China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
August 2014
1
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
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 Zhou Feifei, person in charge of accounting organ
(accounting principal) hereby confirm that the Financial Report of the
Semi-Annual Report 2014 is authentic, accurate and complete.
2
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
Content
Semi-Annual Report 2014
Section I. Important Notice, Contents and Paraphrase ................................................................. 2
Section II Company profile ............................................................................................................... 5
Section III. Accounting data and summary of financial indexes ................................................... 7
Section IV. Report of the Board of Directors ................................................................................... 9
Section V. Important Events............................................................................................................ 20
Section VI. Changes in Shares and Particulars about Shareholders .......................................... 35
Section VII. Preferred Stock ........................................................................................................... 39
Section VIII. Directors, Supervisors and Senior Executives ........................................................ 40
Section IX Financial Report ............................................................................................................ 41
Section X. Documents Available for Reference ........................................................................... 208
3
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
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 Group Co., Ltd., the controlling shareholder of the
Sinopharm Holding Refers to
Company
“Twelfth Five-Year” Refers to Year of 2011 to 2015
Company Law Refers to Company Law of the People’s Republic of China
Securities Law Refers to Securities Law of the People’s Republic of China
Yuan, 10 thousand Yuan, 100 million Yuan Refers to RMB, RMB 10 thousand, RMB 100 million
Terminology: Refers to
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
That is CMS, and information system processing workflow &
Supply Chain Management Refers to
procurement, inventory & sales documents
Company profile Refers to
Sinopharm Refers to China National Pharmaceutical Group Corporation
Sinopharm (CNCM LTD) Refers to China National Medicines Corporation Ltd.
Sinopharm Holding Guangzhou Refers to Sinopharm Holding Guangzhou Co., Ltd.
Sinopharm Holding Guangxi Refers to Sinopharm Holding Guangxi Co., Ltd.
Sinopharm Holding Liuzhou Refers to Sinopharm Holding Liuzhou Co., Ltd.
Zhijun Pharmaceutical Refers to Shenzhen Zhijun Pharmaceutical Co., Ltd
China National Zhijun (Suzhou) Refers to China National Zhijun (Suzhou) Pharmaceutical Co., Ltd.
Zhijun Medicine Trading Refers to Shenzhen Zhijun Medicine Trading Co., Ltd.
Sinopharm TCM Refers to Sinopharm Holding Shenzhen Chinese Medicine Co., Ltd.
Main Luck Pharmaceuticals Refers to Shenzhen Main Luck Pharmaceuticals Inc.
4
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
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
Accord Pharm. Bldg., No. 15, Ba Gua Si Road, Futian District, Shenzhen
Contact adds.
Guangdong
Tel. +(86)755 25875195
Fax. +(86)755 25875147; +(86)755 25195435
E-mail 0028@szaccord.com.cn; gyyz0028@sinopharm.com
III. Others
1. Way of contact
Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or
not
□ Applicable √ Not applicable
Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period,
found more details in Annual Report 2013.
2. Information disclosure and preparation place
Whether information disclosure and preparation place changed in reporting period or not
□ Applicable √ Not applicable
5
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
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 2013.
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 2013.
6
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
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) 11,612,642,434.28 10,131,712,690.44 14.62%
Net profit attributable to shareholders of
349,213,988.51 260,794,678.64 33.90%
the listed company(RMB)
Net profit attributable to shareholders of
the listed company after deducting 326,526,104.00 260,180,187.43 25.50%
non-recurring gains and losses(RMB)
Net cash flow arising from operating
-484,715,807.96 238,276,873.08 -303.43%
activities(RMB)
Basic earnings per share (RMB/Share) 1.073 0.905 18.56%
Diluted earnings per share (RMB/Share) 1.073 0.905 18.56%
Weighted average ROE (%) 10.39% 13.81% -3.42%
Increase/decrease in this
End of current period End of last period report-end over that of last
period-end
Total assets (RMB) 12,490,101,653.57 11,057,896,941.31 12.95%
Net assets attributable to shareholder of
4,457,763,310.27 2,244,757,658.03 98.59%
listed company(RMB)
II. Items and amounts of extraordinary profit (gains)/loss
√ Applicable □ Not applicable
In RMB
Item Amount Note
Gains/losses from the disposal of non-current asset (including the
436,751.38
write-off that accrued for impairment of assets)
Governmental subsidy calculated into current gains and The enterprise supporting fund
losses(while closely related with the normal business of the
14,575,338.73 RMB 6.06 million allocated from
Company, excluding the fixed-amount or fixed-proportion
governmental subsidy according to the unified national standard) Nanning Economic and
7
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
Technological Development
Zone, the deferred income
recognized due to compensation
for removal project was
amortized RMB1.35 million in
the Period; special subsidy RMB
2.28 million from Shenzhen
High-tech industries and
education subsidy for the
strategic emerging industry brand
RMB one million
Reversal of impairment reserve for account receivable with
2,473,206.68
separate impairment testing
The RMB 11.86 million
compensation of Chebei lawsuit
Other non-operating income and expenditure except for the
12,116,477.87 that accrued last year was
aforementioned items
released according to the latest
lawsuit results
Less: impact on income tax 6,865,661.39
Influenced amount of minority shareholders’ equity (after tax) 48,228.76
Total 22,687,884.51 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to
the Public --- Extraordinary Profit/loss
8
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
Section IV. Report of the Board of Directors
I. Introduction
(I)Operating results for the first half year of 2014
During the reporting period, challenged by the complicated market conditions, the Company focused on
exploration and innovation, and completed the sales revenue indicators and various major working tasks as set for
the first half year. During the period from January to June, the Company realized sales revenue of RMB11.574
billion, representing a year-on-year increase of 14.88%, among which, RMB10.679 billion was contributed by the
distribution segment (representing a year-on-year increase of 15.92%) and RMB0.907 billion was contributed
by the pharmaceutical segment (representing a year-on-year increase of 3.78%). During the period from January
to June, the Company realized net profit attributable to shareholders of listed company of RMB0.349 billion,
representing a year-on-year increase of 33.90%, among which, RMB0.174 billion was contributed by the
distribution segment (representing a year-on-year increase of 25.31%) and pharmaceutical segment achieved
RMB 136 million net profit attributable to shareholder of listed company with a year-on-year growth of 14.48%
due to the sales recovery. The major works for the first half year are set out as follows:
1. Under the principal guidelines of compliant operation, he Company seeks for the best practice through model
study as supported by target management and innovation. The Company also inspires organization potentials
through promotion of innovation. By strengthening internal communication and optimizing resources allocation,
the Company realized improvement both in management efficiency and service efficiency. A non-public issuance
was completed in the reporting period, which helped the Company to decrease its gearing ratio to a level which
was lower than the average one of this industry; through intensified control on expenses, the overall expense ratio
decreased by 0.16 percentage points as compared to the corresponding period of last year. On the premise of gross
margin moved up slightly,, the Company improved its space for profit making.
2. Further network penetration by the distribution segment aims to build a smart supply chain and improve an
integrated operation platform.
1) Construction of smart supply chain recorded new progress. VMI united inventory management was gradually
realized in large scale, resulting in general extension of supply chain to upstream suppliers; logistics for Dongpu
Hospital, Military Hospital and other two hospitals formed samples, realizing effective extension of supply chain
management to downstream hospitals; PDA system will be applied soon, under which a visual system platform
will be built to make placing orders and distribution visual in Guangzhou and Shenzhen initially; as for Fosuan
region, integration of the three warehouses was completed and started normal operation, which speed up the
progress of “the sole inventory management” project in Guangdong and Guangxi provinces.
2) Continuous improvement of network coverage of distribution. Sinopharm Shantou Co., Ltd. has already
officially established in May and obtained approval from the relevant pharmaceutical regulatory authorities for
establishing subsidiaries in Hechi and Qinzhou of Guangxi province, the construction of which was in preparation;
9
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
14 companies (including pharmacy) passed the new version of GSP authentication; DTC pharmacy stores
increased to 10.
3) Sound integrated management system in Guangdong and Guangxi provinces. The integration of the basic
operation of these two provinces was promoted; out-of-municipal marketing center and purchase center were
established in respect of Guangxi distribution to enhance integrated management capability; integrated
procurement of Guangdong and Guangxi provinces was improved steadily, recorded a year-on-year increase of
31% in terms of integrated procurement amount for the first half year; an inspection manual of integration and
standardization was prepared, under which our various departments cooperated to implement inspection on
subsidiaries and improved management model for subsidiaries, i.e. “rolling management + site inspection”;
improved risk control model and promoted the same in subsidiaries, clients were managed based on several levels
to prevent risks.
4) Continuous promotion of innovative business and breakthrough realized in pharmacy trust. Sales revenue from
the basic drugs increased by 82% year on year; sales revenue from medical equipments increased by 22% year on
year; B2B sales service has been realized generally in the first half year, with 380 clients developed. And the
Company is seeking for B2C qualification proactively and aims to create value for its customers by fully taking
use of the online and offline resources.
5) As for distribution business segment, the sales of domestic products accounted for 49% and direct sales
accounted for 72%, indicating continuous improvement of varieties and business structure.
3. Pharmaceutical business segment promoted organization reform, optimized management procedure,
strengthened and improved the special function of the three centers aiming to improving its industrial platform,
increasing coordination between the internal and external resources and accelerating transformation of product
structure.
1) Built and enhanced operation through industrial integrated platform. Special management was applied in terms
of domestic and international markets, and in terms of chemical medicine, traditional Chinese medicine and great
health; resources were allocated generally; performance evaluation system, management procedure and working
standard were centralized, so as to realize integrated management.
2) Speeded up research and development of new products for launch into market and improved the two level
distribution system. The Company achieved great progress in integrated research and development. In detail, a
total of 12 new products were determined, two production licenses were applied, and 8 clinic licenses were
applied. Projects under research totaled to 127, and 58 of them were being processed by CDE, among which,
specialist medicines accounted for more than 60% and first generic drug accounted for more than 40%, indicating
obvious progress in transformation of R&D products. The Company actively promoted the general strategic
cooperation with Sinopharm Yigong General Institute, forming the completed research and development industry
chain, under which “Yigong Institute was responsible for research of raw materials technology, composition
10
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
institute was responsible for industrialization of raw materials and pharmaceutical manufacturer was responsible
for industrialization of pharmaceutical preparations”, which laid foundation for research and development of new
products and capability of industrialization. Currently, 6 industrialization projects are being driven forward
successfully, in particular, normal production supply has been realized for cefathiamidine for injection and
cefaclor for oral suspension; as the two-level distribution system was overall expanded, resulting in relatively
rapid growth of cefuroxime axetil tablets and cefixime granules, and new products including azithromycin
dispersible tablets, Dameiqing and Daliluo.
3) Promoted international market strategy steadily. During the first half year, the Company realized export sales of
US$ 8.90 million in total, representing a relatively high increase continuously; new breakthrough was made in
respect of EU strategy, with the sales from major EU markets accounting for more than 82.8%. EU authentication
certificates for powder injection II line and powder injection III line of Zhijun Pharmaceutical have been obtained
in April.
4) Facilitated new GMP authentication. Zhijun Pharmaceutical has renewed its new GMP authentication in
respect of non-cephalosporins solid workshop; Zhijun Suzhou has submitted relevant materials to apply for
approval for the new powder injection workshop at the end of June, and received site inspection in July.
5) Construction of Pingshan Base Project was in progress as scheduled. Roof-sealing for major structure and
facilities installment for the public area have been carried out generally.
(II)The major works for the second half of 2014
During the second half year, the Company will conduct operations aiming for new innovation, steady growth and
better compliance. By adherence to compliance operation, the Company will strengthen target management,
propel innovation and practice, continue to optimize reasonable allocation of various resources and improve
efficient cooperation among various tache, for the purpose of realization overall upgrade of efficient operation and
basic management.
The distribution segment sticks to the established development strategy, continues to strengthen construction of
smart supply chain and promotes penetration through network. Through strengthening the basic operation ability,
releasing development potential in traditional business, promoting upgrade and innovation, offering products and
services with unique characteristics and continuing to increasing its core competitiveness, the Company manages
to occupy a leading position in Guangdong and Guangxi provinces in terms of distribution.
The pharmaceutical segment, by virtue of the new structure, continues to consolidate new platforms and perfect
new patterns focusing on professionalism and integration aiming to improving industrial platform, thus to enhance
industrial integrated operation; the Company continues to accelerate structure adjustment and transformation
upgrade, improve product quality and cost edge, and consolidate industrial development foundation of Accord
Pharmaceutical.
11
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
II. Main business analysis
Summary
Shows the same content disclosed in summary of report of board of directors
√Yes □No
Y-o-y changes of main financial data
In RMB
Current period Same period of last year Y-o-y increase/decrease Reasons for changes
Operating revenue 11,612,642,434.28 10,131,712,690.44 14.62%
Operating costs 10,626,767,657.24 9,279,455,305.53 14.52%
Sales expenses 271,149,210.54 242,609,042.07 11.76%
Administration expenses 215,813,783.67 182,897,044.09 18.00%
Finance expenses 70,931,725.10 76,468,650.83 -7.24%
Total profit increased in
Income tax expenses 86,331,296.75 60,942,244.76 41.66%
the period.
R&D input 32,143,996.40 34,523,641.48 -6.89%
Sales increased in the
Net cash flow arising
-484,715,807.96 238,276,873.08 -303.43% Period and more
from operating activities
purchase quantity growth
Net cash flow arising The investment for
from investment -118,785,713.60 -31,163,438.89 -281.17% infrastructural project
activities increased in the period.
The amount of capital
Net cash flow arising increase from private
914,932,902.63 -245,550,234.63 472.61%
from financing activities placement received in the
Period
The amount of capital
Net increase of cash and increase from private
311,437,219.28 -38,436,801.92 910.26%
cash equivalent placement received in the
Period
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
12
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
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
Operating revenue Operating cost Gross profit ratio 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 10,661,045,598.03 10,075,415,498.70 5.49% 16.01% 15.53% 0.39%
Medical
895,189,021.00 532,012,356.98 40.57% 3.88% 3.25% 0.36%
manufacture
Logistics and
warehousing 12,711,331.79 8,499,455.86 33.13% -30.36% -27.28% -2.83%
services
Lease and other
5,128,001.66 1,280,169.06 75.04% 14.29% -27.50% 14.39%
service
According to products
Nil
According to region
Domestic sales 11,545,262,663.14 10,595,261,761.26 8.23% 14.93% 14.82% 0.09%
Foreign sales 28,811,289.34 21,945,719.34 23.83% -1.49% 2.25% -2.79%
IV. Core competence analysis
1. Improved distribution network
The Company owns completed pharmaceutical distribution network in Guangdong and Guangxi provinces,
covering almost all the medical institutions and large chain pharmacies rated as second-class or above in
Guangdong and Guangxi provinces and also providing medicine distribution services for third end consumers as
represented by various individual pharmacies, community medical service outlets, small clinics and new rural
cooperative medical insurance. The Company fully takes advantage of its distribution network to provide
value-added service and create value for customers.
2. Leading smart supply chain
Benefiting from the core smart supply chain, the Company effectively expanded supply chain service and thus
realized resource sharing and effective coordination between the upstream and downstream through promotion of
central inventory management projects and hospital pharmacy smart inventory management project.
13
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
3. High efficient integrated management
In connection with pharmaceutical distribution, the Company continues to strengthen integrated operation system
in Guangdong and Guangxi provinces, focusing on integration of procurement and basic operation between these
two provinces; cooperation in respect of businesses relating to medical equipments, consumables and vaccine
was accelerated between these two provinces, thus to realize management synchronization of Guangdong and
Guangxi provinces. In connection with pharmaceutical industry, the Company adopted professionalism and
integration as guidance to improve the platform structure with “three centers and three bases”, resulting in
continuous enhancement of industrial integrated operation.
4. Abundant product resources
In connection with pharmaceutical distribution, the Company established vast cooperation with thousands of
domestic manufacturers and business enterprises, and established steady business relationship with hundreds of
import and joint venture manufacturers, to diversify its variety resources. In connection with pharmaceutical
industry, the Company mainly focused on medicines relating to anti-infection, respiratory system, digestive
system and cardiovascular as well as great health area. It owns modern pharmaceutical R&D and production bases
qualified with international standards, and certain production lines for powder injection, orally-taken solid
preparations and active pharmaceutical ingredient with EU authentication. The Company has launched a number
of famous products with leading market share through establishing strict quality management and control system.
5. Domestic brands with unique influences
The Company’s brands and distribution share the same principles with the industrialized sub-brands and those
owned by controlling shareholders and actual controllers. Benefiting from the strong influence as a central
enterprise, the Company takes an increasing significant position in this industry in terms of recognition and
influence.
V. Investment analysis
1. External equity investment
(1) External investment
□ Applicable √ Not applicable
No external investment in Period.
(2) Holding equity of financial enterprise
□ Applicable √ Not applicable
The Company has no equity of financial enterprise held in the Period
(3) Securities investment
□ Applicable √ Not applicable
14
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
The Company has no securities investment in the Period
2. Trust management, derivative investment and entrust loans
(1) Trust financing
□ Applicable √ Not applicable
The Company has no trust financing in the Period
(2) Investment of derivatives
□ Applicable √ Not applicable
The Company has no derivatives investment in the Period
(3) Entrustment loan
□ Applicable √ Not applicable
The Company has no entrustment loan in the Period
3. Application of raised proceeds
Application of raised proceeds found more in Special Report of Raised Fund Deposit and Practical Usage released on 16 August
2014 (disclosure index: Juchao Website Notice No.: 2014-37)
4. Main subsidiaries and joint-stock companies analysis
√ Applicable □ Not applicable
Main subsidiaries and joint-stock companies
In RMB
Main
Industry Registered Operation Operation
Name Type products or Total assets Net assets Net profit
involved capital revenue profit
service
Production
for raw
medicine
of
chemical
products,
processing
Shenzhen for
RMB
Zhijun Subsidia Manufactu Chinese 1,066,758,297. 451,465,590. 732,801,536.7 165,705,868. 144,949,310.
traditional 200,000,0
Pharmaceuti ry re patent 25 48 3 04 54
00
cal Co., Ltd. medicine,
production
of
chemical
material of
medicine;
Import and
export
15
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
trade are
treated by
authorized
certificates
.
Chinese
traditional
patent
medicine,
chemical
preparatio
ns,
antibiotics,
bio-chemic
al
medicine,
biological
medicine,
diagnosis
medicine,
biological
medicine
with
Sinopharm features of
RMB
Holding Subsidia treatment 5,485,842,600. 558,811,556. 6,457,665,536. 106,983,589. 80,042,094.2
Commerce 400,000,0
Guangzhou ry and 68 54 70 70 7
00
Co., Ltd. diagnosis,
shaped
packing
food,
chemical
products,
and
various
commodit
y and
technique
hold by
self-suppor
t and
agency as
well as
import &
export of
technology
16
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
5. Major project invested by non-raised funds
√ Applicable □ Not applicable
In ten thousand Yuan
Amount invested
Total investment Amount invested in
Project accumulative till end Progress Earnings
planned this period
of reporting period
The project covers
approximately 73352
M2 in total,
positioning as the
production base of
essential medicines
(Pingshan) Medicine
and special drugs, a
R&D Manufacturing
manufacture base of
Base of China 88,137.00 5,971.00 12,836.00 18.00%
modern traditional
National Accord
Chinese medicine
Medicines
preparations and
massive health
products as well as
the international
co-ordination
processing base
Total 88,137.00 5,971.00 12,836.00 -- --
Index date for extraordinary notice
2014-03-22
disclosed (if applicable)
Index website for extraordinary notice Juchao Website: Sinopharm Accord—Announcement on Increasing External
disclosed (if applicable) Investment; No.: 2014-18
VI. Prediction of business performance from January – September 2014
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
VII. Explanation from the Board and Supervisory Committee for “Qualified Opinion” from
the CPA of this year’s
□ Applicable √ Not applicable
VIII. Explanation from the Board for “Qualified Opinion” of last year’s
□ Applicable √ Not applicable
17
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
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 2013 was deliberated and approved in the Shareholders General
Meeting of 2013 on April 18, 2014, calculating based on the Company’s total existing shares of 362,631,943
shares, and the Company distribute RMB 1.80 (including tax) dividend per ten shares to all shareholders in cash.
On May 22, 2014, Board of Directors issued Announcement on Implementation of the 2013 Equity Distribution
Plan (published on Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Website
http://www.cninfo.com.cn), the 2013 Annual Profit Distribution Plan was implemented, and dividend for social
public shareholders distributed to shareholders’ account on 28 May 2014 (A shares) and 30 May 2014 (B shares)
respectively.
Special explanation on cash dividend policy
Satisfy regulations of General Meeting or requirement of Article
Y
of Association (Y/N):
Well-defined and clearly dividend standards and proportion
Y
(Y/N):
Completed relevant decision-making process and mechanism
Y
(Y/N):
Independent directors perform duties completely and play a
Y
proper role (Y/N):
Minority shareholders have opportunity to express opinions and
Y
demands totally and their legal rights are fully protected (Y/N):
Condition and procedures are compliance and transparent while
Not applicable
the cash bonus policy adjusted or changed (Y/N):
X. Profit distribution and capitalization of capital reserves in the Period
□ Applicable √ Not applicable
The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for
the semi-annual year
XI. In the report period, reception of research, communication and interview
√ Applicable □ Not applicable
Contents discussed
Time Place Way Type Reception and material
provided
2014-02 Accord China Merchants Securities, Haitong Securities, CCB Visited the
Field research Institution
-18 Pharm. Principal Asset Management, Huarong Securities, Company and
18
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
Bldg. Zhongdian Xinan Investment Management Co., Ltd., knew the influence
Yuance Investment Management Co., Ltd., EverBright of medical reform
Securities, Mingyuan Investment, Dingfeng Asset, policy to the
Qingxi Assets Management Co., Ltd., Huashang Fund development of the
Management, Shanghai Daweide Investment Co., Ltd., industry. No
Anbang Asset, Greenwoods Asset Management, material provided.
Shenzhen Jingshi Investment Management Co., Ltd.,
Goldstate securities, First Capital, Shangcheng Asset
Management、Tianfeng Securities, Shenzhen Branch of
Dongguan Securities, CPIC Asset Management, China
Southern Asset Management, Marco Polo Zhizhen
Assets Management Co., Ltd., China Asset
Management, Anhui Guofu Industrial Investment Fund
Management, First State Cinda Fund
Management, ,Hongguan Assets Co., Ltd., Shanghai
Qinyuan Investment Management Co., Ltd., GF
Securities, Industrial Securities, Fortune SG Fund
Management and Sinolink Securities
Visited the
Company and
knew the influence
Accord
2014-04 Essence Fund, CITIC Securities, China AMC, China of medical reform
Pharm. Field research Institution
-18 Merchants Securities policy to the
Bldg.
development of the
industry. No
material provided.
Knew the influence
Accord Telephone of medical reform
2014-06
Pharm. communicatio Institution Guotai Junan policy to the
-18
Bldg. n development of the
industry
19
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
Section V. Important Events
I. Corporate governance
The Company established and improved legal person governance structure in strict compliance with the
requirements of Company Law, Securities Law and Governance Principles of Listed Issuer. Currently, the
Company enjoys sound legal person governance structure, healthy governance system and standardized operation.
The Company has definite and balanced terms of reference in respect of its general meeting, board of directors,
board of supervisors and manager level which exercise voting right, decision-making right, supervision right and
execution right respectively under standardized operation.
The Company has prepared working procedures applicable for general meeting, board of directors and board of
supervisors, working system applicable for the strategy committee, nomination committee, risk internal control
and audit committee, remuneration and performance committee, genera manager and secretary to the board, and
prepared governance system relating to information disclosure, connected transaction, fund raising, performance
of social responsibility, inside information and insider management, investor relation management, engagement of
CPA, prevention of occupying listed issuer’s capital by substantial shareholders and related parties. During the
reporting period, the Company made amendment to the Articles of Association, detailed methods for convening,
composition and working procedures for general meeting, so as to meet regulatory requirements and demands for
corporate governance.
Meanwhile, by adherence to its annual target, the Company made on-going improvement of internal control
system and the operation mechanism thereof in response to various market and environment changes based on
overall analysis and evaluation of risks. During the reporting period, the Company made overall identification and
evaluation of potential risks arising from internal and external environment changes, adjustment of business
pattern, additional business, and adjustment of internal responsibilities and duties. The Company upgraded and
supplemented 2014 annual risk database, pursuant to which, it amended and improved 2014 system procedure
(internal control) document system and internal control self-evaluation standards, to ensure applicability and
effectiveness of its management. Management of its subsidiaries was also improved through half-year internal
control self-evaluation and site inspection as far as the Company and its business segments concerned.
As a state-owned holding listed company, the Company also executed the relevant provisions on state-owned
assets management required by controlling shareholders and actual controllers. Details are set out below:
Information Relationship with Submitted
Serial Type Basis for submitted
submitted object the listed company cycle
Sinopharm Needs of consolidated
First largest Financial
1 statement of largest Regular
Group Co., Ltd. shareholder statement
shareholder
China National Management method of
Pharmaceutical Assets state-owned property right
2 Actual controller Evalution transfer and equity Temporary
Group Report ect. investment management of
Corporation China National
20
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
Pharmaceutical Group Corp.
In September of 2007, the Company's board of directors and board of supervisors approved the "Bill on
Implementing Staff Report of Insider Trading Information and Governance on Non-standard Special Information
Disclosure" which agreed that the Company implements enforcement of secrecy and staff report system for
insider trading information when conducting relevant provisions of the management of state-owned assets,
regularly submitting the financial statements to major shareholders and reporting to the major shareholder about
state-owned assets disposal.
II. Significant lawsuits and arbitrations of the Company
□Applicable √Not applicable
The Company has no significant lawsuits and arbitrations in reporting period
III. Question from media
□ Applicable √ Not applicable
No universal questioned by media in reporting period
IV. Bankruptcy reorganization
□ Applicable √ Not applicable
In reporting period, the Company has no bankruptcy reorganization occurred.
V. Transaction in assets
1. Assets acquisition
√ Applicable □ Not applicable
The
proportion
Associatio
of the net
ns with
profits that
Transactio counterpar
Counterpa Impact on these Related
n price (in ty
rty and Purchased Progress Impact on gains/losse assets transaction Date of Index of
ultimate or placed 10 (Applicabl
controlling assets operation s of the contribute confirmed disclosure disclosure
thousand e for
party Company d to the (Y/N)
Yuan) related
listed
transaction
company
)
in total
profits
Without Juchao
Sinopharm Acquisitio The
bad impact Not 2013-12-1 Website—
Holding n of the 749.00 acquisition -43.83 0.00% No
on applicable 9 Resolution
Shantou Company completed
operation Notice of
21
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
Co., Ltd. 70% stake of the 23rd
Company Meeting of
6th Session
of the
Board of
Sinopharm
Accord
(Notice
No.:
2013-42)
2. Sales of assets
□ Applicable √ Not applicable
The Company did not sell assets in the Period
3. Business combination
There are 33 subsidiaries included in consolidation range ended as the reporting period
VI. Implementation and its influence of equity incentive
□ Applicable √ Not applicable
The company had not yet made the plan of equity incentive in the reporting.
VII. Insignificant related transactions
1. Related transaction with routine operations concerned
(1) Related transaction with routine operations concerned found more in VI. Related parties and related transaction under the Section
IX Financial Report;
(2) Related transactions are settling in way of cash and note ect., disclosed on 22 March 2014 with disclosure index as Juchao
website; Notice No.: 2014-17;
(3) The Proposal of Routine Related Transaction Between the Company & subordinate Enterprise and Related Parties for year of
2014 deliberated and approved in Annual General Meeting on 21 March 2014. In reporting period, sales from related parties
occupied 41.32% of the total estimated amount for the year, procurement from related parties occupied 38.62% of the total estimated
amount for the year, interest on borrowings from related parties occupied 44.80% of the total estimated amount for the year, the
buyer note discount interest expenses from related parties occupied 16.34% of the total estimated amount for the year, note discount
interest expenses from related parties occupied 4.26% of the total estimated amount for the year, house leasing interest from related
parties occupied 58.56% of the total estimated amount for the year, the expenditure of house and equipment lease from related parties
occupied 47.07% of the total estimated amount for the year, income from labor service providing from related parties occupied
33.81% of the total estimated amount for the year and expenditure of receiving labor service from related parties occupied 60.46% of
the total estimated amount for the year.
22
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
2. Related transaction incurred by purchase or sales of assets
□ Applicable √ Not applicable
No related transaction incurred by purchase or sales of assets in Period
3. Related transaction from jointly investment outside
□ Applicable √ Not applicable
No related transaction from jointly investment outside occurred in Period
4. Current related liabilities and debts
1. No non-operating related credits and liabilities occurred
2. Contact with related parties found more in VI. Related parties and related transaction under the Section IX. Financial Report
5. Other significant related transactions
□ Applicable √ Not applicable
The company had no other significant related transactions in reporting period.
VIII. Non-business capital occupying by controlling shareholders and its related parties
□ Applicable √ Not applicable
No non-business capital occupied by controlling shareholders and its related parties in Period
IX. Significant contracts and its implementation
1. Trusteeship, contract and lease
(1) Trusteeship
√ Applicable □ Not applicable
Instruction of trusteeship
1. As subordinate companies of majority shareholder, Foshan Nanhai Medicine Co., Ltd. (“Nanhai Medicine”) and
Guangdong Dong Fang Uptodate & Special Medicines Co., Ltd. (“Dong Fang Uptodate & Special Medicines”)
both operate pharmaceutical distribution business within Guangdong, which partially overlaps with the
pharmaceutical distribution business and geographical location of the Company and constitutes peer competition.
In July 2013, to solve the problem of peer competition, majority shareholder entrusted Sinopharm Accord and
Sinopharm Accord agreed to take over the management of the above two companies.
2. As a subordinate enterprise of the de facto controller, Guangdong South Pharmaceutical Foreign Trade Co., ltd.
operates pharmaceutical distribution business within Guangdong, which partially overlaps with the
pharmaceutical distribution business and geographical location of the Company and constitutes peer competition.
In September 2013, to solve the problem of peer competition, majority shareholder entrusted Sinopharm Accord
and Sinopharm Accord agreed to take over the management of the above company.
Items generated over 10% gains/losses in total profit in reporting period for the Company
□ Applicable √ Not applicable
The Company had no item generated over 10% gains/losses in total profit in reporting period for the Company in Period.
23
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
(2) Contract
□ Applicable √ Not applicable
The Company had no contract in the reporting period.
(3) Leasing
□ Applicable √ Not applicable
The Company had no leasing in the reporting period.
2. Guarantees
√ Applicable □ Not applicable
In ten thousand Yuan
External guarantee of the Company (Barring the guarantee for the controlling subsidiaries)
Related Actual date of Guarante
Complete
Announcem happening e for
Name of the Guarantee Actual Guarantee Guarantee implemen
ent (Date of related
Company guaranteed limit guarantee limit type term tation
disclosure signing party
(Y/N)
date agreement) (Y/N)
Shenzhen Zhijun
General 2014.6.12-20
Medicine Trading 2014-03-22 3,150 2014-06-12 No Yes
guarantee 15.6.11
Co., Ltd.
China National
General 2014.03.12-2
Accord Medicines 2013-03-21 30,000 2014-03-12 5,000 No Yes
guarantee 015.03.11
Corporation Ltd.
China National
General 2014.05.30-2
Accord Medicines 2014-03-22 25,000 2014-05-30 10,400.35 No Yes
guarantee 015.05.30
Corporation Ltd.
China National
General 2014.05.13-2
Accord Medicines 2014-03-22 25,000 2014-05-13 9,000 No Yes
guarantee 015.02.11
Corporation Ltd.
China National
General 2013.10.14-2
Accord Medicines 2013-08-20 30,000 2013-07-22 No Yes
guarantee 014.10.14
Corporation Ltd.
China National
General 2014.04.04-2
Accord Medicines 2013-08-20 20,000 2014-04-04 809.54 No Yes
guarantee 022.04.04
Corporation Ltd.
Total actual occurred external
Total approving external
53,150 guarantee in report period 27,787.45
guarantee in report period (A1)
(A2)
Total actual balance of
Total approved external guarantee
133,150 external guarantee at the end 25,209.9
at the end of report period ( A3)
of report period (A4)
Guarantee of the Company for the subsidiaries
24
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
Related Actual date of
Complete Guarante
Announcem happening
Name of the Guarantee Actual Guarantee Guarantee implemen e for
ent (Date of
Company guaranteed limit guarantee limit type term tation or related
disclosure signing
not party
date agreement)
Sinopharm Holding General 2013.12.3-2
2013-03-21 10,000 2013-12-03 No Yes
Guangzhou Co., Ltd. guarantee 014.10.31
Sinopharm Holding General 2014.6.30-2
2014-03-22 10,000 2014-06-30 9,026.73 No Yes
Guangzhou Co., Ltd. guarantee 015.6.29
Sinopharm Holding General 2013.9.16-2
2013-03-21 40,000 2013-08-14 22,801.02 No Yes
Guangzhou Co., Ltd. guarantee 014.8.13
Sinopharm Holding General 2014.4.29-2
2014-03-22 15,000 2014-04-29 14,906.77 No Yes
Guangzhou Co., Ltd. guarantee 015.4.29
Sinopharm Holding General 2013.6.26-2
2013-03-21 35,000 2013-06-26 34,902.16 No Yes
Guangzhou Co., Ltd. guarantee 014.6.25
Sinopharm Holding General 2014.5.20-2
2014-03-22 35,000 2014-05-20 30,958.53 No Yes
Guangzhou Co., Ltd. guarantee 015.5.20
Sinopharm Holding General 2014.4.30-2
2014-03-22 30,000 2014-04-30 25,108.68 No Yes
Guangzhou Co., Ltd. guarantee 015.4.30
Sinopharm Holding General 2013.5.20-2
2013-03-21 60,000 2014-05-20 498.36 No Yes
Guangzhou Co., Ltd. guarantee 014.4.23
Sinopharm Holding
General 2014.5.13-2
Guangdong Yuexing 2014-03-22 3,500 2014-05-20 1,939.14 No Yes
guarantee 015.5.12
Co., Ltd.
