China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 August 2015 1 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 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 2015 is authentic, accurate and complete. 2 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 Content 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 VII. Preferred Stock ..................................................................................................................................................................38 Section IX Financial Report .....................................................................................................................................错误!未定义书签。 3 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 Paraphrase Items Refers to Definition The Listed Company, Company, the Company, Refers to China National Accord Medicines Corporation Ltd. China National Accord, the Group Sinopharm Holding Refers to Sinopharm Group Co., Ltd., the controlling shareholder of the Company “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. China National Zhijun (Shenzhen) Pingshan Refers to China National Zhijun (Shenzhen) Pingshan Pharmaceutical Co., Ltd. Main Luck Pharmaceuticals Refers to Shenzhen Main Luck Pharmaceuticals Inc. 4 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 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 25195435 E-mail 0028@szaccord.com.cn; gyyz0028@sinopharm.com III. Others 1. Way of contact 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 2014. 2. Information disclosure and preparation place 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 2014. 5 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 3. Registration changes of the Company 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 2014. 6 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 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) 12,813,803,166.77 11,612,642,434.28 10.34% Net profit attributable to shareholders of 387,319,252.33 349,213,988.51 10.91% the listed company(RMB) Net profit attributable to shareholders of the listed company after deducting 373,659,153.79 326,526,104.00 14.43% non-recurring gains and losses(RMB) Net cash flow arising from operating 448,239,578.83 -484,715,807.96 192.47% activities(RMB) Basic earnings per share (RMB/Share) 1.068 1.073 -0.47% Diluted earnings per share (RMB/Share) 1.068 1.073 -0.47% Weighted average ROE 7.85% 10.39% -2.54% Increase/decrease in this End of current period End of last period report-end over that of last period-end Total assets (RMB) 13,812,656,490.46 12,828,941,540.90 7.67% Net assets attributable to shareholder of 5,079,400,685.82 4,764,607,822.09 6.61% listed company(RMB) II. Difference of the accounting data under accounting rules in and out of China 1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles) The Company had no difference of the net profit or net assets disclosed in financial report, under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles) 2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and Chinese GAAP (Generally Accepted Accounting Principles) The Company had no difference of the net profit or net assets disclosed in financial report, under both foreign accounting rules and 7 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 Chinese GAAP (Generally Accepted Accounting Principles) III. Items and amounts of extraordinary profit (gains)/loss √ Applicable □ Not applicable In RMB Item Amount Note The compensation for housing demolition income obtained from Gains/losses from the disposal of non-current asset (including the 4,114,941.12 disposal of investment real estate write-off that accrued for impairment of assets) by subsidiary Sinopharm Holding Liuzhou Governmental subsidy calculated into current gains and Mainly contained various of losses(while closely related with the normal business of the 10,567,256.16 special subsidies and financial Company, excluding the fixed-amount or fixed-proportion discount. governmental subsidy according to the unified national standard) Reversal of impairment reserve for account receivable with 2,568,108.32 separate impairment testing The entrusted service providing for Sinopharm Holding and Trustee fee obtained from entrusted management 375,000.00 China National Pharmaceutical Foreign Trade Corporation The relocation reward and compensation for arrange due to Other non-operating income and expenditure except for the 2,189,460.15 cessation of business received by aforementioned items subsidiary Sinopharm Holding Liuzhou Less: impact on income tax 4,051,085.07 Influenced amount of minority shareholders’ equity (after tax) 2,103,582.14 Total 13,660,098.54 -- 8 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 Section IV. Report of the Board of Directors I. Introduction In connection with pharmaceutical industry, the year 2015 was especially tough. Intensified releases of medical reform policies further increased existence pressure for pharmaceutical industry, resulting in slow growth of this industry. During the first half year, we made various progresses as scheduled according to our annual operation subjects of “adapt to new normal, hold new business opportunities and achieve new development” in addition to focusing on our business operation, we also conducted compliance and honest career related activities actively. We also developed new business in an orderly manner in addition to increasing efficiency for our traditional businesses. Emphasis has been put on economic and party construction works both, and progresses have been made in both traditional and innovative businesses. (I) the overall economic operation of China National Accord for the first half year of 2015 China National Accord realized operating income of RMB12.814 billion, representing a year-on-year increase of 10.34%, and realized net profit attributable to parent company of RMB387 million, representing a year-on-year increase of 10.91%. The distribution segment realized operating income of RMB11.962 billion, representing a year-on-year increase of 11.72%, and realized net profit attributable to parent company of RMB218 million, representing a year-on-year increase of 31.97%. The pharmaceutical segment realized operating income of RMB859 million, representing a year-on-year decrease of 6.05%, and realized net profit attributable to parent company of RMB122 million, representing a year-on-year decrease of 11.01%. (II) Major works completed by China National Accord for the first half year of 2015 1. Innovative operation model and ideas The distribution segment accelerated overall extension of supply chain to upstream and downstream market by leverage on VMI united stock project and smart chain project. 161 new VMI stock projects were increased during the first half year and 5 smart chain projects including Meizhou People Hospital were newly established. We set supply chain functions in Guangxi and Shenzhen regions, remarking the general implementation of supply chain model in Guangdong and Guangxi provinces. Considering the serious overstock of new medicine approval, the pharmaceutical segment changed its mind actively to focus on production capability improvement and further development of some major varieties, increasing supports for current operation. 9 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 2. Continuous enhancement in integrated operation capability Information integration management project for distribution segment has completed application of three modules including rebate, first operation and payables. Logistics integration management platform project has completed application of cost control module. As the cold chain management systems in Dongguan and Huizhou linked to the network and applied respectively, our capability of logistics integration management would be improved continuously. Besides, steady enhancement was recorded in integrated procurement efficiency. The pharmaceutical segment carried out relevant works to improve platform management efficiency. Six major processes including product and distribution synergy, industrialization and product pricing were emphasized in connection with industrial management projects. Through overall diagnosis and optimization, the Group was able to consolidate management foundation for industrial platforms. 3. Promote network construction and enhance network value The distribution segment participated in establishing Zhuhai Company. Till now, there are 30 subsidiaries, covering 35 cities in Guangdong and Guangxi provinces. Through construction of DTC pharmacies, Guangzhou Company was granted qualification required to operate as a chain pharmacy. The chain management department has been set to incorporate DTC pharmacies into integrated management and 12 DTC pharmacies all obtained medical insurance qualification. New equipment warehouses commenced construction in Guangfo logistics center, Zhanjiang delivery center and Meizhou delivery center, aiming to perfect our logistics network. Marketing of the pharmaceutical segment was based on its secondary distribution system. The segment recorded good performance through cooperation with Jointown to carry out complimentary service for purchases. Besides, the segment also introduced certain Chinese traditional medicine varieties such as Jian’erqing solution to secondary distribution system, commencing marketing for OTC brands. 4. Orderly progress of new business As for distribution segment, management platform has been completed for medical equipment business, realizing online place of orders in Zhongshan third hospital and tumour hospital. The Group also actively developed marketing network for vaccine products, increased resources on developing non-vaccine products and consolidated development foundation as CDC overall product service provider. As for medical treatment cooperation projects, we entered into contracts for five projects including South Five Hospital and Meizhou People Hospital. Internet upgrade for distribution e-commerce B2B business has been completed with new function of pharmaceutical enquiry. Industrial internationalization is being promoted steadily and Pingshan base officially kicked off EU certification. 5. Accelerate base construction and quality certification Shenzhen Medical Materials Processing Plant has totally completed new version GMP certification reform project, 10 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 and has submitted declaration materials required for new version GMP certification to the provincial drug management bureau on 23 June, which is subject to site inspection. This represents a meaningful progress for the plant to become TCM drug pieces processing plant in Guangdong and Guangxi provinces. As for pharmaceutical segment, the comprehensive R&D building and auxiliary projects including dining room and dormitory buildings for Pingshan Base have completed seal roof projects successfully. Three batches of trial production were completed and the base passed site inspection required for new version GMP certification on 30 June and is about to obtain the new GMP certificate soon. II. Main business analysis 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 12,813,803,166.77 11,612,642,434.28 10.34% Operating costs 11,801,661,040.42 10,626,767,657.24 11.06% Sales expenses 262,074,106.01 271,149,210.54 -3.35% Administration expenses 203,589,373.35 215,813,783.67 -5.66% Finance expenses 58,639,672.40 70,931,725.10 -17.33% Income tax expenses 95,348,854.50 86,331,296.75 10.45% R&D input 33,640,577.40 32,143,996.40 4.66% The amount received from merchandising and Net cash flow arising 448,239,578.73 -484,715,807.96 192.47% labor service provided from operating activities increased on a y-o-y basis in the Period The investment for Net cash flow arising infrastructural project from investment -79,800,820.06 -118,785,713.60 32.82% decreased than the same activities period of last year The amount of capital increase from private Net cash flow arising placement received in the -65,104,388.08 914,932,902.63 -107.12% from financing activities same period of last year, and no such business in the Period. Net increase of cash and 303,343,621.01 311,437,219.28 -2.60% cash equivalent 11 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 III. Constitution of main business In RMB Increase or Increase or Increase or decrease of decrease of decrease of gross Gross profit Operating revenue Operating cost operating revenue operating cost profit ratio over ratio over same period over same period same period of of last year of last year last year According to industries Medical business 11,909,286,905.74 11,271,115,377.12 5.36% 11.71% 11.87% -0.13% Medical 844,054,995.84 514,953,649.33 38.99% -5.71% -3.21% -1.58% manufacture Logistics and warehousing 15,603,383.33 11,165,053.51 28.44% 22.75% 31.36% -4.69% services Lease and other 3,923,324.72 1,198,252.92 69.46% -23.49% -6.40% -5.58% service According to region Domestic sales 12,738,740,992.41 11,770,569,151.72 7.60% 10.34% 11.09% -0.63% Foreign sales 34,127,617.22 27,863,181.16 18.36% 18.45% 26.96% -5.47% 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. 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 12 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 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 Investment outside Investment in the same period of last Investment in the reporting (RMB) Changes year’s (RMB) 1,002,980.00 0.00 100.00% Invested company Equity proportion in invested company Name Main business for Listed company Wholesale of drugs and medical devices Sinopharm Holding Zhuhai Co., Ltd. 10.00% etc. (2) Holding equity of financial enterprise The Company has no equity of financial enterprise held in the Period 13 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 (3) Securities investment The Company has no securities investment in the Period (4) Explanation on equity of other listed company held The Company had no equity of other listed company held in Period. 2. Trust management, derivative investment and entrust loans (1) Trust financing The Company has no trust financing in the Period (2) Investment of derivatives The Company has no derivatives investment in the Period (3) Entrustment loan The Company has no entrustment loan in the Period 3. Application of raised proceeds Use condition of the raised capital found more in Special Report on Raised Capital Deposit and Practical Usage released on 20 August 2015 (disclosure on Juchao Website, Notice No.: 2015-31) 4. Main subsidiaries and joint-stock companies analysis Main subsidiaries and joint-stock companies In RMB Industry Main products or Registered Operation Operation Name Type Total assets Net assets Net profit involved service capital revenue profit Production for raw medicine of chemical products, Shenzhen processing for Chinese Zhijun Subsidiar Manufactu traditional patent 200,000,00 1,035,852,3 443,688,20 748,004,49 150,677,1 134,171,922. Pharmaceut medicine, y re production of 0.00 96.80 2.18 3.30 89.66 24 ical Co., chemical material Ltd. of medicine; Import and export trade are treated by authorized certificates. Sinopharm Chinese Subsidiar 1,000,000,0 5,679,262,6 1,187,621,6 7,108,179,1 125,797,5 94,545,153.0 Holding Commerce traditional patent y 00.00 40.65 92.15 22.22 25.27 1 Guangzhou medicine, 14 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 Co., Ltd. chemical preparations, antibiotics, bio-chemical medicine, biological medicine, diagnosis medicine, biological medicine with features of treatment and diagnosis, shaped packing food, chemical products, and various commodity and technique hold by self-support and agency as well as import & export of technology 5. Major project invested by non-raised funds √ Applicable □ Not applicable In ten thousand Yuan Amount invested Total Amount Disclosure accumulative Disclosure date Project investment invested in this Progress Earnings index till end of (if applicable) planned period (if applicable) reporting period The project “China covers National (Pingshan) approximately Accord: Medicine R&D 73352 M2 in Announcement 88,137 7,099.58 42,909.25 65.00% 2014-03-22 Manufacturing total, of Increasing Base positioning as Investment the production Amount”(Notic base of e No.: 15 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 essential 2014-18) medicines and released on special drugs, a Juchao Website manufacture base of modern traditional Chinese medicine preparations and massive health products as well as the international co-ordination processing base Total 88,137 7,099.58 42,909.25 -- -- -- -- VI. Prediction of business performance from January – September 2015 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 IX. Implementation of profit distribution in reporting period The profit distribution scheme for year of 2014 was deliberated and approved in the Shareholders General Meeting of 2014 on April 25, 2015, calculating based on the Company’s total existing shares of 362,631,943 shares, and the Company distribute RMB 2.00 (including tax) dividend per ten shares to all shareholders in cash. On May 16, 2015, Board of Directors issued Announcement on Implementation of the 2014 Equity Distribution Plan (published on Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao Website http://www.cninfo.com.cn), the 2014 Annual Profit Distribution Plan was implemented, and dividend for social public shareholders distributed to shareholders’ account on 22 May 2015 (A shares) and 26 May 2015 (B shares) respectively. Special explanation on cash dividend policy 16 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 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 XI. In the report period, reception of research, communication and interview Contents discussed and Time Place Way Type Reception material provided Haitong Securities, China Galaxy Securities, Harvest Fund, Guotai Junan Securities, Founder Knew the influence of Securities, Century medical reform policy to Accord Pharm. Securities, 2015-04-24 Field research Institution the development of the Bldg. Chonghe industry. No material Investment, provided. Dongguan Hongde Investment, Harvest Fund, Guosen Securities, Bosera Funds 17 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 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, general 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 2015 annual risk database, pursuant to which, it amended and improved 2015 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 the Serial Type Basis for submitted Submitted cycle submitted object listed company 1 Sinopharm Group Financial Needs of consolidated statement First largest shareholder Regular Co., Ltd. statement of largest shareholder 2 Management method of China National Assets state-owned property right Pharmaceutical Actual controller Evalution transfer and equity investment Temporary Report ect. management of China National Group Corporation Pharmaceutical Group Corp. In September of 2007, the Company's board of directors and board of supervisors approved the "Bill on 18 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 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. Lawsuits of the Company The Company has no significant lawsuits and arbitrations in reporting period III. Question from media No universal questioned by media in reporting period IV. Bankruptcy reorganization In reporting period, the Company has no bankruptcy reorganization occurred. V. Transaction in assets 1. Assets acquisition The Company had no assets acquisition in the Period. 2. Sales of assets The Company did not sell assets in the Period 3. Business combination The Company has 34 subsidiaries in consolidation scope till end of the Reporting Period in total VI. Implementation and its influence of equity incentive 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) The related transaction with routine operations concerned found more in the “X. Related parties and related transaction” in “Section IX. Financial Report”; (2) The related transactions are settled by cash and notes, disclosed on 22 March 2015, and disclosure on Juchao Website with Notice No.: 2015-09; (3) According to the “Routine Related Transaction for year of 2015” deliberated and approved by the Board dated 21 March 2015, 19 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 during the reporting period, sales of related parties representing 45.29% in total estimated for the whole year, procurement of related parties takes 40.99% in total estimated for the whole year, loan interest expenditure of the related parties representing 4.31% in total estimated for the whole year, the note buyer discount interest expenditure of related parties representing 11.25% in total estimated for the whole year, income of housing leasing of related parties representing 51.84% in total estimated for the whole year, house equipment leasing expenses of the related parties representing 48.11% in total estimated for the whole year, income from provide service to related parties representing 41.98% in total estimated for the whole year and the expenditure from receiving service by related parties representing 42.41% in total estimated for the whole year. 2. Related transaction incurred by purchase or sales of assets No related transaction incurred by purchase or sales of assets in Period 3. Related transaction from jointly investment outside No related transaction from jointly investment outside occurred in Period 4. Current related liabilities and debts (1) No non-operating related credits and debts transaction (2) The related credits and debts transaction with routine operation concerned found more in “X. Related Party and Related Transactions” carried in the “Section IX . Financial Report” 5. Other significant related transactions The company had no other significant related transactions in reporting period. VIII. Non-business capital occupying by controlling shareholders and its related parties 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 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 20 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 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. (2) Contract The Company had no contract in the reporting period. (3) Leasing 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 Guarante Actual date of Complete Name of the Announce e for Guarantee happening (Date Actual Guarantee Guarantee implemen Company ment related limit of signing guarantee limit type term tation guaranteed disclosure party agreement) (Y/N) date (Y/N) Shenzhen Zhijun General 2015.5.15-20 Medicine Trading 2015-03-21 30,000 2015-05-15 6,000 No Yes guarantee 16.5.14 Co., Ltd. Shenzhen Zhijun General 2015.06.18-2 Medicine Trading 2015-03-21 25,000 2015-06-18 12,507.64 No Yes guarantee 016.06.15 Co., Ltd. Shenzhen Zhijun General 2015.05.28-2 Medicine Trading 2015-03-21 20,000 2015-05-28 10,500 No Yes guarantee 016.02.15 Co., Ltd. Shenzhen Zhijun General 2014.4.4-202 Medicine Trading 2013-08-20 20,000 2014-04-04 2,174.36 No Yes guarantee 2.4.3 Co., Ltd. Shenzhen Zhijun General 2014.7.17-20 Medicine Trading 2014-03-22 40,000 2014-07-17 20 No Yes guarantee 20.7.17 Co., Ltd. Total actual occurred external Total approving external 75,000 guarantee in report period 36,947.97 guarantee in report period (A1) (A2) Total approved external Total actual balance of guarantee at the end of report 135,000 external guarantee at the end 31,202 period ( A3) of report period (A4) Guarantee of the Company for the subsidiaries Name of the Related Guarantee Actual date of Actual Guarantee Guarantee Complete Guarante 21 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 Company Announce limit happening (Date guarantee limit type term implemen e for guaranteed ment of signing tation or related disclosure agreement) not party date Sinopharm Holding General 2014.12.12-2 2014-08-16 5,000 2014-12-12 3,009.64 No Yes Guangzhou Co., guarantee 015.10.31 Ltd. Sinopharm Holding General 2014.6.30-20 2014-03-22 10,000 2014-06-30 3,457.06 No Yes Guangzhou Co., guarantee 15.6.29 Ltd. Sinopharm Holding General 2014.9.9-201 2014-08-16 40,000 2014-09-19 22,942.57 No Yes Guangzhou Co., guarantee 5.9.18 Ltd. Sinopharm Holding General 2015.5.6-201 2015-03-21 35,000 2015-05-06 31,424.5 No Yes Guangzhou Co., guarantee 6.5.6 Ltd. Sinopharm Holding General 2014.7.16-20 2014-03-22 35,000 2014-07-16 30,733.78 No Yes Guangzhou Co., guarantee 15.7.15 Ltd. Sinopharm Holding General 2015.5.20-20 2015-03-21 35,000 2015-05-20 15,934.19 No Yes Guangzhou Co., guarantee 16.5.20 Ltd. Sinopharm Holding General 2014.4.30-20 2014-03-22 30,000 2014-04-30 19,477.88 No Yes Guangzhou Co., guarantee 15.4.30 Ltd. Sinopharm Holding General 2014.6.25-20 2014-03-22 40,000 2014-06-25 25,016.4 No Yes Guangzhou Co., guarantee 15.6.8 Ltd. Sinopharm Holding General 2014.8.19-20 2014-03-22 10,000 2014-08-19 No Yes Guangzhou Co., guarantee 15.8.18 Ltd. Sinopharm General 2014.12.09-2 Holding 2014-08-16 10,000 2014-12-09 No Yes guarantee 015.12.08 Guangzhou Co., 22 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 Ltd. Sinopharm Holding General 2015.5.15-20 2015-04-24 121,600 2015-05-15 28,079.34 No Yes Guangzhou Co., guarantee 16.5.14 Ltd. Sinopharm Holding General 2015.5.20-20 2015-03-21 3,500 2015-05-20 693.01 No Yes Guangdong guarantee 16.5.20 Yuexing Co., Ltd. Sinopharm Holding General 2014.7.16-20 2014-03-22 5,000 2014-07-16 1,201.92 No Yes Guangdong guarantee 15.7.15 Yuexing Co., Ltd. Sinopharm Holding General 2014.9.19-20 2014-03-22 5,000 2014-09-19 No Yes Guangdong guarantee 15.9.18 Yuexing Co., Ltd. Sinopharm General 2014.7.16-20 Holding Foshan 2014-03-22 1,000 2014-07-16 No Yes guarantee 15.7.15 Co., Ltd. Sinopharm General 2014.10.25- Holding Guangxi 2014-03-22 6,000 2014-10-25 650 No Yes guarantee 2015.10.25 Co., Ltd. Sinopharm General 2014.6.26-20 Holding Guangxi 2014-03-22 20,000 2014-06-26 10,517.24 No Yes guarantee 15.6.26 Co., Ltd. Sinopharm General 2014.7.16-20 Holding Guangxi 2014-03-22 30,000 2014-07-16 16,965.9 No Yes guarantee 15.7.15 Co., Ltd. Sinopharm General 2014.4.19-20 Holding Guangxi 2014-03-22 15,000 2014-04-19 11,218.85 No Yes guarantee 15.4.18 Co., Ltd. Sinopharm General 2014.9.19-20 Holding Guangxi 2014-03-22 10,000 2014-09-19 No Yes guarantee 15.9.18 Co., Ltd. Sinopharm General 2015.5.29-20 Holding Guangxi 2015-03-21 10,000 2015-05-29 1,925 No Yes guarantee 16.5.29 Co., Ltd. Sinopharm General 2015.5.1-201 Holding Guangxi 2015-03-21 6,000 2015-05-12 5,548.78 No Yes guarantee 5.12.29 Co., Ltd. 23 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 Sinopharm General 2014.7.16-20 Holding Jiangmen 2014-03-22 3,000 2014-07-16 1,743.71 No Yes guarantee 15.7.15 Renren Co., Ltd. Sinopharm General 2014.11.6-20 Holding Liuzhou 2014-03-22 9,000 2014-11-06 7,565.36 No Yes guarantee 15.7.15 Co., Ltd. Sinopharm General 2015.3.20-20 Holding Liuzhou 2015-03-21 5,000 2015-05-21 3,229.96 No Yes guarantee 16.3.19 Co., Ltd. Sinopharm General 2014.9.9-201 Holding Liuzhou 2014-08-16 4,000 2014-09-09 3,234.63 No Yes guarantee 5.9.8 Co., Ltd. Sinopharm General 2014.9.17-20 Holding Zhanjiang 2014-03-22 1,500 2014-09-17 1,460.09 No Yes guarantee 15.7.15 Co., Ltd. China National Zhijun (Suzhou) General 2014.5.27-20 2014-03-22 5,000 2014-05-27 2,569.23 No Yes Pharmaceutical guarantee 15.5.27 Co., Ltd. China National Zhijun (Suzhou) General 2014.7.16-20 2014-03-22 3,000 2014-07-16 2,927.9 No Yes Pharmaceutical guarantee 15.7.15 Co., Ltd. China National Zhijun (Suzhou) General 2015.1.1-201 2014-08-16 2,000 2015-01-01 320.38 No Yes Pharmaceutical guarantee 5.7.1 Co., Ltd. China National Zhijun (Suzhou) General 2015.1.4-201 2014-03-22 3,000 2015-01-04 441 No Yes Pharmaceutical guarantee 5.10.24 Co., Ltd. China National Zhijun (Suzhou) General 2014.8.28-20 2014-03-22 6,000 2014-08-28 No Yes Pharmaceutical guarantee 15.8.27 Co., Ltd. Shenzhen Zhijun General 2014.8.25-20 Pharmaceutical 2014-03-22 20,000 2014-08-25 2,281.56 No Yes guarantee 15.8.25 Co., Ltd. Shenzhen Zhijun General 2014.7.16-20 Pharmaceutical 2014-03-22 5,000 2014-07-16 No Yes guarantee 15.7.15 Co., Ltd. 24 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 Shenzhen Zhijun General 2014.10.8-20 Pharmaceutical 2014-03-22 2,000 2014-10-08 No Yes guarantee 15.10.8 Co., Ltd. Shenzhen Zhijun General 2014.10.8-20 Medicine Trading 2014-03-22 1,000 2014-10-08 No Yes guarantee 15.10.8 Co., Ltd. Sinopharm Holding Shenzhen General 2015.1.23-20 2014-03-22 500 2015-01-23 No Yes Chinese Medicine guarantee 15.7.15 Co., Ltd. Sinopharm General 2014.10.27-2 Holding Shenzhen 2014-08-16 2,000 2014-10-27 1,948.17 No Yes guarantee 015.10.27 Yanfeng Co., Ltd. Sinopharm General 2014.7.16-20 Holding Shenzhen 2014-03-22 7,000 2014-08-16 6,462.11 No Yes guarantee 15.7.15 Yanfeng Co., Ltd. Sinopharm General 2015-.05.28- Holding Shenzhen 2015-03-21 2,000 2015-05-28 1,600 No Yes guarantee 2016.2.15 Yanfeng Co., Ltd. Sinopharm General 2015.5.15-20 Holding Shenzhen 2015-03-21 3,000 2015-05-15 379.55 No Yes guarantee 16.5.14 Yanfeng Co., Ltd. Sinopharm Holding General 2014.7.16-20 2014-03-22 1,000 2014-07-16 784.46 No Yes Shaoguang Co., guarantee 15.7.15 Ltd. Sinopharm General 2014.7.16-20 Holding Shenzhen 2014-03-22 1,000 2014-07-16 546.22 No Yes guarantee 15.7.15 Medicine Co., Ltd. Total amount of actual Total amount of approving occurred guarantee for guarantee for subsidiaries in 221,100 452,625.37 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 569,100 266,290.39 the end of reporting period end of reporting period (B3) (B4) Guarantee of the subsidiaries for the subsidiaries Related Actual date of Complete Guarante Name of the Announce Guarantee happening (Date Actual Guarantee Guarantee implemen e for Company ment limit of signing guarantee limit type term tation or related guaranteed disclosure agreement) not party date Total amount of guarantee of the Company( total of three abovementioned guarantee) Total amount of approving Total amount of actual 296,100 489,573.34 guarantee in report period occurred guarantee in report 25 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 (A1+B1+C1) period (A2+B2+C2) Total amount of approved Total balance of actual guarantee at the end of report 704,100 guarantee at the end of report 297,492.39 period (A3+B3+C3) period (A4+B4+C4) The proportion of the total amount of actually guarantee in the 58.57% net assets of the Company (that is A4+ B4+C4) Including: (1) Guarantee outside against the regulation No guarantee outside against the regulation in Period 3. Other significant contract The Company had no other significant contract in Period. 