054,911.04 45,054,911.04 - 45,054,911.04 100 100
Sinopharm
Materials Cost method 5,400,000.00 6,450,875.93 - 6,450,875.93 100 100
Sinopharm
Logistics Cost method 900,000.00 1,019,062.68 - 1,019,062.68 100 100
Sinopharm
Guangzhou Cost method 58,283,114.68 435,440,323.63 - 435,440,323.63 100 100
Zhijun Trade Cost method 3,006,866.42 3,006,866.42 - 3,006,866.42 100 100
Sinopharm
Hengxing Cost method 8,421,544.08 35,763,288.00 - 35,763,288.00 100 100
Training center Cost method 30,000.00 30,000.00 - 30,000.00 100 100
Sinopharm
liuzhou Cost method 21,407,965.79 21,407,965.79 - 21,407,965.79 51 51
Sinopharm
Dongguan Cost method 2,742,000.00 9,942,000.00 - 9,942,000.00 100 100
Huixin
Investment Cost method 109,416,937.72 64,416,937.72 - 64,416,937.72 100 100
Guangdong
Logistics Cost method 1,269,502.30 5,596,006.21 - 5,596,006.21 100 100
Sinopharm
Yuexing Cost method 16,459,326.27 43,459,326.27 - 43,459,326.27 100 100
Sinopharm Cost method 6,995,065.51 14,995,065.51 - 14,995,065.51 100 100
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Foshan
Zhijun Suzhou Cost method 134,250,000.00 165,900,000.00 100,000,000 265,900,000.00 100 100
Sinopharm
Guangxi Cost method 33,048,985.28 104,048,985.28 - 104,048,985.28 100 100
Sinopharm
Zhanjiang Cost method 1,369,864.65 15,769,864.65 - 15,769,864.65 100 100
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X Notes to the main items of financial statement of the Company (continued)
(3) Long-term equity investments (continued)
(a) Subsidiaries(continued)
Increases/(decreases) Equity interest Voting rights held
Accounting method Original investment cos 31 December 2012 in investment cost 30 June 2013 held (%) (%)
Sinopharm Cost method
Yanfeng 38,207,800.00 38,207,800.00 - 38,207,800.00 51 51
Sinopharm Cost method
Meizhou 4,481,900.00 4,481,900.00 - 4,481,900.00 100 100
Shenzhen Cost method
Medical 37,850,830.38 37,850,830.38 - 37,850,830.38 100 100
Sinopharm Cost method
Huizhou 20,939,177.19 5,644,200.00 - 5,644,200.00 100 100
Shenzhen Cost method
Trade 7,689,226.69 7,689,226.69 - 7,689,226.69 100 100
Sinopharm Cost method
Zhaoqing 5,060,000.00 5,060,000.00 - 5,060,000.00 100 100
Sinopharm Cost method
Jiangmen 56,000,000.00 56,000,000.00 - 56,000,000.00 100 100
Sinopharm Cost method
Zhongshan 10,000,000.00 10,000,000.00 - 10,000,000.00 100 100
Sinopharm Cost method
Shaoguan 13,580,000.00 13,580,000.00 - 13,580,000.00 70 70
1,355,718,721.07 100,000,000 1,455,718,721.07
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X Notes to the main items of financial statement of the Company (continued)
(3) Long-term equity investments (continued)
(b) Associates
Movement
Equity Voting Explanation for
interest rights the
held held (%) inconsistence
(%) between equity
interest held
Accounting Initial and voting rights
method investment 31 December 2012 Share of profit or loss Dividend declared 30 June 2013 held
Board of the
directors is the
highest decision
making
Wanle MedicalEquity method 4,457,400.00 121,019,845.50 18,576,985.34 (28,152,000.00) 111,444,830.84 35.19 33.33 organization, which
is formed by 2
shareholder of
Wanle Medical
evenly
121,019,845.50 18,576,985.34 (28,152,000.00) 111,444,830.84
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X Notes to the main items of financial statement of the Company (continued)
(3) Long-term equity investments (continued)
(c) Provision for impairment of long-term equity investments
Increase in Decrease in
31 December 2012 Current year Current year 31 June 2013
31 December 2011
Shenzhen Trade 7,689,226.69 - - 7,689,226.69
(4) Sales and cost of sales
Year 2013 January to June Year 2012 January to June
Revenue of main operations 1,189,379,218.09 1,058,403,057.36
Other operating income 4,062,055.85 3,510,823.22
1,193,441,273.94 1,061,913,880.58
Year 2013 January to June Year 2012 January to June
Cost of main operations 1,140,794,978.30 1,008,100,639.25
Other operating expenses 1,872,163.40 1,425,920.58
1,142,667,141.70 1,009,526,559.83
(a) Revenue of main operations and Cost of main operations
Analysed by industry:
Year 2013 January to June Year 2012 January to June
Revenue of main Cost of main Revenue of main Cost of main
operations operations operations operations
Pharmaceutical
distribution 1,189,379,218.09 1,140,794,978.30 1,058,403,057.36 1,008,100,639.25
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X Notes to the main items of financial statement of the Company (continued)
(4) Revenue of main operations and Cost of main operations (continued)
(b) Main operations by district
Year 2013 January to June Year 2012 January to June
District
Revenue Cost Revenue Cost
Domestic sales 1,189,379,218.09 1,140,794,978.30 1,058,403,057.36 1,008,100,639.25
Total 1,189,379,218.09 1,140,794,978.30 1,058,403,057.36 1,008,100,639.25