Sinopharm Holding
General 2014.5.20-2
Guangdong Yuexing 2014-03-22 3,000 2014-05-13 1,929.22 No Yes
guarantee 015.5.20
Co., Ltd.
Sinopharm Holding
General 2013.9.16-2
Guangdong Yuexing 2013-03-21 5,000 2014-08-14 No Yes
guarantee 014.8.13
Co., Ltd.
Sinopharm Holding
General 2013.11.26-2
Shenzhen Medicine 2013-03-21 1,000 2013-11-26 330.67 No Yes
guarantee 014.06.25
Co., Ltd.
Shenzhen Zhijun
General 2013.8.8—2
Pharmaceutical Co., 2013-03-21 20,000 2013-08-08 3,953.34 No Yes
guarantee 014.8.8
Ltd.
Shenzhen Zhijun
General 2013.9.10—
Pharmaceutical Co., 2013-03-21 5,000 2013-09-10 4,412.51 No Yes
guarantee 2014.6.25
Ltd.
Shenzhen Zhijun
General 2013.9.13—
Pharmaceutical Co., 2013-03-21 3,000 2013-09-13 19.99 No Yes
guarantee 2014.9.13
Ltd., Shenzhen
25
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
Zhijun Medicine
Trading Co., Ltd.
Shenzhen Zhijun
General 2013.12.11-2
Pharmaceutical Co., 2013-03-21 6,000 2013-12-11 No Yes
guarantee 014.12.9
Ltd.
Sinopharm Holding General 2013.8.27-2
2013-03-21 6,000 2013-08-27 4,097.87 No Yes
Guangxi Co., Ltd. guarantee 014.8.27
Sinopharm Holding General 2014.6.26-2
2014-03-22 20,000 2014-06-26 14,577.64 No Yes
Guangxi Co., Ltd. guarantee 015.6.26
Sinopharm Holding General 2013.6.26-2
2013-03-21 20,000 2013-06-26 17,934.83 No Yes
Guangxi Co., Ltd. guarantee 014.6.25
Sinopharm Holding General 2014.4.18-2
2014-03-22 15,000 2014-04-19 6,290.83 No Yes
Guangxi Co., Ltd. guarantee 015.4.19
Sinopharm Holding
General 2013.5.28-2
Jiangmen Renren 2013-03-21 3,000 2013-05-28 650.03 No Yes
guarantee 014.5.27
Co., Ltd.
Sinopharm Holding
General 2013.7.1-20
Jiangmen Renren 2013-03-21 3,000 2013-07-01 768 No Yes
guarantee 14.6.30
Co., Ltd.
Sinopharm Holding
General 2013.7.11-20
Jiangmen Renren 2013-03-21 1,000 2013-06-28 997.72 No Yes
guarantee 14.6.25
Co., Ltd.
Sinopharm Holding
General 2013.9.16-2
Jiangmen Renren 2013-03-21 3,000 2013-09-16 No Yes
guarantee 014.8.13
Co., Ltd.
Sinopharm Holding General 2013.6.26-2
2013-03-21 6,000 2013-06-26 5,774.15 No Yes
Liuzhou Co., Ltd. guarantee 014.6.25
Sinopharm Holding General 2013.10.29-
2013-08-20 10,000 2013-10-29 624.82 No Yes
Liuzhou Co., Ltd. guarantee 2014-10.28
Sinopharm Holding General 2014.4.29-2
2014-03-22 5,000 2014-04-29 4,310.09 No Yes
Liuzhou Co., Ltd. guarantee 015.4.28
Sinopharm Holding
General 2014.5.23-2
Shenzhen Yanfeng 2014-03-22 2,000 2014-05-23 1,985.33 No Yes
guarantee 015.5.23
Co., Ltd.
Sinopharm Holding
General 2013.6.26-2
Shenzhen Yanfeng 2013-03-21 5,000 2013-06-26 1,499.7 No Yes
guarantee 014.06.25
Co., Ltd.
Sinopharm Holding
General 2014.5.13-2
Shenzhen Yanfeng 2014-03-22 2,000 2014-05-13 996.69 No Yes
guarantee 015.02.12
Co., Ltd.
26
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
China National
Zhijun (Suzhou) General 2013.8.28-2
2013-03-21 8,000 2013-08-28 4,251.11 No Yes
Pharmaceutical Co., guarantee 014.8.27
Ltd.
China National
Zhijun (Suzhou) General 2014.5.27-2
2014-03-22 5,000 2014-05-27 2,426.03 No Yes
Pharmaceutical Co., guarantee 015.5.27
Ltd.
China National
Zhijun (Suzhou) General 2013.11.25-2
2013-03-21 3,000 2013-11-25 478.8 No Yes
Pharmaceutical Co., guarantee 014.11.25
Ltd.
China National
Zhijun (Suzhou) General 2014.10.00-
2013-08-20 6,000 2013-10-12 1,500 No Yes
Pharmaceutical Co., guarantee 2014.10.22
Ltd.
China National
Zhijun (Suzhou) General 2013.12.16-
2013-03-20 3,000 2013-12-16 1,307.46 No Yes
Pharmaceutical Co., guarantee 2014.6.25
Ltd.
China National
Zhijun (Suzhou) General 2013.10.22-
2013-03-21 5,000 2013-10-22 100 No Yes
Pharmaceutical Co., guarantee 2014.10.21
Ltd.
General
guarantee
Total amount of actual
Total amount of approving
occurred guarantee for
guarantee for subsidiaries in 145,500 407,802.2
subsidiaries in report period
report period (B1)
(B2)
Total balance of actual
Total amount of approved
guarantee for subsidiaries at
guarantee for subsidiaries at the 412,500 221,358.2
the end of reporting period
end of reporting period (B3)
(B4)
Total amount of guarantee of the Company( total of two abovementioned guarantee)
Total amount of approving Total amount of actual
guarantee in report period 198,650 occurred guarantee in report 435,589.65
(A1+B1) period (A2+B2)
Total amount of approved Total balance of actual
guarantee at the end of report 545,650 guarantee at the end of report 246,568.1
period (A3+B3) period (A4+B4)
The proportion of the total amount of actually guarantee in the
55.31%
net assets of the Company (that is A4+ B4)
Including:
Amount of guarantee for shareholders, actual controller and its
0
related parties(C)
27
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
The debts guarantee amount provided for the guaranteed parties
208,490.64
whose assets-liability ratio exceed 70% directly or indirectly(D)
Proportion of total amount of guarantee in net assets of the
23,679.93
Company exceed 50%(E)
Total amount of the aforesaid three guarantees(C+D+E) 232,170.57
Explanation on guarantee with composite way
(1) Guarantee outside against the regulation
□ Applicable √ Not applicable
No guarantee outside against the regulation in Period
3. Other significant contract
□ Applicable √ Not applicable
The Company had no other significant contract in Period.
4. Other material transactions
□ Applicable √ Not applicable
The Company had no other material transactions in the reporting period.
X. Commitments made by the Company or shareholders holding above 5% shares of the Company in
reporting period or extending to reporting period
√ Applicable □ Not applicable
Commitmen Commitmen Implementati
Commitments Accepter Contents
t time t period on
Share Merger Reform
As a large pharmaceutical commercial
enterprise whose business involves
pharmaceutical wholesale and retail, Sinopharm
Holding may overlap with the Company in
geographical segmentation during its future
business development. To avoid the potential
peer competition brought by such geographical
overlap, Sinopharm Holding undertakes that,
Commitments in report Normally
Sinopharm upon the transfer of shares of Sinopharm Long-term
of acquisition or 2005-06-21 implement
Holding Holding Guangzhou it held to Accord Pharma, effective
equity change
“1. it will not newly-establish or broaden within
Guangdong any business operation that actually
compete with that of Accord Pharma, or set up
any new subsidiaries or subordinate enterprises
who engage in such business. 2. it will enter
into business delineation with Accord Pharma
and Sinopharm Holding Guangzhou, thereby
giving the three parties clear geographical areas
28
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
to carry out pharmaceutical wholesale and retail
businesses, so as to avoid potential peer
competition. Apart from above, Sinopharm
Holding will no longer newly-establish any
enterprise that may compete with Accord
Pharma in the production and R&D of
pharmaceutical products.”
Commitments in assets
reorganization
Sinopharm Holding has undertaken in the Letter
of Undertaking from Sinopharm Group Co. Ltd.
on Avoiding Peer Competition that, “I. the
Company and the enterprises it wholly-owns,
controls or has de facto control over (excluding
Sinopharm Accord and its controlled
enterprises, similarly hereinafter) do not exist
any business or operation that would constitute
substantive peer competition with Sinopharm
Accord and its controlled enterprises. II. the
Company and the enterprises it wholly-owns, Controlling
controls or has de facto control over will not shareholder
engage in, participate in or carry out in is implement
Guangdong and Guangxi any business or in real
activities that would constitute substantive earnest,
competition with the pharmaceutical Sinopharm
Commitments make in commercial businesses of Sinopharm Accord. Accord will
Sinopharm Long-term
initial public offering or III. the Company and the enterprises it 2013-09-05 actively
Holding effective
re-financing wholly-owns, controls or has de facto control urged the
over will not engage in, participate in or carry controlling
out any business or activities that would shareholder
constitute substantive competition with the and actual
pharmaceutical industrial businesses of controller to
Sinopharm Accord. IV. the Company will not fulfill
make use of its control over Sinopharm Accord commitments
to damage the legal interests of Sinopharm
Accord and other shareholders (especially
minority shareholders). The Letter of
Undertaking takes effect since the date of issue
and will remain effective during the entire
period when the Company has been the
controlling shareholder or connected party of
Sinopharm Accord. During the validity of the
Undertaking, the Company will indemnify in
time Sinopharm Accord from any loss which
29
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
may arise out of the Company’s violation of the
Undertaking.”
Sinopharm Holding has undertaken in the Letter
of Undertaking from Sinopharm Group Co. Ltd.
on Standardization of the Connected
Transactions with China National Accord
Medicines Corporation Ltd. that, “I. during the
period when the Company takes control over
Sinopharm Accord, the Company and the
companies or enterprises it directly or indirectly
controls (hereinafter referred to as “Connected
Party”) will strictly standardize the connected
transactions with Sinopharm Accord and its
controlled enterprises. II. for those connected
transactions beyond avoidance or out of
reasonable causes, the Company and Connected
Controlling
Party will enter into standardized connected
shareholder
transaction agreement with Sinopharm Accord
is implement
according to law. Sinopharm Accord will
in real
perform approval procedure according to
earnest,
relevant laws, rules and regulations, other
Sinopharm
standardization documents and its constitutional
Accord will
Sinopharm documents, and fulfill its obligation to disclose Long-term
2013-09-05 actively
Holding information on connected transactions. III. for effective
urged the
those connected transactions beyond avoidance
controlling
or out of reasonable causes, the Company and
shareholder
Connected Party will determine the prices of
and actual
connected transactions based on the prices of
controller to
same or similar transactions entered into by
fulfill
independent third parties of no connection
commitments
while following the principles of open, fair and
just to ensure the fairness. IV. when the board or
shareholders’ meeting of Sinopharm Accord
votes on the relevant connected transactions
involving the Company and other enterprises it
controls, the Company will perform obligations
including that necessary interested directors and
shareholders shall be abstained from voting
according to relevant regulations, and follow
the legal procedures for approval of connected
transactions and fulfill its information
disclosure obligation. V. the Company
guarantees to attend shareholders’ meeting
according to the constitutional documents of
30
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
Sinopharm Accord, exercise its corresponding
rights and assumed its corresponding
obligations in an equitable manner, not to take
advantage of its standing as controlling
shareholder to seek unjust interests, or to use
connected transactions to illegally transfer
capital or profit out of Sinopharm Accord, or to
prejudice the legal interests of Sinopharm
Accord and other shareholders (especially
minority shareholders). VI. the Letter of
Undertaking takes effect since the date of issue
and will remain effective during the entire
period when the Company has been the
controlling shareholder or connected party of
Sinopharm Accord. During the validity of the
Undertaking, the Company will indemnify in
time Sinopharm Accord from any loss that may
arise out of the Company’s violation of the
Undertaking.”
”Sinopharm Group has undertaken in the Letter
of Undertaking from China National
Pharmaceutical Group Corporation on Avoiding
the Peer Competition with China National
Accord Medicines Corporation Ltd. that, “I. in
the coming five years, Sinopharm Group Actual
intends to take appropriate measures including controller is
replacement or acquisition of assets or equity implement in
reorganization to solve the problem of peer real earnest,
competition between Weiqida and Sinopharm Sinopharm
Accord. II. apart from the matters disclosed in Accord will
Sinopharm the past and in the Letter of Undertaking, the Long-term actively
2013-10-16
Group Company and the enterprises it wholly-owns, effective urged the
controls or has de facto control over (excluding controlling
Sinopharm Accord and its controlled shareholder
enterprises, similarly hereinafter) do not and actual
directly engage in, participate in or carry out controller to
within the PRC any business or activities that fulfill
would constitute substantive competition with commitments
the production and operation of Sinopharm
Accord. The relative undertakings in respect of
avoiding peer competition given by the
Company in the past remain valid. III. the
Company will not take advantage of its control
31
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
over Sinopharm Accord to damage the legal
interests of Sinopharm Accord and other
shareholders (especially minority shareholders).
IV. the Letter of Undertaking takes effect since
the date of issue and will remain effective
during the entire period when the Company has
been the de facto controller or connected party
of Sinopharm Accord.”
Sinopharm Group has undertaken in the Letter
of Undertaking from China National
Pharmaceutical Group Corporation on
Standardization of the Connected Transactions
with China National Accord Medicines
Corporation Ltd that, “I. during the period
when the Company takes control over
Sinopharm Accord, the Company and the
companies or enterprises it directly or indirectly
controls (hereinafter referred to as “Connected
Party”) will strictly standardize the connected
transactions with Sinopharm Accord and its Actual
controlled enterprises. II. for those connected controller is
transactions beyond avoidance or out of implement in
reasonable causes, the Company and Connected real earnest,
Party will enter into standardized connected Sinopharm
transaction agreement with Sinopharm Accord Accord will
Sinopharm according to law. Sinopharm Accord will Long-term actively
2013-09-22
Group perform approval procedure according to effective urged the
relevant laws, rules and regulations, other controlling
standardization documents and its constitutional shareholder
documents, and fulfill its obligation to disclose and actual
information on connected transactions. III. for controller to
those connected transactions beyond avoidance fulfill
or out of reasonable causes, the Company and commitments
Connected Party will determine the prices of
connected transactions based on the prices of
same or similar transactions entered into by
independent third parties of no connection
while following the principles of open, fair and
just to ensure the fairness. IV. when the board or
shareholders’ meeting of Sinopharm Accord
votes on the relevant connected transactions
involving the Company and other enterprises it
controls, the Company will perform obligations
including that necessary interested directors and
32
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
shareholders shall be abstained from voting
according to relevant regulations, and follow
the legal procedures for approval of connected
transactions and fulfill its information
disclosure obligation. V. the Company
guarantees not to take advantage of its standing
as actual controller to seek unjust interests, or to
use connected transactions to illegally transfer
capital or profit out of Sinopharm Accord, or to
prejudice the legal interests of Sinopharm
Accord and other shareholders (especially
minority shareholders).”VI. the Letter of
Undertaking takes effect since the date of issue
and will remain effective during the entire
period when the Company has been the actual
controller or connected party of Sinopharm
Accord.
Other commitments to
minority shareholders of
the Company
Completed on time or
Yes
not
XI. Engagement and dismissal of CPA
Whether the semi-annual report was audited or not
□ Yes √ No
XII. Penalty and rectification
□ Applicable √ Not applicable
The Company had no penalty or rectification in the reporting period.
XIII. Risk disclosure of delisting with laws and rules violated
□ Applicable √ Not applicable
The Company has no delisting risks with laws and rules violated in Period.
XIV. Explanation on other significant events
√ Applicable □ Not applicable
1. On 19 July 2013, relevant proposals with privately offering of A-share concerned were deliberated and
approved by 19th meeting of 6th session of the Board: ”The Company conforms with the condition of Privately
Offering of A-share”, ”Plan of Privately Offering of A-share”, “Preplan of Privately Offering of A-share”,
“Feasibility Report of the Placement Utilization from Privately Offering of A-share ”, “Explanation on Previous
33
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
Placement Utilization”, ”the “Share Subscription Contract” with entry-into-force conditions that signed by the
Company and Sinopharm Group Co., Ltd”, “Offering with Related transaction involved”, ” Motion for
authorization from the general meeting to the Board for Privately Offering matters”, ” Motion for agreement that
Sinopharm Group Co., Ltd. is free of increasing shares of the Company through tender offer”, ”Amendment on
Management Methods for Raise Funds of China National Accord Medicines Corporation Ltd.”, the “Entrust
Agreement” with entry-into-force conditions that signed by the Company and Sinopharm Group Co., Ltd” and
“Explanation on not convening general meeting temporary after the Board Meeting”, relevant notice please found
in Juchao Website dated 22 July 2013.
2. On 12 September 2013, proposal of the above mentioned private offering of A-share was deliberated and
approved by 3rd extraordinary general meeting of 2013, relevant notice please found in Juchao Website dated 13
September 2013.
3. On 13 February 2014, the “Notice of Approval of Privately Offering of A-share from IEC of the CSRC” was
released by the Company, relevant notice please found in Juchao Website dated 13 February 2014.
4. On 8 March 2014, the “Application of Privately Offering of A-share of Sinopharm Accord was Examined and
Approved by CSRC” was released by the Company, relevant notice please found in Juchao Website dated 8
March 2014.
5. On 20 March 2014, the “Sinopharm Accord: Release Situation of Private Offering of A-share and Listing
Announcement” etc. were released by the Company, found more in Juchao Website date 20 March 2014.
6. On 29 March 2014, the “Sinopharm Accord: Announcement on Replacing the Working Capital Input to Projects
by Raised Capital” etc. were released by the Company, found more in Juchao Website date 29 March 2014.
34
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
Section VI. Changes in Shares and Particulars about Shareholders
I.Changes in share capital
In share
Before the Changes Increase/Decrease in the Change (+, -) After the Changes
Public
Newly-
Proportio Bonus reserve-co
Amount issued Others Subtotal Amount Proportion
n shares nverted
shares
shares
I. Restricted shares 2,651 0.00% 74,482,543 0 0 -663 74,481,880 74,484,531 20.54%
2. State-owned legal
0 0.00% 74,482,543 0 0 0 74,482,543 74,482,543 20.54%
person’s shares
3. Other domestic
2,651 0.00% 0 0 0 -663 -663 1,988 0.00%
shareholding
Domestic
2,651 0.00% 0 0 0 -663 -663 1,988 0.00%
nature person shares
II. Unrestricted shares 288,146,749 100.00% 0 0 0 663 663 288,147,412 79.46%
1. RMB ordinary
233,261,149 80.95% 0 0 0 663 663 233,261,812 64.32%
shares
2. Domestically listed
54,885,600 19.05% 0 0 0 0 0 54,885,600 15.14%
foreign shares
III. Total shares 288,149,400 100.00% 74,482,543 0 0 0 74,482,543 362,631,943 100.00%
Reasons for share changed
√ Applicable □ Not applicable
The shares changed mainly because on 21 March 2014, the private offering to substantial shareholder Sinopharm
Group Co., Ltd. was completed with 74,482,543 restricted shares increased. Found more details in “Sinopharm
Accord: Release Situation of Private Offering of A-share and Listing Announcement” released on Juchao website
(http://www.cninfo.com.cn) dated 20 March 2014
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
Item 2013
Before After
issuance issuance
Fully diluted earning per share attributable to shareholder of listed company (RMB) 1.81 1.44
Fully diluted net assets per share attributable to shareholder of listed company (RMB) 7.79 11.51
Explanation on changes of total shares and shareholders structure as well as changes of structure of assets and
liability
Total shares of the Company increased to 362,631,943 shares from 288,149,400 after the private placement, register capital changed
correspondingly. Shares held by controlling shareholder turns from 110,459,748 shares holding (occupied 38.33%) to 184,942,291
(occupied 51.00%). Net assets of the Company increased 1,929,065,413.47 Yuan due to the private placement, entire asset-liability
ratio reduced to 63.65%.
35
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
II. Number of shareholders and share-holding
In Share
Total preference shareholders
Total common shareholders at with voting rights recovered at
12,020 0
period-end end of reporting period (if
applicable) (see Note 8)
Particulars about shares held above 5% by shareholders or top ten shareholders
Amount Number of share
Amount
Changes of pledged/frozen
Number of of
Nature of Proportion of in un-restri
Shareholders shares held at restricte
shareholder shares held reportin cted
period-end d shares State of share Amount
g period shares
held
held
Sinopharm Group State-owned 74,482, 74,482, 110,459,
51.00% 184,942,291
Co., Ltd. corporate 543 543 748
National Council
Domestic non
for Social
state-owned 2.76% 10,000,664
Security Fund –
corporate
116
HTHK/CMG
FSGUFP-CMG
FIRST STATE Overseas corporate 1.94% 7,032,720
CHINA
GROWTH FD
National Council
Domestic non
for Social
state-owned 1.91% 6,944,094
Security Fund –
corporate
106
VALUE
PARTNERS Overseas corporate 1.42% 5,133,261
CLASSIC FUND
ICBC—Harvest Domestic non
Strategy Growth state-owned 1.23% 4,451,985
Mix Stock Fund corporate
BOC-Harvest
Domestic non
research selected
state-owned 1.20% 4,360,504
stock securities
Corporation
investment fund
ICBC—Harvest Domestic non
1.20% 4,356,835
Theme New state-owned
36
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
Power stock Corporation
securities
investment fund
CCB—Huabao
Domestic non
Xingye Industry
state-owned 1.20% 4,335,493
Selected Stock
corporate
Investment Fund
CCB – China
Domestic non
AMC Advantage
state-owned 1.12% 4,065,328
Growth Stock
corporate
Investment Fund
ICBC—Harvest Strategy Growth Mix Stock Fund, BOC-Harvest research selected stock
securities investment fund and ICBC—Harvest Theme New Power stock securities
investment fund shares the same administrator as Harvest Fund Management Co., Ltd.;
Explanation on associated relationship VALUE PARTNERS CLASSIC FUND, one of the top ten shareholders, is one of the
among the aforesaid shareholders VALUE PARTNERS; 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
National Council for Social Security RMB ordinary
10,000,664 10,000,664
Fund – 116 shares
Domestically
HTHK/CMG FSGUFP-CMG FIRST
7,032,720 listed foreign 7,032,720
STATE CHINA GROWTH FD
shares
National Council for Social Security RMB ordinary
6,944,094 6,944,094
Fund – 106 shares
Domestically
VALUE PARTNERS CLASSIC FUND 5,133,261 listed foreign 5,133,261
shares
ICBC—Harvest Strategy Growth Mix RMB ordinary
4,451,985 4,451,985
Stock Fund shares
BOC-Harvest research selected stock RMB ordinary
4,360,504 4,360,504
securities investment fund shares
ICBC—Harvest Theme New Power RMB ordinary
4,356,835 4,356,835
stock securities investment fund shares
37
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
CCB—Huabao Xingye Industry RMB ordinary
4,335,493 4,335,493
Selected Stock Investment Fund shares
CCB – China AMC Advantage Growth RMB ordinary
4,065,328 4,065,328
Stock Investment Fund shares
ICBC—Harvest Strategy Growth Mix Stock Fund, BOC-Harvest research selected stock
securities investment fund and ICBC—Harvest Theme New Power stock securities
Expiation on associated relationship or
investment fund shares the same administrator as Harvest Fund Management Co., Ltd.;
consistent actors within the top 10
VALUE PARTNERS CLASSIC FUND, one of the top ten shareholders, is one of the
un-restrict shareholders and between
VALUE PARTNERS; it is unknown that there exists no associated relationship or belongs
top 10 un-restrict shareholders and top
to the consistent actionist among the other tradable shareholders regulated by the
10 shareholders
Management Measure of Information Disclosure on Change of Shareholding for Listed
Companies.
Whether has a buy-back agreement in reporting period or not
□Yes √No
The Company had no buy-back agreement in reporting period.
III. Changes of controlling shareholders or actual controller
Changes of controlling shareholders in reporting period
□ Applicable √ Not applicable
Changes of controlling shareholders had no change in reporting period.
Changes of actual controller in reporting period
□ Applicable √ Not applicable
Changes of actual controller in reporting period had no change in reporting period.
IV. Share holding increasing plan proposed or implemented in reporting period from
shareholder of the Company and its concerted action person
□ Applicable √Not applicable
As far as the Company know, there are no share holding increasing plan proposed or implemented in Period from shareholder of the
Company and its concerted action person
38
China National Accord Medicines Corporation Ltd.
SEMI-ANNUAL REPORT 2014
Section VII. Preferred Stock
I. Issuance and listing of preferred stock in Period
□ Applicable √ Not applicable
II. Number of shareholders with preferred stock held and shareholdings
□ Applicable √ Not applicable
III. Repurchase and conversion of preferred stock
1. Preferred stock repurchased
□ Applicable √ Not applicable
2. Preferred stock converted
□ Applicable √ Not applicable
IV. Preferred stock with voting rights recovered and executed
□ Applicable √ Not applicable
V. Accounting policy taken for preferred stock and reasons
□ Applicable √ Not applicable
39
国药集团一致药业股份有限公司 2014 年半年度报告全文
Section VIII. Directors, Supervisors and Senior
Executives
I. Changes of shares held by directors, supervisors and senior executives
□ Applicable √ Not applicable
Shares held by directors, supervisors and senior executives have no changes in reporting period, found more details in
Annual Report 2013.
II. Resignation and dismissal of directors, supervisors and senior executives
√ Applicable □ Not applicable
Name Title Type Date Reasons
Shi Jinming Director Office leaving 2014-01-09 Director resignation
Li Zhiming Director Election 2014-02-18 Director supplement
Li Zhiming Chairman Election 2014-02-27 Elected by the Board
Deputy
Cui Dieling Election 2014-02-27 Elected by the Board
Chairman
40
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Consolidated and companybalance sheets
For the year ended 30June 2014
(All amounts in Renminbi “RMB” unless otherwise stated)
Section IX Financial Report
ASSETS Note Consolidated Company
30 June 30 June
2014 31 December 2013 2014 31 December 2013
Current assets
Cash at bank and on hand V(1) 1,417,891,485.43 1,113,562,211.65 217,796,047.77 218,342,947.03
Notes receivable V(2) 668,212,842.32 739,061,141.72 28,842,493.26 34,964,767.24
Accounts receivable V(3), X(1) 6,379,994,615.37 5,675,658,506.78 474,603,390.50 427,376,566.55
Advances to suppliers V(4) 98,894,281.90 64,367,040.17 1,683,295.49 35,982.02
Other receivables V(5), X(2) 35,191,984.40 29,620,899.71 2,351,989,237.59 1,160,527,938.29
Interest receivable - - 3,567,717.40 1,650,552.45
Dividend receivable 28,152,000.00 - 28,152,000.00 -
Inventories V(6) 2,189,768,998.70 1,831,267,290.00 173,965,479.86 172,165,830.98
Other current assets V(7) 21,496,419.56 12,203,752.77 39,482.38 2,657,068.36
Total current assets 10,839,602,627.68 9,465,740,842.80 3,280,639,144.25 2,017,721,652.92
Non-current assets
Long-term equity investments V(8),X(3) 130,784,733.02 135,341,010.52 1,586,274,227.40 1,583,340,504.90
Investment properties V(10) 74,716,723.59 77,269,718.14 6,160,077.71 7,060,731.46
Fixed assets V(11) 745,157,659.47 766,741,590.63 18,168,343.49 20,722,267.75
Construction in progress V(12) 192,687,064.41 126,606,806.01 123,035,694.03 54,974,475.13
Intangible assets V(13) 147,507,340.48 150,561,964.46 37,663,419.29 37,966,282.04
Development costs V(13) 5,619,315.47 5,619,315.47 - -
Goodwill V(14) 85,228,833.15 85,228,833.15 - -
Long-term prepaid expenses V(15) 39,966,133.19 35,985,621.47 6,234,227.04 6,787,267.98
Deferred income tax assets V(16) 78,911,669.35 68,895,938.25 2,970,111.88 2,941,603.89
Other non-current assets V(18) 149,919,553.76 139,905,300.41 37,257,567.91 29,152,556.06
Total non-current assets 1,650,499,025.89 1,592,156,098.51 1,817,763,668.75 1,742,945,689.21
TOTAL ASSETS 12,490,101,653.57 11,057,896,941.31 5,098,402,813.00 3,760,667,342.13
41
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Consolidated and companybalance sheets (continued)
For the year ended 30June 2014
(All amounts Renminbi “RMB” unless otherwise stated)
LIABILITIES AND OWNER’S
EQUITY Note Consolidated Company
30 June 31 December 30 June
2014 2013 2014 31 December 2013
Current liabilities
Short-term borrowings V(19) 1,400,802,174.34 2,744,941,589.11 143,500,000.00 1,079,500,000.00
Notes payable V(20) 1,270,580,602.55 1,495,401,188.09 253,985,089.50 247,283,090.92
Accounts payable V(21) 4,184,497,888.86 3,436,936,497.16 350,311,065.36 318,141,136.49
Advances from customers V(22) 25,982,230.10 38,570,231.44 740,254.31 291,691.40
Employee benefits payable V(23) 122,405,077.32 159,466,364.12 14,055,339.70 16,512,245.17
Taxes payable V(24) 87,054,850.43 76,045,260.04 10,583,238.11 1,509,173.93
Interests payable V(25) 9,690,081.21 13,065,850.14 564,570.73 1,834,864.78
Other payables V(26) 548,504,807.58 496,102,247.39 235,722,218.09 421,121,969.02
Current portion of long-term
borrowings V(27) 6,733,400.00 7,800,000.00 - -
Other current liabilities V(28) - 22,040,000.00 - -
Total current liabilities 7,656,251,112.39 8,490,369,227.49 1,009,461,775.80 2,086,194,171.71
Non-current liabilities
Long-term borrowings V(29) 39,695,448.00 - 39,695,448.00 -
Payables for specific projects V(30) 4,287,000.00 4,287,000.00 800,000.00 800,000.00
Deferred income tax liabilities V(16) 24,976,843.46 24,644,887.76 3,773,319.00 3,773,319.00
Other non-current liabilities V(31) 224,763,090.86 221,958,761.49 5,000,000.00 -
Total non-current liabilities 293,722,382.32 250,890,649.25 49,268,767.00 4,573,319.00
Total liabilities 7,949,973,494.71 8,741,259,876.74 1,058,730,542.80 2,090,767,490.71
OWNERS’ EQUITY
Share capital V(32) 362,631,943.00 288,149,400.00 362,631,943.00 288,149,400.00
Capital surplus V(33) 1,860,333,209.04 5,750,338.57 1,869,131,597.40 14,548,726.93
Surplus reserve V(34) 144,855,634.40 144,855,634.40 144,855,634.40 144,855,634.40
Undistributed profits V(35) 2,089,942,523.83 1,806,002,285.06 1,663,053,095.40 1,222,346,090.09
Total equity attributable to equity
holders of the Company 4,457,763,310.27 2,244,757,658.03 4,039,672,270.20 1,669,899,851.42
Minority interest V(36) 82,364,848.59 71,879,406.54 - -
Total owners' equity 4,540,128,158.86 2,316,637,064.57 4,039,672,270.20 1,669,899,851.42
TOTAL LIABILITIES AND
OWNERS’ EQUITY 12,490,101,653.57 11,057,896,941.31 5,098,402,813.00 3,760,667,342.13
The accompanying notes form an integral part of these financial statements.
Legal Principal in charge Head of accounting
representative: Yan Zhigang of accounting : Wei Pingxiao department: Zhou Feifei
42
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Consolidated and companyincome statements
For the six months ended 30 June 2014
(All amounts in Renminbi “RMB” unless otherwise stated)
Consolidated Company
Item Note For the six months For the six months For the six For the six months
ended 30 June ended 30 June months ended 30 ended 30 June
2014 2013 June 2014 2013
Sales V(37) ,X(4) 11,612,642,434.28 10,131,712,690.44 1,344,533,386.96 1,193,441,273.94
Less: Cost of sales V(37),X(4) (10,626,767,657.24) (9,279,455,305.53) (1,290,912,374.30) (1,142,667,141.70)
Taxes and surcharges V(38) (27,472,713.53) (23,326,231.67) (3,819,156.69) (2,043,636.20)
Selling and distribution
expenses (271,149,210.54) (242,609,042.07) (23,395,202.86) (21,154,070.92)
Administration expenses (215,813,783.67) (182,897,044.09) (23,650,902.47) (13,859,583.70)
Financial (expenses)/income
– net V(39) (70,931,725.10) (76,468,650.83) 30,937,200.09 (5,893,730.35)
Asset impairment losses V(40) (7,312,907.37) (16,807,658.72) (153,394.98) (319,855.94)
Add: Investment income V(41),X(5) 23,595,722.50 18,576,985.34 480,544,087.23 403,244,931.24
Including: Share of profits of
associates 23,595,722.50 18,576,985.34 23,595,722.50 18,576,985.34
Operating profit 416,790,159.33 328,725,742.87 514,083,642.98 410,748,186.37
Add: Non-operating income V(42) 28,336,065.33 22,135,730.64 705,252.60 4,472,734.63
Less: Non-operating expenses V(43) (1,207,497.35) (22,119,061.64) (0.08) (50.00)
Including: Loss on disposal of
non-current
assets (64,238.16) (28,872.00) - -
Total profit 443,918,727.31 328,742,411.87 514,788,895.50 415,220,871.00
Less: Income taxes expenses V(44) (86,331,296.75) (60,942,244.76) (8,808,140.45) 53,392.68
Net profit 357,587,430.56 267,800,167.11 505,980,755.05 415,274,263.68
Attributable to equity
holders of the Company 349,213,988.51 260,794,678.64 505,980,755.05 415,274,263.68
Minority interest 8,373,442.05 7,005,488.47 - -
Earnings per share V(45)
Basic earnings per share 1.073 0.905 NA NA
Diluted earnings per share 1.073 0.905 NA NA
Other comprehensive income - - - -
Total comprehensive income 357,587,430.56 267,800,167.11 505,980,755.05 415,274,263.68
Attributable to equity holders
of the Company 349,213,988.51 260,794,678.64 505,980,755.05 415,274,263.68
Minority interest 8,373,442.05 7,005,488.47 - -
The accompanying notes form an integral part of these financial statements.