4. Other material transactions 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 Commitment Commitment Commitments Accepter Contents Implementation time period 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 Commitments in Holding undertakes that, upon the transfer of report of Sinopharm shares of Sinopharm Holding Guangzhou it Long-term Normally 2005-06-21 acquisition or Holding held to Accord Pharma, “1. it will not effective implement equity change 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 26 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 areas to carry out pharmaceutical wholesale and retail businesses, so as to avoid potential peer competition. Apart from above, Sinopharm Holding will no longer newly-establish any enterprise that may compete with Accord Pharma in the production and R&D of pharmaceutical products.” 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 Controlling Company and the enterprises it wholly-owns, shareholder is controls or has de facto control over will not implement in engage in, participate in or carry out in real earnest, Guangdong and Guangxi any business or Commitments Sinopharm activities that would constitute substantive make in initial Sinopharm Long-term Accord will competition with the pharmaceutical 2013-09-05 public offering or Holding effective actively urged commercial businesses of Sinopharm re-financing the controlling Accord. III. the Company and the enterprises shareholder and it wholly-owns, controls or has de facto actual controller control over will not engage in, participate in to fulfill or carry out any business or activities that commitments would constitute substantive competition with the pharmaceutical industrial businesses of Sinopharm Accord. IV. the Company will not make use of its control over Sinopharm Accord 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 27 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 connected party of Sinopharm Accord. During the validity of the Undertaking, the Company will indemnify in time Sinopharm Accord from any loss which 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 Controlling reasonable causes, the Company and shareholder is Connected Party will enter into standardized implement in connected transaction agreement with real earnest, Sinopharm Accord according to law. Sinopharm Sinopharm Sinopharm Accord will perform approval Long-term Accord will 2013-09-05 Holding procedure according to relevant laws, rules effective actively urged and regulations, other standardization the controlling documents and its constitutional documents, shareholder and and fulfill its obligation to disclose actual controller information on connected transactions. III. to fulfill for those connected transactions beyond commitments avoidance or out of reasonable causes, the Company and 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 28 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 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 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 Controlling Pharmaceutical Group Corporation on shareholder is Avoiding the Peer Competition with China implement in National Accord Medicines Corporation Ltd. real earnest, that, “I. in the coming five years, Sinopharm Sinopharm Group intends to take appropriate measures Sinopharm Long-term Accord will including replacement or acquisition of 2013-10-16 Group effective actively urged assets or equity reorganization to solve the the controlling problem of peer competition between shareholder and Weiqida and Sinopharm Accord. II. apart actual controller from the matters disclosed in the past and in to fulfill the Letter of Undertaking, the Company and commitments the enterprises it wholly-owns, controls or has de facto control over (excluding 29 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 Sinopharm Accord and its controlled enterprises, similarly hereinafter) do not directly engage in, participate in or carry out within the PRC any business or activities that would constitute substantive competition with 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 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 Controlling over Sinopharm Accord, the Company and shareholder is the companies or enterprises it directly or implement in indirectly controls (hereinafter referred to as real earnest, “Connected Party”) will strictly standardize Sinopharm Sinopharm the connected transactions with Sinopharm Long-term Accord will 2013-09-22 Group Accord and its controlled enterprises. II. for effective actively urged those connected transactions beyond the controlling avoidance or out of reasonable causes, the shareholder and Company and Connected Party will enter actual controller into standardized connected transaction to fulfill agreement with Sinopharm Accord commitments according to law. Sinopharm Accord will perform approval procedure according to relevant laws, rules and regulations, other standardization documents and its constitutional documents, and fulfill its obligation to disclose information on 30 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 connected transactions. III. for those connected transactions beyond avoidance or out of reasonable causes, the Company and 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 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 Y time or not (Y/N) XI. Appointment and non-reappointment (dismissal) of CPA The semi-annual report of the Company has not been audit 31 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 XII. Penalty and rectification The Company had no penalty or rectification in the reporting period. XIII. Risk announcement of the violation of delisting The Company has no violation of delisting risks in the Period XIV. Explanation on other significant events No explanation on other significant events for the Company in reporting period. 32 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 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- Proporti Bonus reserve-co Subtot Proportio Amount issued Others Amount on shares nverted al n shares shares I. Restricted shares 74,484,531 20.54% 74,484,531 20.54% 2. State-owned legal 74,482,543 20.54% 74,482,543 20.54% person’s shares 3. Other domestic 1,988 0.00% 1,988 0.00% shareholding Including: Domestic legal 1,988 0.00% 1,988 0.00% person’s shares II. Unrestricted shares 288,147,412 79.46% 288,147,412 79.46% 1. RMB ordinary shares 233,261,812 64.32% 233,261,812 64.32% 2. Domestically listed 54,885,600 15.14% 54,885,600 15.14% foreign shares III. Total shares 362,631,943 100.00% 362,631,943 100.00% Reasons for share changed □ Applicable √ Not applicable Approval of share changed □ Applicable √ Not applicable Ownership transfer of share changed □ Applicable √ Not applicable Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of Company in latest year and period □ Applicable √ Not applicable Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators □ Applicable √ Not applicable Explanation on change of the shareholder’s structure and total shares, the structure of assets and balance of the Company □ Applicable √ Not applicable II. Number of shareholders and share-holding In Share Total common shareholders at Total preference shareholders 16,448 0 period-end with voting rights recovered at 33 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 end of reporting period (if applicable) (see Note 8) Particulars about shares held above 5% by common shareholders or top ten common shareholders Number Number of share pledged/frozen Amount of of Amount of Proportion common Changes in Nature of restricted un-restricte Shareholders of shares shares reporting shareholder common d common State of share Amount held held at period shares shares held period-en held d Sinopharm State-owned 184,942,2 74,482,54 110,459,74 51.00% Group Co., Ltd. corporate 91 3 8 National Domestic non Council for state-owned 2.12% 7,700,000 7,700,000 Social Security corporate Fund – 116 National Domestic non Council for state-owned 2.01% 7,298,555 7,298,555 Social Security corporate Fund – 106 HTHK/CMG FSGUFP-CMG FIRST STATE Overseas corporate 1.94% 7,032,720 7,032,720 CHINA GROWTH FD BOC- Harvest Domestic non Theme Selected state-owned 1.25% 4,524,288 4,524,288 Mix Stock Fund corporate China Life Insurance Co., Ltd. – tradition Domestic non –general state-owned 1.24% 4,497,385 4,497,385 insurance corporate products -005L-CT001 Shen New China Life Insurance Co., Domestic non Ltd. – Bonus – state-owned 1.16% 4,199,772 4,199,772 Individual corporate bonuses - -018L-FH002 34 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 Shen Agricultural Bank of China Ltd. – Fullgoal Domestic non Zhongzheng state-owned 1.10% 3,984,794 3,984,794 SOE Reform corporate Index Grade Securities Fund VALUE PARTNERS Overseas corporate 1.02% 3,707,803 3,707,803 CLASSIC FUND Bank of China Limited – Harvest Domestic non Advanced state-owned 0.93% 3,356,223 3,356,223 Manufacture corporate Investment Fund BOC- Harvest Theme Selected Mix Stock Fund and Bank of China Limited – Harvest Explanation on associated Advanced Manufacture Investment Fund shares the same administrator as Harvest Fund relationship among the aforesaid Management Co., Ltd.; it is unknown that there exists associated relationship or belongs to the shareholders 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 common shareholders with un-restrict shares held Amount of un-restrict common shares held at Type of shares Shareholders period-end Type Amount RMB ordinary Sinopharm Group Co., Ltd. 110,459,748 110,459,748 shares National Council for Social Security RMB ordinary 7,700,000 7,700,000 Fund – 116 shares National Council for Social Security RMB ordinary 7,298,555 7,298,555 Fund – 106 shares HTHK/CMG FSGUFP-CMG Domestically FIRST STATE CHINA GROWTH 7,032,720 listed foreign 7,032,720 FD shares BOC- Harvest Theme Selected Mix RMB ordinary 4,524,288 4,524,288 Stock Fund shares China Life Insurance Co., Ltd. – RMB ordinary 4,497,385 4,497,385 tradition –general insurance shares 35 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 products -005L-CT001 Shen New China Life Insurance Co., Ltd. RMB ordinary – Bonus – Individual bonuses - 4,199,772 4,199,772 shares -018L-FH002 Shen Agricultural Bank of China Ltd. – RMB ordinary Fullgoal Zhongzheng SOE Reform 3,984,794 3,984,794 shares Index Grade Securities Fund Domestically VALUE PARTNERS CLASSIC 3,707,803 listed foreign 3,707,803 FUND shares Bank of China Limited – Harvest RMB ordinary Advanced Manufacture Investment 3,356,223 3,356,223 shares Fund Expiation on associated relationship BOC- Harvest Theme Selected Mix Stock Fund and Bank of China Limited – Harvest or consistent actors within the top Advanced Manufacture Investment Fund shares the same administrator as Harvest Fund 10 un-restrict common shareholders Management Co., Ltd.; it is unknown that there exists associated relationship or belongs to the and between top 10 un-restrict consistent actionist among the other tradable shareholders regulated by the Management common shareholders and top 10 Measure of Information Disclosure on Change of Shareholding for Listed Companies. common shareholders There are no buy-back agreement in reporting period between the top 10 common shareholders and the top 10 un-restricted common shareholders 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 Disclosure date Shareholders/ Number of Ratio of the Number of Ratio of the Initial disclosure for the person acting in overweight as overweight as overweight overweight date for overweight plan concert planned planned actually actually overweight plan completed Sinopharm Group 2015-07-11 Co., Ltd. Other explanation 36 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 The Company published the announcement relating to stabilizing stock price of the Company (No.2015-23) on 11 July 2015, in which, Sinopharm Group Co., Ltd (our controlling shareholder) undertook to increase shareholding of the Company with amount no less than RMB20 million where the Company experienced substantial decrease of stock price, and undertook not to reduce shareholding of the same within six months upon completion of such increase of shareholding. 37 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 Section VII. Preferred Stock The Company has no preferred stock in reporting period 38 China National Accord Medicines Corporation Ltd. SEMI-ANNUAL REPORT 2015 Section VIII. Directors, Supervisors and Senior Executives I. Changes of shares held by directors, supervisors and senior executives Shares held by directors, supervisors and senior executives have no changes in reporting period, found more details in Annual Report 2014. II. Resignation and dismissal of directors, supervisors and senior executives Directors, supervisors and senior executives have no changes in reporting period, found more in Annual Report 2014. 39 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 Section IX Financial Report I.Report of the Auditors Consolidated financial statements for the six months ended 30 June 2015 haven’t been audited. II.Financial Statements All amounts in Renminbi “RMB” unless otherwise stated. 1. Consolidated balance sheets Preparation Unit: CHINA NATIONAL ACCORD MEDICINES CO., LTD. 30 June 2015 Unit: RMB Item 30 June 2015 31 December 2014 Current assets Cash at bank and on hand 1,161,871,173.03 867,562,115.54 Notes receivable 513,528,605.78 618,995,440.09 Accounts receivable 7,858,941,849.11 7,018,312,673.19 Advances to suppliers 107,416,097.51 96,043,154.40 Dividends receivable 35,190,000.00 0.00 Other receivables 40,817,703.37 28,574,927.90 Inventories 2,227,123,375.20 2,322,333,262.87 Other current assets 19,345,048.23 40,308,591.47 Total current assets 11,964,233,852.23 10,992,130,165.46 Non-current assets Long-term equity investments 151,691,888.29 157,604,846.85 Investment properties 79,822,727.80 73,836,850.51 Fixed assets 711,040,468.46 745,557,829.35 Construction in progress 401,040,277.87 330,218,696.56 Intangible assets 141,209,184.60 144,383,753.87 Development costs 5,619,315.47 5,619,315.47 Goodwill 79,378,833.15 79,378,833.15 Long-term prepaid expenses 36,193,800.15 39,154,232.03 40 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 Deferred income tax assets 82,146,152.88 85,146,479.50 Other non-current assets 160,279,989.56 175,910,538.15 Total non-current assets 1,848,422,638.23 1,836,811,375.44 TOTAL ASSETS 13,812,656,490.46 12,828,941,540.90 Current liabilities Short-term borrowings 1,980,929,436.95 1,517,954,528.88 Notes payable 1,373,483,568.02 1,468,166,640.64 Accounts payable 4,341,666,286.09 3,988,878,234.03 Advances from customers 44,995,822.24 40,339,905.63 Employee benefits payable 109,332,233.24 171,958,142.88 Taxes payable 99,088,331.76 77,445,669.46 Interests payable 9,717,998.71 6,666,712.19 Other payables 372,225,973.50 412,347,201.51 Current portion of long-term borrowings 7,649,200.00 4,000,000.00 Total current liabilities 8,339,088,850.51 7,687,757,035.22 Non-current liabilities Long-term borrowings 54,628,776.85 39,695,448.00 Long-term employee benefits 2,582,100.00 2,896,000.00 payable Payables for specific projects 1,287,000.00 1,287,000.00 Deferred Income 167,418,485.85 176,366,201.15 Deferred income tax liabilities 23,454,624.92 24,297,076.57 Other non-current liabilities 45,427,343.31 45,427,343.31 Total non-current liabilities 294,798,330.93 289,969,069.03 Total liabilities 8,633,887,181.44 7,977,726,104.25 OWNERS’ EQUITY Share capital 362,631,943.00 362,631,943.00 Capital surplus 1,863,894,533.34 1,863,894,533.34 Surplus reserve 181,315,971.50 181,315,971.50 Undistributed profits 2,671,558,237.98 2,356,765,374.25 Total equity attributable to equity holders of the Company 5,079,400,685.82 4,764,607,822.09 Minority interest 99,368,623.20 86,607,614.56 Total owners' equity 5,178,769,309.02 4,851,215,436.65 TOTAL LIABILITIES AND OWNERS’ EQUITY 13,812,656,490.46 12,828,941,540.90 41 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 Legal Principal in charge Head of accounting representative: 闫志刚 of accounting : 魏平孝 department: 周菲菲 2. Company balance sheets Unit: RMB Item 30 June 2015 31 December 2014 Current assets Cash at bank and on hand 232,835,112.63 257,173,314.81 Notes receivable 48,985,487.44 47,389,669.59 Accounts receivable 561,068,339.16 513,791,982.48 Advances to suppliers 554,159.82 5,047,755.80 Interest receivable 1,858,738.27 1,890,165.10 Dividends receivable 35,190,000.00 0.00 Other receivables 1,348,979,769.50 1,111,423,809.76 Inventory 167,275,611.58 184,880,147.05 Other current assets 308,889.73 2,560,096.51 Total current assets 2,397,056,108.13 2,124,156,941.10 Non-current assets Long-term equity investments 2,766,091,382.67 2,772,004,341.23 Investment properties 4,783,775.56 5,272,980.96 Fixed assets 17,097,985.55 17,175,509.65 Construction in progress 372,904,448.40 299,290,846.13 Intangible assets 36,137,443.18 36,923,545.12 Long-term prepaid expenses 5,128,145.16 5,681,186.10 Deferred income tax assets 2,860,992.26 2,800,803.02 Other non-current assets 46,273,400.39 68,103,087.93 Total non-current assets 3,251,277,573.17 3,207,252,300.14 TOTAL ASSETS 5,648,333,681.30 5,331,409,241.24 Current liabilities Short-term borrowings 189,000,000.00 202,000,000.00 Notes payable 334,129,756.08 274,584,574.89 Accounts payable 325,216,434.35 314,477,971.19 Advances from customers 516,073.73 322,008.81 Employee benefits payable 14,064,062.51 20,339,767.52 42 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 Taxes payable 11,696,128.98 13,695,533.72 Interests payable 438,062.59 86,831.07 Other payables 197,284,728.88 447,928,781.45 Total current liabilities 1,072,345,247.12 1,273,435,468.65 Non-current liabilities Long-term borrowings 54,628,776.85 39,695,448.00 Long-term employee benefits 226,000.00 226,000.00 payable Payables for specific projects 800,000.00 800,000.00 Deferred income 5,000,000.00 5,000,000.00 Deferred income tax liabilities 3,774,569.00 3,773,319.00 Total non-current liabilities 64,429,345.85 49,494,767.00 Total liabilities 1,136,774,592.97 1,322,930,235.65 OWNERS’ EQUITY Share capital 362,631,943.00 362,631,943.00 Capital surplus 1,869,692,921.70 1,869,692,921.70 Surplus reserve 181,315,971.50 181,315,971.50 Undistributed profits 2,097,918,252.13 1,594,838,169.39 Total owners' equity 4,511,559,088.33 4,008,479,005.59 TOTAL LIABILITIES AND OWNERS’ EQUITY 5,648,333,681.30 5,331,409,241.24 3. Consolidated and company income statements Unit: RMB Item For the six months ended 30 June 2015 For the six months ended 30 June 2014 I.Sales 12,813,803,166.77 11,612,642,434.28 Including: Sales 12,813,803,166.77 11,612,642,434.28 II.Cost of Sales 12,359,627,721.82 11,219,447,997.45 Including: Cost of Sales 11,801,661,040.42 10,626,767,657.24 Taxes and surcharges 26,443,689.75 27,472,713.53 Selling and distribution expenses 262,074,106.01 271,149,210.54 Administration expenses 203,589,373.35 215,813,783.67 Financial expenses – net 58,639,672.40 70,931,725.10 Asset impairment losses 7,219,839.89 7,312,907.37 Add: Investment income 28,274,061.44 23,595,722.50 43 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 Including: Share of profits of associates 28,274,061.44 23,595,722.50 III. Operating profit 482,449,506.39 416,790,159.33 Add: Non-operating income 12,982,289.46 28,336,065.33 Including: Gain on disposal of 10,297.36 500,989.54 non-current assets Less: Non-operating expenses 440,680.38 1,207,497.35 Including: Loss on disposal of 225,404.59 64,238.16 non-current assets IV. Total profit 494,991,115.47 443,918,727.31 Less: Income taxes expenses 95,348,854.50 86,331,296.75 V. Net profit 399,642,260.97 357,587,430.56 Attributable to equity holders of the 387,319,252.33 349,213,988.51 Company Minority interest 12,323,008.64 8,373,442.05 VI. Other comprehensive income 0.00 0.00 VII. Total comprehensice income 399,642,260.97 357,587,430.56 Attributable to equity holders of the 387,319,252.33 349,213,988.51 Company Minority interest 12,323,008.64 8,373,442.05 VIII. Earnings per share (1) Basic earnings per share 1.068 1.073 (2) Diluted earnings per share 1.068 1.073 Legal Principal in charge Head of accounting representative: 闫志刚 of accounting : 魏平孝 department: 周菲菲 4. Company income statements Unit: RMB Item For the six months ended 30 June 2015 For the six months ended 30 June 2014 I.Sales 1,409,915,735.50 1,344,533,386.96 Less: Cost of sales 1,350,096,101.89 1,290,912,374.30 Taxes and surcharges 2,742,214.76 3,819,156.69 Selling and distribution expenses 22,711,056.43 23,395,202.86 Administration expenses 22,137,614.50 23,650,902.47 Financial expenses – net -32,319,843.63 -30,937,200.09 Asset impairment losses 293,938.78 153,394.98 44 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 Add: Investment income 542,787,180.98 480,544,087.23 Including: Share of profits of associates 28,274,061.44 23,595,722.50 II. Operating profit 587,041,833.75 514,083,642.98 Add: Non-operating income 97,780.77 705,252.60 Including: Gain on disposal of non-current 0.00 0.00 assets Less: Non-operating expenses 0.02 0.08 Including: Loss on disposal of non-current 0.00 0.00 assets III. Total profit 587,139,614.50 514,788,895.50 Less: Income taxes expenses 11,533,143.16 8,808,140.45 IV. Net profit 575,606,471.34 505,980,755.05 V. Other comprehensive income 0.00 0.00 VI. Total comprehensice income 575,606,471.34 505,980,755.05 VII. Earnings per share (1)Basic earnings per share N/A N/A (2)Diluted earnings per share N/A N/A 5. Consolidated and company cash flows statements Unit: RMB For the six months ended 30 June Item For the six months ended 30 June 2014 2015 I. Cash flows from operating activities: Cash received from sales of goods or 13,538,599,427.81 11,799,950,691.25 rendering of services Refund of taxes and surcharges 1,412,100.00 6,571,540.44 Cash received relating to 40,061,810.25 53,448,437.56 other operating activities Sub-total of cash inflows 13,580,073,338.06 11,859,970,669.25 Cash paid for goods and services 12,323,623,570.32 11,553,683,051.08 Cash paid to and on behalf of employees 346,227,791.38 304,214,026.96 Payments of taxes and surcharges 297,175,090.54 302,590,124.70 Cash paid relating to other 164,807,307.09 184,199,274.47 operating activities Sub-total of cash outflows 13,131,833,759.33 12,344,686,477.21 Net cash flows from operating activities 448,239,578.73 -484,715,807.96 II. Cash flows from investing activities 45 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 Net cash received from disposal of fixed assets, intangible assets and 4,695,691.53 904,370.80 other long-term assets Cash received from disposal of subsidiaries and other business 0.00 3,598,827.09 units Sub-total of cash inflows 4,695,691.53 4,503,197.89 Cash paid to acquire fixed assets, intangible assets and other 84,244,511.59 123,288,911.49 long-term assets Net cash paid to acquire subsidiaries 252,000.00 0.00 and other business units Sub-total of cash outflows 84,496,511.59 123,288,911.49 Net cash flows from investing -79,800,820.06 -118,785,713.60 activities III. Cash flows from financing activities Cash received from investments 1,470,000.00 1,929,065,413.47 Including: Cash receivables for dividends or profit to minority 1,470,000.00 0.00 shareholders of subsidiaries Cash received from borrowings 99,576,626.12 177,215,892.08 Cash received relating to other 0.00 52,376,797.32 financing Activities Sub-total of cash inflows 101,046,626.12 2,158,658,102.87 Cash repayments of borrowings 14,333,727.61 1,093,663,188.17 Cash payments for interest expenses and distribution of dividends or 127,751,125.57 146,826,227.89 profits Including: Cash payments for dividends or profit to minority 1,032,000.00 1,098,000.00 shareholders of subsidiaries Cash payments relating to other 24,066,161.02 3,235,784.18 financing activities Sub-total of cash outflows 166,151,014.20 1,243,725,200.24 Net cash flows from financing -65,104,388.08 914,932,902.63 activities IV. Effect of foreign exchange rate 9,250.42 5,838.21 46 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 changes on cash V. Net increase in cash 303,343,621.01 311,437,219.28 Add: Cash at beginning of period 854,212,006.84 1,097,948,354.45 VI. Cash at end of period 1,157,555,627.85 1,409,385,573.73 6. Company cash flows statements Unit: RMB Item For the six months ended 30 June 2015 For the six months ended 30 June 2014 I. Cash flows from operating activities: Cash received from sales of goods or 1,506,941,667.17 1,421,640,664.70 rendering of services Cash received relating to other 6,475,294.32 12,486,044.81 operating activities Sub-total of cash inflows 1,513,416,961.49 1,434,126,709.51 Cash paid for goods and services 1,463,172,714.22 1,439,943,602.26 Cash paid to and on behalf of 30,095,211.91 26,913,040.68 employees Payments of taxes and surcharges 24,640,593.24 13,548,247.06 Cash paid relating to other 17,001,372.02 12,903,407.44 operating activities Sub-total of cash outflows 1,534,909,891.39 1,493,308,297.44 Net cash flows from operating -21,492,929.90 -59,181,587.93 activities II. Cash flows from investing activities Cash received from returns on 165,748,512.00 169,306,012.82 investments Net cash received from disposal of fixed assets, intangible assets 0.00 700.00 and other long-term assets Cash received from disposal of subsidiaries and other business 2,144,319,315.47 1,663,852,850.00 units Sub-total of cash inflows 2,310,067,827.47 1,833,159,562.82 Cash paid to acquire fixed assets, 65,650,551.69 65,829,878.73 47 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 intangible assets and other long-term assets Net cash paid to acquire subsidiaries 252,000.00 1,518,000.00 and other business units Cash paid relating to other investing 2,382,714,617.00 2,859,000,089.73 activities Sub-total of cash outflows 2,448,617,168.69 2,926,347,968.46 Net cash flows from investing -138,549,341.22 -1,093,188,405.64 activities III. Cash flows from financing activities Cash received from investments 0.00 1,929,065,413.47 Cash received from borrowings 64,933,328.85 58,095,448.00 Cash received relating to other 183,994,821.13 258,472,602.86 Financing activities Sub-total of cash inflows 248,928,149.98 2,245,633,464.33 Cash repayments of borrowings 10,000,000.00 925,000,000.00 Cash payments for interest expenses and distribution of dividends or 79,224,081.04 85,892,357.94 profits Cash payments relating to other 24,000,000.00 82,919,213.08 financing activities Sub-total of cash outflows 113,224,081.04 1,093,811,571.02 Net cash flows from financing 135,704,068.94 1,151,821,893.31 activities IV. Effect of foreign exchange rate 0.00 1,201.00 changes on cash V. Net decrease in cash -24,338,202.18 -546,899.26 Add: Cash at beginning of period 257,173,314.81 218,342,947.03 VI. Cash at end of period 232,835,112.63 217,796,047.77 48 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 7. Consolidated statement of changes in owners’ equity For the six months ended 30 June 2015 Unit: RMB For the six months ended 30 June 2015 Item Attributable to the shareholders of the Company Minority interest Total owners’ equity Paid-in capital Capital surplus Surplus reserves Undistributed profits 1. Balance at 31 December 2014 362,631,943.00 1,863,894,533.34 181,315,971.50 2,356,765,374.25 86,607,614.56 4,851,215,436.65 2. Balance at 1 January 2015 362,631,943.00 1,863,894,533.34 181,315,971.50 2,356,765,374.25 86,607,614.56 4,851,215,436.65 3. Movements for this period 0.00 0.00 0.00 314,792,863.73 12,761,008.64 327,553,872.37 (1)Comprehensive income 0.00 0.00 0.00 387,319,252.33 12,323,008.64 399,642,260.97 (2)Capital contribution and 0.00 0.00 0.00 0.00 1,470,000.00 1,470,000.00 withdrawals by owners Capital contribution by owners 0.00 0.00 0.00 0.00 1,470,000.00 1,470,000.00 (3)Profit distribution 0.00 0.00 0.00 -72,526,388.60 -1,032,000.00 -73,558,388.60 Profit distribution to shareholders (or 0.00 0.00 0.00 -72,526,388.60 -1,032,000.00 -73,558,388.60 equity owners) 4. Balance at 30 June 2015 362,631,943.00 1,863,894,533.34 181,315,971.50 2,671,558,237.98 99,368,623.20 5,178,769,309.02 49 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 For the year ended 31 December 2014 Unit: RMB For the year ended 31 December 2014 Item Attributable to the shareholders of the Company Minority interest Total owners’ equity Paid-in capital Capital surplus Surplus reserves Undistributed profits 1. 