China National Accord Medicines Corporation Ltd.
Annual Report 2019
April 2020
Section I. Important Notice, Contents and Interpretation
Board of Directors, Supervisory Committee, all directors, supervisors and senior
executives of China National Accord Medicines Corporation Ltd. (hereinafter
referred to as the Company) hereby confirm that there are no any fictitious
statements, misleading statements, or important omissions carried in this report,
and shall take all responsibilities, individual and/or joint, for the reality,
accuracy and completion of the whole contents.
Lin Zhaoxiong, Principal of the Company, Wei Pingxiao, person in charger of
accounting works and Wang Ying, person in charge of accounting organ
(accounting principal) hereby confirm that the Financial Report of 2019 Annual
Report is authentic, accurate and complete.
All directors are attended the Board Meeting for report deliberation.
Affected by various risk factors, the company’s business operations are facing
risks in terms of changes in industry policies and intensified market competition.
The company has made a specific statement on the “Future Development
Prospects” of the fourth section “Discussion and Analysis of the Operation” in
this annual report, and all investors should pay attention to it.
The profit distribution plan that deliberated and approved by the Board is:
based on total stock issued 428,126,983 shares, distributed 6 Yuan (tax included)
bonus in cash for every 10-share hold by all shareholders, 0 shares bonus issued
(tax included) and no capitalizing of common reserves carried out.
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Contents
Section I. Important Notice, Contents and Interpretation............................................................. 1
Section II Company Profile and Main Financial Indexes...............................................................4
Section III. Summary of Company Business................................................................................... 8
Section IV. Discussion and Analysis of Business........................................................................... 11
Section V. Important Events........................................................................................................... 37
Section VI. Changes in Shares and Particulars about Shareholders...........................................65
Section VII. Preferred Stock........................................................................................................... 73
Section VIII. Convertible Bonds..................................................................................................... 74
Section IX. Particulars about Directors, Supervisors, Senior Executives and Employees........75
Section X. Corporate Governance.................................................................................................. 87
Section XI. Corporate Bond............................................................................................................ 96
Section XII. Financial Report..........................................................................................................97
Section XIII. Documents Available for Reference...................................................................... 366
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Interpretation
Items Refers to Contents
Listed Company, Company, the Company,
Refers to China National Accord Medicines Corporation Ltd.
Sinopharm Accord, the Group
SINOPHARM Refers to China National Pharmaceutical Group Corporation
Sinopharm Group Co., Ltd, Controlling shareholder of the
Sinopharm Holding Refers to
Company
Company Law Refers to Company Law of the People’s Republic of China
Securities Law Refers to Securities Law of the People’s Republic of China
Yuan, 10 thousand Yuan, 100 million Yuan Refers to RMB, RMB 10 thousand, RMB 100 million
Terminology: Refers to
SPD hospital logistics supply chain extension business, IVD
4D business Refers to diagnostic reagent business, CSSD disinfection service, and MED
equipment life cycle management business
GPO Refers to Group purchasing organizations
Abbreviation: Refers to
Sinopharm Holding Guangzhou Refers to Sinopharm Holding Guangzhou Co., Ltd.
Guoda Drugstore Refers to Sinopharm Holding Guoda Drugstore Co., Ltd.
Sinopharm Holding Guangxi Refers to Sinopharm Holding Guangxi Co., Ltd.
Foshan Nanhai Refers to Foshan Nanhai Pharmaceutical Group Co., Ltd.
Nanfang Pharmaceutical Foreign Trade Refers to Guangdong Nanfang Pharmaceutical Foreign Trade Co., Ltd.
China National Zhijun, Zhijun Pharmaceutical Refers to China National Zhijun (Shenzhen) Pharmaceutical Co., Ltd.
Zhijun Pharmacy Trade Refers to Shenzhen Zhijun Pharmacy Trade Co., Ltd.
China National Zhijun (Shenzhen) Pingshan Pharmaceutical Co.,
Zhijun Pingshan, Pingshan Pharmaceutical Refers to
Ltd.
Main Luck Pharmaceuticals Refers to Shenzhen Main Luck Pharmaceuticals Inc.
3
Section II Company Profile and Main Financial Indexes
I. Company profile
Short form of the stock Sinopharm Accord, Accord B Stock code 000028, 200028
Stock exchange for listing Shenzhen Stock Exchange
Name of the Company (in
国药集团一致药业股份有限公司
Chinese)
Short form of the Company
国药一致
(in Chinese)
Foreign name of the Company
China National Accord Medicines Corporation Ltd.
(if applicable)
Short form of foreign name of
Sinopharm Accord
the Company (if applicable)
Legal representative Lin Zhaoxiong
Registrations add. Accord Pharm. Bldg , No. 15, Ba Gua Si Road, Futian District, Shenzhen, Guangdong Province
Code for registrations add 518029
Offices add. Accord Pharm. Bldg, No. 15, Ba Gua Si Road, Futian District, Shenzhen, Guangdong Province
Codes for office add. 518029
Company’s Internet Web Site http://www.szaccord.com.cn
E-mail gyyz0028@sinopharm.com
II. Person/Way to contact
Secretary of the Board Securities affairs representative
Name Chen Changbing Wang Zhaoyu
Accord Pharm. Bldg., No. 15, Ba Gua Si Accord Pharm. Bldg., No. 15, Ba Gua Si
Contact add. Road, Futian District, Shenzhen, Road, Futian District, Shenzhen,
Guangdong Province Guangdong Province
Tel. +(86)755 25875195 +(86)755 25875222
Fax. +(86)755 25195435 +(86)755 25195435
E-mail gyyzinvestor@sinopharm.com gyyz0028@sinopharm.com
III. Information disclosure and preparation place
Securities Times; China Securities Journal; Hong Kong Commercial
Newspaper appointed for information disclosure
Daily
Website for annual report publish appointed by CSRC http://www.szse.cn ; http://www.cninfo.com.cn
Preparation place for annual report Secretariat of the Board of Directors
IV. Registration changes of the Company
Organization code 91440300192186267U
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Changes of main business since listing (if applicable) No change.
Previous changes for controlling shareholders (if
No change.
applicable)
V. Other relevant information
CPA engaged by the Company
Name of CPA Ernst & Young CPA (Special General partnership)
Offices add. for CPA 21/F, China Resources Building, No. 5001, Shennan East Road, Luohu District, Shenzhen
Signing accountant Li Jianguang, Li Yuanfen
Sponsor engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data
□Yes √No
2019 2018 Changes over last year 2017
Operating income (RMB) 52,045,764,143.21 43,122,385,521.23 20.69% 41,263,393,427.41
Net profit attributable to
shareholders of the listed company 1,271,289,183.01 1,210,742,435.78 5.00% 1,057,791,930.67
(RMB)
Net profit attributable to
shareholders of the listed company
1,226,765,271.97 1,175,971,967.39 4.32% 1,035,461,581.00
after deducting non-recurring gains
and losses (RMB)
Net cash flow arising from
2,000,352,083.20 1,322,606,352.27 51.24% 1,285,291,911.82
operating activities (RMB)
Basic earnings per share
2.97 2.83 4.95% 2.47
(RMB/Share)
Diluted earnings per share
2.97 2.83 4.95% 2.47
(RMB/Share)
1.13 percentage points
Weighted average ROE 10.43% 11.56% 11.91%
down
Changes over end of
End of 2019 End of 2018 End of 2017
last year
Total assets (RMB) 33,520,609,123.67 28,930,300,519.97 15.87% 22,343,643,527.77
Net assets attributable to
shareholder of listed company 12,806,410,865.92 11,618,432,603.28 10.22% 9,396,572,345.88
(RMB)
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Note: Weighted average ROE was down by 1.13 percentage points from a year earlier, mainly due to the impact of the industry
policy, gross margin decline in the period and profit margin narrowing.
VII. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (International
Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting
rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or
Chinese GAAP (Generally Accepted Accounting Principles) in the period.
VIII. Quarterly main financial index
In RMB
First quarter Second quarter Third quarter Fourth quarter
Operating income 11,879,309,078.82 13,348,838,298.61 13,647,793,431.64 13,169,823,334.14
Net profit attributable to shareholders
300,149,012.08 350,684,348.32 311,310,706.52 309,145,116.09
of the listed company
Net profit attributable to shareholders
of the listed company after deducting 297,420,355.99 342,280,091.96 303,365,280.52 283,699,543.50
non-recurring gains and losses
Net cash flow arising from operating
-759,367,352.29 1,923,124,933.64 -90,795,420.13 927,389,921.98
activities
Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial
index disclosed in the company’s quarterly report and semi-annual report
□ Yes √ No
IX. Items and amounts of extraordinary profit (gains)/loss
√Applicable □ Not applicable
In RMB
Item 2019 2018 2017 Note
6
Gains/losses from the disposal of non-current
The gains from fixed
asset (including the write-off that accrued for 2,340,925.97 7,048,337.10 -203,279.86
assets disposal .
impairment of assets)
Governmental subsidy reckoned into current Mainly for receiving of
gains/losses (not including the subsidy enjoyed all kinds of special
in quota or ration according to national 49,299,242.48 30,098,383.86 26,854,027.03 subsidies and fiscal
standards, which are closely relevant to interest discount in the
enterprise’s business) period.
Investment costs while acquiring subsidiaries,
joint ventures and associated enterprise, less
Negative goodwill from
than fair value of the identifiable net assets 14.65 729.29 58,022.12
subsidiary acquisition.
from invested enterprise which should be
enjoined
Current net gain/losses of the subsidiary merger
under the same control from beginning of the -1,096.00
period to combination date
Switch back of provision for depreciation of
account receivable and contract assets that are 1,310,345.38 5,301,091.66 1,642,360.26
individually tested for impairment
The gains obtained from
offering entrust loans to
Gains and losses from external entrusted loans 3,460,037.16 3,246,925.69 1,907,519.89
China National Zhijun
(Suzhou).
Consigning fee received for consigned
516,929.44
operation
The non-operating
Other non-operating income and expenditure income recognized for
17,179,002.78 5,069,438.37 377,281.07
except for the aforementioned items written off the unpaid
payments
Other gains/losses satisfy a definition of
508,168.93 1,445,926.01 134,740.70
extraordinary gains/losses
Less: Impact on income tax 17,317,723.70 12,137,071.11 6,690,220.38
Impact on minority shareholders’ equity
12,256,102.61 5,820,221.92 1,749,005.16
(post-tax)
Total 44,523,911.04 34,770,468.39 22,330,349.67 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to
the Public --- Extraordinary Profit/loss
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Section III. Summary of Company Business
I. Main businesses of the company in the reporting period
The Company complies with the disclosure requirement of Information Disclosure Guidelines for the Shenzhen
Stock Exchange No. 8- Listing Company Engaged in Retailing Industry
In the reporting period, the main business of Sinopharm Accord includes pharmaceutical distribution and
pharmaceutical retail, specifically as follows:
(i) In the pharmaceutical distribution field, the company continues to integrate the distribution and logistics
business, deeply penetrates into the end markets, improves the stepped distribution network, creates intelligent
supply chain, and devotes to become a provider for pharmaceutical and health care products and services with the
strongest influence, the highest share, the most complete variety, the best service, and the fastest delivery in south
district of China.
1. The Company’s pharmaceutical distribution business is established in Guangdong and Guangxi, the company
has completed the network construction of Guangdong and Guangxi in 2013, and the business has extended to the
county-level regions; in 2014, we accelerating the integration of three-tier companies and the Company achieved
an operation all over the network in 2015. The network further expanded in 2019 and main development
direction is retail terminals which includes: After optimizing and adjusting the types of customers in 2019, there
are 959 second- and third-tier medical institutions, 6,807 primary-level medical customers, and 4,479 retail
terminal customers (chain pharmacies, single stores, and self-paying pharmacies in hospitals).
2. The Company’s pharmaceutical distribution business has achieved the first scale in Guangdong and Guangxi
and the leading position in market segment of Guangdong and Guangxi, and has obtained the relatively leading
position in vaccine, instrument, and e-commerce industries.
(ii) In the pharmaceutical retail field, Guoda Drugstore is a pharmaceutical retail enterprise that ranks the first in
the sales volume throughout the country, and is one of the few enterprises in China with national direct sales drug
retail network.
By the end of 2019, Guoda Drugstore has operated 5021 stores, covering 20 provinces, autonomous regions and
municipalities, entering nearly 71 large and medium sized cities, which has formed a drugstore networks covering
eastern and northern China, southern coastal cities, and gradually expanded into northeast, central plains and
inland cities, the sales scale of which has exceeded 10 billions, ranking the first within industry; Guoda drugstore,
the business of which were mainly relying on modern retail drugstores, has been putting great attention on the
development of professional service system with medical resources as core competitiveness, building a group of
stores with professional commercial activities, which are able to provide retails and therapy services that
integrating medical service and health-care products sales and cooperate with hospitals; at the same time, the
Company has been vigorously developing new business, exploring and expanding new sales channels, improving
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professional services, being dedicated to transit from a traditional medical retail into an innovative service
enterprise. By means of conventional products retail management, improving major brands and exploring business
cooperation with supplier, accelerating the establishment and improvement of DTP business and continuation of
health care service system, Guoda has built industry-leading professional service ability.
II. Major changes in main assets
1. Major changes in main assets
Major assets Note of major changes
Increased 327.0559 million Yuan over that of period-begin with 17.27% rate of change,
Equity assets mainly because the investment income from joint ventures increased and change of the
fair value of other equity instrument investment.
Increased 4.6661 million Yuan over that of period-begin with 0.77% rate of change, no
Fixed assets
major changes in the reporting period.
Increased 739,600 Yuan over that of period-begin with 0.23% rate of change, no major
Intangible assets
changes in the reporting period.
Decreased 4.83 million Yuan over that of period-begin with -13.26% rate of change,
mainly because the ERP system construction was transferred to intangible assets for
Construction in progress
completion and the supply chain extension project transferred to fixed assets in the
period .
Increased 1955.4611 million Yuan over that of period-begin with 100% rate of change,
Right-of-use assets
mainly due to the implementation of new lease standards in the period.
2. Main overseas assets
□ Applicable √ Not applicable
III. Core competitiveness analysis
1. Strong network coverage and layout
Relying on the perfect distribution network and variety resources, Sinopharm Accord has unified the wholesale
and retail resources. The company has a complete drug distribution network in the Guangdong and Guangxi
regions, comprehensively covering the second- and third-tier medical institutions and retail chain terminals of
Guangdong and Guangxi provinces, in recent years, it has seized the opportunity of developing retail customers,
and vigorously expanded distribution-related retail pharmacies, small-scale social medical services and other
related formats, of which the business sales have achieved rapid growth.
Sinopharm Accord has retail network leading in scale and covering the whole country, Guoda Drugstore has retail
chain network spreading over 20 provinces, municipalities and autonomous regions, covering nearly 71 cities
nationwide.
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2. Abundant variety resources
In the pharmaceutical distribution, the company has established extensive cooperative relations with thousands of
domestic manufacturers and commercial enterprises and established stable business relationships with hundreds of
import and joint venture manufacturers, and has rich variety resources.
Guoda Drugstore operates nearly 120,000 merchandises. With its relatively comprehensive purchasing network
and years of experience in commodity management, Guoda Drug Store has established a merchandise system with
wide coverage, high professionalization, and rich varieties.
3. Complete logistics and distribution system
Sinopharm Accord distribution adopts supply chain management and warehouse management solutions system, it
has built large-scale first-grade logistics centers in Guangzhou, Nanning, Shenzhen and other places and
established distribution centers in Guangdong and Guangxi which has formed ladder logistics and distribution
networks, it is the first enterprise in Guangdong and Guangxi that has achieved the third-party logistics
qualification and has the professional pharmaceutical logistics capabilities with the largest scale, the most
extensive network, and the most complete modes in southern China.
Guoda Drugstore has a nationwide modern logistics and distribution system, and the logistics warehouses are
located in 17 provinces, has 27 large-and-small logistics warehouses, covering an area of about 100,000 square
meters in total.
4. The advantages of medical insurance resources
Regarding medicine retails, the subsidiaries of Guoda Drugstore have featured generally higher medical insurance
acquiring ability, with higher medical insurance sales ratio and steady operation.
5. The advantages of Compliance
The Company had a big lead under an increasingly stringent regulatory environment for the reason that it has kept
emphasizing legalization and compliance in the process of operation and management.
6. Unique-influence Sinopharm brand
Brand of the Company and distribution, industry child-brand and controlling shareholder and actual controller’s
brand come down in one continuous line, depending on powerful force of central enterprises, the Company’s
popularity and influence are prominent day by day in the industry.
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Section IV. Discussion and Analysis of Business
1. Introduction
In 2019, the country continued to deepen medical reform, policies were intensively introduced, and the pace of
reform in the medical field was accelerated. The three-medical reform linkage mechanism is becoming more
mature, with the centralized purchase and use of medicines as the breakthrough, the fee control of medical
insurance has achieved initial results, and the purchase amount policy is becoming more normal, and the industrial
structure of driving supply end has undergone in-depth reforms, the adjustment of the product structure at the
payment end has accelerated, and the concentration at the circulation end has accelerated while bearing pressure,
the business model, transaction form, and industry pattern have continued to change. Sinopharm Accord has
seized opportunities in the change, closely centered on Sinopharm Holding’s “3 + 2” strategic guidance, and
continuously promoted the strategic measures with “technology empowerment, service upgrade, wholesale-retail
integration, and production-financing dual drive” as the core, and grasped the three themes of “solid foundation,
transformation and innovation, and ensuring development”, focused on market share and supply chain
performance improvement, and achieved stable growth in scale and overall operating efficiency.
In 2019, the operating income of the Company accumulated to 52.046 billion yuan with a y-o-y of 20.69% up;
operation profit amounted to 1.836 billion yuan, a 9.85% growth from a year earlier; the net profit attributable to
shareholders of listed company amounted to 1.271 billion yuan, a y-o-y growth of 5.00%.
In 2019, the operating income from distribution business of the Company accumulated to 40.014 billion yuan
with a y-o-y growth of 22.15%, all types of the business have achieved rapid growth by further expanding and
consolidating the advantages of direct selling business, enhancing the coverage of grassroots medical institutions
in breadth and depth. Of which: hospital direct selling has a growth of 21.84% on a y-o-y basis, direct selling
from other medical institutions have growth of 31.64% on a y-o-y basis, direct selling from retail achieved a
32.94% up from a year earlier, equipment consumables business have 47.65% growth on a y-o-y basis, retail
diagnosis and treatment business have 63.05% growth on a y-o-y basis and the distribution business of Sinopharm
Accord achieved a net profit of 846 million yuan for year of 2019, a y-o-y growth of 18.19%.
The operating income from Guoda Drugstore accumulated to 12.754 billion yuan with a y-o-y growth of 17.24%
in 2019. All business have developed steadily, of which, the direct operation has a y-o-y growth of 12.97%, DTP
growth 32.10% on a y-o-y basis, OTO has a y-o-y growth of 33.11%, wholesale business have a y-o-y growth of
64% and the franchise business growth rate was 6.00%. Guoda Drugstore achieved net profit of 312 million yuan
in 2019, a 3.37% up from a year earlier and the cumulative net profit attributable to parent company amounted as
246million yuan with a y-o-y growth of 5.95%.
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In 2019, the investment income to associated enterprise accumulated as 331 million yuan, a y-o-y growth of
3.52%.
(i)Work overview for year of 2019
1. Continued to promote the core strategy of wholesale-retail integration, and enhanced the synergy of
business formats
Deeply implemented the development strategy of wholesale-retail integration, and promoted the wholesale-retail
integration within distribution companies and the wholesale-retail integration of distribution companies and
Guoda. On the basis of network linkage, coordinated the effective allocation and circulation of resources among
various formats and regions, enhanced coordination and complementarity, formed synergy, and explored the
formation of organizational integration model, business integration model, equity integration model, and member
store model, coordinated logistics, supply chain, information and other background systems, gave full play to
scale and sharing effects, simplified the operation process, and realized the interoperability of supply chain
management systems.
2. Speeded up mergers and acquisitions, continued to optimize network layout, and constantly expanded
strategic layout
Actively promoted investment projects and achieved breakthroughs in outbound mergers and acquisitions. During
the reporting period, the company initiated the acquisition of Shanghai Dingqun Enterprise Management
Consulting Co., Ltd. (indirectly purchased Sinopharm Holding Tianhe Jilin Pharmaceutical Co., Ltd.), Pudong
New Area of Shanghai Pharmaceutical Medicine Ltd., Pu’er Songmao Ji’antang Pharmaceutical Co., Ltd., and
Guoda Drugstore (Chaoyang) Renai Pharmacy Co., Ltd., the retail layout strategy has advanced into Jilin
Province and Yunnan Province; completed investment in the establishment of Sinopharm Accord Pharmaceutical
Supply Chain (Shenzhen) Co., Ltd., Sinopharm Holding Guozhi Drug Store (Heyuan) Co., Ltd., Liaoning Guoda
Pharmaceutical Co., Ltd., Sinopharm Holding Guoda Drugstore Yongxingtang Chain (Chaoyang) Co., Ltd., and
Sinopharm Holding Guangyi Health Management (Zhanjiang) Co., Ltd.
As of the end of 2019, the number of holding subsidiaries of Sinopharm Accord has increased to 110, and the
stores of Guoda Drugstore reached 5,021 (excluding new mergers and acquisitions of Jilin Tianhe and
Yanghetang, Jilin Tianhe and Pudong New Area of Shanghai Pharmaceutical Medicine completed the industry
and commerce changes in January 2020 which are not included in the scope of consolidated financial statement
for 2019), a total of 83 retail stores.
3. Technology energized, promoted digital transformation, and improved supply chain efficiency
Started digital transformation, upgraded service capabilities, and built digital management and control platforms
such as supply chain services, omni-channel membership services, and new business services. Externally
improved the external supply chain docking system, expanded the whole medicine network, GPO, provincial
platform, medical insurance interface functions and the upstream and downstream customer information
interconnection, independently developed FYCMS system and AVG, intelligent conveyor line and other
automated equipment docking system, and upgraded C-end users experience; internally upgraded the internal
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supply chain systems, including retail system upgrades, distribution system upgrades, logistics visualization
upgrades, and collaborative sharing and expansion.
4. In distribution business segment, maintained strategic strength, focused on service transformation and
upgrading, and continued to enhance business advantages
(1) Took the initiative to seize policy opportunities such as “4 + 7”, GPO, national talks, etc., and effectively
gained market share under the general trend of drug price reduction. The leading position in Guangdong and
Guangxi provinces continued to be stable, Guangzhou and Shenzhen have achieved a good start in 4 + 7
centralized procurement and expansion, and obtained 25 varieties of distribution rights, including 5 exclusive
varieties, and the gross profit margin of the winning variety increased by 1.75% over the previous year. In terms
of GPO, many subsidiaries overcame the difficulties and drove the market share increase when facing multi-
platform parallel; at the same time, each subsidiary responded quickly and carried out an “ice-breaking action”
against the original trustee hospitals to increase the hospitals’ market shares.
(2) Continued to promote the four major business directions and push the transformation and upgrading of
business structure
The traditional business was further enlarged and strengthened, the market share continuously increased, and the
leading advantage was constantly consolidated. The direct sales format increased by 23% on a year-on-year basis,
and the four major business directions of retail direct sales, retail diagnosis and treatment, primary medical care,
and equipment consumables have maintained double-digit growth.
1) Retail diagnosis and treatment: the retail network layout of Guangdong and Guangxi has been further improved,
as of the end of the reporting period, a total of 83 retail pharmacies have been opened. In 2019, the company
opened 15 new pharmacies, completed the positioning in 20 cities in Guangdong and Guangdong, and carried out
the second stage of in-depth deployment in Guangdong Province; integrated medical insurance and realized 20
prescription hospitals; accelerated development of key products, introduced 27 new DTP products; increased 4
new areas with medical insurance qualification; created a patient-centered professional pharmacy management
service system to achieve brand specialization, management and control refinement, and high-quality service.
2) Retail direct sales: the sales scale of the top 100 national chain customers has maintained rapid growth, and the
channel gathering strength of wholesale-retail integration projects has been continuously intensified; the terminal
network coverage of Guangzhou and Shenzhen has exceeded 35%, and cooperated with the subsidiaries in various
regions to maximize resources; upgraded and improved the B2B platform operation function module, PC online
payment, APP Hengxing member area, mobile terminal application capabilities have been significantly improved;
expanded 320 member stores, empowered terminals, and improved member store management and service models.
3) Instrument consumables: SPD medical consumables comprehensive service platform version 2.0 was
developed and launched to realize the upgrade of information such as the orthopedics management module of the
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new consignment model; gradually established comprehensive service solution provider brands with industry
influence by creating model hospital projects and copying and promoting, among which, 8 projects including
“multi-warehousing integrated smart supply chain”, “Fine Management of Medical Consumables of Guangzhou
Women and Children’s Medical Center” and so on were awarded the “Best Practice Case of Pharmaceutical
Supply Chain in 2019” and “Top Ten Pharmaceutical Supply Chain Service Innovation Cases” by China
Association of Pharmaceutical Commerce.
4) 4D business: the reagent business has established the top three hospital model, and sales and gross profit
margins have continued to increase; equipment maintenance business has completed the signing of contract for 24
projects; disinfection supply business has achieved cooperation with 21 medical institutions.
(3) Continued to promote the advantages of integrated operations and empower the entire business chain
Gave full play to the “management and guide” advantages of the integrated management platform, energized the
operation integration of subsidiaries in Guangdong Province, and stimulated the transformation and innovation of
the subsidiaries; promoted the distribution integration platform construction of Guangxi, launched full integration
comprehensive integration from the aspects of organizational structure construction, procurement, logistics,
functions, etc.; carried out integrated docking and comprehensive budget system construction for new merging
companies.
5. In retail business segment, continued to deepen the network layout, focused on brand building, and
explored new business models
(1) Continued to promote the rapid expansion of stores and improve the quantity and quality of store
expansion
At the end of 2019, the total number of stores of Guoda Drugstore was 5,021, of which 3,744 were direct-operated
stores; the net increase in the number of stores was 746, of which 608 were newly opened direct-operated stores
and franchised stores, and a net increase of 138 mergers and acquisitions (excluding Jilin Tianhe, Yanghetang);
the expansion of stores around the hospitals continued to grow, with a net increase of 74 in 2019. The retail layout
strategy has advanced into Jilin and Yunnan, newly developed seven cities in the existing provinces, continued to
expand the advantageous regions such as Shenyang, Inner Mongolia, Wanmin and Yiyuan, achieved new
breakthroughs in the expansion in Guangdong, Shandong, Xinjiang, Guangxi and Quanzhou, and the enterprise
scale and market share have further increased.
(2) WBA cooperation was further promoted, and brand and service were continuously optimized
Since WBA increased its capital to enter Guoda Drugstore in 2018, after nearly two years of running-in, the two
sides have formed a good project team cooperation mechanism. Learned the advanced methodology of WBA,
connected and repeatedly discussed with the WBA professional team, sorted out and optimized the existing
products, determined the localized brand promotion strategy and specific path, vigorously developed new varieties
and cultivated potential varieties. In January 2019, Guoda Drugstore and WBA launched the “new concept” pilot
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pharmacy in Shanghai, which achieved good results and summarized the experience to facilitate the replication
and promotion of the model.
(3) Accelerated the layout of innovative business, and comprehensively developed multiple formats of e-
commerce business
E-commerce business increased by 29.7% on a year-on-year basis, e-commerce O2O business covered more than
2,800 stores, with an average daily order volume of 12,000 orders. B2C business developed yaofang.com, 1
Drugstore, pinduoduo and other channels. With the advantages of existing networks, products, shop assistants, etc.,
improved self-operated O2O platforms such as WeChat Mall and APP, realized value-added services, realized
seamless connection of member center + mall + healthy community system; realized home delivery of drugs,
online drug search, and online and offline consumption records.
(4) Optimized member management mechanism and built a professional pharmacy system with chronic
disease as the core
Continued to promote the customer health management system, increased customer stickiness through member
management, online health community APP, and patient education. Developed member management applets to
achieve online and offline integration of members, integrated member center, micro mall, healthy community,
POS system consumption data interflow, and increased 2.26 million new active members during the year. In order
to continuously strengthen the team of pharmacists and continue to optimize pharmaceutical services, more than
1,000 offline pharmacy professional trainings and more than 3,600 patient educations were conducted in 2019, the
internal licensed pharmacist training has achieved remarkable results, and more than 1,700 diabetes specialists and
more than 1,500 hypertension specialists have been trained to realize the normalization of chronic disease training.
(5) Promoted the construction of provincial-level platforms and strengthened regional network cultivation
Established and implemented provincial-level platform areas, explored provincial-level platform construction
schemes from corporate governance, business architecture, platform characteristics, etc., determined business
structure and positioning, combined different regional policies, and promoted the development of multiple models
based on business characteristics. The Inner Mongolia Guoda provincial-level platforms, the Fujian Guoda
provincial-level platforms, and the Shenyang Guoda provincial-level platforms have been established; the
provincial-level platforms of Jiangsu, Beijing, Guangdong, and Anhui are under construction.
The Company complies with the disclosure requirement of “Information Disclosure Guidelines for the Shenzhen Stock Exchange No.
8- Listing Company Engaged in Retailing Industry”
(ii)Operation of the retail stores in reporting period:
1. By the end of 2019, Guoda Drugstore has 3,744 direct-sale stores, sales revenue (tax-free) amounted to 9.956
billion yuan; and has 1,277 franchised stores, the distribution revenue (tax-free) amounted as 1.101 billion yuan.
Region Direct-sale store Franchised outlet
15
Distribution
revenue (in
Numbers Sales revenue (in 10 thousand Yuan) Numbers 10
thousand
Yuan)
North 1,798 526,177.54 449 43,460.03
East China 858 219,119.99 589 52,956.27
South China 543 142,588.33 123 8,307.84
Central 285 51,799.48 116 5,354.30
China
Northwest 260 55,898.78 - -
Total 3,744 995,584.12 1,277 110,078.44
Note: North: Liaoning, Shanxi, Inner Mongolia, Beijing, Tianjin, Hebei
East China: Shanghai, Jiangsu, Anhui, Shandong, Fujian, Zhejiang
South China: Guangdong, Guangxi
Central China: Henan, Hunan
Northwest: Ningxia Xinjiang
(1)Top ten stores in sales:
Opening Operating Business Property
Serial Region Store name Actual operating area(M2)
year mode format ownership
1 Shanxi Zhongli Branch 2002 Direct-sale 5+X 821.80 Property rental
Shenzhen Modern
2 Guangdong 2006 Direct-sale 260.00 Property rental
exhibition hall Pharmacy
3 Shaanxi Eryuan Branch 2011 Direct-sale 5+X 629.90 Property rental
Modern
4 Yangzhou Jiangsu Baiyulan 1991 Direct-sale 970.00 Property rental
Pharmacy
5 Inner 2003 Direct-sale 5+X store 1,689.26 Property rental
Headquarter
Mongolian
Modern
6 Beijing Xidan Jinxiang 1997 Direct-sale 773.16 Property rental
Pharmacy
Modern
7 Xiamen New 2005 Direct-sale 132.90 Property rental
Fujian
Special Medicine Pharmacy
Yongdingmen Modern
8 Beijing 2009 Direct-sale 100.00 Property rental
store Pharmacy
Traditional
Le Ren Tang Chinese
9 Hebei 2010 Direct-sale 1,206.00 Property rental
Headquarter Medicine
outpatient store
Shenzhen Lianhua Modern
10 Guangdong 2003 Direct-sale 120.33 Property rental
North Pharmacy
16
(2) In 2019, the Company has 777 new stores and closed 169 stores, with a net increase of 608 stores
Direct-sale store Franchised outlet
Number
Number of Number of
Region Total area (square
store Number of stores shut down of store stores
meters)
increased increased shut
down
North 307 33,361.38 -59 133 -6
East China 98 14,767.67 -33 34 -23
South China 48 4,493.89 -12 65 -9
Central China 25 2,734.38 -7 14 -4
Northwest 53 5,290.50 -16 - -
Total 531 60,647.81 -127 246 -42
(3) Medical insurance qualification of the stores
As of 31 December 2019, the Company has 3,744 chain stores with directly selling, and 3,201 pharmacy stores
obtained the qualification of “Designated retail pharmacies of medical insurance”, representing 85% of the total
pharmacies of the Company.
Stores obtained the qualification of
Ratio in total pharmacies in
Region Number of stores “Designated retail pharmacies of medical
regions
insurance”
North 1798 1599 89%
East China 858 648 76%
South China 543 478 88%
Central China 285 246 86%
Northwest 260 230 88%
Total 3744 3201 85%
2.Change of main selling index
Proportion of medical Proportion of
Per customer Proportion of Proportion of the
Year insurance sales in transaction times of
transaction (RMB) prescription drugs direct member sales
direct-sale stores direct members
2018 74 51% 39% 67% 55%
2019 86 53% 38% 67% 57%
(1) Classify according to region
17
Amount of sales growth (tax-free, in 10 thousand
Region Gross margin Net profit ratio
yuan)
North 108839 25% 3%
East China 35780 24% 3%
South China 24457 25% 2%
Central China 6927 30% 1%
Northwest 10137 31% 3%
(2) Operating efficiency of direct-sale stores in reporting period
Daily average efficiency (tax-
Operating area of the stores Rental efficiency (tax-included,
Region Number of stores included, Yuan/Square
(square meters) annual sales volume/rental)
Meters)
North 1798 231659 72 16
East China 858 109032 62 15
South China 543 60006 72 15
Central China 285 34093 47 12
Northwest 260 32371 53 19
Note: Daily average efficiency=Average daily operating income/Operating area of the stores;
Average daily operating revenue=Operating revenue (tax-included) of the store in the Year/Operating days of
store in the Year.
Rental efficiency=Annual sales volume/Rental
3.Structure of the category at retail terminal
Category 2019 2018
Health food 5.54% 6.62%
Convenience food 0.82% 1.01%
Rx Drug 53.00% 50.71%
OTC 25.97% 26.56%
Personal care 1.07% 1.25%
Home convenience 0.21% 0.24%
Household health products 4.37% 4.35%
Chinese Herbal Medicine 4.44% 5.10%
Proportion of other categories 4.59% 4.16%
4. Purchasing and supplies:
Goods suppliers of Guoda Drugstore are mainly external suppliers and assist affiliated enterprise of
SINOPHARM and private brands. Top five suppliers for year of 2019:
18
Suppliers Purchase amount (tax included) Procurement ratio
No.1 190,416,568 13%
No.2 156,099,814 10%
No.3 117,609,986 8%
No.4 111,068,408 7%
No.5 94,709,145 6%
5. Warehousing logistics:
In 2019, Guoda Drugstore has 27 large and small sized logistic warehouses in total, covering more than 100,000
square meters, spreading out across 17 provinces.
Province Region Warehouse area (M2) Management ownership
Liaoning Shenyang 18,821 Self-management
Guangzhou
/ Delegation
Guangdong Shenzhen
Jiangmen / Delegation
Shanxi Wanmin 10,919 Self-management
Shanxi
Shanxi Yiyuan / Delegation
Dadesheng 4,869 Self-management
Jiangsu Nanjing 2,200 Self-management
Liyang 1,920 Self-management
Fujian 5,688 Self-management
Fujian
Quanzhou 1,096 Self-management
Hebei Hebei 4,300 Self-management
Shandong Shandong 4,800 Self-management
Ningxia Ningxia 3,300 Self-management
Hunan Hunan 3,600 Self-management
Henan Henan 3,610 Self-management
Inner Mongolia Inner Mongolia 5,236 Self-management
Guangxi Guangxi 1,950 Self-management
Beijing Guoda
Beijing / Delegation
Beijing Jinxiang
Tianjin Tianjin / Delegation
Anhui Anhui 1,000 Self-management
Xinjiang Xinjiang 3,517 Self-management
Shanghai Shanghai Fumei 20,000 Self-management
19
Shanghai Guoda
Hangzhou 974 Self-management
Guoda Headquarter Headquarter / Delegation
Total 97,799
II. Main business analysis
1. Overview
Found more in I. Introduction in Discussion and Analysis of Business
2. Revenue and cost
(1) Constitute of operation revenue
In RMB
2019 2018
Ratio in operation Ratio in operation Increase/decrease y-
Amount Amount o-y
revenue revenue
Total of operation
52,045,764,143.21 100% 43,122,385,521.23 100% 20.69%
revenue
According to industries
Pharmaceutical
38,886,408,981.79 74.72% 31,866,749,848.53 73.90% 22.03%
distribution
Retail pharmacy 13,000,514,605.28 24.98% 11,110,718,685.75 25.77% 17.01%
Others 158,840,556.14 0.30% 144,916,986.95 0.33% 9.61%
According to products
Pharmaceuticals 48,181,069,748.36 92.57% 40,634,670,075.31 94.23% 18.57%
Medical devices and
2,756,591,633.83 5.30% 1,589,598,645.85 3.69% 73.41%
disposables
Diagnostic reagents 692,370,435.53 1.33% 548,790,740.10 1.27% 26.16%
Medical equipments 256,891,769.35 0.49% 204,409,073.02 0.47% 25.68%
Others 158,840,556.14 0.31% 144,916,986.95 0.34% 9.61%
According to region
Domestic revenue 52,045,764,143.21 100.00% 43,122,385,521.23 100.00% 20.69%
(2) About the industries, products, or regions accounting for over 10% of the company’s operating income
or operating profit
√Applicable □ Not applicable
In RMB
20
Increase/decre Increase/decre
Increase/decrease
Gross profit ase of ase of
Operating revenue Operating cost of gross profit
ratio operating operating cost
ratio y-o-y
revenue y-o-y y-o-y
According to industries
Pharmaceutical
38,886,408,981.79 36,461,461,480.13 6.24% 22.03% 22.67% -0.49%
distribution
Retail pharmacy 13,000,514,605.28 9,783,657,583.20 24.74% 17.01% 18.45% -0.92%
According to products
Pharmaceuticals 48,181,069,748.36 42,826,247,612.34 11.11% 18.57% 19.65% -0.80%
According to region
Domestic revenue 52,045,764,143.21 46,292,408,840.53 11.05% 20.69% 21.74% -0.77%
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on
latest one year’s scope of period-end
□Applicable √Not applicable
(3) Income from physical sales larger than income from labors
Yes
(4) Fulfillment of the company’s signed significant sales contracts up to this reporting period
□Applicable √Not applicable
(5) Constitute of operation cost
In RMB
2019 2018
Increase/decrease
Industries Item Ratio in Ratio in
Amount Amount y-o-y
operation cost operation cost
Pharmaceutical
Sales cost 36,461,461,480.13 78.77% 29,722,775,504.05 78.17% 22.67%
distribution
Retail pharmacy Sales cost 9,783,657,583.20 21.13% 8,259,946,674.34 21.72% 18.45%
Others Other cost 47,289,777.20 0.10% 41,386,452.76 0.11% 14.26%
(6) Whether the changes in the scope of consolidation in Reporting Period
√Yes □ No
Details of the changes in the scope of consolidation in reporting Period can be seen in Note VI of Financial Report.
(7) Major changes or adjustment in business, product or service of the Company in Reporting Period
□ Applicable √ Not applicable
21
(8) Major sales and main suppliers
Major sales client of the Company
Total top five clients in sales (RMB) 2,343,009,103.83
Proportion in total annual sales volume for top five clients 4.50%
Ratio of related parties in annual total sales among the top
0.00%
five clients
Information of top five clients of the Company
Serial Name Sales amount (RMB) Proportion in total annual sales
1 No. 1 584,218,124.68 1.12%
2 No. 2 542,230,388.31 1.04%
3 No. 3 449,040,746.73 0.86%
4 No. 4 395,485,398.09 0.76%
5 No. 5 372,034,446.02 0.72%
Total -- 2,343,009,103.83 4.50%
Other situation of main clients
□ Applicable √ Not applicable
Main suppliers of the Company
Total purchase amount from top five suppliers (RMB) 7,333,904,753.96
Proportion in total annual purchase amount for top five
19.27%
suppliers
Ratio of related parties in annual total sales among the top
2.79%
five suppliers
Information of top five suppliers of the Company
Serial Suppliers Purchase amount (RMB) Proportion in total annual purchases
1 No. 1 3,759,825,072.02 9.88%
2 No. 2 1,072,847,935.86 2.82%
3 No. 3 1,061,854,652.99 2.79%
4 No. 4 727,478,368.72 1.91%
5 No. 5 711,898,724.37 1.87%
Total -- 7,333,904,753.96 19.27%
Other notes of main suppliers of the Company
□ Applicable √ Not applicable
3. Expenses
In RMB
Increase/decrease
2019 2018 Note of major changes
y-o-y
Sales expense 3,055,403,668.16 2,762,789,885.77 10.59% No major changes occurred
Management expense 842,014,983.53 783,338,308.19 7.49% No major changes occurred
Mainly due to the implementation of
new lease standards int he period, the
interest expenses of the lease liability is
Financial expense 119,972,954.79 51,490,020.59 133.00% calculated according to the discount
rate during each period of the lease
term, while there was no such matter
occurred in same period of last year
22
4. R&D expenses
□ Applicable √ Not applicable
5. Cash flow
In RMB
Item 2019 2018 Y-o-y changes
Subtotal of cash in-flow from
56,559,206,916.41 47,475,381,467.60 19.13%
operation activity
Subtotal of cash out-flow from
54,558,854,833.21 46,152,775,115.33 18.21%
operation activity
Net cash flow from operation
2,000,352,083.20 1,322,606,352.27 51.24%
activity
Subtotal of cash in-flow from
161,121,607.20 238,641,593.44 -32.48%
investment activity
Subtotal of cash out-flow from
401,568,622.84 461,099,860.32 -12.91%
investment activity
Net cash flow from investment
-240,447,015.64 -222,458,266.88 -8.09%
activity
Subtotal of cash in-flow from
379,185,917.92 3,363,461,854.03 -88.73%
financing activity
Subtotal of cash out-flow from
1,348,355,547.51 504,680,787.88 167.17%
financing activity
Net cash flow from financing
-969,169,629.59 2,858,781,066.15 -133.90%
activity
Net increased amount of cash
790,559,744.71 3,958,618,329.29 -80.03%
and cash equivalent
Main reasons for y-o-y major changes in aspect of relevant data
√Applicable □ Not applicable
(1) Net cash flow from operation activity: has 51.24% up from a year earlier, mainly because sales of growth in the period was
better than that of the previous year, the cash received from sales of goods and service providing are increased accordingly; and due
to the implementation of new lease standards, the payment of rental was recorded in item of
Payment of Other Cash Related to Financing Activities while no such matter occurred in the same period last year;
(2) Subtotal of cash in-flow from investment activity: has 32.48% down from a year earlier, mainly because at same period last year,
received payment for plant and equipment of modern pharmaceutical Pingshan base and the repayment of entrusted loans from
associated enterprise Zhijun Suzhou, and no such matter occurred in the period;
(3) Subtotal of cash in-flow from financing activity: has 88.73% down from a year earlier, mainly because at same period last year,
received a capital increase for subsidiary Guoda Drugstore from strategic investor while no such matter occurred in the period;
(4) Subtotal of cash out-flow from financing activity: has 167.17% up from a year earlier, mainly due to the implementation of new
lease standards in the Period, the payment of rental was recorded in item of Payment of Other Cash Related to Financing Activities
and increase of the distribution dividend;
(5) Net cash flow from financing activity: has 133.90% down from a year earlier, mainly because at same period last year, received
a capital increase for subsidiary Guoda Drugstore from strategic investor while no such matter occurred in the period;
(6) Net increased amount of cash and cash equivalent : has 80.03% down from a year earlier, mainly because at same period last
year, received a capital increase for subsidiary Guoda Drugstore from strategic investor while no such matter occurred in the period.
Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company
□Applicable √Not applicable
23
III. Analysis of the non-main business
□ Applicable √ Not applicable
IV. Assets and liability
1. Major changes of assets composition
The Company initially implemented the new financial instrument standard, new revenue standard or new lease
standards since 2019, and relevant items of the financial statement at year-beginning of the implementation year
were adjusted
√Applicable □Not applicable
In RMB
Year-end of 2019 Year-begin of 2019
Ratio
Ratio in Ratio in total Notes of major changes
Amount Amount changes
total assets assets
Cash and bank
8,882,334,845.79 26.50% 8,096,158,013.24 26.49% 0.01% No major changes occurred
balances
Accounts receivable 10,617,981,893.52 31.68% 9,336,861,647.92 30.55% 1.13% No major changes occurred
Inventories 4,947,424,591.53 14.76% 4,389,335,942.19 14.36% 0.40% No major changes occurred
Investment properties 138,900,358.30 0.41% 144,894,495.97 0.47% -0.06% No major changes occurred
Long-term equity
2,105,114,410.88 6.28% 1,880,393,786.10 6.15% 0.13% No major changes occurred
investment
Fix assets 612,599,944.11 1.83% 594,067,973.91 1.94% -0.11% No major changes occurred
Mainly because the ERP
system construction was
Construction in transferred to intangible
31,582,575.84 0.09% 36,412,614.61 0.12% -0.03% assets for completion and
progress
the supply chain extension
project transferred to fixed
assets in the period .
Short-term borrowings 1,453,018,300.01 Mainly due to the decrease
4.33% 2,608,626,099.82 8.53% -4.20%
of supply chain financing.
Mainly because the long-
Long-term borrowings term loans are re-classified
31,638,984.25 0.10% -0.10%
as non-recurrent liability
due within one year
2. Assets and liability measured by fair value
√Applicable □ Not applicable
1. Assets and liabilities at fair value
2019
Input applied in the measurement of fair value
Quoted Significant Significant Total
prices in observable unobservable
active inputs inputs
markets
24
Level 1 Level 2 Level 3
Continuous measurement of
fair value
Receivable financing - 446,342,588.46 - 446,342,588.46
Other investment in equity
instruments - 116,021,000.00 - 116,021,000.00
Other non-current financial
assets - - 140,000,000.00 140,000,000.00
- 562,363,588.46 140,000,000.00 702,363,588.46
2018
Input applied in the measurement of fair value
Quoted Significant Significant Total
prices in observable unobservable
active inputs inputs
markets
Level 1 Level 2 Level 3
Continuous measurement of
fair value
Receivable financing - 567,775,275.40 - 567,775,275.40
Other investment in equity - -
instruments 13,685,760.00 13,685,760.00
Other non-current financial
assets - 140,000,000.00 140,000,000.00
- 581,461,035.40 140,000,000.00 721,461,035.40
2. Assets and liabilities disclosed at fair value
2018
Input applied in the measurement of fair value
Quoted Significant Significant Total
prices in observable unobservable
active inputs inputs
markets
Level 1 Level 2 Level 3
Long-term borrowings - 31,638,984.25 - 31,638,984.25
Other changes
Whether the measurement attribute for main assets of the Company have changed significantly in the reporting
period
□Yes √No
3. Assets right restriction till end of reporting period
Nil
25
V. Investment
1. Overall situation
√ Applicable □ Not applicable
During the reporting period, the Company achieved the enterprises combined under the different control for the
follow three enterprises by cash acquisition of Sinopharm Accord (Guangzhou) Pharmaceutical Co., Ltd. (70%),
Guoda Drugstore (Chaoyang) Renai Pharmacy Co., Ltd. (51%) and Guoda Drugstore ( Pu’er) Song Mao Co., Ltd.
(60%) The new subsidiaries including Liaoning Guoda Pharmaceutical Co., Ltd. (100%), Sinopharm Holding
Guoda Drugstore Yongxingtang Chain (Chaoyang) Co., Ltd. (51%), Sinopharm Accord Medical Supply Chain
(Shenzhen) Co., Ltd. (60%), Sinopharm Holding Guozhi Pharmacy (Heyuan) Co., Ltd. (70%) and Sinopharm
Holding Guangyi Health Management (Zhanjiang) Co., Ltd. (60%) were established in the period including.
During the reporting period, the fund contribution was completed for the Sinopharm Holding Guoda Drugstore
Bayabbaoer Co., Ltd. (80%) and Inner Mongolia Guoda Medicine Co., Ltd. (100%) and completed the capital
increased to Sinopharm Holding Guangzhou Medical Supply Chain Service Co., Ltd. (51%), after capital
increased, the shareholding ratio remains unchanged.
The Company has 30% equity participated in Shanghai Renbei Pharmacy Co., Ltd and 10% equity participated in
Guangdong Jianhui Construction Investment Management Co., Ltd in the reporting period; and completed the
capital increased (29%) to associated enterprise - Sinopharm Jienuo Medical Service Guangdong Co., Ltd, after
capital increased, the shareholding ratio remains unchanged.
For more investment details, see the Note (vi) and Note (vii) in Financial Report
2. The major equity investment obtained in the reporting period
□ Applicable √ Not applicable
3. The major non-equity investment doing in the reporting period
□ Applicable √ Not applicable
26
4. Financial assets investment
(1) Securities investment
□ Applicable √ Not applicable
The company had no securities investment in the reporting period.
(2)Derivative investment
□ Applicable √ Not applicable
The company had no derivative investment in the reporting period.
5. Application of raised proceeds
√ Applicable □ Not applicable
(1) Overall application of raised proceeds
√ Applicable □ Not applicable
In 10 thousand Yuan
Usage of
Total
Cumulativ Ratio of the
raised
e raised cumulative retained
Total capital Total Raised
Total capitals raised raised
raised has accumulati capitals
Total raised accumulative has capitals capitals
Year Way capital purpose ve raised idle for
capitals raised purpose of has and what
used of uses capitals more than
capitals used uses purpose of is expected
in Period changed unused two years
changed in uses to invested
in
total changed with those
Period
capitals
Non-
public Deposit
2016 27,361.49 0 22,469.34 0 0 0.00% 4,892.15 0
offering of bank
shares
Total -- 27,361.49 0 22,469.34 0 0 0.00% 4,892.15 -- 0
Explanation on General usage of raised capital
More details of the use of raised capitals can be seen in Special report on the storage and the actual use of raised capitals of
Sinopharm Accord in 2019 disclosed on 22 April 2020
(2) Situation of committed project of raised proceeds
√ Applicable □ Not applicable
27
In 10 thousand Yuan
The date
Projects
Amoun when theReali Project
Committed investment changed Amount of Investment
Total t project zed Reach the feasibility
projects and capital or not Total investment accumulated program
committed investe reaches intere predicted was
invested in areas with (includin after adjustment investment till till the
investment of d in its sts in interest or changed
fund raising out of the g (1) the period-end period-end
raised capitals report intended Perio not hugely or
plan changed (2) (3)=(2)/(1)
period availabilit d not
partially)
y
Committed investment projects
Cash consideration of
49% equity of
Not
Guangdong Nanfang
N 26,781.67 26,781.67 0 21,889.52 81.73% 0 applicabl N
Pharmaceutical
e
Foreign Trade Co., Ltd.
paid
Not
Payment of issuance
N 579.82 579.82 0 579.82 100.00% 0 applicabl N
cost
e
Subtotal of committed
-- 27,361.49 27,361.49 0 22,469.34 -- -- 0 -- --
investment projects
Capital invested in areas with fund raising out of the plan
Not applicable
Total -- 27,361.49 27,361.49 0 22,469.34 -- -- 0 -- --
Situation about not
coming up to schemed
progress or expected
Not applicable
revenue and the
reason(In specific
project)
Explanation on major
changes on project Not applicable
feasibility
Amount, usage and
progress of using for
Not applicable
fund raising out of the
plan
Change of
implementation place
Not applicable
of investment project
of raised capitals
28
Regulation of
implementation ways
Not applicable
of investment project
of raised capitals
Preliminary investment
and replacement of
Not applicable
investment project of
raised capitals
Temporarily
supplement for the
Not applicable
current capitals with
idle raised capitals
Amount and reason for
surplus of raised
Not applicable
capitals when
implementing projects
Usage of the retained
raised fund and what is
Deposited in a special account for raised funds, purpose of the raised funds have not been changed
expected to invested
with those fund
Issues or other
conditions found in use Use of the fund raised are strictly execute in line with the tri-party supervision agreement for fund raised,
of fund raised and and no related issues or other conditions been found
disclosure
(3) The changed project of raised proceeds
□ Applicable √ Not applicable
The Company has no project of raised proceeds changed in the Period.
VI. Sales of major assets and equity
1. Sales of major assets
□ Applicable √ Not applicable
The Company has no sales of major assets in the Period.
2. Sales of major equity
□ Applicable √ Not applicable
29
VII. Analysis of main holding company and stock-jointly companies
√ Applicable □ Not applicable
Subsidiary and joint-stock enterprise with an impact of more than 10% on the Company’s net profit
In RMB
Company Register Operating Operating
Type Main business Total assets Net Assets Net profit
name capital revenue profit
Sales of drugs, medical
apparatus and
instruments, freight
transportation, storage,
loading and unloading,
Sinopharm glass wares, cosmetics
Holding Subsidia and daily merchandise; 3,553,249, 4,533,117,185.3 29,348,890,454. 746,082,755.8 560,749,042.9
13,903,583,691.99
Guangzho ry other business services, 393.17 6 01 1 9
u Co., Ltd. other professional
consultation, various
goods agency and for
self-operation, import &
export of technology,
houses leasing
Chinese traditional
patent medicine,
chemical preparations,
antibiotics, bio-chemical
medicine, biological
medicine, diagnosis
Sinopharm medicine, biological
Holding medicine with features
Subsidia 1,683,333, 4,993,009,760.2 12,753,608,498. 422,228,850.7 311,908,115.1
Guoda of treatment and 11,173,757,597.94
ry 333.00 8 70 4 6
Drugstore diagnosis, shaped
Co., Ltd. packing food, chemical
products, and various
commodity and
technique hold by self-
support and agency as
well as import & export
of technology
30
Retail and distribution
in respect of
Sinopharm
pharmaceutical products
Holding Subsidia 521,407,9 1,108,937,908.7 6,170,121,266.8 220,472,710.3 193,137,920.0
and medical apparatus 4,006,269,159.15
Guangxi ry 65.79 3 5 4 8
and instruments,
Co., Ltd.
wholesale and retails of
health products
Particular about subsidiaries obtained or disposed in report period
√ Applicable □ Not applicable
The method of obtaining
Company Name and handling subsidiaries The influence to the whole production and performance
during the report period
Further consolidated the pharmaceutical distribution
Sinopharm Accord (Guangzhou)
Acquisition business in Guangxi & Guangdong and without major
Pharmaceutical Co., Ltd.
influence on performance of the Company
Guoda Drugstore (Chaoyang) Renai Pharmacy Expand local medicine retail business layout, and without
Acquisition
Co., Ltd. major influence on performance of the Company
Expand local medicine retail business layout, and without
Guoda Drugstore ( Pu’er) Song Mao Co., Ltd. Acquisition
major influence on performance of the Company
Sinopharm Holding Guoda Drugstore Expand local medicine retail business layout, and without
Establishment
Yongxingtang Chain (Chaoyang) Co., Ltd. major influence on performance of the Company
Further consolidated the pharmaceutical distribution
Sinopharm Accord Medical Supply Chain
Establishment business in Guangxi & Guangdong and without major
(Shenzhen) Co., Ltd.
influence on performance of the Company
Sinopharm Holding Guozhi Pharmacy Expand local medicine retail business layout, and without
Establishment
(Heyuan) Co., Ltd. major influence on performance of the Company
Expand local medicine retail business layout, and without
Liaoning Guoda Pharmaceutical Co., Ltd. Establishment
major influence on performance of the Company
Further consolidated the pharmaceutical distribution
Sinopharm Holding Guangyi Health
Establishment business in Guangxi & Guangdong and without major
Management (Zhanjiang) Co., Ltd.
influence on performance of the Company
Qinghuangdao Guoda Drugstore Chain Co.,
Transfer No major influence.
Ltd.
VIII. Structured vehicle controlled by the Company
□ Applicable √ Not applicable
IX. Future Development Prospects
(i) Industry environment and its impact on the company
Under the goal of “Healthy China”, the linkage of medicine, medical care, and medical insurance continues to
accelerate, and a large number of interlocking major policies are changing and will change the entire medicine and
medical ecosystem. The overall growth rate of the industry is showing a slowing trend, and the profit space is
constantly reduced, and the shuffling is intensified. In addition, the sudden novel coronavirus pneumonia
epidemic in early 2020 has a great impact on the domestic and foreign economies, the slowdown in GDP growth
may have a short-term negative impact on medical expenditures, resulting in increased downward pressure on
drug prices, and the operation and capital chain of various enterprises face heavy pressure and test, the industrial
structure has accelerated to rebuild. However, the long-term development trend of the pharmaceuticals industry
31
has not changed, policy and environmental changes have also driven the continuous improvement of the
concentration of the pharmaceutical circulation industry, and the core competitive advantages of leading
enterprises have been continuously enhanced.
The epidemic will promote national and social investment in disease prevention and control, accelerate the
construction of national emergency supply system and comprehensive supervision system, increase investment in
technological innovation, and accelerate the popularization of LiveApp of digital technology and management.
Faced with the new environment at home and abroad, changes in industrial policies and competition patterns of
new phase and new model, the company will fully explore new profit growth points, upgrade service capabilities,
improve operating quality, and actively respond to challenges and opportunities through continuous technological
innovation and exploration of new ideas.
(ii) Company business plan
1. Strengthen the responsibility of central enterprises and strengthen development confidence
Firstly, as the designated medical equipment reserve units of governments at all levels, we continue to undertake
the procurement, storage and distribution of epidemic emergency supplies, actively obtain the distribution rights
of drugs in the epidemic diagnosis and treatment scheme and shortage of drugs, and adopt various methods to
assist in the admission of medicines; summarize the experience of epidemic prevention and control, and actively
participate in the construction of government and community public health systems;
Secondly, pay attention to market changes, quickly adjust the structure, promote new business models, achieve
wider coverage and deeper sinking of sales and channel resources, prepare for graded diagnosis and treatment;
accelerate the promotion of online to offline integrated pharmaceutical new retail, C-end , B-end multi-channel
services.
2. Continue to promote the strategy of wholesale-retail integration, improve the efficiency of supply chain
integration
Summarize the experience of the typical model of wholesale-retail integration, establish a nationwide work
mechanism for wholesale-retail integration; comprehensively promote the “member store”, and coordinate the
management of the brand of the member store; accelerate the transformation of retail direct sales customers of the
distribution companies and the wholesale-retail jointly expand local small and medium-sized chain pharmacies.
Collaborate procurement resources to form a “unified negotiation and separate procurement” distribution model of
upstream manufacturers + distribution + retail tripartite linkage, promote logistics planning and information
construction, and enhance the local market shares and competitiveness of retail formats.
Integrate the national logistics resources, plan the national logistics network, and realize the national multi-
warehouse linkage; establish a national logistics center supply chain and logistics operation monitoring system,
unify the standardized index system, and improve the overall operation efficiency and service quality.
3. Make every effort to accelerate digital transformation and empower new business models with
technology
Build a digital management platform to empower management, control and services, including financial sharing
32
platform, remuneration evaluation digital platform, property rental management digital platform, risk management
and control digital platform, and security management digital platform, etc.
It is planned to establish an information technology center to simulate “corporate” operation and management,
accelerate the digital transformation of business management and control, and use new technologies to build a
hospital supply chain management information platform and a retail professional supply chain management
information platform to support the deepening of the online to offline supply chain of the business, and improve
the responsiveness of providing solutions to different entities in the upstream and downstream of the supply chain.
4. Invest in mergers and acquisitions to seize opportunities and accelerate the nationwide deployment and
multi-field layout
Deepen the distribution network layout, accelerate the completion of the layout of the blank areas in Guangdong
and Guangxi, and carry out the secondary layout of regional and county markets and key regions; expand the
investment cooperation of innovative businesses around the upstream and downstream of the supply chain and
take value-added demand as the starting point; accelerate the expansion of the national retail network, make full
use of the “direct sales + franchise + mergers and acquisitions” troika to improve the efficiency of store expansion,
and speed up the opening of stores.
5. In distribution business segment, promote the deployment of “one body and two wings” business, and
accelerate the development of efficiency
One body refers to the traditional business, and two wings refer to “retail direct sales + retail diagnosis and
treatment” and “innovative service products”.
(1) Focus on market share and strengthen traditional business: follow the trend, adjust product structure, lay
out in advance, and go all out to grab new products; on the basis of logistics and delivery services, customize
according to customer needs, and extend a series of services to form product service packages and solutions.
(2) Retail direct sales + retail diagnosis and treatment: accelerate the development of distribution and retail
business, and strengthen terminal control. Carry out network construction around the top three hospitals, prioritize
the layout of medical insurance and prescription circulation project intention cities, build the patient-centric full-
chain service system, develop remote diagnosis and treatment cooperation platforms, and improve its own remote
review system; retail direct sales continue to develop resources and carry out terminal networks construction,
increase the retail market share, quickly copy and promote the membership store model, and establish a new profit
model.
(3) Innovative service products: use integrated platforms to share resources and enrich service products around
the upstream and downstream of the supply chain; promote the rapid expansion of innovative businesses to
subsidiaries, make key layout in each region, comprehensive output, promote scale development and income
increase, and promote the profit contributions of innovative service products.
6. Guoda Drugstore: continue to accelerate network layout and accelerate innovation and development
(1) Continue to promote network expansion and sinking, and accelerate the store layout through “direct
33
sales + franchise”: strengthen resource integration in the areas already entered and enhance regional market
influence. In terms of the expansion of direct stores, it quickly seized the advantageous business districts around
the hospital and further settled the distribution points; encourage all subsidiaries to vigorously develop franchise
business; promote the construction of provincial-level platforms by classification and grading, integrate new M &
A enterprises and control risks, and play synergy effects.
(2) Actively promote the digital transformation of retail formats and promote the Internet + service model:
land CRM systems, upgrade member management and assessment mechanisms, and establish an innovative
member model based on big data; make full use of existing network, products, and store staff advantages, and
establish its own e-commerce platform.
(3) Improve OEM brand planning and promote the development of private brand business: improve brand
planning and system construction, establish product planning and evaluation system, establish quality
management system, improve marketing strategy system, enhance product quality and service awareness, and
enhance brand influence.
(4) Continue to integrate WBA resources: continue to strengthen comprehensive project cooperation in
information technology, retail terminal operation, category optimization, private brand, new store model, etc.,
optimize retail service system and business model, and improve management level.
(iii) Possible risks
1.Risks of changes in industry policy
With the continuous deepening of new medical reform, the pharmaceutical industry frequently releases policies,
and the operating environment of the industry has major changes, affected by the “4 + 7” centralized procurement
linkage and expansion, the GPO in Guangdong and Guangxi provinces, and the continuous expansion of the
national talks, and other policies, the drug price has continued to drop sharply, and the company’s profit margin is
facing the risk of further compression. The supervision has been continuously upgraded, the introduction of the
new Drug Administration Law and the implementation of the “four strictest” put forward higher requirements for
the compliance operation of pharmaceutical enterprises, the pharmaceutical circulation industry faces increased
risks of uncertain compliance. The company will respond to the impacts of industry policies by transforming and
upgrading its business structure, exploring new profit models, and improving its risk management and control
capabilities.
2. Management risks of the continuous expansion of marketing network of Guoda Drugstore
Through the continuous opening of new stores and extended M & A, the marketing network of Guoda Drugstore
has maintained a steady growth trend in recent years. The expansions of the sales areas and the increase in the
number of stores have put pressure on the store location, distribution, cash management, marketing and human
resource management of Guoda Drugstore. The company will strengthen management and construction in the
commodity procurement, logistics and delivery, sales and other links, and formulate corresponding management
measures in each link to ensure unified standards and management quality for store expansion, and at the same
time strengthen integration and control of new merged stores.
3. Risks of intensifying market competition
34
As the country continues to introduce corresponding policies to encourage the integration of pharmaceutical retail
industry, the major pharmaceutical retail enterprises in the industry have accelerated the pace of mergers and
acquisitions, and continued to expand the marketing networks, improve the logistics center constructions, and
innovate the business and profit models so that the sales scale and comprehensive strength continuously
strengthen. At the same time, with the upgrading of consumption and the gradual opening of market, the foreign
pharmaceutical distribution enterprises with powerful strength are entering the domestic pharmaceutical
distribution markets through a variety of ways, so the industry competition is further intensifying. In addition, the
cross-border competitors with internet genes have quickly penetrated into the company’s traditional business
fields, which brought certain challenges to the company’s business model.
The company will continue to integrate existing resources, deepen the strategic development initiatives with
wholesale-retail integration as the core, and deeply give play to the synergies, directly face the terminal patients
and consumers through complementary varieties, capital collaboration, supply chain collaboration, and
international promotion, at the same time, it will realize brand globalization by capital operation, and continuously
increase investment in scientific and technological innovation, and actively respond to cross-border competition.
4. Risks of facing the horizontal competition
In the pharmaceutical retail field, Sinopharm Holding’s affiliated distribution subsidiaries have also opened some
social retail pharmacies, which constitute a certain degree of horizontal competition with the subordinate Guoda
Drugstore. Sinopharm Holding and SINOPHARM have pledged to take effective measures to resolve the possible
horizontal competition.
5. The risk of goodwill impairments
On 31 December 2019, the book value of goodwill in consolidate financial statement listed as 944,079,884.56
Yuan, and distributed to the assets group of distribution business and retail business. In accordance with the
Accounting Standards for Business Enterprises, the Company carried out annual impairment test for the goodwill.
Impairment of goodwill will released on the Note V.-17 and Note III-17 & 34 listed under the Financial Statement
X. Reception of research, communication and interview
1. In the report period, reception of research, communication and interview
√Applicable □ Not applicable
Time Way Type Basic situation index of investigation
Field research Institute Resolution of Annual General Meeting
17 May 2019
2018 (Notice No.: 2019-26)
Resolution of Third Extraordinary
13 November 2019 Field research Institute Shareholders’ General Meeting of 2019
(Notice No.: 2019-45)
Reception (times) 2
35
Number of hospitality 65
Number of individual reception 5
Number of other reception 0
Disclosed, released or let out major undisclosed
No disclosed, released or let out major undisclosed information
information
36
Section V. Important Events
I. Profit distribution plan of common stock and capitalizing of common reserves plan
Formulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy during
the Reporting Period
√Applicable □ Not applicable
On 17 May 2019, the profit distribution plan for year of 2018 was deliberated and approved by annual general
meeting of 2018, that is taking total 428,126,983 shares as base, distributed 4.00 yuan (tax included) for each 10
shares in cash. The announcement of 2018 interest distribution implementation was released on 11 June 2019 by
the Board (published in Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao
Website http://www.cninfo.com.cn), the profit distribution plan for year of 2018 was completed, and dividend for
public shares was distributed to the account of shareholders dated 19 June 2019 (A-share) and 21 June 2019 (B-
share) respectively.
Special explanation on cash dividend policy
Satisfy regulations of General Meeting or requirement of Article of Association
Y
(Y/N):
Well-defined and clearly dividend standards and proportion (Y/N): Y
Completed relevant decision-making process and mechanism (Y/N): Y
Independent directors perform duties completely and play a proper role (Y/N): Y
Minority shareholders have opportunity to express opinions and demands totally
Y
and their legal rights are fully protected (Y/N):
Condition and procedures are compliance and transparent while the cash bonus
Not applicable
policy adjusted or changed (Y/N):
Profit distribution plan (pre-plan) of common stock and capitalizing of common reserves plan (pre-plan) in latest three years
(including the reporting period)
(1) Profit distribution plan for year of 2017
Taking the total 428,126,983 shares as base, cash bonus of 3.00 yuan (before tax) each 10 shares will be
distributed to the whole shareholders. This profit distribution did not convert capital reserve into share capital.
(2) Profit distribution plan for year of 2018
Taking the total 428,126,983 shares as base, cash bonus of 4.00 yuan (before tax) each 10 shares will be
distributed to the whole shareholders. This profit distribution did not convert capital reserve into share capital.
(3) Profit distribution plan for year of 2019
Taking the total 428,126,983 shares as base, cash bonus of 6.00 yuan (before tax) each 10 shares will be
distributed to the whole shareholders. This profit distribution did not convert capital reserve into share capital.
Cash dividend of common stock in latest three years (including the reporting period)
In RMB
37
Ratio of the
Ratio of
total cash
the cash
bonus
bonus in
Ratio of the (other ways
net profit
cash bonus by included) in
Net profit attributabl
Proportion other ways in net profit
attributable to e to
for cash net profit attributable
common stock common
Amount for cash bonus by attributable to Total cash bonus to common
Year for bonus shareholders of stock
bonus (tax other common stock (including other stock
shares listed company in shareholde
included) ways(i.e. shareholders of ways) shareholder
consolidation rs of listed
share buy- listed company s of listed
statement for bonus company
backs) contained in company
year contained
consolidation contained
in
statement in
consolidati
consolidati
on
on
statement
statement
2019 256,876,189.80 1,271,289,183.01 20.21% 0.00 0.00% 256,876,189.80 20.21%
2018 171,250,793.20 1,210,742,435.78 14.14% 0.00 0.00% 171,250,793.20 14.14%
2017 128,438,094.90 1,057,791,930.67 12.14% 0.00 0.00% 128,438,094.90 12.14%
The Company gains profits in reporting period and the retained profit of common stock shareholders provided by parent company is
positive but no plan of cash dividend proposed of common stock
□ Applicable √ Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
√Applicable □ Not applicable
Bonus shares for every 10-share (Share) 0
Dividends for every 10-share (RMB) (Tax included) 6
Increments per 10 shares (Share) 0
Equity base of the distribution plan (Share) 428,126,983
Amount of cash dividend(RMB) (Tax included) 256,876,189.80
Amount of cash dividend in other ways(i.e. share repurchase)(RMB) 0.00
Total cash dividend (including other way) (RMB) 256,876,189.80
Profit available for distribution (RMB) 4,996,184,257.34
Proportion of total cash dividend (including other ways) to total profit
20.21%
distribution
Cash dividend situation
If the company’s development is at the growth stage with significant capital expenditures, the minimum proportion of cash
dividend in the profit distribution should reach 40%.
38
III. Implementation of commitment
1. Commitments completed in Period and those without completed till end of the Period from actual
controller, shareholders, related parties, purchaser and companies
√Applicable □ Not applicable
Type of
Commitme Commitmen Commitme Impleme
Promise commitme Content of commitments
nts t date nt term ntation
nts
Commitme
nts for
share
merger
reform
"As a large pharmaceutical commercial enterprise whose business
involves pharmaceutical wholesale and retail, Sinopharm Holding
may overlap with the Company in geographical segmentation
during its future business development. To avoid the potential peer
competition brought by such geographical overlap, Sinopharm
Holding undertakes that, upon the transfer of shares of Sinopharm
Commitme Holding Guangzhou it held to Sinopharm Accord, “1. it will not
nts in report Commitm newly-establish or broaden within Guangdong any business
Normally
of Sinopharm ent of operation that actually compete with that of Sinopharm Accord, or 21 June Long-term
impleme
acquisition Holding shareholde set up any new subsidiaries or subordinate enterprises who engage 2005 effective
nting
or equity rs in such business. 2. It will enter into business delineation with
change Sinopharm Accord and Sinopharm Holding Guangzhou, thereby
giving the three parties clear geographical areas to carry out
pharmaceutical wholesale and retail businesses, so as to avoid
potential peer competition. Apart from above, Sinopharm Holding
will no longer newly-establish any enterprise that may compete
with Sinopharm Accord in the production and R&D of
pharmaceutical products.”
39
“Sinopharm Holding and Sinopharm Foreign Trade made
commitments in the Report about China National Accord
Medicines Corporation Ltd. Purchasing Assets and Raising
Supporting Funds and Related Transactions by Asset Sale, Stock
Issuance and Cash Payment that the non-public offering of shares
of Sinopharm Accord obtained from this transaction shall not be
Sinopharm
transferred within 36 months since the finish date of issuance and
Group Co.,
shall be unlocked after 36 months since the date of listing. Within 6
Ltd;China Commitm
months after the completion of this transaction, if the closing price Normally
National ent on 31 May
of the stock of Sinopharm Accord is less than the issue price in 36 months impleme
Pharmaceutic restricted 2016
continuous 20 trading days, or the closing price at the end of 6 nting
al Foreign shares
months after the completion of this transaction is less than the issue
Trade
price, the lockup period of the stock of Sinopharm Group and
Corporation
Sinopharm Foreign Trade obtained from Sinopharm Accord by this
Commitme
transaction will automatically prolong at least 6 months. The shares
nts in assets
reorganizati derived from stock dividends allocation and capital reserve increase
on
transferring of Sinopharm Accord based on the non-public offering
of shares of Sinopharm Accord obtained by this transaction should
also abide by the above stock restricted arrangements.”
"Ping An Asset Management Co., Ltd. made commitments in the
Report about China National Accord Medicines Corporation Ltd.
Purchasing Assets and Raising Supporting Funds and Related
Transactions by Asset Sale, Stock Issuance and Cash Payment that
Ping’an Commitm
the non-public offering of shares of Sinopharm Accord obtained Normally
Assets ent on 31 May
from this transaction shall not be transferred within 36 months 36 months impleme
Management restricted 2016
since the finish date of issuance and shall be unlocked after 36 nting
Co., Ltd. shares
months since the date of listing. After placement completed, the
shares of the listed company increased due to bonus shares and
turning to increase capital should pursuit to the restriction
arrangement the above mentioned.
40
“Sinopharm Holding made commitments in the Report about China
National Accord Medicines Corporation Ltd. Purchasing Assets and
Raising Supporting Funds and Related Transactions by Asset Sale,
Stock Issuance and Cash Payment that the Company shall be the
controlling shareholder of China National Accord Medicines
Corporation Ltd. (hereinafter referred to as Sinopharm Accord) up
to the issue date of this commitment letter, after the completion of
this major assets reorganization (hereinafter referred to as “this
reorganization”), Sinopharm Accord shall no longer hold shares or
operate relevant businesses of pharmaceutical industry, the main
business will become the national pharmaceutical retail and
pharmaceutical distribution business in Guangdong and Guangxi.
In order to support the business development of Sinopharm Accord
and avoid horizontal competition with Sinopharm Accord and its
controlling enterprises, the Company made following irrevocable
commitments and promises:1, after the completion of this
reorganization, as for the social retail drugstore assets except for
Sinopharm Holding Guoda Drugstore Co., Ltd. and its subsidiaries
and branches owned or controlled by the Company, the Company
promised to take appropriate measures to solve the horizontal
competition problem in the pharmaceutical retail business between
the Company and Sinopharm Accord within 5 years since the
completion date of this reorganization. 2. The Company's way of
resolving horizontal competition problems includes and is not
limited to purchasing the social retail drugstore assets subordinated
to the Company by Sinopharm Accord, taking the entrusted
operation, leasing or contracting operation by Sinopharm Accord
and its controlling enterprises in accordance with the methods
permitted to national laws to hold or control the social retail
Commitm
drugstore assets, or transferring the controlling stake of the social
ents on
retail drugstore assets by the Company. 3. If the shareholders of the
horizontal
social retail drugstore assets (hereinafter referred to as "the third Normally
Sinopharm competitio 28 Dec. Long-term
Group Co., party") of the Company or the enterprises controlled by the impleme
n, relation 2016 effective
Ltd Company have or are going to perform the preemptive rights under nting
transaction
the same conditions in accordance with relevant laws and
and capital
corresponding Articles of Association, then the above commitment
occupation
will not be applicable, but in this case, the Company should try its
utmost to urge the third party to waive its preemptive rights. If the
Company is unable to urge the third party to give up the preemptive
rights, the Company will urge the enterprises controlled by the
Company to transfer the social retail drugstore assets to the third
party to solve the horizontal competition problem. 4. The
pharmaceutical distribution assets currently owned or controlled by
the Company are distributed outside Guangdong and Guangxi
regions, there is no horizontal competition with Sinopharm Accord,
the Company will not engage in the same or similar operation 41
businesses to Sinopharm Accord in Guangdong and Guangxi in the
future, if the Company and its holding enterprises obtain the new
business opportunities constituting substantial horizontal
competition (hereinafter referred to as competitive new business)
“SINOPHARM made commitments in the Report about China
National Accord Medicines Corporation Ltd. Purchasing Assets and
Raising Supporting Funds and Related Transactions by Asset Sale,
Stock Issuance and Cash Payment that the Company shall be the
actual controller of China National Accord Medicines Corporation
Ltd. (hereinafter referred to as Sinopharm Accord) up to the issue
date of this commitment letter, after the completion of this major
assets reorganization (hereinafter referred to as “this
reorganization”), Sinopharm Accord shall no longer hold shares or
operate relevant businesses of pharmaceutical industry, the main
business will become the national pharmaceutical retail and
pharmaceutical distribution business in Guangdong and Guangxi.
In order to support the business development of Sinopharm Accord
and avoid horizontal competition with Sinopharm Accord and its
controlling enterprises, the Company made following irrevocable
commitments and promises:1, after the completion of this
reorganization, as for the social retail drugstore assets except for
Sinopharm Group Guoda Drugstore Co., Ltd. and its subsidiaries
and branches owned or controlled by the Company, the Company
promised to take appropriate measures to solve the horizontal
competition problem in the pharmaceutical retail business between
the Company and Sinopharm Accord within 5 years since the
completion date of this reorganization. 2. The Company's way of
resolving horizontal competition problems includes and is not
limited to purchasing the social retail drugstore assets subordinated
to the Company by Sinopharm Accord, taking the entrusted
operation, leasing or contracting operation by Sinopharm Accord
Commitm
and its controlling enterprises in accordance with the methods
ents on
permitted to national laws to hold or control the social retail
horizontal
drugstore assets, or transferring the controlling stake of the social Normally
competitio 28 Dec. Long-term
SINOPHAR retail drugstore assets by the Company. 3. If the shareholders of the impleme
M n, relation 2016 effective
social retail drugstore assets (hereinafter referred to as "the third nting
transaction
party") of the Company or the enterprises controlled by the
and capital
Company have or are going to perform the preemptive rights under
occupation
the same conditions in accordance with relevant laws and
corresponding Articles of Association, then the above commitment
will not be applicable, but in this case, the Company should try its
utmost to urge the third party to waive its preemptive rights. If the
Company is unable to urge the third party to give up the preemptive
rights, the Company will urge the enterprises controlled by the
Company to transfer the social retail drugstore assets to the third
party to solve the horizontal competition problem. 4. The
pharmaceutical distribution assets currently owned or controlled by
the Company are distributed outside Guangdong and Guangxi
regions, there is no horizontal competition with Sinopharm Accord,
the Company will not engage in the same or similar operation 42
businesses to Sinopharm Accord in Guangdong and Guangxi in the
future, if the Company and its holding enterprises obtain the new
business opportunities constituting substantial horizontal
competition (hereinafter referred to as competitive new business)
Sinopharm Holding made commitments in the Commitment Letter
About Sinopharm Group Co., Ltd. to Avoid Horizontal
Controlli
Competition: “First, the Company and the Company’s wholly-
ng
owned, controlling or other enterprises with actual control (in
sharehol
addition to Sinopharm Accord and its controlling enterprises,
der is
hereinafter the same) don’t have businesses and operations
impleme
constituting the substantial horizontal competition to Sinopharm
nt in real
Accord and its controlling enterprises. Second, the Company and
earnest,
the Company’s wholly-owned, controlling or other enterprises with
Sinophar
actual control shall not engage, participate in or do businesses and
m
activities in Guangdong and Guangxi which constitute substantial
Commitme Accord
Commitm competition to Sinopharm Accord and pharmaceutical business
nts make in will
initial ent of services. Third, the Company and the Company’s wholly-owned, 5 Sept. Long-term
Sinopharm actively
public
Holding shareholde controlling or other enterprises with actual control shall not engage, 2013 effective
offering or urged the
re- rs participate in or do businesses and activities which constitute
financing controlli
substantial competition to Sinopharm Accord and pharmaceutical
ng
industry businesses. Fourth, the Company shall not take advantage
sharehol
of the control to Sinopharm Accord to damage the legitimate rights
der and
and interests of Sinopharm Accord and other shareholders
actual
(especially medium and small shareholders). This commitment
controlle
letter takes effect from the issue date, and remains in effect for the
r to
entire period when the Company acts as the controlling shareholder
fulfill
or its related party of Sinopharm Accord. Within the effective
commitm
period of the commitment, if the Company violates this
ents
commitment and causes a loss to Sinopharm Accord, the Company
will timely make full compensation for Sinopharm Accord.”
43
Sinopharm Holding made commitments in the Commitment Letter
About Sinopharm Group Co., Ltd. to Regulate the Related
Transactions with China National Accord Medicines Corporation
Ltd.: “First, when the Company is controlling Sinopharm Accord,
the Company and the companies and enterprises directly and
indirectly controlled by the Company (“related party” for short)
will strictly regulate the related transactions with Sinopharm
Accord and its controlling enterprises. Second, for the related
transactions that can not be avoided nor have reasonable reasons to
occur, the Company and related party shall sign normative related
transaction agreement in accordance with relevant laws with
Controlli
Sinopharm Accord. Sinopharm Accord implements the approval
ng
procedures and fulfills the information disclosure obligations of the
sharehol
related transactions according to relevant laws, regulations, rules,
der is
other normative documents and the constitutions of Sinopharm
impleme
Accord. Third, for the related transactions that can not be avoided
nt in real
or have reasonable reasons to occur, the Company and related party
earnest,
shall abide by the open, fair and just market principles and confirm
Sinophar
the price of related transactions in accordance with the price that
m
the independent third party without association sets for the same
Accord
Commitm and similar transactions, and ensure the fairness of the price of the
will
ent of related transactions. Fourth, when the board of directors and the 5 Sept. Long-term
Sinopharm actively
Holding shareholde general meeting of stockholders of Sinopharm Accord vote on the 2013 effective
urged the
rs related transactions involving the Company and other enterprises
controlli
controlled by the Company, the Company shall fulfill the necessary
ng
obligations that the associated directors and associated shareholders
sharehol
abstain from voting in accordance with the relevant provisions, and
der and
abide by the legal procedures for approving related transactions and
actual
the information disclosure obligations. Fifth, the Company
controlle
guarantees to participate in the shareholders' general meeting,
r to
equally exercise the corresponding rights and take the
fulfill
corresponding obligations in accordance with the constitutions of
commitm
Sinopharm Accord, not to take advantage of controlling shareholder
ents
status to seek improper benefits or utilize related transactions to
illegally transfer the funds and profits of Sinopharm Accord, and
not to damage the legitimate rights and interests of other
shareholders (especially the medium and small shareholders) of
Sinopharm Accord. Sixth, this commitment letter comes into force
from the issue date and remains in effect for the entire period when
the Company acts as the controlling shareholder or its related party
of Sinopharm Accord. Within the effective period of the
commitment, if the Company violates this commitment and causes
a loss to Sinopharm Accord, the Company will timely make full
compensation for Sinopharm Accord.”
44
"SINOPHARM made commitments in the Commitment Letter
Actual
About China National Pharmaceutical Group Corporation to Avoid
Controlle
Horizontal Competition with China National Accord Medicines
r is
Corporation Ltd.: “First, in the next five years, Sinopharm plans to
impleme
take appropriate measures (including assets replacement or
nt in real
acquisition, equity reorganization, etc.) to resolve the horizontal
earnest,
competition between Sinopharm Weiqida and Sinopharm Accord.
Sinophar
Second, in addition to the past matters and matters disclosed in this
m
commitment letter, the Company and the Company’s wholly-
Accord
owned, controlling or other enterprises with actual control rights
Commitm will
(except for Sinopharm Accord and its controlling enterprises, the
ent of 16 Oct. Long-term actively
SINOPHAR same as below) shall not directly engaged in, participate in or do
M actual 2013 effective urged the
the businesses an activities constituting actual competition to the
controller controlli
production and operation of Sinopharm Accord in China. The
ng
relevant commitments about avoiding horizontal competition that
sharehol
the Company made in the past still remain in effect. Third, the
der and
Company shall not take advantage of the control relationship to
actual
Sinopharm Accord to damage the legitimate rights and interests of
controlle
Sinopharm Accord and its shareholders (especially the medium and
r to
small shareholders). Fourth, this commitment letter comes into
fulfill
force from the issue date and remains in effect for the entire period
commitm
when the Company acts as the controlling shareholder or its related
ents
party of Sinopharm Accord.”
45
"SINOPHARM made commitments in the Commitment Letter
About Sinopharm Group Co., Ltd. to Regulate the Related
Transactions with China National Accord Medicines Corporation
Ltd.: “First, when the Company is controlling Sinopharm Accord,
the Company and the companies and enterprises directly and
indirectly controlled by the Company (“related party” for short)
will strictly regulate the related transactions with Sinopharm
Accord and its controlling enterprises. Second, for the related
Actual
transactions that can not be avoided or have reasonable reasons to
Controlle
occur, the Company and related party shall sign normative related
r is
transaction agreement in accordance with relevant laws with
impleme
Sinopharm Accord. Sinopharm Accord implements the approval
nt in real
procedures and fulfills the information disclosure obligations of the
earnest,
related transactions according to relevant laws, regulations, rules,
Sinophar
other normative documents and the constitutions of Sinopharm
m
Accord. Third, for the related transactions that can not be avoided
Accord
or have reasonable reasons to occur, the Company and related party
Commitm will
shall abide by the open, fair and just market principles and confirm
ent of 22 Sept. Long-term actively
SINOPHAR the price of related transactions in accordance with the price that
M actual 2013 effective urged the
the independent third party without association sets for the same
controller controlli
and similar transactions, and ensure the fairness of the price of the
ng
related transactions. Fourth, when the board of directors and the
sharehol
general meeting of stockholders of Sinopharm Accord vote on the
der and
related transactions involving the Company and other enterprises
actual
controlled by the Company, the Company shall fulfill the necessary
controlle
obligations that the associated directors and associated shareholders
r to
abstain from voting in accordance with the relevant provisions, and
fulfill
abide by the legal procedures for approving related transactions and
commitm
the information disclosure obligations. Fifth, the Company
ents
guarantees not to take advantage of actual controller status to seek
improper benefits or utilize related transactions to illegally transfer
the funds and profits of Sinopharm Accord, and not to damage the
legitimate rights and interests of other shareholders (especially the
medium and small shareholders) of Sinopharm Accord. Sixth, this
commitment letter comes into force from the issue date and
remains in effect for the entire period when the Company acts as
the actual controller or its related party of Sinopharm Accord.
Completed
on time Y
(Y/N)
46
2. Concerning assets or project of the Company, which has profit forecast, and reporting period still in
forecasting period, explain reasons of reaching the original profit forecast
□ Applicable √ Not applicable
IV. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.
V. Explanation from Board of Directors, Supervisory Committee and Independent Directors
(if applicable) for “Qualified Opinion” that issued by CPA
□ Applicable √ Not applicable
VI. Particulars about the changes in aspect of accounting policy, estimates and calculation
method compared with the financial report of last year
√Applicable □Not applicable
(i)New lease standard:
In 2018, the Ministry of Finance issued the revised Accounting Standards for Business Enterprises No. 21 -
Leases (referred to as “new lease standard”). The new lease standards adopt a single model similar to the current
accounting treatment of financial leases, requiring the lessee to affirm the right-of-use assets and lease liabilities
of all leases other than short-term leases and low-value asset leases, and respectively affirm the depreciation and
interest expenses. Since January 1, 2019, the Group has carried out accounting treatment in accordance with the
revised new lease standards, for the contracts existing before the first execution date, it chooses not to re-evaluate
whether they are leases or include leases, and according to the connection regulations, no adjustments are made to
the information in the comparable period, and the difference between the new lease standards on the first
execution date and the current lease standards are adjusted retroactively for retained earnings at the beginning of
2019.