Legal Principal in charge Head of accounting
representative: Yan Zhigang of accounting : Wei Pingxiao department: Zhou Feifei
- 43 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Consolidated and company cash flows statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
k
Consolidated Company
Item Note For the six months For the six months For the six months
ended 30 June ended 30 June For the six months ended 30 June
2014 2013 ended 30 June 2014 2013
I. Cash flows from operating activities:
Cash received from sales of goods or
rendering of services 11,799,950,691.25 10,057,836,735.60 1,421,640,664.70 1,214,280,538.38
Refund of taxes and surcharges 6,571,540.44 7,570,798.77 - -
Cash received relating to
other operating activities V(46)(a) 53,448,437.56 38,823,223.02 12,486,044.81 5,237,699.02
Sub-total of cash inflows 11,859,970,669.25 10,104,230,757.39 1,434,126,709.51 1,219,518,237.40
Cash paid for goods and services (11,553,683,051.08) (9,208,952,026.05) (1,439,943,602.26) (1,185,309,308.36)
Cash paid to and on behalf of employees (304,214,026.96) (261,318,392.72) (26,913,040.68) (24,032,421.42)
Payments of taxes and surcharges (302,590,124.70) (241,792,269.13) (13,548,247.06) (6,825,494.08)
Cash paid relating to other
operating activities V(46)(b) (184,199,274.47) (153,891,196.41) (12,903,407.44) (14,336,903.77)
Sub-total of cash outflows (12,344,686,477.21) (9,865,953,884.31) (1,493,308,297.44) (1,230,504,127.63)
V(47)(a)
Net cash flows from operating activities
X(6)(a) (484,715,807.96) 238,276,873.08 (59,181,587.93) (10,985,890.23)
II. Cash flows from investing activities
Cash received from returns on
investments - - 169,306,012.82 81,042,685.23
Net cash received from
disposal of fixed assets,
intangible assets and other
long-term assets 904,370.80 76,611.00 700.00 -
Cash received relating to
other investing activities V(46)(c) 3,598,827.09 - 1,663,852,850.00 485,718,000.00
Sub-total of cash inflows 4,503,197.89 76,611.00 1,833,159,562.82 566,760,685.23
Cash paid to acquire fixed
assets, intangible assets
and other long-term assets (123,288,911.49) (31,240,049.89) (65,829,878.73) (3,376,519.20)
Cash paid to acquire Investments - - - (100,000,000.00)
Net cash paid to acquire
subsidiaries and other
business units V(47)(b) - - (1,518,000.00) -
Cash paid relating to other
investing activities - - (2,859,000,089.73) (491,200,000.00)
Sub-total of cash outflows (123,288,911.49) (31,240,049.89) (2,926,347,968.46) (594,576,519.20)
Net cash flows from investing activities (118,785,713.60) (31,163,438.89) (1,093,188,405.64) (27,815,833.97)
- 44 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Consolidated and company cash flows statements (continued)
For the six months ended 30 June 2014
(All amounts Renminbi (RMB) unless otherwise stated)
Consolidated Company
Item Note For the six months For the six months For the six months
ended 30 June ended 30 June For the six months ended 30 June
2014 2013 ended 30 June 2014 2013
III. Cash flows from financing activities
Cash received from investments 1,929,065,413.47 - 1,929,065,413.47 -
Cash received from borrowings 177,215,892.08 335,703,705.83 58,095,448.00 238,000,000.00
Cash received relating to other financing
Activities V(46)(d) 52,376,797.32 - 258,472,602.86 482,924,408.91
Sub-total of cash inflows 2,158,658,102.87 335,703,705.83 2,245,633,464.33 720,924,408.91
Cash repayments of borrowings (1,093,663,188.17) (412,825,109.96) (925,000,000.00) (292,000,000.00)
Cash payments for interest expenses and
distribution of dividends or profits (146,826,227.89) (119,481,742.25) (85,892,357.94) (75,035,803.29)
Including: Cash payments for dividends or
profit to minority
shareholders of subsidiaries (1,098,000.00) - - -
Cash payments relating to other
financing activities V(46)(e) (3,235,784.18) (48,947,088.25) (82,919,213.08) (333,808,489.25)
Sub-total of cash outflows (1,243,725,200.24) (581,253,940.46) (1,093,811,571.02) (700,844,292.54)
Net cash flows from financing activities 914,932,902.63 (245,550,234.63) 1,151,821,893.31 20,080,116.37
IV. Effect of foreign exchange rate changes
on cash 5,838.21 (1.48) 1,201.00 -
V. Net increase/(decrease) in cash 311,437,219.28 (38,436,801.92) (546,899.26) (18,721,607.83)
Add: Cash at beginning of year 1,097,948,354.45 920,748,043.53 218,342,947.03 160,633,355.13
V(47)(c)
VI. Cash at end of period X(6)(c) 1,409,385,573.73 882,311,241.61 217,796,047.77 141,911,747.30
The accompanying notes form an integral part of these financial statements.
Legal Principal in charge Head of accounting
representative: Yan Zhigang of accounting : Wei Pingxiao department: Zhou Feifei
- 45 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Consolidated statement of changes in owners’ equity
For the six months ended 30 June 2014
(All amounts Renminbi (RMB) unless otherwise stated)
Attributable to the shareholders of the Company Total
Item
Note Paid-in capital Capital surplus Surplus reserves Undistributed profits Minority interest owners’ equity
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 31
December 2013
Net profit - - - 520,488,198.80 13,731,200.43 534,219,399.23
Other comprehensive income - - - - - -
Capital contribution and withdrawals by
owners
- Others - 200,000.00 - (6,677.73) 6,677.73 200,000.00
Profit distribution
- Appropriation to surplus reserves V(34) - - 45,495,250.25 (45,495,250.25) - -
- Profit distribution to equity owners V(35) - - - (51,866,892.00) (4,966,654.86) (56,833,546.86)
Balance at 31 December 2013 288,149,400.00 5,750,338.57 144,855,634.40 1,806,002,285.06 71,879,406.54 2,316,637,064.57
- 46 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Consolidated statement of changes in owners’ equity (continued)
For the six months ended 30 June 2014
(All amounts Renminbi (RMB) unless otherwise stated)
Attributable to the shareholders of the Company Total
Item
Note Paid-in capital Capital surplus Surplus reserves Undistributed profits Minority interest owners’ equity
Balance at 1 January 2014 288,149,400.00 5,750,338.57 144,855,634.40 1,806,002,285.06 71,879,406.54 2,316,637,064.57
Movements for the six months ended 30
June 2014
Net profit - - - 349,213,988.51 8,373,442.05 357,587,430.56
Other comprehensive income - - - - - -
Capital contribution and withdrawals by
owners
- Capital contribution by owners 74,482,543.00 1,854,582,870.47 - - - 1,929,065,413.47
-Increase due to acquisition of a subsidiry - - - - 3,210,000.00 3,210,000.00
Profit distribution
- Profit distribution to equity owners V(35) - - - (65,273,749.74) (1,098,000.00) (66,371,749.74)
Balance at 30 June 2014 362,631,943.00 1,860,333,209.04 144,855,634.40 2,089,942,523.83 82,364,848.59 4,540,128,158.86
The accompanying notes form an integral part of these financial statements.
Legal Principal in charge Head of accounting
representative: Yan Zhigang of accounting : Wei Pingxiao department: Zhou Feifei
- 47 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Company statement of changes in owners’ equity
For the six months ended 30 June 2014
(All amounts Renminbi (RMB) unless otherwise stated)
Total
Items
Paid-in capital Capital surplus Surplus reservesUndistributed profits owners’ equity
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 31
December 2013
Net profit - - - 454,952,502.47 454,952,502.47
Other comprehensive income - - - - -
Capital contribution and withdrawals
by owners
- Others - 200,000.00 - - 200,000.00
Profit distribution
- Appropriation to surplus reserves - - 45,495,250.25 (45,495,250.25) -
- Profit distribution to equity owners - - - (51,866,892.00) (51,866,892.00)
Balance at 31 December 2013 288,149,400.00 14,548,726.93 144,855,634.40 1,222,346,090.09 1,669,899,851.42
Balance at 1 January 2014 288,149,400.00 14,548,726.93 144,855,634.40 1,222,346,090.09 1,669,899,851.42
Movements for the six months ended
30 June 2014
Net profit - - - 505,980,755.05 505,980,755.05
Other comprehensive income - - - - -
Capital contribution and withdrawals
by owners
- Capital contribution by owners 74,482,543.00 1,854,582,870.47 - - 1,929,065,413.47
Profit distribution
- Profit distribution to equity owners - - - (65,273,749.74) (65,273,749.74)
Balance at 30 June 2014 362,631,943.00 1,869,131,597.40 144,855,634.40 1,663,053,095.40 4,039,672,270.20
The accompanying notes form an integral part of these financial statements.
.
Legal Principal in charge Head of accounting
representative: Yan Zhigang of accounting : Wei Pingxiao department: Zhou Feifei
- 48 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
I Profile of company
China National Accord Medicines Co.,Ltd. (hereinafter referred to asthe “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 1 February 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 RMB362,631,900up to 30 June 2014. 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 31 August 2000 for Shenzhen Investment
Management Company’s 100% equity interests in 11 pharmaceutical companies and certain
properties as well as 51% equity interests in Shenzhen Tefa Modern Computer Co.,Ltd. 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 8 January
2001. On 8 January 2001, the Company changed its name to Shenzhen Accord Pharmaceutical
Co.,Ltd., and belongs to the pharmaceutical manufacturing industry.
On 18 February 2004, the Company’s original main shareholder, Shenzhen Investment
Management Company, entered into a Stock Transfer Agreement with Sinopharm Group Co.,Ltd.
(hereinafter referred to as “Sinopharm Group”) to transfer its 43.33% shares in the Company to
Sinopharm Group. The legal procedures of the above equity transfer were completed on 9
December 2004. At the same time, as approved by 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 14 April 2006, the Company’s proposal on reformation of segregated stocks was approved. To
gain liquidity for the restricted stocks of the Company, the holders of the restricted stocks of the
Company agreed to pay the following consideration: based on the stock registration as of 27 April
2006, the Company issued bonus shares on 28 April 2006 at the ratio of 3 shares to every 10
A-shares to liquidated A-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.
In March 14, 2014, the company issued 74,484,531 ordinary shares (A shares) through the non
public offering.Par value per share is RMB 1 yuan.The shares shall not be transferred within 36
months since the issued day. By June 30, 2014, the total share capital was 362,631,943.
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 2 August 1986 to 2 August 2036. The registered capital
of the Company is RMB362,631,900. The legal representative of the Company is Yan Zhigang.
49
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
I Profile of company(continued)
The approved scope of business of the Company and its subsidiaries (together “the Group”)
includeswholesale of traditional Chinese medicine preparations, bulk pharmaceutical drugs, chemical
preparations, bulk antibiotic drugs, antibiotic preparations, biochemical drugs, biological products
(including vaccines and in vitro diagnostic reagents), psychotropic drugs and preparations, narcotic drugs,
toxic drugs for medical use, protein assimilation preparation and peptide hormones; trade of dietary
supplement; research, development and consultation services of pharmaceutical packaging materialsand
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 authorised for issue by the board of directors of the Company on 16 August
2014.
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 asthe “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 six months ended 30 June2014 are in compliance with the
Accounting Standards for Business Enterprises, and truly and completely present the financial position of
the Group and the Company as of 30 June 2014 and the operating results, cash flows and other information
of the Group and the Company for the six months ended 30 June 2014.
(3) Accounting year
The Company’s accounting year starts on 1 January and ends on 31 December.
(4) Functional currency
The functional currency is Renminbi (RMB).
50
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(5) Business combinations
(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.
(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 intra-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, losses
and comprehensive income for the period not attributable to Company are recognised as minority interests
and presented separately in the consolidated financial statements within equity, net profits and total
comprehensive income respectively.
51
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(7) Acquisition of minority interest in controlled subsidiaries
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 thecarrying amount of acquisition of minority interst and thenet
assets proportion calculated by original share percentage since the acquisition date should be recognised in
capital surplus. If the capital surplus is insufficient to dilute, the retained earnings shall be adjusted.
(8) Cashand cash equivalent
Cash and cash equivalent comprise cash on hand, deposits that can be readily drawn on demand, and
short-term and highly liquid investments that are readily convertible to known amounts of cash and which
are subject to an insignificant risk of changes in value.
(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. The transaction expenses are included in
receivables’original book value, which is measured at amortised cost using the effective interest method.
52
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(10) Financial Instruments(continued)
(a) Financial assets(continued)
(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.The objective evidence are matters occur after the financial assets been recognised, affect its
estimated future cash flow and could be measured accuractly by the Group. 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
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.
(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.
53
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
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.
54
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(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
RMB5 million.
The method of providing for bad debts for those individually significant amounts is as follows: the amount
of the present value of the future cash flows expected to be derived from the receivable below its carrying
amount.
(b) Receivables that are subject to provision for bad debts on the grouping basis
Receivables with amounts that are not individually significant and those receivables that have been
individually assessed for impairment and have not been found impaired are classified into certain groupings
based on their credit risk characteristics.The provision for bad debts is determined based on the historical
loss experience for the groupings of receivables with similar credit risk characteristics, taking into
consideration of the current circumstances.
A provision for impairment of the receivables is made based on the ageing of receivables at the following
percentage:
Provision ratios used for accounts Provision ratios used for other
receivables receivables
Within 1 year - -
1 to 2 years 5% 5%
2 to 3 years 10% 10%
More than 3 years 20% 20%
(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.
55
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
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.
56
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(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
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.
(a) Determination of investment cost
57
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
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.
58
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(13) Long-term equity investments (continued)
(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.
(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)).
59
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
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 residual Annual
lives 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.
60
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
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.
61
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
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 residual Annual
lives 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
62
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
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.
63
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
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 Patentsare 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 liveof 20 years.
(e) Periodical review of useful life and amortisation method
64
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
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.
65
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
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
66
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
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
GuangxiCo.,Ltd. (“Sinopharm Guangxi”), a subsidiary of the Company, is responsible for purchasing,
allocating and providing the medical reserves, which include the medical products needed for 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.
67
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
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，intangible assets with infinite useful lives
and capitalized development expenditures 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.
68
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(22) Employee benefits (continued)
Certain subsidiaries have the defined benefit plans. The Group recognises 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) 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.
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.
(25) 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
69
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Revenue from the sale of goods is recognised 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.
70
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(25) Revenue recognition (continued)
(b) Rendering of services
The Group provides freight，storage and other service to external parties. The freights are recognised 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 recognised 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.
(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 Shenzhen Zhijun Pharmaceutical Co., Ltd. or other free goods. The fair
value of the consideration received or receivable in respect of the initial sale is allocated between the award
credits and the other components of the sale. Fair value of award points is measured on the basis of the value
of the awards (that is, goods or services) for which they could be redeemed, the fair value of the award
credits should take account of expected forfeitures as well as the discounts or incentives that would
otherwise be offered to customers who have not earned award credits from an initial sale.
(26) 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 whenthe conditions attached to it can be complied withand 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 grant received aimed to create long-term asset by contructing or
other methods. And government grant related to income is any grant other than government grant related to
an asset.
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.
71
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
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.
72
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
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
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.
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.
73
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
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 this period.
(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) 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.
(iii) Accounting estimates on impairment of inventories
74
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
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.
75
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
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%、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%
(2) Tax preferences
1.Summary of different applicable tax rate of subsidiries
(1)15%:Shenzhen Zhijun Pharmaceutical Co., Ltd. (“Zhijun Pharm”),、Sinopharm Holding Shenzhen Medicine Co., Ltd.
(“Sinopharm Shenzhen Medicine”)obtained the certificate of High and New Technology Enterprises, with an applicable
Enterprise income tax rate of 15%.
(2)20%: Sinopharm Holding Guangxi Chinese Herbal Pieces Co., Ltd. (“Guangxi Chinese Herbal Pieces” ) is regarded
as a small enterprise with an Enterprise income tax rate of 20% in 2014 (2013: 20%).
(3)25%: Other subsidiaries except those stated above are using 25% as Enterprise income tax rate.
2.Related documents and approvals
In 2011, Zhijun Pharm, subsidiaries of the Company, separately obtained the certificate of High and New Technology
Enterprises with effective period of 3 years, 2011 to 2013. Preferential treatment of taxes has been ended in december.
31 of 2013, Now Zhijun Pharm was going through renewal process of the certificate in local tax bureau. Given the
condition that related laws and regulations have not been changed, The company considered that Zhijun Pharm can still
obtaina high-tech certification covering year 2014 to 2016. Therefore, for the period ended June 30 of 2014, Zhijun
Pharm still use 15% as its tax rate.
In 2012, Sinopharm Shenzhen Medicine obtained the certificate of High and New Technology Enterprises with effective
period of 3 years, 2012 to 2014.
Under the relevant regulations of article 28 of the Corporate Income Tax Law, the applicable tax rates for Zhijun Pharm
and Sinopharm Shenzhen Medicine in year 2014 are 15% (2013: 15%).
76
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Business combinations and consolidated financial statements
(1) Subsidiaries
(a) Subsidiaries acquired not under common control
Principal activities Legal
The holding type of Place of Registered ca;pital Repres-entati
investment registration Nature of business ( RMB’0000) Enterprise Type ve
Sinopharm Holding Guilin Co.,Ltd. Indirect Guilin Comercial 1,000.00 Wholesale of Traditional Chinese medicine, Chinese patent drugs, raw Limited Zhou Ruili
(“Sinopharm Guilin”) ( Note (i)) materials for chemical medicine, chemical material drugs, company
antibiotics, bio-chemical drugs and biological products (excluding
vaccines), narcotic drugs, anabolic agent,Pericarpium Papaveris,etc.
Sinopharm Holding Baise Co.,Ltd. Indirect Baise Comercial 1,000.00 Traditional Chinese medicine, Chinese patent drugs, raw materials for Limited Zhou Ruili
(“Sinopharm Baise”) ( Note (i)) chemical medicine, chemical material drugs, antibiotics, company
bio-chemical drugs and biological products (excluding vaccines),
narcotic drugs, anabolic agent.
Sinopharm Holding Zhongshan Direct Zhongshan Comercial 1,000.00 Wholesale of Traditional Chinese medicine, Chinese patent drugs, raw Limited Yang Yan
Co.,Ltd.(“Sinopharm Zhongshan”) materials for chemical medicine, chemical material drugs, company
antibiotics, bio-chemical drugs and biological products (excluding
vaccines)
Sinopharm Holding Guigang Indirect Guigang Comercial 1,000.00 Wholesale of Traditional Chinese medicine, Chinese patent drugs, raw Limited Zhou Ruili
Co.,Ltd.(“Sinopharm Guigang”) materials for chemical medicine, chemical material drugs, company
( Note (i)) antibiotics, bio-chemical drugs and biological products (excluding
vaccines), narcotic drugs, anabolic agent,Pericarpium Papaveris,etc.
Sinopharm Holding Beihai Co., Ltd. Indirect Beihai Comercial 500.00 Wholesale of Traditional Chinese medicine, Chinese patent drugs, raw Limited Zhou Ruili
(“Sinopharm Beihai ”) ( Note (ii)) materials for chemical medicine, chemical material drugs, company
antibiotics, bio-chemical drugs and biological products (excluding
vaccines), anabolic agent,Pericarpium Papaveris,etc.
Year-end balance of Other assets constitute Equity interest Voting rights held (%) Consolidated or not Minority interests Loss shared by minority interests
investment investment in substance held (%)
( RMB’0000)
Sinopharm Guilin ( Note (i)) 1,000.00 - 100 100 Yes - -
Sinopharm Baise ( Note (i)) 1,000.00 - 100 100 Yes - -
Sinopharm Zhongshan 1,000.00 - 100 100 Yes - -
Sinopharm Guigang ( Note (i)) 1,000.00 - 100 100 Yes - -
Sinopharm Beihai 500.00 - 100 100 Yes - -
- 77 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
(i) Sinopharm Guilin and Sinopharm Baise are wholly owned subsidiaries of Sinopharm Guangxi, indirectly held of 100% in equity by the Company.
(ii) This company is a wholly owned subsidiary set up by Sinopharm Guangxi in February 18, 2014, indirectly held of 100% in equity by the Company.
- 78 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Business combinations and consolidated financial statements
(1) Subsidiaries(continued)
(b) Subsidiaries acquired under common control
The holding Registered Legal
type of Place of Nature of capital Enterprise Repres-entati
investment registration business ( RMB’0000) Principal activities Type ve
Zhijun Pharm Direct Shenzhen Manufacturing 20,000.00 Original chemical medicine manufacture, Chinese patent medicine Limited Yan Zhigang
processing, chemical raw material of medicine, the imports and company
exports business which transacted according to examined and
approved certificate
Sinopharm Holding Jianming Direct Shenzhen Commercial 500.00 Wholesale of chemical agent, antibiotics agent, chemical and Limited Lin Xinyang
Co.,Ltd.(“Sinopharm Jianmin”) biological agent, blood products, raw material of chemical company
product, Chinese medicine and diagnosis products
Sinopharm Holding Material Direct Shenzhen Commercial 600.00 Chinese patent medicine, western medicine, medicine treatment Limited Zhao Yuhe
Co.,Ltd.(“Sinopharm Material”) apparatus company
Shenzhen Zhijun Pharmaceutical Trade Direct Shenzhen Commercial 189.00 Purchase and sale of Chinese traditional,medicinal materials, Limited Deng Baojun
Co.,Ltd.(“Zhijun Trade”) Chinese patent medicine,chemical raw material for medical company
treatment,antibiotic preparation, chemical medicinepreparation
etc.
Sinopharm Holding Shenzhen Logistics Direct Shenzhen Service 100.00 Storage service, convey, liquidation of cargo external package and Limited Lin Min
Co.,Ltd.(“Shenzhen Logistics”) common transportation of road company
Sinopharm Holding Guangzhou Co.,Ltd. Direct Guangzhou Commercial 40,000.00 Chinese patent medicine, chemical medicine preparation, Limited Yan Zhigang
(“Sinopharm Guangzhou”) antibiotics, biochemical medicine, biological products, diagnosis company
medicine, treatment diagnosis biological products, finalised
packing food, chemical products, self-support and surrogate the
imports and exports of various merchandise and skills.
Sinopharm Holding Guangdong Direct Guangzhou Commercial 4,000.00 Drugs, medical apparatus sales Limited Lin
Hengxing Pharmaceutical Co.,Ltd. company Zhaoxiong
(“Sinopharm Hengxing ”)
Sinopharm Holding Yulin Co.,Ltd. Indirect Yulin Commercial 500.00 Drug sales Limited Zhou Ruili
(“Sinopharm Yulin”)(Note iii) company
- 79 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Sinopharm Medicine Holding Liuzhou Direct Liuzhou Commercial 2,053.06 Chinese traditional medicinal materials, Chinese patent medicine, Limited Lin Zhaoxiong
Co.,Ltd. (“Sinopharm Liuzhou”) Chinese traditional medicine in pieces, chemical raw material, company
chemical medicine 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)
- 80 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Business combinations and consolidated financial statements (continued)
(1) Subsidiaries (continued)
(b) Subsidiaries acquired under common control (continued)
The holding Place of Nature of Registered Principal activities Enterprise Legal
type of registration business capital Type Repres-entative
investment (RMB’0000)
Guangxi Chinese Herbal Pieces Indirect Liuzhou Manufacturing 200.00 Manufacturing and sales of Chinese herbal pieces Limited Lei Chaotian
(Note ii) company
Guangdong Huixin Investment Direct Guangzhou Service 500.00 Project investment, property management and leasing, medical Limited Lin zhaoxiong
Co.,Ltd. (“Huixin Investment”) information consultancy, car park management company
Sinopharm Holding Foshan Co.,Ltd. Direct Foshan Commercial 1,000.00 Drug sales Limited Lin Xinyang
(“Sinopharm Foshan”) company
Sinopharm Holding Guangdong Direct Guangzhou Commercial 3,000.00 Sales of medicine and medical treatment apparatus Limited Luo Qin
Yuexing Co.,Ltd. (“Sinopharm company
Yuexing”)
Sinopharm Holding Guangdong Direct Guangzhou Service 500.00 Storage loading and unloading Limited Lin Min
Logistics Co.,Ltd. company
(“Guangdong Logistics”)
Sinopharm Guangxi Direct Nanning Commercial 10,000.00 Drug sales Limited Lin Zhaoxiong
company
Sinopharm Holding Guangxi Indirect Nanning Service 710.07 Storage loading and unloading, consultation service Limited Lin Zhaoxiong
Logistics Co.,Ltd. (“Guangxi company
Logistics”) (Note iii)
Sinopharm Shenzhen Medicine Direct Shenzhen Manufacturing 5,000.00 Manufacturing of granules, lotion, tablet, capsule, oral liquid Limited Chen Zhenyang
and mixture, and syrup; manufacturing and sale of hair company
products, bath foam and cosmetics, and detergent
(antibiosis washing liquid); manufacturing of plastic bottle;
manufacturing and sale of health food.
- 81 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Sinopharm Holding Wuzhou Co.,Ltd. Indirect Wuzhou Commercial 1,000.00 Traditional Chinese medicine, Chinese patent drugs, raw Limited Zhou
(“Sinopharm Wuzhou”) materials for chemical medicine, chemical material drugs, company Ruili
antibiotics, bio-chemical drugs and biological products,
narcotic drugs, anabolic agent, Pericarpium Papaveris,etc.
- 82 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Business combinations and consolidated financial statements (continued)
(1) Subsidiaries (continued)
(b) Subsidiaries acquired under common control (continued)
Year-End balance of Other assets constitute Equity interest Voting Consolidated or Minority Loss shared by
investment investment in substance held (%) rights held not interests minority
(RMB’0000) (%) (RMB’0000) interests
Zhijun Pharm 23,706.17 - 100 100 Yes - -
Sinopharm Jianmin 5,348.29 - 100 100 Yes - -
Sinopharm Material 816.74 - 100 100 Yes - -
Zhijun Trade 373.40 - 100 100 Yes - -
Shenzhen Logistics 101.91 - 100 100 Yes - -
Sinopharm Guangzhou 48,388.83 - 100 100 Yes - -
Sinopharm Hengxing 3,714.17 - 100 100 Yes - -
Sinopharm Yulin (Note iii) 542.50 - 100 100 Yes - -
Sinopharm Liuzhou 2,220.58 - 51 51 Yes 4,698.02 -
Guangxi Chinese Herbal Pieces (Note
ii) 200.00 - 51 51 Yes - -
Huixin Investment 6,441.69 - 100 100 Yes - -
Sinopharm Foshan 1,499.51 - 100 100 Yes - -
Sinopharm Yuexing 4,345.93 - 100 100 Yes - -
Guangdong Logistics 559.60 - 100 100 Yes - -
Sinopharm Guangxi 10,404.90 - 100 100 Yes - -
Guangxi Logistics(Note iii) 710.10 - 100 100 Yes - -
Sinopharm Shenzhen Medicine 4,808.05 - 100 100 Yes - -
Sinopharm Wuzhou 315.00 - 99.9 99.9 Yes 0.78 -
(ii) Guangxi Chinese Herbal Pieces, a wholly owned subsidiary of Sinopharm Liuzhou, is indirectly held of 51% in equity by the Company.
- 83 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
(iii) Sinopharm Yulin and Guangxi Logistics, wholly owned subsidiaries of Sinopharm Guangxi, is indirectly held of 100% in equity by the Company.
- 84 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Business combinations and consolidated financial statements (continued)
(1) Subsidiaries (continued)
(c) Subsidiaries acquired not under common control
The holding Place of Nature of Registered Principal activities Enterprise Type Legal
type of registration business capital Repres-entative
investment (RMB’0000)
Sinopharm holding Zhijun (Suzhou) Direct Suzhou Manufacturing 18,000.00 Production and sales of general raw materials of medicine, raw Limited Huang Kai
Co., Ltd (“Zhijun Suzhou”) 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, Chinese Limited Lin Xinyang
Co.,Ltd.(“Sinopharm Dongguan”) patent medicine, Chinese traditional medicine in pieces, company
chemical raw material; sales of daily general merchandise and
heath protection food
Sinopharm Holding Zhanjiang Direct Zhanjiang Commercial 1,500.00 kof medicine Limited Lin Xinyang
Co.,Ltd.(“Sinopharm Zhanjiang”) company
Sinopharm Holding Yanfeng Co., Ltd. Direct Shenzhen Commercial 3,000.00 Wholesale of medicine Limited Lin Zhaoxiong
(“Sinopharm Yanfeng”) 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 chemical Limited Yang Yan
Co.,Ltd.(“Sinopharm Zhaoqing”) medicine, chemical material drugs, antibiotics, bio-chemical company
drugs and biological products (excluding vaccines), narcotic
drugs, toxic drugs for medical use, pericarpium
papaveris,anabolic agents
Sinopharm Holding Jiangmen Direct Jiangmen Commercial 1,000.00 wholesale of Chinese patent drugs, raw materials for chemical Limited Yang Yan
Co.,Ltd.(“Sinopharm Jiangmen”) medicine, chemical material drugs, antibiotics, bio-chemical company
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 Shaoguan”) chemical medicine and chemical material drugs, ect.; company
- 85 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Sinopharm Holding Shantou Co., Ltd. Direct Shantou Commercial 800.00 Wholesale of Chinese medicines, chemical raw materials, Limited Yang Yan
(“Sinopharm Shantou”) chemical preparation, antibiotic drug, antibiotic preparations, company
biochemical medicines, biological products (including in vitro
diagnostic reagents, except vaccines) etc.
- 86 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Business combinations and consolidated financial statements (continued)
(1) Subsidiaries (continued)
(c) Subsidiaries acquired not under common control(continued)
Year-end balance Other assets constitute Equity interest Voting rights Consolidated or Minority interests Loss shared by minority
of investment investment in substance held (%) held (%) not (RMB’0000) interests
( RMB’0000)
ZhijunSuzhou 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 2,635.27 -
Sinopharm Meizhou 448.19 - 100 100 Yes - -
Sinopharm Huizhou 564.42 - 100 100 Yes - -
Sinopharm Zhaoqing 354.20 - 100 100 Yes - -
Sinopharm Jiangmen 5,010.00 - 100 100 Yes - -
Sinopharm Shaoguan 1,358.00 - 70 70 Yes 594.57 -
Sinopharm Shantou 224.70 - 70 70 Yes 307.85 -
- 87 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Business combinations and consolidated financial statements (continued)
(2) New subsidiaries included in the scope of consolidation in the current period:
(a) New subsidiaries included in the scope of consolidation in the current period:
Net assets as at Net loss from acquisition date
30 June 2014 to 30 June 2014
Sinopharm Shantou 10,261,603.32 (438,396.68)
(3) Business combinations involving enterprises not under common control
Goodwill Calculation method of goodwill
Sinopharm Shantou - Combination cost less the fair value of the identifiable net assets
it obtains from the acquiree as business reputation. Calculated as
follow.
On January 10, 2014, the company acquire 70% equity of Sinopharm Shantou from natural person shareholders Mr.
Zhang Xiaobing and Mr. Zhang Huaqiang. The date of purchase was January 10, 2014, the date on which the Company
actually obtains the control on the acquire.
(a) Combination cost and Goodwill is recognized as follow:
The combination costs
Cash paid 2,247,000.00
Cash to be paid 5,243,000.00
Combination in total 7,490,000.00
Less: share fo the fair value of the identifiable net assets (7,490,000.00)
GoodWill -
(b) Assets, liabilities and cash flow related to acquisition of Sinopharm Shantou as at acquisition day is listed as follow:
Date of purchase Date of purchase 31 December 2012
Fair value Book value Book value
Cash at bank and on hand 5,116,827.09 5,116,827.09 2,509,691.97
Account receivable 7,735,212.93 7,735,212.93 67,688,855.68
Inventory - - 2,816,326.24
Long-term equity investment - - 60,560,470.59
Fixed assets - - 368,956.33
Deferred Income Tax assets 494,865.53 494,865.53 1,722,298.28
Less: Short-term loans - - (35,000,000.00)
Accounts payable (2,272,658.74) (2,272,658.74) (77,548,215.17)
Taxes payable (374,246.81) (374,246.81) (244,917.67)
Net Assets 10,700,000.00 10,700,000.00 22,873,466.25
Less: Minority Interests (3,210,000.00) (3,210,000.00) -
Net assets acquired 7,490,000.00 7,490,000.00 22,873,466.25
- 88 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Consideration paided with cash 2,247,000.00
Less: Cash and cash equivalents from
acquiree (5,116,827.09)
Net cash obtained from acquisition 2,869,827.09
- 89 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Business combinations and consolidated financial statements (continued)
(3) Business combinations involving enterprises not under common control(continued)
(c) Sales, net loss and cash flow of Sinopharm Shantou from purchase day to 30 June 2014 is as follow:
Sales 49,719.90
Net loss (438,396.68)
Net cash flow from Operating Activities 4,453,126.01
Net increase in cash 4,076,426.01
V Notes to the consolidated financial statements
(1) Cash at bank and on hand
30June 2014 31 December 2013
Cash on hand 105,347.04 65,660.84
Cash at bank 1,409,280,226.69 1,097,882,693.61
Other cash balances 8,505,911.70 15,613,857.20
- deposits for bank acceptance notes 6,327,111.70 14,507,046.10
- depostis for letter of credit 1,978,800.00 1,106,811.10
- temporary capital verification 200,000.00 -
1,417,891,485.43 1,113,562,211.65
As at 30 June 2014, no foreign currency deposit in cash atBank and on hand (31 December 2013: RMB134.32,
equivalent to USD22.03).