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 2. 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 3. Movements for this period 74,482,543.00 1,858,144,194.77 36,460,337.10 550,763,089.19 14,728,208.02 2,534,578,372.08 (1)Comprehensive income 0.00 0.00 0.00 652,497,176.03 17,343,991.84 669,841,167.87 (2)Capital contribution and 74,482,543.00 1,858,144,194.77 0.00 0.00 3,210,000.00 1,935,836,737.77 withdrawals by owners Capital contribution by owners 74,482,543.00 1,855,144,194.77 0.00 0.00 3,210,000.00 1,932,836,737.77 Others 0.00 3,000,000.00 0.00 0.00 0.00 3,000,000.00 (3)Profit distribution 0.00 0.00 36,460,337.10 -101,734,086.84 -5,825,783.82 -71,099,533.56 Appropriation to surplus reserves 0.00 0.00 36,460,337.10 -36,460,337.10 0.00 0.00 Profit distribution to shareholders (or 0.00 0.00 0.00 -65,273,749.74 -5,825,783.82 -71,099,533.56 equity owners) 4. Balance at 31 December 2014 362,631,943.00 1,863,894,533.34 181,315,971.50 2,356,765,374.25 86,607,614.56 4,851,215,436.65 50 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 8. Company statement of changes in owners’ equity For the six months ended 30 June 2015 Unit: RMB For the six months ended 30 June 2015 Items Paid-in capital Capital surplus Surplus reserves Undistributed profits Total share holders’ equity 1. Balance at 31 December 2014 362,631,943.00 1,869,692,921.70 181,315,971.50 1,594,838,169.39 4,008,479,005.59 2. Balance at 1 January 2015 362,631,943.00 1,869,692,921.70 181,315,971.50 1,594,838,169.39 4,008,479,005.59 3. Movements for this period 0.00 0.00 0.00 503,080,082.74 503,080,082.74 (1)Comprehensive income 0.00 0.00 0.00 575,606,471.34 575,606,471.34 (2)Profit distribution 0.00 0.00 0.00 -72,526,388.60 -72,526,388.60 Profit distribution to shareholders 0.00 0.00 0.00 -72,526,388.60 -72,526,388.60 (or equity owners) 4. Balance at 30 June 2015 362,631,943.00 1,869,692,921.70 181,315,971.50 2,097,918,252.13 4,511,559,088.33 51 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 For the year ended 31 December 2014 Unit: RMB For the year ended 31 December 2014 Item Paid-in capital Capital surplus Surplus reserves Undistributed profits Total share holders’ equity 1. 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 2. 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 3. Movements for this period 74,482,543.00 1,855,144,194.77 36,460,337.10 372,492,079.30 2,338,579,154.17 (1)Comprehensive income 0.00 0.00 0.00 474,226,166.14 474,226,166.14 (2)Capital contribution and 74,482,543.00 1,855,144,194.77 0.00 0.00 1,929,626,737.77 withdrawals by owners Capital contribution by owners 74,482,543.00 1,854,582,870.47 0.00 0.00 1,929,065,413.47 Others 0.00 561,324.30 0.00 0.00 561,324.30 (3)Profit distribution 0.00 0.00 36,460,337.10 -101,734,086.84 -65,273,749.74 Appropriation to surplus reserves 0.00 0.00 36,460,337.10 -36,460,337.10 0.00 Profit distribution to shareholders 0.00 0.00 -65,273,749.74 -65,273,749.74 (or equity owners) 4. Balance at 31 December 2014 362,631,943.00 1,869,692,921.70 181,315,971.50 1,594,838,169.39 4,008,479,005.59 52 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 III.Profile of company China National Accord Medicines Co., Ltd. (hereinafter referred to as the “the Company”), formerly known as Shenzhen Health Mineral Water Co., Ltd., was approved by the People’s Government of Shenzhen with SFBF (1993) No.356 document to establish on 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 RMB362,631,900. up to 30 June 2015. 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 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 74,482,543ordinary 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. As of 30 June, 2015, the total share capital was 362,631,943. The approved scope of business of the Company and its subsidiaries (together “the Group”) includes wholesale of traditional Chinese medicine preparations, bulk pharmaceutical drugs, chemical preparations, bulk antibiotic drugs, antibiotic preparations, biochemical drugs, biological products (including vaccines and in vitro diagnostic reagents), psychotropic drugs and preparations, narcotic drugs, toxic drugs for medical use, protein assimilation preparation and peptide hormones; trade of dietary supplement; research, development and consultation services of pharmaceutical packaging materials and pharmaceutical industry products; industrial investment holding; domestic trade (other than special licensing), sale of ambulances; trade of second-class and third- class medical equipments; 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 53 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 the State limits or prohibit the company. 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. These financial statements were authorised for issue by the board of directors of the Company on 18 August, 2015. Subsidiaries consolidated in the financial statements are listed in Note IX. New subsidiaries include Sinopharm Holding Guangzhou Medical Management Co., Ltd. (here after referred as “Guangzhou Medical”) (Note VIII). IV.Basis of preparation 1. Basis of preparation The financial statements were prepared in accordance with the Basic Standard and specific standards of the Accounting Standards for Business Enterprises issued by the Ministry of Finance on 15 February 2006 and those updated afterwards, and other relevant regulations issued thereafter (hereafter collectively referred to as the “Accounting Standards for Business Enterprises” or “CAS”), and the disclosure requirements in the Preparation Convention of Information Disclosure by Companies Offering Securities to the Public No.15 – General Rules on Financial Reporting issued by the China Securities Regulatory Commission. 2. Going concern This financial statement is prepared on the basis of going concern. V.Summary of significant accounting policies and accounting estimates The group determines the specific accounting policies and accounting estimates according to the production management characteristics, shown mainly on the bad debt provision withdrawing method for account receivable, measurement of inventory, depreciation for PP&E and amortization for intangible asset, judgement basis for capitalization of development expenditure, measurement model for investment property, recognition timing of revenue. 1. Statement of compliance with the Accounting Standards for Business Enterprises The financial statements of the Company for the period ended 30 June 2015 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 2015 and the operating results, cash flows and other 54 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 information of the Group and the Company for the period then ended. 2. Accounting period The Company’s accounting year starts on 1 January and ends on 31 December. 3. Functional currency The functional currency is Renminbi (RMB). 4. Business combinations involving enterprises under common control and Business combinations involving enterprises not under common control (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. 5. Preparation of consolidated financial statements The consolidated financial statements comprise the financial statements of the Company and all of its subsidiaries. Subsidiaries are consolidated from the date on which the Group obtains control and are de-consolidated from the date that such control ceases. For a subsidiary that is acquired in a business combination involving enterprises under common control, it is included in the consolidated financial statements from the date when it, together with the Company, comes under common control of the ultimate controlling party. 55 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 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 the Company are recognised as minority interests and presented separately in the consolidated financial statements within equity, net profits and total comprehensive income respectively. Unrealised gain or loss from selling assets to subsidiaries fully offsets the net income attributable to equity holders of the company. Unrealised gain or loss from purchasing assets from subsidiaries offsets the net income attributable to equity holders of the company and atrributable to the minority interest by the distribution proportion regarding the company and the subsidiary Unrealised gain or loss from transaction between subsidiaries offsets the net income attributable to equity holders of the company and atrributable to the minority interest by the distribution proportion regarding the company and the selling side of the subsidiaries. If different recognition perspectives for the same transaction arise within different accounting identities setup, there is adjustment for the transaction from the Group’s perspective. 6. Cash and 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 are subject to an insignificant risk of changes in value. 7. Foreign currency translation Foreign currency transactions are translated into RMB using the exchange rates prevailing at the dates of the transactions. At the balance sheet date, monetary items denominated in foreign currencies are 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. 56 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 8. 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. (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 57 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 value through profit or loss and other financial liabilities. The financial liabilities of the Group mainly comprise other financial liabilities, including payables and borrowings Payables, including notes payable, accounts payable and other payables, are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently carried at amortised costs using the effective interest method. Other financial liabilities with maturities no more than one year are classified as current liabilities. Other financial liabilities with maturities over one year but are due within one year at the balance sheet date are classified as the current portion of non-current liabilities. Others are classified as non-current liabilities. A financial liability is derecognised or partly derecognised when the current obligation is discharged or partly discharged. The difference between the carrying amount of the financial liability or the derecognised part of the financial liability and the consideration paid is recognised in profit or loss. 9. Receivables (1)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 The criterion for determing individually significant amounts 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 amount of the present value of the future cash flows The method of providing for bad debts for those individually expected to be derived from the receivable below its significant amounts carrying amount. (2)Receivables that are subject to provision for bad debts on the grouping basis Grouping basis provision for bad debts Receivables with amounts that are not individually significant and those receivables that have been individually assessed for impairment and have not been The ageing of receivables found impaired are classified into certain groupings based on their credit risk characteristics. 58 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 Provisions for impairment of the receivables which have a similar risk level are analysed below: Provision ratios used for accounts Provision ratios used for other Aging receivables receivables Within 1 year (including 1 year ) 0.00% 0.00% 1 to 2 years 5.00% 5.00% 2 to 3 years 10.00% 10.00% More than 3 years 20.00% 20.00% (3)Receivables with amounts that are not individually significant but subject to separate assessment for provision for bad debts There exists objective evidence that the Group will not be The reason for making separate assessment for provision able to collect the amount under the original terms of the for bad debts receivable. The provision for bad debts is determined based on the amount of the present value of the future cash flows The provision for bad debts expected to be derived from the receivable below its carrying amount. 10. Inventories (a) Classification Inventories include raw materials, work in progress, finished goods, delegate processing supplies and turnover materials, and are measured at the lower of cost and net 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 59 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 Turnover materials include low value consumables and packaging materials, which are expensed when issued. 11. Long-term equity investments Long-term equity investments comprise the Company’s long-term equity investments in its subsidiaries and the Group’s long-term equity investments in its associates. Subsidiaries are the investees over which the Company is able to exercise control. Associates are the investees that the Group has significant influence on their financial and operating policies. Investments in subsidiaries are measured using the cost method in the Company’s financial statements, and adjusted by using the equity method when preparing the consolidated financial statements. Interests in associates are accounted for using the equity method. (a) Determination of investment cost For long-term equity investments acquired through a business combination: for long-term equity investments acquired through a business combination involving enterprises under common control, the investment cost shall be the absorbing party’s share of the carrying amount of owners’ equity of the party being absorbed at the combination date; for long-term equity investment acquired through a business combination involving enterprises not under common control, the investment cost shall be the combination cost. (b) Subsequent measurement and recognition of related profit and loss For long-term equity investments accounted for using the cost method, they are measured at the initial investment costs, and cash dividends or profit distribution declared by the investees are recognised as investment income in profit or loss. For long-term equity investments accounted for using the equity method, where the initial investment cost of a long-term equity investment exceeds the Group’s share of the fair value of the investee’s identifiable net assets at the acquisition date, the long-term equity investment is measured at the initial investment cost; where the initial investment cost is less than the Group’s share of the fair value of the investee’s identifiable net assets at the acquisition date, the difference is included in profit or loss and the cost of the long-term equity investment is adjusted upwards accordingly. For long-term equity investments accounted for using the equity method, the Group recognises the investment income according to its share of net profit or loss of the investee. The Group discontinues recognising its share of net losses of an investee after the carrying amount of the long-term equity investment together with any long-term interests that, in substance, form part of the investor’s net investment in the investee are reduced to zero. However, if the Group has obligations for additional losses and the criteria with respect to recognition of provisions under the accounting standards on contingencies are satisfied, the Group continues recognising the investment losses and the provisions. For changes in 60 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 owners’ equity of the investee other than those arising from its net profit or loss, other comprehensive income, and profit distribution, the Group adjusts the book value of the investment and records capital surplus accordingly. The carrying amount of the investment is reduced by the Group’s share of the profit distribution or cash dividends declared by an investee. The 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. 12. 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: Annual depreciation (amortisation) Estimated useful lives Estimated residual value rates Buildings 20-35 years 5% 2.71% to 4.75% Land use rights 30-50 years 0% 2.00% to 3.33% 61 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 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 . 13. Fixed assets (1)Conditions Recoginition and initial measurement of fixed assets Fixed assets comprise buildings, machinery and equipment, motor vehicles, other equipment and leasehold improvements. 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. (2)Depreciation methods Estimated residual Annual Depreciation methods Estimated useful lives value depreciation rates Buildings straight-line method 20-35 years 5% 2.71% to 4.75% Machinery and straight-line method 5-14 years 5% 6.79% to 19% equipment 62 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 Motor vehicles straight-line method 5-10 years 5% 9.50% to 19.00% Other equipment straight-line method 3-10 years 5% 9.50% to 31.67% Leasehold straight-line method Within 5 years 0% Above 20.00% improvements 14. 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. 15. Borrowing costs The borrowing costs that are directly attributable to the acquisition and construction of a fixed asset that needs a substantially long period of time for its intended use commence to be 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. 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. 16. Intangible assets (1)Valuation method.Useful life.Impairment test Intangible assets include land use rights, computer softwares, technology patents,trademarks and 63 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 distribution network, which initially recognised at cost. Intangible assets contributed by state-owned shareholders during the company reorganisation were recorded based on the valuation amount approved by the state-owned assets supervision and management department. (a) Land use rights A land use right granted by government with a infinite useful life would not be amortised. Other land use rights are amortised on the straight-line basis over their approved useful period. If the acquisition costs of land use rights and the buildings located thereon cannot be reliably allocated between the land use rights and the buildings, all of the acquisition costs are recognised as fixed assets. (b) Computer softwares Computer softwares purchased by the Group are initially measured at cost, which are amortised on the straight-line basis over their approved useful period of 3 to 5 years. (c) Trademarks and Technology Patents Trademarks are amortised on the straight-line basis over their effective periods as stipulated by law of 5 to 10 years. Technology Patents are amortised on the straight-line basis over their effective useful period of 5 years. (d) Distribution network Distribution network includes customer relationships and distribution channels, which is amortised on the straight-line basis over its approved useful live of 20 years. (e) Periodical review of useful life and amortisation method 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. (2)Internal research and development (a) 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 for investigation, evaluation and selection of production process researches is recognised in profit or loss in the period in which it is incurred. Expenditure on the designation, measurement of the final utilization of the production process before mass production, is capitalised only if all of the following conditions are satisfied: 64 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 development of the production process has been fully demonstrated by the technical team; management has approved the budget of drug production development; market research analysis suggests that the products produced by the new production technology are able to be promoted; adequate technical, financial and other resources to complete the development and the ability to use or sell the intangible asset; 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. 17. 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. 65 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 18. Long-term prepaid expenses Long-term prepaid expenses include the expenditure for improvements to fixed assets under operating leases, and other expenditures that have been made but should be 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. 19. Employee benefit (1)Short-term employee benefits Short-term employee benefits include wages or salaries, bonus, allowances and subsidies, staff welfare, medical insurance, work injury insurance, maternity insurance, housing funds, and union running costs and employee education costs. The employee benefits are recognised in the accounting period in which the service has been rendered by the employees, and as costs of assets or expenses to whichever the employee service is attributable. (2)Post-employment benefits The Company classifies post-employment benefit plans into either defined contribution plans and defined benefit plans. Defined contribution plans are post-employment benefit plans under which the Company pays fixed contributions into a separate fund and will have no obligation to pay further contributions; and defined benefit plans are post-employment benefit plans other than defined contribution plans. During the reporting period, the Company's post-employment benefits mainly include basic pensions, unemployment insurance and enterprise annuity, both of which belong to the defined contribution plans. Basic pensions The Company’s employees participate in the defined basic pension insurance plan set up and administered by local labour and social protection authorities. Basic pensions are provided monthly according to stipulated bases and proportions to local labour and social security institutions. When employees retire, local labour and social security institutions have a duty to pay the basic pension insurance to them. The amounts payable are recognised as liabilities based on the above provisions in the accounting period in which the service has been rendered by the employees, and as costs of assets or expenses to whichever the employee service is attributable. (3)Termination benefits The group recognizes the debt and the gain or loss, when offering compensation for terminating the labor contract before the due date, or encouraging the staff to resign voluntarily, at the earlier date when the group cannot unilaterally withdraw the labor relation plan or recognize the cost relating to recombinant involving the payment of termination benefits. 66 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 Retirement benefits The group provides retirement benefits to employees who accept the internal retirement arrangements. Retirement benefits refer to the salary and social security contributions provided to those staff who voluntarily quit the job with approval from the management team, before the retirement age. The group offers retirement benefits from the date when the arrangement begins, to the date when the staff reaches the retirement age. The group accounts the retirement benefits referring to the accounting treatment for the termination benefits. Liability including salary and social security contributions is recognized when conditions of termination benefits recognition meet, regarding to the period from the staff leaves the position to the normal retirement date. Difference arising from the changes in actuarial assumptions for retirement benefits and adjustments in welfare standard, will be accounted in the current profits and losses. Retirement benefits that are expected to be paid within one year from the balance sheet date is disclosed as current liability. 20. 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. 21. Revenue 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 can be recognized on condition that the transaction-related economic interest is expected to be satisfied, the amount is able to reliably measured, and the following recognition conditions are met: (a) Sale of goods Revenue from the sale of goods is recognised when significant risks and rewards of ownership of the 67 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 goods are transferred to the buyer, the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, and it is probable that the economic benefit associated with the transaction will flow to the Company and the relevant revenue and costs can be measured reliably. (b) Rendering of services The Group provides freight,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. Other revenue is determined in accordance with the amount provided in the service period stipulated in the contract. (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. 22. Government grants (1)Judging basis and accounting treatments of Related to assets Government grants Government grants are transfers of monetary or non-monetary assets from the government to the Group at nil consideration, including refund of taxes and financial subsidies, etc. A government grant is recognised when the conditions attached to it can be complied with and the government grant can be received. For a government grant in the form of transfer of monetary assets, the grant is measured at the amount received or receivable. For a government grant in the form of transfer of non-monetary assets, it is measured at fair value; if the fair value is not reliably determinable; the grant is measured at nominal amount. A government grant related to an asset is 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. 