(ii) Changes in the presentation mode of financial statements
In accordance with the requirements of the “Notice on the Revision and Issuance of the Format of General
Enterprise Financial Statements for 2019” (CK [2019] No. 6) and the “Notice on the Revision and Issuance of the
Format of Consolidated Financial Statements (2019 Version)” (CK [2019] No. 16), in the balance sheet, the “bills
receivable and accounts receivable” items are split into “bills receivable” and “accounts receivable”, and the “bills
payable and accounts payable” items are split into “bills payable” and “accounts payable”, bills and receivables
that were originally included in “other current assets” item and measured at fair value and whose changes are
included in other comprehensive income are separately listed in the “receivables financing” item, the “interest
receivables” in the “other receivables” item is changed to only reflect the interests of relevant financial
47
instruments that have been due and should be received but not yet received on the balance sheet date (interests of
financial instruments accrued based on the effectively interest rate method are included in the book balance of the
corresponding financial instruments), the “interest payable” in the “other payables” item is changed to only reflect
the interests of relevant financial instruments that have been due and should be paid but not yet paid on the
balance sheet date (interests of financial instruments accrued based on the effectively interest rate method are
included in the book balance of the corresponding financial instruments). The “derecognized gains of financial
assets measured at amortized cost” item in the “investment income” item reflects the gains and losses arising from
derecognition of financial assets measured at amortized cost due to transfers and other circumstances. The Group
has retrospectively adjusted the comparative data accordingly. This accounting policy change has no impact on
the merger and the company’s net profit and owner’s equity.
Found more on 35. Change of accounting policy and accounting estimate carry in Note III. Important accounting
policy and estimate
VII. Major accounting errors within reporting period that needs retrospective restatement
□ Applicable √ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.
VIII. Compare with last year’s financial report; explain changes in consolidation statement’s
scope
√Applicable □ Not applicable
Details of changes in consolidation statement’s scope can be seen in Note VI of Financial Report.
IX. Appointment and non-reappointment (dismissal) of CPA
Accounting firm appointed
Name of domestic accounting firm Ernst & Young CPA (Special General partnership)
Remuneration for domestic accounting firm (in 10 thousand
396.81
Yuan)
Continuous life of auditing service for domestic accounting firm 4
Name of domestic CPA Li Jianguang, Li Yuanfen
Continuous life of CPA from the domestic accounting firm for
4
auditing service
Name of foreign accounting firm (if applicable) N/A
Continuous life of auditing service for foreign accounting firm (if
N/A
applicable)
Name of foreign CPA (if applicable) N/A
Continuous life of CPA from the foreign accounting firm for
N/A
auditing service (if applicable)
48
Re-appointed accounting firms in this period
□ Yes √ No
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√Applicable □ Not applicable
In the Period, the Company engaged Ernst & Young CPA (Special General partnership) as the audit body for internal control, and
auditing charge for internal control amounting as 871,900 yuan.
X. Particular about suspended and delisting after annual report disclosed
□ Applicable √ Not applicable
XI. Bankruptcy reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization for the Company in reporting period.
XII. Significant litigations and arbitration of the Company
□ Applicable √ Not applicable
No significant litigations and arbitration occurred in the reporting period.
XIII. Penalty and rectification
□ Applicable √ Not applicable
No penalty and rectification for the Company in reporting period.
XIV. Integrity of the company and its controlling shareholders and actual controllers
√Applicable □Not applicable
In reporting period, controlling shareholder and actual controller of the Company has a sound integrity , and there are no cases of
failure to implement the effective judgement of the court and the large amount of debt due and unliquidated
XV. Implementation of the company’s stock incentive plan, employee stock ownership plan or
other employee incentives
□ Applicable √ Not applicable
During the reporting period, the company has no stock incentive plan, employee stock ownership plan or other employee incentives
that have not been implemented.
49
XVI. Major related transaction
1. Related transaction with routine operation concerned
√ Applicable □ Not applicable
(1) Related transaction with routine operation concerned can be found in “X. Related party and related transaction” carried in Section
XII. Financial Report;
(2) The related transactions are settled in cash and by notes, according to the Proposal of Expected Routine Related Transactions
with Subordinate Enterprise for Year of 2019 deliberated and approved by 10th session of 8th BOD held on 23 April 2019 and AGM
of 2018 held on 17 May 2019, as well as the Notice on Expected Routine Related Transaction for Year of 2019 (Notice No.: 2019-18)
released on 25 April 2019, the related sales takes 68.47% in total expected amount for the whole year, and related procurement takes
82.33% in total expected amount for the whole year.
2. Related transactions by assets acquisition and sold
□ Applicable √ Not applicable
3. Main related transactions of mutual investment outside
□ Applicable √ Not applicable
No main related transactions of mutual investment outside for the Company in reporting period.
4. Contact of related credit and debt
√Applicable □ Not applicable
Whether the Company had non-operating contact of related credit and debt
□Yes √ No
The Company had no non-operating contact of related credit and debt in the reporting period.
5. Other related transactions
√ Applicable □ Not applicable
In reporting period, the Proposal on 100% Equity of Shanghai Dingqun Enterprise Management Consulting Co.,
Ltd. Acquisition by Sinopharm Holding Guoda Drugstore Co., Ltd and Proposal on 75% Equity of Pudong New
Area of Shanghai Pharmaceutical Medicine Ltd. Acquisition by Sinopharm Holding Guoda Drugstore Co., Ltd
were deliberated and approved by 13th session of 8th BOD and Third Extraordinary Shareholders’ General
Meeting of 2019. The above mentioned target enterprises completed the delivery in January 2020 and has no
impact on the results of the Company for 2019 therefore.
50
Relevant queries on the website of interim notices of major related party transaction disclosed
Interim Notice Date for disclosed Website for notice released
Sinopharm Accord: 75% Equity of Pudong
New Area of Shanghai Pharmaceutical
Medicine Ltd. Acquisition by Sinopharm
29 October 2019 Juchao Website http://www.cninfo.com.cn
Holding Guoda Drugstore Co., Ltd-controlling
subsidiary of the Company and Related Party
Transaction
Sinopharm Accord: 100% Equity of Shanghai
Dingqun Enterprise Management Consulting
Co., Ltd. Acquisition by Sinopharm Holding
Guoda Drugstore Co., Ltd-controlling
29 October 2019 Juchao Website http://www.cninfo.com.cn
subsidiary of the Company and Related Party
Transaction of the 85% Equity Acquisition of
Sinopharm Holding Tianhe Jiling Medical
Co., Ltd.
XVII. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable √ Not applicable
The Company had no trusteeship in the reporting period.
(2) Contract
□ Applicable √ Not applicable
No contract for the Company in reporting period.
(3) Leasing
□ Applicable √ Not applicable
No leasing for the Company in reporting period.
2. Major guarantees
√Applicable □ Not applicable
(1) Guarantees
In 10 thousand Yuan
51
Particulars about the external guarantee of the Company and the subsidiaries (Barring the guarantee for subsidiaries)
Related Guarante
Announce Actual e for
Name of the Company Guarantee Actual date of Guarantee Guarantee Implemen
ment guarantee related
guaranteed limit happening type term ted (Y/N)
disclosure limit party
date (Y/N)
Guarantee between the Company and the subsidiaries
Related Guarante
Announce Actual e for
Name of the Company Guarantee Actual date of Guarantee Guarantee Implemen
ment guarantee related
guaranteed limit happening type term ted (Y/N)
disclosure limit party
date (Y/N)
Sinopharm Holding 24 Aug. Joint liability 2019.9.24-
35,000 24 Sept. 2019 18,642.78 N Y
Guangzhou Co., Ltd. 2019 assurance 2020.8.21
Sinopharm Holding 24 Aug. Joint liability 2019.12.25-
60,000 25 Dec. 2019 54,390.28 N Y
Guangzhou Co., Ltd. 2019 assurance 2020.12.24
Sinopharm Holding 24 Aug. Joint liability 2019.11.29-
60,000 29 Nov. 2019 51,367.85 N Y
Guangzhou Co., Ltd. 2019 assurance 2020.11.27
Sinopharm Holding 19 Sept. Joint liability 2019.1.18-
25,000 18 Jan. 2019 4,910.64 N Y
Guangzhou Co., Ltd. 2019 assurance 2020.1.17
Sinopharm Holding 25 Apr. Joint liability 2019.8.7-
15,000 7 Aug. 2019 N Y
Guangzhou Co., Ltd. 2019 assurance 2020.8.6
Sinopharm Holding 25 Apr. Joint liability 2019.5.20-
70,000 20 May 2019 52,011.39 N Y
Guangzhou Co., Ltd. 2019 assurance 2020.5.19
Sinopharm Holding 19 Sept. Joint liability 2019.1.25-
5,000 25 Jan. 2019 N Y
Guangzhou Co., Ltd. 2019 assurance 2020.1.24
Sinopharm Holding 24 Aug. Joint liability 2019.10.15-
35,000 15 Oct. 2019 N Y
Guangzhou Co., Ltd. 2019 assurance 2020.10.14
Sinopharm Holding 25 Apr. Joint liability 2019.7.26-
52,000 26 Jul. 2019 30,200.11 N Y
Guangzhou Co., Ltd. 2019 assurance 2020.7.25
Sinopharm Holding 25 Apr. Joint liability 2019.8.13-
10,000 13 Aug. 2019 1,705.82 N Y
Guangzhou Co., Ltd. 2019 assurance 2020.8.12
Sinopharm Holding 25 Apr. Joint liability 2019.8.6-
60,000 6 Aug. 2019 N Y
Guangzhou Co., Ltd. 2019 assurance 2020.8.5
Sinopharm Holding
24 Aug. Joint liability 2019.9.24-
Guangdong Yuexing 5,000 24 Sept. 2019 1,723.37 N Y
2019 assurance 2020.8.21
Co., Ltd.
Sinopharm Holding
24 Aug. Joint liability 2019.10.15-
Guangdong Yuexing 15,000 15 Oct. 2019 8,118.82 N Y
2019 assurance 2020.10.14
Co., Ltd.
Sinopharm Holding
24 Aug. Joint liability 2019.12.25-
Guangdong Yuexing 10,000 25 Dec. 2019 4,320.53 N Y
2019 assurance 2020.12.24
Co., Ltd.
52
Sinopharm Holding
25 Apr. Joint liability 2019.8.6-
Guangdong Yuexing 5,000 6 Aug. 2019 N Y
2019 assurance 2020.8.5
Co., Ltd.
Sinopharm Holding
24 Aug. Joint liability 2019.9.26-
Guangdong Yuexing 5,000 26 Sept. 2019 N Y
2019 assurance 2020.9.25
Co., Ltd.
Sinopharm Holding
24 Aug. Joint liability 2019.11.28-
Guangdong Hengxing 10,000 28 Nov. 2019 4,648.94 N Y
2019 assurance 2020.10.18
Co., Ltd.
Sinopharm Holding
24 Aug. Joint liability 2019.11.26-
Guangdong Hengxing 3,000 26 Nov. 2019 N Y
2019 assurance 2020.11.25
Co., Ltd.
Sinopharm Holding 24 Aug. Joint liability 2019.10.15-
3,000 15 Oct. 2019 N Y
Foshan Co., Ltd. 2019 assurance 2020.10.14
Sinopharm Holding 24 Aug. Joint liability 2019.11.7-
2,500 7 Nov. 2019 138.97 N Y
Foshan Co., Ltd. 2019 assurance 2020.11.6
Sinopharm Holding 25 Apr. Joint liability 2019.5.31-
3,000 31 May 2019 68.49 N Y
Foshan Co., Ltd. 2019 assurance 2020.5.30
Sinopharm Holding 24 Aug. Joint liability 2019.10.15-
2,000 15 Oct. 2019 1,943.64 N Y
Zhaoqing Co., Ltd. 2019 assurance 2020.10.14
Sinopharm Holding 24 Aug. Joint liability 2019.12.23-
2,000 23 Dec. 2019 1,998.98 N Y
Zhaoqing Co., Ltd. 2019 assurance 2020.12.22
Guangdong Nanfang
Pharmaceutical 25 Apr. Joint liability 2019.7.1-
15,000 1 Jul. 2019 11,123.22 N Y
Foreign Trade Co., 2019 assurance 2020.6.30
Ltd.
Guangdong Nanfang
Pharmaceutical 24 Aug. Joint liability 2019.9.24-
10,000 24 Sept. 2019 6,331.19 N Y
Foreign Trade Co., 2019 assurance 2020.9.23
Ltd.
Guangdong Nanfang
Pharmaceutical 24 Aug. Joint liability 2019.11.8-
20,000 8 Nov. 2019 20,000 N Y
Foreign Trade Co., 2019 assurance 2020.9.30
Ltd.
Guangdong Nanfang
Pharmaceutical 24 Aug. Joint liability 2019.8.30-
10,000 30 Aug. 2019 1,597.25 N Y
Foreign Trade Co., 2019 assurance 2020.8.13
Ltd.
Guangdong Nanfang
Pharmaceutical 24 Aug. Joint liability 2019.10.15-
3,000 15 Oct. 2019 N Y
Foreign Trade Co., 2019 assurance 2020.10.14
Ltd.
53
Guangdong Nanfang
Pharmaceutical 24 Aug. Joint liability 2019.11.8-
10,000 8 Nov. 2019 1 N Y
Foreign Trade Co., 2019 assurance 2020.10.22
Ltd.
Foshan Nanhai 24 Aug. Joint liability 2019.10.15-
5,000 15 Oct. 2019 295.31 N Y
Medicine Co., Ltd. 2019 assurance 2020.10.14
Foshan Nanhai 25 Apr. Joint liability 2019.5.31-
10,000 31 May 2019 1,843.58 N Y
Medicine Co., Ltd. 2019 assurance 2020.5.30
Foshan Nanhai 24 Aug. Joint liability 2019.11.7-
7,000 7 Nov. 2019 1,913.94 N Y
Medicine Co., Ltd. 2019 assurance 2020.11.6
Foshan Nanhai
24 Aug. Joint liability 2019.10.15-
Uptodate & Special 6,000 15 Oct. 2019 N Y
2019 assurance 2020.10.14
Medicines Co. Ltd.
Foshan Nanhai
25 Apr. Joint liability 2019.5.31-
Uptodate & Special 10,000 31 May 2019 5,262.56 N Y
2019 assurance 2020.5.30
Medicines Co. Ltd.
Foshan Nanhai
24 Aug. Joint liability 2019.11.7-
Uptodate & Special 7,000 7 Nov. 2019 1,789.35 N Y
2019 assurance 2020.11.6
Medicines Co. Ltd.
Foshan Nanhai
24 Aug. Joint liability 2019.11.20-
Uptodate & Special 3,000 20 Nov. 2019 847.95 N Y
2019 assurance 2020.11.19
Medicines Co. Ltd.
Sinopharm Holding 24 Aug. Joint liability 2019.10.15-
1,000 15 Oct. 2019 492.66 N Y
(Jiangmen) Co., Ltd. 2019 assurance 2020.10.14
Sinopharm Holding 24 Aug. Joint liability 2019.12.13-
1,000 13 Dec. 2019 999.52 N Y
(Jiangmen) Co., Ltd. 2019 assurance 2020.12.12
Sinopharm Holding 24 Aug. Joint liability 2019.10.15-
1,000 15 Oct. 2019 1,000 N Y
Meizhou Co., Ltd. 2019 assurance 2020.10.14
Sinopharm Holding 25 Apr. Joint liability 2019.7.29-
2,000 29 Jul. 2019 2,000 N Y
Meizhou Co., Ltd. 2019 assurance 2020.7.28
Sinopharm Holding 24 Aug. Joint liability 2019.10.15-
1,000 15 Oct. 2019 927 N Y
Zhongshan Co., Ltd. 2019 assurance 2020.10.14
Sinopharm Holding 24 Aug. Joint liability 2019.9.24-
2,000 24 Sept. 2019 627.44 N Y
Zhongshan Co., Ltd. 2019 assurance 2020.9.23
Sinopharm Holding 24 Aug. Joint liability 2019.10.15-
500 15 Oct. 2019 500 N Y
Shantou Co., Ltd. 2019 assurance 2020.10.14
Sinopharm Holding 24 Aug. Joint liability 2019.12.23-
1,000 23 Dec. 2019 1,000 N Y
Shantou Co., Ltd. 2019 assurance 2020.12.22
Sinopharm Holding 24 Aug. Joint liability 2019.10.15-
1,000 15 Oct. 2019 501.51 N Y
Huizhou Co., Ltd. 2019 assurance 2020.10.14
Sinopharm Holding 24 Aug. Joint liability 2019.9.18-
1,000 18 Sept. 2019 N Y
Huizhou Co., Ltd. 2019 assurance 2020.9.17
Sinopharm Holding 24 Aug. Joint liability 2019.12.10-
3,000 10 Dec. 2019 505.34 N Y
Huizhou Co., Ltd. 2019 assurance 2020.12.9
54
Sinopharm Holding 24 Aug. Joint liability 2019.10.15-
1,000 15 Oct. 2019 1,000 N Y
Zhanjiang Co., Ltd. 2019 assurance 2020.10.14
Sinopharm Holding 24 Aug. Joint liability 2019.10.15-
1,000 15 Oct. 2019 993.92 N Y
Zhuhai Co., Ltd. 2019 assurance 2020.10.14
Sinopharm Holding 24 Aug. Joint liability 2019.9.24-
2,000 24 Sept. 2019 1,830.16 N Y
Zhuhai Co., Ltd. 2019 assurance 2020.9.23
Sinopharm Holding 24 Aug. Joint liability 2019.10.15-
2,000 15 Oct. 2019 2,000 N Y
Dongguan Co., Ltd. 2019 assurance 2020.10.14
Sinopharm Holding 25 Apr. Joint liability 2019.8.6-
2,000 6 Aug. 2019 N Y
Dongguan Co., Ltd. 2019 assurance 2020.8.5
Sinopharm Holding 24 Aug. Joint liability 2019.9.6-
3,000 6 Sept. 2019 2,000 N Y
Dongguan Co., Ltd. 2019 assurance 2020.9.5
Guangdong Dongfang
19 Sept. Joint liability 2019.1.10-
New Special Medicine 5,000 10 Jan. 2019 4,997.89 N Y
2019 assurance 2020.1.9
Co., Ltd
Guangdong Dongfang
25 Apr. Joint liability 2019.6.14-
New Special Medicine 2,000 14 Jun. 2019 N Y
2019 assurance 2020.6.13
Co., Ltd
Guangdong Dongfang
25 Apr. Joint liability 2019.5.31-
New Special Medicine 5,000 31 May 2019 2,705.64 N Y
2019 assurance 2020.5.30
Co., Ltd
Guangdong Dongfang
25 Apr. Joint liability 2019.7.15-
New Special Medicine 3,000 15 Jul. 2019 2,770.25 N Y
2019 assurance 2020.1.14
Co., Ltd
Guangdong Dongfang
24 Aug. Joint liability 2019.10.17-
New Special Medicine 9,000 17 Oct. 2019 2,273.51 N Y
2019 assurance 2020.10.16
Co., Ltd
Guangdong Dongfang
24 Aug. Joint liability 2019.10.15-
New Special Medicine 4,000 15 Oct. 2019 3,313.53 N Y
2019 assurance 2020.10.14
Co., Ltd
Sinopharm Holding 25 Apr. Joint liability 2019.8.16-
2,000 16 Aug. 2019 1,214.62 N Y
Maoming Co., Ltd. 2019 assurance 2020.8.15
Sinopharm Holding
25 Apr. Joint liability 2019.5.17-
Guangzhou Huadu 1,000 23 Jul. 2019 713.88 N Y
2019 assurance 2020.5.16
Co., Ltd.
Sinopharm Holding
25 Apr. Joint liability 2019.7.23-
Guangzhou Huadu 2,500 23 Jul. 2019 2,243.87 N Y
2019 assurance 2020.7.22
Co., Ltd.
Sinopharm Holding
24 Aug. Joint liability 2019.12.9-
Guangzhou Huadu 1,500 9 Dec. 2019 N Y
2019 assurance 2020.9.30
Co., Ltd.
Sinopharm Holding 24 Aug. Joint liability 2019.12.18-
2,000 18 Dec. 2019 2,000 N Y
Heyuan Co., Ltd. 2019 assurance 2020.12.17
55
Sinopharm Holding
Foshan Medical 24 Aug. Joint liability 2019.11.7-
1,000 7 Nov. 2019 4.49 N Y
Supplies Supply Chain 2019 assurance 2020.11.6
Co., Ltd.
Sinopharm Holding 24 Aug. Joint liability 2019.9.3-
30,000 3 Sept. 2019 23,962.77 N Y
Guangxi Co., Ltd. 2019 assurance 2020.9.2
Sinopharm Holding 24 Aug. Joint liability 2019.10.15-
28,000 15 Oct. 2019 15,765.44 N Y
Guangxi Co., Ltd. 2019 assurance 2020.10.14
Sinopharm Holding 19 Sept. Joint liability 2018.11.15-
25,000 15 Nov. 2018 1,025.47 N Y
Guangxi Co., Ltd. 2019 assurance 2019.11.7
Sinopharm Holding 25 Apr. Joint liability 2019.8.9-
10,000 9 Aug. 2019 8,079.53 N Y
Guangxi Co., Ltd. 2019 assurance 2020.8.8
Sinopharm Holding 19 Sept. Joint liability 2018.12.13-
15,000 13 Dec. 2018 2,583.76 N Y
Guangxi Co., Ltd. 2019 assurance 2019.11.27
Sinopharm Holding 24 Aug. Joint liability 2019.12.25-
25,000 25 Dec. 2019 N Y
Guangxi Co., Ltd. 2019 assurance 2020.12.25
Sinopharm Holding 25 Apr. Joint liability 2019.7.26-
5,000 26 Jul. 2019 4,499.79 N Y
Guangxi Co., Ltd. 2019 assurance 2020.7.25
Sinopharm Holding 25 Apr. Joint liability 2019.6.18-
10,000 18 Jun. 2019 9,933.32 N Y
Guangxi Co., Ltd. 2019 assurance 2020.6.18
Sinopharm Holding 25 Apr. Joint liability 2019.7.3-
20,000 3 Jul. 2019 337.07 N Y
Guangxi Co., Ltd. 2019 assurance 2020.7.3
Sinopharm Holding 24 Aug. Joint liability 2019.10.15-
9,000 15 Oct. 2019 2,000 N Y
Liuzhou Co., Ltd 2019 assurance 2020.10.14
Sinopharm Holding 25 Apr. Joint liability 2019.6.21-
10,000 21 Jun. 2019 6,472.69 N Y
Liuzhou Co., Ltd 2019 assurance 2020.6.20
Sinopharm Holding 19 Sept. Joint liability 2019.2.27-
6,000 27 Feb. 2019 1,263.46 N Y
Liuzhou Co., Ltd 2019 assurance 2020.2.26
Sinopharm Holding 25 Apr. Joint liability 2019.7.9-
5,000 9 Jul. 2019 3,696.72 N Y
Liuzhou Co., Ltd 2019 assurance 2020.7.8
Sinopharm Holding 24 Aug. Joint liability 2019.10.29-
9,000 29 Oct. 2019 2,100 N Y
Liuzhou Co., Ltd 2019 assurance 2020.10.28
Sinopharm Holding 24 Aug. Joint liability 2019.12.20-
10,000 20 Dec. 2019 7,958.78 N Y
Liuzhou Co., Ltd 2019 assurance 2020.12.19
Sinopharm Holding
Medicine Supply 24 Aug. Joint liability 2019.10.8-
1,059 8 Oct. 2019 N Y
Chain Service 2019 assurance 2020.10.7
(Guangxi) Co., Ltd.
Sinopharm Holding 24 Aug. Joint liability 2019.10.15-
3,000 15 Oct. 2019 N Y
Wuzhou Co., Ltd. 2019 assurance 2020.10.14
Sinopharm Holding 24 Aug. Joint liability 2019.10.15-
2,000 15 Oct. 2019 N Y
Guilin Co., Ltd. 2019 assurance 2020.10.14
Sinopharm Holding 24 Aug. Joint liability 2019.10.15-
4,000 15 Oct. 2019 N Y
Beihai Co., Ltd. 2019 assurance 2020.10.14
56
Sinopharm Holding 24 Aug. Joint liability 2019.10.15-
3,000 15 Oct. 2019 N Y
Baise Co., Ltd. 2019 assurance 2020.10.14
Sinopharm Holding 24 Aug. Joint liability 2019.10.15-
2,500 15 Oct. 2019 N Y
Guigang Co., Ltd. 2019 assurance 2020.10.14
Sinopharm Holding 19 Sept. Joint liability 2019.2.19-
3,000 19 Feb. 2019 N Y
Guigang Co., Ltd. 2019 assurance 2020.2.18
Sinopharm Holding 24 Aug. Joint liability 2019.10.15-
2,000 15 Oct. 2019 N Y
Yulin Co., ltd. 2019 assurance 2020.10.14
Sinopharm Holding
19 Sept. Joint liability 2018.12.24-
Shenzhen Jianmin 1,000 24 Dec. 2018 915.61 N Y
2019 assurance 2019.12.24
Co., ltd.
Sinopharm Holding
24 Aug. Joint liability 2019.10.15-
Shenzhen Jianmin 2,000 15 Oct. 2019 1,978.52 N Y
2019 assurance 2020.10.14
Co., ltd.
Sinopharm Holding
24 Aug. Joint liability 2019.10.15-
Shenzhen Medicinal 1,000 15 Oct. 2019 654.55 N Y
2019 assurance 2020.10.14
Materials Co., Ltd.
China National
24 Aug. Joint liability 2019.11.28-
Accord Medicines 10,000 28 Nov. 2019 7,634.04 N Y
2019 assurance 2020.5.28
Corporation Ltd.
Sinopharm Holding
24 Aug. Joint liability 2019.10.15-
Shenzhen Yanfeng 12,000 15 Oct. 2019 5,935.15 N Y
2019 assurance 2020.10.14
Co., Ltd.
Sinopharm Holding
24 Aug. Joint liability 2019.11.28-
Shenzhen Yanfeng 5,000 28 Nov. 2019 3,380 N Y
2019 assurance 2020.5.28
Co., Ltd.
Sinopharm Holding
25 Apr. Joint liability 2019.8.6-
Shenzhen Yanfeng 7,000 6 Aug. 2019 N Y
2019 assurance 2020.8.6
Co., Ltd.
Sinopharm Holding
24 Aug. Joint liability 2019.9.3-
Shenzhen Yanfeng 5,000 3 Sept. 2019 4,199 N Y
2019 assurance 2020.9.3
Co., Ltd.
Total amount of actual
Total amount of approving
occurred guarantee for
guarantee for subsidiaries in report 911,559 1,482,452.67
subsidiaries in report period
period (B1)
(B2)
Total balance of actual
Total amount of approved
guarantee for subsidiaries at
guarantee for subsidiaries at the 952,559 440,186.86
the end of reporting period
end of reporting period (B3)
(B4)
Guarantee between the subsidiaries and the subsidiaries
57
Related Guarante
Announce Actual e for
Name of the Company Guarantee Actual date of Guarantee Guarantee Implemen
ment guarantee related
guaranteed limit happening type term ted (Y/N)
disclosure limit party
date (Y/N)
Sinopharm Holding
Guoda Drugstore 24 Aug. Joint liability 2019.10.10-
2,000 10 Oct. 2019 1,717.75 N Y
Yangzhou Dadesheng 2019 assurance 2020.10.09
Chain Co., Ltd.
Fujian Guoda
25 Apr. Joint liability 2019.05.18-
Drugstore Chain Co., 5,000 18 May 2019 2,562.47 N Y
2019 assurance 2020.05.17
Ltd.
Fujian Guoda
25 Apr. Joint liability 2019.05.10-
Drugstore Chain Co., 2,000 10 May 2019 251.58 N Y
2019 assurance 2020.05.09
Ltd.
Sinopharm Holding
24 Aug. Joint liability 2019.10.10-
Guoda Drugstore 8,000 10 Oct. 2019 5,634.2 N Y
2019 assurance 2020.10.09
Guangdong Co., Ltd.
Sinopharm Holding
24 Aug. Joint liability 2019.12.18-
Guoda Drugstore 3,000 18 Dec. 2019 2,375.33 N Y
2019 assurance 2020.12.17
Guangdong Co., Ltd.
Sinopharm Holding
19 Sept. Joint liability 2018.09.28-
Guoda Drugstore 3,000 28 Sept. 2018 385.8 N Y
2019 assurance 2019.09.27
Guangdong Co., Ltd.
Taishan Sinopharm
Holding Daqun 25 Apr. Joint liability 2019.06.02-
500 2 Jun. 2019 314.6 N Y
Kangda Drugstore 2019 assurance 2020.06.01
Chain Co., Ltd.
Sinopharm Holding
Guoda Drugstore 24 Aug. Joint liability 2019.10.10-
3,000 10 Oct. 2019 1,919.38 N Y
Guangxi Chain Co., 2019 assurance 2020.10.09
Ltd.
Sinopharm Hebei
24 Aug. Joint liability 2019.10.10-
Lerentang Medicine 3,000 10 Oct. 2019 3,000 N Y
2019 assurance 2020.10.09
Chain Co., ltd.
Sinopharm Holding
24 Aug. Joint liability 2019.12.06-
Guoda Drugstore 3,000 6 Dec. 2019 630.13 N Y
2019 assurance 2020.12.05
Henan Chain Co., Ltd.
Hunan Guoda
Minshengtang 24 Aug. Joint liability 2019.10.10-
3,000 10 Oct. 2019 3,000 N Y
Drugstore Chain Co., 2019 assurance 2020.10.09
Ltd.
58
Sinopharm Holding
Guoda Drugstore 24 Aug. Joint liability 2019.10.10-
3,000 10 Oct. 2019 2,624.19 N Y
Jiangmen Chain Co., 2019 assurance 2020.10.09
Ltd.
Sinopharm Holding
Guoda Drugstore 19 Sept. Joint liability 2019.04.01-
2,000 1 Apr. 2019 1,909.57 N Y
Jiangmen Chain Co., 2019 assurance 2020.04.01
Ltd.
Sinopharm Holding
Guoda Drugstore 19 Sept. Joint liability 2018.09.28-
2,000 28 Sept. 2018 665.19 N Y
Jiangmen Chain Co., 2019 assurance 2019.09.27
Ltd.
Beijing Jinxiang
19 Sept. Joint liability 2018.09.28-
Drugstore Medicine 4,000 28 Sept. 2018 2,780.46 N Y
2019 assurance 2019.09.27
Chain Co., ltd.
Sinopharm Holding
Guoda Drugstore 19 Sept. Joint liability 2018.09.28-
1,000 28 Sept. 2018 872.91 N Y
Nanjing Chain Co., 2019 assurance 2019.09.27
Ltd.
Sinopharm Holding
Guoda Drugstore 24 Aug. Joint liability 2019.10.18-
3,000 18 Oct. 2019 2,049.59 N Y
Inner Mongolia Co., 2019 assurance 2020.10.17
Ltd.
Sinopharm Holding
Guoda Drugstore 25 Apr. Joint liability 2019.04.30-
3,000 30 Apr. 2019 0 N Y
Inner Mongolia Co., 2019 assurance 2020.04.29
Ltd.
Sinopharm Holding
Guoda Drugstore 24 Aug. Joint liability 2019.10.10-
9,500 10 Oct. 2019 6,188.81 N Y
Inner Mongolia Co., 2019 assurance 2020.10.09
Ltd.
Ningxia Guoda
24 Aug. Joint liability 2019.08.29-
Drugstore Chain Co., 4,000 29 Aug. 2019 2,855 N Y
2019 assurance 2020.08.28
Ltd.
Sinopharm Holding
24 Aug. Joint liability 2019.10.14-
Guoda Drugstore 4,000 14 Oct. 2019 3,849.71 N Y
2019 assurance 2020.10.13
Shandong Co., ltd.
Shanxi Guoda
24 Aug. Joint liability 2019.11.08-
Wanmin Drugstore 5,000 8 Nov. 2019 4,560 N Y
2019 assurance 2020.11.07
Chain Co.,Ltd
Shanxi Guoda
25 Apr. Joint liability 2019.06.13-
Wanmin Drugstore 6,000 13 Jun. 2019 4,171.8 N Y
2019 assurance 2020.06.12
Chain Co.,Ltd
59
ShanxSinopharm
Holding Guoda 24 Aug. Joint liability 2019.12.10-
5,000 10 Dec. 2019 1,487.98 N Y
Drugstore Shanghai 2019 assurance 2020.12.09
Chain Co., Ltd.
ShanxSinopharm
Holding Guoda 24 Aug. Joint liability 2019.10.25-
4,000 25 Oct. 2019 779.28 N Y
Drugstore Shanghai 2019 assurance 2020.10.24
Chain Co., Ltd.
ShanxSinopharm
Holding Guoda 24 Aug. Joint liability 2019.10.10-
4,000 10 Oct. 2019 0 N Y
Drugstore Shanghai 2019 assurance 2020.10.09
Chain Co., Ltd.
Sinopharm Holding
Guoda Drugstore 19 Sept. Joint liability 2018.11.28-
5,000 28 Nov. 2018 4,986.04 N Y
Shenyang Chain Co., 2019 assurance 2019.11.27
Ltd.
Sinopharm Holding
Guoda Drugstore 24 Aug. Joint liability 2019.09.11-
10,000 11 Sept. 2019 9,225.33 N Y
Shenyang Chain Co., 2019 assurance 2020.09.10
Ltd.
Sinopharm Holding
Guoda Drugstore 24 Aug. Joint liability 2019.10.28-
4,000 28 Oct. 2019 614.61 N Y
Shenyang Chain Co., 2019 assurance 2020.10.27
Ltd.
Sinopharm Holding
Guoda Drugstore 19 Sept. Joint liability 2018.11.17-
6,000 17 Nov. 2018 2,457.33 N Y
Shenyang Chain Co., 2019 assurance 2019.11.16
Ltd.
Sinopharm Holding
Guoda Drugstore 24 Aug. Joint liability 2019.10.10-
25,000 10 Oct. 2019 14,776.62 N Y
Shenyang Chain Co., 2019 assurance 2020.10.09
Ltd.
Sinopharm Holding
Guoda Drugstore
24 Aug. Joint liability 2019.10.29-
Xinjiang New Special 5,000 29 Oct. 2019 2,693.6 N Y
2019 assurance 2020.10.28
Medicine Chain Co.,
Ltd
Sinopharm Holding
Guoda Drugstore 25 Apr. Joint liability 2019.06.21-
6,000 21 Jun. 2019 0 N Y
Shanxi Yiyuan Chain 2019 assurance 2020.06.20
Co., ltd
60
Sinopharm Holding
Guoda Drugstore 19 Sept. Joint liability 2019.04.02-
7,000 2 Apr. 2019 4,828.27 N Y
Shanxi Yiyuan Chain 2019 assurance 2020.04.01
Co., ltd
Sinopharm Holding
Guoda Drugstore 25 Apr. Joint liability 2019.06.14-
5,600 14 Jun. 2019 4,567.64 N Y
Shanxi Yiyuan Chain 2019 assurance 2020.06.13
Co., ltd
Sinopharm Holding
Guoda Drugstore 25 Apr. Joint liability 2019.06.28-
5,000 28 Jun. 2019 2,426.81 N Y
Shanxi Yiyuan Chain 2019 assurance 2020.06.27
Co., ltd
Sinopharm Holding
Guoda Drugstore 25 Apr. Joint liability 2019.06.25-
3,000 25 Jun. 2019 0 N Y
Shanxi Yiyuan Chain 2019 assurance 2020.06.24
Co., ltd
Sinopharm Holding
Guoda Drugstore 24 Aug. Joint liability 2019.10.10-
15,000 10 Oct. 2019 14,994.91 N Y
Shanxi Yiyuan Chain 2019 assurance 2020.10.09
Co., ltd
Sinopharm Holding
Guoda Drugstore 19 Sept. Joint liability 2019.01.09-
10,500 9 Jan. 2019 2,167.31 N Y
Shenyang Chain Co., 2019 assurance 2020.01.08
Ltd.
Sinopharm Holding
Guoda Drugstore
24 Aug. Joint liability 2019.10.30-
Xinjiang New Special 5,000 30 Oct. 2019 1,752.74 N Y
2019 assurance 2020.10.29
Medicine Chain Co.,
Ltd
Shanxi Guoda
19 Sept. Joint liability 2019.01.18-
Wanmin Drugstore 6,000 18 Jan. 2019 0 N Y
2019 assurance 2020.01.17
Chain Co.,Ltd
Shanxi Guoda
19 Sept. Joint liability 2019.02.19-
Wanmin Drugstore 4,000 19 Feb. 2019 750 N Y
2019 assurance 2020.02.19
Chain Co.,Ltd
Sinopharm Holding
Guoda Drugstore 19 Sept. Joint liability 2019.04.02-
8,000 2 Apr. 2019 4,175.78 N Y
Inner Mongolia Co., 2019 assurance 2020.04.01
Ltd.
ShanxSinopharm
Holding Guoda 25 Apr. Joint liability 2019.06.24-
5,000 24 Jun. 2019 4,326.2 N Y
Drugstore Shanghai 2019 assurance 2020.06.23
Chain Co., Ltd.
61
Sinopharm Holding
Guoda Drugstore 25 Apr. Joint liability 2019.06.13-
5,000 13 Jun. 2019 3,620.17 N Y
Shanxi Yiyuan Chain 2019 assurance 2020.06.12
Co., ltd
Sinopharm Holding
Guoda Fumei 25 Apr. Joint liability 2019.06.24-
3,000 24 Jun. 2019 1,085.58 N Y
Drugstore Shanghai 2019 assurance 2020.06.23
Chain Co., Ltd.
Shanxi Guoda
24 Aug. Joint liability 2019.10.10-
Wanmin Drugstore 6,000 10 Oct. 2019 6,000 N Y
2019 assurance 2020.10.09
Chain Co.,Ltd
Taishan Sinopharm
Holding Daqun 24 Aug. Joint liability 2019.10.10-
500 10 Oct. 2019 14 N Y
Kangda Drugstore 2019 assurance 2020.10.09
Chain Co., Ltd.
Total amount of actual
Total amount of approving guarantee occurred guarantee for
223,600 378,052.26
for subsidiaries in report period (C1) subsidiaries in report period
(C2)
Total balance of actual
Total amount of approved
guarantee for subsidiaries at
guarantee for subsidiaries at the 244,600 142,048.67
the end of reporting period
end of reporting period (C3)
(C4)
Total amount of guarantee of the Company ( total of three above mentioned guarantee)
Total amount of approving Total amount of actual
guarantee in report period 1,135,159 occurred guarantee in report 1,860,504.93
(A1+B1+C1) period (A2+B2+C2)
Total amount of approved Total balance of actual
guarantee at the end of report 1,197,159 guarantee at the end of 582,235.53
period (A3+B3+C3) report period (A4+B4+C4)
The proportion of the total amount of actually guarantee in the net
45.46%
assets of the Company (that is A4+ B4+C4)
(2) Guarantee outside against the regulation
□ Applicable √ Not applicable
No guarantee outside against the regulation in Period.
3. Entrust others to cash asset management
(1) Trust financing
□ Applicable √ Not applicable
The Company had no trust financing in the reporting period.
62
(2) Entrusted loans
□ Applicable √ Not applicable
The company had no entrusted loans in the reporting period.
4. Other material contracts
□ Applicable √ Not applicable
No other material contracts for the Company in reporting period.
XVIII. Social responsibility
1. Execution of social responsibility
“Social Responsibility Report of Sinopharm Accord in 2019” can be seen in Juchao website released on the same date
(http://www.cninfo.com.cn)
2. Execution of social responsibility of targeted poverty alleviation
The Company has not carried out targeted poverty alleviation in the reporting period and has no follow-up plan of targeted poverty
alleviation
3. Environment protection
The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department
Name of
Major Distribution Executed
Quantity of Emission Approved
Pollutants Emission of Pollutant Total Excessive
Company Discharge Concentrati Total
/subsidiary and Method Discharge Discharge Emissions Discharge
Outlet on Emissions
Particular Outlet Standards
Pollutants
Discharge Landmark
China
Nanotubes Outlet of A-level of 1.248 7.306
National COD 1 17.87mg/L nd N/A
emissions Waste 2 Time ton/year ton/year
Zhijun
Water Period
Discharge Landmark
China
Ammonia Nanotubes Outlet of A-level of 0.048 0.812
National 1 0.69mg/L N/A
Nitrogen emissions Waste 2nd Time ton/year ton/year
Zhijun
Water Period
Discharge Landmark
China
Nanotubes Outlet of A-level of 0.002 0.041
National Phosphate 1 0.034mg/L nd N/A
emissions Waste 2 Time ton/year ton/year
Zhijun
Water Period
63
Discharge
Standards
of Water
Pollutants
for
Discharge Pharmaceuti
Zhijun Nanotubes Outlet of cal industry 1.1467 2.16
COD 1 16.64mg/L N/A
Pingshan emissions Waste Mixing/Co ton/year ton/year
Water mpounding
and
Formulation
Category
(GB21908-
2008)
Discharge
Standards
of Water
Pollutants
for
Discharge Pharmaceuti
Zhijun Total Nanotubes Outlet of cal industry 0.0069 0.0216
1 0.01mg/L N/A
Pingshan phosphorus emissions Waste Mixing/Co ton/year ton/year
Water mpounding
and
Formulation
Category
(GB21908-
2008)
Class IV
water
(Ammonia
Nitrogen up
to Class V)
Discharge
standard in
Zhijun Ammonia Nanotubes Outlet of 0.0529 0.144
1 0.768mg/L Environmen N/A
Pingshan Nitrogen emissions Waste ton/year ton/year
tal Quality
Water
Standard for
Surface
Water
(GB3838-
2002)
Discharge DB44/26-
Main Luck
Nanotubes Outlet of 2001- A- 0.018 0.108
Pharmaceuti COD 1 15mg/L N/A
emissions Waste level of 2nd ton/year ton/year
cals
Water Time Period
Discharge DB44/26-
Main Luck
Ammonia Nanotubes Outlet of 2001- A- 0.0006 0.012
Pharmaceuti 1 0．5mg/L N/A
Nitrogen emissions Waste level of 2nd ton/year ton/year
cals
Water Time Period
Discharge DB44/26-
Main Luck
Nanotubes Outlet of 2001- A- 0.00006 0.0006
Pharmaceuti Phosphate 1 0.05mg/l N/A
emissions Waste level of 2nd ton/year ton/year
cals
Water Time Period
Discharge DB44/26-
Main Luck
Nanotubes Outlet of 2001- A- 0.012 0.024
Pharmaceuti BOD 1 10mg/L N/A
emissions Waste level of 2nd ton/year ton/year
cals
Water Time Period
Discharge DB44/26-
Main Luck
Nanotubes Outlet of 2001- A- 0.0024 0.072
Pharmaceuti SS 1 2mg/L N/A
emissions Waste level of 2nd ton/year ton/year
cals
Water Time Period
Construction and operation of pollution prevention and control facilities
At present, the above-mentioned environmental pollution key monitoring units in which the Company has a shareholding have
established pollution prevention and control facilities for waste water. In the daily management process, enterprises establish
management procedures and operating instructions for environmental protection facilities, and ensure the normal and compliant
64
operation of anti-pollution facilities through system implementation and responsibility implementation. All enterprises are
continuously investing funds and stepping up the transformation and improvement of pollution prevention and control facilities to
ensure the stable operation of pollution prevention facilities and improve the disposal capacity of environmental protection facilities.
Environmental impact assessment of construction projects and other environmental protection administrative licenses
At present, the projects of all key monitoring units have carried out environmental impact assessments and obtained approvals. The
projects to be built also carry out the relevant administrative review procedures according to the “three simultaneous” requirements
of the environmental protection facilities of the construction project.