(2) Notes receivable
30June 2014 31 December 2013
Trade acceptance notes 355,759,809.05 324,806,645.60
Bank acceptance notes 312,453,033.27 414,254,496.12
668,212,842.32 739,061,141.72
(a) Endorsed undue notes receivable
As at 30 June 2014, the Group endorsed the undue notes receivable of RMB506,056,960.37(31 December 2013:
RMB559,034,616.93). The top five notes receivable are analysed as below.
Issuer Issue date Expiry date Amount
Affiliated Hospital of Guangdong
Medical College 28 April2014 25 July 2014 7,755,990.55
The First Affiliated Hospital Of
Anhui Medical University 28 March 2014 28 September 2014 5,000,000.00
- 90 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Leshan Pharmaceutical Co., Ltd. 12 February2014 12 August 2014 4,971,011.54
Anhui Provincial Hospital 26 February2014 26 August 2014 4,819,942.06
Chongqing Medical (Group) Co., Ltd. 19 March 2014 18 September 2014 4,565,100.00
27,112,044.15
- 91 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(2) Notes receivable (continued)
(b) Discounted undue notes receivable
As at 30 June 2014, notes receivable including undue commercial notes of RMB190,267,307.20(31 December 2013:
RMB122,197,293.96)(NoteV(19)), and undue bank acceptance notes of RMB293,493,590.68(31 December 2013:
RMB216,288,519.38) have been discounted.
(c) As at 30 June 2014, the Group has no notes receivable which need to be reclassified as accounts receivable.
(d) As at 30 June 2014，the Group’s notes receivable of RMB6,939,339.00 (31 December 2013: RMB26,286,066.66) have
been pledged to the banks for issurance of bank acceptance note of RMB6,871,641.25 (31 December 2013:
RMB28,173,366.73).The 5 largest and other pledged note receivables are as follow:
Dawer Date of issue Due date Amount
Zhongshan Pharmaceutical Co., Ltd 14 March 2014 14 September 2014 1,040,528.00
Jointown Pharmaceutical Group Limited 20 January 2014 20 July 2014 1,000,000.00
Hainan Chuntch Co., Ltd. 28 May 2014 28 November 2014 1,000,000.00
Hainan Chuntch Co., Ltd. 28 May 2014 28 November 2014 1,000,000.00
Xiangbei Welman Pharmaceutical Co.,Ltd 08 January 2014 08 July 2014 442,200.00
4,482,728.00
(3) Accounts receivable
30June 2014 31 December 2013
Accounts receivable 6,402,666,341.71 5,700,717,918.33
Less: provision for bad debts (22,671,726.34) (25,059,411.55)
6,379,994,615.37 5,675,658,506.78
(a) The aging of accounts receivable and related provision for bad debts are analysed below:
30June 2014 31 December 2013
Amount Provision for bad Amount Provision for bad
debts debts
Within 1 year 6,365,866,562.61 - 5,666,484,029.89 (2,536,716.74)
1 to 2 years 12,763,825.04 (1,238,239.54) 11,872,413.00 (1,899,306.50)
2 to 3 years 5,679,134.94 (3,173,946.71) 4,156,756.90 (2,418,669.77)
Over 3 years 18,356,819.12 (18,259,540.09) 18,204,718.54 (18,204,718.54)
6,402,666,341.71 (22,671,726.34) 5,700,717,918.33 (25,059,411.55)
- 92 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
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 2014 31 December 2013
Carrying amount Bad debt provision Carrying amount Bad debt provision
amount % of total amount rate amount % of total amount rate
balance balance
individually
significant are
subject to
separate
impairment
assessment 45,320,049.83 0.71% (18,105,002.56) 39.95% 27,376,507.20 0.48% (17,791,726.54) 64.99%
receivable
accounts within
similar credit
risk group 6,321,025,471.44 98.72% (578,643.78) 0.01% 5,647,154,773.79 99.06% (479,964.75) 0.01%
individually not
significant but
individually
evaluated for
impairment 36,320,820.44 0.57% (3,988,080.00) 10.98% 26,186,637.34 0.46% (6,787,720.26) 25.92%
6,402,666,341.71 100.00% (22,671,726.34) 0.35% 5,700,717,918.33 100.00% (25,059,411.55) 0.44%
(c) As at 30 June 2014, impairment provision for accounts receivableindividually significant are analysed as below.
Carrying Bad debt
amount provision Rate Assessment for impairment
Guangdong Liyuan Disputed receivable with higher
Pharmaceutical Co., risk of recoverability
Ltd. 15,686,460.93 (15,686,460.93) 100.00%
Affiliated Hospital of Guilin Difference of balance account
Medical University 7,207,003.75 (35,354.20) 0.49% cannot be verified
Liuzhou Municipal Liutie Difference of balance account
Central Hospital 6,031,129.94 (235,948.82) 3.91% cannot be verified
The Second People's Difference of balance account
Hospital of Shenzhen 6,019,867.96 (1,434,789.46) 23.83% cannot be verified
Peking University Shenzhen Difference of balance account
Hospital 5,194,722.56 (670,476.15) 12.91% cannot be verified
Difference of balance account
Beiliu People's Hospital 5,180,864.69 (41,973.00) 0.81% cannot be verified
45,320,049.83 (18,105,002.56)
(d) Provisions for impairment of the receivables which have a similar risk level are analysed below:
30 June 2014 31 December 2013
Carrying amount Bad debt provision Carrying amount Bad debt provision
amount % of total rate amount % of total amount rate
balance amount balance
Within 1 year 6,310,094,576.88 99.83% - - 5,639,111,868.62 99.86% - -
1 to 2 years 10,307,233.98 0.16% (515,361.72) 5.00% 6,486,515.25 0.11% (324,325.76) 5.00%
- 93 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
2 to 3 years 614,500.58 0.01% (61,450.06) 10.00% 1,556,389.92 0.03% (155,638.99) 10.00%
Over 3 years 9,160.00 0.00% (1,832.00) 20.00% - 0.00% - 0.00%
6,321,025,471.44 100.00% (578,643.78) 0.01% 5,647,154,773.79 100.00% (479,964.75) 0.01%
- 94 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(3) Accounts receivable (continued)
(e) As at 30 June 2014, accounts receivable individually not significant but individually evaluated for impairment are
analysed below:
Carrying Bad debt
amount provision Rate Assessment for impairment
The Guangxi Zhuang Autonomous Region
Brain Hospital 3,879,347.00 (11,368.80) 0.29% Uncertainty in recoverability
Zengcheng Shitan Town Central Health Service
Station 3,422,387.35 (500,091.22) 14.61% Uncertainty in recoverability
Difference of balance account
The First People’s Hospital of Hechi 2,733,443.16 (7,177.72) 0.26% cannot be verified
Zengcheng Xianchun Town Health Station 2,349,728.44 (113,462.74) 4.83% Uncertainty in recoverability
Guiping People's Hospital 1,911,534.03 (20,530.20) 1.07% Uncertainty in recoverability
Zengcheng Zhongxin Hospital 1,790,785.10 (404,693.80) 22.60% Uncertainty in recoverability
Zengcheng Yongning Street Yonghe Difference of balance account
Community Health Service 1,695,779.19 (388,430.52) 22.91% cannot be verified
Huaiji Maternal and Child Health-Care Centre 1,626,083.60 (107,175.13) 6.59% Uncertainty in recoverability
Zengcheng Licheng Street Community Health
Service Station 1,587,801.34 (96,691.86) 6.09% Uncertainty in recoverability
The Red Cross Hospital of Liuzhou 1,399,299.92 (12,682.17) 0.91% Uncertainty in recoverability
Taiping Town Conghua City Center Hospital 1,366,124.19 (84,490.78) 6.18% Uncertainty in recoverability
Yulin Hospital of Traditional Chinese Medicine 1,256,017.24 (7,308.90) 0.58% Uncertainty in recoverability
Zengcheng Xintang Town Central Health
Center Shapu Branch 1,200,594.40 (54,626.92) 4.55% Uncertainty in recoverability
The Red Cross Hospital of Yulin 1,141,227.39 (77,658.00) 6.80% Uncertainty in recoverability
Guangzhou Huadu District Xinhua Hospital 1,065,088.61 (143,478.41) 13.47% Uncertainty in recoverability
Zengcheng Yongning Street Ningxi Community
Health Service Station 896,345.39 (199,749.75) 22.28% Uncertainty in recoverability
Shenzhen Maternal and Children Care Difference of balance account
Service Center 825,267.75 (412,992.00) 50.04% cannot be verified
Others (Individually less than 800,000) 6,173,966.34 (1,345,471.08) 21.79% Uncertainty in recoverability
36,320,820.44 (3,988,080.00) 10.98%
(f) Accounts receivable, which have been fully or partly made impairment provision, recovered in current year are listed
below:
Recovered
Reason for Original assessment for bad debt Recovered
recoverability providing impairment provisions amount
Jilin Kaining Pharmaceutical Co.
Ltd. Amount received Uncertainty in recoverability 943,456.49 943,456.49
Jilin Yongtai Pharmaceutical Co.,
Ltd. Amount received Uncertainty in recoverability 775,795.95 775,795.95
Others Uncertainty in recoverability 753,954.24 753,954.24
2,473,206.68 2,473,206.68
- 95 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
(g) Accounts receivable written off in current year are analysed as below:
Nature of the Related party
receivable Amount Reason transaction or not
Guangzhou Dashenlin Account Aged over 5 years, recoverability in
pharmacy Co. Ltd. receivable 773,956.27 significant doubt No
Account Aged over 5 years, recoverability in
Other receivable 506,835.82 significant doubt No
1,280,792.09
- 96 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(3) Accounts receivable (continued)
(h) Accounts receivable due from shareholders with more than 5% (including 5%) of the Company’s equity interest are
analysed as below:
30 June 2014 31 December 2013
Sinopharm Group(Note VI(6)) 3,922,884.40 4,693,304.80
(i) As at 30 June 2014, the top five accounts receivable by customer are analysed as below:
% of the total
Relationship with accounts
the Group Amount Ageing receivable
Disease Control and Prevention
Center of Guangdong Province Third party 198,310,480.00 Within 1 year 3.10%
The First Affiliated Hospital of
GuangXi Medical University Third party 135,269,847.47 Within 1 year 2.11%
Zhujiang Hospital of Southern
Medical Univesity Third party 103,775,555.30 Within 1 year 1.62%
The Third Affiliated Hospital of
ZhongShan University Third party 99,194,786.71 Within 1 year 1.55%
China Resources Guangdong
Pharmaceutical Co., Ltd Third party 74,142,842.71 Within 1 year 1.16%
610,693,512.19 9.54%
(j) Accounts receivable due from related party
As at 30 June 2014, accounts receivable from related party amounted to RMB289,916,775.80(31 December 2013:
RMB272,941,955.43), which is 4.53% of the total accounts receivable (31 December 2013: 4.78%), and no bad debt
provision was provided (31 December 2013: Nil).(Note VI(6)).
(k) In half year of 2014, accounts receivable of RMB912,614,815.13 are derecognized given that irrevocable factoring
contracts agreed with financial institute(Half year of 2013: RMB397,348,933.07).
(l) As at 30 June 2014, the Group’s accounts receivable totalling RMB17,725,404.38(31December
2013:RMB34,340,216.50) have been pledged to bank as security for short-term loan of RMB14,180,323.50(31
December 2013:RMB27,472,173.20)(Note V(19)).
(m) Accounts receivable denominated in foreign currencies are as follows:
30 June 2014 31 December 2013
Foreign Exchange Foreign Exchange
Currency Rate RMB Currency Rate RMB
- 97 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
USD 1,659,963.34 6.1528 10,213,422.44 2,498,855.43 6.0969 15,235,271.66
GBP 70,749.91 10.4978 742,718.41 17,688.80 10.0556 177,871.50
HKD 365,855.08 0.7938 290,415.76 394,001.47 0.7862 309,763.96
11,246,556.61 15,722,907.12
- 98 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(4) Advances to suppliers
(a) The aging of advances to suppliers is analysed below:
30 June 2014 31 December 2013
amount % of total balance amount % of total balance
Within 1 year 98,567,800.29 99.68% 63,940,204.79 99.34%
1 to 2 years 93,626.61 0.09% 344,224.38 0.53%
2 to 3 years 199,228.00 0.20% 42,900.00 0.07%
Above 3 years 33,627.00 0.03% 39,711.00 0.06%
98,894,281.90 100.00% 64,367,040.17 100.00%
(b) As at 30 June 2014, the top five advances to suppliers by customer are analysed below:
Relationship Reason for
with the Group Amount Proportion Ageing unsettlement
Within 6 Advances for
Seiko Eiyo Yakuhin Co Ltd Third party 23,419,917.21 23.68% months procurement
Jiangsu Huawei Pharmaceutical Within 3 Advances for
Logistics Co., Ltd. Third party 15,388,867.39 15.56% months procurement
Tonghua Yusheng Medicine Co., Within 3 Advances for
Ltd. Third party 9,108,450.00 9.21% months procurement
Guangdong Kai Yuan Within 3 Advances for
Pharmaceutical Co., Ltd Third party 6,728,961.60 6.80% months procurement
Guangdong Linrui Pharmaceutical Within 3 Advances for
Co., Ltd Third party 5,362,862.40 5.42% months procurement
60,009,058.60 60.67%
(c) Advances due from related party
As at 30 June 2014, there are advances of RMB3,343,371.93due from related party (31 December 2013:
RMB5,345,896.87), which is 3.38% of the total advances to suppliers (31 December 2013: 8.46%), and no bad debt
provision was provided (31 December 2013: Nil). (Note VI(6)).
(5) Other receivables
30 June 2014 31 December 2013
Petty cash advance to employees 11,016,075.82 5,772,436.51
Receivable of equity transaction(Note (c)) 8,980,000.00 8,980,000.00
Deposit 6,591,974.31 8,338,022.65
Receivable due from related party(Note(h)) 1,590,000.00 2,450,920.81
Others 17,417,836.56 14,955,273.23
45,595,886.69 40,496,653.20
Less: provision for bad debts (10,403,902.29) (10,875,753.49)
35,191,984.40 29,620,899.71
- 99 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
(a) The ageing of other receivables and related provision for bad debts are analysed below:
30 June 2014 31 December 2013
Within 1 year 30,266,104.72 24,095,302.72
1 to 2 years 1,194,687.10 967,739.44
2 to 3 years 140,964.93 763,087.00
Over 3 years 13,994,129.94 14,670,524.04
45,595,886.69 40,496,653.20
- 100 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(5) Other receivables (continued)
(b) Other receivables and related provision for bad debts by category are analysed below:
30 June 2014 31 December 2013
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 19.69% (8,980,000.00) 100.00% 8,980,000.00 22.17% (8,980,000.00) 100.00%
Receivable
accounts within
similar credit
risk group 31,261,684.02 68.57% (199,224.19) 0.64% 26,647,155.69 65.80% (341,346.42) 1.28%
Individually not
significant but
individually
evaluated for
impairment 5,354,202.67 11.74% (1,224,678.10) 22.87% 4,869,497.51 12.03% (1,554,407.07) 31.92%
45,595,886.69 100.00% (10,403,902.29) 22.82% 40,496,653.20 100.00% (10,875,753.49) 26.86%
(c) As at 30 June 2014, impairment provision for other receivables individually significant are analysed as below.
Bad debt Assessment for
Amount 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 2014 31 December 2013
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 29,717,482.61 95.06% - - 24,063,233.50 90.30% - -
1 to 2 years 650,172.53 2.08% (32,508.63) 5.00% 932,329.44 3.50% (46,110.87) 4.95%
2 to 3 years 120,902.13 0.39% (12,090.21) 10.00% 350,830.00 1.32% (35,083.00) 10.00%
Over 3 years 773,126.75 2.47% (154,625.35) 20.00% 1,300,762.75 4.88% (260,152.55) 20.00%
31,261,684.02 100.00% (199,224.19) 0.64% 26,647,155.69 100.00% (341,346.42) 1.28%
(e) As at 30 June 2014, other receivables individually not significant but individually evaluated for impairment are analysed
below:
Assessment for
Amount Bad debt provision Rate impairment
- 101 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Uncertainty in
ShenZhen Health Food I&E Co., Ltd. 1,157,860.00 (1,157,860.00) 100.00% recoverability
Uncertainty in
Others 4,196,342.67 (66,818.10) 1.59% recoverability
5,354,202.67 (1,224,678.10) 22.87%
- 102 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(5) Other receivables (continued)
(f) Other receivables due from shareholders with more than 5% (including 5%) of the Company’s equity interest are
analysed as below:
30 June 2014 31 December 2013
Sinopharm Group (Note VI(6)) 250,000.00 250,000.00
(g) As at 30 June 2014, the top five other receivables by customer are analysed below:
Relationship % of the total
withthe Group Amount Ageing other receivable
Shenzhen Yinghai Technology&Investment Co., Ltd. Third party 8,980,000.00 Above 5 years 19.69%
Guangxi Autonomous Region Housing System
1,894,499.59
Reformed Department Third party Above 5 years 4.15%
Liuzhou Housing Provident Fund Management
1,226,365.82
Center- Specific Account for Housing Fund Third party Above 5 years 2.69%
Sinopharm Medicine Logistics Co., Ltd. Related party 1,215,000.00 Within 1 year 2.66%
Shenzhen Health Food I&E Co., Ltd. Third Party 1,157,860.00 4-5 years 2.54%
14,473,725.41 31.73%
(h) Other receivables due from related party
As at 30 June 2014, there are other receivables of RMB1,590,000.00due from related party (31 December 2013:
RMB2,450,920.81), which is 3.49% of the total other receivables(31 December 2013: 6.05%), without bad debt
provided (31 December 2013: Nil). (Note VI(6)).
(6) Inventories
(a) Inventories by category are analysed as below:
30 June 2014 31 December 2013
Book value Provision Net book Book value Provision Net book
Value Value
Raw materials 95,274,899.97 (7,095,514.85) 88,179,385.12 125,355,376.95 (5,666,854.74) 119,688,522.21
Packaging materials 641,808.75 (9,392.54) 632,416.21 545,583.87 (18,076.22) 527,507.65
Consigned
processing
materials 1,082,832.94 - 1,082,832.94 520,289.18 - 520,289.18
Finished goods 2,082,360,570.49 (9,391,114.41) 2,072,969,456.08 1,673,005,932.68 (17,091,438.82) 1,655,914,493.86
Work in progress 26,441,693.91 - 26,441,693.91 53,983,888.09 - 53,983,888.09
Low cost consumables 522,805.69 (59,591.25) 463,214.44 632,589.01 - 632,589.01
2,206,324,611.75 (16,555,613.05) 2,189,768,998.70 1,854,043,659.78 (22,776,369.78) 1,831,267,290.00
(b) Provision for declines in value of inventories is analysed as below:
Decreases 30 June
31 December 2013 Increases Reversal Written off 2014
- 103 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Raw materials 5,666,854.74 2,099,229.07 (381,327.48) (289,241.48) 7,095,514.85
Finished goods 17,091,438.82 7,236,422.28 (36,937.29) (14,899,809.40) 9,391,114.41
Packaging materials 18,076.22 8,928.21 (17,611.89) - 9,392.54
Low cost onsumables - 68,333.45 (8,742.20) - 59,591.25
22,776,369.78 9,412,913.01 (444,618.86) (15,189,050.88) 16,555,613.05
- 104 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(6) Inventories (continued)
(c) Provision for decline in the value of inventories are as follows:
Reason of recognise Reason of reverse Reversed Amount/
impairment provision impairment provision Total Inventory
Raw material Carrying amount of raw materials is Increase in net realisable 0.40%
lower than the net realisable value value resulted from sales
caused by decline in the price of price increasing
product
Finished goods Carrying amount of finished Increase in net realisable value -
goods is lower than the net realisable resulted from sales price
value caused by decline in the price increasing
of product
Packaging Carrying amount of packaging Increase in net realisable value 2.74%
materials materials is lower than the net resulted from sales price
realisable value caused by decline in increasing
the price of product
Low cost Carrying amount of Low cost Increase in net realisable value 1.67%
consumables consumables is lower than the net resulted from sales price
realisable value caused by decline in increasing
the price of product
(7) Other current assets
30 June 2014 31 December 2013
Corporate income tax to be deducted 242,231.34 244,354.28
VAT to be deducted 21,254,188.22 10,474,150.59
Other - 1,485,247.90
21,496,419.56 12,203,752.77
(8) Long-term equity investments
30 June 2014 31 December 2013
Associates - Without quoted price (a) 130,784,733.02 135,341,010.52
The Group has no liquidity restriction on its long-term equity investments.
- 105 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(8) Long-term equity investments (continued)
(a) Associates
Increases/(Decreases)
Voting Explanation for the inconsistence between
Cash dividends Equity
Accounting Original Share of profit of declared by 30 June interest rights held equity interest held
method investment cost 31 December 2013 associate associate 2014 held(%) (%) and voting rights held
Note V(41)
Board of the directors is the highest
decision making organization, which is
Shenzhen Wanle Medical formed by 3 shareholders of Wanle
Co., Ltd.(“Wanle Equity Medical evenly, each shareholder appoints
Medical”) method 4,457,400.00 135,341,010.52 23,595,722.50 (28,152,000.00) 130,784,733.02 35.19 33.33 2 directors set up the borad
(9) Investment in associates
Equity interest held Voting rights held As at 30 June 2014 For the six months ended 30 June 2014
Total assets Total liabilities Net assets Revenues Net profit
(%) (%)
Wanle Medical 35.19 33.33 764,367,375.88 392,714,255.61 371,653,120.27 412,190,470.43 67,052,351.55
- 106 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(10) Investment properties
31 December 2013 Increase in Decrease in 30 June
Current year Current year 2014
Cost 167,235,723.04 316,030.61 - 167,551,753.65
Buildings 148,052,856.82 247,247.27 - 148,300,104.09
Land use rights 19,182,866.22 68,783.34 - 19,251,649.56
Accumulated
depreciation/
amortisation (88,666,004.90) (2,869,025.16) - (91,535,030.06)
Buildings (86,324,250.54) (2,712,742.80) - (89,036,993.34)
Land use rights (2,341,754.36) (156,282.36) - (2,498,036.72)
Net book value 78,569,718.14 76,016,723.59
Buildings 61,728,606.28 59,263,110.75
Land use rights 16,841,111.86 16,753,612.84
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 77,269,718.14 74,716,723.59
Buildings 60,428,606.28 57,963,110.75
Land use rights 16,841,111.86 16,753,612.84
In 2014, half of the year, depreciation and amortization of investment properties amount RMB 2,752,681.18 (2013 Half
of the year: RMB 3,109,987.30).
In half year of 2014, the Group changed the use of buildings with a carrying amount of RMB199,686.63 (cost of
RMB316,030.61, accumulated depreciation RMB116,343.98) to lease-out properties,and therefore,such assets were
transferred from fixed assets and intangible assets to investment properties at the dates of change.
- 107 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(11) Fixed assets
31 December Current year other Transfer to investment Current year disposals 30 June
2013 additions properties 2014
Cost 1,250,447,403.48 24,800,566.60 (247,247.27) (7,805,603.93) 1,267,195,118.88
Buildings 523,075,719.87 679,709.02 (247,247.27) (21,000.00) 523,487,181.62
Machinery and
equipment 453,238,323.34 5,933,342.72 - (4,604,806.00) 454,566,860.06
Motor vehicles 57,578,677.13 2,112,704.73 - (2,616,730.30) 57,074,651.56
Other 188,925,746.07 15,547,160.13 - (548,067.63) 203,924,838.57
Leasehold
improvements 27,628,937.07 527,650.00 - (15,000.00) 28,141,587.07
Accumulated
depreciation (478,365,887.71) (45,286,799.32) 108,554.44 5,678,332.35 (517,865,800.24)
Buildings (121,245,681.23) (10,683,613.20) 108,554.44 9,325.64 (131,811,414.35)
Machinery and
equipment (197,709,620.62) (20,273,536.42) - 2,990,253.04 (214,992,904.00)
Motor vehicles (32,273,157.01) (2,839,419.76) - 2,214,170.15 (32,898,406.62)
Other (111,889,907.22) (9,756,505.76) - 452,683.31 (121,193,729.67)
Leasehold
improvements (15,247,521.63) (1,733,724.18) - 11,900.21 (16,969,345.60)
Net book value 772,081,515.77 749,329,318.64
Buildings 401,830,038.64 391,675,767.27
Machinery and
equipment 255,528,702.72 239,573,956.06
Motor vehicles 25,305,520.12 24,176,244.94
Other 77,035,838.85 82,731,108.90
Leasehold
improvements 12,381,415.44 11,172,241.47
provision for
diminution in
value (5,339,925.14) - - 1,168,265.97 (4,171,659.17)
Buildings (2,405,177.30) - - 10,624.36 (2,394,552.94)
Machinery and
equipment (2,930,449.81) - - 1,153,343.58 (1,777,106.23)
Motor vehicles - - - - -
Other (1,948.24) - - 1,948.24 -
Leasehold
improvements (2,349.79) - - 2,349.79 -
Carrying amount 766,741,590.63 745,157,659.47
Buildings 399,424,861.34 389,281,214.33
- 108 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Machinery and
equipment 252,598,252.91 237,796,849.83
Motor vehicles 25,305,520.12 24,176,244.94
Other 77,033,890.61 82,731,108.90
Leasehold
improvements 12,379,065.65 11,172,241.47
- 109 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(11) Fixed assets (continued)
For the six months ended 30 June 2014, details of the depreciation charged arebelow:
For the six months ended For the six months ended
30 June 2014 30 June 2013
Cost of goods sold 19,978,061.91 23,347,564.25
Selling expenses 1,016,530.46 1,977,163.35
General and administrative expenses 20,256,417.51 12,758,408.59
Research and development expenses 4,035,789.44 4,257,148.68
45,286,799.32 42,340,284.87
For the six months ended 30 June 2014, fixed assets transferred from construction in progress are
RMB16,173,324.53(For the six months ended 30 June 2014:5,585,774.91).
(12) Construction in progress
30 June 2014 31 December 2013
Pingshan Pharmaceutical Research & Development
Manufacturing Base 122,781,807.79 54,720,588.89
Zhijun Production Workshop Technological
Transformation Project 13,145,496.07 21,852,704.06
Cephalosporin Powder Injection Preparation Workshop
Transformation Project 28,476,887.89 19,393,066.62
Peinan Project 11,438,747.84 11,438,747.84
Sewage Transformation Project etc. 5,801,283.79 4,417,283.79
Shenzhen Logistics CenterStage II Warehouse
Transformation Project 399,676.74 4,555,429.58
Warehouse Transformation Project - 879,037.82
Other projects 10,643,164.29 9,349,947.41
192,687,064.41 126,606,806.01
- 110 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(12) Construction in progress (continued)
Changes of construction in progress in six months ended 30June 2014are below:
Name of project Budget of project 31 December Current year Transfer out during 30 June Cost up Construction Accumulated Borrowing Weighted Financed
2013 additions current year 2014 todate out in capitalized cost average by
of progress interest
borrowing capitalized
budget (%) rate (%)
cost in 2010
(%)
Pingshan Pharmaceutical Working capital、
Research & Development Financial
Manufacturing Base institutions
borrowing and
881,370,000.00 54,720,588.89 68,061,218.90 - 122,781,807.79 14% 18% 2,437,151.20 2,437,151.20 5.58% Entrusted loan
Zhijun Production Workshop Working capital
Technological Transformation
Project 99,976,000.00 21,852,704.06 7,466,116.54 (16,173,324.53) 13,145,496.07 39% 39% - - -
Cephalosporin Powder Injection Working capital
Preparation Workshop
Transformation Project 35,000,000.00 19,393,066.62 9,083,821.27 - 28,476,887.89 81% 90% - - -
Peinan Project 40,000,000.00 11,438,747.84 - - 11,438,747.84 28% 28% - - - Working capital
Shenzhen Logistics CenterStage Working capital
II Warehouse Transformation
Project 5,750,000.00 4,555,429.58 223,396.65 (4,379,149.49) 399,676.74 83% 100% - - -
Sewage Transformation Project Working capital
etc. 6,300,000.00 4,417,283.79 1,384,000.00 - 5,801,283.79 85% 99% - - -
Warehouse Transformation Working capital
Project 21,790,000.00 879,037.82 - (879,037.82) - 93% 100% - - -
Other projects - 9,349,947.41 1,366,537.40 (73,320.52) 10,643,164.29 - - - - - Working capital
1,090,186,000.00 126,606,806.01 87,585,090.76 (21,504,832.36) 192,687,064.41
- 111 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(13) Intangible assets
31 December Current year Current year 30 June
2013 additions decreases 2014
Cost 254,572,956.12 843,173.03 (68,783.34) 255,347,345.81
Land use rights 145,850,489.22 498,539.51 (68,783.34) 146,280,245.39
Computer
software 20,982,653.94 344,633.52 - 21,327,287.46
Proprietary
technology 53,885,820.10 - - 53,885,820.10
Trademarks 196,850.00 - - 196,850.00
Sales network 33,657,142.86 - - 33,657,142.86
Accumulated
amortization (101,010,991.66) (3,836,803.21) 7,789.54 (104,840,005.33)
Land use rights (34,158,408.37) (1,627,833.75) 7,789.54 (35,778,452.58)
Computer
software (14,331,025.98) (1,207,350.61) - (15,538,376.59)
Proprietary -
technology (49,630,659.69) (160,190.28) (49,790,849.97)
Trademarks (196,850.00) - - (196,850.00)
Sales network (2,694,047.62) (841,428.57) - (3,535,476.19)
Net book value 153,561,964.46 150,507,340.48
Land use rights 111,692,080.85 110,501,792.81
Computer
software 6,651,627.96 5,788,910.87
Proprietary
technology 4,255,160.41 4,094,970.13
Trademarks - -
Sales network 30,963,095.24 30,121,666.67
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 150,561,964.46 147,507,340.48
Land use rights 111,692,080.85 110,501,792.81
Computer
software 6,651,627.96 5,788,910.87
Proprietary
technology 1,255,160.41 1,094,970.13
- 112 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Trademarks - -
Sales network 30,963,095.24 30,121,666.67
In half year of 2014, amortization of intangible assets amount RMB 3,836,803.21 (2013 Half of the year: RMB
4,601,419.99).
- 113 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(13) Intangible assets(continued)
Expenditures on research and development incurred in half year of 2014 are listed as below:
30 June 2014 31 December 2013
Development costs 5,619,315.47 5,619,315.47
In half year of 2014, research and development expenditureof the group amounted to RMB 32,143,996.40(Half year of
2013: RMB34,523,641.48), RMB32,143,996.40 of which has been charged into current period profits and losses (half
year of 2013: RMB34,212,956.64).
(14) Goodwill
30 June 2014 31 December 2013
Goodwill 85,228,833.15 85,228,833.15
Less: provision for impairment (a) - -
85,228,833.15 85,228,833.15
(a) Impairment
The goodwill allocated to the asset groups and groups of asset groups are summarised by operating segments as follows:
30 June 2014 31 December 2013
Pharmaceutical distribution-
Sinopharm Jiangmen 27,392,317.73 27,392,317.73
Sinopharm Yanfeng 16,868,644.87 16,868,644.87
Sinopharm Zhaoqing 2,594,341.53 2,594,341.53
Sinopharm Shaoguan 1,686,496.80 1,686,496.80
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
Pharmaceutical manufacturing -
ZhijunSuzhou 33,869,393.32 33,869,393.32
85,228,833.15 85,228,833.15
Recoverable amount of asset group or combination of group assets is based on the approved five year budget, calculated
according to the cash flow forecasting method. Management determines budgeted gross margin based on historical
experience and forecast on market development, the discount rates determined by management are the pre-tax interest
rates which reflect the risks specific to the related asset groups and groups of asset groups. The above assumptions are
used to assess the recoverable amount of each asset group and group of asset groups within the corresponding operating
segment.As at 30 June 2014, management of the Group considered there was no impairment to goodwill recognised
according to the impairment assessment.
- 114 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
(15) Long-term prepaid expenses
31 December Current year Current year 30 June
2013 additions amortisation 2014
Leasehold improvements 33,965,413.81 8,020,246.54 (3,076,324.16) 38,909,336.19
Others 2,020,207.66 - (963,410.66) 1,056,797.00
35,985,621.47 8,020,246.54 (4,039,734.82) 39,966,133.19
In half year of 2014, current period additions includes RMB5,331,507.83 transferred from Construction in progress.
- 115 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(16) Deferred income tax assets and deferred income tax liabilities
(a) Deferred income tax assets
30 June 2014 31 December 2013
Deferred income Deductible Deferred income Deductible
tax assets temporary tax assets temporary
differences differences
Deductible losses 24,662,835.50 102,186,726.34 10,009,584.17 64,531,193.67
Accrued expenses 14,860,455.85 86,248,327.69 9,323,398.38 51,691,587.96
Deferred revenue 12,975,041.82 81,892,590.81 13,056,138.55 84,518,146.08
Accrued payroll 12,428,193.24 62,603,719.79 14,401,729.27 70,542,501.21
Provision for
accounts receivable 5,662,784.83 22,671,726.34 6,032,385.45 25,059,411.55
Provision for declines in
value of inventories 3,594,322.28 16,555,613.05 3,640,508.27 22,776,369.78
Provision for other
receivables 2,600,638.08 10,403,902.29 2,711,760.38 10,875,753.49
Accrued liabilities - - 5,510,000.00 22,040,000.00
Provision for fixed
assets impairment 609,946.05 2,664,057.68 638,247.96 3,844,571.35
Others 1,517,451.70 6,069,806.78 3,572,185.82 15,362,493.44
78,911,669.35 391,296,470.77 68,895,938.25 371,242,028.53
(b) Deferred income tax liabilities
30 June 2014 31 December 2013
Deferred income Deductible Deferred income Deductible
tax liabilities temporary tax liabilities temporary
differences differences
Changes in fair value 11,217,172.96 44,868,691.82 11,613,211.10 46,452,844.40
Business combination
involving entities not
under common control 9,931,575.49 39,726,301.93 9,219,687.61 40,822,520.57
Others 3,828,095.01 15,312,380.04 3,811,989.05 15,351,076.30
24,976,843.46 99,907,373.79 24,644,887.76 102,626,441.27
(c) As at 30 June 2014, the Group has not recognised deferred tax assets in respect of deductible losses and other deductible
temporary differences are listed as below.