68 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 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. (2)Judging basis and accounting treatments of Government grants related to income 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. 23. 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. 69 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 24. 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. 25. Other significant accounting policies and accounting estimates (a) Governmental medical reserve funds and specially approved reserving materials Appointed by the PRC Government, China National Pharmaceutical Group Corporation (“CNPGC") is responsible for purchasing, allocating and providing the governmental medical reserves, which include the medical products, traditional Chinese medicine and medical appliances for nation-wide emergency rescue and disaster relief. Appointed by the Government of Guangxi Province, Sinopharm Medicine Holding Guangxi Co., Ltd. (“Sinopharm Guangxi”), a subsidiary of the 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. (b) Dividend distribution Cash dividends distribution is recognised as a liability in the period in which it is approved by the annual shareholders’ meeting. (c) 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. (d) Critical accounting estimates The Group continually evaluates the critical accounting estimates and key judgments applied based on 70 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 historical experience and other factors, including expectations of future events that are believed to be reasonable. 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. 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, the Group’s management tests annually whether receivables have suffered any impairment, Impairment of receivables has been assessed by taking into account the customers’ credit history and financial position together with the current market conditions. Even if the Group’s management has made bad debt provision for the expected loss at its best estimate, there is a possibility that changes in customers’ financial position or market conditions will alter the result. (iii) Accounting estimates on impairment of inventories In accordance with the Group’s accounting policy, 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. 71 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 VI.Taxation 1. The types and rates of taxes Type Taxable base Tax rate Value added tax (“VAT”) Taxable value added amount (Tax payable is calculated using the taxable sales amount multiplied by the effective 0%.3%.6%.11%.13% or 17% tax rate less deductible VAT input of current period) Business tax Rental income, interest income and 5% etc. City maintenance and construction tax VAT and business tax 7% Enterprise income tax (“EIT”) Taxable income 10%.15%.25% The enterprises of different corporate income tax rate are disclosured as below: Name of Companies Income Tax Rate Sinopharm Medicine Holding Zhijun(Shenzhen) Pingshan 15% Pharmaceutical Co., Ltd. Shenzhen Zhijun Pharmaceutical Co., Ltd. 15% Sinopharm Medicine Holding Guangxi Co., Ltd. 15% Sinopharm Holding Guangxi Logistics Co., Ltd. 15% Sinopharm Holding Wuzhou Co., Ltd. 15% Sinopharm Beihai 15% Sinopharm Holding Yulin Co., Ltd. 15% Sinopharm Holding Guangzhou Medical Management Co., Ltd 10% 2. Tax preferences In 2012, the subsidiary Sinopharm Medicine Holding Zhijun(Shenzhen) Pingshan Pharmaceutical Co., Ltd.(“Zhijun(Shenzhen) Pingshan”) obtained the certificate of High and New Technology Enterprises with effective period of 3 years, 2012 to 2014. As relevant preferential tax treatment has expires on December 31, 2014, Zhijun(Shenzhen) Pingshan has been renewing the certificate. Assuming there is no change on relevant laws and regulations, we consider Zhijun(Shenzhen) Pingshan still can got the certificate with effective period of 3 years, 2015 to 2017. Hence, Zhijun(Shenzhen) Pingshan uses the income tax rate of 15% for the six months ended 30 June 2015. In 2014, the subsidiary Shenzhen Zhijun Pharmaceutical Co., Ltd. (“Zhijun Medicine”) obtained the certificate of High and New Technology Enterprises with effective period of 3 years, 2014 to 2016. 72 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 Under the relevant regulations of article 28 of the Corporate Income Tax Law, the applicable tax rates for Zhijun Medicine and Zhijun(Shenzhen) Pingshan in year 2015 are 15% (2014: 15%). In 2014, the subdidiary Sinopharm Guangxi Logistics Co., Ltd (“Guangxi Logistics”) got the approval from local tax bureau of Guangxi Province, and was entitled with a Western Development preferential tax rate of 15% from 1 January 2014 to 31 December 2020. In 2015, the subdidiary Sinopharm Holding Guangxi, Sinopharm Holding Beihai Co., Ltd(“Sinopharm Holding Beihai”), Sinopharm Holding Yulin Co., Ltd(“Sinopharm Holding Yulin”), Sinopharm Holding Wuzhou Co., Ltd(“Sinopharm Holding Wuzhou”) got the aforementioned approval as well. Hence, they were entitled with a preferential tax rate of 15% from 1 January 2014 to 31 December 2020, from 28 February 2014 to 31 December 2020, from 1 January 2015 to 31 December 2020 and from 1 January 2015 to 31 December 2020, respectively. In 2015, Guangzhou Medical, which was the ou established lately this year as a subsidiary of Sinopharm Holding Guangzhou, was treated as a small low-profit enterprise, and was entitled with a low income tax rate, which was 10%. VII.Notes to the consolidated financial statements 1. Cash at bank and on hand Unit:RMB Items 30 June 2015 31 December 2014 Cash on hand 77,018.59 41,627.16 Cash at bank 1,157,478,609.26 854,170,379.68 Other cash balances 4,315,545.18 13,350,108.70 Total 1,161,871,173.03 867,562,115.54 At 30 June 2015, other cash balances include deposits for bank acceptance notes and depostis for letter of credit. 2.Notes receivable (1)Types of notes receivable Unit:RMB Items 30 June 2015 31 December 2014 Bank acceptance notes 277,058,160.24 260,984,531.31 Trade acceptance notes 236,470,445.54 358,010,908.78 Total 513,528,605.78 618,995,440.09 73 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 (2)As at the end of this period, pledged notes receivable Unit:RMB Items The pledged notes receivables at the end of this period Bank acceptance notes 4,929,266.00 Total 4,929,266.00 (3)As at the end of this period, the endorsed or the discounted undue notes receivables of the group Unit:RMB Recognition terminated at the end of Recognition not terminated at the end of Items this period this period Bank acceptance notes 818,527,470.71 0.00 Trade acceptance notes 0.00 134,570,639.59 Total 818,527,470.71 134,570,639.59 3. Accounts receivable (1)The accounts receivable and related provision for bad debts Unit:RMB 30 June 2015 31 December 2014 Carrying amount Bad debt provision Carrying amount Bad debt provision Net Types amount % of amount % of total Net book amount % of total amount % of total book total balance value balance balance value balance individually significant are 38,112,28 16,137, 21,974,6 27,306, 17,714,7 9,592,0 subject to separate 0.48% 42.34% 0.39% 64.87% 9.40 611.94 77.46 785.00 27.50 57.50 impairment assessment receivable accounts 7,001,1 7,000,7 7,791,68 98.84 1,934,0 7,789,75 368,802. within similar credit 0.02% 30,510. 99.40% 0.01% 61,707. 6,980.69 % 32.23 2,948.46 84 risk group 38 54 individually not significant but 53,439,5 6,225,3 47,214,2 14,714, 6,756,00 7,958,9 individually 0.68% 11.65% 0.21% 45.91% 43.36 20.17 23.19 908.91 0.76 08.15 evaluated for impairment 74 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 7,043,1 7,018,3 7,883,23 100.00 24,296, 7,858,94 24,839,5 Total 0.31% 52,204. 100.00% 0.35% 12,673. 8,813.45 % 964.34 1,849.11 31.10 29 19 As at the end of this period, impairment provision for accounts receivable individually significant are analysed: Unit:RMB Accounts receivable(by 30 June 2015 currency unit) Accounts receivable Bad debt provision Rate Assessment for impairment Guangdong Liyuan Disputed receivable with Pharmaceutical Co., 14,517,375.00 14,517,375.00 100.00% higher risk of recoverability Ltd which has filed a lawsuit Qinzhou Second High uncertainty in 11,793,056.40 589,652.82 5.00% People's Hospital recoverability Affiliated hospital of High uncertainty in Youjiang medical 6,539,414.40 326,970.72 5.00% recoverability college for Nationalities Tibet Naqukanghui High uncertainty in Pharmaceutical Co., 5,262,443.60 703,613.40 13.37% recoverability Ltd Total 38,112,289.40 16,137,611.94 -- -- Provisions for impairment of the receivables which have a similar risk level: Unit:RMB 30 June 2015 Aging Accounts receivable Bad debt provision Rate Within 1 year 7,754,118,802.17 0.00 0.00% 1 to 2 years 36,482,005.89 1,824,100.31 5.00% 2 to 3 years 1,073,026.03 107,302.60 10.00% Over 3 years 13,146.60 2,629.32 20.00% Total 7,791,686,980.69 1,934,032.23 0.02% (2)Recovered or reversed bad debt amount, and Bad debt provision in this period Bad debt provision in this year is RMB2,086,948.76. Recovered or reversed bad debt amount adds up to RMB2,629,515.52. Important recovered or reversed bad debt items are listed below: Unit:RMB 75 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 Name of company Recovered or reversed amount Way of recovery Tibet Naqukanghui Pharmaceutical 2,493,739.10 Amount received Co., Ltd Zengcheng Zhengguo Institute of 13,526.22 Amount received health Conghua City, Jiang Po Street 60,843.00 Amount received Community Health Service Center Total 2,568,108.32 -- (3)As at 30 June 2015, the top five accounts receivable by customer are summariesd as below: As at 30 June 2015, the top five accounts receivable by customer are summariesd as below: Bad debt provision Amount % of the total accounts receivable amount Total amount of the top five 593,390,063.69 450.00 7.53% accounts receivables (4)Analysis of account receivables that are terminated recognition due to financial asset transfer: By 30 June 2015, accounts receivable of RMB70,499,859.45 has been factored to financial institute(2014 semi-annual: RMB912,614,815.13). The corresponding loss is RMB1,673,457.26 (2014 semi-annual: RMB15,939,629.04). 4. Advances to suppliers (1)The aging of advances to suppliers is analysed below: Unit:RMB 30 June 2015 31 December 2014 Aging amount % of total balance amount % of total balance Within 1 year 107,181,913.91 99.78% 95,744,012.90 99.69% 1 to 2 years 54,628.60 0.05% 66,286.50 0.07% 2 to 3 years 200.00 0.00% 213,144.00 0.22% Above 3 years 179,355.00 0.17% 19,711.00 0.02% Total 107,416,097.51 -- 96,043,154.40 -- (2)The top five advances to suppliers by customer are summarized As at 30 June 2015, the top five advances to suppliers by customer are summarized as below: Amount Proportion of total balance 76 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 Total amount of top five advances to 44,975,556.30 41.87% suppliers 5. Dividends receivable Unit:RMB Projects(or investees) 30 June 2015 31 December 2014 Shenzhen Wanle Medical Co., 35,190,000.00 0.00 Ltd.(“Wanle Medical”) Total 35,190,000.00 0.00 6. Other receivables (1)Other receivables and related provision for bad debts by category: Unit:RMB 30 June 2015 31 December 2014 Carrying amount Bad debt provision Carrying amount Bad debt provision Types Net book Net book % of total % of total value value amount amount amount rate amount amount amount rate Individually significant are 8,980,0 8,980,00 100.00 8,980,0 8,980,00 subject to separate 17.28% 0.00 22.23% 100.00% 0.00 00.00 0.00 % 00.00 0.00 impairment assessment Receivable accounts 38,092, 290,150. 37,802,2 25,447, 219,614. 25,227,573. within similar credit 73.29% 0.76% 63.01% 0.86% 414.75 82 63.93 187.91 23 68 risk group Individually not significant but 4,899,4 1,884,03 3,015,43 5,959,9 2,612,55 3,347,354.2 individually 9.43% 38.45% 14.76% 43.84% 78.95 9.51 9.44 05.13 0.91 2 evaluated for impairment 51,971, 11,154,1 40,817,7 40,387, 11,812,1 28,574,927. Total 100.00% 21.46% 100.00% 29.25% 893.70 90.33 03.37 093.04 65.14 90 As at 30 June 2015, impairment provision for other receivables individually significant: Unit:RMB 30 June 2015 Other receivables(by company) Other receivables Bad debt provision Rate Assessment for 77 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 impairment Shenzhen Yinghai Technology Uncertainty in 8,980,000.00 8,980,000.00 100.00% Investment Co., Ltd. recoverability Total 8,980,000.00 8,980,000.00 -- -- Provisions for impairment of the receivables which have a similar risk group: Unit:RMB 30 June 2015 Aging Other receivables Bad debt provision Rate Within 1 year 35,276,001.51 0.00 0.00% 1 to 2 years 1,572,662.01 78,633.10 5.00% 2 to 3 years 372,325.35 37,232.54 10.00% Over 3 years 871,425.88 174,285.18 20.00% Total 38,092,414.75 290,150.82 0.00% (2)Bad debt provision of Other receivables, Important recovered or reversed items this period Bad debt provision of Other receivables this period is RMB94,528.23with the recovered or reversed amount to be RMB201,854.32. (3)Other receivables written off for the six months ended 30 June,2015 Other receivables written off for the six months ended 30 June, 2015 is RMB550,648.72. (4)Other receivables by nature are analysed below: Unit:RMB Nature 30 June 2015 31 December 2014 Deposit 15,778,888.88 11,871,118.11 Petty cash advance to employees 9,539,942.63 6,131,979.57 Receivable of equity transaction 8,980,000.00 8,980,000.00 Receivable due from related party 1,596,860.68 1,899,766.89 Others 16,076,201.51 11,504,228.47 Total 51,971,893.70 40,387,093.04 (5)The top 5 parties that owe the largest amounts of other receivable balances Unit:RMB 78 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 Company Name Nature Balance Aging % of total amount Provision of bad debt Shenzhen Yinghai Technology Receivable of equity 8,980,000.00 Over 5 years 17.28% 8,980,000.00 Investment Co., Ltd. transaction Guangzhou people's Court of Yuexiu District ,Guangzhou, Litigation deposit 5,388,080.00 Within 1 year 10.37% 0.00 Guangdong Province Guangxi Autonomous Region Collective housing repair Housing Reformed System 1,911,494.23 Over 5 years 3.68% 0.00 funds Finance Department Sinopharm Group Medicine deposit 1,215,000.00 1 to 2 years 2.34% 0.00 Logistic Co.,Ltd. Shenzhen pharmaceutical health care products import and Operational transactions 1,157,860.00 Over 5 years 2.23% 1,157,860.00 Export Co.,Ltd. Total -- 18,652,434.23 -- 35.90% 10,137,860.00 7. Inventories (1)Inventories by category Unit:RMB 30 June 2015 31 December 2014 Items Book value Provision Net book value Book value Provision Net book value Raw materials 118,658,121.30 3,602,497.94 115,055,623.36 144,596,922.64 3,596,085.79 141,000,836.85 Work in 22,510,603.41 4,239,079.92 18,271,523.49 25,031,852.48 6,537,971.20 18,493,881.28 progress Finished goods 2,108,855,510.54 17,210,005.22 2,091,645,505.32 2,174,537,205.97 14,519,470.94 2,160,017,735.03 Consigned processing 881,565.64 0.00 881,565.64 1,288,334.79 0.00 1,288,334.79 materials Low cost 1,476,730.37 207,572.98 1,269,157.39 1,551,729.58 19,254.66 1,532,474.92 consumables Total 2,252,382,531.26 25,259,156.06 2,227,123,375.20 2,347,006,045.46 24,672,782.59 2,322,333,262.87 (2)Provision for declines in value of inventories Unit:RMB 31 December Current period increase Current period decrease Items 30 June 2015 2014 Increases Others Reversal or written off Others 79 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 Raw materials 3,596,085.79 1,695,665.90 0.00 1,689,253.75 0.00 3,602,497.94 Work in progress 6,537,971.20 0.00 0.00 2,298,891.28 0.00 4,239,079.92 Finished goods 14,519,470.94 9,397,728.09 0.00 6,707,193.81 0.00 17,210,005.22 Low cost 19,254.66 188,318.32 0.00 0.00 0.00 207,572.98 consumables Total 24,672,782.59 11,281,712.31 0.00 10,695,338.84 0.00 25,259,156.06 8. Other Current Asset Unit:RMB Items 30 June 2015 31 December 2014 Corporate income tax to be deducted 7,289,470.37 808,216.55 VAT to be deducted 12,055,577.86 39,475,078.08 Other 0.00 25,296.84 Total 19,345,048.23 40,308,591.47 9. Long-term equity investments Unit:RMB Increases/(Decreases) 31 December Provision Investees Additional Share of Dividend Provision of 30 June 2015 2014 ending investment profit or loss declared impairment balance Associates Shenzhen Wanle 157,604,846.85 0.00 28,160,061.44 35,190,000.00 0.00 150,574,908.29 0.00 Medical Co., Ltd. Sinopharm HoldingZhuhai 0.00 1,002,980.00 114,000.00 0.00 0.00 1,116,980.00 0.00 Co., Ltd. Sub total 157,604,846.85 1,002,980.00 28,274,061.44 35,190,000.00 0.00 151,691,888.29 0.00 Total 157,604,846.85 1,002,980.00 28,274,061.44 35,190,000.00 0.00 151,691,888.29 0.00 80 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 10. Investment Properties Unit:RMB Items Buildings Land use rights Total I.Cost 1.31 December 2014 148,033,589.95 21,829,816.24 169,863,406.19 2. Increase in Current period 11,626,330.36 0.00 11,626,330.36 Transferred from fixed assets 11,626,330.36 0.00 11,626,330.36 3. Decrease in Current period 3,155,759.25 825,876.78 3,981,636.03 Other outflow 3,155,759.25 825,876.78 3,981,636.03 4.30 June 2015 156,504,161.06 21,003,939.46 177,508,100.52 II.Accumulated depreciation/ amortisation 1.31 December 2014 91,404,525.86 3,322,029.82 94,726,555.68 2. Increase in Current period 4,339,222.38 285,776.83 4,624,999.21 Provision or depreciation 3,611,236.42 285,776.83 3,897,013.25 Transferred from fixed assets 727,985.96 0.00 727,985.96 3. Decrease in Current period 2,685,594.38 280,587.79 2,966,182.17 Other outflow 2,685,594.38 280,587.79 2,966,182.17 4.30 June 2015 93,058,153.86 3,327,218.86 96,385,372.72 III.Provision for impairment loss 1.31 December 2014 1,300,000.00 0.00 1,300,000.00 2. Increase in Current period 0.00 0.00 0.00 3.Decrease in Current period 0.00 0.00 0.00 4.30 June 2015 1,300,000.00 0.00 1,300,000.00 IV.Net book value 1.30 June 2015 Net book value 62,146,007.20 17,676,720.60 79,822,727.80 2.31 December 2014 Net book value 55,329,064.09 18,507,786.42 73,836,850.51 In 2015 semi annual, the amount of depreciation and amortization were RMB3,897,013.25 (2014 semi annual:RMB2,752,681.18). In 2015 semi annual, the Group changed the use of buildings with a carrying amount of RMB10,898,344.40 (Cost: RMB11,626,330.36, accumulated depreciation:RMB727,985.96) The relative fixed assets and intangible assets were respectively transferred into investment properties at the date of change in use. 81 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 In 2015 semi annual, the Group changed the use of buildings with a carrying amount of RMB1,015,453.86 (Cost: RMB3,981,636.03, accumulated depreciation:RMB2,966,182.17) The relative investment properties were transferred into fixed assets and intangible assets respectively for self use at the date of change. 11. Fixed Assets (1)Fixed Assets Unit:RMB Machinery and Leasehold Items Buildings Motor vehicles Other Total equipment improvements I.Cost: 1.31 December 542,206,947.63 490,373,556.86 56,105,467.78 207,135,443.61 30,798,145.75 1,326,619,561.63 2014 2. Current period 4,855,073.81 6,435,426.09 957,198.38 3,110,411.11 8,051,071.93 23,409,181.32 other additions (1)purchase 1,699,314.56 3,483,394.68 957,198.38 2,675,411.11 1,362,064.66 10,177,383.39 (2)Transfer from Construction in 0.00 2,952,031.41 0.00 435,000.00 6,689,007.27 10,076,038.68 Progress (3)Increase in 0.00 0.00 0.00 0.00 0.00 0.00 Enterprise merger (4) Transfer to investment 3,155,759.25 0.00 0.00 0.00 0.00 3,155,759.25 properties 3. Current period 11,626,330.36 1,011,077.61 1,044,076.00 536,404.25 2,441,552.96 16,659,441.18 disposals (1)Disposal or 0.00 1,011,077.61 1,044,076.00 536,404.25 2,441,552.96 5,033,110.82 dumping (2)Transfer to investment 11,626,330.36 0.00 0.00 0.00 0.00 11,626,330.36 properties 4.30 June 2015 535,435,691.08 495,797,905.34 56,018,590.16 209,709,450.47 36,407,664.72 1,333,369,301.77 II. Accumulated depreciation 1.31 December 142,633,804.31 235,009,650.93 33,060,080.55 128,375,890.50 18,665,819.09 557,745,245.38 2014 2. Current period 11,420,762.50 19,918,999.90 2,671,525.52 10,490,631.85 2,232,082.95 46,734,002.72 82 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 other additions (1)Provision 8,735,168.12 19,918,999.90 2,671,525.52 10,490,631.85 2,232,082.95 44,048,408.34 (2) Transfer to investment 2,685,594.38 0.00 0.00 0.00 0.00 2,685,594.38 properties 3. Current period 727,985.96 956,352.11 848,899.47 512,032.25 2,382,281.75 5,427,551.54 disposals (1)Disposal or 0.00 956,352.11 848,899.47 512,032.25 2,382,281.75 4,699,565.58 dumping (2)Transfer to investment 727,985.96 0.00 0.00 0.00 0.00 727,985.96 properties 4.30 June 2015 153,326,580.85 253,972,298.72 34,882,706.60 138,354,490.10 18,515,620.29 599,051,696.56 III. Provision for diminution in value 1.31 December 2,449,969.17 20,855,885.66 0.00 2,873.43 7,758.64 23,316,486.90 2014 2. Current period 0.00 0.00 0.00 0.00 0.00 0.00 other additions 3. Current period 0.00 39,350.15 0.00 0.00 0.00 39,350.15 disposals Disposal or 0.00 39,350.15 0.00 0.00 0.00 39,350.15 dumping 4.30 June 2015 2,449,969.17 20,816,535.51 0.00 2,873.43 7,758.64 23,277,136.75 IV. Net book value 1.30 June 2015 379,659,141.06 221,009,071.11 21,135,883.56 71,352,086.94 17,884,285.79 711,040,468.46 Net book value 2.31 December 397,123,174.15 234,508,020.27 23,045,387.23 78,756,679.68 12,124,568.02 745,557,829.35 2014 Net book value (2)Temporary idle fixed assets Unit:RMB accumulated Provision of Net book Items Cost Notes depreciation impairment value Machinery and equipments subjected to a provision by management in the past machinery and 55,544,750.19 34,044,756.62 20,644,827.73 855,165.84 year because the machinery and equipments equipments were left temporarily idle and expectedly no longer in use due to 83 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 the strategic adjustments of productions. In 2015 semi annual, details of the depreciation are charged as below: For the six months ended 30 June 2015 For the six months ended 30 June 2014 Cost of goods sold 24,199,873.36 19,978,061.91 Selling expenses 2,710,530.24 1,016,530.46 General and administrative expenses 13,633,937.70 20,256,417.51 Research and development expenses 3,504,067.04 4,035,789.44 Total 44,048,408.34 45,286,799.32 12. Construction in progress (1)Construction in progress Unit:RMB 30 June 2015 31 December 2014 Items Carrying Provision of Provision of Net book value Carrying amount Net book value amount impairment impairment Pingshan Pharmaceutical Research & 369,661,249.55 0.00 369,661,249.55 298,665,439.18 0.00 298,665,439.18 Development Manufacturing Base Zhijun Production Workshop Technological 9,720,528.90 0.00 9,720,528.90 14,214,138.81 0.00 14,214,138.81 Transformation Project Sewage Transformation 6,062,283.79 0.00 6,062,283.79 6,062,283.79 0.00 6,062,283.79 Project etc Peinan Project 3,398,466.80 1,500,000.00 1,898,466.80 3,398,466.80 1,500,000.00 1,898,466.80 Other projects 13,697,748.83 0.00 13,697,748.83 9,378,367.98 0.00 9,378,367.98 Total 402,540,277.87 1,500,000.00 401,040,277.87 331,718,696.56 1,500,000.00 330,218,696.56 84 CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF CHINA NATIONAL ACCORD MEDICINES CO., LTD. For the six months ended 30 June 2015 (2)Significant changes of construction in progress Unit:RMB Cost up Borrowing Constru Weighted Transfer out Current to date Accumulated cost 31 December Current period ction in average Financed Name of Project Budget of Project during period 30 June 2015 out of capitalized capitalized 2014 additions progress interest by current year disposals budget borrowing cost in 2015 semi (%) rate (%) (%) annual Pingshan Pharmaceutical Working Researc& Development 881,370,300.00 298,665,439.18 70,995,810.37 0.00 0.00 369,661,249.55 42.00% 65% 15,738,784.07 7,274,927.93 5.48% capital and Manufacturing Base borrowings Zhijun Production Working Workshop Technological 105,340,000.00 14,214,138.81 4,649,009.96 9,142,619.87 0.00 9,720,528.90 34.00% 39% 0.00 0.00 0.00% capital Transformation Project Sewage Transformation Working 6,300,000.00 6,062,283.79 0.00 0.00 0.00 6,062,283.79 87.00% 99% 0.00 0.00 0.00% Project etc. capital Working Peinan Project 40,000,000.00 3,398,466.80 0.00 0.00 0.00 3,398,466.80 28.00% 70% 0.00 0.00 0.00% capital Working Other projects 0.00 9,378,367.98 5,777,231.05 933,418.81 524,431.39 13,697,748.83 0.00 0.00 0.00 0.00 0.00% capital Total 1,033,010,300.00 331,718,696.56 81,422,051.38 10,076,038.68 524,431.39 402,540,277.87 -- -- 15,738,784.07 7,274,927.93 5.48% -- In 2015 semi annual, the amounts that construction in progress transferred into fixed asset were RMB10,076,038.68 (2014 semi annual: RMB16,173,324.53), and long term prepaid expense were RMB524,431.39 (2014 semi annual: RMB5,331,507.83). 85 国药集团一致药业股份有限公司 2015 年半年度报告 13. Intangible asset (1)Intangible asset Unit:RMB Proprietary Computer Items Land use rights Trademarks Sales network Total technology software I. Cost 255,590,952.5 1.31 December 2014 143,702,078.73 53,901,204.72 24,133,676.24 196,850.00 33,657,142.86 5 2. Current period 825,876.78 0.00 101,566.65 927,443.43 additions 0.00 0.00 (1)purchase 0.00 0.00 101,566.65 0.00 0.00 101,566.65 (2)Transferred from 825,876.78 825,876.78 investment properties 0.00 0.00 0.00 0.00 3. Current period decreases 0.00 0.00 0.00 0.00 0.00 0.00 256,518,395.9 4. 30 June 2015 144,527,955.51 53,901,204.72 24,235,242.89 196,850.00 33,657,142.86 8 II. Accumulated amortization 107,942,246.4 1.31 December 2014 36,737,160.08 49,952,578.71 16,678,752.94 196,850.00 4,376,904.76 9 2.Current period additions 1,723,345.09 160,190.28 1,377,048.75 0.00 841,428.58 4,102,012.70 (1)Provision 1,442,757.30 160,190.28 1,377,048.75 0.00 841,428.58 3,821,424.91 (2)Transferred from 280,587.79 280,587.79 investment properties 0.00 0.00 0.00 0.00 3.Current period decreases 0.00 0.00 0.00 0.00 0.00 0.00 112,044,259.1 4.30 June 2015 38,460,505.17 50,112,768.99 18,055,801.69 196,850.00 5,218,333.34 9 III. Provision for impairment loss 1.31 December 2014 0.00 3,000,000.00 264,952.19 0.00 0.00 3,264,952.19 2.Current period additions 0.00 0.00 0.00 0.00 0.00 0.00 3.Current period decreases 0.00 0.00 0.00 0.00 0.00 0.00 4.30 June 2015 0.00 3,000,000.00 264,952.19 0.00 0.00 3,264,952.19 86 国药集团一致药业股份有限公司 2015 年半年度报告 IV. Net book value 1.30 June 2015 Net book 141,209,184.6 106,067,450.34 788,435.73 5,914,489.01 0.00 28,438,809.52 value 0 2.31 December 2014 Net 144,383,753.8 106,964,918.65 948,626.01 7,189,971.11 0.00 29,280,238.10 book value 7 There is no intangible asset recognized through internal research and development for the six months ended 30 June 2015. 