Emergency plan for environmental emergencies
At present, the above-mentioned environmental pollution key monitoring units in which the Company has a shareholding have
formulated the Emergency Plan for Environmental Emergencies and reported them according to the regulatory requirements of the
local regulatory authorities. According to the management requirements of the emergency plan, the key units regularly carry out
emergency plan drills to further provide the enterprises’ emergency response capability.
Environmental self-monitoring scheme
At present, the above-mentioned environmental pollution key monitoring units in which the Company has a shareholding have
established environmental self-detection scheme and plan, and implemented self-inspection, third-party detection and other
monitoring methods according to the government requirements. Relevant monitoring data and reports have been archived and saved.
Other environmental information that should be disclosed
The above two companies are joint stock companies of the Company. The Company and its holding subsidiaries are not listed as key
pollutant discharge units announced by the environmental protection department.
Relevant information on environment protection
Nil
XIX. Explanation on other significant events
□ Applicable √ Not applicable
No other significant events need to explain in the reporting period.
XX. Significant event of subsidiary of the Company
□ Applicable √ Not applicable
65
Section VI. Changes in Shares and Particulars about Shareholders
I. Changes in Share Capital
1. Changes in Share Capital
In Share
Before the Change Increase/Decrease in the Change (+, -) After the Change
New
Capitaliza
share
Bonus tion of
Amount Proportion s Others Subtotal Amount Proportion
shares public
issue
reserve
d
I. Restricted shares 65,498,153 15.30% 65,498,153 15.30%
2. State-owned legal person’s
60,380,743 14.10% 60,380,743 14.10%
shares
3. Other domestic
5,117,410 1.20% 5,117,410 1.20%
shareholding
Including: Domestic legal
5,114,297 1.19% 5,114,297 1.19%
person’s shares
Domestic nature person
3,113 0.00% 3,113 0.00%
shares
II. Unrestricted shares 362,628,830 84.70% 362,628,830 84.70%
1. RMB Ordinary shares 307,744,355 71.88% 307,744,355 71.88%
2. Domestically listed foreign
54,884,475 12.82% 54,884,475 12.82%
shares
III. Total shares 428,126,983 100.00% 428,126,983 100.00%
Reasons for share changed
□Applicable √Not applicable
Approval of share changed
□Applicable √Not applicable
Ownership transfer of share changed
□ Applicable √ Not applicable
Progress of shares buy-back
□Applicable √Not applicable
Implementation progress of the reduction of repurchases shares by centralized bidding
□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
The major assets reorganization non-public offering of shares for year of 2016 were lifted on 6 Jan. 2020,
59,989,270 shares are released for trading, representing 14.01% of the total share capital of the Company.
65
2. Changes of restricted shares
√ Applicable □ Not applicable
In Share
Restricted
shares
Opening shares increased Shares released Ending shares Restricted
Shareholders Date for released
restricted in in Period restricted reasons
the
Period
On January 6, 2020,
49,551,930 shares
Sinopharm Group Non-public
55,057,700 0 0 55,057,700 were released for sale,
Co., Ltd offering share
and 5,505,770 lock-up
shares.
China National The 5,323,043 shares
Non-public
Pharmaceutical 5,323,043 0 0 5,323,043 has been lifted on
offering share
Foreign Trade Corp. January 6, 2020.
Ping An Asset-ICBM
-Ping An Asset The 2,557,148 shares
Non-public
Xinxiang No. 7 2,557,148 0 0 2,557,148 has been lifted on
offering share
Insurance Asset January 6, 2020.
Management Product
Ping An Asset-ICBM
The 2,557,149 shares
- Xinxiang No. 3 Non-public
2,557,149 0 0 2,557,149 has been lifted on
Asset Management offering share
January 6, 2020.
Product
Total 65,495,040 0 0 65,495,040 -- --
II. Securities issuance and listing
1. Security offering (without preferred stock) in Reporting Period
□Applicable √Not applicable
2. Changes of total shares and shareholders structure as well as explanation on changes of assets and
liability structure
□Applicable √Not applicable
3. Current internal staff shares
□ Applicable √ Not applicable
III. Particulars about shareholder and actual controller of the Company
1. Amount of shareholders of the Company and particulars about shares holding
In Share
66
Total preference
shareholders
Total preference
Total common with voting
Total common shareholders with
stock rights recovered
stock voting rights
shareholders at at end of last
shareholders in 20,191 26,399 recovered at end of 0 0
end of last month month before
reporting reporting period (if
before annual annual report
period-end applicable) (found
report disclosed disclosed (if
in note 8)
applicable)
(found in note 8)
Particulars about shares held above 5% by shareholders or top ten shareholders
Proportio Total Chang Number of share
Amount of Amount of
Full name of Nature of n of shareholders es in pledged/frozen
lock-up un-restricted
Shareholders shareholder shares at the end of report State of
shares held shares held Amount
held report period period share
Sinopharm Group State-owned
56.06% 239,999,991 55,057,700 184,942,291
Co., Ltd Corporation
Hong Kong
Foreign
Securities Clearing 5.13% 21,952,787 21,952,787
Corporation
Company Ltd
HTHK/CMG
FSGUFP-CMG
Foreign
FIRST STATE 2.68% 11,469,644 11,469,644
Corporation
CHINA GROWTH
FD
China National
Pharmaceutical State-owned
1.24% 5,323,043 5,323,043 0
Foreign Trade Corporation
Corp.
Fidelity Investment
Management
Foreign
(Hong Kong) 1.13% 4,825,907 4,825,907
Corporation
Limited - Client’s
fund
Central Huijin State-owned
0.89% 3,804,400 3,804,400
Investment Ltd. Corporation
BBH BOS S/A
FIDELITY FD - Foreign
0.78% 3,358,761 3,358,761
CHINA FOCUS Corporation
FD
Bank of China –
Domestic non
Harvest Medical
state-owned 0.71% 3,028,525 3,028,525
Care Securities
Corporation
Investment Fund
Basic endowment Domestic non
insurance fund- state-owned 0.69% 2,933,056 2,933,056
portfolio 1003 Corporation
VALUE
Foreign
PARTNERS 0.64% 2,747,418 2,747,418
Corporation
CLASSIC FUND
Sinopharm Group Co., Ltd. and China National Pharmaceutical Foreign Trade Corporation
have the same actual controller, which is China National Pharmaceutical Group
Explanation on associated relationship Corporation. It is unknown that there exists no associated relationship or belongs to the
among the aforesaid shareholders consistent person acting in concert among the other tradable shareholders regulated by the
Management Measure of Information Disclosure on Change of Shareholding for Listed
Companies.
Particular about top ten shareholders with un-restrict shares held
Type of shares
Shareholders’ name Amount of un-restrict shares held at Period-end
Type Amount
RMB ordinary
Sinopharm Group Co., Ltd 239,999,991 239,999,991
shares
Hong Kong Securities Clearing RMB ordinary
21,952,787 21,952,787
Company Ltd shares
HTHK/CMG FSGUFP-CMG FIRST Domestic listed
11,469,644 11,469,644
STATE CHINA GROWTH FD foreign shares
67
Fidelity Investment Management RMB ordinary
4,825,907 4,825,907
(Hong Kong) Limited - Client’s fund shares
RMB ordinary
Central Huijin Investment Ltd. 3,804,400 3,804,400
shares
BBH BOS S/A FIDELITY FD - Domestic listed
3,358,761 3,358,761
CHINA FOCUS FD foreign shares
Bank of China – Harvest Medical Care RMB ordinary
3,028,525 3,028,525
Securities Investment Fund shares
Basic endowment insurance fund- RMB ordinary
2,933,056 2,933,056
portfolio 1003 shares
VALUE PARTNERS CLASSIC Domestic listed
2,747,418 2,747,418
FUND foreign shares
National Social Security Fund- RMB ordinary
2,550,024 2,550,024
portfolio 413 shares
Expiation on associated relationship or
consistent actors within the top 10 un- It is unknown that there exists no associated relationship or belongs to the consistent person
restrict shareholders and between top acting in concert among the other tradable shareholders regulated by the Management
10 un-restrict shareholders and top 10 Measure of Information Disclosure on Change of Shareholding for Listed Companies.
shareholders
Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held
have a buy-back agreement dealing in reporting period
□Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the
Company have no buy-back agreement dealing in reporting period.
2. Controlling shareholder of the Company
Nature of controlling shareholders: central state-owned holding
Type of controlling shareholders: legal person
Controlling Legal person/person Organization
Date of foundation Main operation business
shareholders in charge of the unit code
68
Industrial investment holding; management and assets
reorganization entrusted by pharmaceutical enterprise;
Chinese medicine, Chinese medicine tablets, chemical
medicine preparations, chemical raw materials,
antibiotics, biochemical drugs, biological products,
narcotic drugs, psychotropic substances, toxic drugs
for medical use (compatible with the business scope),
medicine IVD Reagents, vaccine, anabolic agents,
peptide hormone medical device management, food
sales management (non-physical method), technology
development, technology transfer, technical
consultation, technical service in the field of medical
technology, chemical raw materials and products
(except hazardous chemicals, monitoring chemicals,
fireworks and firecrackers, flammables and
explosives, explosives for civilian use), business
management consulting, business consulting, market
Sinopharm Group
Li Zhiming 2003-01-08 74618434-4 information consulting and investigation (no social
Co., Ltd
surveys, social investigation, opinion surveys, or
opinion polls), data processing services, e-commerce
(no value-added telecommunications financial
services), sales, design, production agency, publishing
various domestic and foreign advertisements of
disinfection products, daily necessities, textiles and
knitwear, sporting goods, household appliances,
electronic products, furniture, toys, edible agricultural
products, cosmetics, and cultural and sports goods,
domestic trade (except special license), logistics and
related consulting services, operating various types of
goods and import and export of technology (not
attached directory of import and export commodities),
but excluded the import and export of goods and
technology the State limits or prohibit the company. If
an enterprise’s operation involves an administrative
license, it shall be operated on the basis of the license.
Equity of other
domestic/oversea
listed company
control by Sinopharm Group Co., Ltd. hold 54.72 percent equity of China National Medicines Corporation Ltd (Stock code:
controlling 600511) up to the end of Period.
shareholder as well
as stock-joint in
report period
Changes of controlling shareholders in reporting period
69
□ Applicable √ Not applicable
The Company had no changes of controlling shareholders in reporting period.
3. Actual controller of the Company and persons acting in concert
Nature of actual controller: central state-owned assets management
Type of actual controller: legal person
Legal
Organization
Actual controlling shareholders person/person in Date of foundation Main operation business
code
charge of the unit
Chinese patent drug, traditional Chinese
medicines prepared in ready-to-use forms,
traditional Chinese medicinal materials,
chemical API, chemical medicine
preparation, antibiotics, biochemical drug
and biologic pharmacy (License for
pharmaceutical trading runs until 12 May
2020); mandatory for pharmaceutical
China National Pharmaceutical enterprise, asset reorganization; consulting
Liu Jingzhen 1987-03-26 10000588-8
Group Corporation service of medicine industrial investment;
exhibition of medical devices; consulting
services with main business concerned. (the
enterprise has independent choices on
operation items for business; in right of
exequatur to run if refers to permission
operation ; operation activity that prohibited
or restricted by the City Government are not
allowed)
70
Name of listed Total shareholders
Proportion of
Name company with held (10 thousand
shares held
shares held shares)
SINOPHARM Jianmin Group 132.35 0.86%
Sinopharm
SINOPHARM 20,728.95 6.64%
Holding
Sinopharm
Holding
Sinopharm
Industrial 157,155.60 50.36%
Holding
Investment
Equity of domestic/oversea Co., Ltd.
Sinopharm Sinopharm
listed company control by 41,284.17 54.72%
Holding Holding
actual controller in report period Sinopharm Sinopharm
24,000.00 56.06%
Holding Accord
Sinopharm Lianhuan
375.21 1.30%
Holding Pharmaceutical
Shyndec
SIPS 23,951.26 22.68%
Pharmaceutical
China National
Pharmaceutical Hengrui
18,511.94 4.16%
Investment Medicine
Co., Ltd.
China National
Biotec Group BTBP 52,228.04 49.96%
Co., Ltd.
SINOPHARM
China TCM 163,468.56 32.46%
H.K. Co., Ltd.
Changes of actual controller in reporting period
□ Applicable √ Not applicable
No changes of actual controllers for the Company in reporting period.
Property right and controlling relationship between the actual controller and the Company is as follow:
71
Actual controller controlling the Company by entrust or other assets management
□ Applicable √ Not applicable
4. Particulars about other legal person shareholders with over 10% shares held
□ Applicable √ Not applicable
5. Limitation and reducing the holdings of shares of controlling shareholders, actual controllers,
restructuring side and other commitment subjects
□ Applicable √ Not applicable
72
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the Period.
73
Section VIII. Convertible Bonds
□ Applicable √ Not applicable
The Company had no convertible bonds in the Period
74
Section IX. Particulars about Directors, Supervisors, Senior
Executives and Employees
I. Changes of shares held by directors, supervisors and senior executives
Amount Amount
Shares Shares
End of shares of shares
held at Other held at
Working Start dated of date of increased decreased
Title Sex Age period- changes period-
Name status office term office in this in this
begin (share) end
term period period
(Share) (Share)
(Share) (Share)
Independ
Chen Currently
ent M 57 2018-04-17 1,500 0 0 0 1,500
Shengqun in office
director
Deputy
GM,
Chen Currently
Secretary M 52 2015-01-13 2,651 0 0 0 2,651
Changbin in office
of the
Board
Total -- -- -- -- -- -- 4,151 0 0 0 4,151
II. Changes of directors, supervisors and senior executives
√Applicable □ Not applicable
Name Title Type Date Reasons
Appointment and
Liu Tianrao Deputy GM 2019-01-11 New Deputy GM
removal
Appointment and
Ma Zhanjun Director 2019-01-24 New Director of 8th BOD
removal
Deputy Appointment and
Ma Zhanjun 2019-01-31 New Deputy Chairman of 8th BOD
Chairman removal
Independent Appointment and
Su Weiwei 2019-01-24 New Independent Director of 8th BOD
Director removal
Chairman of the
board of Resign from chairman of the board of supervisors,
Wu Yijian Office leaving 2019-05-17
supervisors, supervisor for job arrangement
supervisor
Appointment and
Wen Deyong Supervisor 2019-05-17 New Supervisor of 8th Board of supervisors
removal
Chairman of the
Appointment and New Chairman of the board of supervisors of 8th Board of
Wen Deyong board of 2019-07-10
removal supervisors
supervisors
III. Post-holding
Professional background, major working experience and present main responsibilities in Company of directors,
supervisors and senior executive at the present
1. Members of BOD
75
Mr. Liu Yong, joined Sinopharm Group Co., Ltd in January 2003 and serves as executive director and president
of Sinopharm Holding since November 2017 and acts as deputy party secretary of Sinopharm Holding since
January 2018; Mr. Liu own over 26 years of working experience, among which, over 23 years are related to
management experience in medicine and health care products industry. He is a pharmacist-in-charge and licensed
pharmacist. During the period from July 1992 to July 1999, Mr. Liu worked in the Shanghai Pharma, and
successively served as deputy general manager of the marketing department of Shanghai Branch of China
National Pharmaceutical Group Corporation and Shanghai Guoda Drugstore Chain Company Limited from July
1999 to April 2003. Mr. Liu served as GM and party secretary of the Sinopharm Holding Shenyang Co., Ltd from
April 2003 to November 2009; a deputy president of Sinopharm Holding from January 2009 to November 2017;
the Secretary of the Board of Sinopharm Holding from October 2016 to November 2017 and General Counsel of
Sinopharm Holding from January 2014 to December 2017. Currently, he also acts as the Director of
SINOPHARM, Sinopharm Holding Guoda Drugstore Co., Ltd., China National Scientific Instruments &
Materials Co., Ltd and China National Medical Equipment Co., Ltd.; and Director and GM of Sinopharm Holding
H.K. Co., Ltd. Mr. Liu serves as Director of the 7th BOD of the Company since January 2017 and Chairman of the
7th and 8th BOD of the Company since October 2017.
Mr. Ma Zhanjun served as president of Wuhan Ruipu Pharmaceutical Co., Ltd. from December 2000 to December
2003, from January 2004 to April 2005, he served as general manager of Sinopharm Group Pharmaceutical
Holding Wuhan Co., Ltd., from April 2005 to December 2005, he served as executive deputy general manager of
Sinopharm Holding Hubei Co., Ltd., and he served as general manager of Sinopharm Group Hubei Co., Ltd. from
January 2006 to December 2014, from January 2015 to October 2018, he served as president of Sinopharm
Holding Hubei Co., Ltd., since November 2018, he has concurrently been serving as vice president of Sinopharm
Holding Hubei Co., Ltd. Since January 2019, he has been serving as vice president of the eighth board of directors
of the Company.
Mr. Li Zhiming, chairman of the board and the deputy Party Secretary of Sinopharm Group Co., Ltd, he joined the
Sinopharm Holding in May 2010 as deputy president, served as executive director and president of Sinopharm
Holding from November 2013 to March 2017; He serves as chairman of Sinopharm Holding since November
2017 and he is the deputy party secretary of Sinopharm Holding since November 2018. Mr. Li held the position
of General counsel, Secretary of Committee for Discipline Inspection, chairman of the labor union, deputy Party
Secretary and party secretary of Sinopharm Holding from October 2012 to March 2017. He owns more than 37
years of working experience, among which, 33 years are related to management experience in medicine and health
care products industry. He is a senior economist and pharmacist-in-charge. During the period from July 1985 to
July 1996, Mr. Li successively served as deputy director of the financing department of Xinjiang Xinte
Nationality Pharmacy Company Limited, deputy general manager and chief accountant of Xinjiang
Pharmaceutical Industry and Trading Corporation, deputy general manager and chief accountant of Xinjiang Xinte
Nationality Pharmacy Corporation, and deputy director of the preparation office of Xinjiang Autonomous Region
Medicine Administration Bureau. From July 1996 to February 2016, Mr. Li worked in Xinjiang Xinte Nationality
76
Pharmacy Corporation as general manager, chairman of the board and party secretary, and worked in Xinjiang
Pharmaceutical Group Corporation (currently known as Sinopharm Group (Xinjiang) Co., Ltd.) as its general
manager, Deputy Chairman of the board, chairman of the board and party secretary. Currently, he also serves as
Director of China National Xinjiang Medicine Co., Ltd, Sinpharm Holding Senyi Tech. (Shanghai) Co., Ltd,
China National Pharmaceutical Co., Ltd and Sinopharm Holding Guoda Drugstore Co., Ltd.; the deputy chairman
of Shanghai Shyndec Pharmaceutical Co., Ltd and Chairman of Sinopharm Holding H.K. Co., Ltd, Sinopharm
Holding (China) Finance Leasing Co., Ltd, China National Zhongjin (Shanghai) Medical Health Investment
Management Co., Ltd and Sinopharm Holding Medicine Investment Co., Ltd; He served as Chairman of the
Company from February 2014 to August 2016 and acts as Director of the 7th and 8th BOD of the Company since
August 2016.
Mr. Jiang Xiuchang, entered into Sinopharm Holding as the CFO in May 2010, and he has also acted as vice
president of Sinopharm Holding since July 2013. Mr. Jiang owns over 31 years of working experiences, among
which, 20 years of management experiences are related to medicine and health-care industries. He is a senior
economist and senior accountant. Mr. Jiang has worked as deputy director of information department, deputy
director of restructuring office, deputy director of financial department as well as deputy director of
pharmaceutical department in China National Pharmaceutical Group Corporation from July 1986 to March 2002;
he has also served as deputy director, director of financial department and chief financial officer of China National
Medicines Corporation Ltd. in succession from March 2002 to May 2010. Currently, Mr. Jiang serves as
Chairman of Sinopharm Holding Jiangxi Co., Ltd, Sinopharm Holding Shanxi Co., ltd, Sinopharm Holding
Tianjin Co., ltd. and China National Medicines Corporation Ltd; Director of Sinopharm Holding H.K. Co., ltd and
China National Finance Corporation Ltd; and executive Director of Beijing Sinopharm Taiyuan Property
Management Co., Ltd and SINOPHARM Shanghai Co., Ltd; he serves as Director of the 6th ,7th and 8th BOD of
the Company since March 2011.
Mr. Lian Wanyong is vice president of Sinopharm Group Co., Ltd. He joined China National Pharmaceutical
(Group) Corporation Guangzhou Company in 1996 and successively served as product director of Yuexing
Pharmaceutical Co., Ltd. and senior product manager of Hong Kong Tianjian International Co., Ltd. From August
2002 to January 2004, he served as deputy manager of the financial department of Barr laboratories, Inc., USA.
From January 2004 to June 2005, he was appointed as manager of operational audit department of China
Medicinal Materials Group Company. From July 2005 to January 2008, he was appointed as deputy director of
financial asset management department and director of investment management department of China National
Pharmaceutical (Group) Corporation. From December 2010 to February 2014, he served as deputy general
manager of Beijing Sinopharm Asset Management Center, from April 2014 to January 2018, he served as deputy
director of the Policy Research Office of China National Pharmaceutical Group Corporation.
Since January 2018, he has been serving as vice president of Sinopharm Group Co., Ltd., and Mr. Lian is
concurrently serving as chairman of Sinopharm Holding Anhui Co., Ltd., Sinopharm Holding Hubei Co., Ltd.,
and Sinopharm Holding Changsha Co., Ltd., and director of China National Medicines Corporation Ltd., director
77
of China National Zhongjin (Shanghai) Medical Health Investment Management Co., Ltd, and director of West
China Dental Co., Ltd. He serves as Director of 8th BOD of the Company since April 2018.
Mr. Li Dongjiu is vice president and general counsel of Sinopharm Group Co., Ltd. From April 1997 to January
2002, he served as deputy general manager of North China Pharmaceutical Huasheng Co., Ltd., from January
2002 to December 2009, he served as deputy general manager of North China Pharmaceutical Co., Ltd., and
concurrently served as general manager of North China Pharmaceutical Group Sales Company, and property
representative of North China Pharmaceutical Group Southern Company (concurrently), from December 2009 to
June 2010, he served as executive president of Shanghai Fosun Pharmaceutical Industry Development Co., Ltd.,
and from June 2010 to September 2011, he was appointed as vice president of Shanghai Fosun Pharmaceutical
(Group) Limited and director of the Pharmaceutical Management Committee, and president of Shanghai Fosun
Pharmaceutical Industry Development Co., Ltd., from September 2011 to January 2018, he served as senior vice
president of Shanghai Fosun Pharmaceutical (Group) Limited, and concurrently served as director of
pharmaceutical business and consumer goods management committee and chairman, president of Shanghai Fosun
Pharmaceutical Industry Development Co., Ltd. and concurrently vice-president of pharmaceutical industry
management committee, responsible for strategy, investment, operation and management of pharmaceutical
business and consumer product. Since January 2018, he has been serving as vice president of Sinopharm Group
Co., Ltd. Mr. Li is concurrently director of China National Medicines Corporation Ltd., and chairman of
Sinopharm Holding Fujian Co., Ltd., Sinopharm Holding Fuzhou Co., Ltd., Sinopharm Holding Guizhou Co.,
Ltd., Sinopharm Holding Yunnan Co., Ltd., Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd., Sinopharm
Holding Hainan Co., Ltd., China National Health Online Co., Ltd., Sinopharm Chemical Reagent Co., Ltd. and
Sinopharm Holding Hutchison Whampoa Medicine Co., Ltd., Sinopharm Holding Shanxi Co., Ltd. and
Sinopharm Holding Gansu Co., Ltd. He serves as Director of 8th BOD of the Company since April 2018.
Mr. Lin Zhaoxiong: Director and GM of Sinopharm Accord. Has served as deputy manager and manager of
pharmaceutical department, manager of Pharmaceutical corporations and director of operation and management
department during his work in China Pharmaceutical (Group) Guangzhou Co.,Ltd from January 1999 to
December 2003 in succession; He has acted as the deputy general manager of Sinopharm Holding Guangzhou
Co.,Ltd; the general manager of Sinopharm Holding Guangzhou Co.,Ltd from December 2006 to December 2008;
He has served as the deputy general manager of the Company from December 2008 to March 2016; Mr Lin
serves as the chairman of Sinopharm Holding Guoda Drugstore Co.,Ltd since October 2017; and GM of the
Company since March 2016, Director of the 7th and 8th BOD of the Company since April 2016.
Mr. Chen Honghui, professor of Lingnan (University) College of Sun Yat-Sen University, a doctoral supervisor of
management. He worked in school of management, Wuhan University of Science & Technology from July 1993
to June 2003 and successively acted as a tutor and instructor; he works in Lingnan (University) College of Sun
Yat-Sen University since July 2003 and also served as deputy professor and professor; vice president of the
Lingnan (University) College of Sun Yat-Sen University from 2007 to 2012; the director of department of
78
business administration in Lingnan College from 2008 to 2019, the director of Corporate Social Responsibility
Research Centerin Lingnan College since 2018, currently Mr. Chen serves as deputy chairman of the GDISR,
independent director of Cabbeen Fashion Co., Ltd and Guangzhou Grandbuy Co., Ltd. He serves as independent
director of the 7th and 8th BOD of the Company since March 2017.
Mr. Ou Yongliang is a Chinese practicing lawyer, vice chairman of All China Lawyers Association, vice
chairman of Guangdong Province Law Society, president of the 9th and 10th Session of Guangdong Lawyers
Association, director of Guangdong Hopesun Law Firm, member of the 12th Session of Guangdong Provincial
Committee of the CPPCC, expert advisor of the 11th Party Congress of Guangdong Provincial Party Committee of
the Communist Party of China, legislative consultant of the 12th Session of Standing Committee of Guangdong
Provincial People’s Congress, specially invited member of the 11th Session of Guangdong Provincial Committee
of the CPPCC, member of the Guangdong Provincial Judge and Prosecutor Selection Committee, representative
of the 9th Congress of Guangzhou Municipality of the Communist Party of China, arbitrator of China International
Economic and Trade Arbitration Commission, arbitrator of Shenzhen International Arbitration Commission,
arbitrator of Shanghai International Arbitration Commission, and arbitrator of Guangzhou Arbitration
Commission. He serves as independent director of the 8th BOD of the Company since April 2018.
Mr. Chen Shengqun is an associate researcher and senior accountant, he has been teaching at the Shanghai
National Accounting Institute since 2013. Mr. Chen came out of the postdoctoral research station of Shanghai
University of Finance and Economics in 1998 as the first postdoctoral fellow in management accounting. He was
employed as a senior researcher at the CAFR Center of the Hong Kong Polytechnic University and is currently a
visiting professor of EDP curriculum at the Xiamen University. Since 1998, Mr. Chen has served as director of
the finance division of China Pacific Insurance Co., Ltd., in 2002, he was transferred to serve as deputy general
manager of the financing plan department of China Pacific Insurance Co., Ltd. (presiding work), at the end of
2003, he joined China Reinsurance Group and successively served as general manager of the fund application
department of China Continent Insurance (concurrently general manager of the strategic development department,
and general manager assistant of China Re Asset Management Company. He serves as independent director of the
8th BOD of the Company since April 2018.
Ms. Su Weiwei: Doctor of pharmacy, professor of School of Life Sciences of Sun Yat-Sen University and a
doctoral supervisor. She worked in Guangdong pharmaceutical University from July 1987 to April 2000, and
successively served as a teaching assistant, lecturers, associate professor and professor, she serves as a professor
in Sun Yat-Sen University since May 2000. Ms. Su Weiwei have devoted herself to the research and development
of innovative drugs for many years, and achieved two chemical clinical permission for first-type new drugs and
one clinical permission for the fifth-type new drugs of TCM (traditional Chinese medicine) which have
independent intellectual property rights.
2. Members of BOS:
79
Mr. Wen Deyong, joined Sinopharm Group Co., Ltd. in September 2017, and has been serving as a non-executive
director of Sinopharm Group Co., Ltd. to this day. From September 1995 to May 2016, Mr. Wen served as a
technician in the hydro-acupuncture workshop of Chongqing No. 6 Pharmaceutical Factory, field salesman of
sales department of Chongqing YaoPharma, sales director of Chongqing YaoPharma Co., Ltd., general manager
of sales department 2 of Chongqing YaoPharma Co., Ltd., general manager of Northern Company of Chongqing
Haisiman Pharmaceutical Co., Ltd., vice president of Chongqing YaoPharma, president of Chongqing YaoPharma,
currently serves as vice president of Shanghai Fosun Pharmaceutical (Group) Co., Ltd., director of pharmaceutical
business management committee, general manager of centralized procurement and procurement management
department, and executive vice president of Shanghai Fosun Pharmaceutical Industry Development Co., Ltd. He
has been the chairman of the board of supervisors of the eighth board of supervisors of the Company since July
2019.
Ms. Liu Jingyun, postgraduate background. Currently she serves as the director of financial and asset management
and director of assets and credit management dept. in Sinopharm Group Co., Ltd. and he successively hold a
teaching post in Nanjing Radio and Television University, works in Sinopharm Group Co., Ltd. since November
2003 and serves as deputy director of assets management department, director of the financial & assets
management dept. and Director of ministry of finance and credit management. She serves as supervisor of the 7th
and 8th supervisory committee of the Company since September 2016.
Ms. Chen Guojing: she worked in Shenzhen Accord Medicinal Materials Company in December 1999, now she
serves as the office director and director of security department in the Company. Ms. Chen served as the financial
manager and deputy chief of Finance and Funds Department of the Company from June 2005 to December 2013,
she is the member of trade union federations of the Company and chairman of the first trade union since March
2009; she served as chief (part-time) of the auditing department of the Company from January 2013 to August
2017, and chief (part-time) of the risk and operation management of the Company from January 2014 to May
2016. She serves as staff supervisor of the 8th supervisory committee of the Company since August 2018
3. Senior executive
Mr. Lin Zhaoxiong, found in aforesaid previous work experience
Mr. Lin Min: Deputy GM of the Company. worked in China Pharmaceutical (Group) Guangzhou Co.,Ltd with
successively taking the posts of assistant to manager, deputy general manager of Pharmacy Department and
deputy general manager of purchasing in Pharmaceutical Company from Jan. 2001 to Nov. 2003; the city medical
sales director of Sinopharm Holding Guangzhou Co., Ltd. From November 2003 to January 2005; took deputy
general manager of Sinopharm Holding Guangzhou Co., Ltd from Jan. 2005 to Dec. 2008; he also acting as the
GM of distribution business dept. of the Sinopharm Accord and Sinopharm Holding Guangzhou Co., Ltd. he
serves as deputy GM of the Company since December 2008.
80
Mr. Zhao Xiaochuan: Deputy GM of the Company. He has served as the general manager of Liaoning Accord
Chain Co., Ltd from December 2001 to April 2008; served as the general manager of Sinopharm Holding Guoda
Tian Yi Tang Drugstore Chain (Shenyang) Co., Ltd and Sinopharm Holding Guoda Shenyang Chain Co., Ltd
from May 2008 to June 2015; he has acted as general manager of Sinopharm Holding Guoda Drugstore Co., Ltd
since June 2015; He has worked as the deputy general mange of the Company since July 2017.
Mr. Liu Tianyao is deputy general manager of the Company. From August 2002 to April 2009, he served as senior
director of human resources department of China National Pharmaceutical Group Corporation. From April 2009
to May 2017, he successively served as deputy director of human resources department, director of talent
development department, director of human resources department, and director of retail medical business
development department of Sinopharm Group Co., Ltd., from December 2013 to July 2016, he concurrently
served as general manager of Shanghai Management Consulting Branch, from July 2016 to May 2017, he
concurrently served as general manager of Sinopharm Holding Medical Management (Shanghai) Co., Ltd., from
May 2017 to January 2019, he has been serving as director of human resources and director of human resources
department of Sinopharm Group Co., Ltd and he serves as Deputy GM of the Company since January 2019.
Mr. Lin Xinyang: Deputy GM of the Company.He took the turns of deputy GM of Nanfang Pharm. Co., deputy
GM of China Pharmaceutical (Group) Guangzhou Company Yuexing Company, general supervisor of PD of
Sinopharm Holding Guangzhou Company successively since January 1996; took the post of deputy GM of
Sinopharm Holding Guangzhou Company from Jan. to Dec. 2004; serves as deputy GM of the Company since
January 2005.
Mr. Lang Baochun is deputy secretary of the party committee, secretary of the disciplinary committee, chairman
of the labor union and general counsel of the Company. From September 2007 to March 2008, he served as
deputy director of general office of Sinopharm Group Co., Ltd., from March 2008 to December 2009, he served as
general manager of Shanghai Chuanghui Investment Co., Ltd., from January 2010 to May 2010, he served as
director of the research office of Shanghai Shibei Hi-Tech (Group) Co., Ltd., from June 2010 to September 2011,
he served as deputy director of the president’s office of Sinopharm Group Co., Ltd., from October 2011 to
December 2015, he served as director of the strategic planning department of Sinopharm Group Co., Ltd., from
January 2016 to June 2017, he served as secretary of the party committee of Sinopharm Guoda Drugstore Co.,
Ltd., from March 2016 to February 2018, he served as deputy secretary of the party committee and secretary of
the disciplinary committee of the Company. Since March 2018, he has been serving as deputy secretary of the
party committee, secretary of the disciplinary committee, and chairman of the labor union of the Company. He
serves as General Counsel of the Company since August 2018
Mr. Wei Pingxiao: CFO of the Company. He took the turns of deputy section chief of financial department of
China Electronic Information Industry Group, financial director of AMOI, section chief of planning financial
department of China Electronic Finance Leasing Company, Deputy GM of AMOI Beijing branch, financial
81
charger of AMOI and director of its subsidiary since April 1993; and he hold the post of CFO of the Company
since December 2004.
Mr. Chen Changbin: Deputy GM of the Company, and Secretary of the Board. He has served as secretary of board
of directors of the Company since December 2000; he has also worked as the director of planning investment
management department of the Company as well as assistant general manager, in charge of strategic planning,
investment and mergers and acquisitions, capital operation, affairs related to three major meetings and
international co-operation. He has acted as the deputy general manager of the Company since April 2017.
Post-holding in shareholder’s unit
√ Applicable □ Not applicable
Name Name of shareholder’s unit Position in shareholder’s unit n Start dated of office term
Liu Yong Sinopharm Group Co., Ltd Executive Director, President November 2017
Liu Yong Sinopharm Group Co., Ltd Deputy party secretary January 2018
Li Zhiming Sinopharm Group Co., Ltd Chairman November 2017
Li Zhiming Sinopharm Group Co., Ltd Deputy party secretary November 2018
Jiang Xiuchang Sinopharm Group Co., Ltd CFO May 2010
Jiang Xiuchang Sinopharm Group Co., Ltd Deputy President July 2013
Lian Wanyong Sinopharm Group Co., Ltd Deputy President January 2018
Li Dongjiu Sinopharm Group Co., Ltd Deputy President January 2018
Li Dongjiu Sinopharm Group Co., Ltd General counsel January 2018
Director of ministry of finance and credit
Liu Jingyun Sinopharm Group Co., Ltd management, director of the financial & July 2016
assets management dept.
Post-holding in other unit
√ Applicable □ Not applicable
Name Name of other units Position in other unit n Start dated of office term
Liu Yong China National Medicines Corporation Ltd Director November 2017
Liu Yong Sinopharm Holding Guoda Drugstore Co., Ltd. Director October 2017
China National Scientific Instruments & Materials
Liu Yong Director December 2018
Co., Ltd
China National Medical Equipment Co., Ltd.
Liu Yong Director December 2018
Liu Yong Sinopharm Holding H.K. Co., ltd Director, GM May 2018
Li Zhiming China National Xinjiang Medicine Co., Ltd Director June 2017
Li Zhiming China National Medicines Corporation Ltd Director May 2016
Li Zhiming Sinopharm Holding Guoda Drugstore Co., Ltd. Director July 2014
Li Zhiming Shanghai Shyndec Pharmaceutical Co., Ltd Vice Chairman November 2016
Li Zhiming Sinopharm Holding H.K. Co., ltd Chairman April 2017
Li Zhiming Sinopharm Holding (China) Finance Leasing Co., Ltd Chairman November 2014
China National Zhongjin (Shanghai) Medical Health
Li Zhiming Chairman September 2016
Investment Management Co., Ltd
Li Zhiming Sinopharm Holding Medicine Investment Co., Ltd Chairman October 2017
Jiang Xiuchang Sinopharm Holding Jiangxi Co., Ltd Chairman June 2013
Jiang Xiuchang Sinopharm Holding Shanxi Co., ltd Chairman December 2013
Jiang Xiuchang Sinopharm Holding Tianjin Co., ltd Chairman December 2013
Jiang Xiuchang China National Medicines Corporation Ltd Chairman November 2017
Jiang Xiuchang Sinopharm Holding H.K. Co., ltd Director November 2011
Jiang Xiuchang China National Finance Corporation Ltd Director November 2011
82
Beijing Sinopharm Taiyuan Property Management
Jiang Xiuchang Executive Director December 2017
Co., Ltd
Jiang Xiuchang SINOPHARM Shanghai Co., Ltd Executive Director November 2017
Ma Zhanjun Sinopharm Holding Hubei Co., Ltd. Vice Chairman November 2018
Lian Wanyong China National Medicines Corporation Ltd Director December 2017
China National Zhongjin (Shanghai) Medical Health
Lian Wanyong Director July 2018
Investment Management Co., Ltd
Lian Wanyong West China Dental Co., Ltd Director January 2019
Lian Wanyong Sinopharm Holding Anhui Co., Ltd. Chairman January 2019
Lian Wanyong Sinopharm Holding Anhui Medicine Co., Ltd. Chairman June 2019
Lian Wanyong Sinopharm Holding Changsha Co., Ltd. Chairman June 2019
Lian Wanyong Sinopharm Holding Hubei Co., Ltd. Chairman January 2020
Li Dongjiu China National Medicines Corporation Ltd Director December 2016
Li Dongjiu Sinopharm Holding Fujian Co., Ltd Chairman February 2018
Li Dongjiu Sinopharm Holding Fuzhou Co., Ltd Chairman February 2018
Li Dongjiu Sinopharm Holding Guizhou Co., Ltd Chairman February 2018
Li Dongjiu Sinopharm Holding Yuannan Co., Ltd Chairman February 2018
Sinopharm Xingsha Pharmaceuticals (Xiamen) Co.,
Li Dongjiu Chairman February 2018
Ltd.
Li Dongjiu Sinopharm Holding Hainan Co., Ltd. Chairman February 2018
Li Dongjiu China National Health Online Co., Ltd. Chairman February 2018
Li Dongjiu SINOPHARM Chemical Reagent Co., Ltd. Chairman December 2018
Sinopharm Holding Hutchison Whampoa Medicine
Li Dongjiu Chairman December 2018
Co., Ltd
Li Dongjiu Sinopharm Holding Shanxi Co., Ltd. Chairman January 2020
Li Dongjiu Sinopharm Holding Gansu Co., Ltd. Chairman January 2020
Punishment of securities regulatory authority in recent three years to the company’s current and outgoing directors,
supervisors and senior management during the reporting period
□ Applicable √ Not applicable
IV. Remuneration for directors, supervisors and senior executives
Decision-making procedures, recognition basis and payment for directors, supervisors and senior executives
(i) Remuneration decision procedure of directors, supervisors, senior management:
The Company implemented the annual salary system for senior executives based on the 2019 annual performance
appraisal (scheme) on management staff, paid annual salary remuneration according to the appraisal results.
Remuneration and appraisal committee of the company's board of directors is responsible for the formulation and
examination of salary plan and program as well as formulation and examination of salary plan and assessment
standards of directors (not including the independent directors), supervisors and senior executives. They also
evaluate the performance assessment of directors, supervisors and senior officers in accordance with the
assessment criteria, compensation scheme.
(ii) Remuneration determining basis
The main principles of making standard of compensation are: (1) the company's overall business and the profit
level; (2) the overall salary level and dynamic index over past years; (3) difference in position and duty; (4)
relative importance and risks of position; (5) related post salary level in the same industry; (6) individual
professional ability.
(iii) Actual payment
Executives get monthly basic salary and annual salary after the issuance of annual examination.
83
Remuneration for directors, supervisors and senior executives in reporting period
In 10 thousand Yuan
Total Received
remuneration remuneration
Post-holding
Name Title Sex (F/M) Age before tax from related party
status
obtained from the of the Company
Company (Y/N)
Currently in
Liu Yong Chairman M 50 Y
office
Currently in
Ma Zhanjun Deputy Chairman M 59 250 Y
office
Currently in
Li Zhiming Director M 56 Y
office
Currently in
Jiang Xiuchang Director M 56 Y
office
Currently in
Lian Wanyong Director M 49 Y
office
Currently in
Li Dongjiu Director M 54 Y
office
Currently in
Lin Zhaoxiong Director, GM M 52 250 N
office
Independent Currently in
Chen Honghui M 48 12 N
Director office
Independent Currently in
Ou Yongliang M 50 12 N
Director office
Independent Currently in
Chen Shengqun M 57 12 N
Director office
Independent Currently in
Su Weiwei F 60 11.3 N
Director office
Chairman of
Currently in
Wen Deyong supervisory M 47 Y
office
committee
Chairman of
Wu Yijian supervisory M 49 Office leaving Y
committee
Currently in
Liu Jingyun Supervisor F 43 Y
office
Currently in
Chen Guojing Staff supervisor F 49 72.02 N
office
Party secretary, Currently in
Lin Min M 55 225 N
Deputy GM office
Currently in
Zhao Xiaochuan Deputy GM M 56 200 N
office
Currently in
Liu Tianrao Deputy GM M 40 175 N
office
Currently in
Lin Xinyang Deputy GM M 55 175 N
office
Deputy party
secretary,
Secretary of
Currently in
Lang Baochun Committee for M 56 162.5 N
office
Discipline
Inspection,
General counsel
Currently in
Wei Pingxiao CFO M 56 175 N
office
Deputy GM,
Currently in
Chen Changbin Secretary of the M 52 150 N
office
Board
Total -- -- -- -- 1,881.82 --
Delegated equity incentive for directors and senior executives in reporting period
□ Applicable √ Not applicable
84
V. Particulars of workforce
1. Number of staff, professional composition and education background
The number of current employees of parent company (people) 119
The number of current employees of main subsidiaries (people) 27,128
Total number of current employees (people) 27,247
The total number of employees in payroll (people) 27,247
The total number of retired staff and workers that the parent company and
1,914
main subsidiaries need to bear the costs (people)
Professional composition
Category of professional composition Number of professional composition (people)
Production staff 38
Salesman 19,030
Technical staff 201
Financial staff 635
Administrative staff 182
Other 7,161
Total 27,247
Education background
Category of education Number (people)
Post-graduate qualification and above 163
Undergraduate 4,109
Junior college 10,090
Junior college below 12,885
Total 27,247
2. Remuneration policy
Sinopharm Accord and the subordinate enterprises provide perfect compensation and benefits for the staff,
the compensation level is closely combined with organization (total amount of labor, compensation strategy,
job value), staff (capacity development, performance results), and market (market level, talent competition). The
company adjusts the remuneration for staff having abilities and contributions every year by the responsibility
sorting, position evaluation, target remuneration range positioning, and the staff annual work performance and
ability assessment; at the same time, performance bonuses and performance closely link together, and realize win-
win of the interests of company and the interests of employees. Pay attention to the income growth requirements
of low-income groups, develop annual wage growth program, and implement after the deliberation and approval
of the workers' congress.
85
3. Training programs
Sinopharm Accord and its subordinate companies attach great importance to building learning organizations,
invest training resources every year to train and develop employees at all levels, and constantly improve the
company’s training and cultivating system.