30 June 2014 31 December 2013
Deductible losses(Note(i)) 1,627,172.87 1,627,172.87
- 116 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
(i) For those loss-making subsidiaries, the Group does not recognise deferred tax assets arising from accumulated losses
amounting to RMB1,627,172.87which are tax deductible under the tax law within 2014 to 2018.
As at 30 June 2014, the unrecognised deferred tax assets in respect of deductible losseswill be expired as follows:
Year 30 June 2014 31 December 2013
2015 1,627,172.87 1,627,172.87
- 117 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(17) Provision for asset impairment
31 December Decreases 30 June
2013 Increases Reversal Written off 2014
Bad debt provision 35,935,165.04 1,517,564.27 (3,096,308.59) (1,280,792.09) 33,075,628.63
Including:
Provision for ccounts
receivable 25,059,411.55 1,479,880.30 (2,586,773.42) (1,280,792.09) 22,671,726.34
Provision for other
receivables 10,875,753.49 37,683.97 (509,535.17) - 10,403,902.29
Provision for declines in
value of inventories 22,776,369.78 9,412,913.01 (444,618.86) (15,189,050.88) 16,555,613.05
Provision for fixed assets 5,339,925.14 - - (1,168,265.97) 4,171,659.17
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
68,351,459.96 10,930,477.28 (3,540,927.45) (17,638,108.94) 58,102,900.85
(18) Other non-current assets
30 June 2014 31 December 2013
Non-monetary compensation of resettlement (Note
V(31)) 70,250,000.00 70,250,000.00
Medical reserve fund 45,389,023.37 44,071,813.66
Prepayment for equipment 34,280,530.39 23,336,486.75
Equity money in advance - 2,247,000.00
149,919,553.76 139,905,300.41
(19) Short-term borrowings
(a) Bank borrowings are analysed by catagories as follows:
Currency 30 June 2014 31 December 2013
Unsecured borrowings (Note(i)) RMB 696,853,183.30 1,643,740,120.17
Guaranteed borrowings (Note(ii)) RMB 499,501,360.34 551,532,001.78
Discounted notes (Note V(2)(b)) RMB 190,267,307.20 122,197,293.96
Pledged borrowings (Note V(3)(l)) RMB 14,180,323.50 27,472,173.20
Entrusted borrowings RMB - 400,000,000.00
1,400,802,174.34 2,744,941,589.11
(i) As at 30 June 2014, unsecured borrowings of RMB 656,853,183.30(31 December 2013: RMB1,323,740,120.17) are
guaranteed by the Company and its subsidiaries, unsecured borrowings of RMB40,000,000.00(31 December
2013:RMB320,000,000.00) are lent by Sinopharm Group Financial Co., Ltd. (“Group Financial Co.”).
- 118 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
(ii) As at 30 June 2014, bank borrowings of RMB499,501,360.34(31 December 2013: RMB551,532,001.78) are guaranteed
by Sinopharm Group;
As at 30 June 2014, the weighted average interest rate of short-term borrowings is 6.13% per annum (31 December
2012: 5.83%).
(b) As at 30 June 2014, there were no expired bank borrowings(31 December 2013: Nil).
- 119 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(20) Notes payable
30 June 2014 31 December 2013
Bank acceptance notes 912,689,915.29 1,137,746,742.09
Trade acceptance notes 357,890,687.26 357,654,446.00
1,270,580,602.55 1,495,401,188.09
As at 30 June 2014, notes receivable of RMB1,270,580,602.55would be expired within 1 year (31 December 2013:
RMB1,495,401,188.09).
(21) Accounts payable
30 June 2014 31 December 2013
Trade payable 4,184,497,888.86 3,436,936,497.16
(a) Accounts payable due from shareholders with more than 5% (including 5%) of the Company’s equity interest are
analysed as below:
30 June 2014 31 December 2013
Sinopharm Group(Note VI(6)) 51,450,848.88 38,114,764.12
(b) Accounts payable due to related party
As at 30 June 2014, there are accounts payable of RMB324,152,930.37due to related party (31 December 2013:
RMB249,751,993.01), which accounts for 7.75% of the total accounts payable(31 December 2013: 7.27%).(Note VI(6)).
(c) As at 30 June 2014, accounts payable of RMB91,139,379.93(31 December 2013: RMB92,581,168.79) 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 2014 31 December 2013
Foreign Currency Exchange RMB Foreign Currency Exchange RMB
rate rate
USD 1,448,670.50 6.1528 8,913,379.85 1,025,442.00 6.0969 6,252,017.33
(22) Advances from customers
30 June 2014 31 December 2013
- 120 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Sales received in advance 25,982,230.10 38,570,231.44
As at 30 June 2014, there are RMB174,496.65of advances due to related party (31 December 2013: RMB129,139.99),
which accounts for 0.67% of the total accounts payable(31 December 2013: 0.33%). (Note VI(6)).
As at 30 June 2014, advances from customers of RMB1,243,369.07(31 December 2013: RMB1,307,064.22) were aged
over 1 year. Before the financial statement is approved, no such long aged advance has been settled.
- 121 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(23) Employee benefits payable
31 December Current year Current year 30 June
2013 additions reductions 2014
Wages and salaries,
bonuses, allowances
and subsidies 134,064,138.60 221,066,667.61 (258,907,827.06) 96,222,979.15
Staff welfare 1,215,567.00 10,366,234.00 (11,436,838.53) 144,962.47
Social security
contributions 912,142.97 27,424,673.98 (27,390,975.07) 945,841.88
Including:
Medical insurance 93,292.12 7,198,869.41 (7,152,584.04) 139,577.49
Basic pensions 692,682.31 17,992,302.13 (17,986,945.17) 698,039.27
Unemployment insurance 87,692.95 1,051,012.04 (1,089,483.63) 49,221.36
Work injury insurance 19,082.96 630,086.23 (617,394.39) 31,774.80
Maternity insurance 19,392.63 552,404.17 (544,567.84) 27,228.96
Housing funds 779,385.83 8,646,842.16 (8,678,188.82) 748,039.17
Supplemental pensions 593,860.97 1,653,502.47 (347,960.60) 1,899,402.84
Labor union funds and
employee education funds 12,607,659.97 7,358,704.45 (6,084,419.70) 13,881,944.72
Compensation for employee
dismission 3,408,407.84 32,583.26 (82,546.06) 3,358,445.04
Early retirement benefits 4,809,240.00 112,841.14 (461,566.60) 4,460,514.54
Others 1,075,960.94 1,580,926.53 (1,913,939.96) 742,947.51
159,466,364.12 278,242,975.60 (315,304,262.40) 122,405,077.32
As at 30 June 2014, there are no payroll payables in arrears. Most part of the payroll payables would be paid out in the
coming year 2015.
(24) Taxes payable
30 June 2014 31 December 2013
Enterprise income tax payable 53,091,040.16 42,539,425.26
Value-added-tax payable 16,837,078.56 16,407,977.00
Water conservancy fund payable 4,782,768.03 4,830,062.90
Anti-flood fund payable 2,627,776.56 4,517,546.01
Stamp duty tax payable 1,215,231.28 1,660,657.55
City maintenance and construction tax payable 1,462,300.80 1,296,993.82
Real estate tax payable 972,146.98 1,110,392.16
Business tax payable 1,248,722.50 967,037.88
Educational surcharge payable 1,033,385.52 933,092.63
Rivers management fee payable 463,368.44 428,177.78
Individual income tax payable 2,847,092.10 1,224,396.25
- 122 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Others 473,939.50 129,500.80
87,054,850.43 76,045,260.04
- 123 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(25) Interests payable
30 June 2014 31 December 2013
Short term borrowing interests payable 9,672,066.00 13,065,850.14
Long term borrowing interests payable 18,015.21 -
9,690,081.21 13,065,850.14
(26) Other payables
30 June 2014 31 December 2013
Accrued selling and distribution expenses 217,427,657.34 179,075,786.05
Amount collected on behalf of third party 156,377,886.98 135,601,089.66
Payables for construction in progress and
equipment 70,313,271.00 66,609,945.42
Deposit 14,687,602.72 19,990,983.83
Compensation payment for suspension of chebei
project (Note V (28)) - 12,620,000.00
Equity transaction payable 15,140,803.17 11,415,803.17
Others 74,557,586.37 70,788,639.26
548,504,807.58 496,102,247.39
(a) Other payables due to shareholders with more than 5% (including 5%) of the Company’s equity interest are
analysed as below:
30 June 2014 31 December 2013
Sinopharm Group(Note VI (6)) 4,530,696.87 4,530,696.87
(b) Other payables due to related party
As at 30 June 2014, there are other payables of RMB16,030,612.59due to related party (31 December 2013:
RMB12,732,813.77), which accounts for 2.92% of the total other payables (31 December 2013: 2.57%). (Note VI(6)).
(c) As at 30 June 2014, other payables of RMB108,496,305.15(31 December 2013: RMB81,693,772.92) were aged over 1
year, which were mainly for accrued selling expenses. Before the financial statement is approved, no such long aged
accounts payable have been settled.
- 124 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(27) Current portion of long-term borrowings
30 June 2014 31 December 2013
Promotion rewards program
- due within one year 6,733,400.00 7,800,000.00
(28) Other non-current liabilities
30 June 2014 31 December 2013
Accured liabilities (Note(a)) - 22,040,000.00
(a) In March 2010, the Group signed a contract about real estate development project cooperation on the Group’s Land
(hereinafter referred to as "the Cooperative Contract")with a real estate development company (hereinafter referred to as
"the Other Contract Party"). The project had never substantively started after the contract was signed. In 2012, the
Group determined to terminate the contract based on development plannning. The Other Contract Party took legal
proceeding against the Group to the People’s Court of Tianhe District to pay for the remaining compensation, late
penalty and double the compensation. On 10 May 2013, the Group received the first civil judgement that the Group
need to pay the Other Contract Party the remaining compensation RMB11.02 million, later penalty RMB11.02 million
and the doubled compensation RMB11.02 million. The Group appeal against the judgement made by People’s Court of
Tianhe District, as the Group wasn’t satisfied with the judgement. As of 14 February 2014, the Group received the final
civil judgement from Intermediate People’s Court of Tianhe District, that the late penalty of RMB11.02 million was
rejected. As both parties are entitled to apply to People's Court for retrial within six months, Management believes it’s
not able to make a reliable estimate of the final outcome of the contract dispute. Therefore, the Group accrued the
provision and recognised non-operating expenses of RMB22.04 for prudence (Note V(43)).Up to the report day, as the
time limit for retrial has expired, the Group hasn’t been noticed of a retrial, the Group therefore reverse the rejected late
penalty and recognized it as non-operating income (Note V(42)). The remaining compensation and doubled
compensation was paid according to the judgement.
- 125 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(29) Long-term borrowings
Currency 30 June 2014 31 December 2013
Unsecured borrowings RMB 8,095,448.00 -
Entrusted borrowings (i) RMB 31,600,000.00 -
39,695,448.00 -
(i) As at 30June 2014, consigned loan of RMB31,600,000.00 is lend by CNPGC through Group Financial Co. (31
December 2013: Nil).
As at 30June 2014, the weighted average interest rate of long-term borrowings 5.70%(31 December2013: Nil)
(a) Top two long-term borrowing
Borrowing Repayment Currency Interest 30 June 2014 31 December 2013
date date rate per
annum
(%)
The State
Development
Bank Shenzhen
branch 4 April 2014 4 April 2022 RMB 6.88% 8,095,448.00 -
CNPGC 7 May 2014 7 May 2017 RMB 5.40% 31,600,000.00 -
(30) Payables for specific projects
30 June 2014 31 December 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 3,000,000.00 3,000,000.00
4,287,000.00 4,287,000.00
(31) Other non-current liabilities
30 June 2014 31 December 2013
Deferred income(Note(a)) 179,335,747.55 176,531,418.18
Medical reserve funds (Note(b)) 45,427,343.31 45,427,343.31
224,763,090.86 221,958,761.49
- 126 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(31) Other non-current liabilities(continued)
(a) Deferred income
30 June 2014 31 December 2013
Government grants
Resettlement Compansation(i) 87,698,279.69 89,047,483.97
Cephalosporin Solid Preparations Development
Project 15,000,000.00 15,000,000.00
Guangxi Logistics Project 5,871,493.35 6,006,695.79
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
Cephalosporin Powder Injection Passing EU-GMP
Authentication 5,000,000.00 5,000,000.00
Esomeprazole Magnesium Enteric-coated Pellets
Industrial R&D Projects 2,668,537.40 2,700,000.00
Cefpirome Sulfate R&D Project 2,515,089.58 2,637,395.56
Shared Logistics Center(completed) 1,694,615.30 2,163,761.90
Cefixime Particles Prescription Process
Improvement and Industrial Project 2,000,000.00 2,000,000.00
New Cephalosporin R&D Project 1,524,640.66 1,829,887.42
Other Projects(in progress) 16,770,026.00 10,091,515.54
155,742,681.98 151,476,740.18
Promotion Rewards Program 23,593,065.57 25,054,678.00
179,335,747.55 176,531,418.18
Amount included
31 December Current year in non-operating 30 June Related to
Government grants programme 2013 addition income in 2014 2014 income/assets
Resettlement Compansation(i) 89,047,483.97 - (1,349,204.28) 87,698,279.69 Related to assets
Cephalosporin Solid Preparations
Development Project 15,000,000.00 - - 15,000,000.00 Related to assets
Guangxi Logistics Project 6,006,695.79 - (135,202.44) 5,871,493.35 Related to assets
R&D Library 5,000,000.00 - - 5,000,000.00 Related to assets
Medical R&D center II 5,000,000.00 - - 5,000,000.00 Related to assets
Medication for Stomach Disease
R&D Project 5,000,000.00 - - 5,000,000.00 Related to assets
Cephalosporin Powder Injection
Passing EU-GMP Authentication 5,000,000.00 - - 5,000,000.00 Related to assets
Esomeprazole Magnesium
Enteric-coated Pellets Industrial
R&D Projects 2,700,000.00 - (31,462.60) 2,668,537.40 Related to assets
Cefpirome Sulfate R&D Project 2,637,395.56 - (122,305.98) 2,515,089.58 Related to assets
Shared Logistics Center 2,163,761.90 - (469,146.60) 1,694,615.30 Related to assets
Cefixime Particles Prescription
Process Improvement and
Industrial Project 2,000,000.00 - - 2,000,000.00 Related to assets
New Cephalosporin R&D Project 1,829,887.42 - (305,246.76) 1,524,640.66 Related to assets
Other projects 10,091,515.54 7,700,000.00 (1,021,489.54) 16,770,026.00 Related to assets
- 127 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
151,476,740.18 7,700,000.00 (3,434,058.20) 155,742,681.98
(i) Because the Nanning Government planned to reconstruction of the old urban area, a subsidiary of the company, Guangxi
Logistics, which located in Nanning Longteng Road need to relocated. According to compensation agreement signed in
May, 2012, the company obtained RMB120,250,000.00 compensation for the demolition carried out by the government,
including cash compensation amounted RMB50,000,000.00 and another physical compensation amounted
RMB70,250,000.00 would be received in year 2015 when completion( Note V(18)). Amounting to RMB93,320,000.00
relating to capital expenditure for reconstruction was recognised as deferred income, which would be amortised to profit or
loss over the useful life of the related asset; others was recognised in profit or loss in 2012.
(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.
- 128 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(32) Share capital
30 June 2014 31 December 2013
Listed shares without 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
Restricted share-shares held by state - owned companies(i) 74,482,543.00 -
362,631,943.00 288,149,400.00
(i) In 28 Febraury 2014, the Company was permitted to issue ordinary shares (A share) to Sinopharm Group, a domestic
investor according toDocument [2014] No. 232 《关于核准国药集团一致药业股份有限公司非公开发行股票的批
复》issued by China Securities Regulatory Commission. Face value of the stock is RMB 1 yuan, the number issued is
74,482,543 (The shares shall not be transferred within 36 months since the issued day.) and the issue price is RMB 26.07
Yuan.
Through the non-public offering of ordinary shares (A share), the Company has received funding of RMB
1,941,759,896.01, including the increase of equity of RMB74,482,543.00, the increase of capital reserve of RMB
1,854,582,870.47 (expenses related to the issurance of RMB 12,694,482.54 has been deducted, while the interest income
generated from purchasing funds during the freezing period of issurance). All increase of capital has been invested with
cash in RMB.
These funds has been gathered by 14 March 2014, and verified by PricewaterhouseCoopers Zhong Tian LLP,
Guangzhou Branch with the capital verification report 普华永道中天验字(2014)第 132 号.
(33) Capital surplus
31 December Current year Current year 30 June
2013 addition reductions 2014
The share premium (Note(32)) - 1,854,582,870.47 - 1,854,582,870.47
Other 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 720,000.00 - - 720,000.00
5,750,338.57 1,854,582,870.47 - 1,860,333,209.04
31 December Current year 31 December
2012 Current year addition reductions 2013
Other 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 520,000.00 200,000.00 - 720,000.00
- 129 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
5,550,338.57 200,000.00 - 5,750,338.57
- 130 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(34) Surplus reserve
31 December Current year Current year 30 June
2013 additions reductions 2014
Statutory surplus reserve 144,855,634.40 - - 144,855,634.40
31 December Current year Current year 31 December 2013
2012 additions reductions
Statutory surplus reserve 99,360,384.15 45,495,250.25 - 144,855,634.40
(35) Undistributed profits
For the six months ended 30 June For the six months ended 30 June
2014 2013
Amount Appropriation Amount Appropriation
rate rate
Undistributed profits at beginning of
year 1,806,002,285.06 1,382,882,906.24
Add:net profit attributable to the
shareholders of the company 349,213,988.51 520,488,198.80
Less:appropriation of statutory surplus
reserve (Note V(34)) - (45,495,250.25) 10%
Dividends (a) (65,273,749.74) (51,866,892.00)
Other outflow - (6,677.73)
Ending balance of retained earnings 2,089,942,523.83 1,806,002,285.06
(a) Pursuant to the resolution of General Meetingon 19April2014, cash dividends of RMB65,273,749.74 (RMB1.8 per 10
shares) was paid based on the issued shares of 362,631,943.
(36) Minority Interest
Minority interests are analysed as below:
30 June 2014 31 December 2013
Sinopharm Liuzhou 46,980,175.66 41,954,133.73
Sinopharm Yanfeng 26,352,684.01 23,410,777.54
Sinopharm Shaoguan 5,945,695.81 6,507,084.81
Sinopharm Shantou 3,078,481.00 -
Sinopharm Wuzhou 7,812.11 7,410.46
82,364,848.59 71,879,406.54
- 131 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(37) Sales and cost of sales
For the six months ended For the six months ended
30 June 2014 30 June 2014
Revenue of main operations 11,574,073,952.48 10,074,492,043.06
Other operating income 38,568,481.80 57,220,647.38
11,612,642,434.28 10,131,712,690.44
For the six months ended For the six months ended
30 June 2014 30 June 2014
Cost of main operations (10,617,207,480.60) (9,249,427,107.76)
Other operating expenses (9,560,176.64) (30,028,197.77)
(10,626,767,657.24) (9,279,455,305.53)
(a) Revenue and cost of main operations
Revenue and cost of main operations analysed by industries are set out below:
For the six months ended 30 June 2014 For the six months ended 30 June 2013
Revenue of Cost of main Revenue of Cost of main
main operations operations main operations operations
Pharmaceutical
distribution 10,661,045,598.03 (10,075,415,498.70) 9,189,991,363.76 (8,720,715,328.37)
Pharmaceutical
manufacturing 895,189,021.00 (532,012,356.98) 861,761,411.80 (515,258,589.23)
Logistics and freights 12,711,331.79 (8,499,455.86) 18,252,493.23 (11,687,475.17)
Rental and training
income 5,128,001.66 (1,280,169.06) 4,486,774.27 (1,765,714.99)
11,574,073,952.48 (10,617,207,480.60) 10,074,492,043.06 (9,249,427,107.76)
(b) Other operating income and expenses
For the six months ended 30 June 2014 For the six months ended 30 June 2013
Other operating Other operating Other operating Other operating
income expenses income expenses
Sales of raw materials 5,360,332.87 (6,371,865.47) 25,287,399.41 (26,364,532.45)
Rental income 10,494,549.39 (1,173,951.57) 10,090,064.69 (1,048,773.75)
Rendering of services 22,713,599.54 (2,014,359.60) 21,686,782.45 (1,743,367.20)
Others - - 156,400.83 (871,524.37)
38,568,481.80 (9,560,176.64) 57,220,647.38 (30,028,197.77)
(c) Top five customers are analysed as follows:
- 132 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
The sales to top five customers of the Group amounted to RMB692,947,593.89, which accounted for 5.97% of the total
revenue from main operations. Details are set out below:
Sales % of total sales of the
Group
The First Affiliated Hospital of GuangXi Medical University 179,770,199.71 1.55%
Disease Control and Prevention Center of Guangdong Province 152,149,317.28 1.31%
Nanfang Hospital of Southern Medical University 123,906,197.83 1.07%
The Affiliated Tumor Hospital of Sun Yet-Sen University 123,535,671.31 1.06%
China Resources Guangdong Pharmaceutical Co., Ltd 113,586,207.76 0.98%
692,947,593.89 5.97%
- 133 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(38) Tax and surcharges
For the six months ended For the six months
30 June 2014 ended 30 June 2013
Business tax 3,581,457.89 3,062,195.30
City maintenance and construction tax 13,024,580.97 11,003,775.72
Educational surcharge 9,436,144.77 7,858,049.22
Others 1,430,529.90 1,402,211.43
27,472,713.53 23,326,231.67
(39) Financial expenses – net
For the six months ended For the six months
30 June 2014 ended 30 June 2013
Interest expenses 86,209,674.28 82,720,265.02
Less: interest income (4,223,008.09) (2,292,175.64)
discount in cash (17,547,093.60) (9,496,329.83)
Exchange losses 107,893.77 45,433.64
Others 6,384,258.74 5,491,457.64
70,931,725.10 76,468,650.83
(40) Assets impairment losses
For the six months ended For the six months
30 June 2014 ended 30 June 2013
Bad debts (1,655,386.78) 1,262,307.12
Declines in values of inventories 8,968,294.15 15,545,351.60
7,312,907.37 16,807,658.72
(41) Investment income
For the six months ended For the six months
30 June 2014 ended 30 June 2013
Share of profit of investees under equity method (Note a) 23,595,722.50 18,576,985.34
(a) The investment income from long-term investment under equity method represented the profit from Wanle Medical. The
increase was due to improved business performance of that associate.
There is no significant restriction on the remittance of investment income to the Group.
(42) Non-operating income
For the six months ended For the six months
30 June 2014 ended 30 June 2013
- 134 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Government grants (Note a) 14,575,338.73 12,384,950.86
Reversal of unpaid compensation 11,862,275.78 -
Payment written off 811,269.33 9,425,827.28
Gain on disposal of fixed assets 500,989.54 32,537.89
Others 586,191.95 292,414.61
28,336,065.33 22,135,730.64
Non-operating income is wholly classified as non-recurring profit.
- 135 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(42) Non-operating income(continued)
(a) Government grants
For the six months For the six months
ended 30 June 2014 ended 30 June 2013 Note
Government grants related to assets
Resettlement compensation-amortization of Transfer from deferred
assets 1,349,204.28 1,412,978.16 amortization income
Transfer from deferred
Others 2,084,853.92 990,380.90 amortization income
Government grants related to income
High-tech industries and
emerging industry
Industrial subsidies 3,277,100.00 - subsidies
Tax return 6,060,187.00 7,052,996.58 Tax return
Government-funded interest discount 1,049,200.00 647,930.50 Fiscal interest discount
Other 754,793.53 2,280,664.72 Subsidy for contribution
14,575,338.73 12,384,950.86
(43) Non-operating expenses
For the six months For the six months
ended 30 June 2014 ended 30 June 2013
Compensation payment for suspension of chebei project (Note V
(28)(a)) - 22,040,000.00
Losses on disposal of fixed assets 64,238.16 28,872.00
Donation 410,000.00 -
Others 733,259.19 50,189.64
1,207,497.35 22,119,061.64
Non-operating cost is wholly classified as non-recurring and loss.
(44) Income taxes expenses
For the six months For the six months
ended 30 June ended 30 June 2013
2014
Current income tax 91,607,455.92 71,756,396.40
Deferred income tax (5,276,159.17) (10,814,151.64)
86,331,296.75 60,942,244.76
(45) Earnings per share
- 136 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
(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:
For the six months For the six months
ended 30 June ended 30 June
2014 2013
Consolidated net profit attributable to shareholders of the
Company 349,213,988.52 260,794,678.64
Weighted average number of ordinary shares in issue 325,390,671.50 288,149,400.00
Basic earnings per share 1.073 0.905
Including:
Basic earnings per share on going 1.073 0.905
V Notes to the consolidated financial statements (continued)
(45) Earnings per share(continued)
(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 (For the six months ended 30
June 2013: nil), the diluted earnings per share equals the basic earnings per share.
(46) Cash received relating to other operating activities
(a) Cash received relating to other operating activities
For the six months For the six months
ended 30 June ended 30 June
2014 2013
Rental income 8,320,925.55 10,090,064.69
Other government subsidies in addition to receive tax refunds
outside 2,700,000.00 4,603,595.22
Others 42,427,512.01 24,129,563.11
53,448,437.56 38,823,223.02
(b) Cash paid relating to other operating activities
For the six months For the six months
ended 30 June ended 30 June
2014 2013
Compensation payment for suspension of chebei project 22,797,724.22 -
Entertainment expenses 14,493,219.02 15,495,391.10
Rental expenses 16,066,215.94 6,541,396.42
- 137 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Travel expenses 12,658,679.23 10,951,613.09
Research and development expenses 11,553,667.63 8,584,549.31
Advertising expenses 8,223,830.25 8,876,379.11
Bank charges 6,014,112.01 4,928,733.17
Other 92,391,826.17 98,513,134.21
184,199,274.47 153,891,196.41
(c) Cash received relating to other investing activities
For the six months For the six months
ended 30 June ended 30 June
2014 2013
Net cash received from acquisition of subsidiaries
(Note(47)(d)) 3,598,827.09 -
(d) Cash received relating to other financing activities
For the six months For the six months
ended 30 June ended 30 June
2014 2013
Entrusted borrowings borrowed from Sinopharm Group 31,600,000.00 -
Other 20,776,797.32 -
52,376,797.32 -
- 138 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(46) Cash received relating to other operating activities(continued)
(e) Cash payments relating to other financing activities
For the six months ended For the six months ended
30 June 30 June
2014 2013
Others 3,235,784.18 48,947,088.25
(47) Supplementary information of cash flow statements
(a) Supplementary information of cash flow statements
Reconciliation of net profit to cash flows from operating activities
For the six months For the six months
ended 30 June ended 30 June
2014 2013
Net profit 357,587,430.56 267,800,167.11
Add:Provision for assets impairment 7,312,907.37 16,807,658.72
Depreciation of fixed assets and investment
properties 48,039,480.50 45,450,272.17
Amortisation of intangible assets 3,836,803.21 4,601,419.99
Amortisation of long-term prepaid expenses 4,039,734.82 2,709,268.12
Gains on disposal of fixed assets, and other
non-current assets (436,751.38) (3,665.89)
Financial expenses 89,553,352.23 82,765,700.14
Investment income (23,595,722.50) (18,576,985.34)
Increase of deferred tax assets (9,520,865.56) (9,995,275.31)
Increase/ (decrease) of deferred tax liabilities 331,955.70 (818,876.33)
Increase of inventory (368,787,212.56) (5,166,401.30)
Increase in operating receivables (691,530,669.43) (902,816,610.27)
Increase in operating payables 91,345,803.58 732,402,755.13
Decrease in operating cash with restriction 7,107,945.50 23,117,446.14
Net cash flow from operating activities (484,715,807.96) 238,276,873.08
Significant non-cash investing activities
For the six months For the six months
ended 30 June ended 30 June
2014 2013
Properties constructed with endorsed notes receivables 10,285,964.14 16,349,298.55
- 139 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Movement of cash
For the six months For the six months
ended 30 June ended 30 June
2014 2013
Cash at end of period 1,409,385,573.73 882,311,241.61
Less: cash at beginning of year (1,097,948,354.45) (920,748,043.53)
Net increase in cash 311,437,219.28 (38,436,801.92)
- 140 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Notes to the consolidated financial statements (continued)
(47) Supplementary information of cash flow statements(continued)
(b) Acquisition of subsidiaries and operating unit
For the six months For the six months
ended 30 June ended 30 June
2014 2013
The consideration of acquisition 7,490,000.00 -
Consideration settled in cash - -
Less: cash in the subsidiaries and business acquired (5,116,827.09) -
Add: cash paid for prior year acquisition 1,518,000.00 -
Net cash outflow on acquisition of the subsidiaries and
business (3,598,827.09) -
(c) Cash
30 June 2014 30 June 2013
Cash at end of period 1,409,385,573.73 882,311,241.61
Including: Cash on hand 105,347.04 45,748.49
Call deposits with banks 1,409,280,226.69 882,265,493.12
Restricted cash 8,505,911.70 10,126,580.95
Cash at bank and on hand 1,417,891,485.43 892,437,822.56
VI Related party relationships and significant related partytransactions
(1) The parent company
(a) General information of the parent company:
Enterprise Place of Legal
Type registration representative Principal business
Industrial Investment Holding, Trustee of
Company pharmaceutical enterprise, Distribution and
limited by retailof medicines and pharmaceutical
Sinopharm Group shares Shanghai Wei Yulin products, etc
The Company’s ultimate controlling equity holder is CNPGC.
(b) Registered capital and changes in registered capital of the parent company
31 December 2013 Current yearaAddition 30 June 2014
(RMB’0,000) (RMB’0,000) (RMB’0,000)
- 141 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Sinopharm Group 256,829.35 - 256,829.35
(c) The proportions of equity interests and voting rights in the Company held by the parent company:
30 June 2014 31 December 2013
% interest held % voting rights % interest held % voting rights
Sinopharm Group 51.00 51.00 38.33 38.33
- 142 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related partytransactions (continued)
(2) Subsidiaries of the Company
The general background and other related information of the subsidiaries is set out in Note V.
(3) Associates
Enterprise Place of Legal Principal Register % interest % voting
Type Registration Representative business capital held rights
Wanle Foreign Medicine USD
Medical capital Shenzhen Yan Zhigang manufacture 19,544,550 35.19% 33.33%
(4) Other related parties
Relationship with the
Company
Sinopharm Holding Sub Marketing Center Co.,Ltd. Controlled by CNPGC
China National Medicines Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Hunan Co.,Ltd. Controlled by CNPGC
Guangdong Dong Fang Uptodate & Special Medicines Co.,Ltd. Controlled by CNPGC
Foshan Nanhai Uptodate & Special Medicines Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Beijing Co.,Ltd. Controlled by CNPGC
Sinopharm Holding JiangsuCo.,Ltd. Controlled by CNPGC
Sinopharm Holding Hainan Co.,Ltd. Controlled by CNPGC
Sinopharm Group Chemical Reagent Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Guizhou Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Zhangzhou Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Beijing Huahong Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Hubei Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Fujian Co.,Ltd. Controlled by CNPGC
Sinopharm Yixin Medicine Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Fuzhou Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Suzhou Co.,Ltd. Controlled by CNPGC
Foshan Nanhai Medicine Co.,Ltd. Controlled by CNPGC
Foshan Nanhai Medicine Group Co.,Ltd. Controlled by CNPGC
Sinopharm Group Chemical Reagent Suzhou Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Chongqing Co.,Ltd. Controlled by CNPGC
Sinopharm Group Guorui Medicine Co.,Ltd. Controlled by CNPGC
Sinopharm Holding DezhouCo.,Ltd. Controlled by CNPGC
Sinopharm Holding Hainan Hongyi Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Yunnan Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Sanyi Medicine(Wuhu)Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Putian Co.,Ltd. Controlled by CNPGC
Sinopharm Holding (Yangzhou) Chinese Western Medicine Branch Controlled by CNPGC
- 143 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Co., Ltd.