14. Expenditures on research and development Unit:RMB Current period additions Current period decreases 31 December Expenditures on Confirmed Projects Recognized in 30 June 2015 2014 internal Other as Intangible profit and loss development asset Projects of cardiovascular and cerebrovascular diseases 0.00 9,203,191.09 0.00 0.00 9,203,191.09 0.00 treatment subtotal Projects of respiratory system 18,117.29 3,252,049.44 0.00 0.00 3,252,049.44 18,117.29 diseases treatment subtotal Projects of antibiotics preparation and powder injection projects 0.00 10,147,492.59 0.00 0.00 10,147,492.59 0.00 subtotal Projects of digestive system 0.00 784,285.27 0.00 0.00 784,285.27 0.00 diseases treatment etc. Projects of antibiotics crude 5,357,691.17 1,403,029.86 0.00 0.00 1,403,029.86 5,357,691.17 drugs etc. Projects of Chinese patent 0.00 1,411,464.74 0.00 0.00 1,411,464.74 0.00 medicine Other Projects 243,507.01 7,439,064.41 0.00 0.00 7,439,064.41 243,507.01 Total 5,619,315.47 33,640,577.40 0.00 0.00 33,640,577.40 5,619,315.47 Expenditures on research and development incurred in 2015 semi annual amount to RMB33,640,577.40 (2014 semi annual: RMB32,143,996.40),the total amount is recognised in profit or loss for the current period, RMB 33,640,577.40 (2014 semi annual: RMB32,143,996.40) was recognized in profit and loss and as development cost. 87 国药集团一致药业股份有限公司 2015 年半年度报告 15. Goodwill (1)Goodwill cost Unit:RMB Current period additions Current period decreases 31 December 2014 30 June 2015 Business combination Disposal Sinopharm Group Zhijun(Suzhou) 33,869,393.32 0.00 0.00 33,869,393.32 Pharmaceutical Co.,Ltd. Sinopharm Jiangmen 27,392,317.73 0.00 0.00 27,392,317.73 Sinopharm Yanfeng 16,868,644.87 0.00 0.00 16,868,644.87 Sinopharm Zhaoqing 2,594,341.53 0.00 0.00 2,594,341.53 Sinopharm Shaoguan 1,686,496.80 0.00 0.00 1,686,496.80 Sinopharm Meizhou 1,610,819.66 0.00 0.00 1,610,819.66 Sinopharm Huizhou 923,184.67 0.00 0.00 923,184.67 Sinopharm Zhanjiang 282,135.55 0.00 0.00 282,135.55 Sinopharm Dongguan 1,499.02 0.00 0.00 1,499.02 Total 85,228,833.15 0.00 0.00 85,228,833.15 (2)Provision of impairment loss Unit:RMB Current period additions Current period decreases 31 December 2014 30 June 2015 Provision Disposal Sinopharm Group Zhijun(Suzhou) 5,850,000.00 0.00 0.00 5,850,000.00 Pharmaceutical Co.,Ltd. The method of goodwill impairment testing process, parameter and recognition of impairment loss: The recoverable amount of asset groups and groups of asset groups is calculated by using the estimated cash flows according to the five-year budget approved by management. Management determines budgeted gross margin based on historical experience and forecast on market development. The discount rates determined by management are the pre-tax interest rates which reflect the risks specific to the related asset groups and groups of asset groups. The above assumptions are used to assess the recoverable amount of each asset group and group of asset groups within the corresponding operating segment. 88 国药集团一致药业股份有限公司 2015 年半年度报告 16. Long term prepaid expense Unit:RMB Current period Current period Other current period Projects 31 December 2014 30 June 2015 additions amortization decreases Leasehold improvements 37,049,985.15 631,192.60 3,924,374.78 0.00 33,756,802.97 Other 2,104,246.88 671,015.69 338,265.39 0.00 2,436,997.18 Total 39,154,232.03 1,302,208.29 4,262,640.17 0.00 36,193,800.15 17. Deferred income tax assets and deferred income tax liabilities (1)Deferred income tax assets Unit:RMB 30 June 2015 31 December 2014 Projects Deductible temporary Deferred income tax Deductible temporary Deferred income tax differences assets differences assets Provision for 83,987,447.48 19,550,683.04 85,594,942.59 20,930,880.12 impairment of assets Deductible losses 112,951,621.20 26,733,778.60 96,865,385.40 23,331,434.22 Accrued expenses 76,744,301.48 12,937,865.54 56,704,614.52 9,771,547.36 Accrued payroll 39,765,973.43 8,525,803.34 59,051,247.05 13,595,697.03 Deferred revenue 73,336,376.37 10,873,434.87 82,178,700.44 13,634,799.37 Other 12,992,430.69 3,524,587.49 15,528,485.56 3,882,121.40 Total 399,778,150.65 82,146,152.88 395,923,375.56 85,146,479.50 (2)Deferred income tax liabilities Unit:RMB 30 June 2015 31 December 2014 Projects Deductible temporary Deferred income tax Deductible temporary Deferred income tax differences liabilities differences liabilities Business combination involving entities 37,533,864.40 9,383,466.10 38,630,083.24 9,657,520.81 not under common control Changes in fair value 41,700,386.71 10,265,203.43 43,284,539.27 10,821,134.82 Other 15,223,821.56 3,805,955.39 15,273,683.76 3,818,420.94 89 国药集团一致药业股份有限公司 2015 年半年度报告 Total 94,458,072.67 23,454,624.92 97,188,306.27 24,297,076.57 (3)The net value of deferred income tax assets/liabilities after the offset Unit:RMB The net value of The net value of Offseting value of Offseting value of deferred income tax deferred income tax deferred income tax deferred income tax Projects assets/liabilities after assets/liabilities after assets/liabilities assets/liabilities the offset the offset 30 June 2015 31 December 2014 30 June 2015 31 December 2014 Deferred income tax 0.00 82,146,152.88 0.00 85,146,479.50 assets deferred income tax 0.00 23,454,624.92 0.00 24,297,076.57 liabilities (4)Unrecognised deferred tax assets Unit:RMB Projects 30 June 2015 31 December 2014 deductible losses 1,627,172.87 1,627,172.87 Total 1,627,172.87 1,627,172.87 (5)Unrecognised deferred tax assets in respect of deductible losses due next year Unit:RMB Year 30 June 2015 31 December 2014 Notes For those loss-making subsidiaries, as the large uncertainty of being able to gain enough taxable income to utilise the deductible losses in 2015 1,627,172.87 1,627,172.87 the future, the Group does not recognise deferred tax assets arising from accumulated losses amounting to RMB 1,627,172.87tax deductible under the tax law. Total 1,627,172.87 1,627,172.87 -- 90 国药集团一致药业股份有限公司 2015 年半年度报告 18. Other non-current assets Unit:RMB Projects 30 June 2015 31 December 2014 Medical reserve fund 40,991,298.70 42,039,659.05 Prepayment for project and equipment 49,038,690.86 63,620,879.10 Non-monetary compensation of 70,250,000.00 70,250,000.00 resettlement Total 160,279,989.56 175,910,538.15 19. Short term borrowings Unit:RMB Projects 30 June 2015 31 December 2014 Guaranteed borrowings 483,029,496.81 459,757,465.32 Unsecured borrowings 1,363,329,300.55 966,752,021.57 Discounted notes 134,570,639.59 91,445,041.99 Total 1,980,929,436.95 1,517,954,528.88 On 30 June 2015, unsecured borrowings of RMB 1,318,329,300.55(31 December 2014: RMB966,752,021.57) are guaranteed by the Company and its subsidiaries, and unsecured borrowing of RMB5,000,000.00(31 December 2014: Nil) without a secured party. Meanwhile, unsecured borrowing of RMB40,000,000.00 is borrowed from the Sinopharm Group Financial Co., Ltd. (“Group Financial Co.”). On 30 June 2015, bank borrowings of RMB483,029,496.81 (31 December 2014: RMB459,757,465.32) are guaranteed by Sinopharm Group. On 30 June 2015, the weighted average interest rate of short-term borrowings is 5.16% per annum (31 December 2014: 5.50%). In 30 June 2015, there has been no unpaid due short-term borrowings (December 31, 2014: Nil). 20. Notes paybale Unit:RMB category 30 June 2015 31 December 2014 Trade acceptance notes 84,312,289.57 380,502,886.42 91 国药集团一致药业股份有限公司 2015 年半年度报告 Bank acceptance notes 1,289,171,278.45 1,087,663,754.22 Total 1,373,483,568.02 1,468,166,640.64 21. Accounts payable (1)Accounts payable Unit:RMB Projects 30 June 2015 31 December 2014 Trafe paybale 4,341,666,286.09 3,988,878,234.03 Total 4,341,666,286.09 3,988,878,234.03 (2)Account payable aged over 1 year Unit:RMB Reasons that accounts payable have not Projects 30 June 2015 been settled Trade payable 117,267,739.44 Transactions were not closed yet. Total 117,267,739.44 -- 22.Advances from customers (1)Advances from customers Unit:RMB Projects 30 June 2015 31 December 2014 Sales received in advance 44,995,822.24 40,339,905.63 Total 44,995,822.24 40,339,905.63 (2)Advances from customers aged over 1 year Unit:RMB Reasons that accounts payable have not Projects 30 June 2015 been settled Sales received in advance 838,999.27 Other Total 838,999.27 -- 92 国药集团一致药业股份有限公司 2015 年半年度报告 23. Employee benefits payable (1)Employee benefits payable Unit:RMB Projects 31 December 2014 Current period additions Current period decreases 30 June 2015 1.Short term employee 168,068,439.41 257,019,483.59 319,167,959.18 105,919,963.82 benefits payable 2. Defined contribution 2,166,584.27 23,713,303.03 23,383,974.13 2,495,913.17 plans payable 3. Termination benefits 1,723,119.20 823,094.45 1,629,857.40 916,356.25 payable Total 171,958,142.88 281,555,881.07 344,181,790.71 109,332,233.24 (2)Short term employee benefits payable Unit:RMB Projects 31 December 2014 Current period additions Current period decreases 30 June 2015 1.Wages and salaries, bonuses, allowances 150,384,510.97 217,647,902.41 280,622,410.82 87,410,002.56 and subsidies 2.Staff welfare 973,559.02 10,051,487.39 10,879,915.40 145,131.01 3.Social security 355,247.78 10,538,816.65 10,560,455.72 333,608.71 contributions Including: 300,176.39 8,698,124.94 8,743,930.26 254,371.07 Medical insurance Work injury insurance 28,672.53 772,825.21 746,019.73 55,478.01 Maternity insurance 26,398.86 1,067,866.50 1,070,505.73 23,759.63 4.Housing funds 542,776.75 10,851,697.93 10,673,190.21 721,284.47 5.Labor union funds and employee 14,939,701.87 7,399,732.45 5,704,360.88 16,635,073.44 education funds 6.Others 872,643.02 529,846.76 727,626.15 674,863.63 Total 168,068,439.41 257,019,483.59 319,167,959.18 105,919,963.82 (3)Defined contribution plans payable Unit:RMB Projects 31 December 2014 Current period additions Current period decreases 30 June 2015 93 国药集团一致药业股份有限公司 2015 年半年度报告 1.Basic pensions 421,293.14 20,302,829.74 20,105,119.79 619,003.09 2.Unemployment 44,419.92 1,224,114.20 1,268,534.12 0.00 insurance 3.Supplementary 1,700,871.21 2,186,359.09 2,010,320.22 1,876,910.08 pensions Total 2,166,584.27 23,713,303.03 23,383,974.13 2,495,913.17 (4)Termination benefits payable 30 June 2015 31 December 2014 Retirement benefits payable – within 1 year 437,621.37 1,115,000.00 Other dismission benefits(Note i) 478,734.88 608,119.20 Total 916,356.25 1,723,119.20 (i) For year 2015 semi annual, the amount that the group provided other termination benefits for severing labor relations was RMB629,131,63, no amount that the group wrote off other termination benefits for needless payments of severing labor relation. (For year 2014, the amount that the group provided other termination benefits for severing labor relations was RMB223,425.95 , the amount that the group wrote off other termination benefits for needless payments of severing labor relation was RMB2,335,000.00). 24.Tax payable Unit:RMB Projects 30 June 2015 31 December 2014 Value-added-tax payable 33,847,774.12 10,022,374.90 Business tax payable 938,366.47 943,302.08 Enterprise income tax payable 47,052,910.34 52,868,801.89 Individual income tax payable 3,417,037.68 1,514,928.86 City maintenance and construction tax 2,432,194.11 787,872.30 payable Anti-flood fund payable 5,885,914.98 7,950,610.72 Stamp duty tax payable 2,067,427.82 1,198,400.07 Real estate tax payable 947,637.41 923,420.99 Educational surcharge payable 1,747,168.03 571,654.75 Land use tax payable 471,111.34 426,390.62 Other tax payables 280,789.46 237,912.28 Total 99,088,331.76 77,445,669.46 94 国药集团一致药业股份有限公司 2015 年半年度报告 25. Interest payable Unit:RMB Projects 30 June 2015 31 December 2014 Long term borrowing interests payable 154,157.50 56,519.97 Short term borrowing interests payable 9,563,841.21 6,610,192.22 Total 9,717,998.71 6,666,712.19 26. Other payable (1)Other payable by nature are analysed below: Unit:RMB Projects 30 June 2015 31 December 2014 Accrued selling and distribution 209,996,940.53 187,784,029.00 expenses Payables for construction in progress 51,858,585.90 70,267,980.15 and equipment Amount collected on behalf of third 20,132,302.46 44,057,463.73 party Deposit 13,968,153.31 19,495,588.90 Equity transaction payable 9,330,197.17 9,330,197.17 Other 66,939,794.13 81,411,942.56 Total 372,225,973.50 412,347,201.51 (2)Significant other payable aged over 1 year Unit:RMB Reasons that accounts payable have Projects 30 June 2015 not been settled Return of deposits that the project 89,229,338.17 Transactions were not closed yet. quality margin and other deposits Total 89,229,338.17 -- 27. Current portion of long-term borrowings Unit:RMB Projects 30 June 2015 31 December 2014 Promotion rewards program 7,649,200.00 4,000,000.00 95 国药集团一致药业股份有限公司 2015 年半年度报告 - due within one year Total 7,649,200.00 4,000,000.00 28. Long term borrowings Unit:RMB Projects 30 June 2015 31 December 2014 Unsecured borrowings 23,028,776.85 8,095,448.00 Entrusted borrowings 31,600,000.00 31,600,000.00 Total 54,628,776.85 39,695,448.00 As at 30 June 2015, the entrusted borrowing of RMB31,600,000.00 was lent by Sinopharm Group through Group Financial Co.(31 December 2014: RMB31,600,000.00). As at 30 June 2015, the weighted average interest rate of long-term borrowings is 5.42% per annum. (31 December 2014: 5.62%). 29. Long term employee benefits Unit:RMB Projects 30 June 2015 31 December 2014 Early retirement benefits payable 2,582,100.00 2,896,000.00 Total 2,582,100.00 2,896,000.00 30. Payables for specific projects Unit:RMB Current period Current period Projects 31 December 2014 30 June 2015 Reasons of formation additions decreases Sepecial funds granted by 852,000.00 0.00 0.00 852,000.00 Government grants government Government grants for 435,000.00 0.00 0.00 435,000.00 Government grants ERP system construction Total 1,287,000.00 0.00 0.00 1,287,000.00 -- 31. Deferred income Unit:RMB Current period Current period Reasons of Projects 31 December 2014 30 June 2015 additions decreases formation Government grants 153,119,166.83 2,110,000.00 5,841,041.01 149,388,125.82 Government 96 国药集团一致药业股份有限公司 2015 年半年度报告 grants Promotion Rewards Fair value of 23,247,034.32 4,721,146.71 9,937,821.00 18,030,360.03 Program rewards Total 176,366,201.15 6,831,146.71 15,778,862.01 167,418,485.85 -- Projects involve Government grant: Unit:RMB Government grants 31 December Current year Amount recognized as Other Related to 30 June 2015 program 2014 addtions non-operating income change income/assets Resettlement Related to 86,349,075.41 0.00 1,349,204.28 0.00 84,999,871.13 Compansation(i) assets Cephalosporin Solid Related to Preparations 13,845,923.14 0.00 986,653.71 0.00 12,859,269.43 assets Development Project Guangxi Logistics Related to 8,084,052.18 0.00 218,203.20 0.00 7,865,848.98 Project assets Stomach medicine domestic clinical Related to 5,000,000.00 0.00 0.00 0.00 5,000,000.00 research and assets development project Pingshan Related to pharmaceutical R & D 5,000,000.00 0.00 0.00 0.00 5,000,000.00 assets base engineering Cephalosporin Powder Injection Passing Related to 4,505,783.82 0.00 328,008.24 0.00 4,177,775.58 EU-GMP assets Authentication New Cephalosporin Related to 3,962,385.17 0.00 458,022.30 0.00 3,504,362.87 R&D Project assets Related to Medical R&D Center II 3,877,620.85 0.00 410,659.98 0.00 3,466,960.87 assets Cardiovascular system targeted drug Related to 3,000,000.00 0.00 0.00 0.00 3,000,000.00 development assets programs A comprehensive experimental modern Related to 2,700,000.00 0.00 150,000.00 0.00 2,550,000.00 service industry assets subsidies 97 国药集团一致药业股份有限公司 2015 年半年度报告 Enteric coated pellets Related to industry research and 2,508,837.40 0.00 3,500.00 0.00 2,505,337.40 assets development project Cefpirome Sulfate R&D Related to 2,386,456.55 0.00 129,898.44 0.00 2,256,558.11 Project assets Shaaban raw materials Related to and tablets R&D 0.00 1,500,000.00 0.00 0.00 1,500,000.00 assets Projects New Cephalosporin Related to 1,219,393.90 0.00 305,246.76 0.00 914,147.14 R&D Project assets Related to Shared Logistics Center 1,225,468.70 0.00 469,146.60 0.00 756,322.10 assets Related to Other projects 9,454,169.71 610,000.00 1,032,497.50 0.00 9,031,672.21 assets Total 153,119,166.83 2,110,000.00 5,841,041.01 0.00 149,388,125.82 -- (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 relocate. 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 VII(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. 32. Other non-current liabilities Unit:RMB Projects 30 June 2015 31 December 2014 Medical reserve funds 45,427,343.31 45,427,343.31 Total 45,427,343.31 45,427,343.31 33. Share Capital Unit: RMB Movements (+.—) 31 December Issue new reserved funds 30 June 2015 2014 Stock dividend Other Subtotal shares transfer to shares Listed shares 362,631,943.00 0.00 0.00 0.00 0.00 0.00 362,631,943.00 98 国药集团一致药业股份有限公司 2015 年半年度报告 34. Capital reserve Unit:RMB Current period Current period Projects 31 December 2014 30 June 2015 additions decreases Capital surplus 1,855,144,194.77 0.00 0.00 1,855,144,194.77 Other Capital reserve 8,750,338.57 0.00 0.00 8,750,338.57 Total 1,863,894,533.34 0.00 0.00 1,863,894,533.34 35. Surplus reserve Unit:RMB Current period Current period Projects 31 December 2014 30 June 2015 additions decreases Statutory surplus 0.00 0.00 181,315,971.50 181,315,971.50 reserve Total 181,315,971.50 0.00 0.00 181,315,971.50 36. Undistributed profits Unit:RMB For the six months ended 30 June For the six months ended 30 June Projects 2015 2014 Undistributed profits at the beginning of year 2,356,765,374.25 1,806,002,285.06 Adjustment of retained earnings(add +,minus -) 0.00 0.00 Adjusted undistributed profits at the beginning 2,356,765,374.25 1,806,002,285.06 of year Add:net profit attributable to the 387,319,252.33 349,213,988.51 shareholders of the company Less: Dividend 72,526,388.60 65,273,749.74 Ending balance of undistributed profits 2,671,558,237.98 2,089,942,523.83 37. Sales and cost of sales Unit:RMB For the six months ended 30 June 2015 For the six months ended 30 June 2014 Projects Income Expenses Income Expenses Revenue of main 12,772,868,609.63 11,798,432,332.88 11,574,073,952.48 10,617,207,480.60 operations 99 国药集团一致药业股份有限公司 2015 年半年度报告 Other operating 40,934,557.14 3,228,707.54 38,568,481.80 9,560,176.64 income Total 12,813,803,166.77 11,801,661,040.42 11,612,642,434.28 10,626,767,657.24 38. Tax and surcharges Unit:RMB Projects For the six months ended 30 June 2015 For the six months ended 30 June 2014 Business tax 2,983,841.85 3,581,457.89 City maintenance and construction tax 12,685,982.46 13,024,580.97 Educational surcharge 9,308,250.19 9,436,144.77 Other 1,465,615.25 1,430,529.90 Total 26,443,689.75 27,472,713.53 39. Selling and distribution expenses Unit:RMB Projects For the six months ended 30 June 2015 For the six months ended 30 June 2014 Employees payroll and welfare benefits 112,490,739.45 107,196,450.96 Transportation charges 27,939,051.39 29,308,866.99 Promotion and marketing expenses 46,124,636.39 52,602,362.06 Conference expenses 4,354,342.75 4,356,232.26 Travel allowances 7,496,122.39 10,809,167.49 Entertainment expenses 10,897,298.61 10,185,826.51 Advertising expenses 4,705,456.10 8,223,830.25 Storage expenses 4,518,164.34 7,333,195.42 Office allowances 1,582,850.88 2,282,804.11 Rental expenses 13,666,951.13 13,392,366.19 Depreciation expenses 2,937,090.09 2,684,307.23 Other 25,361,402.49 22,773,801.07 Total 262,074,106.01 271,149,210.54 40. General and administrative expense Unit:RMB Projects For the six months ended 30 June 2015 For the six months ended 30 June 2014 Employees payroll and welfare benefits 104,170,785.32 105,475,000.33 100 国药集团一致药业股份有限公司 2015 年半年度报告 Research and development expenses 33,640,577.40 32,143,996.40 Depreciation expenses 16,379,344.44 19,869,820.88 Taxations 11,862,094.67 13,423,589.20 Entertainment expenses 4,101,888.76 4,307,392.51 Amortisation of intangible assets 2,819,911.80 3,836,803.22 Office allowances 3,053,398.52 2,991,765.13 Rental expenses 2,508,540.85 3,342,744.39 Vehicle management expenses 3,060,128.18 3,182,775.19 Conference expenses 117,497.36 210,047.70 Maintenance and other charges 1,561,358.97 923,970.27 Travel allowances 1,572,653.34 1,849,511.74 Utilities 2,496,765.25 3,972,594.42 Other 16,244,428.49 20,283,772.29 Total 203,589,373.35 215,813,783.67 41. Financial expense Unit:RMB Projects For the six months ended 30 June 2015 For the six months ended 30 June 2014 Interest expenses 66,320,510.56 86,209,674.28 Less: interest income -2,669,578.08 -4,223,008.09 discount in cash -8,821,521.20 -17,547,093.60 Gain and loss from exchanges -536,717.77 107,893.77 Other 4,346,978.89 6,384,258.74 Total 58,639,672.40 70,931,725.10 42. Asset impairment loss Unit:RMB Projects For the six months ended 30 June 2015 For the six months ended 30 June 2014 Bad debt -649,892.85 -1,655,386.78 Declines in values of inventories 7,869,732.74 8,968,294.15 Total 7,219,839.89 7,312,907.37 43. Gain from investment Unit:RMB 101 国药集团一致药业股份有限公司 2015 年半年度报告 Projects For the six months ended 30 June 2015 For the six months ended 30 June 2014 Share of profit of investees under 28,274,061.44 23,595,722.50 equity method Total 28,274,061.44 23,595,722.50 The investment income from long-term investment under equity method represented the profit from Wanle Medical, Sinopharm Zhuhai. The increase was due to improved business performance of the associates. There is no significant restriction on the remittance of investment income to the Group. 44. Non-operating income Unit:RMB For the six months ended 30 For the six months ended 30 Projects Amount in Non-routine items June 2015 June 2014 Gain on disposal of 10,297.36 500,989.54 10,297.36 non-current assets Including: Gain on disposal 10,297.36 500,989.54 10,297.36 of fixed assets Government grants 10,567,256.16 14,575,338.73 10,567,256.16 Write off payments 146,039.32 811,269.33 146,039.32 Reversal of payments 0.00 11,862,275.78 0.00 Other 2,258,696.62 586,191.95 2,258,696.62 Total 12,982,289.46 28,336,065.33 12,982,289.46 Classified as this period profit Government grants: Unit:RMB For the six months ended 30 For the six months ended 30 Government grants related to Government grants Projects June 2015 June 2014 income Government-funded interest 1,635,195.84 1,049,200.00 Related to income discount Industry grant 0.00 3,277,100.00 Related to income Tax return 0.00 6,060,187.00 Related to income Other 3,091,019.31 754,793.53 Related to income Resettlement compensation- 1,349,204.28 1,349,204.28 Related to assets amortization of assets Others 4,491,836.73 2,084,853.92 Related to assets Total 10,567,256.16 14,575,338.73 -- 102 国药集团一致药业股份有限公司 2015 年半年度报告 45. Non-operating expenses Unit:RMB For the six months ended 30 For the six months ended 30 Projects Amount in Non-routine items June 2015 June 2014 Loss on disposal of 225,404.59 64,238.16 225,404.59 non-current assets Including: Losses on 225,404.59 64,238.16 225,404.59 disposal of fixed assets Donations 0.00 410,000.00 0.00 Other 215,275.79 733,259.19 215,275.79 Total 440,680.38 1,207,497.35 440,680.38 46. Income taxes expenses (1)Income taxes expenses Unit:RMB Projects For the six months ended 30 June 2015 For the six months ended 30 June 2014 Current income tax 93,190,979.53 91,607,455.92 Deferred income tax 2,157,874.97 -5,276,159.17 Total 95,348,854.50 86,331,296.75 (2)The reconciliation from income tax calculated based on applicable tax rates and total profit presented in the consolidated financial statements to the income tax expenses is listed below: Unit:RMB Projects For the six months ended 30 June 2015 Total profit 494,991,115.47 Income tax expenses calculated at applicable tax rates 123,747,778.87 Differences in preferential tax rates of certain companies -25,937,299.98 Income not subject to tax -6,965,840.39 Deferred tax changes with tax rate adjustments 1,009,834.20 Expenses not deductible for tax purposes 3,494,381.80 Income tax 95,348,854.50 47. Cash flow statements (1)Cash received relating to other operating activities 103 国药集团一致药业股份有限公司 2015 年半年度报告 Unit:RMB Projects For the six months ended 30 June 2015 For the six months ended 30 June 2014 Withdraw deposits for bank acceptance 9,034,563.52 7,107,945.50 notes and depostis for letter of credit Interest income 2,669,578.08 4,223,008.09 Government grants except tax return 4,926,078.35 2,700,000.00 Rental income 10,585,370.80 8,320,925.55 Other 12,846,219.50 31,096,558.42 Total 40,061,810.25 53,448,437.56 (2)Cash paid relating to other operating activities Unit:RMB Projects For the six months ended 30 June 2015 For the six months ended 30 June 2014 Market development expenses 46,124,636.39 52,602,362.06 Research and development expesnses 10,782,478.49 11,553,667.63 Rental expenses 16,175,491.98 16,066,215.94 Entertainment expenses 14,999,187.37 14,493,219.02 Travel expenses 9,068,775.73 12,658,679.23 Advertising expenses 4,705,456.10 8,223,830.25 Office expenses 4,636,249.40 6,610,987.93 Other 58,315,031.63 61,990,312.41 Total 164,807,307.09 184,199,274.47 (3)Cash received relating to other investing activities Unit:RMB Projects For the six months ended 30 June 2015 For the six months ended 30 June 2014 Cash received from acquiring 0.00 3,598,827.09 subsidiaries Total 0.00 3,598,827.09 (4)Cash received relating to other financing activities Unit:RMB Projects For the six months ended 30 June 2015 For the six months ended 30 June 2014 Entrusted borrowings borrowed from 0.00 31,600,000.00 CNPGC 104 国药集团一致药业股份有限公司 2015 年半年度报告 Other 0.00 20,776,797.32 Total 0.00 52,376,797.32 (5)Cash payments relating to other financing activities Unit:RMB Projects For the six months ended 30 June 2015 For the six months ended 30 June 2014 Other 24,066,161.02 3,235,784.18 Total 24,066,161.02 3,235,784.18 48. Supplementary information of cash flow statements (1)Supplementary information of cash flow statements Unit:RMB Supplementary information For the six months ended 30 June 2015 For the six months ended 30 June 2014 1.Reconciliation of net profit to cash -- -- flows from operating activities: Net profit 399,642,260.97 357,587,430.56 Add: Provision for assets impairment 7,219,839.89 7,312,907.37 Depreciation of fixed assets and 47,945,421.59 48,039,480.50 investment properties Amortisation of intangible assets 3,821,424.91 3,836,803.21 Amortisation of long-term prepaid 4,262,640.17 4,039,734.82 expenses Losses on disposal of fixed assets, intangible assets, and other -4,114,941.12 -436,751.38 non-current assets Financial expenses 66,674,714.71 89,553,352.23 Investment losses -28,274,061.44 -23,595,722.50 Decrease of deferred tax assets 3,000,326.62 -9,520,865.56 Increase of deferred tax liabilities -842,451.65 331,955.70 Decrease of inventory 88,388,515.28 -368,787,212.56 Decrease in operating receivables -753,547,929.22 -691,530,669.43 Increase in operating payables 605,029,254.51 91,345,803.58 Other 9,034,563.51 7,107,945.50 Net cash flow from operating activities 448,239,578.73 -484,715,807.96 105 国药集团一致药业股份有限公司 2015 年半年度报告 2.Significant non-cash investing -- -- activities: 3.Movement of cash -- -- Cash on 30 June 2015 1,157,555,627.85 1,409,385,573.73 Less:Cash on 31 December 2014 854,212,006.84 1,097,948,354.45 Net increase in cash 303,343,621.01 311,437,219.28 (2)Composition of cash and cash equivalents Unit:RMB Programs 30 June 2015 31 ecember 2014 1.Cash 1,157,555,627.85 854,212,006.84 Including: Cash on hand 77,018.59 41,627.16 Call deposits with banks 1,157,478,609.26 854,170,379,68 2.Cash equivalents Including:Bonds investment matured within three months 3.Cash and cash equivalents 1,157,555,627.85 854,212,006.84 Including: restricted cash and cash equivalents of 0.00 0.00 the parent company and its subsidiaries 49. Assets with restricted ownership or use right Unit:RMB Projects Net book value on 30 June 2015 Reson of restriction Bank acceptance notes and depostis for Cash at bank and on hand 4,315,545.18 letter of credit The pledged notes receivables are used Notes receivable 4,929,266.00 as guarantee for for issurance of bank acceptance notes. Total 9,244,811.18 -- 50. Foreign currencies projects Unit:RMB Financial assets Financial assets denominated Projects denominated in foreign Exchange rate in RMB currency 106 国药集团一致药业股份有限公司 2015 年半年度报告 Cash at bank and on hand -- -- Including:US Dollars 0.58 6.1136 3.55 Accounts receivables -- -- Including:US Dollars 1,803,480.17 6.1136 11,026,180.45 HK Dollars 289,854.06 0.7900 228,984.71 Accounts payable -- -- Including:US Dollars 786,632.20 6.1136 4,806,322.74 VIII. Alteration of consolidated financial statement scope Guangzhou Medical was established By Sinopharm Guangzhou, which is a subsidiary of the Company, and Guangzhou Huaqiao medical investment co., Ltd by cash RMB1,530,000.00 and RMB 1,470,000.00, respectively. Sinopharm Guangzhou accounted for 51% of its shares. IX. Shares and rights in other companies 1. Subsidiaries Place of Place of Nature of Equity interest held (%) Company name Mode of acquisition operation registration business Direct Indirect Sinopharm Holding Guilin Co., Guilin Guilin Commercial 100.00% Set up Ltd. Sinopharm Holding Baise Co., Baise Baise Commercial 100.00% Set up Ltd. Sinopharm Holding Zhongshan Commercial 100.00% Set up Zhongshan Co., Ltd. Zhongshan Sinopharm Holding Guigang Guigang Guigang Commercial 100.00% Set up Co., Ltd. Sinopharm Beihai Beihai Beihai Commercial 100.00% Set up Zhijun Pharm Business combinations Shenzhen Manufacturing 100.00% involving Shenzhen