Firstly, optimize the training management system, revise the training system management system, the employee
training management system, the internal trainer management system, the employee continuing education
management system, the intern management system, the internal lecturer management system, and the training
integral management system, optimize internal trainers management process, annual training needs and plan
management process, and training implementation process.
Secondly, the headquarters, operation headquarters, and key subsidiaries all set up full-time training posts to assist
managers at all levels to carry out employee training. The company has promoted a three-level training model
throughout the company, and conducted outstanding learning organizations, learning projects, excellent internal
trainers, and excellent training managers on Teachers’ Day.
Thirdly, vigorously promote online training, and use the online learning platform to organize online learning and
online assessment for all employees. The per capital online learning hours for all employees exceed 30 hours,
covering more than 3,000 people.
Fourthly, the types of training include training for new recruits, vocational training for employees, leadership
training for managers, and internal trainer training. Courses include management courses, general quality courses,
and vocational skills classes, the courses also include group coaching of action learning outcomes conducted by
managers to employees.
Fifthly, as of the end of 2019, the training expenses of the headquarters and distribution operation headquarters of
Sinopharm Accord and the headquarters of Guoda Drugstore were about 1.85 million yuan, and the per capital
period reached more than 50 hours. In 2019, it won the Excellent Learning Project Award of the “Training”
magazine and the Excellent Learning Case Award of Sinopharm.
4. Labor outsourcing
√ Applicable □ Not applicable
Total number of working hours of labor outsourcing (Hour) 799,704
Total remuneration paid of labor outsourcing (RMB) 30,726,586.84
86
Section X. Corporate Governance
I. Corporate governance of the Company
During the reporting period, the company strictly followed the requirements of the Company Law, Securities Law,
Government Guidelines for Listed Companies and the relevant laws and regulations of the China Securities
Regulatory Commission and Shenzhen Stock Exchange, continuously improved the company’s corporate
governance structure, and established and improved the company’s internal control. The general meeting of
shareholders, the board of directors and the board of supervisors have standardized operations, independent
directors and special committees of the board of directors have performed their respective duties, continuously
strengthened company management, controlled and prevented risks, standardized company operations, and
improved operational efficiency. The company gradually formed a governance mechanism with clear powers and
responsibilities, standardized operations, mutual coordination, and mutual checks and balances among power
institutions, decision-making institutions, supervisory institutions, and managers.
During the reporting period, the company strengthened internal coordination and communication, revised and
improved internal control related systems, and sorted out various work processes, and further improved the
company’s management quality and operational efficiency. At the same time, it continuously strengthened the
management of inside information, further improved the process systems of inside information management,
strengthened the disclosure of information, improved the management of investor relations, strengthened and
improved the management of affiliated companies, so that the company’s standard operation level has been
further improved. In the future, the company will continue to strictly implement the specific requirements of the
regulatory agencies, strengthen the implementation, improve the evaluation mechanism, and improve the
corporate governance structure, at the same time, strengthen supervision, and strive to promote governance to a
higher level.
Is there any difference between the actual condition of corporate governance and relevant regulations about
corporate governance for listed company from CSRC?
□Yes √ No
There are no differences between the actual condition of corporate governance and relevant regulations about
corporate governance for listed company from CSRC.
II. Independence of the Company relative to controlling shareholders’ in aspect of businesses,
personnel, assets, organization and finance
The Company totally separates from the controlling shareholders in business, personnel, assets, institutions,
financial and other aspects, with independent and complete self-management ability.
87
1. The business: the Company was independent from controlling shareholders, having a complete business system
and self-managing ability; the company has independent procurement and sales system thus all procurement and
sales of drugs and raw materials is in charge of the purchasing department and subordinate subsidiary, branch and
production enterprises; production, supply, marketing and R & D separate from each other; the Company is a
legal market person with independent operation.
2. Personnel: procedures of the controlling shareholder nominating directors and general and deputy general
manager are legal; no intervene on the appointment and removal of personnel made by the board of directors and
shareholders’ meeting happened; the Company set up independent human resource department, responsible for
assessment, training and salary review on staff, making rules and regulations and handbook the employees should
abide by. Labor, personnel, wages and pension, medical insurance and other insurance are independently managed.
3. Institution: production and operation mechanism and administrative management is completely independent
from the controlling shareholder or actual controller; offices and sites of business operation separate from the
controlling shareholder; the Company established corporate governance structure where the board of directors,
board of supervisors and managers carry out their duties and exercise their respective duties in accordance with
relevant provisions of the articles of association.
4. Asset: property and rights relationship between the Company and the controlling shareholder is clear, with
independent operations; the company has independent production system, auxiliary production system and
supporting system; industrial property rights, trademarks, non-patented technology and other intangible assets
owned by the Company and its subsidiary.
5. Financial aspects: the Company established independent financial departments and independent financial
accounting system; the Company opened a bank account independently; the financial staff is independent without
taking part-time and receiving remuneration in the controlling shareholder; the Company pays tax independently.
III. Horizontal competition
√ Applicable □ Not applicable
Name of Nature of Work schedule
Type controlling controlling Reason Solution measure and follow-up
shareholder shareholder plan
Distribution subsidiary In December 2016, Sinopharm
of Sinopharm Holding Holding issued a commitment
established some social letter of avoiding horizontal
retail pharmacy, which competition with Sinopharm
Horizontal State-owned might have horizontal Accord, and promise to solve Normally
Sinopharm Holding
competition control competition with the the horizontal competition in implementing
Guoda Drugstore, the respect of pharmaceutical retail
subordinate enterprise business in an appropriate way
of the listed company within five years since the date
after restructuring when reorganization completed
88
In December 2016,
Distribution subsidiary
SINOPHARM issued a
of SINOPHARM
commitment letter of avoiding
established some social
horizontal competition with
retail pharmacy, which
Sinopharm Accord, and promise
Horizontal State-owned might have horizontal Normally
SINOPHARM to solve the horizontal
competition control competition with the implementing
competition in respect of
Guoda Drugstore, the
pharmaceutical retail business in
subordinate enterprise
an appropriate way within five
of the listed company
years since the date when
after restructuring
reorganization completed
IV. AGM (Annual General Meeting) and extraordinary shareholders’ general meeting held in
the Period
1. AGM
Ratio of
Date of
Session of meeting Type investor Date Index of disclosure
disclosure
participation
Juchao Website—
First extraordinary
Extraordinary (http://www.cninfo.com.cn) “Notice of
general meeting of 62.79% 2019-01-24 2019-01-25
general meeting Resolution of First extraordinary general
2019
meeting of 2019” No.: 2019-07
Juchao Website—
Annual General (http://www.cninfo.com.cn) “Notice of
AGM 65.67% 2019-05-17 2019-05-18
Meeting of 2018 Resolution of AGM of 2018” No.: 2019-
26
Second Juchao Website—
extraordinary Extraordinary (http://www.cninfo.com.cn) “Notice of
66.21% 2019-09-12 2019-09-13
general meeting of general meeting Resolution of Second extraordinary
2019 general meeting of 2019” No.: 2019-38
Juchao Website—
Third extraordinary
Extraordinary (http://www.cninfo.com.cn) “Notice of
general meeting of 68.52% 2019-11-13 2019-11-14
general meeting Resolution of Third extraordinary general
2019
meeting of 2019” No.: 2019-45
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
V. Responsibility performance of independent directors
1. The attending of independent directors to Board meetings and shareholders general meeting
The attending of independent directors to Board Meeting & shareholders general meeting
89
Times of Absent the Times
Times of
Name of Board meeting Times of Meeting for attending the
Times of attending by Times of
independent supposed to entrusted the second shareholders
Presence communicatio Absence
director attend in the presence time in a row general
n
report period (Y/N) meeting
Chen Honghui 8 1 7 0 0 N 1
Ou Yongliang 8 1 7 0 0 N 1
Su Weiwei 7 1 6 0 0 N 1
Chen Shengqun 8 1 7 0 0 N 1
Explanation of absent the Board Meeting for the second time in a row
2. Objection for relevant events from independent directors
Independent directors come up with objection about Company’s relevant matters
□Yes √No
Independent directors have no objections for relevant events in reporting period
3. Other explanation about responsibility performance of independent directors
The opinions from independent directors have been adopted
√ Yes □ No
Explanation on advice that accepted/not accepted from independent directors
During the reporting period, the independent directors performed their duties in a careful, diligent, dedicated
attitude in accordance with requirements of the "Working System of Independent Director", offered some useful
suggestions and opinions on business decision-making, legal affairs, financial management and other aspects;
carefully examined important matters those needed opinions of independent directors, made independent
judgments and issued a written independent opinion on major related transactions, daily related transactions,
accountancy hiring and other matters, playing a positive role in safeguarding the legitimate rights and interests of
small shareholders. Besides, independent directors played an important role in operation of special committee. At
the same time, the Company can guarantee independent directors and other directors of the same right to know.
During the reporting period, the independent directors have no objection on the related issues of the Company.
VI. Duty performance of the special committees under the board during the reporting period
(i) Duties fulfillment of the board of directors and audit committee on internal control over risk
Internal control on risk and Audit Committee of the board of directors of the company comprises three
independent directors and three directors, including the convener (professional accountant) is an independent
director. In accordance with relevant provisions of China Securities Regulatory Commission and Shenzhen Stock
90
Exchange and working system, Internal control on risk and Audit Committee of the board of directors seriously
performed duties in a dedicated attitude. In the annual financial report audit, they acted as supervisors, maintained
individuality of audit and issued a series of notices such as the Written Opinion on Financial Accounting
Statements Issued by the Company before CPA of Annual Examination Entered, the Written Opinion on Financial
Accounting Statements after Preliminary Audit Issued by CPA of Annual Examination, the Summary Report of
Internal Risk Control and Audit Committee on the Annual Audit Work of CPA as well as the Resolution on
Rehire the Audit Institution. Its main duties comprise the following:
1. Risk internal control and audit committee is responsible for determining the audit work schedule, negotiating
with CPA who engages in audit;
2. Before CPA enters, audit committee should review the financial statements prepared by the Company and issue
written opinions;
3. Strengthen communication with the CPA, and urge them to submit audit report within stipulated time with
urgency letter;
4. Review again the financial statements after the CPA issues preliminary opinion, and issue written opinions;
5. The Committee held annual work conference 2019, approved proposal of financial accounting report, summary
report of annual audit work of CPA and rehiring Ernst & Young CPA (Special General Partnership) as the audit
institution, and then formed a resolution to submit to board of directors for approval.
(ii) Duties fulfillment of Remuneration and Appraisal Committee
As special working mechanism of the board of directors, the remuneration and appraisal committee are
responsible for approving the assessment standard of directors and senior executives, formulating and reviewing
compensation policies and programs of directors and executive. And they take charge in examining according to
the standard and policies. The remuneration and appraisal committee is composed of three independent directors;
convener is Chen Honghui, an independent director.
During the reporting period, remuneration and assessment committee actively performed duty; clearly defined
their responsibilities; did serious research and appraisal on the remuneration and appraisal system, especially
salary, assessment system and program over directors, supervisors and senior executive. According to working
rules of the remuneration and appraisal committee, they have rights to check regular reports, meetings records,
business planning and other materials by telephone, interviews and other methods to learn the performance of
directors, executives. And they’re required to submit problems existing in implementation of system to the Board
of Directors and raise up suggestion on them. Their contents are as follows:
1. In 2019, the remuneration and appraisal committee carried out the performance evaluation of executives
according to the 2018 Annual operation standard and performance.
2. It proposed the "2020 Evaluation Scheme of Operating Performance", and submitted it to the board of directors
for approval.
3. The remuneration and appraisal committee approved salary of directors, supervisors and senior executives
disclosed in 2019 annual report. And it issued the following opinions:
91
Compensation decision procedures of directors, supervisors and senior management personnel was in accordance
with the provisions; the standard was in accordance with the remuneration system; the disclosure of 2019 annual
report about personnel salary of the directors, supervisors and senior management is real and accurate.
VII. Works from Supervisory Committee
The Company has risks in reporting period that found in supervisory activity from supervisory committee
□ Yes √ No
Supervisory committee has no objection about supervision events in reporting period
VIII. Examination and incentives of senior management
Senior executives of the Company took responsibility for the board of directors, in the reporting period, the board
of directors implemented the performance checking mechanism that the remuneration of senior executives related
with their performance checking, with achievement as direction, and made relevant reward and punishment
according to target completion. The Company’s relevant incentive and restriction mechanism gradually in order to
further exert the enthusiasm and creativity of senior executives, urge the senior executives to perform the
obligations of being honest and diligent. The Company had no incentive mechanism for senior executives such as
stock option, purchase of management team and equity held by owner.
IX. Internal Control
1. Details of major defects in IC appraisal report that found in reporting period
□Yes √ No
2. Appraisal Report of Internal Control
Disclosure date of full internal control
22 April 2020
evaluation report
Disclosure index of full internal control ” Self-evaluation report of internal control for 2019” in Juchao website
evaluation report (www.cninfo.com.cn) appointed by Shenzhen Stock Exchange
The ratio of the total assets of units
included in the scope of evaluation
accounting for the total assets on the 98.90%
company's consolidated financial
statements
The ratio of the operating income of units
included in the scope of evaluation
accounting for the operating income on the 99.75%
company's consolidated financial
statements
92
Defects Evaluation Standards
Category Financial Reports Non-financial Reports
Financial report defects are mainly judged
Non-financial report defects are mainly
and decided by the degree of influence and
judged and decided by the degree of
the likelihood of occurrence to the
influence and the likelihood of
misstatements of financial reports caused by
occurrence of defects to the validity of
defects. (1) Significant defects: a
business process. (1) Significant defects:
combination of one or multiple internal
a combination of one or multiple internal
control defects that exists in internal control
control defects that may cause the
and may cause the material misstatements in
enterprise’s serious deviation to internal
financial statements cannot be prevented,
Qualitative criteria control objectives; (2) Major defects: a
found or corrected in time; (2) Major
combination of one or multiple internal
defects: a combination of one or multiple
control defects whose severity level and
internal control defects that exists in internal
economic consequences are lower than
control and has lower severity level than
significant defects but still may cause the
significant defects but still should be
enterprise’s deviation to internal control
concerned by the superintendents of
objectives; (3) Common defects: other
enterprise financial reports; (3) Common
defects except for significant and major
defects: other defects except for significant
defects.
and major defects.
93
Quantitative standard: A quantitative
criterion determines the degree of
importance of the company’s defects
based on the amount of direct loss and
the degree of significant influence to the
company. (1) Significant defects: the
amount of direct property loss is or more
than 10 million Yuan, or has been
A quantitative criterion determines the
officially disclosed and caused negative
degree of importance of misstatements
effects to periodic report disclosure of
(including missing reports) in the
the joint-stock companies; (2) Major
consolidated statements of listed companies
defects: the amount of direct property
based on the consolidated statement data. (1)
Quantitative standard loss is between 5 million and 10 million
Significant defects: equal to or greater than
Yuan, or has been punished by the
5% of profit before tax; (2) Major defects:
national government departments but has
Between 1% and 5% of profit before tax; (3)
not caused negative effects to periodic
Common defects: Less than or equal to 1%
report disclosure of the joint-stock
of profit before tax
companies;(3) Common defects: the
amount of direct property loss is between
0.1 million and 5 million Yuan, or has
been punished by the provincial or sub-
provincial government departments but
has not caused negative effects to
periodic report disclosure of the joint-
stock companies.
Amount of significant defects in financial
0
reports
Amount of significant defects in non-
0
financial reports
Amount of important defects in financial
0
reports
Amount of important defects in non-
0
financial reports
X. Auditing report of internal control
√ Applicable □ Not applicable
Deliberations in Internal Control Audit Report
According to relevant regulations and “Basic Rules of Internal Control for Enterprises”, China National Accord Medicines
Corporation Ltd. in all major aspects, keeps an efficiency of internal control of financial report dated 31 December 2019
Disclosure details of audit report of
Disclosed
internal control
Disclosure date of audit report of
22 April 2020
internal control (full-text)
94
Index of audit report of internal Audit Report of Internal Control under the name of China National Accord Medicines
control (full-text) Corporation Ltd. released on Juchao Website (http://www.cninfo.com.cn)
Opinion type of auditing report of
Standard unqualified
IC
Whether the non-financial report
No
had major defects
Carried out modified opinion for internal control audit report from CPA
□Yes √ No
The internal control audit report, issued by CPA, has concerted opinion with self-evaluation report, issued from
the Board
√ Yes □ No
95
Section XI. Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and
without due on the date when annual report approved for released or fail to cash in full on due
No
96
Section XII. Financial Report
97
98
AUDITOR’S REPORT
Ernst & Young Hua Ming (2020) Shen Zi No. 61295118_H01
China National Accord Medicines Corporation Ltd.
To the shareholders of China National Accord Medicines Corporation Ltd.
(I)Opinion
We have audited the financial statements of China National Accord Medicines Corporation Ltd. (the
“Company”), which comprise the consolidated and the Company’s balance sheets as at 31 December 2019,
and the consolidated and the Company’s income statements, the consolidated and the Company’s
statements of changes in equity and the consolidated and the Company’s statements of cash flows for the
year then ended, and notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated
and the Company’s financial position as at 31 December 2019, and the consolidated and the Company’s
financial performance and cash flows for the year then ended in accordance with Accounting Standards for
Business Enterprises (“ASBEs”).
(II)Basis for opinion
We conducted our audit in accordance with China Standards on Auditing (“CSAs”). Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial statements
section of our report. We are independent of the Company in accordance with China Code of Ethics for
Certified Public Accountants (the “Code”), and we have fulfilled our other ethical responsibilities in accordance
with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
(III)Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial statements of the current period. These matters were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. For each matter below, our description of how our audit addressed the matter is
provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial
statements section of our report, including in relation to these matters. Accordingly, our audit included the
performance of procedures designed to respond to our assessment of the risks of material misstatement of
the financial statements. The results of our audit procedures, including the procedures performed to address
the matters below, provide the basis for our audit opinion on the accompanying financial statements.
- 99 -
AUDITOR’S REPORT (Continued)
Ernst & Young Hua Ming (2020) Shen Zi No. 61295118_H01
China National Accord Medicines Corporation Ltd.
(III)Key audit matters (continued)
Key audit matter How our audit addressed the key audit
matter
Impairment of goodwill
The carrying value of goodwill amounted to The procedures performed in order to address
RMB944,079,884.56 as at 31 December 2019 this matter are as follows:
and was allocated to the Company’s cash- 1) We invited internal evaluation experts to
generating units (“CGUs”) of pharmaceutical assist in evaluating the goodwill impairment
distribution and retail pharmacy. method used and forecasted figures used in
Under ASBEs, the Company is required to the impairment test, especially the discount
annually perform the impairment test for rate and perpetual growth rate.
goodwill. The impairment test is based on the 2) We assessed the rationality of the forecasts
recoverable amount of the respective CGUs to used with respect to future revenues and
which the goodwill is allocated. The operating results, also compared the
recoverable amount of the CGUs is forecasts with the historical performance of
determined by the higher of the present value the respective CGUs and the industry
of the forecasted future cash flows and the fair trends. In particular, we re-examined the
value of the asset net of its disposal cost. future revenue growth rate, projected gross
Assumptions such as the forecasted future rate, related expenses and so on.
cash flows and discount rate are set up by 3) We also re-examined the sufficiency of
applying estimates and significant judgements disclosure regarding goodwill.
by management. Therefore, we considered
this to be a key audit matter.
The Company’s disclosures about impairment
of goodwill are included in Note III (17, 34) and
Note V (17) to the financial statements.
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AUDITOR’S REPORT (Continued)
Ernst & Young Hua Ming (2020) Shen Zi No. 61295118_H01
China National Accord Medicines Corporation Ltd.
(III) Key audit matters (continued)
Key audit matter How our audit addressed the key audit
matter
Impairment of accounts receivable
Major clients of the Company are medical The procedures performed in order to address
establishments, pharmacy chain stores, this matter are as follows:
monomer drugstores, community medical 1) We re-examined management’s internal
service centers, downstream distribution control that relates to impairment of
companies, etc. As at 31 December 2019, the accounts receivable.
Company had net accounts receivable of 2) We discussed the bad debt policy with
RMB10,617,981,893.52, representing 31.68% management and evaluated the sufficiency
of the Group’s total assets. of bad debt provision including the adequacy
According to ASBE 22 – Recognition and of the bad debt provision assessment
measurement of Financial Instruments, method.
management utilizes the expected credit loss 3) We discussed with management regarding
model to measure the impairment of financial the recoverability of individually significant
assets. Management’s estimation of the accounts receivable for which provision for
expected credit loss model is based on the bad debts is recognised separately.
historical default rate of the Group and other 4) We tested the aging of accounts receivable,
specific factors including types of client, aging including a test of information system
of the ending balance, collection history, write- automatic controls related to information
offs, the migration rate and estimated weighted system automatically-generated aging
financing cost. At the same time, management analysis and carried out analytical reviewing
also takes into consideration forward-looking procedures for the aging analysis in order to
information including whether disputes exist, confirm the accuracy of basic data used by
the expected macro-economic environment, management for bad debt provision for
etc. During the year, significant management accounts receivable.
judgement and estimates were involved during 5) We reviewed the credit profile and carried
the classification of the credit exposure out background check for significant clients.
portfolio and assessment of the expected 6) We reviewed and evaluated the sufficiency
credit loss, and therefore, we considered this of the Group’s disclosure related to accounts
to be a key audit matter. receivable.
The Company’s disclosures about impairment
of accounts receivable are included in Note III
(8, 34) and Note V (3) to the financial
statements.
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AUDITOR’S REPORT (Continued)
Ernst & Young Hua Ming (2020) Shen Zi No. 61295118_H01
China National Accord Medicines Corporation Ltd.
(IV)Other information
The management of the Company is responsible for the other information. The other information comprises
the information included in the annual report, other than the financial statements and our auditor’s report
thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
(V)Responsibilities of the management and those charged with governance for the financial
statements
The management of the Company is responsible for the preparation and fair presentation of the financial
statements in accordance with ASBEs, and for designing, implementing and maintaining such internal control
as the management determines is necessary to enable the preparation of financial statements to be free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting, unless management either intends to liquidate the Company or to cease
operations or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
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AUDITOR’S REPORT (Continued)
Ernst & Young Hua Ming (2020) Shen Zi No. 61295118_H01
China National Accord Medicines Corporation Ltd.
(VI)Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with CSAs will always detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are generally considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of these financial
statements.
As part of an audit in accordance with CSAs, we exercise professional judgement and maintain professional
scepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the management.
(4) Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If
we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report
to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify
our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s
report. However, future events or conditions may cause the Company to cease to continue as a going
concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in
a manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Company to express an opinion on the financial statements. We are
responsible for the direction, supervision and performance of the group audit. We remain solely
responsible for our audit opinion.
- 103 -
AUDITOR’S REPORT (Continued)
Ernst & Young Hua Ming (2020) Shen Zi No. 61295118_H01
China National Accord Medicines Corporation Ltd.
(VI)Auditor’s responsibilities for the audit of the financial statements (continued)
We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were
of most significance in the audit of the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not
be communicated in our report because the adverse consequences of doing so would reasonably be
expected to outweigh the public interest benefits of such communication.
Ernst & Young Hua Ming LLP Chinese Certified Public Accountant: Li Jian Guang
(Engagement partner)
Chinese Certified Public Accountant: Li Yuan Fen
Beijing, the People’s Republic of China 20 April 2020
Important Notice
This auditor’s report is an English translation of the auditor’s report for the audit engagements which adopt CSAs.
In case the English version does not conform to the Chinese version, the Chinese version prevails.
- 104 -
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED BALANCE SHEET
31 December 2019 E
ASSETS Note V 31 December 2019 31 December 2018
Current assets
Cash and bank balances 1 8,882,334,845.79 8,096,158,013.24
Notes receivable 2 793,301,688.64 789,536,654.23
Accounts receivable 3 10,617,981,893.52 9,336,861,647.92
Receivables financing 4 446,342,588.46 567,775,275.40
Advances to suppliers 5 384,882,547.24 583,484,515.95
Other receivables 6 477,988,244.98 637,116,650.64
Inventories 7 4,947,424,591.53 4,389,335,942.19
Other current assets 8 102,198,564.38 95,347,629.18
Total current assets 26,652,454,964.54 24,495,616,328.75
Non-current assets
Long-term equity investments 9 2,105,114,410.88 1,880,393,786.10
Other equity instrument investment 10 116,021,000.00 13,685,760.00
Other non-current financial assets 11 140,000,000.00 140,000,000.00
Investment properties 12 138,900,358.30 144,894,495.97
Fixed assets 13 612,599,944.11 607,933,827.67
Construction in progress 14 31,582,575.84 36,412,614.61
Right-of-use assets 15 1,955,461,133.01 -
Intangible assets 16 319,946,727.04 319,207,126.15
Goodwill 17 944,079,884.56 833,547,800.60
Long-term prepaid expenses 18 366,462,139.01 311,328,706.46
Deferred tax assets 19 60,631,015.99 74,914,209.95
Other non-current assets 20 77,354,970.39 72,365,863.71
Total non-current assets 6,868,154,159.13 4,434,684,191.22
Total assets 33,520,609,123.67 28,930,300,519.97
The accompanying notes form an integral part of these financial statements.
105
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED BALANCE SHEET (CONTINUED)
31 December 2019 E
LIABILITIES AND SHAREHOLDERS’
Note V 31 December 2019 31 December 2018
EQUITY
Current liabilities
Short-term borrowings 22 1,453,018,300.01 2,608,626,099.82
Notes payable 23 5,555,697,557.53 3,416,755,681.80
Accounts payable 24 6,554,105,124.13 6,468,535,961.17
Contract liabilities 25 302,650,567.97 255,590,612.37
Employee benefits payable 26 255,827,721.66 231,866,407.40
Tax payable 27 250,118,388.14 241,980,412.72
Other payables 28 1,756,858,461.02 1,528,424,590.29
Non-current liabilities due within one year 29 601,427,093.62 5,861,324.37
Other current liabilities 30 749,710.19 292,465.75
Total current liabilities 16,730,452,924.27 14,757,933,555.69
Non-current liabilities
Long-term borrowings 31 - 31,638,984.25
Lease liabilities 32 1,182,407,085.08 -
Long-term payables 33 800,000.00 4,563,978.52
Long-term employee benefits payable 34 1,433,000.00 2,050,000.00
Deferred income 35 88,704,272.88 91,491,170.40
Deferred tax liabilities 19 83,717,486.28 67,605,161.88
Other non-current liabilities 36 73,256,514.93 69,241,176.18
Total non-current liabilities 1,430,318,359.17 266,590,471.23
Total liabilities 18,160,771,283.44 15,024,524,026.92
The accompanying notes form an integral part of these financial statements.
106
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED BALANCE SHEET (CONTINUED)
31 December 2019 E
LIABILITIES AND
SHAREHOLDERS’ EQUITY
Note V 31 December 2019 31 December 2018
Shareholders’ equity
Share capital 37 428,126,983.00 428,126,983.00
Capital surplus 38 4,363,007,511.57 4,320,984,981.51
Other comprehensive income 39 45,917,342.77 -
Surplus reserves 40 214,063,491.50 214,063,491.50
Retained earnings 41 7,755,295,537.08 6,655,257,147.27
Shareholders’ equity attributable to
12,806,410,865.92 11,618,432,603.28
shareholders of the parent
Non-controlling interests 2,553,426,974.31 2,287,343,889.77
Total shareholders’ equity 15,359,837,840.23 13,905,776,493.05
Total liabilities and shareholders’ 33,520,609,123.67 28,930,300,519.97
equity
The accompanying notes form an integral part of these financial statements.
The financial statements have been signed by:
Legal representative: Financial controller: Head of Accounting Department:
107
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED INCOME STATEMENT
Year ended 31 December 2019 Expressed in Renminbi Yuan
Note V 2019 2018
Operating revenue 42 52,045,764,143.21 43,122,385,521.23
Less: Operating costs 42 46,292,408,840.53 38,024,108,631.15
Taxes and surcharges 43 136,293,695.54 121,012,139.02
Selling expenses 44 3,055,403,668.16 2,762,789,885.77
Administrative expenses 45 842,014,983.53 783,338,308.19
Finance costs 46 119,972,954.79 51,490,020.59
Including: Interest expense 271,718,934.85 140,315,267.43
Interest income 139,842,489.11 81,119,506.63
Add: Other income 47 43,413,430.42 28,458,401.31
Investment income 48 246,185,242.97 258,524,453.70
Including: Investment income from associates 331,171,902.87 319,903,890.47
Income from the derecognition of financial
(86,377,492.55) (61,372,718.53)
assets measured at amortised cost
Credit impairment losses 49 (53,163,490.61) (298,479.55)
Impairment losses 50 (3,108,889.20) (2,744,605.36)
Gain on disposal of assets 51 2,551,175.02 7,392,547.56
Operating profits 1,835,547,469.26 1,670,978,854.17
Add: Non-operating income 52 25,586,916.14 12,715,353.51
Less: Non-operating expenses 53 4,476,248.90 4,764,850.15
Total profit 1,856,658,136.50 1,678,929,357.53
Less: Income tax expenses 56 372,439,441.37 330,498,245.68
Net profit 1,484,218,695.13 1,348,431,111.85
Net profit classified by continuing operations
Profit or loss from continuing operations 1,484,218,695.13 1,348,431,111.85
Net profit classified by attribution of ownership
Net profit attributable to owners of the parent 1,271,289,183.01 1,210,742,435.78
Non-controlling interests 212,929,512.12 137,688,676.07
Other comprehensive income, net of tax 76,618,063.81 -
Other comprehensive income, net of tax, attributable to owners of
39 45,917,342.77 -
the parent,
Other comprehensive income that will not be reclassified to profit or
loss
Change in the fair value of other equity investments 46,050,708.96 -
Other comprehensive income that may be reclassified to profit or
loss
Other comprehensive income using the equity method that may (133,366.19) -
be reclassified to profit or loss
Other comprehensive income, net of tax, attributable to non- 30,700,721.04 -
39
controlling interests
Total comprehensive income 1,560,836,758.94 1,348,431,111.85
The accompanying notes form an integral part of these financial statements.
108
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED INCOME STATEMENT (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
Note V 2019 2018
Total comprehensive income 1,560,836,758.94 1,348,431,111.85
Including:
Total comprehensive income attributable to
1,317,206,525.78 1,210,742,435.78
owners of the parent
Total comprehensive income attributable to 243,630,233.16 137,688,676.07
non-controlling interests
Earnings per share 57
Basic earnings per share 2.97 2.83
Diluted earnings per share 2.97 2.83
The accompanying notes form an integral part of these financial statements.
109
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For the Year ended 31 December 2018
(Expressed in Renminbi Yuan)
Attributable to owners of the parent
2019
Other comprehensive Non-controlling
Share capital Capital surplus income Surplus reserves Retained earnings Subtotal interests Total equity
Opening balance of the current year
428,126,983.00 4,320,984,981.51 - 214,063,491.50 6,655,257,147.27 11,618,432,603.28 2,287,343,889.77 13,905,776,493.05
Movements in the current year - 42,022,530.06 45,917,342.77 - 1,100,038,389.81 1,187,978,262.64 266,083,084.54 1,454,061,347.18
(1) Total comprehensive income - - 45,917,342.77 - 1,271,289,183.01 1,317,206,525.78 243,630,233.16 1,560,836,758.94
(2) Capital paid and reduced by
owners
- 42,022,530.06 - - - 42,022,530.06 62,799,658.33 104,822,188.39
1.Capital injection by owners - - - - - - 48,136,000.00 48,136,000.00
2.Others - 42,022,530.06 - - - 42,022,530.06 14,663,658.33 56,686,188.39
(3) Profit distribution
- - - - (171,250,793.20) (171,250,793.20) (40,346,806.95) (211,597,600.15)
1.Distribution to equity owners - - - - (171,250,793.20) (171,250,793.20) (40,346,806.95) (211,597,600.15)
Closing balance of the current year 428,126,983.00 4,363,007,511.57 45,917,342.77 214,063,491.50 7,755,295,537.08 12,806,410,865.92 2,553,426,974.31 15,359,837,840.23
The accompanying notes form an integral part of these financial statements.
110
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Continued)
For the Year ended 31 December 2018
(Expressed in Renminbi Yuan)
Attributable to owners of the parent
2018
Non-controlling
Share capital Capital surplus Surplus reserves Retained earnings Subtotal interests Total equity
Opening balance of the current year
428,126,983.00 3,181,429,064.99 214,063,491.50 5,572,952,806.39 9,396,572,345.88 530,930,411.26 9,927,502,757.14
Movements in the current year - 1,139,555,916.52 - 1,082,304,340.88 2,221,860,257.40 1,756,413,478.51 3,978,273,735.91
(1) Total comprehensive income - - - 1,210,742,435.78 1,210,742,435.78 137,688,676.07 1,348,431,111.85
(2) Capital paid and reduced by
owners - 1,139,555,916.52 - - 1,139,555,916.52 1,679,926,889.17 2,819,482,805.69
1.Capital injection by owners - 1,120,284,623.39 - - 1,120,284,623.39 2,793,191,200.00 3,913,475,823.39
2.Others - 19,271,293.13 - - 19,271,293.13 (1,113,264,310.83) (1,093,993,017.70)
(3) Profit distribution
- - - (128,438,094.90) (128,438,094.90) (61,202,086.73) (189,640,181.63)
1.Distribution to equity owners - - - (128,438,094.90) (128,438,094.90) (61,202,086.73) (189,640,181.63)
Closing balance of the current year 428,126,983.00 4,320,984,981.51 214,063,491.50 6,655,257,147.27 11,618,432,603.28 2,287,343,889.77 13,905,776,493.05
The accompanying notes form an integral part of these financial statements.
111
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 31 December 2019 Expressed in Renminbi Yuan
Note V 2019 2018
1. CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from the sale of goods and the
55,803,880,635.86 46,794,007,122.39
rendering of services
Receipts of taxes and surcharges refunds 14,595,925.20 1,777,623.17
Other cash receipts relating to operating 58 740,730,355.35 679,596,722.04
activities
Total cash inflows from operating activities 56,559,206,916.41 47,475,381,467.60
Cash payments for goods and services 49,939,998,830.19 41,436,895,750.53
Cash payments to and on behalf of employees 2,175,588,129.28 1,893,939,719.20
Payments of all types of taxes and surcharges 1,270,243,180.50 1,096,228,714.78
Other cash payments relating to operating 1,173,024,693.24 1,725,710,930.82
58
activities
Total cash outflows from operating activities 54,558,854,833.21 46,152,775,115.33
Net cash flows from operating activities 59 2,000,352,083.20 1,322,606,352.27
2. CASH FLOWS FROM INVESTING ACTIVITIES
Cash receipts from returns of investments 151,841,842.08 131,401,264.72
Net cash received from disposal of fixed assets,
5,299,820.29 5,978,720.99
intangible assets and other long-term assets
Net cash received for acquisition of subsidiaries
59 - 2,468,522.33
and other business units
Net cash receipts from disposal of subsidiaries
59 791,464.76 -
and other business units
Other cash receipts relating to investing activities 58 3,188,480.07 98,793,085.40
Total cash inflows from investing activities 161,121,607.20 238,641,593.44
The accompanying notes form an integral part of these financial statements.
112
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 31 December 2019 Expressed in Renminbi Yuan
113
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
Note V 2019 2018
2. CASH FLOWS FROM INVESTING ACTIVITIES (Continued)
Cash payments to acquire fixed assets, intangible assets
245,167,920.77 255,481,604.79
and other long-term assets
Cash payments for investments 56,001,023.17 124,575,351.00
Net cash payments for acquisition of subsidiaries and
59 97,801,928.16 -
other business units
Other cash payments relating to investing activities 58 2,597,750.74 81,042,904.53
Total cash outflows from investing activities 401,568,622.84 461,099,860.32
Net cash flows from investing activities (240,447,015.64) (222,458,266.88)
3. CASH FLOWS FROM FINANCING ACTIVITIES
Cash proceeds from investments by others 46,093,966.84 2,793,191,200.00
Including: Cash receipts from capital contributions from
46,093,966.84 2,793,191,200.00
non-controlling interests of subsidiaries
Cash receipts from borrowings 83,786,182.96 86,231,834.83
Other cash receipts relating to financing activities 58 249,305,768.12 484,038,819.20
Total cash inflows from financing activities 379,185,917.92 3,363,461,854.03
Cash repayments for debts 99,846,808.49 79,670,200.30
Cash payments for distribution of dividends or profit and
529,835,909.14 340,534,805.52
interest expenses
Including: Dividends or profit paid to non-controlling
39,827,223.10 66,702,208.88
shareholders of subsidiaries
Other cash payments relating to financing activities 58 718,672,829.88 84,475,782.06
Total cash outflows from financing activities 1,348,355,547.51 504,680,787.88
Net cash flows from financing activities (969,169,629.59) 2,858,781,066.15
4. EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON (175,693.26) (310,822.25)
CASH AND CASH EQUIVALENTS
5. NET INCREASE IN CASH AND CASH EQUIVALENTS 790,559,744.71 3,958,618,329.29
Add: Cash and cash equivalents at beginning of the year 7,632,117,020.77 3,673,498,691.48
6. CASH AND CASH EQUIVALENTS AT END OF YEAR 59 8,422,676,765.48 7,632,117,020.77
The accompanying notes form an integral part of these financial statements.
114
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY BALANCE SHEET
31 December 2019 Expressed in Renminbi Yuan
ASSETS Note XIV 31 December 2019 31 December 2018
Current assets
Cash and bank balances 2,909,417,289.71 1,821,351,681.34
Notes receivable 1 14,900,068.42 34,154,774.75
Accounts receivable 2 571,544,784.65 631,236,593.94
Receivables financing 3 30,194,682.11 29,716,205.64
Advances to suppliers 7,996,243.28 4,760,182.00
Other receivables 4 1,928,941,595.38 1,538,283,800.17
Inventories 169,422,075.78 158,166,185.65
Other current assets 39,482.38 39,482.38
Total current assets 5,632,456,221.71 4,217,708,905.87
Non-current assets
Long-term equity investments 5 7,698,756,525.83 7,432,906,692.24
Other non-current financial assets 140,000,000.00 140,000,000.00
Investment properties 1,484,198.56 1,955,854.46
Fixed assets 14,763,656.62 21,362,422.03
Right-of-use assets 6,217,504.50 -
Intangible assets 5,838,737.17 2,452,222.51
Long-term prepaid expenses 6,130,534.55 7,481,809.53
Deferred tax assets 9,327,850.53 -
Other non-current assets 9,000,000.00 7,000,000.00
Total non-current assets 7,891,519,007.76 7,613,159,000.77
Total assets 13,523,975,229.47 11,830,867,906.64
The accompanying notes form an integral part of these financial statements.
115
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY BALANCE SHEET (CONTINUED)
31 December 2019 Expressed in Renminbi Yuan
LIABILITIES AND SHAREHOLDERS’ EQUITY 31 December 2019 31 December 2018
Current liabilities
Short-term borrowings 121,350,644.36 539,000,000.00
Notes payable 751,577,900.22 252,317,800.78
Accounts payable 322,436,681.01 442,049,241.22
Contract liabilities 7,293,184.46 4,182,083.40
Employee benefits payable 30,469,777.88 36,233,563.12
Tax payables 22,909,124.90 13,426,601.90
Other payables 2,120,794,765.05 1,481,778,872.31
Non-current liabilities due within
32,640,325.77 -
one year
Other current liabilities 338,196.81 226,427.99
Total current liabilities 3,409,810,600.46 2,769,214,590.72
Non-current liabilities
Long-term borrowings - 31,638,984.25
Lease liabilities 5,461,257.38 -
Long-term payables 800,000.00 800,000.00
Long-term employee benefits payable - 118,000.00
Deferred income 1,276,698.66 1,687,899.50
Deferred tax liabilities - 2,298,426.39
Total non-current liabilities 7,537,956.04 36,543,310.14
Total liabilities 3,417,348,556.50 2,805,757,900.86
The accompanying notes form an integral part of these financial statements.
116
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY BALANCE SHEET (CONTINUED)
31 December 2019 Expressed in Renminbi Yuan
LIABILITIES AND SHAREHOLDERS’
31 December 2019 31 December 2018
EQUITY
Shareholders’ equity
Share capital 428,126,983.00 428,126,983.00
Capital surplus 4,468,385,307.32 4,426,362,777.26
Other comprehensive income (133,366.19) -
Surplus reserves 214,063,491.50 214,063,491.50
Retained earnings 4,996,184,257.34 3,956,556,754.02
Total shareholders’ equity 10,106,626,672.97 9,025,110,005.78
Total liabilities and shareholders’ equity 13,523,975,229.47 11,830,867,906.64
The accompanying notes form an integral part of these financial statements.
117
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY INCOME STATEMENT
Year ended 31 December 2019 Expressed in Renminbi Yuan
Note XIV 2019 2018
Operating revenue 6 4,108,399,019.34 3,481,446,876.93
Less: Operating costs 6 3,916,035,572.52 3,317,568,640.99
Taxes and surcharges 6,459,864.79 4,618,925.42
Selling expenses 69,400,890.32 61,120,258.01
Administrative expenses 73,489,681.09 77,784,120.97
Finance costs (64,025,013.54) (44,503,498.58)
Including: Interest expense 46,025,863.16 41,179,105.37
Including: Interest income 111,805,557.75 86,569,728.06
Add: Other income 4,810,134.29 4,916,458.17
Investment income 7 1,158,737,566.83 702,555,982.30
Including: Investment income from 353,856,432.16 342,730,085.14
associates
Income from the
derecognition of
financial assets (4,379,465.57) (1,688,557.15)
measured at amortised
cost
Credit impairment losses (45,728,840.12) 983,688.72
Impairment losses (371,833.95) (466,647.08)
Gain on disposal of assets 155,014.05 11,116.50
Operating profits 1,224,640,065.26 772,859,028.73
Add: Non-operating income 741,954.13 46,446.88
Less: Non-operating expenses 280.00 183,374.99
Total profit 1,225,381,739.39 772,722,100.62
Less: Income tax expenses 14,503,442.87 17,140,073.18
Net profit 1,210,878,296.52 755,582,027.44
Including: Profit or loss from continuing operations 1,210,878,296.52 755,582,027.44
Other comprehensive income, net of tax (133,366.19) -
Other comprehensive income that may be
reclassified to profit or loss
Other comprehensive income using the equity
method that may be reclassified to profit or (133,366.19) -
loss
Total comprehensive income 1,210,744,930.33 755,582,027.44
The accompanying notes form an integral part of these financial statements.
118
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY STATEMENT OF CHANGES IN EQUITY
Year ended 31 December 2019 Expressed in Renminbi Yuan
Other comprehensive
2019 Share capital Capital surplus Surplus reserves Retained earnings Total equity
income
Opening balance of the current year 428,126,983.00 4,426,362,777.26 - 214,063,491.50 3,956,556,754.02 9,025,110,005.78
Movements in the current year - 42,022,530.06 (133,366.19) - 1,039,627,503.32 1,081,516,667.19
(1) Total comprehensive income - - (133,366.19) - 1,210,878,296.52 1,210,744,930.33
(2) Capital paid and reduced by owners - 42,022,530.06 - - - 42,022,530.06
1. Others - 42,022,530.06 - - - 42,022,530.06
(3) Profit distribution - - - - (171,250,793.20) (171,250,793.20)
1. Distribution to equity owners - - - - (171,250,793.20) (171,250,793.20)
Closing balance of the current year 428,126,983.00 4,468,385,307.32 (133,366.19) 214,063,491.50 4,996,184,257.34 10,106,626,672.97
The accompanying notes form an integral part of these financial statements.