Sinopharm Guoda Drug Store(Shenzhen) Chain Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Shandong Co., Ltd. Controlled by CNPGC
Sinopharm Le -Ren-Tang Medicine Co.,Ltd. Controlled by CNPGC
Sinopharm Group Xinjiang Special Drugs National PharmaceuticalCo.,Ltd. Controlled by CNPGC
Sinopharm Group Southwest Medicine Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Ningxia Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Tianjin Co.,Ltd. Controlled by CNPGC
Sinopharm Guoda Drug Store Guangxi Chain Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Zhejiang Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Nantong Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Gansu Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Shenyang Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Wenzhou Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Jinzhou Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Henan Co.,Ltd. Controlled by CNPGC
China Pharmaceutical Group Shanxi Co., Ltd. Controlled by CNPGC
Sinopharm Holding Heilongjiang Co.,Ltd. Controlled by CNPGC
VI Related party relationships and significant related partytransactions (continued)
(4) Other related parties (continued)
Relationship with the
Company
Sinopharm Holding YangzhouCo.,Ltd. Controlled by CNPGC
Sinopharm Holding Shaanxi Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Shanxi Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Xuzhou Co.,Ltd. Controlled by CNPGC
Sinopharm Guoda Drug Store Jiangmen Chain Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Jilin Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Wuxi Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Guoda Pharmacy Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Yancheng Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Dalian Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Linyi Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Taizhou Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Inner Mongolia Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Tianjin North Medicine Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Qinghai Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Shanghai Likang Pharmaceutical Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Changzhou Medical logistics center Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Longyan Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Ningde Co.,Ltd. Controlled by CNPGC
Sinopharm Lerentang Tangshan Medicine Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Jinan Co.,Ltd. Controlled by CNPGC
Shanghai YunnuoMarketing Consulting Co.,Ltd. Controlled by CNPGC
- 144 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Sinopharm Holding Qingdao Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Jiangxi Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Yantai Co.,Ltd. Controlled by CNPGC
Shanghai Donghong MedicineCo.,Ltd. Controlled by CNPGC
Sinopharm Holding Wuhu Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Anqing Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Quanzhou Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Huaian Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Sanming Co.,Ltd. Controlled by CNPGC
Sinopharm Lerentang Qinhuangdao Medicine Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Changzhou Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Anhui Co.,Ltd. Controlled by CNPGC
Sinopharm Holding ChiFeng Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Xinjiang New Kashi Pharmaceutical Co.,Ltd. Controlled by CNPGC
Sinopharm Holding HongKong Co.,Ltd. Controlled by CNPGC
Shanxi Guoyi Drug StoreCo.,Ltd. Controlled by CNPGC
Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Zunyi Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Shiyan Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Qujing Co.,Ltd. Controlled by CNPGC
Sinopharm Xinjiang Korla Pharmaceutical Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Zhoukou Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Shangqiu Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Jingmen Co.,Ltd. Controlled by CNPGC
Shanghai Nutraceuticals (Shanghai) Co., Ltd. Controlled by CNPGC
Sinopharm Holding Yueyang Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Beijing Kangchen Bio-Pharmaceutical Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Nanping Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Lishui Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Tongliao Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Xinxiang Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Puyang Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Guoda Drug Store Guangzhou Chain Co., Ltd. Controlled by CNPGC
Sinopharm Holding SipingCo.,Ltd. Controlled by CNPGC
Sinopharm Holding Macheng Co.,Ltd. Controlled by CNPGC
Xiamen Xingsha Huaideju Pharmaceutical Co., Ltd. Controlled by CNPGC
Sinopharm Holding Guoda Drugstore Shenyang Chain Co., Ltd. Controlled by CNPGC
Sinopharm Holding Dandong Co.,Ltd.
VI Related party relationships and significant related partytransactions (continued)
(4) Other related parties (continued)
Relationship with the
Company
Sinopharm holding Zhejiang Biological Products Co., Ltd. Controlled by CNPGC
Sinopharm Holding Jingzhou Co., Ltd. Controlled by CNPGC
Sinopharm Holding Medical DevicesCo., Ltd. Controlled by CNPGC
- 145 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Sinopharm Holding Qianxinan Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Honghe Co., Ltd. Controlled by CNPGC
Shanghai Huyong Pharmaceutical Co., Ltd. Controlled by CNPGC
Sinopharm Holding Jiaozuo Co., Ltd. Controlled by CNPGC
Sinopharm Holding Changde Co., Ltd. Controlled by CNPGC
Sinopharm Holding Anyang Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Kaifeng Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Xinyu Co.,Ltd. Controlled by CNPGC
Sinopharm Group Medicine Logistic Co., Ltd. Controlled by CNPGC
Sinopharm Holding Guoda Drug Store Guangdong Co., Ltd. Controlled by CNPGC
Shanghai Tongyu Information Technology Co., Ltd. Controlled by CNPGC
Sinopharm Holding Bengbu Co.,Ltd. Controlled by CNPGC
Sinopharm Holding Hunan Guoda Minshengtang Drug Store Chain Co., Ltd. Controlled by CNPGC
Sinopharm holding Shenyang Guoda pharmacy chain Co., Ltd. Controlled by CNPGC
Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co., Ltd. Controlled by CNPGC
China National Pharmaceutical Group Shanghai Co., Ltd. Controlled by CNPGC
Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd. Controlled by CNPGC
Sinopharm Pharmaceutical Logistics Co., Ltd. Guangzhou Branch Controlled by CNPGC
Sinopharm Holding Liaocheng Co., Ltd. Controlled by CNPGC
Sinopharm Jiankun (Beijing) Medicines Co., Ltd. Controlled by CNPGC
Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd. Controlled by CNPGC
Shanghai Meiluo Medicine Co., Ltd. Controlled by CNPGC
Sinopharm Holding Jining Co., Ltd. Controlled by CNPGC
Group Financial Co. Controlled by Sinopharm Group
Guang dong South Pharmaceutical Foreign Trade Co., Ltd. Controlled by Sinopharm Group
Chengdu Rongsheng Pharmacy Co., Ltd. Controlled by Sinopharm Group
Foshan Yingtian Pharmaceutical Sales Co., Ltd. Controlled by Sinopharm Group
Lanzhou Biotechnology Development Co., Ltd. Controlled by Sinopharm Group
Chinese medicine industry and Drug Sales Co. Ltd. Controlled by Sinopharm Group
Huayi Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Wuhan Institute of Biological Products Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group Weiqida Medicine Co., Ltd. Controlled by Sinopharm Group
Guizhou Tongjitang Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
China National Pharmaceutical Foreign Trade Co., Ltd. Controlled by Sinopharm Group
Shanghai Shyndec Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group Rongsheng Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Anhui Jingfang Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Shanghai Institute of Biological Products Co., Ltd. Controlled by Sinopharm Group
Shandong Lu Ya Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Shanghai Modern Hasen (Shangqiu) Pharmacertical Co., Ltd. Controlled by Sinopharm Group
China Pharmaceutical Group Shanghai Medical Instrument Co., Ltd. Controlled by Sinopharm Group
Guizhou Longlife Pharmacertical Co., Ltd. Controlled by Sinopharm Group
Guangdong Medi-World Pharmacertical Co., Ltd. Controlled by Sinopharm Group
Qinghai Pharmaceutical Factory Co., Ltd. Controlled by Sinopharm Group
China medicine company Controlled by Sinopharm Group
Wuhan Zhonglian Pharmaceutical Group Co., Ltd. Controlled by Sinopharm Group
China Sinopharm International Corporation Controlled by Sinopharm Group
Reed Sinopharm Exhibitions Co., Ltd. Controlled by Sinopharm Group
China National Scientific Instruments & Materials Corporation Controlled by Sinopharm Group
- 146 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Heilongjiang Sinopharm Medical Herbs Co., Ltd. Controlled by Sinopharm Group
Sinopharm Fortuneway Company Controlled by Sinopharm Group
Sinopharm United Engineering Corporation Controlled by Sinopharm Group
Beijing Fusheng Tiandi Property Management Ltd. Controlled by Sinopharm Group
The Chinese medicine (Shanghai) Agel Ecommerce Ltd Controlled by Sinopharm Group
- 147 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related partytransactions (continued)
(4) Other related parties (continued)
Relationship with the Company
Sinopharm Group Guangdong Province medical instrument limited company Controlled by Sinopharm Group
Shanghai Institute of Pharmaceutical Industry Controlled by Sinopharm Group
Sinopharm Chongqing Pharmaceutical and Medical Industry Controlled by Sinopharm Group
Design Institute
China State Institute of Pharmaceutical Industry Controlled by Sinopharm Group
Foshan Dezhong Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group Beijing Medical equipment Co., Ltd. Controlled by Sinopharm Group
Foshan Fengliaoxing Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
The Fourth Pharmaceutical Co., Ltd. of Zhonglian Group Controlled by Sinopharm Group
Beijing Huasheng Pharmaceutical Biotechnology Development Co., Ltd. Controlled by Sinopharm Group
Winteam Pharmaceutical Group Co., Ltd. Controlled by Sinopharm Group
Shareholders have signigicant
Shanghai Fosun Pharmaceutical (Group) Co., Ltd.("Fosun Pharm") influence on Sinopharm Group
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
Hunan Dongting Pharmaceutical Co., Ltd. Subsdiary of Fosun Pharm
Shanghai Chaohui Pharmecurical Co., Ltd. Subsdiary of Fosun Pharm
Foshan Chancheng District Central Hospital Subsdiary of Fosun Pharm
Wanbang Biopharmaceuticals Subsdiary of Fosun Pharm
Shanghai Fosun Pharmaceutical Co., Ltd. Subsdiary of Fosun Pharm
Jiangsu the Yellow River pharmaceutical Co.,Ltd. Subsdiary of Fosun Pharm
Shenyang Hongqi Pharmaceutical Co., Ltd. Subsdiary of Fosun Pharm
Family member of minority interest
Wang Yang of subsidiary
Shaoguan Wujiang District Muyang Medicine Information Consultant Co., Controlled by minority interest of
Ltd. subsidiary
Yichang Humanwell Pharmaceutical Co., Ltd. Associate of Sinopharm Group
Renaissance Shanghai Medical Beauty Clinic Co. Ltd. Associate of Sinopharm Group
Sino-Swed Pharmaceutical Corp.Ltd. Associate of Sinopharm Group
China Otsuka Pharmaceutical Co., Ltd. Associate of Sinopharm Group
Shanghai Sailun Biological Technology Co., Ltd. Associate of Sinopharm Group
Shenzhen Wanwei Medicine trading Co., Ltd. Controlled by Wanle
Controlled by subsidiary's key
Jiang Meng Renren Medical instrument Co., Ltd. management
- 148 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related partytransactions (continued)
(5) Related party transactions
(a) Purchase of goods
For the six months ended For the six months ended
30 June 2014 30 June 2013
Amount % of same Amount % of same
Related party Pricing policies transaction transaction
Sinopharm Holding Sub Marketing Center Co., Ltd. Market price 44,811.98 4.26% 47,304.67 5.09%
Sinopharm Group Market price 22,026.46 2.10% 24,151.00 2.60%
China National Medicines Co., Ltd. Market price 15,692.30 1.49% 12,882.76 1.38%
Sino-Swed Pharmaceutical Co., Ltd. Market price 4,052.95 0.39% 4,180.62 0.45%
Guang dong South Pharmaceutical Foreign Trade Co.,
Ltd. Market price 2,670.00 0.25% 1,942.21 0.21%
Shenzhen Wanwei Medicine trading Co., Ltd. Market price 2,643.04 0.25% 981.19 0.11%
Foshan Yingtian Pharmaceutical Sales Co., Ltd. Market price 2,124.24 0.20% 1,174.29 0.13%
Jiangsu Wanbang Pharmacy Marketing Co., Ltd. Market price 1,678.77 0.16% 1,112.72 0.12%
Chengdu Rongsheng Pharmacy Co., Ltd. Market price 1,653.07 0.16% 3,133.32 0.34%
Sinopharm Holding Guizhou Co., Ltd. Market price 1,549.58 0.15% 93.34 0.01%
Wanle Medical Market price 1,523.09 0.14% 2,069.99 0.22%
Sinopharm Holding Hunan Co., Ltd. Market price 900.93 0.09% 784.74 0.08%
Chongqing Yaoyou Pharmaceutical Co., Ltd. Market price 879.55 0.08% 710.32 0.08%
Lanzhou Biotechnology Development Co., Ltd. Market price 542.57 0.05% 835.22 0.09%
Chongqing Haisiman Pharmaceutical Co., Ltd. Market price 496.60 0.05% 507.81 0.05%
Qinghai Pharmaceutical Co., Ltd. Market price 467.78 0.04% - -
Sinopharm Holding Macheng Co., Ltd. Market price 422.86 0.04% - -
Foshan Nanhai Uptodate & Special Medicines Co.,
Ltd. Market price 337.10 0.03% 94.87 0.01%
Wuhan Institute of Biological Products Co., Ltd. Market price 334.83 0.03% 1,043.50 0.11%
Guangdong Dong Fang Uptodate & Special
Medicines Co., Ltd. Market price 296.49 0.03% 105.96 0.01%
Sinopharm Holding Beijing Co., Ltd. Market price 220.25 0.02% 158.89 0.02%
Sinopharm Holding Hubei Co., Ltd. Market price 202.73 0.02% 0.79 0.00%
Sinopharm Group Weiqida Medicine Co., Ltd. Market price 127.74 0.01% 428.11 0.05%
Beijing Huasheng Pharmaceutical Biotechnology
Development Co., Ltd. Market price 126.07 0.01% - 0.00%
Guizhou Tongjitang Pharmaceutical Co., Ltd. Market price 106.75 0.01% - 0.00%
Sinopharm Holding Beijing Kangchen
Bio-Pharmaceutical Co., Ltd. Market price 102.36 0.01% - 0.00%
Shanghai Shyndec Pharmaceutical Co., Ltd. Market price 96.94 0.01% 121.90 0.01%
Sinopharm Group Rongsheng Pharmaceutical Co.,
Ltd. Market price 55.50 0.01% 62.95 0.01%
China National Pharmaceutical Foreign Trade Co.,
Ltd. Market price 49.77 0.00% 123.84 0.01%
Sinopharm Holding Beijing Huahong Co., Ltd. Market price 49.14 0.00% 77.20 0.01%
Sinopharm Holding Fujian Co., Ltd. Market price 49.10 0.00% 18.64 0.00%
Shandong Lu Ya Pharmaceutical Co., Ltd. Market price 34.91 0.00% 41.79 0.00%
China Otsuka Pharmaceutical Co., Ltd. Market price 34.66 0.00% 24.97 0.00%
Anhui Jingfang Pharmaceutical Co., Ltd. Market price 33.52 0.00% - 0.00%
Sinopharm Holding Shanxi Co., Ltd. Market price 26.16 0.00% - 0.00%
- 149 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Sinopharm Group Guorui Medicine Co., Ltd. Market price 25.77 0.00% 12.25 0.00%
To next page 106,445.56 10.09% 104,179.86 11.20%
- 150 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VII Related party relationships and significant related partytransactions (continued)
(5) Related party transactions
(a) Purchase of goods(continued)
For the six months ended For the six months ended
30 June 2014 30 June 2013
Amount % of same Amount % of same
Related party Pricing policies transaction transaction
continued 106,445.56 10.09% 104,179.86 11.20%
Wuhan Zhonglian Pharmaceutical Group Co., Ltd. Market price 22.19 0.00% - 0.00%
Guilin South pharmaceutical Co., Ltd. Market price 20.68 0.00% 20.25 0.00%
Sinopharm Group Chemical Reagent Co., Ltd. Market price 20.07 0.00% 57.48 0.01%
Shanghai Modern Hasen (Shangqiu) Pharmacertical
Co., Ltd. Market price 14.00 0.00% 9.09 0.00%
Sinopharm Holding Heilongjiang Co., Ltd. Market price 13.19 0.00% - 0.00%
Foshan Nanhai Medicine Co., Ltd. Market price 11.87 0.00% 18.11 0.00%
Sinopharm Group Chemical Reagent Suzhou Co.,
Ltd. Market price 8.32 0.00% 4.52 0.00%
Shenyang Hongqi Pharmaceutical Co., Ltd. Market price 8.09 0.00% 3.24 0.00%
Handan Pharmaceutical Co., Ltd. Market price 6.53 0.00% 13.66 0.00%
Sinopharm Yixin Medicine Co., Ltd. Market price 6.11 0.00% 29.02 0.00%
Sinopharm Xingsha Pharmaceuticals (Xiamen) Co.,
Ltd. Market price 5.18 0.00% - 0.00%
Sinopharm Holding Hainan Co., Ltd. Market price 5.13 0.00% 42.65 0.00%
Hunan Dongting Pharmaceutical Co., Ltd. Market price 4.72 0.00% 3.97 0.00%
Sinopharm Holding JIangsu Co., Ltd. Market price 3.24 0.00% 198.06 0.02%
Yichang Humanwell Pharmaceutical Co., Ltd. Market price 2.20 0.00% 2.87 0.00%
Sinopharm Holding Henan Co., Ltd. Market price 2.08 0.00% - 0.00%
Sinopharm Holding Dezhou Co., Ltd. Market price 1.47 0.00% 5.87 0.00%
China Pharmaceutical Group Shanghai Medical
Instrument Co., Ltd. Market price 1.12 0.00% 1.79 0.00%
Sinopharm Group Southwest Medicine Co., Ltd. Market price 1.02 0.00% - 0.00%
Sinopharm Guoda Drug Store(Shenzhen) Chain Co.,
Ltd. Market price 0.70 0.00% 1.33 0.00%
Sinopharm Holding Shaanxi Co., Ltd. Market price 0.61 0.00% - 0.00%
Jiangsu the Yellow River pharmaceutical Co.,Ltd. Market price 0.49 0.00% - 0.00%
Sinopharm Holding Ningxia Co., Ltd. Market price 0.26 0.00% - 0.00%
Sinopharm Holding Zhangzhou Co., Ltd. Market price - 0.00% 93.16 0.01%
Shanghai Institute of Biological Products Co., Ltd. Market price - 0.00% 67.55 0.01%
Sinopharm Holding Fuzhou Co., Ltd. Market price - 0.00% 27.39 0.00%
Winteam Pharmaceutical Group Co., Ltd. Market price - 0.00% 21.00 0.00%
Sinopharm Holding Hainan Hongyi Co., Ltd. Market price - 0.00% 3.49 0.00%
Shanghai Sailun Biological Technology Co., Ltd. Market price - 0.00% 0.27 0.00%
Sinopharm Holding Sanyi Medicine(Wuhu) Co., Ltd. Market price - 0.00% 0.17 0.00%
Sinopharm Holding Guoda Drug Store Guangdong
Co., Ltd. Market price - 0.00% (0.03) 0.00%
Guangdong Medi-World Pharmacertical Co., Ltd. Market price (0.03) 0.00% (0.01) 0.00%
Sinopharm Holding Suzhou Co., Ltd. Market price (0.49) 0.00% 21.80 0.00%
Guizhou Longlife Pharmacertical Co., Ltd. Market price (0.77) 0.00% - 0.00%
- 151 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Total 14.00 0.00% 9.09 0.00%
- 152 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related party transactions (continued)
(5) Related party transactions (continued)
(b) Sales of goods
For the six months ended For the six months ended
30 June 2014 30 June 2013
Amount % of same Amount % of same
Related party Pricing policies transaction transaction
Sinopharm Holding Hunan Co., Ltd. Market price 7,210.59 0.62% 6,897.20 0.68%
Foshan Nanhai Uptodate & Special
Medicines Co., Ltd. Market price 6,658.88 0.58% 6,723.28 0.67%
Sinopharm Holding Hubei Co., Ltd. Market price 4,320.15 0.37% 3,428.67 0.34%
Sinopharm Holding Hainan Co., Ltd. Market price 3,968.26 0.34% 2,911.68 0.29%
Sinopharm Le -Ren-Tang Medicine Co., Ltd. Market price 3,690.71 0.32% 1,532.53 0.15%
Sinopharm Holding Beijing Co., Ltd. Market price 3,474.50 0.30% 2,618.69 0.26%
Sinopharm Holding Guoda Drug Store
Guangdong Co., Ltd. Market price 3,348.78 0.29% 3,382.18 0.34%
Foshan Nanhai Medicine Co., Ltd. Market price 3,128.53 0.27% 2,485.62 0.25%
Sinopharm Holding Beijing Huahong Co.,
Ltd. Market price 3,041.49 0.26% 3,259.54 0.32%
Sinopharm Holding Sub Marketing Center
Co., Ltd. Market price 2,835.19 0.24% 1,354.53 0.13%
Sinopharm Group (Tianjin) Eastern Bokang
Pharmaceutical Co., Ltd. Market price 2,810.09 0.24% 2,451.50 0.24%
Sinopharm Group Xinjiang Special Drugs
National Pharmaceutical Co., Ltd. Market price 2,777.93 0.24% 2,171.71 0.22%
Sinopharm Holding Shandong Co., Ltd. Market price 2,639.06 0.23% 1,653.61 0.16%
Sinopharm Holding Ningxia Co., Ltd. Market price 2,209.86 0.19% 1,950.19 0.19%
Sinopharm Holding Zhejiang Co., Ltd. Market price 1,847.16 0.16% 1,461.43 0.15%
Sinopharm Group Southwest Medicine Co.,
Ltd. Market price 1,568.83 0.14% 1,909.04 0.19%
Sinopharm Guoda Drug Store Guangxi
Chain Co., Ltd. Market price 1,474.83 0.13% 1,720.06 0.17%
Sinopharm Holding Nantong Co., Ltd. Market price 1,335.53 0.12% 1,349.61 0.13%
Sinopharm Holding Wenzhou Co., Ltd. Market price 1,293.45 0.11% 818.87 0.08%
Sinopharm Holding Xinjiang Special Drugs
Western Pharmaceutical Co., Ltd. Market price 1,269.15 0.11% 941.24 0.09%
Sinopharm Group Market price 1,250.33 0.11% 928.88 0.09%
Chongqing Yaoyou Pharmaceutical Co., Ltd. Market price 1,220.19 0.11% 2,625.23 0.26%
Sinopharm Holding Tianjin Co., Ltd. Market price 1,186.49 0.10% 1,936.98 0.19%
Sinopharm Holding Hainan Hongyi Co., Ltd. Market price 1,156.57 0.10% 1,321.37 0.13%
Sinopharm Holding Jinzhou Co., Ltd. Market price 1,085.97 0.09% 736.32 0.07%
Guangdong Dong Fang Uptodate & Special
Medicines Co., Ltd. Market price 834.44 0.07% 585.90 0.06%
Sinopharm Holding Shenyang Co., Ltd. Market price 722.45 0.06% 985.36 0.10%
Sinopharm Holding Yunnan Co., Ltd. Market price 710.93 0.06% 778.36 0.08%
Sinopharm Holding Fuzhou Co., Ltd. Market price 664.89 0.06% 717.26 0.07%
Sinopharm Holding Chongqing Co., Ltd. Market price 559.12 0.05% 765.58 0.08%
Sinopharm Holding Henan Co., Ltd. Market price 555.94 0.05% 373.18 0.04%
Foshan Chancheng District Central Hospital Market price 508.67 0.04% - 0.00%
Sinopharm Holding Xuzhou Co., Ltd. Market price 495.87 0.04% 313.37 0.03%
Sinopharm Holding Yangzhou Co., Ltd. Market price 449.30 0.04% 417.94 0.04%
- 153 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Sinopharm Holding Shanxi Co., Ltd. Market price 419.74 0.04% 263.93 0.03%
Sinopharm Holding Heilongjiang Co., Ltd. Market price 418.27 0.04% 334.99 0.03%
China Pharmaceutical Group Shanxi Co.,
Ltd. Market price 411.44 0.04% 402.75 0.04%
Sinopharm Guoda Drug Store Jiangmen
Chain Co., Ltd. Market price 332.10 0.03% 133.93 0.01%
Sinopharm Holding Guizhou Co., Ltd. Market price 325.97 0.03% 174.72 0.02%
China National Medicines Co., Ltd. Market price 267.04 0.02% 435.01 0.04%
Sinopharm Holding Jilin Co., Ltd. Market price 234.93 0.02% 179.49 0.02%
To next page 74,713.62 6.46% 65,431.73 6.48%
- 154 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related partytransactions (continued)
(5) Related party transactions (continued)
(b) Sales of goods (continued)
For the six months ended For the six months ended
30 June 2014 30 June 2013
Pricing Amount % of same Amount % of same
Related party policies transaction transaction
continued 74,713.62 6.46% 65,431.73 6.48%
Sinopharm Holding Fujian Co., Ltd. Market price 232.47 0.02% 105.72 0.01%
China Sinopharm International Corporation Market price 231.87 0.02% - 0.00%
Sinopharm Holding Qingdao Co., Ltd. Market price 220.93 0.02% - 0.00%
Sinopharm Holding Wuxi Co., Ltd. Market price 213.16 0.02% 110.38 0.01%
Sinopharm Holding Yancheng Co., Ltd. Market price 173.19 0.01% 97.64 0.01%
Sinopharm Holding Inner Mongolia Co., Ltd. Market price 141.73 0.01% 101.42 0.01%
Sinopharm Holding Gansu Co., Ltd. Market price 132.55 0.01% 1,018.11 0.10%
Sinopharm Holding Qinghai Co., Ltd. Market price 123.83 0.01% 44.70 0.00%
Guang dong South Pharmaceutical Foreign Trade
Co., Ltd. Market price 112.25 0.01% 83.21 0.01%
Sinopharm Holding Tianjin North Medicine Co.,
Ltd. Market price 109.53 0.01% 95.87 0.01%
Sinopharm Holding Beijing Kangchen
Bio-Pharmaceutical Co., Ltd. Market price 103.87 0.01% - 0.00%
Sinopharm Holding Quanzhou Co., Ltd. Market price 93.23 0.01% - 0.00%
Sinopharm Lerentang Tangshan Medicine Co., Ltd. Market price 92.77 0.01% - 0.00%
Sinopharm Holding Taizhou Co., Ltd. Market price 89.57 0.01% 99.50 0.01%
Sinopharm Holding Guoda Pharmacy Co., Ltd. Market price 88.77 0.01% 101.96 0.01%
Sinopharm Holding Dalian Co., Ltd. Market price 80.97 0.01% 85.47 0.01%
Sinopharm Holding Linyi Co., Ltd. Market price 73.62 0.01% 180.02 0.02%
Sinopharm Holding Longyan Co., Ltd. Market price 66.25 0.01% 63.89 0.01%
Sinopharm Holding Putian Co., Ltd. Market price 63.33 0.01% 19.63 0.00%
Sinopharm Holding Anqing Co., Ltd. Market price 62.21 0.01% 14.32 0.00%
Sinopharm Holding Shaanxi Co., Ltd. Market price 54.01 0.00% 442.36 0.04%
Sinopharm Holding Ningde Co., Ltd. Market price 52.88 0.00% 63.05 0.01%
Shanghai Donghong Medicine Co., Ltd. Market price 49.36 0.00% 0.10 0.00%
Shanghai Meiluo Medicine Co., Ltd. Market price 45.96 0.00% - 0.00%
Sinopharm Holding Changde Co., Ltd. Market price 35.67 0.00% 59.28 0.00%
Sinopharm Holding Yantai Co., Ltd. Market price 30.28 0.00% 16.13 0.00%
Sinopharm Holding Changzhou Medical logistics
center Co., Ltd. Market price 28.21 0.00% 64.21 0.01%
Sinopharm Holding Suzhou Co., Ltd. Market price 24.32 0.00% 103.12 0.01%
Sinopharm Holding Shanghai Likang
Pharmaceutical Co., Ltd. Market price 18.22 0.00% 76.52 0.01%
Sinopharm Holding Jiangsu Co., Ltd. Market price 17.72 0.00% 96.81 0.01%
Sinopharm Lerentang Qinhuangdao Medicine Co.,
Ltd. Market price 14.29 0.00% - 0.00%
Sinopharm Holding Sanming Co., Ltd. Market price 13.19 0.00% 7.11 0.00%
China National Scientific Instruments & Materials
Corporation Market price 12.18 0.00% 3.81 0.00%
Sinopharm Holding Huaian Co., Ltd. Market price 8.60 0.00% 10.30 0.00%
Sinopharm Holding Jiangxi Co., Ltd. Market price 8.39 0.00% 38.31 0.00%
- 155 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Sinopharm Holding ChiFeng Co., Ltd. Market price 7.79 0.00% 2.60 0.00%
Sinopharm Holding Jinan Co., Ltd. Market price 7.62 0.00% 4.82 0.00%
Sinopharm Holding HongKong Co., Ltd. Market price 4.13 0.00% 2.25 0.00%
Sinopharm Holding Guoda Drugstore Shenyang
Chain Co., Ltd. Market price 3.69 0.00% - 0.00%
Beijing Fusheng Tiandi Property Management Ltd. Market price 2.57 0.00% 1.54 0.00%
Sinopharm Holding Changzhou Co., Ltd. Market price 2.08 0.00% 9.62 0.00%
Sinopharm Holding (Yangzhou) Chinese Western
Medicine Branch Co., Ltd. Market price 2.07 0.00% 126.82 0.01%
Sinopharm Holding Zhangzhou Co., Ltd. Market price 1.06 0.00% 2.90 0.00%
Sinopharm Holding Wuhu Co., Ltd. Market price 0.92 0.00% 22.05 0.00%
Heilongjiang Sinopharm Medical Herbs Co., Ltd. Market price 0.79 0.00% 6.86 0.00%
Huayi Pharmaceutical Co., Ltd. Market price 0.75 0.00% - 0.00%
Sinopharm Holding Xinjiang Xinte Karamay
Pharmaceutical Co., Ltd. Market price 0.72 0.00% 0.75 0.00%
Sinopharm Holding Jining Co., Ltd. Market price 0.72 0.00% - 0.00%
To next page 77,667.91 6.70% 68,814.89 6.80%
- 156 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related partytransactions (continued)
(5) Related party transactions (continued)
(b) Sales of goods (continued)
For the six months ended For the six months ended
30 June 2014 30 June 2013
Pricing Amount % of same Amount % of same
Related party policies transaction transaction
Continued 77,667.91 6.70% 68,814.89 6.80%
Sinopharm Holding Dezhou Co., Ltd. Market price 0.72 0.00% 0.00%
Sinopharm Holding Zhoukou Co., Ltd. Market price 0.70 0.00% 0.60 0.00%
Sinopharm Holding Kaifeng Co., Ltd. Market price 0.64 0.00% 0.30 0.00%
Sinopharm Holding Anyang Co., Ltd. Market price 0.60 0.00% 0.60 0.00%
Shanxi Guoyi Drug Store Co., Ltd. Market price 0.58 0.00% 3.88 0.00%
Sinopharm Xinjiang Korla Pharmaceutical Co.,
Ltd. Market price 0.57 0.00% 0.80 0.00%
Sinopharm Holding Dandong Co., Ltd. Market price 0.54 0.00% - -
Sinopharm Holding Nanping Co., Ltd. Market price 0.45 0.00% - 0.00%
Sinopharm Holding Tongliao Co., Ltd. Market price 0.45 0.00% - 0.00%
Sinopharm Holding Qianxinan Co., Ltd. Market price 0.36 0.00% 0.21 0.00%
Shanghai Nutraceuticals (Shanghai) Co., Ltd. Market price 0.33 0.00% 0.38 0.00%
Sinopharm Holding Xinxiang Co., Ltd. Market price 0.27 0.00% - -
Shanghai Tongyu Information Technology Co.,
Ltd. Market price 0.26 0.00% - -
The Chinese medicine (Shanghai) Agel
Ecommerce Ltd Market price 0.20 0.00% - -
Shanghai Yunnuo Marketing Consulting Co., Ltd. Market price 0.08 0.00% 63.26 0.01%
Sinopharm holding Zhejiang Biological Products
Co., Ltd. Market price 0.04 0.00% - -
Sinopharm Group Weiqida Medicine Co., Ltd. Market price - 0.00% 547.04 0.05%
Shanghai Chaohui Pharmecurical Co., Ltd. Market price - 0.00% 247.95 0.02%
CNPGC Market price - 0.00% 8.94 0.00%
Sinopharm Holding Guoda Drug Store
Guangzhou Chain Co., Ltd. Market price - 0.00% 8.35 0.00%
Sinopharm Holding Xinjiang New Kashi
Pharmaceutical Co., Ltd. Market price - 0.00% 7.30 0.00%
Sinopharm Jiankun (Beijing) Medicines Co., Ltd. Market price - 0.00% 4.58 0.00%
Renaissance Shanghai Medical Beauty Clinic Co.
Ltd. Market price - 0.00% 4.10 0.00%
Reed Sinopharm Exhibitions Co., Ltd. Market price - 0.00% 1.86 0.00%
Sinopharm Fortuneway Company Market price - 0.00% 1.54 0.00%
Sinopharm Holding Shiyan Co., Ltd. Market price - 0.00% 1.36 0.00%
China National Pharmaceutical Foreign Trade
Co., Ltd. Market price - 0.00% 1.13 0.00%
Sinopharm Holding Jingmen Co., Ltd. Market price - 0.00% 0.69 0.00%
Sinopharm Holding Shangqiu Co., Ltd. Market price - 0.00% 0.56 0.00%
Sinopharm Holding Lishui Co., Ltd. Market price - 0.00% 0.48 0.00%
Sinopharm Holding Jingzhou Co., Ltd. Market price - 0.00% 0.24 0.00%
Sinopharm Holding Medical Devices Co., Ltd. Market price - 0.00% 0.22 0.00%
Sinopharm Holding Siping Co., Ltd. Market price - 0.00% 0.14 0.00%
- 157 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Shanghai Huyong Pharmaceutical Co., Ltd. Market price - 0.00% 0.09 0.00%
Sinopharm Holding Xinyu Co., Ltd. Market price - 0.00% -4.09 0.00%
Sinopharm Holding Anhui Co., Ltd. Market price -0.69 0.00% 7.18 0.00%
Jiang Meng Renren Medical instrument Co., Ltd. Market price - 0.00% 34.07 0.01%
Group Financial Co. Market price - 0.00% 2.47 0.00%
Total 77,674.01 6.70% 69,761.12 6.89%
- 158 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related partytransactions (continued)
(5) Related party transactions (continued)
(c) Lease
The Group as leaser:
Type of
assets Contract beginning Contract terminated Rental
Leasers Lessees use for date date income
Sinopharm Guoda Drug Store
Sinopharm liuzhou Guangxi Chain Co., Ltd. Building 1 January 2013 31 December 2015 81.43
Sinopharm Guoda Drug Store
Huixin Investment (Shenzhen) Chain Co., Ltd. Building 1 January 2014 31 December 2014 30.47
Sinopharm Guoda Drug Store
Guangxi Logistics Guangxi Chain Co., Ltd. Building 1 July 2009 31 December 2015 19.07
Sinopharm Guoda Drug Store
Sinopharm liuzhou Guangxi Chain Co., Ltd. Building 1 January 2014 31 December 2016 16.59
Sinopharm Group Guangdong
Province medical instrument
Huixin Investment limited company Building 18September 2013 31 December 2015 13.51
Sinopharm Guoda Drug Store
The Company (Shenzhen) Chain Co., Ltd. Building 1 January 2013 31 December 2015 5.12
China National Medicines Co.,
Huixin Investment Ltd. Building 1 January 2014 31 December 2014 4.32
Sinopharm Guoda Drug Store
Sinopharm Materials (Shenzhen) Chain Co., Ltd. Building 1 January 2014 31 December 2014 3.00
Sinopharm industry and Drug
Huixin Investment Sales Co. Ltd. Building 20December 2013 31December 2014 2.16
175.67
Rental income received from related parties is negotiated by both parties involved in the lease and by making reference to the market
price.