enterprises under common control Sinopharm Holding Jianmin Business Co., Ltd. combinations Shenzhen Shenzhen Commercial 100.00% involving enterprises under common control 107 国药集团一致药业股份有限公司 2015 年半年度报告 Sinopharm Holding Material Business Co., Ltd. combinations Shenzhen Shenzhen Commercial 100.00% involving enterprises under common control Shenzhen Zhijun Business Pharmaceutical Trade Co., combinations Ltd. Shenzhen Shenzhen Commercial 100.00% involving enterprises under common control Sinopharm Holding Shenzhen Business Logistics Co., Ltd. combinations Shenzhen Shenzhen Service 100.00% involving enterprises under common control Sinopharm Holding Business Guangzhou Co., Ltd. combinations Guangzhou Guangzhou Commercial 100.00% involving enterprises under common control Sinopharm Holding Business Guangdong Hengxing combinations Pharmaceutical Co., Ltd. Guangzhou Guangzhou Commercial 100.00% involving enterprises under common control Sinopharm Holding Yulin Business Co., Ltd. combinations Yulin Yulin Commercial 100.00% involving enterprises under common control Sinopharm Medicine Holding Business Liuzhou Co., Ltd. combinations Liuzhou Liuzhou Commercial 51.00% involving enterprises under common control Guangxi Chinese Herbal Business Pieces combinations Liuzhou Liuzhou Manufacturing 51.00% involving enterprises under common control Guangdong Huixin Investment Business Guangzhou Guangzhou Service 100.00% Co., Ltd. combinations 108 国药集团一致药业股份有限公司 2015 年半年度报告 involving enterprises under common control Sinopharm Holding Foshan Business Co., Ltd. combinations Foshan Foshan Commercial 100.00% involving enterprises under common control Sinopharm Holding Business Guangdong Yuexing Co., combinations Ltd. Guangzhou Guangzhou Commercial 100.00% involving enterprises under common control Sinopharm Holding Business Guangdong Logistics Co., combinations Ltd. Guangzhou Guangzhou Service 100.00% involving enterprises under common control Sinopharm Guangxi Business combinations Nanning Nanning Commercial 100.00% involving enterprises under common control Sinopharm Holding Guangxi Business Logistics Co., Ltd. combinations Nanning Nanning Service 100.00% involving enterprises under common control Zhijun (Shenzhen) Pingshan Business combinations Shenzhen Shenzhen Manufacturing 100.00% involving enterprises under common control Sinopharm Holding Wuzhou Business Co., Ltd. combinations Wuzhou Wuzhou Commercial 99.90% involving enterprises under common control Sinopharm Group Zhijun Business (Suzhou) Pharmaceutical combinations Suzhou Suzhou Manufacturing 100.00% Co. Ltd. involving enterprises under 109 国药集团一致药业股份有限公司 2015 年半年度报告 common control Sinopharm holding Dongguan Business Co., Ltd. combinations involving Dongguan Dongguan Commercial 100.00% enterprises not under common control Sinopharm Holding Zhanjiang Business Co., Ltd. combinations involving Zhanjiang Zhanjiang Commercial 100.00% enterprises not under common control Sinopharm Holding Shenzhen Business Yanfeng Co.,Ltd combinations involving Shenzhen Shenzhen Commercial 51.00% enterprises not under common control Sinopharm Holding Meizhou Business Co., Ltd. combinations involving Meizhou Meizhou Commercial 100.00% enterprises not under common control Sinopharm Holding Huizhou Business Co., Ltd. combinations involving Huizhou Huizhou Commercial 100.00% enterprises not under common control Sinopharm Holding Zhaoqing Business Co., Ltd. combinations involving Zhaoqing Zhaoqing Commercial 100.00% enterprises not under common control Sinopharm Holding Jiangmen Business Renren Co., Ltd. combinations Jiangmen Jiangmen Commercial 100.00% involving enterprises not under common 110 国药集团一致药业股份有限公司 2015 年半年度报告 control Sinopharm Holding Shaoguan Business Co., Ltd. combinations involving Shaoguan Shaoguan Commercial 70.00% enterprises not under common control Sinopharm Holding Shantou Business Co., Ltd. combinations involving Shantou Shantou Commercial 70.00% enterprises not under common control Sinopharm Holding Guangzhou Medical Guangzhou Guangzhou Commercial 51.00% Set up Management Co., Ltd. 2. Associates (1) Financial information of the nonsignificant cooperative and joint venture Unit:RMB 30 June 2015 31 December 2014 Associates -- -- Book value of investment 151,691,888.28 157,604,846.85 Total Amount according to the -- -- shareholding proportions --Net profit 28,274,061.44 50,415,836.33 -- Other comprehensive income 0.00 0.00 -- Total comprehensive income 0.00 0.00 X. Related party relationships and significant related party transactions 1. The parent company The proportions of The proportions of equity interests in Place of Registered voting rights in the The parent company Principal business the Company held registration capital Company held by the by the parent parent company company Industrial Investment 2,767,095,089 Sinopharm Group Shanghai 51.00% 51.00% Holding, Trustee of yuan 111 国药集团一致药业股份有限公司 2015 年半年度报告 pharmaceutical enterprise, Assets Reorganization, Distribution and retail of medicines and pharmaceutical products, etc The Company’s ultimate controlling equity holder is CNPGC. 2. Subsidiaries of the Company The general background and other related information of the subsidiaries is set out in Note IX (1). 3. Associates Associates consolidated in the financial statements are listed in Note VII (9). The associates which have balance formed from related party transactions with us shows as below: Company nace Relationship with the Company Wanle Medical Associate 4. Other related parties Other related parties Relationship with the Company Sinopharm Holding Sub Marketing Center Co., Ltd. Controlled by Sinopharm Group China National Medicines Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Hunan Co., Ltd. Controlled by Sinopharm Group Guangdong Dong Fang Uptodate & Special Medicines Co., Controlled by Sinopharm Group Ltd. Foshan Nanhai Uptodate & Special Medicines Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Beijing Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jiangsu Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Hainan Co., Ltd. Controlled by Sinopharm Group Sinopharm Group Chemical Reagent Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Guizhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Zhangzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Beijing Huahong Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Hubei Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Fujian Co., Ltd. Controlled by Sinopharm Group 112 国药集团一致药业股份有限公司 2015 年半年度报告 Sinopharm Yixin Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Fuzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Suzhou Co., Ltd. Controlled by Sinopharm Group Foshan Nanhai Medicine Co., Ltd. Controlled by Sinopharm Group Foshan Nanhai Medicine Group Co., Ltd. Controlled by Sinopharm Group Sinopharm Group Chemical Reagent Suzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Chongqing Co., Ltd. Controlled by Sinopharm Group Sinopharm Group Guorui Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Dezhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Hainan Hongyi Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Yunnan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Putian Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding (Yangzhou) Chinese Western Medicine Controlled by Sinopharm Group Branch Co., Ltd. Sinopharm Holding Shandong Co., Ltd. Controlled by Sinopharm Group Sinopharm Le -Ren-Tang Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Group Xinjiang Special Drugs National Controlled by Sinopharm Group Pharmaceutical Co., Ltd. Sinopharm Group Southwest Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Ningxia Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Tianjin Co., Ltd. Controlled by Sinopharm Group Sinopharm Guoda Drug Store Guangxi Chain Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Zhejiang Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Nantong Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Gansu Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Xinjiang Special Drugs Western Controlled by Sinopharm Group Pharmaceutical Co., Ltd. Sinopharm Holding Shenyang Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Wenzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jinzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Henan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Shanxi Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Heilongjiang Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Yangzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Shan`xi Co., Ltd. Controlled by Sinopharm Group 113 国药集团一致药业股份有限公司 2015 年半年度报告 Sinopharm Holding Xuzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Guoda Drug Store Jiangmen Chain Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jilin Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Wuxi Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Guoda Pharmacy Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Yancheng Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Dalian Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Taizhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Inner Mongolia Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Tianjin North Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Qinghai Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Changzhou Medical logistics center Controlled by Sinopharm Group Co., Ltd. Sinopharm Holding Longyan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Ningde Co., Ltd. Controlled by Sinopharm Group Sinopharm Lerentang Tangshan Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jinan Co., Ltd. Controlled by Sinopharm Group Shanghai Nuoyun Marketing Consulting Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Qingdao Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jiangxi Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Yantai Co., Ltd. Controlled by Sinopharm Group Shanghai Donghong Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Wuhu Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Anqing Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Quanzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Huaian Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Sanming Co., Ltd. Controlled by Sinopharm Group Sinopharm Lerentang Qinhuangdao Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Changzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Anhui Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding ChiFeng Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Xinjiang New Kashi Pharmaceutical Controlled by Sinopharm Group Co., Ltd. Sinopharm Holding HongKong Co., Ltd. Controlled by Sinopharm Group Shanxi Guoyi Drug Store Co., Ltd. Controlled by Sinopharm Group 114 国药集团一致药业股份有限公司 2015 年半年度报告 Sinopharm Xinjiang Korla Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Zhoukou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Shangqiu Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jingmen Co., Ltd. Controlled by Sinopharm Group Shanghai Nutraceuticals (Shanghai) Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Beijing Kangchen Bio-Pharmaceutical Controlled by Sinopharm Group Co., Ltd. Sinopharm Holding Nanping Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Tongliao Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Xinxiang Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Puyang Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Guoda Drug Store Guangzhou Chain Controlled by Sinopharm Group Co., Ltd. Sinopharm Holding Macheng Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Huaideju Pharmaceutical (Xiamen) Co., Controlled by Sinopharm Group Ltd. Guoda Shenyang Tianyitang Pharmacy Chain Store Co., Controlled by Sinopharm Group Ltd. Sinopharm Holding Dandong Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Zhejiang Biological Product Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Qianxinan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Changde Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Anyang Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Kaifeng Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Xinyu Co., Ltd. Controlled by Sinopharm Group Sinopharm Group Medicine Logistic Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Guoda Drug Store Guangdong Co., Ltd. Controlled by Sinopharm Group Shanghai Tongyu Information Technology Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Hunan Guoda Minshengtang Drug Controlled by Sinopharm Group Store Chain Co., Ltd. Sinopharm Holding Beijing Tianxing Puxin Biological Controlled by Sinopharm Group Medical Co., Ltd. Sinopharm Holding Shanghai Co., Ltd. Controlled by Sinopharm Group Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Controlled by Sinopharm Group Co., Ltd. Sinopharm Holding Liaocheng Co., Ltd. Controlled by Sinopharm Group 115 国药集团一致药业股份有限公司 2015 年半年度报告 Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd. Controlled by Sinopharm Group Shanghai Merro Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jining Co., Ltd. Controlled by Sinopharm Group Group Financial Co. Controlled by CNPGC Guang dong South Pharmaceutical Foreign Trade Co., Ltd. Controlled by CNPGC Chengdu Rongsheng Pharmacy Co., Ltd. Controlled by CNPGC Winteam Pharmaceutical Group Ltd. Controlled by CNPGC Lanzhou Institute of Biological Products Co., Ltd. Controlled by CNPGC China National Pharmaceutical Industry Medicine Controlled by CNPGC distribution Co. Ltd. Huayi Pharmaceutical Co., Ltd Controlled by CNPGC Wuhan Institute of Biological Products Co., Ltd. Controlled by CNPGC Sinopharm Group Weiqida Medicine Co., Ltd. Controlled by CNPGC Guizhou Tongjitang Pharmaceutical Co., Ltd. Controlled by CNPGC China National Pharmaceutical Foreign Trade Co., Ltd. Controlled by CNPGC Shanghai Shyndec Pharmaceutical Co., Ltd. Controlled by CNPGC Sinopharm Group Rongsheng Pharmaceutical Co., Ltd. Controlled by CNPGC Anhui Jingfang Pharmaceutical Co., Ltd. Controlled by CNPGC Shandong Lu Ya Pharmaceutical Co., Ltd. Controlled by CNPGC Sinopharm Group Shanghai Medicine Device Co., Ltd. Controlled by CNPGC Guizhou Longlife Pharmacertical Co., Ltd. Controlled by CNPGC Guangdong Medi-World Pharmacertical Co., Ltd. Controlled by CNPGC China Sinopharm International Corporation Controlled by CNPGC Reed Sinopharm Exhibitions Co., Ltd. Controlled by CNPGC China National Scientific Instruments & Materials Imp/Exp Controlled by CNPGC Shenzhen CO., Ltd Heilongjiang Sinopharm Medical Herbs Co., Ltd. Controlled by CNPGC Beijing Fusheng Tiandi Property Management Ltd. Controlled by CNPGC Sinopharm (Shanghai) E-Health Co,.Ltd. Controlled by CNPGC Sinopharm Group Guangdong Medicine Device Co., Ltd. Controlled by CNPGC Shanghai Institute of Pharmaceutical Industry Controlled by CNPGC Sinopharm Chongqing Pharmaceutical and Medical Controlled by CNPGC Industry Design Institute China State Institute of Pharmaceutical Industry Controlled by CNPGC Foshan Dezhong Pharmaceutical Co., Ltd. Controlled by CNPGC 116 国药集团一致药业股份有限公司 2015 年半年度报告 Sinopharm Group Beijing Medical equipment Co., Ltd. Controlled by CNPGC Foshan Fengliaoxing Pharmaceutical Co., Ltd. Controlled by CNPGC The Fourth Pharmaceutical Co., Ltd. of Zhonglian Group Controlled by CNPGC Beijing Huasheng Pharmaceutical Biotechnology Controlled by CNPGC Development Co., Ltd. Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (“Fosun Shareholders have signigicant influence on Sinopharm Group Pharma”) 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 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 Jiangsu Huanghe Pharmaceutical Co., Ltd Subsdiary of Fosun Pharm Shenyang Hongqi Pharmaceutical Co., Ltd. Subsdiary of Fosun Pharm Wang Yang Family member of minority interest of subsidiary Shaoguan Wujiang District Muyang Medicine Information Controlled by minority interest of subsidiary Consultant Co., Ltd. Yichang Humanwell Pharmaceutical Co., Ltd. Associate of Sinopharm Group Shanghai Wanli Medical Beauty Clinic Limited Associate of Sinopharm Group Sino-Swed Pharmaceutical Corp.Ltd. Associate of CNPGC China Otsuka Pharmaceutical Co., Ltd. Associate of CNPGC Shanghai Sailun Biological Technology Co., Ltd. Associate of CNPGC Shenzhen Wanwei Medicine trading Co., Ltd. Subsidiary of Wanle Medical Jiang Meng Renren Medical instrument Co., Ltd. Controlled by subsidiary's key management Beijing Huasheng Pharmaceutical Biotechnology Controlled by CNPGC Development Co., Ltd. Changchun Changsheng Gene Pharmaceutical Co., Ltd. Associate of CNPGC Foshan Fengliaoxing Pharmaceutical Co., Ltd. Controlled by CNPGC Foshan Chancheng District Pharmaceutical Co., Ltd Subsdiary of Fosun Pharm Foshan Chanyixing Medicine Development Co Ltd Subsdiary of Fosun Pharm Sinopharm (Shanghai) E-Health Co,.Ltd. Controlled by CNPGC China National Pharmaceutical Industry Co., Ltd. Controlled by CNPGC Sinopharm Group Guangdong Medical Inspection Co., Ltd Controlled by CNPGC 117 国药集团一致药业股份有限公司 2015 年半年度报告 Sinopharm Holding Sanyi Medicine(Wuhu) Co., Ltd. Controlled by Sinopharm Group Sinopharm Group Shanghai Likang Pharmaceutical Co. Controlled by Sinopharm Group Ltd. Sinopharm Group Zhonglian Pharmaceutical Co. Ltd. Controlled by CNPGC Shanghai Nutraceuticals (Shanghai) Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Chenzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Chengdu Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Fuyang Co., Ltd. Controlled by Sinopharm Group Sinopharm Group The Parent Company Sinopharm Holding Shanghai management consulting Controlled by Sinopharm Group branch Sinopharm Holding Guoda Fumei Pharmaceutical Controlled by Sinopharm Group (Shanghai) Co., Ltd. Guoda Shenyang Tianyitang Pharmacy Chain Store Co., Controlled by Sinopharm Group Ltd. Sinopharm Guoda Drug Store(Shenzhen) Chain Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Hebei Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Huaideju Pharmaceutical (Xiamen) Co., Controlled by Sinopharm Group Ltd. Sinopharm Holding Huainan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Lunan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Luoyang Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Nanping New Power Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Nanyang Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Shanxi Linfen Co., Ltd. Controlled by Sinopharm Group Sinopharm Sichuan Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Suzhou Kangmin Pharmaceutical Co. Controlled by Sinopharm Group Ltd. Sinopharm Holding Hongkong International Co. Ltd Controlled by Sinopharm Group Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Controlled by Sinopharm Group Co., Ltd. Handan Pharmaceutical Co., Ltd Subsdiary of Fosun Pharm Hetian Region Ankang Chain Drugstore Co., Ltd. Controlled by Sinopharm Group NanJing Iron & Steel Co., Ltd. Subsdiary of Fosun Pharm Nanjing Iron & Steel Group International Trade Co., Ltd Subsdiary of Fosun Pharm Ningxia Guoda Drug StoreChain Co., Ltd. Controlled by Sinopharm Group 118 国药集团一致药业股份有限公司 2015 年半年度报告 Qinghai Medical Pharmaceutical Material Co., Ltd. Controlled by CNPGC Qinghai Pharmaceutical (Group) Co., Ltd. Controlled by CNPGC Shanghai Modern Hasen (Shangqiu) Pharmacertical Co., Controlled by CNPGC Ltd. Shanghai Institute of biomedical Pharmaceutical Co. Ltd Controlled by CNPGC Shenzhen Wanle Medical Co., Ltd. Associate Sichuan Hexin Pharmaceutical Co., Ltd. Subsdiary of Fosun Pharm Sichuan Jiang You Zhong Ba Science and Technology Controlled by CNPGC Development Co., Ltd. Sichuan Kang Daxin Pharmaceutical Co., Ltd. Associate of CNPGC Suzhou Erye Pharmaceutical Limited Company Subsdiary of Fosun Pharm China scientific equipment company Controlled by CNPGC CNPGC Controlled by CNPGC China Traditional Chinese Medicine Co. Controlled by CNPGC 5. Related party transactions (1)Purchase/Sales of goods, Purchase/Rendering of servic Purchase of goods / Purchase of service Unit:RMB For the six For the six months Related party Approved trading Whether exceed Related party months ended ended transactions limit trading limit 30 June 2015 30 June 2014 Sinopharm Holding Sub Purchase of 473,896,462.97 No 448,119,799.98 Marketing Center goods Co., Ltd. Purchase of Sinopharm Group 220,482,005.40 No 220,264,634.58 goods China National Purchase of Medicines Co., 182,000,081.49 2,700,000,000.00 No 156,923,025.22 goods Ltd. Sino-Swed Purchase of Pharmaceutical 44,774,861.25 No 40,529,477.76 goods Corp.Ltd. Shenzhen Purchase of Wanwei Medicine 37,187,026.99 No 26,430,381.62 goods trading Co., Ltd. 119 国药集团一致药业股份有限公司 2015 年半年度报告 Guang dong South Purchase of Pharmaceutical 24,983,541.39 No 26,699,952.31 goods Foreign Trade Co., Ltd. Jiangsu Wanbang Pharmacy Purchase of 21,718,308.34 No 16,787,691.74 Marketing Co., goods Ltd. Foshan Nanhai Uptodate & Purchase of 14,813,289.21 No 3,370,955.43 Special Medicines goods Co., Ltd. Sinopharm Purchase of Holding Guizhou 11,777,123.06 No 15,495,788.70 goods Co., Ltd. Chongqing Yaoyou Purchase of 11,561,348.52 No 8,795,511.61 Pharmaceutical goods Co., Ltd. Lanzhou Institute Purchase of of Biological 10,770,840.00 No 5,425,700.00 goods Products Co., Ltd. Winteam Purchase of Pharmaceutical 10,095,226.43 No 21,242,409.32 goods Group Ltd. Chengdu Rongsheng Purchase of 8,372,573.00 No 16,530,660.00 Pharmacy Co., goods Ltd. Qinghai Purchase of Pharmaceutical 4,514,443.50 No 4,677,786.37 goods (Group) Co., Ltd. Wuhan Institute of Purchase of Biological 3,936,356.00 No 3,348,300.00 goods Products Co., Ltd. Guangdong Dong Fang Uptodate & Purchase of 3,073,788.88 No 2,964,854.03 Special Medicines goods Co., Ltd. Sinopharm Group Purchase of 2,980,769.22 No 1,277,376.15 120 国药集团一致药业股份有限公司 2015 年半年度报告 Weiqida Medicine goods Co., Ltd. Chongqing Haisiman Purchase of 2,290,382.37 No 4,965,950.85 Pharmaceutical goods Co., Ltd. Sinopharm Holding Beijing Purchase of Tianxing Puxin 2,062,006.33 No 0.00 goods Biological Medical Co., Ltd. Guizhou Tongjitang Purchase of 1,658,359.36 No 1,067,484.63 Pharmaceutical goods Co., Ltd. Sinopharm Purchase of Holding Beijing 1,633,846.16 No 2,202,461.51 goods Co., Ltd. China National Scientific Instruments & Purchase of 1,549,539.30 No 0.00 Materials Imp/Exp goods Shenzhen CO., Ltd Sinopharm Purchase of Holding Beijing 1,368,186.29 No 491,441.87 goods Huahong Co., Ltd. Beijing Huasheng Pharmaceutical Purchase of Biotechnology 1,165,876.23 No 1,260,683.77 goods Development Co., Ltd. Shanghai Shyndec Purchase of 993,581.20 No 969,389.51 Pharmaceutical goods Co., Ltd. Sinopharm Group Rongsheng Purchase of 760,017.61 No 555,012.76 Pharmaceutical goods Co., Ltd. Sinopharm Group Purchase of 624,526.11 No 200,653.94 121 国药集团一致药业股份有限公司 2015 年半年度报告 Chemical Reagent goods Co., Ltd. China Otsuka Purchase of Pharmaceutical 589,739.54 No 346,591.41 goods Co., Ltd. Anhui Jingfang Purchase of Pharmaceutical 535,332.58 No 335,214.26 goods Co., Ltd. China National Pharmaceutical Purchase of 530,655.75 No 497,742.52 Foreign Trade goods Co., Ltd. Sichuan Hexin Purchase of Pharmaceutical 441,452.30 No 0.00 goods Co., Ltd. Sinopharm Holding Chengdu Purchase of 346,153.85 No 0.00 Pharmaceutical goods Co., Ltd. Sinopharm Group Zhonglian Purchase of 343,373.23 No 221,943.60 Pharmaceutical goods Co. Ltd. Foshan Nanhai Purchase of 338,654.17 No 118,741.27 Medicine Co., Ltd. goods Sinopharm Group Purchase of Southwest 305,128.20 No 10,165.02 goods Medicine Co., Ltd. Sinopharm Group Purchase of Chemical Reagent 161,323.08 No 83,248.85 goods Suzhou Co., Ltd. Shenyang Hongqi Purchase of Pharmaceutical 240,758.99 No 80,871.78 goods Co., Ltd. Sinopharm Group Purchase of Guorui Medicine 234,240.60 No 257,749.58 goods Co., Ltd. Sinopharm Purchase of Holding Hubei 229,075.88 No 2,027,299.39 goods Co., Ltd. 122 国药集团一致药业股份有限公司 2015 年半年度报告 Guilin South Purchase of pharmaceutical 226,311.99 No 206,809.88 goods Co., Ltd. Foshan Fengliaoxing Purchase of 168,830.34 No 0.00 Pharmaceutical goods Co., Ltd. Handan Purchase of Pharmaceutical 150,992.73 No 65,307.69 goods Co., Ltd Sinopharm Purchase of Holding Hunan 130,865.31 No 9,009,304.51 goods Co., Ltd. Yichang Humanwell Purchase of 122,603.64 No 22,017.09 Pharmaceutical goods Co., Ltd. Sinopharm Purchase of Holding Luoyang 97,094.01 No 0.00 goods Co., Ltd. Shanghai Modern Hasen (Shangqiu) Purchase of 87,488.42 No 139,950.72 Pharmacertical goods Co., Ltd. Sichuan Jiang You Zhong Ba Science Purchase of and Technology 63,716.82 No 0.00 goods Development Co., Ltd. Sinopharm Xingsha Purchase of 60,354.91 No 51,784.45 Pharmaceuticals goods (Xiamen) Co., Ltd. Hunan Dongting Purchase of Pharmaceutical 53,955.90 No 47,235.90 goods Co., Ltd. Suzhou Erye Purchase of Pharmaceutical 49,594.02 No 0.00 goods Limited Company Sinopharm Guoda Purchase of 48,160.32 No 6,981.60 Drug goods 123 国药集团一致药业股份有限公司 2015 年半年度报告 Store(Shenzhen) Chain Co., Ltd. Shanghai Institute of biomedical Purchase of 39,205.99 No 0.00 Pharmaceutical Co. goods Ltd Sinopharm Purchase of Holding Dalian 11,282.05 No 0.00 goods Co., Ltd. Foshan Fengliaoxing Purchase of 9,415.93 No 0.00 Pharmaceutical goods Co., Ltd. Sinopharm Purchase of Holding Hainan 5,864.40 No 0.00 goods Hongyi Co., Ltd. Sinopharm Purchase of Holding Shan`xi 5,230.38 No 6,123.49 goods Co., Ltd. Sinopharm Group Guangdong Purchase of Medical 632.48 No 0.00 goods Inspection Co., Ltd Sinopharm Purchase of Holding Suzhou 187.18 No -4,919.87 goods Co., Ltd. Sinopharm Purchase of Holding Shanxi 0.00 No 261,572.93 goods Co., Ltd. Sinopharm Holding Beijing Purchase of Kangchen 0.00 No 1,023,607.50 goods Bio-Pharmaceutic al Co., Ltd. Sinopharm Purchase of Holding Henan 0.00 No 20,782.77 goods Co., Ltd. Sinopharm Purchase of Holding Dezhou 0.00 No 14,666.67 goods Co., Ltd. 124 国药集团一致药业股份有限公司 2015 年半年度报告 Sinopharm Purchase of Holding Hainan 0.00 No 51,342.54 goods Co., Ltd. Sinopharm Purchase of Holding Fujian 0.00 No 491,008.63 goods Co., Ltd. Sinopharm Purchase of Holding Ningxia 0.00 No 2,569.50 goods Co., Ltd. Sinopharm Yixin Purchase of 0.00 No 61,102.56 Medicine Co., Ltd. goods Sinopharm Holding Purchase of 0.00 No 131,917.94 Heilongjiang Co., goods Ltd. Jiangsu Huanghe Purchase of Pharmaceutical 0.00 No 4,935.91 goods Co., Ltd Sinopharm Group Shanghai Purchase of 0.00 No 11,219.09 Medicine Device goods Co., Ltd. Shandong Lu Ya Purchase of Pharmaceutical 0.00 No 349,143.80 goods Co., Ltd. Guizhou Longlife Purchase of Pharmacertical -25.64 No -7,666.67 goods Co., Ltd. Sinopharm Purchase of Holding Macheng -214.86 No 4,228,615.37 goods Co., Ltd. Guangdong Medi-World Purchase of -427.18 No -329.44 Pharmacertical goods Co., Ltd. Sinopharm Holding Sanyi Purchase of -1,054.87 No 0.00 Medicine(Wuhu) goods Co., Ltd. Shenzhen Wanle Purchase of -7,097.80 No 15,230,871.29 125 国药集团一致药业股份有限公司 2015 年半年度报告 Medical Co., Ltd. goods Sinopharm Purchase of Holding Jiangsu -19,408.20 No 32,365.44 goods Co., Ltd. Sinopharm Chongqing Pharmaceutical Other labor 31,325,674.00 No 0.00 and Medical service Industry Design Institute Sinopharm Chongqing Pharmaceutical Designing fee 1,129,620.00 No 2,855,000.00 and Medical Industry Design Institute Sinopharm Group Transportation Medicine Logistic and warehousing 922,860.39 No 791,201.60 Co., Ltd. charges Sinopharm Chongqing Pinshan Pharmaceutical management 527,358.49 No 5,372,663.52 and Medical 82,000,000.00 fees Industry Design Institute Sinopharm Group Information Medicine Logistic system 443,026.99 No 284,905.66 Co., Ltd. maintenance China scientific Other labor equipment 192,500.00 No 0.00 service company Shanghai Institute Research and of Pharmaceutical development 175,471.70 No 202,500.00 Industry expenses Reed Sinopharm Exhibition Exhibitions Co., 34,000.00 No 44,000.00 expenses Ltd. Sinopharm Research and Xingsha development 16,500.00 No 0.00 Pharmaceuticals expenses (Xiamen) Co., Ltd. 126 国药集团一致药业股份有限公司 2015 年半年度报告 Sinopharm Holding Shanghai Other labor 3,600.00 No 0.00 management service consulting branch Sinopharm Group Research and Chemical Reagent development 1,625.64 No 765.39 Suzhou Co., Ltd. expenses Sinopharm Other labor Holding Shenyang 0.00 No 400,619.60 service Co., Ltd. Sinopharm Holding Guoda Product Drug Store promotion 0.00 