(c) Top five customers are analysed as follows:
The sales to the top five customers of the Company totaling to RMB403,795,388.58 (Year 2012 January to
June: RMB225,878,839.42), which accounted for 33.83% (2012: 21.34%) of the total revenue from main
operations. Details are set out below:
Sales % of total revenue from main
operations
Sinopharm Jianmin 166,569,729.97 13.96%
Shenzhen People’s Hospital 75,447,314.66 6.32%
Shenzhen Second People’s Hospital 61,033,391.05 5.11%
Peking University Shenzhen Hospital 59,233,493.99 4.96%
Shenzhen Nanshan Center People’s Hospital 41,511,458.91 3.48%
403,795,388.58 33.83%
(5) Investment income
Year 2013 January to Year 2012 January to
June June
Long-term equity investments income in Cost 316,636,115.70
384,667,945.90
method (Note (a))
Long-term equity investments income in equity 16,016,159.76
18,576,985.34
method (Note (b))
Investment income from disposal of long-term
equity investment - 436,680.29
403,244,931.24 333,088,955.75
There is no significant restriction on the investment income remittance to the Company
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X Notes to the main items of financial statement of the Company (continued)
(5) Investment income (continued)
(a) Long-term equity investments income in Cost method
Investment income from the top five investees are analysed as below:
Year 2013 Year 2012 Reason of
January to June January to June Fluctuation
Zhijun Pharm 208,233,461.30 170,527,785.07 Profit increased
Sinopharm Guangzhou 111,653,923.40 99,439,823.03 Profit increased
Sinopharm Guangxi 30,056,575.76 30,121,638.83 Profit decreased
Sinopharm Yuexing 8,334,758.40 4,704,136.15 Profit increased
Sinopharm Jianmin 6,338,217.07 1,551,225.94 Profit increased
364,616,935.93 306,344,609.02
(b) Long-term equity investments income in equity method (Note (b))
Share of profit in an associated company
Year 2013 Year 2012 Reason of Fluctuation
January to June January to June
Wanle Medical 18,576,985.34 16,016,159.76 Profit increased
- 187 -
X Notes to the main items of financial statement of the Company (continued)
(6) Notes to cash flow statement
(a) Reconciliation of net profit to cash flows from operating activities
Year 2013 January to Year 2012 January to
June June
Net profit 415,274,263.68 326,019,343.36
Add：Provision for assets impairment 319,855.94 (87,845.57)
Depreciation of fixed assets and investment
3,651,261.19 3,762,686.67
properties
Amortisation of intangible assets 683,584.76 844,228.64
Amortisation of long-term prepaid expenses 553,549.62 569,556.30
Gains/(losses) on disposal of fixed assets - 23,154.69
Financial expenses 5,352,962.48 11,725,700.60
Investment income (403,244,931.24) (333,088,955.75)
(Decrease)/increase in deferred income tax assets (53,392.68) 2,298,245.25
Increase in inventories (20,585,829.83) 8,682,514.28
Decrease in operating receivables (94,100,583.70) (72,592,952.09)
Increase in operating receivables 81,163,369.55 99,800,033.57
(10,985,890.23) 47,955,709.95
(b) Net increase in cash
Year 2013 January to June Year 2012 January to June
Cash at end of year 141,911,747.30 144,950,816.05
less：cash at beginning of year (160,633,355.13) (164,840,499.86)
Net decrease in cash and cash
equivalents (18,721,607.83) (19,889,683.81)
X Notes to the main items of financial statement of the Company (continued)
(6) Notes to cash flow statement (continued)
- 188 -
(c) Cash and cash equivalents
30 June 2013 31 September 2012
Cash at bank and on hand 141,911,747.30 160,633,355.13
Less: restricted other cash balance - -
Cash at end of year 141,911,747.30 160,633,355.13
- 189 -
XI Non-routine items
Year 2012
Year 2013 January to June January to June
(Losses)/gains on disposal of non-current
assets 3,665.89 (8,813,780.88)
Government grants 12,384,950.86 17,984,705.34
Net profit gained for the period from 1 January
2011 to the date of business combination
under common control - (240,695.14)
Receivables impairment reversal by individual
assessment 469,770.27 -
Other non-operating (expenses)/income, net (12,371,947.75) (19,735,314.91)
486,439.27 (10,805,085.59)
Tax impact of above non-routine items 169,935.06 3,022,046.74
Share of minority interests of above
non-routine items after tax (41,883.12) (490,633.30)
614,491.21 (8,273,672.15)
Basis of preparation for non-routine items
According to the “Information Disclosures Requirement Interpretation for Listed Companies No.1 -
non-routine gain and loss”, non-routine gain and loss represent those gain or loss that are not related to
the daily operation of the Group or even if being related to the daily operation, separate disclosure of
these items will help a better understanding of results and profitability of the Group’s operation by
considering their nature and frequency.