119
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY STATEMENT OF CHANGES IN EQUITY (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
2018 Share capital Capital surplus Surplus reserves Retained earnings Total equity
Opening balance of the current year 428,126,983.00 4,407,091,484.13 214,063,491.50 3,329,412,821.48 8,378,694,780.11
Movements in the current year - 19,271,293.13 - 627,143,932.54 646,415,225.67
(1) Total comprehensive income - - - 755,582,027.44 755,582,027.44
(2) Capital paid and reduced by owners - 19,271,293.13 - - 19,271,293.13
1. Others - 19,271,293.13 - - 19,271,293.13
(3) Profit distribution - - - (128,438,094.90) (128,438,094.90)
1. Distribution to equity owners - - - (128,438,094.90) (128,438,094.90)
Closing balance of the current year 428,126,983.00 4,426,362,777.26 214,063,491.50 3,956,556,754.02 9,025,110,005.78
The accompanying notes form an integral part of these financial statements.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY STATEMENT OF CASH FLOWS
Year ended 31 December 2019 Expressed in Renminbi Yuan
2019 2018
1. CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from the sale of goods and the
4,484,950,773.68 3,650,605,970.28
rendering of services
Other cash receipts relating to operating 55,105,150.55 107,373,506.99
activities
Total cash inflows from operating activities 4,540,055,924.23 3,757,979,477.27
Cash payments for goods and services 4,272,419,447.94 3,406,447,268.87
Cash payments to and on behalf of employees 90,592,261.08 79,402,008.01
Payments of all types of taxes and surcharges 56,746,556.88 36,195,123.57
Other cash payments relating to operating 36,680,891.34 55,863,168.11
activities
Total cash outflows from operating activities 4,456,439,157.24 3,577,907,568.56
Net cash flows from operating activities 83,616,766.99 180,071,908.71
2. CASH FLOWS FROM INVESTING ACTIVITIES
Cash receipts from returns of investments 958,057,018.50 525,074,396.36
Net cash receipts from disposal of fixed assets,
3,961,383.00 44,700.00
intangible assets and other long-term assets
Other cash receipts relating to investing 2,293,944,952.05 1,574,115,586.01
activities
Total cash inflows from investing activities 3,255,963,353.55 2,099,234,682.37
Cash paid for acquisition of fixed assets,
11,264,989.90 11,649,093.77
intangible assets and other long-term assets
Cash payments for investments 19,998,000.00 90,000,000.00
Other cash payments relating to investing 2,669,650,683.28 1,749,321,606.82
activities
Total cash outflows from investing activities 2,700,913,673.18 1,850,970,700.59
Net cash flows from investing activities 555,049,680.37 248,263,981.78
The accompanying notes form an integral part of these financial statements.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CASH FLOW STATEMENT (Continued)
For the Year ended 31 December 2016
(Expressed in Renminbin Yuan)
2019 2018
3. CASH FLOWS FROM FINANCING ACTIVITIES
Cash receipts from borrowings 10,000,000.00 10,000,000.00
Other cash receipts relating to financing 26,701,067,083.61 17,388,748,779.90
activities
Total cash inflows from financing activities 26,711,067,083.61 17,398,748,779.90
Cash repayments for debts 10,000,000.00 10,000,000.00
Cash payments for distribution of dividends,
210,404,986.68 161,361,930.89
profit or interest expenses
Other cash payments relating to financing 26,052,473,492.66 17,614,453,662.11
activities
Total cash outflows from financing activities 26,272,878,479.34 17,785,815,593.00
Net cash flows from financing activities 438,188,604.27 (387,066,813.10)
4. EFFECT OF FOREIGN EXCHANGE RATE
CHANGES ON CASH AND CASH (175,693.26) (310,822.25)
EQUIVALENTS
5. NET INCREASE IN CASH AND CASH
1,076,679,358.37 40,958,255.14
EQUIVALENTS
Add: Cash and cash equivalents at beginning of 1,817,654,598.01 1,776,696,342.87
the year
6. CASH AND CASH EQUIVALENTS 2,894,333,956.38 1,817,654,598.01
AT END OF YEAR
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CASH FLOW STATEMENT (Continued)
For the Year ended 31 December 2016
(Expressed in Renminbin Yuan)
The accompanying notes form an integral part of these financial statements.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS
Year ended 31 December 2019
I Profile of the Company
As approved by the People’s Government of Shenzhen (SFBF (1993) No.356), China National
Accord Medicines Corporation Ltd. (hereinafter referred to as the “the Company”), formerly
known as Shenzhen Health Mineral Water Corp., Ltd., was registered as a joint stock liability
limited company on 1 February 1993 through stock transformation. In March 1993, with the
approval from the Shenzhen Branch of the People’s Bank of China, the Company issued 30
million A shares (including 16.5 million public shares, 3.5 million employee shares and 10 million
corporation shares) and 20 million B shares. After this issuance, the Company’s share capital
was RMB105.00 million. Through converting capital surplus into share capital, bonus issues and
issuance of shares for years, the share capital of the Company increased to 428.13 million as at
31 December 2019.
In November 2000, the Company entered into an Asset Exchange Agreement with Shenzhen
Investment Management Company, the original major shareholder of the Company, to exchange
all the assets and liabilities of the Company as of 31 August 2000 for Shenzhen Investment
Management Company’s 100% equity interests in 11 pharmaceutical companies and certain
properties as well as 51% equity interests in Shenzhen Tefa Modern Computer Co., Ltd. The
above asset exchange proposal was approved by shareholders in the Second Extraordinary
General Meeting on 29 December 2000. The transaction was completed on 8 January 2001.
On 18 February 2004, the Company’s original major shareholder, Shenzhen Investment
Management Company, entered into a stock transfer agreement with Sinopharm Group Co., Ltd.
(hereinafter referred to as “Sinopharm Group”) to transfer its 43.33% shares in the Company to
Sinopharm Group. The legal procedures of the above equity transfer were completed on 9
December 2004. At the same time, as approved by the State-owned Assets Supervision and
Administration Commission of the State Council (GZCQ (2004) No.525) and the China
Securities Regulatory Commission (ZJGSZ (2004) No.94), the nature of these shares changed
from state-owned stock to state-owned legal entity stock and Sinopharm Group became the
largest shareholder of the Company.
On 14 April 2006, the Company’s proposal on reformation of segregated stocks was approved.
To gain liquidity for the restricted stocks of the Company, the holders of the restricted stocks of
the Company agreed to pay the following consideration: based on the stock registration as of 27
April 2006, the Company issued bonus shares on 28 April 2006 at the ratio of 3 shares to every
10 A shares to liquidated A-shareholders which went public on the same day. After this bonus
issue, the total number of shares of the Company remained unchanged with corresponding
changes in the composition of shareholdings.
On 14 March 2014, the Company issued 74,482,543 ordinary shares (A shares) through the
non-public offering. The par value per share is RMB1.00 yuan. The shares shall not be
transferred within 36 months since the issue date. The total number of shares of the Company
was 362,631,943 since the date of issue.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
I Profile of the Company (Continued)
The Company acquired the companies under common control, including Sinopharm Holding
Guoda Pharmacy Co., Ltd. (“Guoda Pharmacy”), Foshan Nanhai Medicine Group Co., Ltd.
(“Foshan Nanhai”), Guangdong South Pharmaceutical Foreign Trade Co., Ltd. (“South Pharma
& Trade”) and Guangdong Dong Fang Uptodate & Special Medicines Co., Ltd. (“Guangdong
Uptodate & Special Medicines”) by issuing shares and raised supporting funds by issuing shares
to Ping An Asset Management Co., Ltd. to acquire the non-controlling interest of South Pharma
& Trade. The relevant shares were successfully issued and listed on 5 January 2017. Afterwards,
the total number of shares of the Company increased to 428,126,983.
As of 31 December 2019, the total share capital was 428,126,983.
The Company is registered with Shenzhen Administration for Industry & Commerce. Its Uniform
Social Credit Code is 91440300192186267U. The operation period of the Company is from 2
August 1986 to the long term. The registered capital of the Company is RMB428.13 million. The
legal representative of the Company is Lin Zhaoxiong.
The approved scope of business of the Company and its subsidiaries (together “the Group”)
includes: the wholesale of Chinese herbal slices, 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; trading of dietary supplements; industrial
investment holding; domestic trade; material supply and the marketing industry (other than
special licensing); the sale of ambulances; trading of second-class and third-class medical
equipment; project investment; property management and leasing of self-owned properties;
pharmacovigilance and medical information consulting; parking operation; logistics and related
services; the package agency business; logistic design; import and export services (excluding
projects that are prohibited by the country; and limited projects have to be approved before
operating).
Subsidiaries consolidated in the financial statements for the current year and change in the
consolidation scope are shown in Note VI.
The Group’s parent and ultimate parent companies are Sinopharm Group and China National
Pharmaceutical Group Corporation (“CNPGC”) , respectively.
These financial statements were authorized for issue by the board of directors of the Company
on 20 April 2020.
125
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIBasis of preparation
The financial statements were prepared in accordance with the Basic Standard and specific
standards of Accounting Standards for Business Enterprises issued by the Ministry of Finance
and the specific accounting standards, application guidance, interpretation and other relevant
regulations issued or amended thereafter (hereafter collectively referred to as “Accounting
Standards for Business Enterprises” or “CAS”).
These financial statements are prepared on a going concern basis.
Except for certain financial instruments, the financial statements have been prepared using the
historical cost as the principle of measurement. Where assets are impaired, provisions for asset
impairment are made in accordance with the relevant requirements.
IIISummary of significant accounting policies and accounting estimates
The Group determines the specific accounting policies and estimates based on its features of
production and operation, primarily comprising the methods of provision for expected credit
losses on receivables, valuation of inventories, depreciation of fixed assets and amortisation of
intangible assets, the measurement model of investment properties, recognition and
measurement of revenue, etc.
1.Statement of compliance with Accounting Standards for Business Enterprises
The financial statements present truly and completely the financial positions of the Group and
the Company as at 31 December 2019, and the financial performance and the cash flows for
the year then ended in accordance with Accounting Standards for Business Enterprises.
2.Accounting year
The Group’s accounting year begins on 1 January and ends on 31 December.
3.Functional currency
The functional currency is Renminbi. The Company’s functional and presentation currency is
Renminbi (RMB). The currency unit is RMB Yuan unless otherwise stated.
4.Business combinations
Business combinations are classified into business combinations involving entities under
common control and business combinations not involving entities under common control.
126
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
4.Business combinations (Continued)
(a)Business combinations involving entities under common control
A business combination involving entities under common control is a business combination in
which all of the combining entities are ultimately controlled by the same party or parties both
before and after the combination, and that control is not transitory. In a business combination
involving entities under common control, the entity that, at the combination date, obtains control
of another combining entity is the absorbing entity, while that other combining entity is the entity
being absorbed. The combination date is the date on which the absorbing entity effectively
obtains control on the entity being absorbed.
Assets and liabilities (including goodwill arising from the ultimate controlling shareholder’s
acquisition of the party being absorbed) that are obtained by the absorbing party in a business
combination shall be measured at their carrying amounts at the combination date as recorded
by the party being absorbed. The difference between the carrying amount of the net assets
obtained and the carrying amount of the consideration paid for the combination (or the
aggregate face value of shares issued as consideration) shall be adjusted to share premium
under capital surplus. If the capital surplus is not sufficient to absorb the difference, any excess
shall be adjusted against retained earnings.
(b)Business combinations involving enterprises not under common control
A business combination not involving entities under common control is a business combination
in which all of the combining entities are not ultimately controlled by the same party or parties
both before and after the combination. In a business combination not involving entities under
common control, the entity that, on the acquisition date, obtains control of another combining
entity is the acquirer, while that other combining entity is the acquiree. The acquisition date is
the date on which the acquirer effectively obtains control of the acquiree.
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.
Goodwill is initially recognised and measured at cost, being the excess of the aggregate of the
fair value of the consideration transferred (or the fair value of the equity securities issued) and
any fair value of the Group’s previously held equity interest in the acquiree over the Group’s
interest in the fair value of the acquiree’s net identifiable assets. After initial recognition,
goodwill is measured at cost less any accumulated impairment losses. Where the aggregate of
the fair value of the consideration transferred (or the fair value of the equity securities issued)
and any fair value of the Group’s previously held equity interest in the acquiree is lower than the
Group’s interest in the fair value of the acquiree’s net identifiable assets, the Group reassesses
the measurement of the fair value of the acquiree’s identifiable assets, liabilities and contingent
liabilities and the fair value of the consideration transferred (or the fair value of the equity
securities issued), together with the fair value of the Group’s previously held equity interest in
the acquiree. If after that reassessment, the aggregate of the fair value of the consideration
transferred (or the fair value of the equity securities issued) and the Group’s previously held
equity interest in the acquiree is still lower than the Group’s interest in the fair value of the
acquiree’s net identifiable assets, the Group recognises the remaining difference in profit or
loss.
127
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
4.Business combinations (Continued)
(b)Business combinations involving enterprises not under common control (Continued)
Where the business combination not involving enterprises under common control is achieved in
stages, the acquirer’s previously held equity interests in the acquiree are remeasured at the fair
value on the acquisition date, with the difference between the fair value and carrying amount
recognised as investment income for the current period. If the acquirer’s previously held equity
interests of the acquiree involve other comprehensive income (“OCI”) under the equity method,
the accounting treatment is conducted on the same basis as would have been required if the
investee had directly disposed of the related assets or liabilities, and the changes in
shareholders’ equity other than net profit or loss, OCI and profit distributions are charged to
profit or loss for the current period on the acquisition date. For financial assets at fair value
through OCI held before the acquisition date, changes in fair value that were accumulated
through OCI will transfer to retained earnings.
5.Preparation of consolidated financial statements
The scope of the consolidated financial statements, which include the financial statements of
the Company and all of its subsidiaries, is determined on the basis of control. A subsidiary is
an entity that is controlled by the Company (such as an enterprise, a deemed separate entity,
or a structured entity controlled by the Company).
In the preparation of the consolidated financial statements, the financial statements of
subsidiaries are prepared for the same accounting year as the Company, using consistent
accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash
flows relating to transactions between members of the Group are eliminated in full on
consolidation.
Where the loss for the current period attributable to non-controlling interests of a subsidiary
exceeds the non-controlling interests of the opening balance of equity of the subsidiary, the
excess shall still be allocated against the non-controlling interests.
For subsidiaries acquired through business combinations not involving entities under common
control, the financial performance and cash flows of the acquiree shall be consolidated from the
date on which the Group obtains control, and continue to be consolidated until the date such
control ceases. While preparing the consolidated financial statements, the Group shall adjust
the subsidiary’s financial statements, on the basis of the fair values of the identifiable assets,
liabilities and contingent liabilities recognised on the acquisition date.
For subsidiaries acquired through business combinations involving entities under common
control, the financial performance and cash flows of the entity being absorbed shall be
consolidated from the beginning of the period in which the combination occurs. While preparing
the comparative financial statements, adjustments are made to related items in the financial
statements for the prior period as if the reporting entity after the combination has been in
existence since the date the ultimate controlling party first obtained the control.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
5.Preparation of consolidated financial statements (Continued)
The Group reassesses whether or not it controls an investee if any change in facts and
circumstances indicates that there are changes to one or more of the three elements of control.
When the Group loses control of a subsidiary in multiple transactions in which it disposes of its
long-term equity investment in the subsidiary in stages, if each of the multiple transactions does
not form part of a bundled transaction, the transactions conducted before the loss of control of
the subsidiary are accounted for in accordance with the accounting policy for partial disposal of
the equity investment in subsidiaries where control is retained. If each of the multiple
transactions forms part of a bundled transaction which eventually results in the loss of control in
the subsidiary, these multiple transactions are accounted for as a single transaction. In the
consolidated financial statements, the difference between the consideration received and the
corresponding proportion of the subsidiary’s net assets (calculated continuously from the
acquisition date) in each transaction prior to the loss of control shall be recognised in other
comprehensive income and transferred to profit or loss when the parent eventually loses control
of the subsidiary.
6. Cash and cash equivalents
Cash comprises the Group’s cash on hand and bank deposits that can be readily withdrawn on
demand. Cash equivalents are short-term, highly liquid investments that are readily convertible
into 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 capitalized as part of the cost of those
assets. Non-monetary items denominated in foreign currencies that are measured at historical
cost are translated at the balance sheet date using the spot exchange rates at the dates of the
transactions.
Foreign currency cash flows are translated using the spot exchange rates prevailing on the
dates of cash flows. The effect of exchange rate changes on cash is presented separately in
the cash flow statement.
129
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
8.Financial instruments
Financial instruments are the contracts that formed the financial assets of one entity, and at the
same time formed the financial liabilities or equity instruments of other entities.
Recognition and derecognition of financial instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the
contractual provisions of the instrument.
The Group derecognises a financial asset, part of a financial asset or group of financial assets,
i.e., offset from the accounts and statement of financial position, if either of the following
conditions is satisfied:
(1)The contractual rights to the cash flows from the financial asset expire; or
(2) The contractual rights to the cash flows from the financial asset are transferred out, or obligated
to transfer out all generated cash flows on receipt; and (a) substantially all the risks and
rewards of ownership of the financial asset are transferred to the transferee; or (b) the Group
neither transfers nor retains substantially all the risks and rewards of ownership of the financial
asset, but has not retained control of the financial asset.
A financial liability is derecognised when the obligation under the liability is discharged or
cancelled, or expires. When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as a derecognition of the original liability
and a recognition of a new liability, and the difference between the respective carrying amounts
is recognised in profit or loss.
Regular way purchases and sales of financial assets are recognised and derecognised using
trade date accounting. Regular way purchases or sales are purchases or sales of financial
assets that require delivery within the period generally established by regulation or convention
in the marketplace. The trade date is the date that the Group committed to purchase or sell a
financial asset.
130
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
8.Financial instruments (Continued)
Classification and measurement of financial assets
The classification of financial assets at initial recognition depends on the financial asset’s
contractual cash flow characteristics and the Group’s business model for managing them:
financial assets at fair value through profit or loss, financial assets at amortised cost, or
financial assets at fair value through other comprehensive income, according to the Group’s
business model for managing financial assets and the contract cash flow characteristics of the
financial assets.
Financial assets are measured at fair value at initial recognition, provided that accounts
receivable or bills receivable not containing significant financing components or for which
financing components of not more than 1 year are not taken into consideration shall be
measured at their transaction prices at initial recognition.
For financial assets at fair value through profit or loss, the relevant transaction costs are directly
recognised in profit or loss; while for other financial assets, the relevant transaction costs are
recognised in their initial recognition amount.
The subsequent measurement of financial assets depends on their classification as follows:
Debt investments measured at amortised cost
The Group measures financial assets at amortized cost if both of the following conditions are
met: The financial asset is held within a business model with the objective to hold financial
assets in order to collect contractual cash flows; The contractual terms of the financial asset
give rise on specified dates to cash flows that are solely payments of principal and interest on
the principal amount outstanding. Interest income of this kind of financial assets is recognised
using the effective interest method. Gains and losses are recognised in the income statement
when the asset is derecognised, modified or impaired.
Debt investments at fair value through other comprehensive income
The Group measures debt investments at fair value through other comprehensive income if
both of the following conditions are met: the financial asset is held within a business model with
the objective of both holding to collect contractual cash flows and selling; the contractual terms
of the financial asset give rise on specified dates to cash flows that are solely payments of
principal and interest on the principal amount outstanding. Changes in fair values are
recognised in other comprehensive income except that interest income, impairment losses and
exchange differences are recognised in current profit or loss. Upon derecognition, the
cumulative fair value change recognised in other comprehensive income is transferred to profit
or loss.
131
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
8.Financial instruments (Continued)
Classification and measurement of financial assets (Continued)
Equity investments at fair value through other comprehensive income
The Group irrevocably chooses to designate some non-tradable equity instrument investments
as financial assets at fair value through other comprehensive income. Only the relevant
dividend income (excluding dividend income explicitly recovered as part of investment cost) is
recognised in profit or loss, and subsequent changes in fair value are included in other
comprehensive income without provision for impairment. When financial assets are
derecognised, the accumulated gains or losses previously recognised in other comprehensive
gains are transferred from other comprehensive income and recognised in retained earnings.
Financial assets at fair value through profit or loss
The financial assets other than the above financial assets measured at amortised cost and
financial assets at fair value through other comprehensive income are classified as financial
assets at fair value through profit or loss. Such financial assets are subsequently measured at
fair value with net changes in fair value recognised in profit or loss except for the derivatives
designated as hedging instruments in an effective hedge.
Only when an accounting mismatch is eliminated or significantly decreased, financial assets are
designated as financial assets at fair value through profit or loss at initial recognition.
When an enterprise initially designates a financial asset as a financial asset at fair value
through profit or loss, it cannot be reclassified to other financial assets; and other financial
assets cannot be re-designated after initial recognition as financial assets measured at fair
value through profit or loss.
Classification and measurement of financial liabilities
The Group’s financial liabilities are, on initial recognition, classified into financial liabilities at fair
value through profit or loss, other financial liabilities or derivatives designated as effective
hedging instruments. For financial liabilities at fair value through profit or loss, the relevant
transaction costs are directly recognised in profit or loss, and the related transaction costs of
other financial liabilities are recognised in their initial amount.
132
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
8.Financial instruments (Continued)
Classification and measurement of financial liabilities (Continued)
Subsequent measurement of financial liabilities is determined by its classification:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading
(including derivative instruments attributable to financial liabilities) and financial liabilities
designated upon initial recognition as at fair value through profit or loss. Financial liabilities
held for trading (including derivative instruments attributable to financial liabilities) are
subsequently measured at fair value. All changes in fair value of such financial liabilities are
recognised in profit or loss. Financial liabilities designated at fair value through profit or loss are
subsequently measured at fair value and gains or losses are recognised in profit or loss, except
for the gains or losses arising from the Group’s own credit risk which are presented in other
comprehensive income. If gains or losses arising from the Group’s own credit risk which are
presented in other comprehensive income will lead to or expand accounting mismatch in profit
or loss, the Group will include all the changes in fair value (including the amount affected by
changes in the Group’s own credit risk) of such financial liabilities in profit or loss.
Only if one of the following conditions is met can financial liabilities be designated as financial
liabilities at fair value through profit or loss on initial recognition:
(1) It can eliminate or significantly reduce the accounting mismatch.
(2) The formal written document of the risk management or investment strategy has stated that
the portfolio of financial instruments is managed, evaluated and reported to key managers
on the basis of fair value.
(3) The financial liability is a hybrid instrument that contains one or more embedded derivatives,
unless the embedded derivatives have no significant change in the cash flows of the hybrid
instrument, or the embedded derivatives should obviously not be separated from the related
hybrid instruments.
(4) Mixed instruments contain embedded derivatives that need to be split but cannot be
measured separately at the time of acquisition or on subsequent balance sheet days.
When an enterprise designates a financial liability as a financial liability at fair value through
profit or loss, it cannot be reclassified as other financial liabilities; nor can other financial
liabilities be re-designated as financial liabilities at fair value through profit or loss after initial
recognition.
Other financial liabilities
For such financial liabilities, subsequent measurement is made at amortized cost using the
effective interest rate method.
133
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
8.Financial instruments (Continued)
Impairment of financial assets
Based on the expected credit losses (“ECLs”), the Group recognises an allowance for ECLs for
the financial assets measured at amortised cost, debt investments at fair value through other
comprehensive income and contract assets.
For accounts receivable and contract assets that do not contain significant financing
components, the Group uses a simplified measurement method to measure loss provisions in
accordance with the amount of expected credit losses equivalent to the entire life cycle.
For accounts receivable and contract assets with significant financing components, the Group
uses a simplified measurement method to measure loss provisions in accordance with the
amount of the expected credit loss equivalent to the entire lifetime.
For financial assets other than those measured with simplified valuation methods, the Group
evaluates at each balance sheet date whether its credit risk has significantly increased since
initial recognition. The period during which credit risk has not significantly increased since initial
recognition is considered the first stage, at which the Group shall measure the loss provision
based on the amount of the expected credit loss for the next 12 months and shall compute
interest income according to the book balance and effective interest rate; the period during
which credit risk has significantly increased since initial recognition although no credit
impairment has occurred is considered the second stage, at which the Group shall measure the
loss provision based on the amount of the expected credit loss for the entire valid period and
shall compute interest income according to the book balance and effective interest rate; and the
period during which credit impairment has occurred after initial recognition is considered the
third stage, at which the Group shall measure the loss provision based on the amount of the
expected credit loss for the entire period and shall compute interest income according to the
amortised cost and effective interest rate. For financial instruments with relatively low credit risk
at the balance sheet date, the Group assumes that its credit risk has not significantly increases
since initial recognition.
The Group evaluates the expected credit losses on financial instruments on a single and
combined basis. Taking into account the credit risk characteristics of different customers, the
Group evaluates the expected credit losses on accounts receivable based on the aging portfolio.
Refer to Note VIII (3) for the disclosure of the Group's criteria for judging the significant increase
in credit risk, the definition of assets with impaired credit losses, and the assumption of
measuring expected credit losses.
When the Group no longer reasonably expects to be able to recover all or part of the contract
cash flows of the financial assets, the Group directly writes down the carrying amount of the
financial asset.
134
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
8.Financial instruments (Continued)
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance
sheet if there is a currently enforceable legal right to offset the recognised amounts and there is
an intention to settle on a net basis, or to realize the financial assets and settle the financial
liabilities simultaneously.
Transfer of financial assets
A financial asset is derecognised when the Group has transferred substantially all the risks and
rewards of the asset to the transferee. A financial asset is not derecognised when the Group
retains substantially all the risks and rewards of the financial asset.
If the Group neither transfers nor retains substantially all the risks and rewards of ownership of
financial assets, the related accounting treatments of such financial assets are as follows: the
Group derecognises financial assets when it retains no control on them, and associated assets
and liabilities are recognised at the same time. If the Group retains control of the financial asset,
it recognizes the financial asset to the extent of its continuing involvement in the transferred
financial asset and recognizes an associated liability.
Continuing involvement that takes the form of a financial guarantee over the transferred asset is
measured at the lower of the original carrying amount of the asset and the financial guarantee.
The amount of the financial guarantee is the maximum amount of consideration that the Group
could be required to repay.
9.Inventories
Inventories include raw materials, work in progress, finished goods, delegate processing
supplies and turnover materials, and are measured at the lower of cost and net realizable
value.
Inventories are initially carried at cost. Cost of inventories comprises all costs of purchase,
costs of conversion and other costs. Cost is determined on the weighted average basis.
Turnover materials include low-value consumables and packing materials, which are on the
immediate write-off basis.
The Group adopts the perpetual inventory system.
At the balance sheet date, inventories are stated at the lower of cost and net realisable value.
The inventories are written down below cost to net realisable value and the write-down is
recognised in profit or loss if the cost is higher than the net realisable value. When the
circumstances that previously caused the inventories to be written down below cost no longer
exist, in which case the net realisable value of inventories becomes higher than the carrying
amount, the amount of the write-down is reversed. The reversal is limited to the amount of the
original write-down, and is recognised in profit or loss.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
9.Inventories (Continued)
Net realizable value is determined based on the estimated selling price in the ordinary course of
business, less the estimated costs to completion and estimated costs necessary to make the
sale and related taxes. Finished goods are written down category by category.
10.Long-term equity investments
Long-term equity investments include equity investments in subsidiaries, joint ventures and
associates.
A long-term equity investment is initially measured at its initial investment cost on acquisition.
For long-term equity investments arising from business combination involving enterprises under
common control, the initial investment cost shall be the share of the carrying amount of equity
of the acquiree in the consolidated financial statements of the ultimate controlling party as at the
combination date. The difference between the initial investment cost and book value of
consideration of combination is adjusted to capital reserves, and to retained earnings if capital
reserves is insufficient. Other comprehensive income recognised before the combination date is
accounted for on the same basis as would have been required if the investee had directly
disposed of the related assets or liabilities. Equity previously recognised resulting from the
investee’s equity changes other than profit or loss, other comprehensive income and profit
distribution is reclassified to profit or loss. Equity which still involves a long-term investment
after disposal is reclassified to profit or loss on a pro-rata basis and equity which swiches to a
financial instrument after disposal is fully reclassified to profit or loss. For long-term equity
investments arising from business combination involving enterprises not under common control,
the investment cost shall be the combination cost. (For a business combination achieved in
stages, the initial investment cost is determined as the sum of the carrying amount of equity of
the acquiree and the additional investment costs on the combination date.) The combination
cost involves the assets paid by the acquirer, liabilities incurred and the fair value of equity
securities. Other comprehensive incomes recognised using the equity method before the
combination date is accounted for on the same basis as would have been required if the
investee had directly disposed of the related assets or liabilities. Equity previously recognised
resulting from the investee’s equity changes other than profit or loss, other comprehensive
income and profit distribution is reclassified to profit or loss. Equity which still involves a long-
term investment after disposal is reclassified to profit or loss on a pro-rata basis and equity
which swiches to a financial instrument after disposal is fully reclassified to profit or loss. The
accumulated changes in the fair value of financial assets at fair value through other
comprehensive income is reclassified to retained earnings when adopting the cost method.
Depending on the way of acquisition of long-term equity investments, the initial investment cost
is determined as follows: For long-term equity investments acquired by way of cash payment,
the initial investment cost includes all directly associated expenses, applicable taxes and fees,
and other necessary expenses. For long-term equity investments acquired by way of issuing
equity securities, the initial investment cost includes the fair value of equity securities. For long-
term equity investments acquired by way of the swap of non-monetary assets, the initial
investment cost shall be determined in accordance with “ASBE No. 7 — Swap of Non-monetary
Assets.” For long-term equity investments acquired by way of debt restructuring, the initial
investment cost shall be determined in accordance with “ASBE No. 12 — Debt Restructuring.”
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
10.Long-term equity investments (Continued)
The Company's financial statements using the cost method of accounting for long-term equity
can exercise control over the investee. 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.
For long-term equity investments accounted for using the cost method, they are measured at
the initial Investment costs. The cost of long-term equity investments is adjusted with additional
investment or divestment. Cash dividends or profit distribution declared by the investees are
recognised as investment income in profit or loss.
The equity method is adopted when the Group has joint control, or exercises significant
influence over the investee. Joint control is the contractually agreed sharing of control of an
arrangement, which exists only when decisions about the relevant activities require the
unanimous consent of the parties sharing control. Significant influence is the power to
participate in the financial and operating policy decisions of the investee, but is not control or
joint control with other parties over those policies.
Under the equity method, where the initial investment cost of a long-term equity investment
exceeds the Group’s interest in the fair value of the investee’s identifiable net assets at the
acquisition date, no adjustment is made to the initial investment cost. Where the initial
investment cost is less than the Group’s interest in the fair values of the investee’s identifiable
net assets at the acquisition date, the difference is charged to profit or loss, and the cost of the
long-term equity investment is adjusted accordingly.
Under the equity method, after the Group has acquired a long-term equity investment, the
Group recognises its share of the investee’s profit or loss, as well as its share of the investee’s
other comprehensive income, as investment income or loss and other comprehensive income,
and adjusts the carrying amount of the investment accordingly. The Group recognises its share
of the investee’s profit or loss after making appropriate adjustments to the investee’s profit or
loss based on the fair value of the investee’s identifiable assets at the acquisition date, using
the Group’s accounting policies and periods. Unrealised profits and losses from transactions
with its joint ventures and associates are eliminated to the extent of the Group’s investments in
the associates or joint ventures (except for assets that constitute a business). The carrying
amount of the investment is reduced based on the Group’s share of any profit distributions or
cash dividends declared by the investee. The Group’s share of net losses of the investee is
recognised to the extent that the carrying amount of the investment together with any long-term
interests that in substance form part of its net investment in the investee is reduced to zero,
except that the Group has the obligations to assume further losses. The Group’s share of the
investee’s equity changes, other than those arising from the investee’s profit or loss, other
comprehensive income or profit distribution, is recognised in the Group’s equity, and the
carrying amount of the long-term equity investment is adjusted accordingly.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
10.Long-term equity investments (Continued)
Upon disposal of a long-term equity investment, the difference between the proceeds actually
received and the carrying amount is recognised in profit or loss. For a long-term equity
investment accounted for using the equity method, when the Group discontinues using the
equity method due to disposal, all amounts previously recognised in other comprehensive
income are accounted for on the same basis as would have been required if the investee had
directly disposed of the related assets or liabilities. Equity previously recognised resulting from
the investee’s equity changes other than profit or loss, other comprehensive income and profit
distribution is reclassified to profit or loss in its entirety. When the Group continues to use the
equity method, the amounts previously recognised in other comprehensive income are
accounted for on the same basis as would have been required if the investee had directly
disposed of the related assets or liabilities and reclassified to profit or loss on a pro-rata basis.
Equity previously recognised resulting from the investee’s equity changes other than profit or
loss, other comprehensive income and profit distribution is reclassified to profit or loss on a pro-
rata basis.
11.Investment properties
Investment properties are properties held to earn rental income and/or for capital appreciation.
Investment properties include land use rights leased out, land use rights held for transfer upon
capital appreciation, and buildings leased out.
Investment properties are measured initially at cost. Subsequent expenditures incurred in
relation to investment properties are included in the cost of investment properties when it is
probable that the associated economic benefits will flow to the Group and their costs can be
reliably measured; otherwise, the expenditures are recognised in profit or loss in the period in
which they are incurred.
138
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
11.Investment properties (Continued)
The Group adopts the cost model for subsequent measurement of investment properties.
Buildings and land use rights are depreciated or amortized to their estimated net residual
values over their estimated useful lives. The estimated useful lives, the estimated net residual
values that are expressed as a percentage of cost and the annual depreciation (amortization)
rates of investment properties are as follows:
Estimated useful lives Estimated residual value Annual depreciation
(amortization) rates
Buildings and constructions 12-35 years 0-5% 2.71-7.92%
Land use rights 30-50 years - 2.00-3.33%
When an investment property is transferred to owner-occupied property, it is reclassified as a
fixed asset or intangible asset at the date of transfer. When an owner-occupied property is
transferred out for earning rentals or for capital appreciation, the fixed asset or intangible asset
is reclassified as an investment property at its carrying amount at the date of transfer.
The investment properties’ useful life, net residual value and depreciation (amortization)
method applied are reviewed and adjusted as appropriate at the end of each year.
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CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
12. Fixed assets
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. 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.
Fixed assets are initially measured at cost and the effect of any expected costs of abandoning
the asset at the end of its use is considered. The cost of a fixed asset is the aggregate cost of
purchase price, related taxes and any directly attributable expenditure for bringing the asset to
its working condition for its intended use.
Fixed assets are depreciated using the straight-line method to allocate the cost of the assets to
their estimated residual values over their estimated useful lives. For the fixed assets that have
been provided for impairment loss, the related depreciation charge is prospectively determined
based upon the adjusted carrying amounts over their remaining useful lives.
Estimated useful lives Estimated residual values Annual depreciation rates
Buildings and constructions 20-35 years 0-5% 2.71-5.00%
Machinery 5-14 years 3-6% 6.79-19.40%
Motor vehicles 3-10 years 0-5% 9.50-33.33%
Office equipment 3-10 years 0-5% 9.50-33.33%
Electronic equipment within 5 years 0% 20% and above
The Group reviews the useful life, estimated net residual value of a fixed asset and the
depreciation method applied at least once at each financial year end, and adjusts for any
change when necessary.
140
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
13.Borrowing costs
Borrowing costs are interest and other costs incurred by the Group in connection with the
borrowing of the funds. Borrowing costs include interest, amortisation of discounts or premiums
related to borrowings, ancillary costs incurred in connection with the arrangement of borrowings,
and exchange differences arising from foreign currency borrowings.
The borrowing costs that are directly attributable to the acquisition, construction or production of
a qualifying asset are capitalised. The amounts of other borrowing costs incurred are
recognised as an expense in the period in which they are incurred. Qualifying assets are
assets (fixed assets, investment properties, inventories, etc.) that necessarily take a substantial
period of time of acquisition, construction or production to get ready for their intended use or
sale.
The borrowing costs shall not be capitalized unless they simultaneously meet the following
requirements:
(1) The asset disbursements have already incurred;
(2) The borrowing costs have already incurred; and
(3) The acquisition and construction or production activities which are necessary to prepare the
asset for its intended use or sale have already started.
When the qualified asset under acquisition and construction or production is ready for the
intended use or sale, the capitalization of the borrowing costs shall be ceased. Borrowing costs
incurred after the intended use or sale shall be recorded in the current profits and losses.
During the period of capitalization, the capitalized amount of interest in each accounting period
shall be calculated and determined in the ways below:
(1) The enterprise shall calculate and determine the interest of a specific loan by deducting
interest income of the loan capital deposit in the bank or investment income obtained from a
temporary investment.
(2) The enterprise shall calculate and determine the to-be-capitalized amount of interest on the
general borrowing by multiplying the weighted average asset disbursement of the part of the
accumulative asset disbursements minus the general borrowing by the capitalization rate of
the general borrowing used.
Capitalisation of borrowing costs is suspended during periods in which the acquisition,
construction or production of a qualifying asset is suspended abnormally by activities other than
those necessary to get the asset ready for its intended use or sale, when the suspension is for
a continuous period of more than 3 months. Borrowing costs incurred during these periods are
recognised as an expense in profit or loss until the acquisition, construction or production is
resumed.
141
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
14.Right-of-use assets (applicable from 1 January 2019)
The right-of-use assets of the Group mainly include buildings, machinery, vehicles, office
equipment and other assets such as land use rights.
At the commencement date of the lease, the Group recognises a right-of-use asset. The cost
of the right-of-use asset comprises: (i) the amount of the initial measurement of the lease
liability; (ii) any lease payments made at or before the commencement date of the lease less
any lease incentives received; (iii) any initial direct cost incurred; and (iv) an estimate of costs
incurred by the lessee in dismantling and removing the underlying asset, restoring the site on
which it is located or restoring the underlying asset to the condition required by the terms and
conditions of the lease. The right-of-use assets are depreciated on a straight-line basis
subsequently by the Group. If the Group is reasonably certain that the ownership of the
underlying asset will be transferred to the Group at the end of the lease term, the Group
depreciates the asset from the commencement date to the end of the useful life of the asset.
Otherwise, the Group depreciates the assets from the commencement date to the earlier of the
end of the useful life of the asset or the end of the lease term.
The Group remeasures the lease liability at the present value of the changed lease payments
and adjusts the carrying amount of the right-of-use assets accordingly, when the carrying
amount of the right-of-use asset is reduced to zero, and there is a further reduction in the
measurement of the lease liability, the Group recognises the remaining amount of the
remeasurement in profit or loss.
15.Construction in progress
The cost of construction in progress is determined according to the actual expenditures
incurred for the construction, including all necessary construction expenditures incurred during
the construction period, borrowing costs that shall be capitalised before the construction is
ready for its intended use, and other relevant expenditures.
An item of construction in progress is transferred to fixed assets when the asset is ready for its
intended use.
142
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
16.Intangible assets
Intangible assets are recognised and measured on initial recognition at cost only if the related
economic benefits will probably flow into the Group and their costs can be measured reliably.
However, the intangible assets acquired through a business combination not involving
enterprises under common control should be measured at fair value separately as intangible
assets when their fair values can be reliably measured.
The useful life of the intangible assets shall be assessed according to the estimated beneficial
period expected to generate economic benefits for the Group. An intangible asset shall be
regarded as having an indefinite useful life when there is no foreseeable limit to the period over
which the asset is expected to generate economic benefits for the Group.
The useful lives of the intangible assets are as follows:
Categories Useful lives
Land use rights Between the approved useful period and the Company’s
operating period
Software 3-5 years
Trademarks 5-10 years
Technology patents 5 years
Distribution network 20 years
Franchis 10 years
Favorable leases 17-20 years
Land use rights obtained by the Group are usually accounted for as intangible assets. As for
the construction of plants, factories and other buildings of the Group, the related land use rights
and other buildings were accounted for as intangible assets and fixed assets, respectively.
Purchase costs of land use rights and buildings were allocated to intangible assets and fixed
assets separately. Purchase costs were recognised as cost of fixed assets, only if the
separation was impracticable.
Intangible assets with a finite useful life are amortised over their estimated useful lives using the
straight-line method. For an intangible asset with a finite useful life, the Group reviews the
useful life and amortization method at least once at each financial year end, and makes
adjustments when necessary.
Land use rights allocated by the State are regarded as an intangible asset with an indefinite
useful life due to an uncertain useful life. The impairment test should be conducted for the
intangible assets with the indefinite service life every year to determine whether the impairment
exists. The intangible assets with the indefinite service life shall not be amortized, and the
Company shall make the review of the service life of the intangible assets during every
accounting period. If evidence prove that useful lives are finite, the Group accounts for the
intangible assets in accordance with intangible assets with a finite useful life.
143
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
16.Intangible assets (Continued)
Internal research and development project
The Group classifies the expenses for internal research and development as research costs
and development costs. All research costs are charged to the current profit or loss as incurred.
Expenditure incurred on projects to develop new products is capitalised and deferred only when
the Group can demonstrate the technical feasibility of completing the intangible asset so that it
will be available for use or sale, its intention to complete and its ability to use or sell the asset,
how the asset will generate future economic benefits (including demonstration that the product
derived from the intangible asset or the intangible asset itself will be marketable or, in the case
of internal use, the usefulness of the intangible asset as such), the availability of technical and
financial resources to complete the project and procure the use or sale of the intangible asset,
and the ability to measure reliably the expenditure during the development. Product
development expenditure which does not meet these criteria is expensed when incurred.
Expenditure for investigation, evaluation and selection of production process and new drug
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 and new drugs
before mass production is capitalized only if all of the following conditions are satisfied:
(1) development of the production process and new drugs has been fully demonstrated by the
technical team;
(2) management has approved the budget of drug production development and new drugs;
(3) market research analysis suggests that the products produced by the new production
technology are able to be promoted;
(4) adequate technical, financial and other resources to complete the development and the
ability to use or sell the intangible asset;
(5) the expenditure attributable to the intangible asset during its development phase can be
reliably measured.
Other development costs that do not meet the conditions above are 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. Capitalized expenditure on the
development phase is presented as development costs in the balance sheet and transferred to
intangible assets at the date that the asset is ready for its intended use.
144
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
17.Impairment of long-term assets
The Group determines the impairment of assets, other than the impairment of inventories,
investment properties measured using the fair value model, deferred tax assets, financial
assets and assets classified as held for sale, using the following methods:
The Group assesses at the balance sheet date whether there is any indication that an asset
may be impaired. If any indication exists that an asset may be impaired, the Group estimates
the recoverable amount of the asset and performs impairment testing. Goodwill arising from a
business combination and an intangible asset with an indefinite useful life are tested for
impairment at least at each year end, irrespective of whether there is any indication that the
asset may be impaired. Intangible assets that have not been ready for their intended use are
tested for impairment each year.
The recoverable amount of an asset is the higher of its fair value less costs to sell and the
present value of the future cash flows expected to be derived from the asset. The Group
estimates the recoverable amount on an individual basis unless it is not possible to estimate the
recoverable amount of the individual asset, in which case the recoverable amount is determined
for the asset group to which the asset belongs. Identification of an asset group is based on
whether major cash inflows generated by the asset group are largely independent of the cash
inflows from other assets or asset groups.
When the recoverable amount of an asset or asset group is less than its carrying amount, the
carrying amount is reduced to the recoverable amount by the Group. The reduction in the
carrying amount is treated as an impairment loss and recognised in profit or loss. A provision
for impairment loss of the asset is recognised accordingly.
For the purpose of impairment testing, the carrying amount of goodwill acquired in a business
combination is allocated from the acquisition date on a reasonable basis, to each of the related
asset groups unless it is impossible to allocate to the related asset groups, in which case it is
allocated to each of the related sets of asset groups. Each of the related asset groups or sets
of asset groups is an asset group or a set of asset groups that is expected to benefit from the
synergies of the business combination and shall not be larger than a reportable segment
determined by the Group.