No 21,266.28 Guangdong Co., expense Ltd. Sinopharm Product Holding Guoda promotion 0.00 No 2,500.00 Pharmacy Co., expense Ltd. Sales of goods /Rendering of service Unit:RMB Content of related party For the six months ended For the six months ended Related party transactions 30 June 2015 30 June 2014 Sinopharm Holding Hunan Sales of goods 77,915,186.98 72,105,886.82 Co., Ltd. Foshan Nanhai Uptodate & Sales of goods 76,833,546.36 66,588,829.16 Special Medicines Co., Ltd. Sinopharm Holding Sales of goods 47,623,472.79 26,390,588.97 Shandong Co., Ltd. Sinopharm Sichuan Sales of goods 43,440,891.95 0.00 Pharmaceutical Co., Ltd. Sinopharm Holding Hainan Sales of goods 42,611,254.30 39,682,622.73 Co., Ltd. Sinopharm Holding Beijing Sales of goods 40,646,909.68 34,745,031.52 Co., Ltd. Foshan Nanhai Medicine Sales of goods 40,499,542.53 31,285,279.06 Co., Ltd. Sinopharm Group (Tianjin) Sales of goods 37,385,364.68 28,100,874.23 Eastern Bokang 127 国药集团一致药业股份有限公司 2015 年半年度报告 Pharmaceutical Co., Ltd. Sinopharm Le -Ren-Tang Sales of goods 34,684,209.72 36,907,139.61 Medicine Co., Ltd. Sinopharm Holding Guoda Drug Store Guangdong Co., Sales of goods 34,048,558.78 33,487,776.29 Ltd. Sinopharm Holding Hubei Sales of goods 32,219,359.25 43,201,513.00 Co., Ltd. Sinopharm Holding Beijing Sales of goods 31,818,003.87 30,414,890.53 Huahong Co., Ltd. Sinopharm Group Xinjiang Special Drugs National Sales of goods 31,056,792.97 27,779,324.67 Pharmaceutical Co., Ltd. Sinopharm Holding Ningxia Sales of goods 21,192,630.53 22,098,551.90 Co., Ltd. Sinopharm Guoda Drug Store Guangxi Chain Co., Sales of goods 16,268,845.77 14,748,263.80 Ltd. Sinopharm Group Sales of goods 15,579,638.74 12,503,255.00 Sinopharm Holding Sub Sales of goods 15,497,277.04 28,351,930.01 Marketing Center Co., Ltd. Sinopharm Holding Tianjin Sales of goods 15,395,118.07 11,864,858.00 Co., Ltd. Sinopharm Group Southwest Sales of goods 15,212,888.04 15,688,262.79 Medicine Co., Ltd. Sinopharm Holding Wenzhou Sales of goods 15,099,938.24 12,934,486.31 Co., Ltd. Sinopharm Holding Hainan Sales of goods 12,678,051.93 11,565,687.67 Hongyi Co., Ltd. Sinopharm Holding Nantong Sales of goods 12,309,543.99 13,355,319.76 Co., Ltd. Sinopharm Holding Xinjiang Special Drugs Western Sales of goods 11,741,123.13 12,691,533.61 Pharmaceutical Co., Ltd. Sinopharm Holding Zhejiang Sales of goods 11,611,214.64 18,471,568.26 Co., Ltd. Sinopharm Holding Fuzhou Sales of goods 9,718,182.05 6,648,904.14 Co., Ltd. Sinopharm Holding Yunnan Sales of goods 9,419,118.45 7,109,332.86 128 国药集团一致药业股份有限公司 2015 年半年度报告 Co., Ltd. Sinopharm Holding Jinzhou Sales of goods 9,282,821.20 10,859,701.89 Co., Ltd. Sinopharm Holding Henan Sales of goods 8,870,236.38 5,559,429.50 Co., Ltd. Foshan Chancheng District Sales of goods 8,798,005.75 0.00 Pharmaceutical Co., Ltd Guangdong Dong Fang Uptodate & Special Sales of goods 7,213,575.88 8,344,388.58 Medicines Co., Ltd. Sinopharm Holding Shanxi Sales of goods 5,999,416.05 4,114,435.39 Co., Ltd. Sinopharm Holding Shanxi Sales of goods 5,960,444.74 4,197,414.13 Co., Ltd. Sinopharm Holding Sales of goods 5,782,044.41 7,224,474.70 Shenyang Co., Ltd. Sinopharm Holding Guizhou Sales of goods 5,116,359.93 3,259,653.28 Co., Ltd. Sinopharm Holding Chengdu Sales of goods 4,656,653.54 0.00 Pharmaceutical Co., Ltd. Sinopharm Guoda Drug Store Jiangmen Chain Co., Sales of goods 4,525,339.36 3,321,010.31 Ltd. Sinopharm Holding Sales of goods 3,443,566.66 4,182,733.84 Heilongjiang Co., Ltd. Sinopharm Holding Sales of goods 3,253,616.01 4,493,029.85 Yangzhou Co., Ltd. Foshan Chancheng District Sales of goods 3,007,579.36 5,086,729.68 Central Hospital China National Medicines Sales of goods 2,441,499.27 2,670,378.79 Co., Ltd. Sinopharm Holding Gansu Sales of goods 2,123,949.16 1,325,545.44 Co., Ltd. Sinopharm Holding Qinghai Sales of goods 2,037,902.58 1,238,266.68 Co., Ltd. Sinopharm Holding Qingdao Sales of goods 1,789,913.20 2,209,254.70 Co., Ltd. Sinopharm Holding Fujian Sales of goods 1,708,344.06 2,324,732.15 Co., Ltd. 129 国药集团一致药业股份有限公司 2015 年半年度报告 Sinopharm Holding Sales of goods 1,604,406.39 1,731,905.99 Yancheng Co., Ltd. Sinopharm Holding Wuxi Sales of goods 1,593,582.85 2,131,601.56 Co., Ltd. Sinopharm Holding Jilin Co., Sales of goods 1,580,127.02 2,349,302.00 Ltd. Sinopharm Holding Inner Sales of goods 1,529,454.28 1,417,306.25 Mongolia Co., Ltd. Sinopharm Holding Guoda Sales of goods 1,307,427.35 887,680.93 Pharmacy Co., Ltd. Sinopharm Lerentang Sales of goods 1,254,769.21 927,692.31 Tangshan Medicine Co., Ltd. Sinopharm Holding Suzhou Kangmin Pharmaceutical Co. Sales of goods 1,125,856.31 0.00 Ltd. Sinopharm Holding Lunan Sales of goods 978,264.96 736,160.68 Co., Ltd. Sinopharm Holding Xuzhou Sales of goods 910,548.70 4,958,689.10 Co., Ltd. Chongqing Yaoyou Sales of goods 794,871.79 12,201,923.07 Pharmaceutical Co., Ltd. Sinopharm Holding Longyan Sales of goods 794,650.72 662,502.50 Co., Ltd. Sinopharm Holding Tianjin Sales of goods 777,435.92 1,095,282.10 North Medicine Co., Ltd. Sinopharm Holding Taizhou Sales of goods 732,858.62 895,744.78 Co., Ltd. Sinopharm Holding Sales of goods 660,609.25 932,349.94 Quanzhou Co., Ltd. Sinopharm Holding Dalian Sales of goods 607,011.05 809,692.99 Co., Ltd. Sinopharm Holding Sales of goods 591,571.81 5,591,245.35 Chongqing Co., Ltd. Sinopharm Holding Ningde Sales of goods 464,264.03 528,805.48 Co., Ltd. Sinopharm Holding Shan`xi Sales of goods 442,999.38 540,110.85 Co., Ltd. Sinopharm Holding Putian Sales of goods 381,461.55 633,318.71 Co., Ltd. 130 国药集团一致药业股份有限公司 2015 年半年度报告 Sinopharm Holding Changzhou Medical logistics Sales of goods 356,495.77 282,139.32 center Co., Ltd. Sinopharm Holding Anqing Sales of goods 327,912.83 622,112.83 Co., Ltd. Sinopharm Holding Jiangsu Sales of goods 309,194.86 177,248.72 Co., Ltd. Sinopharm Lerentang Qinhuangdao Medicine Co., Sales of goods 307,179.50 142,871.79 Ltd. Sinopharm Holding Anhui Sales of goods 301,567.25 -6,872.42 Co., Ltd. Sinopharm Holding Changde Sales of goods 281,577.44 356,700.14 Co., Ltd. Sinopharm Holding Sanming Sales of goods 237,305.65 131,856.84 Co., Ltd. Sinopharm Holding Jiangxi Sales of goods 228,099.69 83,923.13 Co., Ltd. Sinopharm Holding Yantai Sales of goods 227,815.40 302,765.11 Co., Ltd. Jiang Meng Renren Medical Sales of goods 199,355.46 0.00 instrument Co., Ltd. Sinopharm Group Guorui Sales of goods 134,615.38 0.00 Medicine Co., Ltd. Qinghai Medical Pharmaceutical Material Co., Sales of goods 113,333.33 0.00 Ltd. Hetian Region Ankang Chain Sales of goods 92,155.52 0.00 Drugstore Co., Ltd. China National Scientific Instruments & Materials Sales of goods 81,230.76 121,846.17 Imp/Exp Shenzhen CO., Ltd Shanghai Merro Sales of goods 77,694.03 459,604.35 Pharmaceutical Co., Ltd. Guang dong South Pharmaceutical Foreign Sales of goods 76,327.18 1,122,538.67 Trade Co., Ltd. Sinopharm Holding Suzhou Sales of goods 68,948.73 243,203.42 Co., Ltd. 131 国药集团一致药业股份有限公司 2015 年半年度报告 Shanghai Donghong Sales of goods 63,538.46 493,594.87 Medicine Co., Ltd. Sinopharm Group Medicine Sales of goods 57,692.30 0.00 Logistic Co., Ltd. Beijing Fusheng Tiandi Sales of goods 56,697.41 25,673.07 Property Management Ltd. Shenzhen Wanle Medical Sales of goods 51,295.73 0.00 Co., Ltd. Foshan Chanyixing Medicine Sales of goods 50,322.00 0.00 Development Co Ltd China Sinopharm Sales of goods 44,871.79 2,318,706.88 International Corporation Shanxi Guoyi Drug Store Sales of goods 43,794.85 5,794.87 Co., Ltd. Sinopharm Holding ChiFeng Sales of goods 25,969.23 77,907.69 Co., Ltd. Sinopharm Holding Sales of goods 24,094.37 10,584.63 Zhangzhou Co., Ltd. Sichuan Kang Daxin Sales of goods 16,615.38 0.00 Pharmaceutical Co., Ltd. Sinopharm Holding Anyang Sales of goods 14,905.98 5,962.39 Co., Ltd. Sinopharm Holding Sales of goods 14,423.93 3,646.14 Qianxinan Co., Ltd. Sinopharm Holding Dezhou Sales of goods 12,923.07 7,179.49 Co., Ltd. Sinopharm Holding Sales of goods 11,282.05 0.00 Liaocheng Co., Ltd. Sinopharm Holding Xinjiang Xinte Karamay Sales of goods 11,075.89 7,179.49 Pharmaceutical Co., Ltd. Sinopharm Holding Sales of goods 11,068.38 20,757.26 Changzhou Co., Ltd. Heilongjiang Sinopharm Sales of goods 11,025.63 7,948.71 Medical Herbs Co., Ltd. Sinopharm Group Shanghai Likang Pharmaceutical Co. Sales of goods 10,829.08 182,188.03 Ltd. Sinopharm Holding Sales of goods 10,660.51 20,740.51 132 国药集团一致药业股份有限公司 2015 年半年度报告 (Yangzhou) Chinese Western Medicine Branch Co., Ltd. Sinopharm Holding Beijing Kangchen Sales of goods 10,568.21 1,038,706.67 Bio-Pharmaceutical Co., Ltd. Sinopharm Holding Jining Sales of goods 10,461.52 7,179.49 Co., Ltd. Sinopharm Holding Xinyu Sales of goods 6,478.65 0.00 Co., Ltd. Sinopharm Holding Nanping Sales of goods 3,743.58 0.00 New Power Co., Ltd. Sinopharm Holding Sales of goods 3,692.31 0.00 Chenzhou Co., Ltd. Sinopharm Holding Shangqiu Sales of goods 3,226.50 0.00 Co., Ltd. Sinopharm Holding Zhoukou Sales of goods 2,726.38 7,047.05 Co., Ltd. Shanghai Wanli Medical Sales of goods 2,136.75 0.00 Beauty Clinic Limited Sinopharm Holding Shanxi Sales of goods 1,923.07 0.00 Linfen Co., Ltd. Sinopharm (Shanghai) Sales of goods 1,846.16 2,025.63 E-Health Co,.Ltd. Sinopharm Holding Xinxiang Sales of goods 931.62 2,683.77 Co.,Ltd Sinopharm Holding Puyang Sales of goods 305.98 0.00 Co., Ltd. Sinopharm Holding Huaian Sales of goods 0.00 86,030.77 Co., Ltd. Sinopharm Holding Jinan Sales of goods 0.00 76,153.85 Co., Ltd. Sinopharm Holding Sales of goods 0.00 41,329.43 HongKong Co., Ltd. Guoda Shenyang Tianyitang Pharmacy Chain Store Co., Sales of goods 0.00 36,923.07 Ltd. Sinopharm Holding Wuhu Sales of goods 0.00 9,230.76 Co., Ltd. Huayi Pharmaceutical Co., Sales of goods 0.00 7,521.36 133 国药集团一致药业股份有限公司 2015 年半年度报告 Ltd Sinopharm Holding Kaifeng Sales of goods 0.00 6,444.44 Co., Ltd. Sinopharm Xinjiang Korla Sales of goods 0.00 5,733.34 Pharmaceutical Co., Ltd. Sinopharm Holding Dandong Sales of goods 0.00 5,429.06 Co., Ltd. Sinopharm Holding Nanping Sales of goods 0.00 4,530.60 Co., Ltd. Sinopharm Holding Tongliao Sales of goods 0.00 4,487.18 Co., Ltd. Shanghai Nutraceuticals Sales of goods 0.00 3,316.24 (Shanghai) Co., Ltd. Shanghai Tongyu Information Sales of goods 0.00 2,564.10 Technology Co., Ltd. Sinopharm Holding Zhejiang Sales of goods 0.00 427.36 Biological Product Co., Ltd. Shanghai Nuoyun Marketing Sales of goods -155,982.92 846.15 Consulting Co., Ltd. China National Medicines Dispatching and 2,856,084.27 2,172,980.55 Co., Ltd. transportation charges Sinopharm Holding Guoda Dispatching and Drug Store Guangdong Co., 2,418,885.86 1,689,083.80 transportation charges Ltd. Sinopharm Group Medicine Dispatching and 2,046,871.70 3,255,073.15 Logistic Co., Ltd. transportation charges Foshan Nanhai Uptodate & Dispatching and 1,615,666.54 1,768,562.85 Special Medicines Co., Ltd. transportation charges Foshan Nanhai Medicine Dispatching and 1,327,072.71 1,395,859.92 Co., Ltd. transportation charges Sinopharm Group Entrusted revenue 250,000.00 250,000.00 Shenzhen Wanwei Medicine Consultation revenue 183,714.43 131,079.23 trading Co., Ltd. China National Pharmaceutical Foreign Entrusted revenue 125,000.00 125,000.00 Trade Co., Ltd. Sinopharm Holding Guoda Drug Store Guangzhou Parking fees 8,500.00 6,000.00 Chain Co., Ltd. 134 国药集团一致药业股份有限公司 2015 年半年度报告 Shenzhen Wanle Medical Consultation revenue 0.00 52,160.54 Co., Ltd. Winteam Pharmaceutical Consultation revenue 0.00 6,314.42 Group Ltd. (2)Lease The Group as leaser: Unit:RMB Lessees Type of assets use for Rental income of this period Rental income of last period Sinopharm Guoda Drug Store Guangxi Chain Co., Building 822,778.08 814,333.74 Ltd. Sinopharm Guoda Drug Store Guangxi Chain Co., Building 165,900.00 165,900.00 Ltd. Sinopharm Guoda Drug Store(Shenzhen) Chain Co., Building 195,084.00 304,695.00 Ltd. Sinopharm Guoda Drug Store Guangxi Chain Co., Building 189,384.72 190,707.72 Ltd. Sinopharm Group Guangdong Medicine Device Building 141,900.00 135,144.00 Co., Ltd. Sinopharm Guoda Drug Store(Shenzhen) Chain Co., Building 52,783.38 51,246.00 Ltd. China National Medicines Building 43,200.00 43,200.00 Co., Ltd. Sinopharm Guoda Drug Store(Shenzhen) Chain Co., Building 30,000.00 30,000.00 Ltd. China National Pharmaceutical Industry Building 0.00 21,600.00 Medicine distribution Co. Ltd. Sinopharm Holding Guoda Drug Store Guangzhou Building 141,050.00 0.00 Chain Co., Ltd. 135 国药集团一致药业股份有限公司 2015 年半年度报告 Sinopharm Holding Sub Building 32,400.00 0.00 Marketing Center Co., Ltd. The Group as lessee: Unit:RMB Lease expenses of this Leasers Type of assets use for Lease expenses of last period period Sinopharm Group Medicine Equipment 3,750,000.00 3,750,000.00 Logistic Co., Ltd. Sinopharm Group Medicine Building 3,540,000.00 3,540,000.00 Logistic Co., Ltd. Shaoguan Wujiang District Muyang Medicine Building 484,969.92 324,789.24 Information Consultant Co., Ltd. Wang Yang Building 276,000.00 276,000.00 Foshan Nanhai Medicine Building 128,160.00 110,880.00 Group Co., Ltd. (3)Guarantees provided As a guarantor Unit:RMB Beginning date of Maturity date of Guarantee obligation Guarantee Amount guarantee contract guarantee contract expired Sinopharm Holding 30,096,431.81 12 December 2014 31 October 2015 No Guangzhou Co., Ltd. Sinopharm Holding 34,570,639.59 30 June 2014 29 June 2015 No Guangzhou Co., Ltd. Sinopharm Holding 229,425,743.53 19 September 2014 18 September 2015 No Guangzhou Co., Ltd. Sinopharm Holding 314,245,039.27 06 May 2015 06 May 2016 No Guangzhou Co., Ltd. Sinopharm Holding 307,337,775.28 16 July 2014 15 July 2015 No Guangzhou Co., Ltd. Sinopharm Holding 159,341,870.32 20 May 2015 20 May 2016 No Guangzhou Co., Ltd. Sinopharm Holding 194,778,819.03 30 April 2014 30 April 2015 No Guangzhou Co., Ltd. 136 国药集团一致药业股份有限公司 2015 年半年度报告 Sinopharm Holding 250,163,981.05 25 June 2014 08 June 2015 No Guangzhou Co., Ltd. Sinopharm Holding 280,793,407.86 15 May 2015 14 May 2016 No Guangzhou Co., Ltd. Sinopharm Holding Guangdong Yuexing 6,930,103.40 20 May 2015 20 May 2016 No Co., Ltd. Sinopharm Holding Guangdong Yuexing 12,019,194.50 16 July 2014 15 July 2015 No Co., Ltd. Sinopharm Holding 6,500,000.00 25 October 2014 25 October 2015 No Guangxi Co., Ltd. Sinopharm Holding 105,172,399.18 26 June 2014 26 June 2015 No Guangxi Co., Ltd. Sinopharm Holding 169,659,032.18 16 July 2014 15 July 2015 No Guangxi Co., Ltd. Sinopharm Holding 112,188,535.57 19 April 2014 18 April 2015 No Guangxi Co., Ltd. Sinopharm Holding 19,250,027.34 29 May 2015 29 May 2016 No Guangxi Co., Ltd. Sinopharm Holding 55,487,759.61 12 May 2015 29 December 2015 No Guangxi Co., Ltd. Sinopharm Holding Jiangmen Renren Co., 17,437,149.43 16 July 2014 15 July 2015 No Ltd. Sinopharm Medicine Holding Liuzhou Co., 75,653,561.29 06 November 2014 15 July 2015 No Ltd. Sinopharm Medicine Holding Liuzhou Co., 32,299,557.53 20 March 2015 19 March 2016 No Ltd. Sinopharm Medicine Holding Liuzhou Co., 32,346,299.52 09 September 2014 08 September 2015 No Ltd. Sinopharm Holding 14,600,944.46 17 September 2014 15 July 2015 No Zhanjiang Co., Ltd. Sinopharm Group Zhijun (Suzhou) 25,692,321.48 27 May 2014 27 May 2015 No Pharmaceutical Co. Ltd. 137 国药集团一致药业股份有限公司 2015 年半年度报告 Sinopharm Group Zhijun (Suzhou) 29,279,000.00 16 July 2014 15 July 2015 No Pharmaceutical Co. Ltd. Sinopharm Group Zhijun (Suzhou) 3,203,849.81 01 January 2015 01 July 2015 No Pharmaceutical Co. Ltd. Sinopharm Group Zhijun (Suzhou) 4,410,000.00 04 January 2015 24 October 2015 No Pharmaceutical Co. Ltd. Shenzhen Zhijun Pharmaceutical Co., 22,815,555.20 25 August 2014 25 August 2015 No Ltd. Sinopharm holding Shenzhen Yanfeng 19,481,663.78 27 October 2014 27 October 2015 No Co.,Ltd Sinopharm holding Shenzhen Yanfeng 64,621,126.80 16 July 2014 15 July 2015 No Co.,Ltd Sinopharm holding Shenzhen Yanfeng 16,000,000.00 28 May 2015 15 February 2016 No Co.,Ltd Sinopharm holding Shenzhen Yanfeng 3,795,523.03 15 May 2015 14 May 2016 No Co.,Ltd Sinopharm Holding 7,844,562.13 16 July 2014 15 July 2015 No Shaoguan Co., Ltd. Sinopharm Holding 5,462,230.84 16 July 2014 15 July 2015 No Material Co., Ltd. As guarantee Unit:RMB Beginning date of Maturity date of Guarantee obligation Guarantor Amount guarantee contract guarantee contract expired Shenzhen Zhijun Pharmaceutical Co., 60,000,000.00 15 May 2015 14 May 2016 No Ltd. Shenzhen Zhijun 125,076,375.12 18 June 2015 15 June 2016 No 138 国药集团一致药业股份有限公司 2015 年半年度报告 Pharmaceutical Co., Ltd. Shenzhen Zhijun Pharmaceutical Co., 105,000,000.00 28 May 2015 15 February 2016 No Ltd. Shenzhen Zhijun Pharmaceutical Co., 21,743,592.63 04 April 2014 03 April 2022 No Ltd. Shenzhen Zhijun Pharmaceutical Co., 200,000.00 17 July 2014 17 July 2020 No Ltd. Sinopharm Guangzhou as guarantee Unit:RMB Beginning date of Maturity date of Guarantee obligation Guarantor Amount guarantee contract guarantee contract expired Sinopharm Group 483,029,496.81 03 June 2014 03 June 2015 No (4)Financing Unit:RMB Related Party Amount Effective date Maturity date Notes Borrowed from- Group Financial Co. 40,000,000.00 28 February 2015 28 February 2016 Short-term borrowings CNPGC 31,600,000.00 07 May 2014 07 May 2017 Entrusted loan (5)Interest Expense Unit:RMB For the six months ended For the six months ended Related Party Type of transaction 30 June 2015 30 June 2014 Interest paid for the loans from related CNPGC 839,572.50 260,700.00 party Interest paid for the loans from Group Group Financial Co. 667,955.53 3,976,833.33 Financial Co Sinopharm Holding Sub Charges of discounted notes payable 284,004.78 2,421,609.56 Marketing Center Co., Ltd. Sinopharm Group Charges of discounted notes payable 391,286.97 520,387.02 Sinopharm Group Interest paid for the loans from related 0.00 5,039,990.23 party 139 国药集团一致药业股份有限公司 2015 年半年度报告 Group Financial Co. Charges of discounted notes payable - 425,990.03 Total 2,182,819.78 12,645,510.17 (6)Interest Revenue Unit:RMB For the six months ended For the six months ended Related Party Type of transaction 30 June 2015 30 June 2014 Group Financial Co. Deposit interest 15,368.24 12,702.39 6. Accounts receivable from and payables to related parties (1)Accounts receivable from related parties Unit:RMB 30 June 2015 31 December 2014 Nature Related parties Provision for bad Provision for bad Cost Cost debts debts Foshan Nanhai Accounts Uptodate & Special 26,157,549.60 0.00 23,756,856.11 0.00 receivable Medicines Co., Ltd. Accounts Sinopharm Holding 22,437,075.54 0.00 25,600,093.77 0.00 receivable Hunan Co., Ltd. Accounts Sinopharm Holding 14,977,399.36 0.00 12,892,087.23 0.00 receivable Beijing Co., Ltd. Sinopharm Accounts Sichuan 14,953,509.29 0.00 12,494,740.26 0.00 receivable Pharmaceutical Co., Ltd. Sinopharm Group (Tianjin) Eastern Accounts Bokang 14,282,156.22 0.00 7,484,251.20 0.00 receivable Pharmaceutical Co., Ltd. Accounts Sinopharm Holding 13,325,378.92 0.00 10,216,514.39 0.00 receivable Shandong Co., Ltd. Accounts Foshan Nanhai 11,927,363.32 0.00 11,979,793.06 0.00 receivable Medicine Co., Ltd. Accounts Sinopharm Holding 11,246,067.76 0.00 15,916,697.65 0.00 receivable Hainan Co., Ltd. 140 国药集团一致药业股份有限公司 2015 年半年度报告 Sinopharm Holding Accounts Beijing Huahong 10,995,794.33 0.00 7,890,664.87 0.00 receivable Co., Ltd. Sinopharm Le Accounts -Ren-Tang 10,449,518.90 0.00 14,234,771.99 0.00 receivable Medicine Co., Ltd. Foshan Accounts Chancheng District 10,112,360.98 0.00 0.00 0.00 receivable Pharmaceutical Co., Ltd Sinopharm Holding Accounts Guoda Drug Store 9,172,073.04 0.00 9,704,626.52 0.00 receivable Guangdong Co., Ltd. Accounts Sinopharm Holding 9,100,475.63 0.00 20,947,735.07 0.00 receivable Hubei Co., Ltd. Sinopharm Group Xinjiang Special Accounts Drugs National 8,678,282.94 0.00 14,901,575.66 0.00 receivable Pharmaceutical Co., Ltd. Accounts Sinopharm Holding 7,169,150.84 0.00 6,219,986.94 0.00 receivable Tianjin Co., Ltd. Sinopharm Group Accounts Southwest 6,661,956.37 0.00 6,859,315.42 0.00 receivable Medicine Co., Ltd. Accounts Sinopharm Group 6,438,154.10 0.00 5,347,281.64 0.00 receivable Accounts Sinopharm Holding 5,684,798.06 0.00 5,904,534.60 0.00 receivable Ningxia Co., Ltd. Accounts Sinopharm Holding 5,424,259.60 0.00 2,924,497.97 0.00 receivable Nantong Co., Ltd. Sinopharm Guoda Accounts Drug Store 5,058,806.52 0.00 6,589,054.06 0.00 receivable Guangxi Chain Co., Ltd. Accounts Sinopharm Holding 4,985,313.27 0.00 5,268,486.11 0.00 receivable Wenzhou Co., Ltd. Accounts Sinopharm Holding 4,051,845.16 0.00 4,591,981.10 0.00 receivable Sub Marketing 141 国药集团一致药业股份有限公司 2015 年半年度报告 Center Co., Ltd. Sinopharm Holding Xinjiang Special Accounts Drugs Western 3,660,969.04 0.00 3,770,263.86 0.00 receivable Pharmaceutical Co., Ltd. Sinopharm Holding Accounts Hainan Hongyi 3,430,886.34 0.00 2,604,871.82 0.00 receivable Co., Ltd. Accounts Sinopharm Holding 3,173,457.36 0.00 1,826,590.08 0.00 receivable Shanxi Co., Ltd. Sinopharm Group Accounts Medicine Logistic 2,822,507.06 0.00 3,521,227.69 0.00 receivable Co., Ltd. Accounts Sinopharm Holding 2,521,730.78 0.00 1,505,859.96 0.00 receivable Yunnan Co., Ltd. Accounts Sinopharm Holding 2,285,855.98 0.00 2,847,145.76 0.00 receivable Jinzhou Co., Ltd. Accounts Sinopharm Holding 2,234,798.32 0.00 1,854,656.73 0.00 receivable Shanxi Co., Ltd. Accounts Sinopharm Holding 2,202,113.85 0.00 2,762,374.20 0.00 receivable Henan Co., Ltd. Accounts Sinopharm Holding 1,855,407.42 0.00 1,239,408.42 0.00 receivable Fuzhou Co., Ltd. Sinopharm Holding Accounts Chengdu 1,803,998.02 0.00 38,660.00 0.00 receivable Pharmaceutical Co., Ltd. Guangdong Dong Accounts Fang Uptodate & 1,774,774.56 0.00 2,350,070.03 0.00 receivable Special Medicines Co., Ltd. Accounts Sinopharm Holding 1,718,409.42 0.00 1,358,428.16 0.00 receivable Shenyang Co., Ltd. Accounts Sinopharm Holding 1,527,501.10 0.00 896,848.13 0.00 receivable Guizhou Co., Ltd. Sinopharm Holding Accounts Heilongjiang Co., 1,485,109.28 0.00 1,642,680.23 0.00 receivable Ltd. Accounts Foshan 1,323,020.35 0.00 4,522,094.66 0.00 142 国药集团一致药业股份有限公司 2015 年半年度报告 receivable Chancheng District Central Hospital Accounts China National 1,237,132.12 0.00 2,388,847.85 0.00 receivable Medicines Co., Ltd. Accounts Sinopharm Holding 1,008,763.00 0.00 1,476,745.88 0.00 receivable Yangzhou Co., Ltd. Sinopharm Guoda Accounts Drug Store 972,206.70 0.00 1,251,757.35 0.00 receivable Jiangmen Chain Co., Ltd. Accounts Sinopharm Holding 799,078.44 0.00 568,341.65 0.00 receivable Gansu Co., Ltd. Accounts Sinopharm Holding 697,049.29 0.00 494,390.88 0.00 receivable Jilin Co., Ltd. Sinopharm Holding Accounts Guoda Pharmacy 650,520.00 0.00 598,180.00 0.00 receivable Co., Ltd. Accounts Sinopharm Holding 618,717.00 0.00 344,726.94 0.00 receivable Qinghai Co., Ltd. Sinopharm Accounts Lerentang 490,080.00 0.00 328,497.80 0.00 receivable Tangshan Medicine Co., Ltd. Accounts Sinopharm Holding 488,264.80 0.00 6,756,555.98 0.00 receivable Zhejiang Co., Ltd. Accounts Sinopharm Holding 445,918.51 0.00 231,074.80 0.00 receivable Longyan Co., Ltd. Accounts Sinopharm Holding 439,635.28 0.00 241,355.80 0.00 receivable Taizhou Co., Ltd. Accounts Sinopharm Holding 431,411.13 0.00 825,483.13 0.00 receivable Xuzhou Co., Ltd. Accounts Sinopharm Holding 427,455.68 0.00 563,011.50 0.00 receivable Yancheng Co., Ltd. Sinopharm Holding Accounts Suzhou Kangmin 400,872.00 0.00 0.00 0.00 receivable Pharmaceutical Co. Ltd. Accounts Sinopharm Holding 398,134.14 0.00 786,713.14 0.00 receivable Wuxi Co., Ltd. 143 国药集团一致药业股份有限公司 2015 年半年度报告 Accounts Sinopharm Holding 394,478.36 0.00 864,753.84 0.00 receivable Fujian Co., Ltd. Accounts Sinopharm Holding 389,653.72 0.00 536,255.16 0.00 receivable Dalian Co., Ltd. Sinopharm Holding Accounts Chongqing Co., 337,466.49 0.00 2,248,998.17 0.00 receivable Ltd. Sinopharm Holding Accounts Inner Mongolia 323,446.74 0.00 327,343.79 0.00 receivable Co., Ltd. Sinopharm Accounts Lerentang 322,920.00 0.00 30,744.72 0.00 receivable Qinhuangdao Medicine Co., Ltd. Accounts Sinopharm Holding 267,786.00 0.00 0.00 0.00 receivable Putian Co., Ltd. Accounts Sinopharm Holding 193,278.43 0.00 565,976.79 0.00 receivable Qingdao Co., Ltd. Sinopharm Holding Accounts Quanzhou Co., 185,925.12 0.00 179,570.31 0.00 receivable Ltd. Sinopharm Holding Accounts Changzhou 140,553.67 0.00 246,140.48 0.00 receivable Medical logistics center Co., Ltd. Sinopharm Holding Accounts Tianjin North 139,080.00 0.00 559,722.27 0.00 receivable Medicine Co., Ltd. Accounts Sinopharm Holding 131,198.27 0.00 160,260.67 0.00 receivable Changde Co., Ltd. Accounts Sinopharm Holding 115,002.00 0.00 70,416.00 0.00 receivable Ningde Co., Ltd. Accounts Sinopharm Holding 105,842.56 0.00 84,878.70 0.00 receivable Shan`xi Co., Ltd. Accounts Sinopharm Holding 103,769.29 0.00 208,244.76 0.00 receivable Jiangsu Co., Ltd. Accounts Sinopharm Holding 94,500.00 0.00 197,948.00 0.00 receivable Anqing Co., Ltd. Accounts Sinopharm Holding 85,512.00 0.00 80,520.00 0.00 receivable Yantai Co., Ltd. 144 国药集团一致药业股份有限公司 2015 年半年度报告 Qinghai Medical Accounts Pharmaceutical 70,050.00 0.00 25,500.00 0.00 receivable Material Co., Ltd. China Sinopharm Accounts International 52,500.00 0.00 0.00 0.00 receivable Corporation Jiang Meng Accounts Renren Medical 50,087.10 0.00 39,045.20 0.00 receivable instrument Co., Ltd. Accounts Sinopharm Holding 47,921.10 0.00 45,812.40 0.00 receivable Jiangxi Co., Ltd. Accounts Sinopharm Holding 35,439.59 0.00 8,640.00 0.00 receivable Sanming Co., Ltd. Accounts Sinopharm Holding 33,420.00 0.00 177,054.00 0.00 receivable Suzhou Co., Ltd. Accounts Shanxi Guoyi Drug 30,300.00 0.00 15,060.00 0.00 receivable Store Co., Ltd. Foshan Chanyixing Accounts Medicine 18,484.40 0.00 32,786.80 0.00 receivable Development Co Ltd Guang dong South Accounts Pharmaceutical 6,912.00 0.00 39,331.20 0.00 receivable Foreign Trade Co., Ltd. Sinopharm Holding Accounts Nanping New 4,380.00 0.00 0.00 0.00 receivable Power Co., Ltd. Accounts Sinopharm Holding 3,190.00 0.00 5,755.00 0.00 receivable Zhoukou Co., Ltd. Sinopharm Holding (Yangzhou) Accounts Chinese Western 1,992.80 0.00 44,332.00 0.00 receivable Medicine Branch Co., Ltd. Accounts Sinopharm Holding 1,500.00 0.00 426,089.07 0.00 receivable Anhui Co., Ltd. Accounts Sinopharm Holding 1,090.00 0.00 0.00 0.00 receivable Xinxiang Co.,Ltd 145 国药集团一致药业股份有限公司 2015 年半年度报告 Accounts Sinopharm Holding 500.00 0.00 2,180.00 0.00 receivable Shangqiu Co., Ltd. Sinopharm Holding Accounts Beijing Kangchen 0.00 0.00 7,728.00 0.00 receivable Bio-Pharmaceutica l Co., Ltd. Shanghai Tongyu Accounts Information 0.00 0.00 3,000.00 0.00 receivable Technology Co., Ltd. Accounts Sinopharm Holding 0.00 0.00 45,804.00 0.00 receivable Puyang Co., Ltd. Sinopharm Holding Accounts Hongkong 0.00 0.00 63,009.89 0.00 receivable International Co. Ltd Sinopharm Holding Accounts Beijing Tianxing 0.00 0.00 1,711.00 0.00 receivable Puxin Biological Medical Co., Ltd. Sinopharm Group Accounts Shanghai Likang 0.00 0.00 128,320.00 0.00 receivable Pharmaceutical Co. Ltd. Shanghai Accounts Nutraceuticals 0.00 0.00 2,320.00 0.00 receivable (Shanghai) Co., Ltd. Sinopharm Holding Accounts Changzhou Co., 0.00 0.00 27,600.00 0.00 receivable Ltd. Shanghai Accounts Donghong 0.00 0.00 224,610.00 0.00 receivable Medicine Co., Ltd. Shanghai Nuoyun Accounts Marketing 0.00 0.00 100,000.00 0.00 receivable Consulting Co., Ltd. Shenzhen Wanwei Accounts Medicine trading 0.00 0.00 1,200.00 0.00 receivable Co., Ltd. 146 国药集团一致药业股份有限公司 2015 年半年度报告 Sinopharm Holding Notes receivable 4,874,345.98 0.00 3,940,454.90 0.00 Hunan Co., Ltd. Sinopharm Holding Notes receivable 4,515,746.05 0.00 3,326,140.88 0.00 Hainan Co., Ltd. Sinopharm Guoda Drug Store Notes receivable 4,074,440.19 0.00 3,379,828.22 0.00 Guangxi Chain Co., Ltd. Sinopharm Holding Notes receivable Hainan Hongyi 3,239,255.56 0.00 2,487,781.91 0.00 Co., Ltd. Sinopharm Holding Notes receivable 2,014,138.07 0.00 233,786.00 0.00 Tianjin Co., Ltd. Sinopharm Group (Tianjin) Eastern Notes receivable Bokang 1,871,320.00 0.00 0.00 0.00 Pharmaceutical Co., Ltd. Sinopharm Holding Notes receivable 1,255,125.58 0.00 200,000.00 0.00 Shandong Co., Ltd. Sinopharm Holding Notes receivable 900,000.00 0.00 183,647.00 0.00 Yancheng Co., Ltd. Sinopharm Sichuan Notes receivable 875,741.95 0.00 0.00 0.00 Pharmaceutical Co., Ltd. Chongqing Yaoyou Notes