XII Return on equity and earnings per share
Weighted average return Earnings per share
on equity
Basic earnings per share Diluted earnings per share
(%)
Year 2013 Year 2012 Year 2013 Year 2012 Year 2013 Year 2012
January to January to January to January to January to January to
June June June June June June
Consolidated net profit
attributable to the
shareholders of the
Company 13.81% 16.35% 0.905 0.833 0.905 0.833
Consolidated net profit
attributable to the
shareholders of the
Company, excluding
non-routine items 13.78% 16.92% 0.903 0.862 0.903 0.862
- 190 -
XIII Notes for significant fluctuation of major accounts in financial statements
Fluctuation with 30% or above, and balance accounting for 5% or above of total assets or
transaction accounting for 10% or above of profit before tax are analysed as below:
(1) Balance sheet items
Items Note 30 June 2013 31 December 2012 Increase / Margin
(decrease) Amount
consolidated consolidated
Cash and bank 1.1 892,437,822.56 953,992,070.61 (61,554,248.05) -6%
Notes receivable 1.2 755,579,086.01 650,860,240.37 104,718,845.64 16%
Accounts receivable 1.3 5,183,848,441.33 4,393,325,300.66 790,523,140.67 18%
Dividends receivable 1.4 28,152,000 - 28,152,000 100%
Inventory 1.5 1,719,167,536.68 1,734,679,063.78 (15,511,527.10) -1%
Other current assets 1.6 3,728,366.69 8,080,607.66 (4,352,240.97) -54%
Fixed assets 1.7 665,983,445.31 690,487,633.12 (24,504,187.81) -4%
Short-term borrowings 1.8 1,855,381,004.66 1,687,810,294.37 167,570,710.29 10%
Notes payable 1.9 1,263,380,691.48 1,105,275,538.24 158,105,153.24 14%
Accounts payable 1.10 3,503,374,828.56 3,197,354,275.46 306,020,553.10 10%
Taxes payable 1.11 79,707,226.64 51,390,674.43 28,316,552.21 55%
Interest payable 1.12 22,077,246.57 13,035,821.07 9,041,425.50 69%
Provisions 1.13 22,040,000.00 - 22,040,000.00 100%
Long-term payables 1.14 - 32,259.60 (32,259.60) -100%
Undistributed profit 1.15 1,591,804,015.15 1,382,882,906.24 208,921,108.91 15%
1.1 Mainly due to net cash inflow between operating activities and cash investing and financing activities increased.
1.2 Mainly due to increased sales.
1.3 Mainly due to increased sales.
1.4 Mainly due to cash dividends declared by associate, Wanle Medical.
1.5 Mainly due to the work in progress and finished goods in pharmaceutical companies decreased
1.6 Mainly due to the VAT overpaid decrease.
1.7 Mainly due to the depreciation.
1.8 Mainly due to the increase in discounted notes receivable and in credit loans.
1.9 Mainly due to the increase in purchases.
1.10 Mainly due to the increase in purchases.
1.11 Mainly due to the increase in sales and purchases and corporate earnings.
1.12 Mainly due to increased interest in short-term financing bonds.
1.13 Mainly due to provisions for the compensation of lawsuit.
1.14 Mainly due to the Company's subsidiary seniority workers’ compensation paid during the period.
1.15 Mainly due to the profit for the period due.
- 191 -
XIII Notes for significant fluctuation of major accounts in financial statements(continued)
(2) Income statement items
Items Note Year 2013 Year 2012 Increase / Margin
January to June January to June (decrease) Amount
consolidated consolidated
Sales 2.1 10,131,712,690.44 8,803,252,346.20 1,328,460,344.24 15%
Cost 2.2 9,279,455,305.53 7,967,951,745.26 1,311,503,560.27 16%
Selling and distribution
expenses 2.3 242,609,042.07 233,599,483.22 9,009,558.85 4%
Administration expenses 2.4 182,897,044.09 176,226,562.15 6,670,481.94 4%
Financial expenses – net 2.5 76,468,650.83 88,489,461.15 (12,020,810.32) -14%
Asset impairment losses 2.6 16,807,658.72 8,388,213.89 8,419,444.83 100%
Including: Loss on disposal of 2.7 28,872.00 8,985,832.50 (8,956,960.50) -100%
non-current assets
Minority interest 2.8 7,005,488.47 3,176,522.02 3,828,966.45 121%
2.1 Mainly due to the growth in sales.