When testing an asset group (a set of asset groups) to which goodwill has been allocated for
impairment, if there is any indication of impairment, the Group firstly tests the asset group (set
of asset groups), excluding the amount of goodwill allocated, for impairment, i.e., the Group
determines and compares the recoverable amount with the related carrying amount and
recognises any impairment loss. After that, the Group tests the asset group (set of asset
groups), including goodwill, for impairment, the carrying amount of the related asset group (set
of asset groups) is compared to its recoverable amount. If the carrying amount of the asset
group (set of asset groups) is higher than its recoverable amount, the amount of the impairment
loss is firstly used to reduce the carrying amount of the goodwill allocated to the asset group
(set of asset groups), and then used to reduce the carrying amount of other assets (other than
the goodwill) within the asset group (set of asset groups), on a pro-rata basis of the carrying
amount of each asset.
Once the above impairment loss is recognised, it will not be reversed for the value recovered in
the subsequent periods.
145
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
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 recognised as
expenses over more than one year in the current and subsequent periods. Long-term prepaid
expenses are amortized on the straight-line basis over the expected beneficial period and are
presented at actual expenditure net of accumulated amortization.
19.Governmental medical reserve funds and specially approved reserving materials
Appointed by the PRC Government, CNPGC is responsible for purchasing, allocating and
providing the governmental medical reserves, which include the medical products, traditional
Chinese medicine and medical appliances for nation-wide emergency rescue and disaster
relief. Appointed by the Government of Guangxi Province and Guangdong Province, the
Company, Sinopharm Medicine Holding Guangxi Co., Ltd. (“Sinopharm Guangxi”) and
Sinopharm Medicine Holding Guangzhou Co., Ltd. (“Sinopharm Guangzhou”) are responsible
for purchasing, allocating and providing the medical reserves, which include the medical
products needed for serious disasters, epidemics and other emergencies as well as endemic
diseases in Guangxi Province and Guangdong Province. In accordance with the regulation of
CNPGC, being the enterprise which bears the obligation for specially approved medical
reserving materials, the medical reserve funds received from the PRC Government or local
government are recognised as other non-current liabilities. The Group reserves the specially
approved medical reserving materials according to the reserve program (by category and by
quantity), applies dynamic management and recognizes them as other non-current assets.
20.Employee benefits
Employee benefits mainly include short-term employee benefits, post-employment benefits,
termination benefits and other long-term employee benefits incurred in exchange for service
rendered by employees or various forms of rewards or compensation due to severance of labor
relation.
Short-term employee benefits
The actual occurred short-term employee benefits are recognized as liabilities during 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.
Post-employment benefits (defined contribution plans)
The employees in the Group participate in social insurance and unemployment insurance
schemes administrated by the local governments, and the related expenditures are recorded in
cost of related assets or profit or loss in the period when they incurred.
146
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
20.Employee benefits (Continued)
Post-employment benefits (defined benefit plans)
The Group operates a defined benefit pension scheme. No funds have been injected into the
scheme. The cost of benefits provided under the defined benefit scheme is calculated using the
expected benefit accrual unit approach.
Remeasurement arising from defined benefit pension schemes, including actuarial gains or
losses, changes in the asset cap effect (deducting amounts included in net interest) and returns
on scheme assets (deducting amounts included in net interest), is instantly recognised in the
balance sheet and charged to shareholders’ equity through other comprehensive income for the
period during which it is incurred. It will not be reversed to profit and loss in subsequent periods.
Previous service costs are recognised as current expenses when: the defined benefit scheme
is revised, or the relevant restructuring costs or termination benefits are recognised by the
Group, whichever earlier.
Net interest is arrived at by multiplying net liabilities or net assets of defined benefits with a
discount rate. Changes in net obligations of defined benefits are recognised as operating costs
and administration expenses in the income statement. Service costs include current services
costs, past service costs and settlement of profit or loss. Net interest include interest income
from scheme assets, interest expenses for scheme obligations and interest of the asset cap
effect.
Termination benefits
The Group recognizes a liability for termination benefits and charges to profit or loss at the
earlier of the following dates: a) when the Group can no longer withdraw from the termination
plan or the redundancy offer; and b) when the Group recognizes costs or expense for a
restructuring plan which involves the payment of termination benefits.
The Group offers termination benefits to the employees who accept internal retirement
arrangements. Termination benefits refers to salaries and social securities paid to the
employees who voluntarily retire and approved by the management before the legal retirement
age. The Group pays termination benefits from the date of the starting of internal retirement
arrangements to legal retirement age. When meeting the recognition criteria, termination
benefits are recognised as liabilities from the date on which the employees stop offering
services to the legal retirement date and recognised in profit or loss as incurred. The change of
termination benefits’ actuarial assumptions and difference incurred by the adjustment of welfare
standards are recognised in profit or loss as incurred.
The termination benefits expected to be settled within one year since the balance sheet date
are classified as current liabilities.
Other long-term employee benefits
Other long-term employee’ benefits provided to employees shall be recognised and measured
as net liabilities or net assets where provisions regarding post-employment benefits are
applicable, provided that changes shall be included in the current profit and loss or related
asset costs.
147
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
21.Lease liabilities (applicable from 1 January 2019)
At the commencement date of the lease, the Group measures the lease liability at the present
value of the lease payments that are not paid at that date, except for short-term leases and
leases of low-value assets. In calculating the present value of the lease payments, the Group
uses the interest rate implicit in the lease as the discount rate. If that rate cannot be readily
determined, the Group uses the lessee’s incremental borrowing rate. The Group calculates the
interest expenses of the lease liability in each period during the lease term using the constant
periodic rate of interest, and recognises such interest expenses in profit or loss, except those in
the costs of the related asset as required. Variable lease payments that are not included in the
measurement of the lease liabilities are recognised in profit or loss as incurred, except those in
the costs of the related asset as required.
After the commencement date of the lease, the Group remeasures lease liabilities with changed
present value of the lease payments when fixed payment, expected unguaranteed residual
value payable, the interest rate implicit in the lease as the discount rate, purchase options,
options to extend the lease or determination of the lease term change.
22. Provisions
An obligation related to a contingency shall be recognised by the Group as a provision when all
of the following conditions are satisfied, except for contingent considerations and contingent
liabilities assumed in a business combination not involving enterprises under common control:
(1)The obligation is a present obligation of the Group;
(2)It is probable that an outflow of economic benefits from the Group will be required to settle the
obligation; and
(3)The amount of the obligation can be measured reliably.
The provisions are initially measured at the best estimate of the expenditure required to settle
the related present obligation, taking into account factors pertaining to a contingency such as
the risks, uncertainties and time value of money as a whole. The carrying amount of provisions
is reviewed at the balance sheet date. Where there is clear evidence that the carrying amount
of a provision does not reflect the current best estimate, the carrying amount is adjusted to the
current best estimate.
For business combinations not under common control, contingent liabilities of the acquiree
obtained in a business combination shall be measured at fair value in initial recognition. After
initial recognition, subsequent measurement is conducted using the higher of the amount
recognised by provisions and the amount of initial recognition deducting the accumulated
amortization amount determined by the principles of revenue recognition.
148
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
23.Share-based payments
The share-based payments shall consist of equity-settled share-based payments and cash-
settled share-based payments. The term "equity-settled share-based payment" refers to a
transaction in which the group grants shares or other equity instruments as a consideration in
return for services.
The equity-settled share-based payment in return for employee services shall be measured at
the fair value of the equity instruments granted to the employees. As to an equity-settled share-
based payment in return for services of employees, if the right may be exercised immediately
after the grant, the fair value of the equity instruments shall, on the date of the grant, be
included in the relevant cost or expense and the capital reserves shall be increased
accordingly. As to an equity-settled share-based payment in return for employee services, if the
right cannot be exercised until the vesting period comes to an end or until the prescribed
performance conditions are met, then on each balance sheet date within the vesting period, the
Group shall make the best estimate of the number of vested equity instruments based on the
latest movement of the granted employee, the content of prescribed performance and other
conditions. Based on the best estimate, the services obtained in the current period shall be
included in the relevant costs or expenses and the capital reserves at the fair value of the
equity instruments on the date of the grant. The fair value of the equity instruments is
determined using the binomial model.
The cost of equity-settled transactions is recognised, together with a corresponding increase in
capital reserves, over the period in which the specified performance or service conditions are
fulfilled. The cumulative expense recognised for equity-settled transactions at each balance
sheet date until the vesting date reflects the extent to which the vesting period has expired and
the Group’s best estimate of the number of equity instruments that will ultimately vest.
For awards that do not ultimately vest because non-market performance and service conditions
have not been met, no expense is recognised. Where awards include a market or non-vesting
condition, the transactions are treated as vesting irrespective of whether the market or non-
vesting condition is satisfied, provided that all other performance and service conditions are
satisfied.
Where the terms of an equity-settled award are modified, as a minimum an expense is
recognised as if the terms had not been modified, if the original terms of the award are met. In
addition, an expense is recognised for any modification that increases the total fair value of the
share-based payments, or is otherwise beneficial to the employee as measured at the date of
modification.
Where an equity-settled award is cancelled, it is treated as if it had vested on the date of
cancellation, and any expense not yet recognised for the award is recognised immediately. This
includes any award where non-vesting conditions within the control of either the Group or the
employee are not met. However, if a new award is substituted for the cancelled award, and is
designated as a replacement award on the date that it is granted, the cancelled and new
awards are treated as if they were a modification of the original award, as described in the
previous paragraph.
149
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
23.Share-based payments (Continued)
A cash-settled share-based payment shall be measured in accordance with the fair value of the
liability calculated and confirmed based on the shares or other equity instruments undertaken
by an enterprise. As to a cash-settled share-based payment instruments, if the right may be
exercised immediately after the grant, the fair value of the liability undertaken by the enterprise
shall, on the date of the grant, be included in the relevant costs or expenses, and the liabilities
shall be increased accordingly. As to a cash-settled share-based payment, if the right may not
be exercised until the vesting period comes to an end or until the specified performance
conditions are met, on each balance sheet date within the vesting period, the services obtained
in the current period shall, based on the best estimate of the information about the exercisable
right, be included in the relevant costs or expenses and the corresponding liabilities at the fair
value of the liability undertaken by the Group. The Group shall, on each balance sheet date and
on each account date prior to the settlement of the relevant liabilities, re-measure the fair
values of the liabilities and include the changes in the current profits and losses.
24.Revenue from contracts with customers
The group recognizes revenue when it has fulfilled its obligations under the contract, i, e. when
the customer acquires control relevant goods or services. Acquiring control over the goods or
services refers to the ability to dominate the use of the goods or the portion of services and to
derive almost all the economic benefits therefrom.
Contracts for sale of goods
The contracts for the sale of goods between the Group and its customer usually only contain
the performance obligations for the transfer of goods. The Group generally recognizes revenue
at the point of transferring the control of goods on the basis of a combination of the following
factors: the current right to collect the goods, the transfer of major risks and benefits in the
ownership of the goods, and the transfer of the legal ownership of the goods, the transfer of
physical assets of the goods and that the customers have accepted the goods.
Service contracts
The service contracts between the Group and its customers usually consist of performance
obligations such as storage and logistics and so on. As the Group's performance of contracts is
at the same time when the customer obtains and consumes the economic benefits of the
performance of the Group, and the Group has the right to collect receivables from the
performance of contacts that has been completed to date, the Group regards it as a contract
obligation over a period of time, except that the progress of performance cannot be reasonably
determined. The Group determines the progress of the performance of contracts in accordance
with the input method. If the progress of performance of contracts cannot be reasonably
determined and the cost incurred by the Group is expected to be compensated, the revenue is
recognised on the basis of the incurred costs until the progress of performance of contacts can
be reasonably measured.
150
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
24.Revenue from contracts with customers (Continued)
Variable consideration
Some of the Group's contracts with customers including arrangements of sales rebates (list
items in accordance with the customer’s actual conditions, such as early completion awards or
others) result in variable consideration. The Group determines the best estimate of variable
consideration by using the expected value method or the most likely amount method. However,
the transaction price including variable consideration is only to the extent that it is highly
probable that a significant reversal in the amount of cumulative revenue recognised will not
occur when the uncertainty associated with the variable consideration is subsequently resolved.
Consideration payable to customers
Where consideration is payable by the Group to a customer, such consideration payable shall
be deducted against the transaction price, and against current revenue upon the recognition of
revenue or the payment of (or the commitment to pay) the consideration to the customer
(whichever is later), save for consideration payable to the customer for the purpose of acquiring
from the customer other clearly separable products.
Return clauses
In connection with sales with a return clause, revenue is recognised according to the amount of
consideration it expects to be entitled to for the transfer to a customer when the customer
acquires control of the relevant products. Amounts expected to be refunded for the return of
sales are recognised as liabilities. At the same time, the balance of the carrying value of the
product expected to be returned upon transfer less expected costs for the recall of such product
(including an impairment loss of the recalled product) shall be recognised as an asset (i.e. cost
of return receivables), and the net amount of the carrying value of the transferred product upon
the transfer less the aforesaid asset cost shall be transferred to cost. At each balance sheet
date, the Group reassesses the future return of sales and remeasures the above assets and
liabilities.
Significant financing component
Where a contract contains a significant financing component, the Group determines transaction
prices based on amounts payable assumed to be settled in cash by customers immediately
upon the acquisition of control over the products. The difference between such transaction price
and contract consideration is amortised over the contract period using the effective interest rate
method based on a ratio that discounts the nominal contractual consideration to the current
selling price of the products.
The Group shall not give consideration to any significant financing component in a contract if
the gap between the customer’s acquisition of control over the products and payment of
consideration is expected to be less than 1 year.
151
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
24.Revenue from contracts with customers (Continued)
Warranty clauses
The Group provides quality assurance for products sold and assets built in accordance with
contract terms and laws and regulations. The accounting treatment of quality assurance in the
form of warranty assuring customers products sold are in compliance with required standards is
set out in Note III (22). Where the Group provides a service warranty for a standalone service in
addition to the assurance of compliance of products with required standards, such warranty is
treated as a stand-alone contractual performance obligation, and a portion of the transaction
price shall be allocated to the service warranty based on a percentage of the stand-alone price
for the provision of the product and service warranty. When assessing whether a warranty is
rendering a stand-alone service in addition to providing guarantee to customers that all sold
goods are in compliance with required standards, the Group will consider whether or not such
warranty is a statutory requirement, the term of the warranty and the nature of the Group’s
undertaking to perform its obligations.
Reward points program
The Group grants reward points to customers when selling goods. Customers can use reward
points to redeem free or discounted goods provided by the Group. This reward points program
provides significant rights to customers, and the Group considers it as an individual
performance obligation, and apportions part of the transaction prices to reward points based on
pricing of goods or services with warranty clauses. Revenue is recognised when customers
obtain goods redeemed or when reward points expire.
Principal responsible person/proxy
For goods or other assets obtained from a third party which were transferred later to customers,
the Group has the right to decide, independently, the pricing of goods. This means that the
Group has obtained control over related goods before transferring to customers. Therefore, the
Group is the principal responsible person, and revenue is recognised based on the total amount
of consideration received or receivable. Otherwise, the Group is proxy, and revenue is
recognised based on expected commission. This amount should be the total amount of
consideration received or receivable net of the amount payable to other parties, or based on the
fixed amount or percentage.
152
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
25.Contract assets and contract liabilities
The Group presents contract assets or contract liabilities on the balance sheet according to the
relationship between contractual performance obligations and customer payments. Contract
assets and contract liabilities under the same contract are presented on a net basis after set-
off.
Contract assets
The right to receive consideration following the transfer of products to customers which is
dependent on factors other than the passage of time is presented as contract assets.
For details of the Group’s determination and accounting treatment of expected credit losses
from contract assets, please refer to Note III (8).
Contract liabilities
The obligation to pass products to customers in connection with customer consideration
received or receivable is presented as contract liabilities, for example, amounts received prior
to the transfer of the promised products.
153
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
26.Assets relating to contract cost
The Group’s assets relating to contract costs include the contract acquisition costs and contract
performance costs, presented respectively under inventories, other current assets and other
non-current assets.
Where the Group expects the incremental costs for acquiring a contract to be recoverable, such
contract acquisition costs are recognised as an asset (unless the amortisation period of the
asset is not more than 1 year).
Costs incurred by the Group for the performance of a contract are recognised as an asset as
contract performance costs if they do not fall under the scope of the relevant standards for
inventories, fixed assets or intangible assets but meet all the following conditions:
(1) They are directly related to a current or anticipated contract, including direct labour, direct
materials, manufacturing expenses (or similar expenses), to be borne by customers as
specifically stipulated, and otherwise incurred solely in connection with the contract;
(2) they will increase the resources to be utilised in the Company’s future performance of its
contractual obligations; and
(3) they are expected to be recoverable.
The Group amortises assets relating to contract costs on the same basis as that for the
recognition of revenue relating to such assets and recognises the amortised assets in current
profit or loss.
For assets relating to contract costs whose carrying value is higher than the difference between
the following two items, the Group makes provision for impairment for the excess to be
recognised as asset impairment losses:
(1) The remaining consideration expected to be obtained as a result of the transfer of goods
relating to such assets;
(2) Estimated costs to be incurred in connection with the transfer of relevant goods
In the event that the difference between (1) and (2) becomes higher than the carrying value of
such assets as a result of changes in the factors of impairment for previous periods, previous
provisions for asset impairment losses should be written back and included in current profit or
loss, provided that the asset’s carrying value following the write-back shall not exceed the
carrying value that such assets would have on the date of write-back were there no provision
for impairment.
154
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
27.Government grants
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.
Government grants related to assets refer to government assets which are granted to
enterprises for the long-term assets formed by acquisition, construction or in other manners.
Government grants related to income refer to government grants other than those related to
assets.
Government grants related to income to be used as compensation for future expenses or
losses shall be recognised as deferred income and shall be charged to current profit or loss or
be used to write down the relevant loss, during the recognition of the relevant cost expenses or
losses; or used as compensation for relevant expenses or losses already incurred by
enterprises shall be directly charged to the profit or loss account in the current period or used to
write down the relevant cost.
The government grants related to assets shall be used to write down the book value of the
relevant assets or be recognised as deferred income. The government grants related to assets,
recognised as deferred income, shall be charged to profit and loss reasonably and
systematically in stages over the useful lives of the relevant assets. The government grants
measured at a nominal amount shall be directly charged to current profit or loss. If any related
asset is sold, transferred, written off or destroyed before the end of its useful life, the balance of
the undistributed deferred income shall be transferred to the current gain or loss on disposal of
the asset.
155
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
28.Income tax
Income tax comprises current and deferred tax. Income tax is recognised as income or
expense in profit or loss, or recognised directly in equity if it arises from a business combination
or relates to a transaction or event which is recognised directly in equity.
Current tax liabilities or assets arising from the current and prior periods at the amount
expected to be paid by the Group or returned by the tax authority are calculated according to
related tax laws.
Deferred tax is provided using the balance sheet liability method, on all temporary differences
at the balance sheet date between the tax bases of assets and liabilities and their carrying
amounts, and temporary differences between the tax bases and the carrying amounts of the
items, which have a tax base according to related tax laws but are not recognised as assets
and liabilities.
Deferred tax liabilities are recognised for all taxable temporary differences, except:
(1) when the taxable temporary difference arises from the initial recognition of goodwill, or an
asset or liability in a transaction that is not a business combination and, at the time of
transaction, affects neither accounting profit nor taxable profit or loss; and
(2) in respect of taxable temporary differences associated with investments in subsidiaries,
associates and joint ventures, when the timing of the reversal of the temporary differences
can be controlled and it is probable that the temporary differences will not be reversed in
the foreseeable future.
Deferred tax assets are recognised for all deductible temporary differences, and the
carryforward of unused tax losses and any unused tax credits. Deferred tax assets are
recognised to the extent that it is probable that taxable profit will be available against which the
deductible temporary differences, the carryforward of unused tax losses and unused tax credits
can be utilised, except:
(1) when the deductible temporary difference arises from the initial recognition of an asset or
liability in a transaction that is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor taxable profit or loss; and
(2) in respect of the deductible temporary differences associated with investments in
subsidiaries, associates and joint ventures, deferred tax assets are only recognised to the
extent that it is probable that the temporary differences will be reversed in the foreseeable
future and taxable profit will be available against which the temporary differences can be
utilised in the future.
156
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
28.Income tax (Continued)
At the balance sheet date, deferred tax assets and 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, in
accordance with the requirements of tax laws. The measurement of deferred tax assets and
deferred tax liabilities reflects the tax consequences that would follow from the manner in which
the Group expects, at the balance sheet date, to recover the assets or settle the liabilities.
The carrying amount of deferred tax assets is reviewed at the balance sheet date and reduced
to the extent that it is no longer probable that sufficient taxable profit will be available in future
periods to allow the deferred tax assets to be utilised. Unrecognised deferred tax assets are
reassessed at the balance sheet date and are recognised to the extent that it has become
probable that sufficient taxable profit will be available to allow all or part of the deferred tax
asset to be recovered.
Deferred tax assets and deferred tax liabilities are offset if and only if the Group has a legally
enforceable right to set off current tax assets and current tax liabilities, and the deferred tax
assets and deferred tax liabilities relate to income taxes levied by the same taxation authority
on either the same taxable entity or different taxable entities which intend either to settle current
tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities
simultaneously, in each future period in which significant amounts of deferred tax liabilities or
assets are expected to be settled or recovered.
29.Leases (applicable from 1 January 2019)
Identification of leases
At inception of a contract, the Group assesses whether the contract is, or contains, a lease. A
contract is, or contains, a lease if the contract conveys the right to control the use of an
identified asset for a period of time in exchange for consideration. To assess whether a
contract conveys the right to control the use of an identified asset for a period of time, the
Group assesses whether, throughout the period of use, the customer has both of the right to
obtain substantially all of the economic benefits from use of the identified asset and the right to
direct the use of the identified asset.
Identification of separate lease components
For a contract that contains multiple separate lease components, the Group separates the
components of the contract and accounts for each separate lease component. The right to use
an underlying asset is a separate lease component if both:
(1) the lessee can benefit from use of the underlying asset either on its own or together with
other resources that are readily available to the lessee; and
(2) the underlying asset is neither highly dependent on, nor highly interrelated with, the other
underlying assets in the contract.
157
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
29.Leases (applicable from 1 January 2019) (Continued)
Separating lease components and non-lease components
For a contract that contains lease components and non-lease components, the Group accounts
for lease components and non-lease components separately as a lessor or a lessee.
Assessment of the lease term
The lease term is the non-cancellable period of a lease for which the Group has the right to use
an underlying asset. If the Group has an option to extend the lease, that is, the Group has the
right to extend the lease, and is reasonably certain to exercise that option, the lease term also
includes periods covered by an option to extend the lease. If the Group has an option to
terminate the lease, that is, the Group has the right to terminate the lease, but is reasonably
certain not to exercise that option, the lease term includes periods covered by an option to
terminate the lease. The Group reassesses whether it is reasonably certain to exercise an
extension option, purchase option, or not to exercise a termination option, upon the occurrence
of either a significant event or a significant change in the circumstances that is within the control
of the Group and affects whether the Group is reasonably certain to exercise an option not
previously included in its determination of the lease term.
As lessee
The Group accounts as a lessee applying Note III (15) and Note III (21).
Lease modifications
Lease modification is a change in the scope of a lease, or the consideration for a lease, that
was not part of the original terms and conditions of the lease, for example, adding or
terminating the right to use one or more underlying assets, or extending or shortening the
contractual lease term.
The Group accounts for a lease modification as a separate lease if both:
(1) the modification increases the scope of the lease by adding the right to use one or more
underlying assets; and
(2) the consideration for the lease increases by an amount commensurate with the stand-
alone price for the increase in scope and any appropriate adjustments to that stand-alone
price to reflect the circumstances of the particular contract.
For a lease modification that is not accounted for as a separate lease, at the effective date of
the lease modification the Group remeasures the lease liability by discounting the revised lease
payments using a revised discount rate. The revised discount rate is determined as the interest
rate implicit in the lease for the remainder of the lease term, or the lessee’s incremental
borrowing rate at the effective date of the modification, if the interest rate implicit in the lease
cannot be readily determined.
158
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
29.Leases (applicable from 1 January 2019) (Continued)
As lessee (Continued)
Lease modifications (Continued)
For a lease modification that is not accounted for as a separate lease, the Group accounts for
the remeasurement of the lease liability by:
(1) decreasing the carrying amount of the right-of-use asset to reflect the partial or full
termination of the lease for lease modifications that decrease the scope of the lease, and
recognising the gain or loss relating to the partial or full termination of the lease in profit or
loss; or
(2) making a corresponding adjustment to the right-of-use asset for all other lease
modifications.
Short-term leases and leases of low-value assets
The Group considers a lease that, at the commencement date of the lease, has a lease term of
12 months or less, and does not contain any purchase option as a short-term lease; and a
lease for which the value of the individual underlying asset is not more than RMB40,000 when it
is new as a lease of low-value assets. If the Group subleases an asset, or expects to sublease
an asset, the head lease does not qualify as a lease of a low-value asset. The Group does not
recognise the right-of-use assets and lease liabilities for short-term leases and low-value
assets. The Group recognises lease payments on short-term leases and leases of low-value
assets in the costs of the related asset or profit or loss on a straight-line basis over the lease
term.
As lessor
A lease is classified as a finance lease if it transfers substantially all the risks and rewards
incidental to ownership of an underlying asset, except that a lease is classified as an operating
lease at the inception date. The Group, as an intermediate lessor, classifies the sublease by
reference to the right-of-use asset arising from the head lease.
As lessor of an operating lease
Rent income under an operating lease is recognised on a straight-line basis over the lease
term, through profit or loss. Variable lease payments that are not included in the measurement
of lease receivables are charged to profit or loss as incurred.
The Group accounts for a modification to an operating lease as a new lease from the effective
date of the modification, considering any prepaid or accrued lease payments relating to the
original lease as part of the lease payments for the new lease.
159
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
30.Leases (applicable in 2018)
Finance leases are leases with the whole risks and rewards related to the asset substantially
transferred. The other kinds of leases are nominated operating leases.
As lessee of operating leases
Rental expenses under operating leases are recognised as relevant asset costs or in current
profit or loss on the straight-line basis over the lease term. Contingent rental is charged to
current profit or loss when incurred.
As lessor of operating leases
Rental income under operating leases are recognised as profit/loss for the current period on a
straight-line basis over the lease term. Contingent rental is charged to current profit or loss
when incurred.
As lessee under finance leases
An asset held under finance leases is initially recognised at the lower of the leased assets’ fair
value and the present value of minimum lease payments on the lease commencement date.
The amount of long-term payables will be recognised as minimum lease payments accordingly,
and the differences between the leased assets’ fair value and the present value of minimum
lease payments will be recorded as unrecognised financing costs which will be amortised using
the effective interest method over the term of the relevant lease. Contingent rentals will be
recognised in profit or loss for the period when they are actually incurred.
Fixed assets that are held under finance leases are depreciated by applying the same policy as
that for the fixed assets owned by the Group. If it can be reasonably determined that the
ownership of the leased asset can be obtained at the end of the lease term, the leased asset is
depreciated over its useful life; otherwise, the leased asset is depreciated over the shorter of
the lease term and its useful life.
31.Dividend distribution
Cash dividend distribution is recognised as a liability in the period in which it is approved by
shareholders at the annual shareholders’ meeting.
160
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
32.Fair value measurement
At each balance sheet date, the Group measures the fair value of equity instrument
investments. Fair value means the price receivable from the disposal of an asset or required to
be paid for the transfer of a liability in an orderly transaction incurred by market participants on
the measurement date. The Group measures assets or liabilities at fair value with the
assumption that the orderly transaction of asset disposal or the transfer of liabilities takes place
in the major market for the relevant assets or liabilities. Where there is no major market, the
Group assumes that such transaction takes place in the most favourable market for the relevant
assets or liabilities. The major market (or most favourable market) is a trading market which the
Group has access to on the measurement date. The Group adopts assumptions used by
market participants when they price the asset or liability with the aim of maximising its
economic benefits.
The measurement of non-financial assets measured at fair value should take into account the
ability of market participants to utilise the asset in the best way for generating economic
benefits, or the ability to dispose of such asset to other market participants who are able to
utilise the asset in the best way for generating economic benefits.
The Group adopts valuation techniques that are appropriate in the current circumstances and
supported by sufficient usable data and other information. Observable input will be used first
and foremost. Unobservable input will only be used when it is not possible or practicable to
obtain observable input.
The fair value hierarchy in which an asset or liability is measured or disclosed in the financial
statements at fair value will be determined on the basis of the lowest level of input which is
significant for the fair value measurement as a whole. Input at the first level represents
unadjusted quoted prices in an active market for the acquisition of the same asset or liability on
the measurement date. Input at the second level represents directly or indirectly observable
assets or liabilities apart from input at the first level. Input at the third level represents
unobservable input for the asset or liability.
At each balance sheet date, the Group reassesses assets and liabilities measured at fair value
on an ongoing basis recognised in the financial statements to determine whether the level of
fair value measurement should be changed.
33.Segment information
The Group identifies operating segments based on the internal organization structure,
management requirements and internal reporting system, and discloses segment information of
reportable segments which is determined on the basis of operating segments.
An operating segment is a component of the Group that satisfies all of the following conditions:
(1) the component is able to earn revenues and incur expenses from its ordinary activities; (2)
the component’s 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.
161
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
34.Significant accounting judgements and estimates
The preparation of the financial statements requires management to make judgements,
estimates and assumptions that affect the reported amounts of revenue, expenses, assets and
liabilities, and their accompanying disclosures, and the disclosure of contingent liabilities at the
balance sheet date. Uncertainty about these assumptions and estimates could result in
outcomes that could require a material adjustment to the carrying amounts of the assets or
liabilities affected in the future.
Judgements
In the process of applying the Group’s accounting policies, management has made the
following judgements, which have the most significant effect on the amounts recognised in the
financial statements:
Operating leases – as lessor
The Group signed lease contracts for investment properties. The Group considers these leases
as operating leases because according to the lease contract terms, the Group reserves all
significant risks and rewards of ownership of the properties.
Business model
The classification of financial assets at initial recognition is dependent on the Group’s business
model for managing the assets. Factors considered by the Group in judging the business model
include enterprise valuation, the method of reporting the results of financial assets to key
management members, risks affecting the results of financial assets and the method for
managing such risks, as well as the form of remuneration received by the management
personnel of the businesses concerned. In assessing whether the business model is aimed at
receiving contract cash flows, the Group is required to analyse and exercise judgment in
respect of the reasons, timing, frequency and values of any disposals prior to maturity.
Contractual cash flow characteristics
The classification of financial assets at initial recognition depends on the financial asset’s
contractual cash flow characteristics, and the judgements on whether the contractual cash
flows are solely payments of principal and interest on the principal amount outstanding,
including when assessing the modification of the time value of money, the judgement on
whether there is any significant difference from the benchmark cash flow and whether the fair
value of the prepayment features is insignificant for financial assets with prepayment features,
etc.
162
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
34.Significant accounting judgements and estimates (Continued)
Estimation uncertainty
The key assumptions concerning the future and other key sources of estimation uncertainty at
the end of the reporting period that may cause material adjustment to the carrying amounts of
assets and liabilities are discussed below.
Impairment of financial instruments
The Group uses the expected credit loss model to assess the impairment of financial
instruments. The Group is required to perform significant judgement and estimation and take
into account all reasonable and supportable information, including forward-looking information.
When making such judgements and estimates, the Group infers the expected changes in the
debtor's credit risk based on historical repayment data combined with economic policies,
macroeconomic indicators, industry risks and other factors. The different estimates may impact
the impairment assessment, and the provision for impairment may also not be representative of
the actual impairment loss in the future.
Impairment of non-current assets other than financial assets (excluding goodwill)
The Group assesses whether there are any indicators of impairment for non-current assets
other than financial assets at the date of statement of financial position. Intangible assets with
indefinite useful lives are tested for impairment annually and at other times when such an
indicator exists. Other non-current assets other than financial assets are tested for impairment
when there are indicators that the carrying amounts may not be recoverable. An impairment
exists when the carrying value of an asset or asset group exceeds its recoverable amount,
which is the higher of its fair value less costs to sell and its present value of future cash flows.
The calculation of the fair value less costs to sell is based on available data from binding sales
transactions in an arm’s length transaction of similar assets or observable market prices less
incremental costs for disposing of the asset. When value-in-use calculations are undertaken,
management must estimate the expected future cash flows from the asset or asset group and
choose a suitable discount rate in order to calculate the present value of those cash flows.
Refer to Note V (12), (13), (14), (15), (16).
Impairment of goodwill
Goodwill is tested for impairment at least at the end of each year. For the purpose of
impairment testing, the present value of future cash flows, which are generated from asset
groups or sets of asset groups considered together with allocated goodwill, is estimated. The
Group estimates the present value of future cash flows from asset groups or sets of asset
groups by forecasting the related cash flows and selecting a suitable discount rate. Refer to
Note V (17).
Deferred tax assets
To the extent that it is probable that there are sufficient taxable profits to offset the deductible
losses, deferred tax assets shall be recognised for all unused deductible losses. Substantial
management’s judgements regarding the timing and amount of future taxable profit are needed
when estimating the amount of deferred tax assets.
Fair value of non-listed equity investments
Non-listed equity investments are valued as expected future cash flows based on the current
discount rate of other financial instruments with similar contractual terms and risk
characteristics. This requires the Group to estimate future cash flows, credit risks, fluctuations
and discount rates and is therefore uncertain.
163
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
34.Significant accounting judgements and estimates (Continued)
Estimation uncertainty (Continued)
Reward points
The Group considers the observable separate selling price of the redeemable free or
discounted goods, the probability of redeeming and all the related information, after which
estimates a reasonable reward points separate selling price. When estimating the probability of
redeeming, the Group bases on historical data, current data and takes into consideration future
change of the client, also market trends and other factors. The Group re-evaluates the separate
selling price of reward points at least once every balance sheet date, and allocates it to the
reward points transaction price based on the result.
Return clauses
The Group reasonably estimates the return rate for contract groups with similar characteristics
according to the historical return rate, current conditions of return, the change of customers and
markets. The Group at least reassesses the return rate at every balance sheet date and
determines return payables and cost of return receivables.
Warranty
The Group makes reasonable estimates on warranty fee rates in respect of contract groups
with similar characteristics based on the historical data and current conditions of warranty,
taking into consideration all relevant information such as product improvements and market
changes, among others. The Group reassesses the warranty fee rates at least annually at each
balance sheet date and determines its estimated liabilities based on the reassessed warranty
fee rates.
Evaluating limitations of variable consideration
When estimating variable consideration, the Group considers all the reasonable information
obtained, including historical information, current information and forecasted information, and
also estimates all the possible consideration amount and possibility within a reasonable range.
For contracts that are likely to have multiple different outcomes, the Group estimates the
consideration amount based on the expected value method. For contracts with only two
possible outcomes, the Group estimates the consideration amount based on the most likely
outcome. The estimated amount of variable consideration will be included in the transaction
price only to the extent that it is highly probable that a significant reversal in the amount of
cumulative revenue recognised will not occur when the uncertainty associated with the variable
consideration is subsequently resolved. The Group re-evaluates the amount of variable
consideration on every balance sheet date, including re-evaluating whether the estimations
used are limited, to reflect changes which occurred in the financial statement period.
Lessee’s incremental borrowing rate
If the interest rate implicit in the lease cannot be readily determined, the Group measures the
lease liability at the present value of the lease payments discounted using the lessee’s
incremental borrowing rate. According to the economic environment, the Group takes the
observable interest rate as the reference basis for determining the incremental borrowing rate,
then adjusts the observable interest rate based on its own circumstances, underlying assets,
lease terms and amounts of lease liabilities to determine the applicable incremental borrowing
rate.
164
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
35.Changes in accounting policies and estimates
Changes in accounting policies
The New Leases Standard
In 2018, the MOF issued revised Accounting Standard for Business Enterprises No. 21 –
Leases (the “New Leases Standard”). The New Leases Standard introduces a single model
similar to the current accounting treatment of finance leases, requiring the lessor to recognise
right-of-use assets and lease liabilities for all the leases, except for short-term leases and
leases of low-value assets, and recognise depreciation and interest expense, respectively. The
Group has accounted for leases under the revised leases standard since 1 January 2019. As a
practical expedient, the Group did not reassess whether a contract is, or contains, a lease at
the date of initial application. According to the transitional requirements, the Group did not
restate comparative information. Instead, the Group recognised the cumulative effect of the
initial application of the New Leases Standard as an adjustment to the opening balance of
retained earnings of 2019 at the date of initial application:
(1) the Group recognised the right-of-use asset and the lease liabilities at the amount of the
carrying amount of the lease asset and lease liability under the original standards
applicable at the date of initial application for leases previously classified as finance
leases;
(2) for leases previously classified as operating leases, the Group recognised lease liabilities
based on the present value of the remaining lease payments discounted at the incremental
borrowing rate at the date of initial application, and measured right-of-use assets based on
the amount equal to the lease liabilities, adjusted for any related prepaid and accrued
lease payments previously recognised; and
(3) the Group applied Note III (17) to perform its impairment test of right-of-use assets and
account for the impairment.
For operating leases of low-value assets and operating leases for which the lease term ends
within 12 months before initial application, the Group applied a simplified approach and did not
recognise the right-of-use assets and lease liabilities. For leases previously classified as
operating leases, the Group also applied the available practical expedients wherein it:
(1) applied a single discount rate to a portfolio of leases with reasonably similar
characteristics; and excluded the initial direct costs from the measurement of the right-of-
use asset at the date of initial application;
(2) used hindsight in determining the lease term where the contract contained options to
extend or terminate the lease;
(3) relied on its assessment of whether leases are onerous applying Note III (17) immediately
before the date of initial application as an alternative to performing an impairment review,
and adjusted the right-of-use assets at the date of initial application by the amount of any
provision for onerous leases recognised in the balance sheet immediately before the date
of initial application; and
(4) accounted for the changes in leases before the date of initial application based on the final
arrangement for such changes.
165
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
35.Changes in accounting policies and estimates (Continued)
Changes in accounting policies (Continued)
The New Leases Standard (Continued)
As an intermediate lessor, the Group reassessed subleases that were classified as operating
leases before and are ongoing at the date of initial application, to determine whether each
sublease should be classified as an operating lease or a finance lease applying the New
Leases Standard. Except for these, the Group did not adjust the leases for which it is an
intermediate lessor.
The Group reconciled the outstanding minimum lease payments for operating leases with lease
liabilities included in the balance sheet as at 1 January 2019 based on the present value of the
minimum lease payments discounted using the incremental borrowing rate of the Group as the
lessee as at 1 January 2019 as follows:
Minimum lease payments for operating leases as at
31 December 2018 1,873,246,508.02
Less: Practical expedients 81,858,324.15
Including: Short-term leases 62,717,394.74
Leases with lease term that ends within 12 months 14,646,195.26
Leases of low-value assets with lease term that ends in
more than 12 months 4,494,734.15
Add: Payments for optional extension periods not recognised as at
31 December 2018 -
1,791,388,183.87
Weighted average incremental borrowing rate 4.39%
Discounted operating lease commitments as at 1 January 2019 1,636,342,934.06
Add: Finance lease payables as at 31 December 2018 9,625,302.89
Add (or less): Other adjustments -
Lease liabilities as at 1 January 2019 1,645,968,236.95
The effect of implementation of the New Leases Standard on the balance sheet as at 1 January
2019 is as follows:
Consolidated balance sheet
Under the original
Carrying amount standard Effect
Assets
Right-of-use assets 1,833,958,765.93 - 1,833,958,765.93
Advances to suppliers 414,434,268.91 583,484,515.95 (169,050,247.04)
Other non-current assets 58,168,919.11 72,365,863.71 (14,196,944.60)
Fixed assets 594,067,973.91 607,933,827.67 (13,865,853.76)
Intangible assets 318,693,082.72 319,207,126.15 (514,043.43)
3,219,323,010.58 1,582,991,333.48 1,636,331,677.10
166
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
35.Changes in accounting policies and estimates (Continued)
Changes in accounting policies (Continued)
The New Leases Standard (Continued)
The effect of implementation of the New Leases Standard on the balance sheet as at 1 January
2019 is as follows: (Continued)
Consolidated balance sheet (Continued)
Under the original
Carrying amount standard Effect
Liabilities
Lease liabilities 1,107,537,419.92 - 1,107,537,419.92
Non-current liabilities due
within one year 538,430,817.03 5,861,324.37 532,569,492.66
Other payables 1,528,413,333.33 1,528,424,590.29 (11,256.96)
Long-term payables 800,000.00 4,563,978.52 (3,763,978.52)
3,175,181,570.28 1,538,849,893.18 1,636,331,677.10
The Company’s balance sheet
Under the original
Carrying amount standard Effect
Assets
Right-of-use assets 6,827,192.24 - 6,827,192.24
Advances to suppliers 4,757,318.65 4,760,182.00 (2,863.35)
11,584,510.89 4,760,182.00 6,824,328.89
Under the original
Carrying amount standard Effect
Liabilities
Lease liabilities 6,038,239.60 - 6,038,239.60
Non-current liabilities due
within one year 786,089.29 - 786,089.29
6,824,328.89 - 6,824,328.89
167
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
35.Changes in accounting policies and estimates (Continued)
Changes in accounting policies (Continued)
The New Leases Standard (Continued)
The effect of implementation of the New Leases Standard on the financial statements for the
year ended 31 December 2019 is as follows:
Consolidated balance sheet
Under the original
Carrying amount standard Effect
Assets
Right-of-use assets 1,955,461,133.01 - 1,955,461,133.01
Advances to suppliers 384,882,547.24 615,222,683.69 (230,340,136.45)
Other non-current assets 77,354,970.39 100,466,171.39 (23,111,201.00)
Fixed assets 612,599,944.11 622,528,263.55 (9,928,319.44)
Intangible assets 319,946,727.04 320,329,827.67 (383,100.63)
Deferred tax assets 60,631,015.99 48,148,235.29 12,482,780.70
3,410,876,337.78 1,706,695,181.59 1,704,181,156.19
Liabilities
Lease liabilities 1,182,407,085.08 - 1,182,407,085.08
Non-current liabilities due
within one year 601,427,093.62 35,174,327.51 566,252,766.11
Other payables 1,756,858,461.02 1,758,047,509.65 (1,189,048.63)
Long-term payables 800,000.00 1,126,365.68 (326,365.68)
3,541,492,639.72 1,794,348,202.84 1,747,144,436.88
Consolidated income statement
Carrying amount Under the original standard Effect
Operating costs 46,292,408,840.53 46,293,105,089.37 (696,248.84)
Selling expenses 3,055,403,668.16 3,072,829,651.71 (17,425,983.55)
Administrative expenses 842,014,983.53 843,205,630.95 (1,190,647.42)
Finance costs 119,972,954.79 43,351,250.41 76,621,704.38
Gain on disposal of assets
(loss expressed with
positive value) 2,551,175.02 688,411.84 1,862,763.18
Income taxes 372,439,441.37 384,922,222.07 (12,482,780.70)
50,679,688,713.36 50,636,725,432.67 42,963,280.69
168
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
35.Changes in accounting policies and estimates (Continued)
Changes in accounting policies (Continued)
The New Leases Standard (Continued)
The effect of implementation of the New Leases Standard on the financial statements for the
year ended 31 December 2019 is as follows: (Continued)
The Company’s balance sheet
Carrying amount Under the original standard Effect
Assets
Right-of-use assets 6,217,504.50 - 6,217,504.50
Advances to suppliers 7,996,243.28 8,029,735.59 (33,492.31)
Deferred tax assets 9,327,850.53 9,265,861.07 61,989.46
23,541,598.31 17,295,596.66 6,246,001.65
Liabilities
Lease liabilities 5,461,257.38 - 5,461,257.38
Non-current liabilities
due within one year 32,640,325.77 31,638,984.25 1,001,341.52
38,101,583.15 31,638,984.25 6,462,598.90
The Company’s income statement
Carrying amount Under the original standard Effect
Administrative expenses 73,489,681.09 73,493,681.60 (4,000.51)
Finance costs (64,025,013.54) (64,307,600.76) 282,587.22
Income taxes 14,503,442.87 14,565,432.33 (61,989.46)
23,968,110.42 23,751,513.17 216,597.25
169
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
35.Changes in accounting policies and estimates (Continued)
Changes in accounting policies (Continued)
The New Leases Standard (Continued)
In addition, the cash paid by the Group for repayment of the principal and interest of the lease
liability is included in the statement of cash flows as cash outflows from financing activities, and
the payments for short-term leases and leases of low-value assets accounted for using the
practical expedients and variable lease payments not included in the measurement of the lease
liability are still included in cash outflows from operating activities.