receivable Pharmaceutical 724,410.89 0.00 1,661,088.00 0.00 Co., Ltd. Sinopharm Holding Notes receivable 256,360.80 0.00 0.00 0.00 Anhui Co., Ltd. Ningxia Guoda Notes receivable Drug StoreChain 250,000.00 0.00 0.00 0.00 Co., Ltd. Sinopharm Holding Notes receivable 213,812.80 0.00 0.00 0.00 Wuhu Co., Ltd. Sinopharm Holding Notes receivable 167,232.00 0.00 539,043.12 0.00 Shenyang Co., Ltd. Sinopharm Holding Notes receivable 142,297.20 0.00 366,032.00 0.00 Chongqing Co., 147 国药集团一致药业股份有限公司 2015 年半年度报告 Ltd. Sinopharm Holding Guoda Drug Store Notes receivable 134,851.25 0.00 989,431.36 0.00 Guangdong Co., Ltd. Sinopharm Holding Chengdu Notes receivable 105,451.00 0.00 0.00 0.00 Pharmaceutical Co., Ltd. Sinopharm Holding Notes receivable 100,000.00 0.00 0.00 0.00 Ningxia Co., Ltd. Sinopharm Holding Notes receivable 99,733.50 0.00 0.00 0.00 Nanyang Co., Ltd. Sinopharm Group Xinjiang Special Notes receivable Drugs National 97,300.00 0.00 0.00 0.00 Pharmaceutical Co., Ltd. Sinopharm Holding Notes receivable 68,664.00 0.00 36,456.00 0.00 Yantai Co., Ltd. Sinopharm Holding Notes receivable Sub Marketing 26,000.00 0.00 0.00 0.00 Center Co., Ltd. Sinopharm Holding Notes receivable 0.00 0.00 148,911.00 0.00 Shan`xi Co., Ltd. Sinopharm Holding Notes receivable 0.00 0.00 378,000.00 0.00 Hubei Co., Ltd. Sinopharm Holding Hunan Guoda Notes receivable Minshengtang 0.00 0.00 184,000.00 0.00 Drug Store Chain Co., Ltd. Sinopharm Holding Notes receivable 0.00 0.00 223,074.00 0.00 Zhejiang Co., Ltd. Sinopharm Holding Notes receivable 0.00 0.00 12,800.00 0.00 Taizhou Co., Ltd. Sinopharm Holding Notes receivable 0.00 0.00 100,000.00 0.00 Anyang Co., Ltd. Sinopharm Holding Notes receivable 0.00 0.00 42,183.00 0.00 Huainan Co., Ltd. 148 国药集团一致药业股份有限公司 2015 年半年度报告 Sinopharm Holding Notes receivable 0.00 0.00 100,000.00 0.00 Fuyang Co., Ltd. Sinopharm Holding Notes receivable 0.00 0.00 39,055.91 0.00 Lunan Co., Ltd. Sinopharm Holding Notes receivable 0.00 0.00 119,016.00 0.00 Ningde Co., Ltd. Sinopharm Le Notes receivable -Ren-Tang 0.00 0.00 84,503.26 0.00 Medicine Co., Ltd. NanJing Iron & Notes receivable 0.00 0.00 200,000.00 0.00 Steel Co., Ltd. Nanjing Iron & Steel Group Notes receivable 0.00 0.00 100,000.00 0.00 International Trade Co., Ltd China National Pharmaceutical Notes receivable 0.00 0.00 30,000.00 0.00 Foreign Trade Co., Ltd. Sinopharm Group Other receivables Medicine Logistic 1,215,000.00 0.00 1,215,000.00 0.00 Co., Ltd. Other receivables Sinopharm Group 250,000.00 0.00 250,000.00 0.00 China National Pharmaceutical Other receivables 131,823.93 0.00 250,000.00 0.00 Foreign Trade Co., Ltd. Guang dong South Pharmaceutical Other receivables 36.75 0.00 36.75 0.00 Foreign Trade Co., Ltd. China National Other receivables 0.00 0.00 184,730.14 0.00 Medicines Co., Ltd. Sinopharm Chongqing Advances to Pharmaceutical 6,142,166.67 0.00 16,612,166.67 0.00 suppliers and Medical Industry Design Institute Advances to Winteam 5,003,400.42 0.00 0.00 0.00 149 国药集团一致药业股份有限公司 2015 年半年度报告 suppliers Pharmaceutical Group Ltd. Chengdu Advances to Rongsheng 389,600.00 0.00 118,628.00 0.00 suppliers Pharmacy Co., Ltd. Wuhan Institute of Advances to Biological Products 362,200.00 0.00 310,400.00 0.00 suppliers Co., Ltd. Sinopharm Holding Advances to Sub Marketing 301,360.00 0.00 0.00 0.00 suppliers Center Co., Ltd. Advances to Shenzhen Wanle 45,602.97 0.00 45,602.97 0.00 suppliers Medical Co., Ltd. Shanghai Institute Advances to of Pharmaceutical 40,000.00 0.00 0.00 0.00 suppliers Industry Sino-Swed Advances to Pharmaceutical 18,400.00 0.00 0.00 0.00 suppliers Corp.Ltd. Foshan Nanhai Advances to Uptodate & Special 8,993.75 0.00 649.36 0.00 suppliers Medicines Co., Ltd. Advances to China National 5,541.40 0.00 8,608.07 0.00 suppliers Medicines Co., Ltd. Advances to Sinopharm Holding 3,884.87 0.00 11,581.25 0.00 suppliers Suzhou Co., Ltd. Yichang Advances to Humanwell 2,993.74 0.00 0.00 0.00 suppliers Pharmaceutical Co., Ltd. Sinopharm Group Advances to Guorui Medicine 957.26 0.00 957.26 0.00 suppliers Co., Ltd. China National Advances to Pharmaceutical 947.81 0.00 0.00 0.00 suppliers Foreign Trade Co., Ltd. Advances to Sinopharm Holding 214.86 0.00 0.00 0.00 suppliers Macheng Co., Ltd. Advances to Guangdong Dong 46.55 0.00 0.00 0.00 150 国药集团一致药业股份有限公司 2015 年半年度报告 suppliers Fang Uptodate & Special Medicines Co., Ltd. Sinopharm Group Advances to Chemical Reagent 0.00 0.00 27,307.69 0.00 suppliers Co., Ltd. Advances to Sinopharm Holding 0.00 0.00 1,480.70 0.00 suppliers Hunan Co., Ltd. Advances to Sinopharm Holding 0.00 0.00 4,386.00 0.00 suppliers Fujian Co., Ltd. Advances to Sinopharm Holding 0.00 0.00 379.92 0.00 suppliers Guizhou Co., Ltd. China National Scientific Advances to Instruments & 0.00 0.00 1,806,138.00 0.00 suppliers Materials Imp/Exp Shenzhen CO., Ltd Beijing Huasheng Pharmaceutical Advances to Biotechnology 0.00 0.00 437.62 0.00 suppliers Development Co., Ltd. China National Advances to Pharmaceutical 0.00 0.00 10.50 0.00 suppliers Industry Co., Ltd. Qinghai Advances to Pharmaceutical 0.00 0.00 5,138,698.55 0.00 suppliers (Group) Co., Ltd. (2)Accounts payables to related parties Unit:RMB Nature Related parties 30 June 2015 31 December 2014 Sinopharm Holding Sub Accounts payable 150,387,205.95 168,855,238.90 Marketing Center Co., Ltd. China National Medicines Accounts payable 48,133,232.95 40,965,238.69 Co., Ltd. Accounts payable Sinopharm Group 42,205,548.33 68,114,014.57 Sino-Swed Pharmaceutical Accounts payable 16,496,283.73 7,452,712.28 Corp.Ltd. 151 国药集团一致药业股份有限公司 2015 年半年度报告 Shenzhen Wanwei Medicine Accounts payable 10,050,520.04 12,058,843.67 trading Co., Ltd. Jiangsu Wanbang Pharmacy Accounts payable 7,637,070.79 5,511,809.11 Marketing Co., Ltd. Guang dong South Accounts payable Pharmaceutical Foreign 6,826,776.18 7,999,963.51 Trade Co., Ltd. Chongqing Yaoyou Accounts payable 6,508,613.00 2,242,748.93 Pharmaceutical Co., Ltd. Lanzhou Institute of Accounts payable 3,440,560.00 3,360,000.00 Biological Products Co., Ltd. Foshan Nanhai Uptodate & Accounts payable 3,401,035.52 1,773,366.89 Special Medicines Co., Ltd. Winteam Pharmaceutical Accounts payable 2,119,154.16 2,782,751.64 Group Ltd. Sinopharm Group Medicine Accounts payable 810,654.51 708,527.88 Logistic Co., Ltd. Sinopharm Holding Beijing Accounts payable 710,666.35 388,738.14 Co., Ltd. Sinopharm Holding Beijing Accounts payable 587,884.15 310,189.92 Huahong Co., Ltd. Shanghai Shyndec Accounts payable 573,538.00 220,866.53 Pharmaceutical Co., Ltd. Sinopharm Holding Beijing Accounts payable Tianxing Puxin Biological 457,929.43 0.00 Medical Co., Ltd. Sinopharm Group Accounts payable Rongsheng Pharmaceutical 422,264.41 78,975.41 Co., Ltd. Chongqing Haisiman Accounts payable 401,573.21 1,462,551.60 Pharmaceutical Co., Ltd. Beijing Huasheng Pharmaceutical Accounts payable 388,297.01 637.01 Biotechnology Development Co., Ltd. Guizhou Tongjitang Accounts payable 325,537.57 282,671.52 Pharmaceutical Co., Ltd. China Otsuka Accounts payable 264,611.06 196,492.56 Pharmaceutical Co., Ltd. 152 国药集团一致药业股份有限公司 2015 年半年度报告 Handan Pharmaceutical Co., Accounts payable 242,911.34 263,842.34 Ltd Sinopharm Group Zhonglian Accounts payable 235,048.83 176,769.70 Pharmaceutical Co. Ltd. Anhui Jingfang Accounts payable 144,572.13 31,541.61 Pharmaceutical Co., Ltd. Qinghai Pharmaceutical Accounts payable 138,453.45 0.00 (Group) Co., Ltd. Sinopharm Group Chemical Accounts payable 135,240.19 443,678.43 Reagent Co., Ltd. Sinopharm Holding Hunan Accounts payable 123,520.50 249.04 Co., Ltd. Yichang Humanwell Accounts payable 110,894.07 15,820.01 Pharmaceutical Co., Ltd. Guilin South pharmaceutical Accounts payable 103,018.41 96,499.78 Co., Ltd. Sinopharm Holding Luoyang Accounts payable 97,094.01 0.00 Co., Ltd. Guangdong Dong Fang Accounts payable Uptodate & Special 93,221.91 661,951.36 Medicines Co., Ltd. Shenyang Hongqi Accounts payable 86,550.67 97,796.06 Pharmaceutical Co., Ltd. Suzhou Erye Pharmaceutical Accounts payable 72,650.00 92,623.93 Limited Company Foshan Nanhai Medicine Accounts payable 66,378.81 62,758.66 Co., Ltd. Sinopharm Guoda Drug Accounts payable Store(Shenzhen) Chain Co., 62,589.80 23,757.18 Ltd. Hunan Dongting Accounts payable 61,301.52 47,614.27 Pharmaceutical Co., Ltd. Sinopharm Xingsha Accounts payable Pharmaceuticals (Xiamen) 60,622.82 39,113.92 Co., Ltd. Foshan Dezhong Accounts payable 60,002.93 60,002.93 Pharmaceutical Co., Ltd. Shandong Lu Ya Accounts payable 53,469.45 53,469.45 Pharmaceutical Co., Ltd. 153 国药集团一致药业股份有限公司 2015 年半年度报告 Sinopharm Holding Hubei Accounts payable 46,014.36 35,238,692.18 Co., Ltd. Shanghai Institute of Accounts payable biomedical Pharmaceutical Co. 43,012.23 0.85 Ltd Foshan Fengliaoxing Accounts payable 40,514.97 437,829.45 Pharmaceutical Co., Ltd. Sichuan Hexin Accounts payable 32,659.20 0.00 Pharmaceutical Co., Ltd. Guangdong Medi-World Accounts payable 30,114.22 30,541.40 Pharmacertical Co., Ltd. Guizhou Longlife Accounts payable 26,922.69 26,948.33 Pharmacertical Co., Ltd. Sinopharm Holding Sanyi Accounts payable 21,261.25 22,356.76 Medicine(Wuhu) Co., Ltd. Shanghai Modern Hasen Accounts payable (Shangqiu) Pharmacertical 20,881.84 29,802.78 Co., Ltd. Changchun Changsheng Accounts payable Gene Pharmaceutical Co., 17,914.80 17,914.80 Ltd. Sinopharm Group Chemical Accounts payable 17,583.33 58,032.78 Reagent Suzhou Co., Ltd. Sinopharm Group Shanghai Accounts payable 16,603.02 16,603.02 Medicine Device Co., Ltd. Sinopharm Holding Accounts payable 16,197.93 16,197.93 Liaocheng Co., Ltd. Sinopharm Holding Dalian Accounts payable 11,282.05 0.00 Co., Ltd. Sinopharm Group Beijing Accounts payable 8,827.77 8,827.77 Medical equipment Co., Ltd. Sinopharm Holding Jiangsu Accounts payable 8,386.03 27,794.23 Co., Ltd. Sinopharm Group Weiqida Accounts payable 8,150.45 201.73 Medicine Co., Ltd. Shanghai Chaohui Accounts payable 7,494.85 7,494.85 Pharmecurical Co., Ltd. Sinopharm Holding Shan`xi Accounts payable 6,119.55 0.00 Co., Ltd. 154 国药集团一致药业股份有限公司 2015 年半年度报告 China National Scientific Accounts payable Instruments & Materials 5,849.56 0.00 Imp/Exp Shenzhen CO., Ltd Shenzhen Wanle Medical Accounts payable 4,444.06 4,290.22 Co., Ltd. Sinopharm Holding Dezhou Accounts payable 4,333.65 4,333.65 Co., Ltd. Foshan Fengliaoxing Accounts payable 3,914.41 3,914.41 Pharmaceutical Co., Ltd. Shanghai Sailun Biological Accounts payable 2,941.10 2,941.10 Technology Co., Ltd. Jiangsu Huanghe Accounts payable 2,789.73 2,789.73 Pharmaceutical Co., Ltd Sinopharm Holding Huaideju Accounts payable Pharmaceutical (Xiamen) 1,113.85 1,113.85 Co., Ltd. Chengdu Rongsheng Accounts payable 794.87 794.87 Pharmacy Co., Ltd. The Fourth Pharmaceutical Accounts payable 752.14 752.14 Co., Ltd. of Zhonglian Group Sinopharm Holding Guoda Accounts payable Fumei Pharmaceutical 189.71 189.71 (Shanghai) Co., Ltd. Sinopharm Holding Fujian Accounts payable 51.00 0.00 Co., Ltd. Sinopharm Holding Guizhou Accounts payable 41.02 41.02 Co., Ltd. Sinopharm Holding Sanming Accounts payable 12.82 12.82 Co., Ltd. Sinopharm Group Southwest Accounts payable 0.00 222,265.56 Medicine Co., Ltd. Sinopharm Holding Inner Accounts payable 0.00 78,106.98 Mongolia Co., Ltd. China National Accounts payable Pharmaceutical Foreign 0.00 367,884.12 Trade Co., Ltd. China State Institute of Other payables 8,590,000.00 150,000.00 Pharmaceutical Industry Other payables Sinopharm Group 4,530,696.87 4,330,696.87 155 国药集团一致药业股份有限公司 2015 年半年度报告 Sinopharm Chongqing Other payables Pharmaceutical and Medical 4,030,000.00 1,730,000.00 Industry Design Institute Sinopharm Group Medicine Other payables 2,900,553.36 14,148.79 Logistic Co., Ltd. Sinopharm Holding Shanghai Other payables 1,660,431.38 1,660,431.38 Co., Ltd. China Traditional Chinese Other payables 1,300,000.00 1,300,000.00 Medicine Co. Sinopharm Group Chemical Other payables 240,944.50 220,000.00 Reagent Co., Ltd. Sinopharm Guoda Drug Other payables Store(Shenzhen) Chain Co., 72,000.00 0.00 Ltd. Sinopharm Guoda Drug Other payables Store Guangxi Chain Co., 55,300.00 0.00 Ltd. Sinopharm Holding Guoda Other payables Drug Store Guangzhou 46,000.00 0.00 Chain Co., Ltd. Sinopharm Group Other payables Guangdong Medicine Device 44,000.00 44,000.00 Co., Ltd. Sinopharm Holding Hainan Other payables 20,000.00 20,000.00 Hongyi Co., Ltd. Sinopharm Holding Shanxi Other payables 15,000.00 15,000.00 Co., Ltd. Sinopharm Holding Tianjin Other payables 10,000.00 10,000.00 Co., Ltd. Sinopharm Group (Tianjin) Other payables Eastern Bokang 10,000.00 10,000.00 Pharmaceutical Co., Ltd. Sinopharm Group Southwest Other payables 5,000.00 5,000.00 Medicine Co., Ltd. Sinopharm Holding Hubei Other payables 5,000.00 5,000.00 Co., Ltd. Sinopharm Holding Sub Other payables 5,000.00 5,000.00 Marketing Center Co., Ltd. Other payables Sinopharm Holding 5,000.00 5,000.00 156 国药集团一致药业股份有限公司 2015 年半年度报告 (Yangzhou) Chinese Western Medicine Branch Co., Ltd. Sinopharm Holding Wuxi Other payables 5,000.00 5,000.00 Co., Ltd. Sinopharm Le -Ren-Tang Other payables 5,000.00 5,000.00 Medicine Co., Ltd. Other payables CNPGC 0.00 900,000.00 Notes payable Sinopharm Group 50,760,344.94 72,843,584.86 Sinopharm Group Chemical Notes payable 25,465.00 45,110.30 Reagent Suzhou Co., Ltd. Sinopharm Holding Beijing Notes payable 0.00 212,400.00 Co., Ltd. China National Medicines Notes payable 10,939,643.27 10,591,195.40 Co., Ltd. Sinopharm Holding Sub Notes payable 161,338,460.37 140,809,327.41 Marketing Center Co., Ltd. Chongqing Yaoyou Notes payable 2,474,852.99 918,825.60 Pharmaceutical Co., Ltd. Shenyang Hongqi Notes payable 149,450.00 0.00 Pharmaceutical Co., Ltd. Jiangsu Wanbang Pharmacy Notes payable 1,000,209.72 2,013,158.00 Marketing Co., Ltd. Chongqing Haisiman Notes payable 1,628,968.60 2,071,879.20 Pharmaceutical Co., Ltd. Guizhou Tongjitang Notes payable 1,224,804.50 1,228,680.00 Pharmaceutical Co., Ltd. Anhui Jingfang Notes payable 283,256.00 477,198.00 Pharmaceutical Co., Ltd. Winteam Pharmaceutical Notes payable 318,943.43 0.00 Group Ltd. Lanzhou Institute of Notes payable 794,447.76 600,000.00 Biological Products Co., Ltd. Shanghai Shyndec Notes payable 0.00 223,384.80 Pharmaceutical Co., Ltd. Sinopharm Group Notes payable Rongsheng Pharmaceutical 85,625.00 308,385.00 Co., Ltd. Shenzhen Wanwei Medicine Notes payable 1,357,430.50 1,291,900.00 trading Co., Ltd. 157 国药集团一致药业股份有限公司 2015 年半年度报告 Sinopharm Guoda Drug Advances from customers Store Guangxi Chain Co., 94,692.36 94,692.36 Ltd. Guang dong South Advances from customers Pharmaceutical Foreign 43,920.00 292,192.94 Trade Co., Ltd. Sinopharm Holding Gansu Advances from customers 11,003.00 11,003.00 Co., Ltd. Sinopharm Holding Xuzhou Advances from customers 5,744.00 11,530.00 Co., Ltd. Sinopharm Holding Suzhou Advances from customers Kangmin Pharmaceutical Co. 5,635.00 0.00 Ltd. Sinopharm Group Southwest Advances from customers 2,456.00 0.00 Medicine Co., Ltd. Sinopharm Holding Chengdu Advances from customers 1,450.09 1,802.98 Pharmaceutical Co., Ltd. Sinopharm Holding Advances from customers 755.62 755.62 Chongqing Co., Ltd. Sinopharm Holding Zhejiang Advances from customers 505.00 505.00 Biological Product Co., Ltd. Sinopharm Lerentang Advances from customers 291.52 0.00 Tangshan Medicine Co., Ltd. Chongqing Yaoyou Advances from customers 203.47 0.00 Pharmaceutical Co., Ltd. Sinopharm Sichuan Advances from customers 100.00 100.00 Pharmaceutical Co., Ltd. Sinopharm Holding Jingmen Advances from customers 1.00 1.00 Co., Ltd. Sinopharm Le -Ren-Tang Advances from customers 0.00 329,098.00 Medicine Co., Ltd. Guangdong Dong Fang Advances from customers Uptodate & Special 0.00 187,200.00 Medicines Co., Ltd. Sinopharm Holding Advances from customers 0.00 133,290.00 Yangzhou Co., Ltd. Sinopharm Holding Guoda Advances from customers 0.00 129,200.00 Pharmacy Co., Ltd. Advances from customers Sinopharm Holding Beijing 0.00 91,800.00 158 国药集团一致药业股份有限公司 2015 年半年度报告 Co., Ltd. Hetian Region Ankang Chain Advances from customers 0.00 63,128.00 Drugstore Co., Ltd. Sinopharm Holding Longyan Advances from customers 0.00 59,508.00 Co., Ltd. Sinopharm Holding Anhui Advances from customers 0.00 44,302.05 Co., Ltd. Sinopharm Holding Shanxi Advances from customers 0.00 38,340.00 Co., Ltd. Sinopharm Holding Wenzhou Advances from customers 0.00 33,999.60 Co., Ltd. Sinopharm Holding Suzhou Advances from customers 0.00 32,220.00 Co., Ltd. Sinopharm Holding ChiFeng Advances from customers 0.00 30,384.00 Co., Ltd. Sinopharm Holding Sub Advances from customers 0.00 24,741.60 Marketing Center Co., Ltd. Sinopharm Holding Jilin Co., Advances from customers 0.00 16,496.52 Ltd. Sinopharm Holding Advances from customers 0.00 16,320.00 Shandong Co., Ltd. Sinopharm Group Shanghai Advances from customers Likang Pharmaceutical Co. 0.00 12,620.00 Ltd. Sinopharm Holding Zhejiang Advances from customers 0.00 11,652.00 Co., Ltd. Sinopharm Holding Tianjin Advances from customers 0.00 8,600.00 Co., Ltd. Sinopharm Holding Jiangsu Advances from customers 0.00 4,833.00 Co., Ltd. Sinopharm Holding Advances from customers 0.00 1,872.00 Heilongjiang Co., Ltd. Sinopharm Holding Hebei Advances from customers 0.00 3.48 Medical Co., Ltd. Interests payable CNPGC 60,291.18 52,140.00 Interests payable Group Financial Co. 56,155.04 0.00 159 国药集团一致药业股份有限公司 2015 年半年度报告 7. Commitment with related parties Undertaking contracted for at the balance sheet date but not recognised in balance sheet are anaylsed as follows: As a leasee Unit: RMB’0,000 30 June 2015 31 December 2014 Shaoguan Wujiang District Muyang Medicine 766.17 640.52 Information Consultant Co., Ltd. Sinopharm Group Medicine Logistic Co., Ltd. 729.00 0.00 Wang Yang 248.40 0.00 Foshan Nanhai Medicine Group Co., Ltd. 18.24 3.70 Total 1,761.81 644.22 As a leaser Unit: RMB’0,000 30 June 2015 31 December 2014 Sinopharm Guoda Drug Store Guangxi Chain 150.99 275.25 Co., Ltd. Sinopharm Guoda Drug Store(Shenzhen) 107.94 10.25 Chain Co., Ltd. Sinopharm Holding Guoda Drug Store 41.17 54.03 Guangzhou Chain Co., Ltd. Sinopharm Group Guangdong Medicine 14.19 28.38 Device Co., Ltd. Total 314.29 367.91 Guarantee (Unused quotas) Unit: RMB’0,000 30 June 2015 31 December 2014 Sinopharm Group 7,697.05 10,024.25 Total 7,697.05 10,024.25 XI. Commitments and Contingencies 1. Commitments (1) Capital commitments 160 国药集团一致药业股份有限公司 2015 年半年度报告 Capital expenditures contracted for at the balance sheet date but not recognised in balance sheet are analysed as follows: Unit: RMB’0,000 30 June 2015 31 December 2014 Buildings, machinery and equipment 2,660.67 14,228.32 Total 2,660.67 14,228.32 (2) Operating lease commitments The future minimum lease payments due under the signed irrevocable operating leases contracts are summarised as follows: Unit: RMB’0,000 30 June 2015 31 December 2014 Within one year 3,585.99 2,446.33 Between 1 and 2 years 2,682.19 2,407.97 Between 2 and 3 years 2,489.98 2,364.04 Over 3 years 13,233.29 16,372.28 Total 21,991.45 23,590.62 XII. Notes to the main items of financial statement of the Company 1. Accounts receivable (1)The accounts receivable and related provision for bad debts by category are analysed below: Unit:RMB 30 June 2015 31 December 2014 Bad debt Carrying amount Carrying amount Bad debt provision provision Book % of % of Book value value amoun amount total amount rate total amount rate t balance balance individually significant are subject to separate 0.00 0.00% 0.00 0.00% 0.00 0.00 0.00% 0.00 0.00% 0.00 impairment assessment receivable 513,79 accounts within 561,068, 100.00 561,068, 100.00 513,791,982. 0.00 0.00% 1,982. 0.00 0.00% similar credit risk 339.16 % 339.16 % 48 48 group 161 国药集团一致药业股份有限公司 2015 年半年度报告 individually not significant but individually 0.00 0.00% 0.00 0.00% 0.00 0.00 0.00% 0.00 0.00% 0.00 evaluated for impairment 513,79 561,068, 100.00 561,068, 100.00 513,791,982. Total 0.00 0.00% 1,982. 0.00 0.00% 339.16 % 339.16 % 48 48 The aging of accounts receivable and related provision for bad debts are analysed below: Unit:RMB 30 June 2015 Aging Accounts receivable Provision for bad debts rate Within 1 year 561,068,339.16 0.00 0.00% Total 561,068,339.16 0.00 0.00% (2)The top five accounts receivable by customer are summariesd as below: % of the total accounts Amount Bad debt provision amount receivable Total amount of the top five 149,192,318.92 0.00 26.59% accounts receivables 2. Other receivables (1)Other receivables and related provision for bad debts by category are analysed below: Unit:RMB 30 June 2015 31 December 2014 Bad debt Carrying amount Carrying amount Bad debt provision provision Classification Book % of % of Book value value amount total amount rate amount total amount rate amount amount Individually significant are 8,980,00 8,980,00 100.00 8,980,0 8,980,00 subject to separate 0.66% 0.00 0.80% 100.00% 0.00 0.00 0.00 % 00.00 0.00 impairment assessment Receivable 1,349,02 99.25% 41,054.9 0.00% 1,348,9 1,111,4 99.10% 41,461.3 0.00% 1,111,423,80 162 国药集团一致药业股份有限公司 2015 年半年度报告 accounts within 0,824.40 0 79,769. 65,271. 0 9.76 similar credit risk 50 06 group Individually not significant but 1,157,86 1,157,86 100.00 1,157,8 1,157,86 individually 0.09% 0.00 0.10% 100.00% 0.00 0.00 0.00 % 60.00 0.00 evaluated for impairment 1,348,9 1,121,6 1,359,15 100.00 10,178,9 100.00 10,179,3 1,111,423,80 Total 0.75% 79,769. 03,131. 0.91% 8,684.40 % 14.90 % 21.30 9.76 50 06 As at 30 June 2015, impairment provision for other receivables individually significant are analysed as below: Unit:RMB 30 June 2015 Other receivables(by Assessment for company) Amount Bad debt provision Rate impairment Shenzhen Yinghai Uncertainty in Technology Investment 8,980,000.00 8,980,000.00 100.00% recoverability Co., Ltd. Total 8,980,000.00 8,980,000.00 -- -- Provisions for impairment of the receivables which have a similar risk group are analysed below: Unit:RMB 30 June 2015 Aging Amount Bad debt provision Rate Within 1 year 1,348,199,726.44 0.00 0.00% 1 to 2 years 821,097.96 41,054.90 5.00% Total 1,349,020,824.40 41,054.90 0.00% (2)Other receivables by nature are analysed below Unit:RMB Nature 30 June 2015 31 December 2014 Amounts due from related parties 1,344,841,150.15 1,107,496,851.78 Petty cash advance to employees 2,329,088.34 1,050,529.32 Deposit 1,372,469.72 2,370,709.80 Purchasing rebates 414,367.80 0.00 163 国药集团一致药业股份有限公司 2015 年半年度报告 Others 10,201,608.39 10,685,040.16 Total 1,359,158,684.40 1,121,603,131.06 (3)As at 30 June of 2015,the top 5 parties that owe the largest amounts of other receivable balances are analysd as below: Unit:RMB Company name Nature Balance Aging % of total amount Provision of bad debt Entrusted Sinopharm Yuexing 209,700,000.00 Within 1 year 15.43% 0.00 borrowings Entrusted Suzhou Zhijun 177,949,000.00 Within 1 year 13.09% 0.00 borrowings Sinopharm Entrusted 130,000,000.00 Within 1 year 9.56% 0.00 Guangzhou borrowings Sinopharm Entrusted 118,000,000.00 Within 1 year 8.68% 0.00 Zhanjiang borrowings Entrusted Guangxi Logistics 81,840,000.00 Within 1 year 6.02% 0.00 borrowings Total -- 717,489,000.00 -- 52.78% 0.00 3. Long-term equity investments Unit:RMB 30 June 2015 31 December 2014 Provision for Provision for Carrying Amount Book Value Carrying Amount Book Value impairment impairment Investments in 2,735,399,494.38 121,000,000.00 2,614,399,494.38 2,735,399,494.38 121,000,000.00 2,614,399,494.38 subsidiaries Investments 151,691,888.29 0.00 151,691,888.29 157,604,846.85 0.00 157,604,846.85 in associates Total 2,887,091,382.67 121,000,000.00 2,766,091,382.67 2,893,004,341.23 121,000,000.00 2,772,004,341.23 (1)Investments in subsidiaries Unit:RMB Original Increases in Decreases in Provision for Investees 30 June 2015 Impairment investment cost investment cost investment cost impairment Zhijun Medicine 204,903,284.87 0.00 0.00 204,903,284.87 0.00 0.00 164 国药集团一致药业股份有限公司 2015 年半年度报告 Sinopharm 60,054,911.04 0.00 0.00 60,054,911.04 0.00 0.00 Jianming Sinopharm Shenzhen 15,450,875.93 0.00 0.00 15,450,875.93 0.00 0.00 Material Shenzhen 5,019,062.68 0.00 0.00 5,019,062.68 0.00 0.00 Logistics Sinopharm 1,035,440,323.63 0.00 0.00 1,035,440,323.63 0.00 0.00 Guangzhou Zhijun Medicine 11,116,866.42 0.00 0.00 11,116,866.42 0.00 0.00 Sinopharm 45,763,288.00 0.00 0.00 45,763,288.00 0.00 0.00 Hengxing Sinopharm 21,407,965.79 0.00 0.00 21,407,965.79 0.00 0.00 Liuzhou Sinopharm 17,942,000.00 0.00 0.00 17,942,000.00 0.00 0.00 Dongguan Huixin 64,416,937.72 0.00 0.00 64,416,937.72 0.00 0.00 Investment Guangdong 10,596,006.21 0.00 0.00 10,596,006.21 0.00 0.00 Logistics Sinopharm 113,459,326.27 0.00 0.00 113,459,326.27 0.00 0.00 Yuexing Sinopharm 19,995,065.51 0.00 0.00 19,995,065.51 0.00 0.00 Foshan Suzhou Zhijun 265,900,000.00 0.00 0.00 265,900,000.00 0.00 121,000,000.00 Sinopharm 504,048,985.28 0.00 0.00 504,048,985.28 0.00 0.00 Guangxi Sinopharm 70,769,864.65 0.00 0.00 70,769,864.65 0.00 0.00 Zhanjiang Sinopharm 38,207,800.00 0.00 0.00 38,207,800.00 0.00 0.00 Yanfeng Sinopharm 21,281,900.00 0.00 0.00 21,281,900.00 0.00 0.00 Meizhou Zhijun(Shenzhen 37,850,830.38 0.00 0.00 37,850,830.38 0.00 0.00 )Pingshan Sinopharm 16,644,200.00 0.00 0.00 16,644,200.00 0.00 0.00 Huizhou Sinopharm 18,060,000.00 0.00 0.00 18,060,000.00 0.00 0.00 165 国药集团一致药业股份有限公司 2015 年半年度报告 Zhaoqing Sinopharm 106,000,000.00 0.00 0.00 106,000,000.00 0.00 0.00 Jiangmen Sinopharm 10,000,000.00 0.00 0.00 10,000,000.00 0.00 0.00 Zhongshan Sinopharm 13,580,000.00 0.00 0.00 13,580,000.00 0.00 0.00 Shaoguan Sinopharm 7,490,000.00 0.00 0.00 7,490,000.00 0.00 0.00 Shantou Total 2,735,399,494.38 0.00 0.00 2,735,399,494.38 0.00 121,000,000.00 (2)Investments in associates Unit:RMB Movement Provision 31 December Provision Additional Share of Dividend 30 Jnue 2015 ending 2014 of investment profit or loss declared balance impairment Associates Wanle Medical 157,604,846.85 0.00 28,160,061.44 35,190,000.00 0.00 150,574,908.29 0.00 Sinopharm Zhuhai 0.00 1,002,980.00 114,000.00 0.00 0.00 1,116,980.00 0.00 subtotal 157,604,846.85 1,002,980.00 28,274,061.44 35,190,000.00 0.00 151,691,888.29 0.00 Total 157,604,846.85 1,002,980.00 28,274,061.44 35,190,000.00 0.00 151,691,888.29 0.00 4. Sales and cost of sales Unit:RMB For the six months ended 30 June 2015 For the six months ended 30 June 2014 Revenue Cost Revenue Cost Revenue of main 1,404,606,954.44 1,349,606,896.49 1,339,376,773.85 1,289,133,611.14 operations Other operating income 5,308,781.06 489,205.40 5,156,613.11 1,778,763.16 Total 1,409,915,735.50 1,350,096,101.89 1,344,533,386.96 1,290,912,374.30 5. Investment income Unit:RMB For the six months ended 30 June 2015 For the six months ended 30 June 2014 166 国药集团一致药业股份有限公司 2015 年半年度报告 Gain on long-term equity investment 514,513,119.54 456,948,364.73 under cost method Gain on long-term equity investment 28,274,061.44 23,595,722.50 under equity method Total 542,787,180.98 480,544,087.23 XIII.Supplementary information 1. Non-routine items Unit:RMB amount Notes Mainly was compensation for demolition Gains on disposal of non-current assets 4,114,941.12 from disposal the investment real estate by Sinopharm Holding Liuzhou. Mainly contained various of special Government grants related to income 10,567,256.16 subsidies and financial discount. Receivables impairment reversal by 2,568,108.32 individual assessment Mainly comes from hosting service for Entrusted management custody fee 375,000.00 Sinopharm Group and China National income Pharmaceutical Foreign Trade Co., Ltd. Mainly was relocation rewards and closed resettlement compensation for Other non-operating income 2,189,460.15 demolition of Sinopharm Holding Liuzhou. Less:Tax impact of above non-routine 4,051,085.07 items Share of minority interests of above 2,103,582.14 non-routine items after tax Total 13,660,098.54 -- 2. Return on equity and earnings per share Earnings per share Profit during the reporting period Weighted average return on equity (%) Basic earnings per Diluted earnings per share share Consolidated net profit attributable to the shareholders 7.85% 1.068 1.068 of the Company 167 国药集团一致药业股份有限公司 2015 年半年度报告 Consolidated net profit attributable to the shareholders 7.58% 1.030 1.030 of the Company, excluding non-routine items 168 国药集团一致药业股份有限公司 2015 年半年度报告 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 169