2.2 Mainly due to increased sales, thus cost of sales increased.
2.3 Mainly due to increased sales scale and publicity.
2.4 Mainly due to the R & D and tax increases spending.
2.5 Mainly due to the current decrease in loans and financing rates.
2.6 Mainly due to the current limitation in antibiotic by the pharmaceutical industry and local bidding policy changes.
2.7 Mainly due to resettlement costs and losses caused by the disposal of non-current asset, which doesn’t happen in
this period.
2.8 Mainly due to the growth in net profit.
- 192 -
XIII Notes for significant fluctuation of major accounts in financial statements(continued)
(3) Cash flow item
Items Note Year 2013 Year 2012 Increase / Margin
January to June January to June (decrease) Amount
consolidated consolidated
Refund of taxes and surcharges 3.1 7,570,798.77 1,635,046.52 5,935,752.25 363%
Net cash flows from operating activities 3.2 238,276,873.08 138,909,868.17 99,367,004.91 72%
Cash received from disposal of investments 3.3 - 13,520,461.47 (13,520,461.47) 100%
Cash received from returns on investments 3.4 76,611.00 1,186,748.27 (1,110,137.27) -94%
Cash received relating to other investing
3.5 - 50,000,000.00 (50,000,000.00) 100%
activities
Cash paid to acquire fixed assets, intangible
3.6 31,240,049.89 100,816,136.04 (69,576,086.15) -69%
assets and other long-term assets
Net cash paid to acquire subsidiaries
3.7 - 24,618,888.24 (24,618,888.24) 100%
and other business units
Cash received from borrowings 3.8 335,703,705.83 542,234,155.37 (206,530,449.54) -38%
Cash received relating to other financing
3.9 - 379,293,299.15 (379,293,299.15) 100%
Activities
Including: Cash payments for dividends or
3.10 - 915,144.07 (915,144.07) 100%
profit to minority shareholders of subsidiaries
Cash repayments of borrowings 3.11 412,825,109.96 556,539,508.71 (143,714,398.75) -26%
Cash payments relating to other financing
3.12 48,947,088.25 367,370,000.00 (318,422,911.75) (87%)
activities
Effect of foreign exchange rate changes on
3.13 -1.48 8,041.08 (8,042.56) (100%)
cash
3.1 Mainly due to the Company's subsidiaries received tax refund because of government support policies and other reasons.
3.2 Mainly due to the sales grew when compared with the last year and the accelerating the return of receivables.
Mainly due to the bonus receipt from the associate Wanle Pharm during the same period last year, but the Company has not
3.3 yet received bonus this year.
3.4 Mainly due to less disposal of vehicles and other fixed assets in the current year.
3.5 Mainly due to in the same period last year, the subsidiary Guangxi Logistics received government grants because the
Government implemented the relocation of urban redevelopment.
Mainly due to the same period last year payment to completed works. But the current business with such large expenditures
3.6 does not exist this period.
3.7 Mainly due to payment to the newly acquired subsidiaries equity funds. But not the same matter exists this year.
3.8 Mainly due to the decreased scale of financing.
3.9 Mainly due to the decreased scale of financing.
3.10 Mainly due to the Company's subsidiary Sinopharm Yanfeng paid dividends to minority shareholders. But not the same matter
exists this year.
3.11 Mainly due to the decreased cash repayments.
3.12 Mainly due to the decrease of debt repayment this year.
- 193 -
3.13 Mainly due to the increased of foreign currency holdings.
- 194 -
Section IX. Documents Available for Reference
(I)Accounting Statements carried with the signature and seals of legal representative, chief
financial officer and person in charge of accounting;
(II)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;
(III)Semi-annual Report of 2013 carried with the personnel signature of the Chairman;
(IV)Other relevant files
- 195 -