- 159 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related partytransactions (continued)
(5) Related party transactions (continued)
(c) Lease(continued)
The Group as lessee:
Type of assets Contract Contract terminated Lease
Lessees Leasers use for beginning date date expenses
Sinopharm Sinopharm Group Medicine
Guanghzou Logistic Co., Ltd. Equipment 1 January 2014 31 December 2014 375.00
Sinopharm Sinopharm Group Medicine
Guanghzou Logistic Co., Ltd. Building 1 January 2014 31 December 2014 354.00
Shaoguan Wujiang Muyang
Sinopharm Medicine Information Building
Shaoguan Cousulting Co., Ltd. 1 August 2012 31 July 2020 32.48
Sinopharm
Yanfeng Wang Yang Building 1 January 2014 31 December 2014 27.60
Sinopharm Foshan Nanhai Medicine Co.,
Foshan Ltd. Building 1 March 2013 28February 2015 11.09
800.17
Lease charges paid to related parties are negotiated by both parties involved in the lease and by making reference to the market price.
- 160 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related partytransactions (continued)
(5) Related party transactions (continued)
(d) Guarantees provided
Guarantee
Amount Beginning date of Maturity date of obligation
Guarantor Guarantee (RMB’0,000) guarantee contract guarantee contract expired
Sinopharm Group Sinopharm Guangzhou 49,950.14 3 June 2014 3 June2015 No
The Company Sinopharm Guangzhou 34,902.16 26June2013 25June2014 No
The Company Sinopharm Guangzhou 30,958.53 20May2014 20May2015 No
The Company Sinopharm Guangzhou 25,108.68 30April2014 30Apri2015 No
The Company Sinopharm Guangzhou 22,801.02 16September 2013 13August 2014 No
The Company Sinopharm Guangxi 17,934.83 26 June 2013 25 June 2014 No
The Company Sinopharm Guangzhou 14,906.77 29April 2014 29April 2015 No
The Company Sinopharm Guangxi 14,577.64 26 June2014 25 June2015 No
Zhijun Medicine The Company 10,400.35 30May2014 30May 2015 No
The Company Sinopharm Guangzhou 9,026.73 30June 2014 29June 2015 No
Zhijun Medicine The Company 9,000.00 13May 2014 11February 2015 No
The Company Sinopharm Guangxi 6,290.83 18April 2014 19April 2015 No
The Company Sinopharm Liuzhou 5,774.15 26June 2013 25June 2014 No
Sinopharm
Guangzhou &
Zhijun Medicine The Company 5,000.00 12 March 2014 11 March 2015 No
The Company Zhijun Medicine 4,412.51 10September 2013 25 June 2014 No
The Company Sinopharm Liuzhou 4,310.09 29April 2014 28April 2015 No
The Company ZhijunSuzhou 4,251.11 28August 2013 27August 2014 No
The Company Sinopharm Guangxi 4,097.87 27August 2013 27August 2014 No
The Company Zhijun Medicine 3,953.34 8August 2013 8August 2014 No
The Company Zhijun Suzhou 2,426.03 27May 2014 27 May 2015 No
The Company Sinopharm Yanfeng 1,985.33 23May 2013 23 May 2014 No
The Company Sinopharm Yuexing 1,939.14 13May 2014 12May 2015 No
The Company Sinopharm Yuexing 1,929.22 20May 2014 20May 2015 No
The Company Zhijun Suzhou 1,500.00 12 October 2013 12 October 2014 No
The Company Sinopharm Yanfeng 1,499.70 26 June 2013 25 June 2014 No
The Company Zhijun Suzhou 1,307.46 16 December 2013 25 June 2014 No
The Company Sinopharm Jiangmen 997.72 11July 2013 25 June 2014 No
The Company Sinopharm Yanfeng 996.69 13 February 2014 12 February 2015 No
Zhijun Medicine The Company 809.54 4 April 2014 4 April 2022 No
The Company Sinopharm Jiangmen 768.00 1 July 2013 30 June 2014 No
The Company Sinopharm Jiangmen 650.03 28May 2013 27May 2014 No
The Company Sinopharm Liuzhou 624.82 29 October 2013 28 October 2014 No
The Company Sinopharm Guangzhou 498.36 20May 2013 23 April 2014 No
To next page 295,588.79
- 161 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related partytransactions (continued)
(5) Related party transactions (continued)
(d) Guarantees provided (continued)
Guarantee
Amount Beginning date of Maturity date of obligation
Guarantor Guarantee (RMB’0,000) guarantee contract guarantee contract expired
Continued 295,588.79
The Company Zhijun Suzhou 478.80 25November 2013 25November 2014 No
The Company Sinopharm Drugs 330.67 26November 2013 25June 2014 No
The Company Zhijun Suzhou 100.00 22 October 2013 21 October 2014 No
Zhijun Medicine& Zhijun
The Company Trade 19.99 13 September 2013 13 September 2014 No
Total 296,518.25
(e) Financing
Category Amount Effective date Maturity date
(RMB’0,000)
For the six months ended
30 June 2014
Borrowed from-
Sinopharm Group Entrusted borrowings 3,160.00 7May 2014 7 May 2017
Group Financial Co. Short-term loans 2,000.00 25 February2014 28 February 2014
Discount on bank
Group Financial Co. acceptance notes 200.00 24March2014 17 June 2014
Discount on bank
Group Financial Co. acceptance notes 165.00 29May 2014 26 September 2014
Discount on bank
Group Financial Co. acceptance notes 150.00 24 March 2014 21 May 2014
Discount on bank
Group Financial Co. acceptance notes 124.58 24 March 2014 7 June 2014
Discount on bank
Group Financial Co. acceptance notes 100.00 24 March 2014 13 August 2014
Discount on bank
Group Financial Co. acceptance notes 100.00 24 March 2014 27 August 2014
Discount on bank
Group Financial Co. acceptance notes 100.00 30 June 2014 17 October 2014
Discount on bank
Group Financial Co. acceptance notes 78.62 24 March 2014 24 May 2014
Discount on bank
Group Financial Co. acceptance notes 61.80 24 March 2014 27 August 2014
Discount on bank
Group Financial Co. acceptance notes 58.85 29May 2014 24 July 2014
Discount on bank
Group Financial Co. acceptance notes 50.00 24 March 2014 24 May 2014
Discount on bank
Group Financial Co. acceptance notes 50.00 24 March 2014 24 May 2014
Discount on bank
Group Financial Co. acceptance notes 50.00 29 May 2014 26 June 2014
- 162 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Discount on bank
Group Financial Co. acceptance notes 50.00 29 May 2014 26 June 2014
Discount on bank
Group Financial Co. acceptance notes 50.00 29 May 2014 26 June 2014
Discount on bank
Group Financial Co. acceptance notes 50.00 29 May 2014 29 June 2014
Discount on bank
Group Financial Co. acceptance notes 50.00 29 May 2014 22October 2014
To next page 6,648.85
- 163 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related party transactions (continued)
(5) Related party transactions (continued)
(e) Financing(continued)
Category Amount Effective date Maturity date
(RMB’0,000)
Continued 6,648.85
Discount on bank
Group Financial Co. acceptance notes 50.00 29May 2014 22October 2014
Discount on bank
Group Financial Co. acceptance notes 50.00 30June 2014 16November 2014
Discount on bank
Group Financial Co. acceptance notes 48.54 29May 2014 28June 2014
Discount on bank
Group Financial Co. acceptance notes 48.53 29May 2014 20June 2014
Discount on bank
Group Financial Co. acceptance notes 47.24 30June 2014 30August 2014
Discount on bank
Group Financial Co. acceptance notes 44.99 24 March 2014 17 April 2014
Discount on bank
Group Financial Co. acceptance notes 43.23 24 March 2014 28May 2014
Discount on bank
Group Financial Co. acceptance notes 42.00 30June 2014 23October 2014
Discount on bank
Group Financial Co. acceptance notes 40.01 24 March 2014 17April 2014
Discount on bank
Group Financial Co. acceptance notes 40.00 24 March 2014 24 August 2014
Discount on bank
Group Financial Co. acceptance notes 37.94 24 March 2014 19May 2014
Discount on bank
Group Financial Co. acceptance notes 37.91 24 March 2014 24 August 2014
Discount on bank
Group Financial Co. acceptance notes 34.18 30June 2014 30August 2014
Discount on bank
Group Financial Co. acceptance notes 34.00 29May 2014 18June 2014
Discount on bank
Group Financial Co. acceptance notes 31.68 29May 2014 24 July 2014
Discount on bank
Group Financial Co. acceptance notes 30.00 24 March 2014 19 June 2014
Discount on bank
Group Financial Co. acceptance notes 30.00 24 March 2014 19 May 2014
Discount on bank
Group Financial Co. acceptance notes 30.00 24 March 2014 19 May 2014
Discount on bank
Group Financial Co. acceptance notes 30.00 29May 2014 22 October 2014
Discount on bank
Group Financial Co. acceptance notes 30.00 30June 2014 29August 2014
Discount on bank
Group Financial Co. acceptance notes 28.48 29May 2014 17 October 2014
Discount on bank
Group Financial Co. acceptance notes 27.63 30June 2014 29 November 2014
- 164 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Discount on bank
Group Financial Co. acceptance notes 25.22 29May 2014 20 August 2014
Discount on bank
Group Financial Co. acceptance notes 21.76 30June 2014 29 August 2014
Discount on bank
Group Financial Co. acceptance notes 20.43 30June 2014 19 August 2014
Discount on bank
Group Financial Co. acceptance notes 20.19 29May 2014 14 July 2014
Discount on bank
Group Financial Co. acceptance notes 20.00 24 March 2014 22 April 2014
Discount on bank
Group Financial Co. acceptance notes 20.00 24 March 2014 22 April 2014
Discount on bank
Group Financial Co. acceptance notes 20.00 24 March 2014 17 June 2014
To next page 7,632.81
- 165 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related party transactions (continued)
(5) Related party transactions (continued)
(e) Financing(continued)
Category Amount Effective date Maturity date
(RMB’0,000)
Continued 7,632.81
Discount on bank
Group Financial Co. acceptance notes 20.00 29 May 2014 25 June 2014
Discount on bank
Group Financial Co. acceptance notes 20.00 29 May 2014 25 July 2014
Discount on bank
Group Financial Co. acceptance notes 20.00 29 May 2014 28 July 2014
Discount on bank
Group Financial Co. acceptance notes 20.00 29 May 2014 28 July 2014
Discount on bank
Group Financial Co. acceptance notes 20.00 29 May 2014 28 July 2014
Discount on bank
Group Financial Co. acceptance notes 20.00 29 May 2014 14 October 2014
Discount on bank
Group Financial Co. acceptance notes 20.00 29 May 2014 20 August 2014
Discount on bank
Group Financial Co. acceptance notes 20.00 29 May 2014 20 August 2014
Discount on bank
Group Financial Co. acceptance notes 20.00 29 May 2014 20 August 2014
Discount on bank
Group Financial Co. acceptance notes 20.00 30 June 2013 22 October 2014
Discount on bank
Group Financial Co. acceptance notes 20.00 30 June 2013 27 August 2014
Discount on bank
Group Financial Co. acceptance notes 20.00 30 June 2013 27 August 2014
Discount on bank
Group Financial Co. acceptance notes 20.00 30 June 2013 27 August 2014
Discount on bank
Group Financial Co. acceptance notes 20.00 30 June 2013 27 August 2014
Discount on bank
Group Financial Co. acceptance notes 20.00 30 June 2013 27 August 2014
Discount on bank
Group Financial Co. acceptance notes 20.00 30 June 2013 29November 2014
Discount on bank
Group Financial Co. acceptance notes 20.00 30 June 2013 15November 2014
Discount on bank
Group Financial Co. acceptance notes 20.00 30 June 2013 10 October 2014
Discount on bank
Group Financial Co. acceptance notes 20.00 30 June 2013 13 November 2014
Discount on bank
Group Financial Co. acceptance notes 19.00 29 May 2014 23 October 2014
Discount on bank
Group Financial Co. acceptance notes 17.71 29 May 2014 26 June 2014
8,049.52
- 166 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related party transactions (continued)
(5) Related party transactions (continued)
(e) Financing(continued)
Category Amount Effective date Maturity date
(RMB’0,000)
Continued
Discount on bank
Group Financial Co. acceptance notes 8,049.52
Discount on bank
Group Financial Co. acceptance notes 15.89 30 June 2014 30 July 2014
Discount on bank
Group Financial Co. acceptance notes 14.70 29 May 2014 24 July 2014
Discount on bank
Group Financial Co. acceptance notes 14.59 24 March 2014 23 May 2014
Discount on bank
Group Financial Co. acceptance notes 14.00 24 March 2014 12 August 2014
Discount on bank
Group Financial Co. acceptance notes 14.00 30 June 2014 9 September 2014
Discount on bank
Group Financial Co. acceptance notes 12.50 29 May 2014 17 October 2014
Discount on bank
Group Financial Co. acceptance notes 12.08 30 June 2014 27 August 2014
Discount on bank
Group Financial Co. acceptance notes 12.00 30 June 2014 27 November 2014
Discount on bank
Group Financial Co. acceptance notes 11.00 29 May 2014 23 October 2014
Discount on bank
Group Financial Co. acceptance notes 10.53 29 May 2014 20 June 2013
Discount on bank
Group Financial Co. acceptance notes 10.06 30 June 2014 15 August 2014
Discount on bank
Group Financial Co. acceptance notes 10.00 24 March 2014 14 July 2014
Discount on bank
Group Financial Co. acceptance notes 10.00 30 June 2014 17 October 2014
Discount on bank
Group Financial Co. acceptance notes 10.00 30 June 2014 27 August 2014
Discount on bank
Group Financial Co. acceptance notes 10.00 30 June 2014 28 August 2014
Discount on bank
Group Financial Co. acceptance notes 10.00 30 June 2014 28 August 2014
Discount on bank
Group Financial Co. acceptance notes 10.00 30 June 2014 28 August 2014
Discount on bank
Group Financial Co. acceptance notes 10.00 30 June 2014 19 November 2014
Discount on bank
Group Financial Co. acceptance notes 10.00 30 June 2014 15 October 2014
8,270.87
- 167 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related party transactions (continued)
(5) Related party transactions (continued)
(e) Financing(continued)
Category Amount Effective date Maturity date
(RMB’0,000)
For the six months ended
30 June 2013
Borrowed from-
Group Financial Co. Short-term loans 3,000.00 4March 2013 4March 2014
Group Financial Co. Short-term loans 7,000.00 2 April 2013 2 April 2014
Group Financial Co. Short-term loans 4,300.00 27May 2013 27May 2014
Group Financial Co. Short-term loans 2,500.00 29May 2013 29May 2014
Discount on bank
Group Financial Co. acceptance notes 100.00 28 June 2013 22 August 2013
Discount on bank
Group Financial Co. acceptance notes 100.00 28 June 2013 22 August 2013
Discount on bank
Group Financial Co. acceptance notes 100.00 28 June 2013 22 August 2013
Discount on bank
Group Financial Co. acceptance notes 50.00 28 June 2013 22 August 2013
Discount on bank
Group Financial Co. acceptance notes 50.00 28 June 2013 22 August 2013
Discount on bank
Group Financial Co. acceptance notes 50.00 28 June 2013 22 August 2013
Discount on bank
Group Financial Co. acceptance notes 50.00 28 June 2013 22 August 2013
Discount on bank
Group Financial Co. acceptance notes 100.00 28 June 2013 30 August 2013
Discount on bank
Group Financial Co. acceptance notes 100.00 28 June 2013 30 August 2013
Discount on bank
Group Financial Co. acceptance notes 100.00 28 June 2013 30 August 2013
Discount on bank
Group Financial Co. acceptance notes 100.00 28 June 2013 30 August 2013
Discount on bank
Group Financial Co. acceptance notes 100.00 28 June 2013 30 August 2013
Discount on bank
Group Financial Co. acceptance notes 50.00 28 June 2013 4 September 2013
Discount on bank
Group Financial Co. acceptance notes 50.00 28 June 2013 4 September 2013
Discount on bank
Group Financial Co. acceptance notes 50.00 28 June 2013 4 September 2013
Discount on bank
Group Financial Co. acceptance notes 50.00 28 June 2013 4 September 2013
Discount on bank
Group Financial Co. acceptance notes 50.00 28 June 2013 4 September 2013
Discount on bank
Group Financial Co. acceptance notes 50.00 28 June 2013 4 September 2013
Discount on bank
Group Financial Co. acceptance notes 50.00 28 June 2013 4 September 2013
- 168 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Discount on bank
Group Financial Co. acceptance notes 60.16 28 June 2013 7 September 2013
18,210.16
- 169 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related party transactions (continued)
(5) Related party transactions (continued)
(f) Interest expenses
For the six months For the six
ended 30 June months ended 30
2014 June 2013
Related party Type of transaction (RMB’0,000) (RMB’0,000)
Sinopharm Group Interest paid for the entrusted loans 504.00 -
Interest paid for the loans from
Sinopharm Group Financial Co. Group Financial Co. 397.68 607.30
Sinopharm Holding Sub Marketing
Center Co., Ltd. Charges of discounted notes payable 242.16 468.16
Sinopharm Group Financial Co. Payment bill discount interest 42.60 14.73
CNPGC Interest paid for the entrusted loans 26.07 -
Sinopharm Group Charges of discounted notes payable 52.04 29.30
1,264.55 1,119.49
(g) Interest income
For the six months For the six
ended 30 June months ended 30
2014 June 2013
Related party Type of transaction (RMB’0,000) (RMB’0,000)
Group Financial Co. Deposit interest 1.27 0.32
(h) Rendering of service
Related party Type of transaction For the six For the six
months ended months ended
30 June 2014 30 June 2013
(RMB’0,000) (RMB’0,000)
Dispatching and
Sinopharm Group Medicine Logistic Co., Ltd. transportation charges 325.51 715.89
Dispatching and
China National Medicines Co., Ltd. transportation charges 217.30 314.20
Dispatching and
Foshan Nanhai Uptodate & Special Medicines Co., Ltd. transportation charges 176.86 -
Dispatching and
Sinopharm Holding Guoda Drug Store Guangdong Co., Ltd. transportation charges 168.91 166.75
Dispatching and
Foshan Nanhai Medicine Co., Ltd. transportation charges 139.59 -
Sinopharm Group entrusted revenue 25.00 -
Shenzhen Wanwei Medicine trading Co., Ltd. Consultation revenue 13.11 5.15
China National Pharmaceutical Foreign Trade Co., Ltd. entrusted revenue 12.50 -
Wanle Medical Consultation revenue 5.22 10.88
Foshan Yingtian Pharmaceutical Sales Co., Ltd. Consultation revenue 0.63 -
Sinopharm Holding Guoda Drug Store Guangzhou Chain Co., Ltd. Parking fee 0.60 -
1,085.23 1,212.87
- 170 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related party transactions (continued)
(5) Related party transactions (continued)
(j) Other services
Related party Type of transaction For the six months For the six months
ended 30 June 2014 ended 30 June 2013
(RMB’0,000) (RMB’0,000)
Sinopharm Chongqing Pharmaceutical and
Medical Industry Design Institute Pinshan management fees 537.27 -
Sinopharm Chongqing Pharmaceutical and
Medical Industry Design Institute Designing fee 285.50 -
Sinopharm Group Medicine Logistic Co., CMS system operating
Ltd. charges 28.49 15.00
Sinopharm Group Medicine Logistic Co., CMS system operating
Ltd. charges 79.12 57.93
Sinopharm Holding Shenyang Co., Ltd. Other expenses 40.06 31.05
Shanghai Institute of Pharmaceutical Research and development
Industry expenses 20.25 -
Reed Sinopharm Exhibitions Co., Ltd. Exhibition expenses 4.40 4.20
Sinopharm Holding Guoda Drug Store
Guangdong Co., Ltd. Products promotion fee 2.13 1.44
Sinopharm Holding Guoda Pharmacy Co.,
Ltd. Products promotion fee 0.25 -
Sinopharm Group Chemical Reagent Research and development
Suzhou Co., Ltd. expenses 0.08 -
Dispatching and
Sinopharm Holding Shenyang Co., Ltd. transportation charges - 17.05
997.55 126.67
- 171 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related party transactions (continued)
(6) Accounts receivable from and payables to related parties
30 June 2014 31 December 2013
(RMB’0,000) (RMB’0,000)
Notes receivable Chongqing Yaoyou Pharmaceutical Co., Ltd. 690.19 479.85
Foshan Nanhai Medicine Co., Ltd. 263.48 -
Sinopharm Holding Hainan Co., Ltd. 220.52 208.67
Sinopharm Holding Tianjin Co., Ltd. 210.43 62.92
Sinopharm Holding Shandong Co., Ltd. 148.94 848.54
Sinopharm Holding Guoda Drug Store Guangdong
136.65 309.88
Co., Ltd.
Sinopharm Holding Hainan Hongyi Co., Ltd. 131.85 105.20
Sinopharm Holding Hubei Co., Ltd. 117.10 199.04
Sinopharm Holding Chongqing Co., Ltd. 71.77 20.05
Sinopharm Holding Yancheng Co., Ltd. 70.75 55.40
Sinopharm Holding Shaanxi Co., Ltd. 30.54 98.75
Sinopharm Holding Hunan Co., Ltd. 24.90 407.58
Sinopharm Holding Changzhou Medical logistics
15.00 -
center Co., Ltd.
Sinopharm Holding Yangzhou Co., Ltd. 14.62 10.00
Sinopharm Holding Jiaozuo Co., Ltd. 11.76 -
Sinopharm Holding Hunan Guoda Minshengtang
10.59 8.60
Drug Store Chain Co., Ltd.
Sinopharm Le -Ren-Tang Medicine Co., Ltd. 9.98 -
Sinopharm Holding Shenyang Co., Ltd. 9.50 15.28
Sinopharm Holding Yantai Co., Ltd. 5.44 3.02
Sinopharm Holding Jiangsu Co., Ltd. 3.80 -
Sinopharm Guoda pharmacy Shenyang chain Co.,
2.79 4.01
Ltd.
Sinopharm Holding Henan Co., Ltd. 2.39 -
Sinopharm Holding Guizhou Co., Ltd. 2.23 71.08
Shanghai Chaohui Pharmecurical Co., Ltd. - 150.50
Sinopharm Holding Beijing Huahong Co., Ltd. - 92.33
Sinopharm Holding Gansu Co., Ltd. - 71.31
China National Medicines Co., Ltd. - 66.50
Sinopharm Holding Fuzhou Co., Ltd. - 56.70
Sinopharm Holding Xuzhou Co., Ltd. - 52.67
Sinopharm Holding Bengbu Co., Ltd. - 15.00
Sinopharm Guoda Drug Store Guangxi Chain Co.,
- 10.80
Ltd.
Sinopharm Holding Heilongjiang Co., Ltd. - 8.83
2,205.22 3,432.51
30 June 2014 31 December 2013
(RMB’0,000) (RMB’0,000)
Accounts receivable Sinopharm Holding Hunan Co., Ltd. 3,014.18 2,857.02
Foshan Nanhai Uptodate & Special Medicines Co.,
Ltd. 2,362.44 1,704.67
- 172 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Sinopharm Le -Ren-Tang Medicine Co., Ltd. 1,810.22 1,313.68
Sinopharm Holding Hubei Co., Ltd. 1,749.88 1,158.86
Sinopharm Holding Shandong Co., Ltd. 1,320.10 2,051.41
Sinopharm Holding Beijing Co., Ltd. 1,269.16 946.84
Sinopharm Group (Tianjin) Eastern Bokang
Pharmaceutical Co., Ltd. 1,238.53 676.72
Sinopharm Holding Hainan Co., Ltd. 1,154.61 1,260.47
Sinopharm Holding Beijing Huahong Co., Ltd. 1,072.45 1,347.20
Sinopharm Holding Guoda Drug Store Guangdong
Co., Ltd. 1,000.18 1,100.37
Sinopharm Group Xinjiang Special Drugs National
Pharmaceutical Co., Ltd. 914.09 1,381.80
To next page 16,905.84 15,799.04
- 173 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related party transactions (continued)
(6) Accounts receivable from and payables to related parties (continued)
30 June 2014 31 December 2013
(RMB’0,000) (RMB’0,000)
Accounts receivable Continued 16,905.84 15,799.04
Foshan Nanhai Medicine Co., Ltd. 832.68 634.33
Sinopharm Holding Ningxia Co., Ltd. 743.72 352.55
Sinopharm Group Southwest Medicine Co., Ltd. 730.00 642.34
Sinopharm Holding Zhejiang Co., Ltd. 651.28 753.76
Sinopharm Holding Tianjin Co., Ltd. 622.77 650.50
Chongqing Yaoyou Pharmaceutical Co., Ltd. 595.48 333.73
Sinopharm Group Medicine Logistic Co., Ltd. 545.11 324.48
Sinopharm Holding Xinjiang Special Drugs
Western Pharmaceutical Co., Ltd. 472.15 394.44
Sinopharm Holding Nantong Co., Ltd. 455.12 375.65
Sinopharm Holding Sub Marketing Center Co.,
Ltd. 443.15 397.32
Foshan Chancheng District Central Hospital 429.42 337.12
Sinopharm Holding Chongqing Co., Ltd. 400.97 345.65
Sinopharm Group 392.29 469.33
Sinopharm Guoda Drug Store Guangxi Chain Co.,
Ltd. 357.14 467.60
Sinopharm Holding Jinzhou Co., Ltd. 352.17 243.44
Sinopharm Holding Wenzhou Co., Ltd. 320.97 385.01
Sinopharm Holding Hainan Hongyi Co., Ltd. 316.42 489.49
Sinopharm Holding Henan Co., Ltd. 301.07 214.39
Sinopharm Holding Yunnan Co., Ltd. 268.61 221.05
Guangdong Dong Fang Uptodate & Special
Medicines Co., Ltd. 267.33 331.81
China National Medicines Co., Ltd. 218.98 250.94
Sinopharm Holding Heilongjiang Co., Ltd. 214.33 193.73
Sinopharm Holding Shanxi Co., Ltd. 198.55 135.02
Sinopharm Holding Guizhou Co., Ltd. 183.93 52.09
Sinopharm Holding Fuzhou Co., Ltd. 182.96 426.40
Sinopharm Holding Shenyang Co., Ltd. 154.40 217.46
Sinopharm Holding Yangzhou Co., Ltd. 115.97 167.90
China Pharmaceutical Group Shanxi Co., Ltd. 107.54 144.57
Sinopharm Holding Qingdao Co., Ltd. 106.07 63.35
Sinopharm Holding Fujian Co., Ltd. 105.90 45.52
Sinopharm Holding Yancheng Co., Ltd. 88.32 45.71
Sinopharm Holding Gansu Co., Ltd. 77.51 169.01
Sinopharm Guoda Drug Store Jiangmen Chain Co.,
Ltd. 73.19 89.31
Sinopharm Holding Inner Mongolia Co., Ltd. 73.13 35.66
Sinopharm Holding Jilin Co., Ltd. 70.59 67.63
Sinopharm Holding Guoda Pharmacy Co., Ltd. 69.90 106.17
- 174 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Sinopharm Holding Dalian Co., Ltd. 44.73 66.00
Shanghai Donghong Medicine Co., Ltd. 43.75 16.34
Sinopharm Holding Qinghai Co., Ltd. 42.46 28.70
Sinopharm Holding Longyan Co., Ltd. 42.14 15.56
Sinopharm Holding Xuzhou Co., Ltd. 41.00 69.25
Guang dong South Pharmaceutical Foreign Trade
Co., Ltd. 37.29 42.34
Sinopharm Holding Tianjin North Medicine Co.,
Ltd. 34.77 27.82
Sinopharm Holding Putian Co., Ltd. 32.48 17.30
Sinopharm Holding Wuxi Co., Ltd. 24.78 124.61
Sinopharm Holding Quanzhou Co., Ltd. 23.90 8.72
Sinopharm Holding Changzhou Medical logistics
center Co., Ltd. 19.55 33.01
Sinopharm Holding Ningde Co., Ltd. 18.59 10.62
To next page 28,850.40 26,833.77
- 175 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related party transactions (continued)
(6) Accounts receivable from and payables to related parties (continued)
30 June 2014 31 December 2013
(RMB’0,000) (RMB’0,000)
Accounts receivable Continued 28,850.40 26,833.77
Sinopharm Holding Suzhou Co., Ltd. 18.29 25.19
Sinopharm Holding Shaanxi Co., Ltd. 17.30 137.78
Sinopharm Holding Taizhou Co., Ltd. 16.36 27.60
Sinopharm Holding Anqing Co., Ltd. 11.66 8.82
Sinopharm Lerentang Tangshan Medicine Co.,
Ltd. 11.40 95.52
Shanghai Yunnuo Marketing Consulting Co.,
Ltd. 10.00 10.07
Sinopharm Holding Shanghai Likang
Pharmaceutical Co., Ltd. 9.66 30.01
Sinopharm Holding Changde Co., Ltd. 7.88 32.08
Sinopharm Holding Jiangsu Co., Ltd. 7.57 33.74
Sinopharm Holding Yantai Co., Ltd. 7.23 17.68
Sinopharm Holding Zunyi Co., Ltd. 3.02 3.02
Sinopharm Holding Huaian Co., Ltd. 2.74 7.85
Sinopharm Lerentang Qinhuangdao Medicine
Co., Ltd. 2.50 5.70
Sinopharm Holding (Yangzhou) Chinese
Western Medicine Branch Co., Ltd. 2.43 5.23
Sinopharm Holding HongKong Co., Ltd. 2.07 -
Shanxi Guoyi Drug Store Co., Ltd. 1.87 1.19
Sinopharm Holding Changzhou Co., Ltd. 1.68 4.30
Sinopharm Holding Guoda Drugstore
Shenyang Chain Co., Ltd. 1.62 -
Sinopharm Holding Sanming Co., Ltd. 1.22 0.91
Sinopharm Holding Jiangxi Co., Ltd. 0.88 3.87
Sinopharm Holding Beijing Kangchen
Bio-Pharmaceutical Co., Ltd. 0.77 0.62
Sinopharm Holding Zhoukou Co., Ltd. 0.72 -
Sinopharm Holding Yueyang Co., Ltd. 0.68 0.68
Beijing Fusheng Tiandi Property Management
Ltd. 0.61 -
Sinopharm Holding Qianxinan Co., Ltd. 0.43 -
Shanghai Tongyu Information Technology Co.,
Ltd. 0.30 -
Shanghai Nutraceuticals (Shanghai) Co., Ltd. 0.23 0.16
Sinopharm Holding Kaifeng Co., Ltd. 0.14 0.14
Foshan Yingtian Pharmaceutical Sales Co.,
Ltd.. 0.02 -
Sinopharm Holding Qujing Co., Ltd. - 2.34
Heilongjiang Sinopharm Medical Herbs Co.,
Ltd. - 1.20
Sinopharm Holding Shiyan Co., Ltd. - 1.09
Sinopharm Jiankun (Beijing) Medicines Co., - 0.80
- 176 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Ltd.
Sinopharm Holding Anhui Co., Ltd. - 0.75
Sinopharm Holding Anyang Co., Ltd. - 0.70
Sinopharm United Engineering Corporation - 0.35
Sinopharm Holding Xinjiang Xinte Karamay
Pharmaceutical Co., Ltd. - 0.34
Lanzhou Biotechnology Development Co.,
Ltd. - 0.32
Sinopharm Holding Honghe Co., Ltd. - 0.13
Sinopharm Holding Xinxiang Co., Ltd. - 0.13
Sinopharm Holding Wuhu Co., Ltd. - 0.12
Sinopharm Holding Puyang Co., Ltd. - 0.04
Total 28,991.68 27,294.24
- 177 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related party transactions (continued)
(6) Accounts receivable from and payables to related parties (continued)
30 June 2014 31 December 2013
(RMB’0,000) (RMB’0,000)
Sinopharm Group Medicine Logistic
Other receivables Co., Ltd. 121.50 211.76
Sinopharm Group 25.00 25.00
China National Pharmaceutical Foreign Trade
Co., Ltd. 12.50 8.33
159.00 245.09
30 June 2014 31 December 2013
(RMB’0,000) (RMB’0,000)
Advances to suppliers Chengdu Rongsheng Pharmacy Co., Ltd. 164.00 0.05
Sinopharm Chongqing Pharmaceutical and
Medical Industry Design Institute 65.22 111.80
Sinopharm Holding Sub Marketing Center Co.,
Ltd. 64.55 -
Wuhan Institute of Biological Products Co.,
Ltd. 31.04 -
Wanle Medical 4.71 -
Shanghai Modern Hasen (Shangqiu)
Pharmacertical Co., Ltd. 1.84 -
Reed Sinopharm Exhibitions Co., Ltd. 0.90 -
Sinopharm Holding Guoda Drug Store
Guangdong Co., Ltd. 0.69 -
Sinopharm Holding Suzhou Co., Ltd. 0.49 -
Sinopharm Holding Fujian Co., Ltd. 0.44 0.44
Sinopharm Holding Beijing Kangchen
Bio-Pharmaceutical Co., Ltd. 0.16 -
Sinopharm Holding Guizhou Co., Ltd. 0.12 0.04
Sinopharm Group Guorui Medicine Co., Ltd. 0.10 12.06
Sinopharm Holding Hainan Co., Ltd. 0.05 -
Guangdong Medi-World Pharmacertical Co.,
Ltd. 0.03 -
Qinghai Pharmaceutical Factory Co., Ltd. - 383.84
Shanghai Institute of Pharmaceutical Industry - 20.25
Foshan Nanhai Medicine Co., Ltd. - 2.75
China National Medicines Co., Ltd. - 2.50
Sinopharm Holding Jiangsu Co., Ltd. - 0.49
Hunan Dongting Pharmaceutical Co., Ltd. - 0.31
Foshan Nanhai Uptodate & Special Medicines
Co., Ltd. - 0.04
Sinopharm Group Chemical Reagent Co., Ltd. - 0.02
334.34 534.59
Management consider that there is no recoverability risk in related to receivables due from other related party.
Therefore, no provision has been made.
- 178 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related party transactions (continued)
(6) Accounts receivable from and payables to related parties (continued)
30 June 2014 31 December 2013
(RMB’0,000) (RMB’0,000)
Notes payable Sinopharm Holding Sub Marketing Center Co., Ltd. 6,911.35 11,839.49
Sinopharm Group 3,488.64 2,611.93
China National Medicines Co., Ltd. 1,333.38 1,185.05
Chongqing Haisiman Pharmaceutical Co., Ltd. 223.97 242.08
Sinopharm Holding Beijing Co., Ltd. 157.57 29.11
Shenzhen Wanwei Medicine trading Co., Ltd. 152.18 -
Chongqing Yaoyou Pharmaceutical Co., Ltd. 108.05 173.88
Jiangsu Wanbang Pharmacy Marketing Co., Ltd. 93.90 216.49
Sinopharm Group Chemical Reagent Suzhou Co.,
Ltd. 64.90 10.99
Guizhou Tongjitang Pharmaceutical Co., Ltd. 62.57 -
Sinopharm Group Rongsheng Pharmaceutical Co.,
Ltd. 43.04 -
Anhui Jingfang Pharmaceutical Co., Ltd. 30.76 -
Foshan Yingtian Pharmaceutical Sales Co., Ltd. 19.67 -
Shanghai Shyndec Pharmaceutical Co., Ltd. 6.42 23.01
Lanzhou Biotechnology Development Co., Ltd. - 186.00
Wanle Medical - 73.21
Sinopharm Holding Guoda Drug Store Guangdong
Co., Ltd. - -
12,696.40 16,591.24
30 June 2014 31 December 2013
(RMB’0,000) (RMB’0,000)
Accounts payable Sinopharm Holding Sub Marketing Center Co., Ltd. 16,843.78 12,614.82
Sinopharm Group 5,145.08 3,811.48
China National Medicines Co., Ltd. 3,172.98 3,019.50
Sino-Swed Pharmaceutical Corp.Ltd. 1,472.08 1,461.94
Shenzhen Wanwei Medicine trading Co., Ltd. 1,202.64 360.23
Foshan Yingtian Pharmaceutical Sales Co., Ltd. 1,135.20 755.74
Guangdong South Pharmaceutical Foreign Trade
Co., Ltd. 782.71 436.16
Jiangsu Wanbang Pharmacy Marketing Co., Ltd. 558.06 268.24
Chongqing Yaoyou Pharmaceutical Co., Ltd. 372.73 358.13
Sinopharm Holding Hubei Co., Ltd. 228.26 57.48
Lanzhou Biotechnology Development Co., Ltd. 210.00 150.00
Chongqing Haisiman Pharmaceutical Co., Ltd. 196.58 139.17
Sinopharm Group Medicine Logistic Co., Ltd. 190.71 139.13
Foshan Nanhai Uptodate & Special Medicines Co.,
Ltd. 142.42 28.89
Sinopharm Holding Macheng Co., Ltd. 137.43 -
Guangdong Dong Fang Uptodate & Special
Medicines Co., Ltd. 92.50 27.67
Shanghai Shyndec Pharmaceutical Co., Ltd. 58.43 61.81
- 179 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Sinopharm Group Weiqida Medicine Co., Ltd. 52.82 56.72
Sinopharm Holding Beijing Huahong Co., Ltd. 44.15 -
Beijing Huasheng Pharmaceutical Biotechnology
Development Co., Ltd. 41.96 0.06
Sinopharm Holding Fujian Co., Ltd. 39.69 31.75
Sinopharm Holding Beijing Co., Ltd. 39.07 10.57
Sinopharm Group Rongsheng Pharmaceutical Co.,
Ltd. 37.42 32.18
Guizhou Tongjitang Pharmaceutical Co., Ltd. 33.26 36.49
Shandong Lu Ya Pharmaceutical Co., Ltd. 31.81 13.68
To next page 32,261.77 23,871.84
- 180 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related partytransactions (continued)
(6) Accounts receivable from and payables to related parties (continued)
30 June 2014 31 December 2013
(RMB’0,000) (RMB’0,000)
Accounts payable Continued 32,261.77 23,871.84
Sinopharm Holding Hunan Co., Ltd. 21.64 233.13
Wuhan Zhonglian Pharmaceutical Group Co.,
Ltd. 20.48 2.71
Guilin South pharmaceutical Co., Ltd. 20.20 13.73
Sinopharm Holding Heilongjiang Co., Ltd. 13.19 -
China Otsuka Pharmaceutical Co., Ltd. 11.62 20.25
Sinopharm Group Chemical Reagent Co., Ltd. 5.92 11.37
Sinopharm Group Chemical Reagent Suzhou
Co., Ltd. 4.03 -
China National Pharmaceutical Foreign Trade
Co., Ltd. 6.49 95.05
Foshan Dezhong Pharmaceutical Co., Ltd. 6.00 5.83
Handan Pharmaceutical Co., Ltd. 5.96 8.51
Hunan Dongting Pharmaceutical Co., Ltd. 5.00 4.90
Shenyang Hongqi Pharmaceutical Co., Ltd. 4.78 0.55
Sinopharm Holding JIangsu Co., Ltd. 3.31 -
Sinopharm Xingsha Pharmaceuticals (Xiamen)
Co., Ltd. 3.24 -
Guangdong Medi-World Pharmacertical Co.,
Ltd. 3.05 3.05
Foshan Nanhai Medicine Co., Ltd. 2.77 -
Guizhou Longlife Pharmacertical Co., Ltd. 2.69 3.46
Yichang Humanwell Pharmaceutical Co., Ltd. 2.25 0.05
Sinopharm Holding Sanyi Medicine(Wuhu) Co.,
Ltd. 1.96 0.17
China Pharmaceutical Group Shanghai Medical
Instrument Co., Ltd. 1.66 3.02
Sinopharm Holding Liaocheng Co., Ltd. 1.62 1.62
Anhui Jingfang Pharmaceutical Co., Ltd. 0.96 11.78
Sinopharm Group Beijing Medical equipment
Co., Ltd. 0.88 0.88
Shanghai Chaohui Pharmecurical Co., Ltd. 0.75 0.75
Sinopharm Holding Shaanxi Co., Ltd. 0.72 -
Jiangsu the Yellow River pharmaceutical
Co.,Ltd. 0.28 -
Sinopharm Holding Dezhou Co., Ltd. 0.43 6.84
Foshan Fengliaoxing Pharmaceutical Co., Ltd. 0.39 0.39
Wanle Medical 0.37 578.28
Sinopharm Holding Ningxia Co., Ltd. 0.30 -
Shanghai Sailun Biological Technology Co., Ltd. 0.29 0.29
Xiamen Xingsha Huaideju Pharmaceutical Co.,
Ltd. 0.11 0.11
The Fourth Pharmaceutical Co., Ltd. of
Zhonglian Group 0.08 0.08
Chengdu Rongsheng Pharmacy Co., Ltd. 0.08 -
Shanghai Fosun Pharmaceutical Co., Ltd. 0.02 0.02
- 181 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Wanbang Biopharmaceuticals - 51.06
Sinopharm Holding Chongqing Co., Ltd. - 17.07
Sinopharm Holding Hainan Co., Ltd. - 16.90
Sinopharm Pharmaceutical Logistics Co., Ltd.
Guangzhou Branch - 6.30
Sinopharm Holding Yunnan Co., Ltd. - 1.91
Sinopharm Holding Suzhou Co., Ltd. - 1.62
Shanghai Modern Hasen (Shangqiu)
Pharmacertical Co., Ltd. - 1.38
Sinopharm Guoda Drug Store(Shenzhen) Chain
Co., Ltd. - 0.30
Total 32,415.29 24,975.20
- 182 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related partytransactions (continued)
(6) Accounts receivable from and payables to related parties (continued)
30 June 2014 31 December 2013
(RMB’0,000) (RMB’0,000)
Other payables Sinopharm Group 453.07 453.07
China State Institute of Pharmaceutical Industry 400.00 15.00
Sinopharm Chongqing Pharmaceutical and
Medical Industry Design Institute 255.00 216.83
China National Pharmaceutical Group Shanghai
Co., Ltd. 166.04 166.04
China medicine company 150.00 150.00
CNPGC 90.00 170.00
Guangdong Dong Fang Uptodate & Special
Medicines Co., Ltd. 56.76 56.76
Sinopharm Holding Guoda Drug Store
Guangzhou Chain Co., Ltd. 15.00 30.00
Sinopharm Guoda Drug Store Guangxi Chain
Co., Ltd. 5.53 0.28
Sinopharm Group Guangdong Province medical
instrument Co.,Ltd. 4.40 -
Sinopharm Holding Shanxi Co., Ltd. 1.50 1.50
Sinopharm Holding Tianjin Co., Ltd. 1.00 1.00
Sinopharm Group (Tianjin) Eastern Bokang
Pharmaceutical Co., Ltd. 1.00 1.00
Sinopharm industry Drug Sales Co. Ltd. 0.72 -
Sinopharm Group Southwest Medicine Co., Ltd. 0.50 0.50
Sinopharm Holding Hubei Co., Ltd. 0.50 0.50
Sinopharm Holding Yangzhou Co., Ltd. 0.50 0.50
Sinopharm Holding Sub Marketing Center 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 Group Medicine Logistic Co., Ltd. 0.04 -
Sinopharm Group Shanghai Medical Instrument
Co., Ltd. - 4.40
China National Scientific Instruments &
Materials Corporation - 4.40
1,603.06 1,273.28
30 June 2014 31 December 2013
(RMB’0,000) (RMB’0,000)
Advances from Sinopharm Guoda Drug Store Guangxi Chain
customers Co., Ltd. 9.47 9.47
Sinopharm Holding Yunnan Co., Ltd. 3.02 -
Sinopharm Group Xinjiang Special Drugs
National Pharmaceutical Co., Ltd. 1.57 -
Sinopharm Holding Gansu Co., Ltd. 1.44 0.04
Sinopharm Holding Anhui Co., Ltd. 0.80 -
Sinopharm Holding Xuzhou Co., Ltd. 0.51 -
Sinopharm Holding Beijing Tianxing Puxin 0.34 -
- 183 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Biological Medical Co., Ltd.
Sinopharm Holding Tianjin Co., Ltd. 0.13 -
Sinopharm Holding Chongqing Co., Ltd. 0.08 -
Sinopharm holding Zhejiang Biological Products
Co., Ltd. 0.05 -
Sinopharm Holding Inner Mongolia Co., Ltd. 0.03 -
Sinopharm Le -Ren-Tang Medicine Co., Ltd. 0.01 -
Sinopharm Holding Fujian Co., Ltd. - 2.58
Sinopharm Holding Zhangzhou Co., Ltd. - 0.53
Sinopharm Holding Beijing Huahong Co., Ltd. - 0.10
Sinopharm Holding Changzhou Medical logistics
center Co., Ltd. - 0.10
Sinopharm holding (Shanghai) Agel Ecommerce
Ltd - 0.08
Wanle Medical - 0.01
17.45 12.91
- 184 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Related party relationships and significant related partytransactions (continued)
(6) Accounts receivable from and payables to related parties (continued)
30 June 2014 31 December 2013
(RMB’0,000) (RMB’0,000)
Interests payable CNPGC 4.74 -
Sinopharm Group - 68.44
Group Financial Co. - 52.80
4.74 121.24
30 June 2014 31 December 2013
(RMB’0,000) (RMB’0,000)
Entrusted loans CNPGC 3,160.00 -
Sinopharm Group - 40,000.00
3,160.00 40,000.00
30 June 2014 31 December 2013
(RMB’0,000) (RMB’0,000)
Other non-current
liabilities Sinopharm Group 3,506.18 3,506.18
30 June 2014 31 December 2013
(RMB’0,000) (RMB’0,000)
Short-term loans Group Financial Co. - 32,000.00
30 June 2014 31 December 2013
(RMB’0,000) (RMB’0,000)
Cash at related party Group Financial Co. 11,172.59 27.28
(7) Commitment with related parties
Undertaking contracted for at the balance sheet date but not recognised in balance sheet are anaylsed as follows:
30 June 2014 31 December 2013
(RMB’0,000) (RMB’0,000)
Lease
-As a lessee
Sinopharm Group Medicine Logistic Co., Ltd. 729.00 -
Shaoguan Wujiang Distrct Muyang Consulting Co., Ltd. 501.06 194.42
Wang Yang 27.60 -
Foshan Nanhai Medicine Co., Ltd. 12.94 25.87
1,270.60 220.29
-As a leaser
Sinopharm Guoda Drug Store Guangxi Chain Co., Ltd. 302.21 333.88
- 185 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Sinopharm Holding Guoda Pharmacy Co., Ltd. 56.82 75.75
Sinopharm Group Guangdong Medicine Device Co., Ltd. 41.89 55.41
Sinopharm Guoda Drug Store(Shenzhen) Chain Co., Ltd. 23.50 25.90
Chinese medicine industry and Drug Sales Co. Ltd. 2.16
426.58 490.94
Guarantee
- Guaranteed by related party(Not yet used amount)
Sinopharm Group 21,049.86 8,346.80
- 186 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VII Contingencies
Nil.
VIII Commitments
(1) Capital commitments
Capital expenditures contracted for at the balance sheet date but not recognised in balance sheet are analysed as follows:
30 June 2014 31 December 2013
(RMB’0,000) (RMB’0,000)
Buildings, machinery and equipment 16,885.23 21,398.14
(2) Operating lease commitments
The future minimum lease payments due under the signed irrevocable operating leases contracts are summarised as
follows:
30 June 2014 31 December 2013
(RMB’0,000) (RMB’0,000)
Within one year 4,276.27 2,272.32
Between 1 and 2 years 2,334.49 2,120.22
Between 2 and 3 years 2,216.38 2,148.15
Over 3 years 12,236.15 15,782.29
21,063.29 22,322.98
(3) Execution of commitments of prior years
The Group has fulfilled the commitments as of 30 June 2014according to the relevant contracts.
IX Subsequent events after the balance sheet date
Nil.
X Notes to the main items of financial statement of the Company
(1) Accounts receivable
30 June 2014 31 December 2013
Accounts receivable 475,772,476.43 428,545,652.48
Less: provision for bad debts (1,169,085.93) (1,169,085.93)
474,603,390.50 427,376,566.55
- 187 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
(a) The ageing of accounts receivable is analysed below:
30 June 2014 31 December 2013
Within 1 year 474,603,390.50 427,376,566.55
Over 3 years 1,169,085.93 1,169,085.93
475,772,476.43 428,545,652.48
- 188 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
X Notes to the main items of financial statement of the Company(continued)
(1) Accounts receivable(continued)
(b) The accounts receivable and related provision for bad debts by category are analysed below:
30 June 2014 31 December 2013
Carrying amount Bad debt provisions Carrying amount Bad debt provisions
% of total % of total
amount balance amount rate amount balance amount rate
Receivable accounts
within similar
credit risk group 474,603,390.50 99.75% - - 427,376,566.55 99.73% - -
Individually not
significant but
individually
evaluated for
impairment 1,169,085.93 0.25% (1,169,085.93) 100.00% 1,169,085.93 0.27% (1,169,085.93) 100.00%
475,772,476.43 100.00% (1,169,085.93) 0.25% 428,545,652.48 100.00% (1,169,085.93) 0.27%
(c) As at 30 June 2014, accounts receivable individually not significant but individually evaluated for impairment are
analysed below:
Bad debt % of Reason
Per book provisions provision
Disputed receivables with
Guangdong Liyuan uncertainty in
Pharmaceutical Co.,Ltd. 1,169,085.93 (1,169,085.93) 100.00% recoverability
(d) As at 30 June 2014, there is no accounts receivable due from shareholders who holds more than 5% (including 5%)
shares of the Company (31December2013: Nil).
(e) As at 30 June 2014, the top five accounts receivable by customer are analysed as below:
% of the total
Relationship accounts
with the Company Amount Ageing receivable
Shenzhen People’s Hospital The third party 32,322,841.37 Within 1 year 6.79%
Shenzhen Second People’s
Hospital The third party 31,349,294.36 Within 1 year 6.59%
Peking University Shenzhen
Hospital The third party 25,182,670.75 Within 1 year 5.29%
Shenzhen Nanshan Center
People’s Hospital The third party 18,477,495.07 Within 1 year 3.88%
Shenzhen Baoan People’s
Hospital The third party 18,027,694.93 Within 1 year 3.79%
125,359,996.48 26.34%
(f) Accounts receivable due from related party
As at 30 June 2014, there are accounts receivable of RMB25,947,267.73due from related party (31 December 2013:
RMB27,194,712.47), which is 5.45% of the total accounts receivable (31 December 2013: 6.35%), without any bad debt
- 189 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
provided (31 December 2013: Nil).
(g) In half year of 2014, accounts receivable of RMB 188,557,344.33are derecognized given that irrevocable factoring
contracts agreed with financial institute(Half year of 2013: RMB 115,552,613.39).
- 190 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
X Notes to the main items of financial statement of the Company (continued)
(2) Other receivables
30 June 2014 31 December 2013
Amounts due from subsidiaries 2,348,869,112.11 1,156,486,010.97
Receivable from equity transaction 8,980,000.00 8,980,000.00
Borrowings due from employees 963,647.96 979,997.96
Others 3,317,857.52 4,222,309.36
2,362,130,617.59 1,170,668,318.29
Less: provision for bad debts (10,141,380.00) (10,140,380.00)
2,351,989,237.59 1,160,527,938.29
(a) The ageing of other receivables is analysed as follows:
30 June 2014 31 December 2013
Within 1 year 2,351,922,357.59 1,160,480,058.29
1 to 2 years 70,400.00 50,400.00
Over 3 years 10,137,860.00 10,137,860.00
2,362,130,617.59 1,170,668,318.29
(b) Other receivables and related provision for bad debts by category are analysed below:
30 June 2014 31 December 2013
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 0.38% (8,980,000.00) 100.00% 8,980,000.00 0.77% (8,980,000.00) 100.00%
Receivable accounts
within similar credit
risk group 2,351,992,757.59 99.57% (3,520.00) 0.00% 1,160,530,458.29 99.13% (2,520.00) 0.00%
Individually not
significant but
individually evaluated
for impairment 1,157,860.00 0.05% (1,157,860.00) 100.00% 1,157,860.00 0.10% (1,157,860.00) 100.00%
2,362,130,617.59 100.00% (10,141,380.00) 0.43% 1,170,668,318.29 100.00% (10,140,380.00) 0.87%
(c) As at 30 June 2014, impairment provision for other receivables individually significant is analysed as below.
Bad debt Assessment for
Amount 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:
- 191 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
30 June 2014 31 December 2013
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 2,351,922,357.59 100.00% - - 1,160,480,058.29 100.00% - -
1 to 2 years 70,400.00 0.00% (3,520.00) 5.00% 50,400.00 0.00% (2,520.00) 5.00%
2,351,992,757.59 100.00% (3,520.00) 0.00% 1,160,530,458.29 100.00% (2,520.00) 0.00%
- 192 -
CHINA NATIONAL ACCORD MEDICINESCO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
X Notes to the main items of financial statement of the Company (continued)
(2) Other receivables(continued)
(e) As at 30 June 2014, other receivables individually not significant but individually evaluated for impairment are analysed
below:
Assessment for
Amount Bad debt provision Rate impairment
Shenzhen Health Food I&E Co., Uncertainty in
Ltd. 1,157,860.00 (1,157,860.00) 100.00% recoverability
(f) As at 30 June 2014, there is RMB250,000.00 due from shareholders who holds more than 5% (including 5%) shares of
the Company (31December2013: RMB250,000.00).
(g) As at 30 June 2014, the top five other receivables by customer are analysed below:
Relationship Amount Ageing % of the total
with the other receivable
Company
Sinopharm Guangzhou Subsidiary 787,664,717.36 Within 1 year 33.35%
Sinopharm Guangxi Subsidiary 369,198,417.05 Within 1 year 15.63%
Sinopharm Yuexing Subsidiary 212,704,652.93 Within 1 year 9.00%
Sinopharm Zhanjiang Subsidiary 148,000,000.00 Within 1 year 6.27%
Zhijun Suzhou Subsidiary 109,100,000.00 Within 1 year 4.62%
1,626,667,787.34 68.87%
(h) Other receivables due from related parties are analysed as below:
As at 30 June 2014, there are other receivables of RMB2,349,244,112.11due from related party (31 December 2013:
RMB1,156,486,010.97), which is 99.45% of the total other receivables (31 December 2013: 98.79%), without any bad
debt provided (31 December 2013: Nil).
(3) Long-term equity investments
30 June 2014 31 December 2013
Investments in subsidiaries (a) 1,455,489,494.38 1,447,999,494.38
Investments in associates (b) 130,784,733.02 135,341,010.52
1,586,274,227.40 1,583,340,504.90
Less: provision for impairment of long-term
equity investments - -
1,586,274,227.40 1,583,340,504.90
The long-term equity investments of the Company are not subject to restriction on conversion into cash.
- 193 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
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 cost 31 December 2013 in investment cost 30 June 2014 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
Shenzhen 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
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 Logistic 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 Foshan Cost method 6,995,065.51 14,995,065.51 - 14,995,065.51 100 100
Zhijun Suzhou Cost method 134,250,000.00 265,900,000.00 - 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
Sinopharm Yanfeng Cost method 38,207,800.00 38,207,800.00 - 38,207,800.00 51 51
Sinopharm Meizhou Cost method 4,481,900.00 4,481,900.00 - 4,481,900.00 100 100
Shenzhen Medicine Cost method 37,850,830.38 37,850,830.38 - 37,850,830.38 100 100
Sinopharm Huizhou Cost method 20,939,177.19 5,644,200.00 - 5,644,200.00 100 100
Sinopharm Zhaoqing Cost method 5,060,000.00 5,060,000.00 - 5,060,000.00 100 100
Sinopharm Jiangmen Cost method 56,000,000.00 56,000,000.00 - 56,000,000.00 100 100
- 194 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Sinopharm Zhongshan Cost method 10,000,000.00 10,000,000.00 - 10,000,000.00 100 100
Sinopharm Shaoguan Cost method 13,580,000.00 13,580,000.00 - 13,580,000.00 70 70
Sinopharm Shantou Cost method 7,490,000.00 - 7,490,000.00 7,490,000.00 70 70
1,447,999,494.38 7,490,000.00 1,455,489,494.38
- 195 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
X Notes to the main items of financial statement of the Company (continued)
(3) Long-term equity investments (continued)
(b) Associates
Movement
Explanation for the inconsistence
Accounting Initial investment Share of Dividend Equity interest Voting rights between equity interest held and
method cost 31 December 2013 profit or loss declared 30 June2014 held (%) held (%) voting rights held
Board of the directors is the
highest decision making
organization, which is formed by
Wanle Equity 3 shareholder of Wanle Medical
Medical method 4,457,400.00 135,341,010.52 23,595,722.50 (28,152,000.00) 130,784,733.02 35.19 33.33 evenly
- 196 -
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
X Notes to the main items of financial statement of the Company (continued)
(4) Sales and cost of sales
For the six months ended For the six months ended
30 June 2014 30 June 2013
Revenue of main operations 1,339,376,773.85 1,189,379,218.09
Other operating income 5,156,613.11 4,062,055.85
1,344,533,386.96 1,193,441,273.94
For the six months ended For the six months ended
30 June 2014 30 June 2013
Cost of main operations (1,289,133,611.14) (1,140,794,978.30)
Other operating expenses (1,778,763.16) (1,872,163.40)
(1,290,912,374.30) (1,142,667,141.70)
(a) Revenue and cost of main operations
Analysed by industry:
For the six months ended 30 June 2014 For the six months ended 30 June 2013
Revenue of main Cost of main Revenue of main Cost of main
operations operations operations operations
Commercial
pharmaceutical
wholesale 1,339,376,773.85 (1,289,133,611.14) 1,189,379,218.09 (1,140,794,978.30)
(b) Other operating income and expenses
For the six months ended 30 June 2014 For the six months ended 30 June 2013
197
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Other operating Other operating Other operating Other operating
income expenses income expenses
Rental income 3,290,970.68 (900,653.75) 2,311,563.12 (532,919.37)
Rendering of
services 1,865,642.43 (878,109.41) 1,750,492.73 (1,339,244.03)
5,156,613.11 (1,778,763.16) 4,062,055.85 (1,872,163.40)
(c) Top five customers are analysed as follows:
The sales to the top five customers of the Companytotaling to RMB431,217,833.94(For the six months ended 30 June
2013: RMB403,795,388.58), which accounted for 32.07% (2013:33.83%) of the total revenue from main operations.
Details are set out below:
% of total revenue from
Sales main operations
Sinopharm Jianmin 168,093,996.01 12.50%
Shenzhen People’s Hospital 80,658,797.44 6.00%
Shenzhen Second People’s Hospital 72,447,591.89 5.39%
Peking University Shenzhen Hospital 64,317,781.07 4.78%
Shenzhen Nanshan Center People’s Hospital 45,699,667.53 3.40%
431,217,833.94 32.07%
198
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
X Notes to the main items of financial statement of the Company (continued)
(5) Investment income
For the six months ended For the six months ended
30 June 2014 30 June 2013
Cash dividends declared by subsidiaries (a) 456,948,364.73 384,667,945.90
Share of profit in an associated company (b) 23,595,722.50 18,576,985.34
Investment income from disposal of long-term equity
investment - -
480,544,087.23 403,244,931.24
There is no significant restriction on the investment income remittance to the Company.
(a) Cash dividends declared by subsidiaries
Investment income from the top five investees are analysed as below:
For the six months For the six months
ended 30 June ended 30 June
2014 2013 Reason of Fluctuation
Zhijun Pharm 234,559,959.43 208,233,461.30 Profit increased comparing 2013
Sinopharm Guangzhou 123,183,476.82 111,653,923.40 Profit increased comparing 2013
Sinopharm Guangxi 38,155,909.66 30,056,575.76 Profit increased comparing 2013
Sinopharm Yuexing 14,612,152.47 8,334,758.40 Profit increased comparing 2013
Sinopharm Jianmin 10,292,930.09 6,338,217.07 Profit increased comparing 2013
420,804,428.47 364,616,935.93
(b) Share of profit in an associated company
199
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
For the six months For the six months
ended 30 June ended 30 June
2014 2013 Reason of Fluctuation
Wanle Medical 23,595,722.50 18,576,985.34 Profit increased comparing 2013
(6) Notes to cash flow statement
(a) Reconciliation of net profit to cash flows from operating activities
For the six months For the six months
ended 30 June 2014 ended 30 June 2013
Net profit 505,980,755.05 415,274,263.68
Add: Provision for assets impairment reversal 153,394.98 319,855.94
Depreciation of fixed assets and Investment properties 3,536,884.58 3,651,261.19
Amortisation of intangible assets 781,278.08 683,584.76
Amortisation of long-term prepaid expenses 553,040.94 553,549.62
(Gains) /Losses on disposal of fixed assets (326.59) -
Financial expenses (30,420,949.30) 5,352,962.48
Investment income (480,544,087.23) (403,244,931.24)
(Increase) /decrease in deferred income tax assets (28,507.99) (53,392.68)
Increasein inventories (1,913,680.85) (20,585,829.83)
Increase in operating receivables (36,449,337.03) (94,100,583.70)
Increasein operating payables (20,830,052.57) 81,163,369.55
Net cash flows from operating activities (59,181,587.93) (10,985,890.23)
200
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
X Notes to the main items of financial statement of the Company (continued)
(6) Notes to cash flow statement(continued)
(b) Net increase in cash
For the six months For the six months
ended 30 June 2014 ended 30 June 2013
Cash at end of period 217,796,047.77 141,911,747.30
Less: cash at beginning of year (218,342,947.03) (160,633,355.13)
Net decrease in cash and cash equivalents (546,899.26) (18,721,607.83)
(c) Cash
For the six months For the six months
ended 30 June 2014 ended 30 June 2013
Cash at bank and on hand 217,796,047.77 141,911,747.30
Less: restricted other cash balance - -
Cash at end of period 217,796,047.77 141,911,747.30
201
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
I Non-routine items
For the six months For the six months
ended 30 June 2014 ended 30 June 2013
Gains on disposal of non-current assets 436,751.38 3,665.89
Government grants 14,575,338.73 12,384,950.86
Receivables impairment reversal by individual assessment 2,473,206.68 469,770.27
Other non-operating income /(expenses), net 12,116,477.87 (12,371,947.75)
29,601,774.66 486,439.27
Tax impact of above non-routine items (6,865,661.39) 169,935.06
Share of minority interests of above non-routine itemsafter tax (48,228.76) (41,883.12)
22,687,884.51 614,491.21
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.
II Return on equity and earnings per share
Weighted average return on Earnings per share
equity
Basic earnings per share
Diluted earnings per share
(%)
For the six For the six For the six For the six For the six For the six
months months months months months months
ended 30 ended 30 ended 30 ended 30 ended 30 ended 30
June 2014 June 2013 June 2014 June 2013 June 2014 June 2013
Consolidated net profit
attributable to the
shareholders of the
Company 10.39% 13.81% 1.073 0.905 1.073 0.905
202
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Consolidated net profit
attributable to the
shareholders of the
Company, excluding
non-routine items 9.74% 13.78% 1.003 0.903 1.003 0.903
203
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
III 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) Consolidated Balance Sheet
Notes 30 June 2014 31 December 2013 Fluctuation %
Consolidated Consolidated
Cash at bank and on
hand 1.1 1,417,891,485 1,113,562,212 304,329,274 27.33%
Notes receivable 1.2 668,212,842 739,061,142 -70,848,299 -9.59%
Accounts receivable 1.3 6,379,994,615 5,675,658,507 704,336,109 12.41%
Advance to suppliers 1.4 98,894,282 64,367,040 34,527,242 53.64%
Inventories 1.5 2,189,768,999 1,831,267,290 358,501,709 19.58%
Other current assets 1.6 21,496,420 12,203,753 9,292,667 76.15%
Fixed assets 1.7 745,157,659 766,741,591 -21,583,931 -2.82%
Construction in
progress 1.8 192,687,064 126,606,806 66,080,258 52.19%
Short-term borrowings 1.9 1,400,802,174 2,744,941,589 -1,344,139,415 -48.97%
Accounts payable 1.10 4,184,497,889 3,436,936,497 747,561,392 21.75%
Advance from
customers 1.11 25,982,230 38,570,231 -12,588,001 -32.64%
Other current liabilities 1.12 10,262,276 22,040,000 -11,777,724 -53.44%
Surplus reserve 1.13 1,860,333,209 5,750,339 1,854,582,870 32,251.72%
Undistributed profits 1.14 2,081,045,817 1,806,002,285 275,043,532 15.23%
1.1 Increase was due to the receipt of Non-public offering funds.
1.2 Decreasewas mainly due to increase of purchase and Notes receivable endorsement.
1.3 Increase was mainly due to increase of sales.
204
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
1.4 Increase was mainly due to increase new suppliers and the increase of purchase.
1.5 Increase was mainly due to the increased inventory amount from increased purchase.
1.6 Increase was mainly because of the increase of VAT offset.
1.7 Decrease was mainly due to the depreciation of the period.
1.8 Increase was mainly due to the investment of the construction projects.
1.9 Increase mainly due to the repayments to most of the short-term debt with the fund raised from issurance.
1.10 Increase was mainly due to the increase of purchase.
1.11 Decrease was mainly due to decrease of purchse from commercial customers.
1.12 Decrease was mainly because the compensation amount for court case reduced in final judgement.
1.13 Increase was due to the Non-public offering.
1.14 Increase was mainly due to the profit increase.
205
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
III Notes for significant fluctuation of major accounts in financial statements (Continued)
(2) Consolidated Income Statement
For the six For the six months
months ended 30 ended 30 June 2013
Notes June 2014 Fluctuation %
Consolidated Consolidated
Sales 2.1 11,612,642,434 10,131,712,690 1,480,929,744 14.62%
Cost of sales 2.2 11,219,447,997 9,821,563,933 1,397,884,065 14.23%
Selling and distribution
expenses 2.3 271,149,211 242,609,042 28,540,168 11.76%
General and administrative
expenses 2.4 215,813,784 182,897,044 32,916,740 18.00%
Financial expenses - net 2.5 70,931,725 76,468,651 -5,536,926 -7.24%
Assets impairment 2.6 7,312,907 16,807,659 -9,494,751 -56.49%
Investment income 2.7 23,595,723 18,576,985 5,018,737 27.02%
Non-operationg expenses 2.8 1,207,497 22,119,062 -20,911,564 -94.54%
Income tax expenses 2.9 83,365,728 60,942,245 22,423,483 36.79%
Profit and loss of equity
holders of the Company 2.10 340,317,282 260,794,679 79,522,603 30.49%
2.1 Increase in sales was mainly due to the increase in sales volume.
2.2 Increase in cost of sales was mainly due to the increase in sales volume.
2.3 Increase in sales was mainly due to the increase in sales volume.
2.4 Increase in general and administrative expenses was mainly due to the increase in tax, technical service fee and the staff
expenses increased due to the increased scale of recruitment of staff.
2.5 Decrease in financial expenses was mainly due to the receipt of non-public funds and thus reduced the cost of financing.
206
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
2.6 Decrease in assets impairment was mainly due to the decrease of bad debt and inventory impairment risks.
2.7 Increase in investment income was mainly due to the profit increase from associate company.
2.8 Decrease in non-operating expenses was mainly because the Group accure provision related to the court case in last
period but no similar transaction in this period.
2.7 Increase in income tax expenses was mainly the profit increased.
2.8 Increase mainly because of the profit increase.
207
CHINA NATIONAL ACCORD MEDICINES CO.,LTD.
Notes to financial statements
For the six months ended 30 June 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Section X. Documents Available for Reference
1. Accounting Statements carried with the signature and seals of legal representative, chief
financial officer and person in charge of accounting;
2. Original text of all documents of the Company as well as manuscript of the announcement
disclosed in reporting period on Securities Times, China Securities Journal and Hong Kong
Commercial Daily appointed by the CSRC;
3. Annual Report carried with the personal signature of the Chairman;
4. The Place Where the document placed: Office of Secretariat of the Board of Directors, Accord
Pharm Bldg., No. 15, Ba Gua Si Road, Futian District, Shenzhen
208