Change in the reporting format of financial statements
To meet the requirements of the Notice on Revising and Issuing Format of 2019 Financial
Statements for General Business Enterprises (Cai Kuai [2019] No.6) and the Notice on
Revising and Issuing Format of Consolidated Financial Statements (2019 edition) (Cai Kuai
[2019] No.16), in the balance sheet, the amount previously presented in “notes receivable and
accounts receivable” shall be presented separately in “notes receivable” and “accounts
receivable”; the amount previously presented in “notes payable and accounts payable” shall be
presented separately in “notes payable” and “accounts payable”; the notes and receivables at
fair value through other comprehensive income previously presented in “other current assets”
are separately presented in “receivables financing”; the “interest receivable” in “other
receivables” is changed to reflect only the outstanding interest on financial instruments that
expired and can be collected at the balance sheet date (the interest on the financial instrument
accrued using the effective interest method is included in the outstanding amount of the
corresponding financial instrument); the “interest payable” in “other payables” is changed to
reflect only the outstanding interest on financial instruments that expired and should be paid at
the balance sheet date (the interest on the financial instrument accrued using the effective
interest method are included in the outstanding amount of the corresponding financial
instrument). In the income statement, the amount presented in “income from the derecognition
of financial assets measured at amortised cost” of “investment income” include profit or loss
incurred when derecognising financial assets measured at amortised cost. The Group has
retrospectively adjusted the comparative amounts correspondingly. The changes in accounting
policies have had no impact on the net profit and equity in the consolidated and company
financial statements.
170
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
35.Changes in accounting policies and estimates (Continued)
Changes in accounting policies (Continued)
The cumulative effects of the retrospective adjustments caused by the above changes in accounting
policies on the financial statements are as follows:
The Group
2019
Before changes Changes in accounting policies After changes
Effect of the Other changes in
Closing balance New Leases presentation of Opening balance
for 2018 Standard financial statements for 2019
Cash and bank
balances 8,089,781,304.56 - 6,376,708.68 8,096,158,013.24
Notes receivable - - 789,536,654.23 789,536,654.23
Accounts receivable - - 9,336,861,647.92 9,336,861,647.92
Receivables financing - - 567,775,275.40 567,775,275.40
Notes receivable and
accounts receivable 10,694,173,577.55 - (10,694,173,577.55) -
(169,050,247.04
Advances to suppliers
583,484,515.95 ) - 414,434,268.91
Other receivables 643,493,359.32 - (6,376,708.68) 637,116,650.64
Fixed assets 607,933,827.67 (13,865,853.76) - 594,067,973.91
Intangible assets 319,207,126.15 (514,043.43) - 318,693,082.72
1,833,958,765.9
Right-of-use assets
- 3 - 1,833,958,765.93
Other non-current
financial assets 72,365,863.71 (14,196,944.60) - 58,168,919.11
Short-term borrowings 2,597,652,702.43 - 10,973,397.39 2,608,626,099.82
Notes payable - - 3,416,755,681.80 3,416,755,681.80
Accounts payable - - 6,468,535,961.17 6,468,535,961.17
Notes payable and
accounts payable 9,885,291,642.97 - (9,885,291,642.97) -
Other payables 1,539,436,971.93 (11,256.96) (11,012,381.64) 1,528,413,333.33
Non-current liabilities
due within one year 5,861,324.37 532,569,492.66 - 538,430,817.03
1,107,537,419.9
Lease liabilities
- 2 - 1,107,537,419.92
Long-term borrowings 31,600,000.00 - 38,984.25 31,638,984.25
Long-term payables 4,563,978.52 (3,763,978.52) - 800,000.00
2018
Before changes Changes in accounting policies After changes
Effect of the Other changes in
Closing balance New Leases presentation of Opening balance
for 2018 Standard financial statements for 2019
Finance costs 112,862,739.12 - (61,372,718.53) 51,490,020.59
Investment income 319,897,172.23 - (61,372,718.53) 258,524,453.70
171
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IIISummary of significant accounting policies and accounting estimates (Continued)
35.Changes in accounting policies and estimates (Continued)
Changes in accounting policies (Continued)
The cumulative effects of the retrospective adjustments caused by the above changes in
accounting policies on the financial statements are as follows: (Continued)
The Company
2019
Before changes Changes in accounting policies After changes
Other changes in
Closing balance for Effect of the New presentation of Closing balance for
2018 Leases Standard financial statements 2018
Cash and bank
balances 1,817,654,598.01 - 3,697,083.33 1,821,351,681.34
Notes receivable - - 34,154,774.75 34,154,774.75
Accounts receivable - - 631,236,593.94 631,236,593.94
Receivables financing - - 29,716,205.64 29,716,205.64
Notes receivable and
accounts receivable 695,107,574.33 - (695,107,574.33) -
Advances to suppliers 4,760,182.00 (2,863.35) - 4,757,318.65
Other receivables 1,541,980,883.50 - (3,697,083.33) 1,538,283,800.17
Right-of-use assets - 6,827,192.24 - 6,827,192.24
Notes payable - - 252,317,800.78 252,317,800.78
Accounts payable - - 442,049,241.22 442,049,241.22
Notes payable and
accounts payable 694,367,042.00 - (694,367,042.00) -
Other payables 1,481,817,856.56 - (38,984.25) 1,481,778,872.31
Non-current liabilities
due within one year - 786,089.29 - 786,089.29
Lease liabilities - 6,038,239.60 - 6,038,239.60
Long-term borrowings 31,600,000.00 - 38,984.25 31,638,984.25
Before changes Changes in accounting policies After changes
Other changes in
Closing balance for Effect of the New presentation of Opening balance for
2018 Leases Standard financial statements 2019
Finance costs (42,814,941.43) - (1,688,557.15) (44,503,498.58)
Investment income 704,244,539.45 - (1,688,557.15) 702,555,982.30
172
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IV Taxation
1. Main categories and rates of taxes:
Categories Tax base Tax rate
Corporate income tax
(“CIT”) Taxable income 10%,15%,20% or 25%
Taxable value added amount (Tax
payable is calculated using the taxable
sales amount multiplied by the effective
tax rate less deductible VAT input of the 0%,3%,5%,6%,9%,10%,13% or
Value-added tax (“VAT”) current period) 16%
City maintenance and
construction tax Amount of VAT paid 5% or 7%
Educational surcharge Amount of VAT paid 3%
Local educational
surcharge Amount of VAT paid 2%
2. Tax preferences
In 2011, the Urumqi Head Office, Changji Branch and Karamay Branch of Sinopharm Holding
Xinjiang New & Special Medicines Chain Store Co., Ltd. (“Xinjiang New & Special
Medicines”), subsidiaries of the Group, shall pay tax at a rate of 15% by jurisdiction.
According to the Circular of the Ministry of Finance, the State Administration of Taxation, the
General Administration of Customs on Issues Concerning Tax Policies for the Further
Development of the Western Regions (Cai shui [2011] No.58), enterprises from encouraged
industries in the Western Regions could enjoy a reduced CIT rate of 15% from 1 January
2011 to 31 December 2020.
In 2014, the Group’s subsidiary, Sinopharm Holding Guangxi Logistics Co., Ltd. (“Sinopharm
Guangxi Logistics”), was approved by the Guangxi Local Tax Bureau to enjoy a tax discount
applicable to corporations in the region of Western Development to pay income tax at a tax
rate of 15% from 1 January 2014 to 31 December 2020..
In 2015, eight subsidiaries of the Group in the Guangxi Province, including Sinopharm
Guangxi, Sinopharm Holding Liuzhou Co., Ltd. (“Sinopharm Liuzhou”) , Sinopharm Holding
Beihai Co., Ltd (“Sinopharm Beihai”), Sinopharm Holding Guilin Co., Ltd. (“Sinopharm
Guilin”), Sinopharm Holding Guigang Co., Ltd. (“Sinopharm Guigang”), Sinopharm Holding
Yulin Co., Ltd. (“Sinopharm Yulin”), Sinopharm Holding Baise Co., Ltd (“Sinopharm Baise”)
and Sinopharm Holding Wuzhou Co., Ltd. (“Sinopharm Wuzhou”), were all approved by the
Guangxi Local Tax Bureau to enjoy a tax concession of Western Development at a
preferential CIT rate of 15%. The applicable period for Sinopharm Guangxi, Sinopharm
Liuzhou and Sinopharm Beihai is from 1 January 2014 to 31 December 2020, and that for the
other five subsidiaries is from 1 January 2015 to 31 December 2020.
173
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
IV Taxation (Continued)
2. Tax preferences (Continued)
In 2019, according to the Circular of the Ministry of Finance, the State Administration of Taxation,
the General Administration of Customs on Issues Concerning Tax Policies for the Further
Development of the Western Regions (Cai shui [2011] No.58), Sinopharm Holding Guoda Inner
Mongolia Pharmacy Chain Store Co., Ltd.(“Guoda Inner Mongolia”), Sinopharm Holding Hulun
Buir Pharmacy Chain Store Co., Ltd., Sinopharm Holding Guoda Drug Store Manchuria Co., Ltd.,
Inner Mongolia Guoda Medicine Co., Ltd., Sinopharm Holding Guoda Guangxi Pharmacy Chain
Store Co., Ltd, Ningxia Guoda Pharmacy Chain Store Co., Ltd, Guoda Pharmacy (Pu’er)
Songmao Co., Ltd (“Guoda Pu’er”), Sinopharm Holding Qinzhou Co., Ltd., Sinopharm Holding
Hezhou Co., Ltd. and Sinopharm Holding Hechi Co., Ltd., subsidiaries of the Group, shall pay CIT
at a rate of 15% by jurisdiction.
In 2019, according to the Inclusive Tax Deduction and Exemption Policies for Micro and Small
Enterprises (Cai Shui [2019] No. 13) jointly issued by the Ministry of Finance and the State
Administration of Taxation, the portion of annual taxable income of the Group's subsidiaries,
Shanghai Guoda Dongsheng Pharmacy Co., Ltd., Shanghai Guoda Haohai Pharmacy Co., Ltd.,
Shanghai Guoda Ruijing Pharmacy Co., Ltd., Shanghai Guoda Dongxin Pharmacy Co., Ltd.,
Sinopharm Guoda Yongsheng Pharmacy (Shanghai) Co., Ltd., Zhejiang Sinopharm Pharmacy
Dongshan Pharmacy Co., Ltd., Sinopharm Holding Guoda Pharmacy Guangzhou Chain Co., Ltd.,
Taishan Sinopharm Holding Guoda Qunkang Pharmacy Chain Store Co., Ltd. (“Guoda Taishan”),
Sinopharm Holding Guoda Pharmacy Yongxingtang Chain Store (Chaoyang) Co., Ltd., Liaoning
Guoda Medicine Co., Ltd., Sinopharm Holding Guoda Pharmacy Bayannur Co., Ltd., Sinopharm
Holding Guoda Pharmacy Ulanqab Co., Ltd., Sinopharm Holding Baiyi Pharmacy Guangxi Co.,
Ltd. and Sinopharm Accord (Guangzhou) Medicine Co., Ltd.(“Guangzhou Medicine”), is subject to
CIT at the rate of 20%.
174
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
V Notes to the consolidated financial statements
1. Cash and bank balances
31 December 2019 31 December 2018
Cash on hand 5,077,406.65 5,587,191.18
Cash at banks 8,434,585,141.71 7,632,906,538.27
Cash and cash equivalents 8,417,599,358.83 7,626,529,829.59
Undue interest receivable 16,985,782.88 6,376,708.68
Other cash balances 442,672,297.43 457,664,283.79
Deposits for letters of credit 124,806.00 4,191,246.00
Deposits for bank acceptance
bills 442,547,491.43 453,473,037.79
8,882,334,845.79 8,096,158,013.24
Current deposits earn interest at the rate based on current deposit interest rates. Maturities of
short-term time deposits range from 1 month to 6 months depending on the fund arrangements of
the Group, and the deposits earn interest at the respective deposit rates. The maturities of bank
notice deposits are 7 days depending on the fund arrangement of the Group, and the deposits earn
interest at the respective deposit rates.
2. Notes receivable
31 December 2019 31 December 2018
Commercial acceptance bills 793,301,688.64 789,536,654.23
At 31 December 2019 and 2018, there were no notes receivable that were pledged.
175
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
V Notes to the consolidated financial statements (Continued)
2. Notes receivable (Continued)
Notes receivable endorsed or discounted by the Group to other parties which were not yet due at 31
December 2019 and 31 December 2018 are as follows:
31 December 2019 31 December 2018
Derecognised Not derecognised Derecognised Not derecognised
Commercial
acceptance bills - 64,038,348.12 - 170,314,843.11
As at 31 December 2019 and 31 December 2018, notes receivable that were converted into accounts
receivable due to the drawer’s inability to settle the notes on the maturity date are as follows:
31 December 2019 31 December 2018
Commercial acceptance bills 1,174,861.29 -
3. Accounts receivable
The credit period for accounts receivable normally ranges from 0 to 90 days. Accounts receivable
are interest-free.
An aging analysis of accounts receivable is as follows:
31 December 2019 31 December 2018
Within 1 year 10,622,827,598.95 9,339,491,654.21
1 to 2 years 19,945,711.69 15,786,120.79
2 to 3 years 896,129.90 4,825,981.07
Over 3 years 14,941,871.10 16,279,326.59
Less: Bad debt provision for accounts receivable 40,629,418.12 39,521,434.74
10,617,981,893.52 9,336,861,647.92
176
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
V Notes to the consolidated financial statements (Continued)
3. Accounts receivable (Continued)
Changes in provision for bad debts are presented as follows:
Reversal of
Opening write-off in Increases in Increases in Reversal in Written off in
Closing balance
balance previous the year merger the year the year
years
2019 39,521,434.74 22,080.00 25,098,772.50 56,980.49 (20,246,309.59) (3,823,540.02) 40,629,418.12
2018 43,925,465.41 221,031.35 12,467,357.34 - (16,899,781.64) (192,637.72) 39,521,434.74
The carrying amount of accounts receivable that affected the changes in provision this year is as
follows:
31 December 2019
Carrying amount Bad debt provisions
Amount Proportion Amount Proportion
Items for which provision for bad
debts is recognised separately 590,399,747.84 5.54% (18,329,609.15) 3.10%
Items for which provision for bad
debts is recognised by group
(credit risk characteristics) 10,068,211,563.80 94.46% (22,299,808.97) 0.22%
10,658,611,311.64 100.00% (40,629,418.12) 0.38%
31 December 2018
Carrying amount Bad debt provisions
Amount Proportion Amount Proportion
Items for which provision for bad
debts is recognised separately 595,919,487.29 6.36% (16,766,679.23) 2.81%
Items for which provision for bad
debts is recognised by group
(credit risk characteristics) 8,780,463,595.37 93.64% (22,754,755.51) 0.26%
9,376,383,082.66 100.00% (39,521,434.74) 0.42%
177
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
V Notes to the consolidated financial statements (Continued)
3. Accounts receivable (Continued)
At 31 December 2019, accounts receivable that are individually significant and individually assessed for provisions are as
follows:
Expected
Credit Loss
Carrying amount Bad debt provision Rate Assessment for impairment
The receivable of medical
Receivable of medical insurance has lower-tier
insurance 425,784,659.32 - 0.00% default risk.
Debtor had irregular operations
of subject to serious financial
difficulties and related to
multiple lawsuits, is with
Client A 11,559,178.29 (11,559,178.29) 100.00% lower-tier recoverability.
Debtor had irregular operations
of subject to serious financial
difficulties, and has been
placed on a national list of
defaulters, with highly risk of
going bankruptcy or financial
Client B 2,447,976.74 (2,447,976.74) 100.00% restructuring.
Debtor had irregular operations
of subject to serious financial
difficulties, and has been
placed on a national list of
defaulters, with highly risk of
going bankruptcy or financial
Client C 2,365,253.03 (2,365,253.03) 100.00% restructuring.
Part of the receivable takes
longer than usual to recover,
Others 148,242,680.46 (1,957,201.09) 1.32% and has risk of recoverability
590,399,747.84 (18,329,609.15)
At 31 December 2018, accounts receivable that were individually significant and individually assessed for provisions are as
follows:
Expected
Credit Loss
Carrying amount Bad debt provision Rate Assessment for impairment
The receivable of medical
Receivable of medical insurance has lower-tier
insurance 380,933,117.06 (605,476.95) 0.16% default risk.
Debtor had irregular operations
of subject to serious financial
difficulties and related to
multiple lawsuits, is with lower-
Client A 11,559,178.29 (11,559,178.29) 100.00% tier recoverability.
Part of the receivable takes
longer than usual to recover,
Others 203,427,191.94 (4,602,023.99) 2.26% and has risk of recoverability
595,919,487.29 (16,766,679.23)
178
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
V Notes to the consolidated financial statements (Continued)
3. Accounts receivable (Continued)
The accounts receivable for which the Group recognised provision for bad debts using the aging analysis method are
presented as follows:
31 December 2019 31 December 2018
Expected credit Expected
Estimated default Expected loss in entire Estimated default credit loss Expected credit loss
amount credit loss rate lifetime amount rate in entire lifetime
Within 1 year 10,046,467,724.08 0.20% (19,806,004.64) 8,763,673,896.90 0.25% (21,544,996.66)
1 to 2 years 18,859,269.14 10.47% (1,974,732.42) 10,195,222.35 4.83% (492,440.38)
2 to 3 years 896,129.90 13.34% (119,533.01) 3,462,472.01 8.53% (295,199.01)
Over 3 years 1,988,440.68 20.09% (399,538.90) 3,132,004.11 13.48% (422,119.46)
10,068,211,563.80 (22,299,808.97) 8,780,463,595.37 (22,754,755.51)
The provision for bad debts amounted to RMB25,098,772.50 in 2019 (2018: RMB12,467,357.34), including
RMB20,246,309.59 which was recovered or reversed (2018: RMB16,899,781.64).
Important recovered or reversed items of provision for individually assessed bad debts in 2019 are listed below:
Reason for recoverability or Original assessment for Recovered or Method of
reversal impairment reversed amount recovery
Client A Amount received Uncertainty in recovery 167,280.00 Amount received
Client B Amount received Uncertainty in recovery 140,801.62 Amount received
Client C Amount received Uncertainty in recovery 117,446.10 Amount received
Client D Amount received Uncertainty in recovery 99,886.22 Amount received
525,413.94
Important recovered or reversed items of provision for individually assessed bad debts in 2018 are listed below:
Reason for recoverability or Original assessment for Recovered or Method of
reversal impairment reversed amount recovery
Client A Amount received Uncertainty in recovery 4,083,065.20 Amount received
Client B Amount received Uncertainty in recovery 93,140.50 Amount received
Client C Amount received Uncertainty in recovery 54,698.00 Amount received
Client D Amount received Uncertainty in recovery 54,437.96 Amount received
4,285,341.66
179
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
V Notes to the consolidated financial statements (Continued)
3. Accounts receivable (Continued)
Accounts receivable written off in 2019 are RMB3,823,540.02 (2018: RMB192,637.72).
Accounts receivable written off in 2019 are analysed below:
Nature of the Related party
receivable Amount Reason Fulfiled write-off procedures transaction or not
The write-off procedures have
been fulfilled in accordance
with the internal rules and
Client A Payment for goods 793,588.14 Non-recoverable regulations. No
The write-off procedures have
been fulfilled in accordance
with the internal rules and
Client B Payment for goods 506,604.84 Non-recoverable regulations. No
The write-off procedures have
been fulfilled in accordance
with the internal rules and
Client C Payment for goods 280,324.00 Non-recoverable regulations. No
The write-off procedures have
been fulfilled in accordance
with the internal rules and
Client D Payment for goods 276,000.00 Non-recoverable regulations. No
The write-off procedures have
been fulfilled in accordance
with the internal rules and
Others Payment for goods 1,967,023.04 Non-recoverable regulations. No
3,823,540.02
Accounts receivable written off in 2018 are analysed below:
Nature of the Related party
receivable Amount Reason Fulfiled write-off procedures transaction or not
The write-off procedures have
been fulfilled in accordance
with the internal rules and
Client A Payment for goods 120,418.94 Non-recoverable regulations. No
The write-off procedures have
been fulfilled in accordance
with the internal rules and
Client B Payment for goods 43,646.94 Non-recoverable regulations. No
The write-off procedures have
been fulfilled in accordance
with the internal rules and
Client C Payment for goods 28,571.84 Non-recoverable regulations. No
192,637.72
180
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
V Notes to the consolidated financial statements (Continued)
3. Accounts receivable (Continued)
In 2019, the Group factored a small portion of accounts receivable at amortised cost to
financial institutions. The amount of accounts receivable derecognised was
RMB6,274,777,382.79 (2018: RMB3,665,602,250.53), and the amount of loss recognised
through Investment income was RMB86,377,492.55 (2018: RMB61,372,718.53).
As at 31 December 2019, the top five accounts receivable by customer are summarised
below:
% of the total
Bad debt provision accounts
Amount amount receivable
Top 1 Account receivable 170,343,305.26 (651,626.93) 1.60%
Top 2 Account receivable 168,729,902.27 (1,268,752.66) 1.58%
Top 3 Account receivable 165,585,249.66 (834,284.84) 1.55%
Top 4 Account receivable 149,692,676.64 (497,239.72) 1.40%
Top 5 Account receivable 141,678,146.50 (522,091.42) 1.33%
796,029,280.33 (3,773,995.57) 7.46%
As at 31 December 2018, the top five accounts receivable by customer are summarised
below:
% of the total
Bad debt provision accounts
Amount amount receivable
Top 1 Account receivable 153,684,242.23 (151,473.45) 1.64%
Top 2 Account receivable 150,595,649.56 (1,204,596.60) 1.61%
Top 3 Account receivable 138,844,133.79 (75,576.22) 1.48%
Top 4 Account receivable 136,286,804.49 (265,259.53) 1.45%
Top 5 Account receivable 130,575,790.77 (56,042.86) 1.39%
709,986,620.84 (1,752,948.66) 7.57%
Refer to Note VIII (2) for details of transfer of accounts receivable.
181
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
V Notes to the consolidated financial statements (Continued)
4. Receivables financing
31 December 2019 31 December 2018
Bank acceptance bills 446,342,588.46 567,775,275.40
At 31 December 2019 and 2018, there were no receivables financing that were pledged.
Receivables financing endorsed or discounted by the Group to other parties which were not yet due at 31
December 2019 and 31 December 2018 are as follows:
31 December 2019 31 December 2018
Derecognised Not Derecognised Derecognised Not
Derecognised
Bank acceptance
bills 2,280,123,957.94 - 1,273,262,524.19 -
As at 31 December 2019 and 31 December 2018, receivables financing that was converted into accounts
receivable due to the drawer’s inability to settle the notes on the maturity date is as follows:
31 December 2019 31 December 2018
Bank acceptance bills - 50,000.00
5. Advances to suppliers
The aging of advances to suppliers is analyzed below:
31 December 2019 1 January 2019 31 December 2018
% of total % of total % of total
Amount balance Amount balance Amount balance
Within 1 year 383,626,398.63 99.67% 411,094,093.16 99.19% 580,144,340.20 99.43%
1 to 2 years 244,213.07 0.06% 873,351.85 0.21% 873,351.85 0.15%
2 to 3 years 815,319.09 0.21% 2,466,823.90 0.60% 2,466,823.90 0.42%
Over 3 years 196,616.45 0.06% - 0.00% - 0.00%
384,882,547.24 100.00% 414,434,268.91 100.00% 583,484,515.95 100.00%
In accordance with the New Leases Standard, on 1 January 2019, the Group adjusted the prepaid
rents except for short-term leases and low-value assets to right-of-use assets. Compared with 31
December 2018, the advances to suppliers by less than one year were reduced. Please refer to
NoteⅢ(35) for details of the impact of the New Leases Standard on the opening of the statement.
182
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
V Notes to the consolidated financial statements (Continued)
5. Advances to suppliers (Continued)
As at 31 December 2019, the top five advances to suppliers by customer are summarized below:
Amount Proportion of total balance
Total amount of top five advances to
suppliers 56,871,461.86 14.78%
As at 31 December 2018, the top five advances to suppliers by customer are summarized below:
Amount Proportion of total balance
Total amount of top five advances to
suppliers 119,855,873.09 20.54%
6. Other receivables
31 December 2019 31 December 2018
Dividend receivable 834,914.61 -
Other receivables 477,153,330.37 637,116,650.64
477,988,244.98 637,116,650.64
Dividend receivable
31 December 2019 31 December 2018
Shanghai Dingqun Enterprise
Management Consulting Co., Ltd
(“Shanghai Dingqun”) 834,914.61 -
183
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
V Notes to the consolidated financial statements (Continued)
6. Other receivables (Continued)
Other receivables
The aging of other receivables is analysed below:
31 December 2019 31 December 2018
Within 1 year 451,743,352.46 609,703,501.56
1 to 2 years 61,631,709.62 18,452,286.18
2 to 3 years 6,522,348.87 9,357,373.34
Over 3 years 21,196,047.56 19,525,443.28
Less: Bad debt provision for other receivables 63,940,128.14 19,921,953.72
477,153,330.37 637,116,650.64
Categories of other receivables by nature are as follows:
31 December 2019 31 December 2018
Deposits 273,189,294.54 278,455,623.30
Receivable of price reduction compensation and
purchasing rebates 67,585,688.47 99,668,799.22
Receivable of the pharmaceutical electronic trading
platform 49,597,763.58 83,826,127.02
Entrusted borrowings 45,360,333.35 44,000,000.00
Petty cash advance to employees 11,591,921.79 12,439,613.27
Receivable of equity transactions 8,980,000.00 8,980,000.00
Receivable due from related parties 3,786,279.26 8,119,399.79
Others 81,002,177.52 121,549,041.76
Less: Bad debt provision for other receivables 63,940,128.14 19,921,953.72
477,153,330.37 637,116,650.64
184
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
V Notes to the consolidated financial statements (Continued)
6. Other receivables (Continued)
Changes in bad debt provision for the 12-month expected credit losses and lifetime expected credit
losses on other receivables are as follows:
2019
Stage 1 Stage 2 Stage 3 Total
12-month Lifetime Credit-impaired
expected expected financial assets
credit losses credit losses (Lifetime
expected credit
losses)
Balance at 1 January 2019 - 2,989,960.03 16,931,993.69 19,921,953.72
Balance at 1 January 2019 during the period - - - -
--Transfer to the Stage 2 - - - -
--Transfer to the Stage 3 - - - -
--Reverse to the Stage 2 - - - -
--Reverse to the Stage 1 - - - -
Provisions during the period - 4,735,357.64 45,405,997.63 50,141,355.27
Reversal during the period - (909,367.44) (920,960.13) (1,830,327.57)
Transfer out during the period - - - -
Write-off during the period - - (4,333,603.88) (4,333,603.88)
Addition due to combination - 200.00 - 200.00
Reversal of write-off in previous years - 40,550.60 - 40,550.60
Balance at 31 December 2019 - 6,856,700.83 57,083,427.31 63,940,128.14
185
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
V Notes to the consolidated financial statements (Continued)
6. Other receivables (Continued)
2018
Stage 1 Stage 2 Stage 3 Total
12-month Lifetime Credit-impaired
expected expected financial assets
credit losses credit losses (Lifetime
expected credit
losses)
Balance at 1 January 2018 - 2,782,712.61 12,328,337.26 15,111,049.87
Balance at 1 January 2018 during the period - - - -
--Transfer to the Stage 2 - - - -
--Transfer to the Stage 3 - - - -
--Reverse to the Stage 2 - - - -
--Reverse to the Stage 1 - - - -
Provisions during the period - 1,601,047.86 5,539,406.43 7,140,454.29
Reversal during the period - (1,393,800.44) (1,015,750.00) (2,409,550.44)
Write-back during the period - - - -
Write-off during the period - - - -
Addition due to combination - - 80,000.00 80,000.00
Balance at 31 December 2018 - 2,989,960.03 16,931,993.69 19,921,953.72
The bad debt provision amount of other receivables in 2019 was RMB50,141,355.27 (2018:RMB7,140,454.29), with
the recovered or reversed amount of RMB1,830,327.57 (2018: RMB2,409,550.44).
The write-off amount of other receivables in 2019 was RMB4,333,603.88 (2018: nil).
186
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
V Notes to the consolidated financial statements (Continued)
6. Other receivables (Continued)
As at 31 December 2019, the top 5 parties that owed the largest amounts of other receivable balances are analysed below:
% of total Provision of bad
Nature Amount Age amount debts
Sinopharm Group Zhijun
(Suzhou) Pharmaceutical Entrusted borrowings
Co., Ltd. (“Zhijun Suzhou”)
(Note) 45,360,333.35 Within 2 years 8.38% 45,360,333.35
Pharmaceutical trading
Guangdong Pharmaceutical platform repayment not
electronic trading platform yet cleared 35,328,767.60 Within 1 year 6.53% -
TCM-Integrated Cancer
Center of Southern Medical Deposit of a logistics
University extension service project 20,000,000.00 Within 3 years 3.70% -
Shenyang Society Medical
Medical insurance
Insurance Management 19,676,531.29
deposit
Bureau Within 1 year 3.64% -
China Resources
Pharmaceutical Business Price reduction
Group Co., Ltd compensation 15,649,769.94 Within 1 year 2.89% -
136,015,402.18 25.14% 45,360,333.35
As at 31 December 2018, the top 5 parties that owed the largest amounts of other receivable balances are analysed below:
% of total Provision of bad
Nature Amount Age amount debts
Pharmaceutical trading
Guangdong Pharmaceutical platform repayment not
electronic trading platform yet cleared 83,826,127.02 Within 1 year 12.76% -
Zhijun Suzhou Entrusted borrowings 45,846,618.96 Within 1years 6.98% -
TCM-Integrated Cancer Center Deposit of a logistics
of Southern Medical extension service
University project 30,000,000.00 Within 2 years 4.57% -
AstraZeneca (Wuxi) Trading Price reduction
Co., Ltd. compensation 22,811,275.77 Within 1 year 3.47% -
Taiyuan Medical Insurance
Management Service Medical Insurance
Center Guarantee Deposit 19,681,824.13 Within 1 year 3.00% -
202,165,845.88 30.78% -
Note: With bad operation, declining solvency and increasing credit risk of Zhijun Suzhou in 2019, the Group accrued the total
amount RMB45,360,333.35 of the entrusted borrowings of Zhijun Suzhou for bad debt provision.
187
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
V Notes to the consolidated financial statements (Continued)
6. Other receivables (Continued)
As at 31 December 2019, the amount of government grants receivable is analysed below:
Grants program Amount Ageing Estimated collection time, amount and basis
Karamay Social Based on “Measures of Karamay City for
Insurance employment promotion”(Kerenshefa [2017]
Administration Karamay Employment No.184), expected to be fully recovered in
Bureau Promotion Award 15,128.72 Within 1 year June 2020.
7. Inventories
Inventories by category are analysed below:
31 December 2019 31 December 2018
Book value Provision Net book value Book value Provision Net book value
Raw materials 645,627.66 - 645,627.66 1,410,012.28 - 1,410,012.28
Finished goods 4,951,220,747.35 (8,305,500.35) 4,942,915,247.00 4,392,144,746.88 (8,313,195.29) 4,383,831,551.59
Work in progress 140,458.20 - 140,458.20 1,011,007.23 - 1,011,007.23
Low cost consumables 3,723,258.67 - 3,723,258.67 3,083,371.09 - 3,083,371.09
4,955,730,091.88 (8,305,500.35) 4,947,424,591.53 4,397,649,137.48 (8,313,195.29) 4,389,335,942.19
Provision for inventories is analysed below:
Increases Decreases
Back transfer of Addition due
previous years’ to 31 December
1 January 2019 write-off Current combination Reversal Write-off 2019
Finished goods 8,313,195.29 5,356.03 4,362,375.48 139,294.62 (3,110,765.80) (1,403,955.27) 8,305,500.35
Decreases
1 January 2018 Increases Reversal Write-off 31 December 2018
Finished goods 6,840,110.55 5,422,984.90 (2,678,379.54) (1,271,520.62) 8,313,195.29
In 2019, due to the value recovery of partial inventories, provision for inventories was reversed by
RMB3,110,765.80 (2018: RMB2,678,379.54); and due to the sales of goods in stock, provision for
inventories was written off by RMB1,403,955.27 (2018: RMB1,271,520.62).
188
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019
V Notes to the consolidated financial statements (Continued)
8. Other current assets
31 December 2019 31 December 2018
VAT tax credit 101,367,670.10 94,312,573.34
CIT to be deducted 513,305.14 723,000.46
Others 317,589.14 312,055.38
102,198,564.38 95,347,629.18
189
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
9. Long-term equity investments
2019
Changes in the year Amount of
Investee 1 January 2019 Additional Profit or loss under Changes in other Other changes Cash dividend Provision for 31 December 2019 provision for
Investment equity method comprehensive income in equity declared by investee impairment impairment
Shenzhen Main Luck Pharmaceutical Inc.
265,316,653.68 - 87,216,213.59 - - (58,063,500.00) - 294,469,367.27 -
(“Main Luck Pharmaceutical”). (a)
Shanghai Beiyi Guoda Pharmaceutical Co.
11,029,918.10 - 987,426.88 - - (2,129,400.00) - 9,887,944.98 -
Ltd. (“Shanghai Beiyi”) (b)
Shanghai Liyi Pharmacy Co., Ltd.
955,428.23 83,611.65 - - - - 1,039,039.88 -
(“Shanghai Liyi”) (c)
Shanghai Renbei Pharmacy Co., Ltd.
- 1,800,000.00 - - - - 1,800,000.00 -
(“Shanghai Renbei”) (d)
Dongyuan Accord Pharmaceutical Chain
396,638.32 - - - - - - - (396,638.32)
Co., Ltd. (“Dongyuan Accord”) (e)
Sinopharm Jienuo Medical Treatment
Service Guangdong Co., Ltd. 6,802,156.19 1,740,000.00 (2,088,476.23) - - - - 6,453,679.96 -
(“Guangdong Jienuo”) (f)
Guangdong Jianhui Construction
Investment Management Co., Ltd. - 2,000,000.00 (145,352.19) - - - - 1,854,647.81 -
(“Guangdong Jianhui”) (g)
Zhijun Suzhou (h) 23,379,018.92 - (21,521,739.40) - - (1,857,279.52) - (1,857,279.52)
Sinopharm Group Zhijun (Shenzhen)
Pharmaceutical Co., Ltd. (“Zhijun 355,353,196.15 - 106,436,143.29 - - (61,210,764.76) - 400,578,574.68
Medicine”) (i)
Shenzhen Zhijun Pharmaceutical Trade
8,730,994.87 - 2,318,103.99 - - (773,841.25) - 10,275,257.61 -
Co., Ltd. (“Zhijun Trade”) (i)
Sinopharm Group Zhijun (Shenzhen)
PingShan Pharmaceutical Co., Ltd. 86,292,927.33 - 46,881,613.08 - - (12,296,521.67) - 120,878,018.74 -
(“Zhijun Pingshan”) (i)
Shanghai Shyndec Pharmaceutical Co.,Ltd,
1,098,566,852.51 - 111,498,302.56 (133,366.19) 42,022,530.06 (16,714,220.15) - 1,235,240,098.79 -
(“Shyndec Pharma”) (i)
Shanghai Dingqun (j) 23,966,640.12 - (493,944.35) - - (834,914.61) - 22,637,781.16 -
1,880,790,424.42 5,540,000.00 331,171,902.87 (133,366.19) 42,022,530.06 (152,023,162.44) (1,857,279.52) 2,105,114,410.88 (2,253,917.84)
190
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
9. Long-term equity investments (Continued)
2018
Changes in the year
Amount of provision for
Investee 1 January 2018 31 December 2018
Additional Profit or loss under Other changes in Cash dividend impairment
Others
Investment equity method equity declared by investee
Main Luck Pharmaceutical. (a) 239,046,738.14 - 79,054,915.54 - (52,785,000.00) - 265,316,653.68 -
Shanghai Beiyi (b) 9,518,694.65 - 1,511,223.45 - - - 11,029,918.10 -
Shanghai Liyi (c) 771,408.05 - 184,020.18 - - - 955,428.23 -
Dongyuan Accord (e) 396,638.32 - - - - - - (396,638.32)
Guangdong Jienuo (f) 8,502,884.50 - (1,700,728.31) - - - 6,802,156.19 -
Zhijun Suzhou (h) 46,199,728.91 - (22,820,709.99) - - - 23,379,018.92 -
Zhijun Medicine (i) 291,042,921.20 - 122,421,529.52 - (58,111,254.57) - 355,353,196.15
Zhijun Trade (i) 7,676,142.69 - 1,719,647.21 - (664,795.03) - 8,730,994.87 -
Zhijun Pingshan (i) 68,686,804.33 - 27,325,603.71 - (9,719,480.71) - 86,292,927.33 -
Shyndec Pharma (i) 979,174,050.62 - 108,241,749.04 19,599,266.75 (8,448,213.90) - 1,098,566,852.51 -
Shanghai Dingqun (j) - 20,000,000.00 3,966,640.12 - - - 23,966,640.12 -
1,651,016,011.41 20,000,000.00 319,903,890.47 19,599,266.75 (129,728,744.21) - 1,880,393,786.10 (396,638.32)
191
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
9. Long-term equity investments (Continued)
(a) On 4 July 1990, the Group jointly established Main Luck Pharmaceutical with Mercian Kabushiki
Kaisha and Main Life Co., Ltd., subscribing 35.19%, 34.15% and 30.66% of shareholdings,
respectively. According to the Articles of Association, the board of directors of Main Luck
Pharmaceutical consisted of six directors, in which two were appointed by the Group, accounting
for 33.33% of voting rights. Therefore, the Group had significant influence over Main Luck
Pharmaceutical, and thus, it was considered as an associate of the Group.
(b) On 26 July 1994, the Group jointly established Shanghai Beiyi with Shanghai Beiyi (Group) Co.,
Ltd. and eight natural persons including Fuchun Zhu, with the share percentages being 26%, 26%
and 48%, respectively. According to the Articles of Association, the board of directors of Shanghai
Beiyi consisted of seven directors, in which two were appointed by the Group, accounting for
28.57% of voting rights. Therefore, the Group had significant influence over Shanghai Beiyi, and
thus, it was considered as an associate of the Group.
(c) On 25 November 2003, the Group jointly established Shanghai Liyi with Shanghai Pudong District
Central Hospital and Shanghai Liyi, with the share percentages being 35%, 35% and 30%,
respectively. According to the Articles of Association, the board of directors of Shanghai Liyi
consisted of five directors, in which two were appointed by the Group, accounting for 40.00% of
voting rights. Therefore, the Group had significant influence over Shanghai Liyi, and thus, it was
considered as an associate of the Group.
(d) On 3 March 2019, the Group acquired 30% shares of Shanghai Renbei. According to the Articles
of Association, the board of directors of Shanghai Renbei was composed of three directors, one of
whom was appointed by the Group, accounting for 33.33% of voting rights. Therefore, the Group
has significant influence over Shanghai Renbei, and thus, it is considered as an associate of the
Group.
(e)In 2007, Dongyuan Accord, an associate of the Group, operated in poor conditions and its future
operation would be significantly uncertain, so the Group made a full provision for impairment of the
long-term equity investment on it.
(f)On 23 February 2016, the Group jointly established Guangdong Jienuo with Sinopharm Jienuo
Medical Treatment Service Co., Ltd. and Guangzhou Jinluo Investment Development Co., Ltd., with
the share percentages being 29%, 51% and 20%, respectively. According to the Articles of
Association, the board of directors of Guangdong Jienuo was composed of five directors, one of
whom was appointed by the Group, accounting for 20% of voting rights. Therefore, the Group has
significant influence over Guangdong Jienuo, and thus it, is considered as an associate of the
Group. On 25 July 2019, the Group, together with current shareholders Sinopharm Jienuo Medical
Treatment Service Co., Ltd. and Foshan Jiejianchengfeng Medical Equipment Co., Ltd., increased
the capital of Sinopharm Jienuo Medical Treatment Service Co., Ltd. by 29%, 51% and 20%
according to the shareholding ratio respectirely, and the total amount of increased capital was
RMB6,000 thousand.
192
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
9. Long-term equity investments (Continued)
(g)On 23 November 2018, the Group jointly established Guangdong Jianhui with Guangdong
Construction Engineering Group Co., Ltd., Suixi People's Hospital and Guangdong Jianke
Architectural Design Institute Co., Ltd., with the share percentages being 10%, 79.90%, 10% and
0.10%, respectively. The registered capital of the company was RMB20,000 thousand. On 22
March 2019, the Group completed the investment of RMB2,000 thousand. According to the Articles
of Association, the board of directors of Guangdong Jianhui was composed of five directors, one of
whom was appointed by the Group, accounting for 20% of voting rights. Therefore, the Group has
significant influence over Guangdong Jianhui, and thus, it is considered as an associate of the
Group.
(h)The Group disposed of its 67% equity interest of Zhijun Suzhou in April 2016. After the disposal, the
Group held a 33% equity interest of Zhijun Suzhou. According to the Articles of Association, the
board of directors of Zhijun Suzhou was composed of five directors, one of whom was appointed by
the Group, accounting for 20% of voting rights. As a result, the Group has significant influence over
Zhijun Suzhou, and thus, it is considered as an associate of the Group. In 2019, on account of
mismanagement, there was significant uncertainty in the future operation of the Group's affiliated
enterprise Zhijun Suzhou. Thus, the Group made full provision for impairment of long-term equity
investment in Zhijun Suzhou.
(i)The Group subscribed 15.56% of new issued shares of Shyndec Pharma, a related party, by the
transferring of the productive assets in Pingshan base and its 51% equity interest of three
pharmaceutical companies (Zhijun Medicines, Zhijun Pharma & Trade, Zhijun Pingshan) of the
Group in 2016, respectively. After the completion of the reorganization, Shyndec Pharma holds a
51% equity interest of each of the three pharmaceutical companies, and the Group holds a 49%
equity interest of each of the three pharmaceutical companies, and they have significant influence
over the three pharmaceutical companies. At the same time, after the completion of the
reorganization, the Group holds a 15.56% equity interest of Shyndec Pharma. Since Shyndec
Pharma acquired the shares of subsidiaries with share-based payment in previous years, as at 31
December 2019, the Group held a 16.28% equity interest of Shyndec Pharma. Shyndec Pharma
set up a board of directors that was responsible for the shareholders' meeting, with a total of nine
members, among which, one was appointed by the Group. Each director shall represent one vote
for resolutions of the board, accounting for 11.11% of the voting rights. The Group has significant
influence over Shyndec Pharma. The above three pharmaceutical companies and Shyndec Pharma
are considered as associates of the Group.
(j)On May 2018, the Group jointly established Shanghai Dingqun with Ningbo Meishan bonded port
area Qiling equity investment center LP, subscribing 2.53% and 97.47% of shareholdings,
respectively. According to the Articles of Association, the board of directors of Shanghai Dingqun
consisted of three directors and one of them was appointed by our Company. Each director shall
represent one vote on the board’s decisions, which shall be adopted if they are voted for by a
simple majority of all the members of the board. Therefore, the Group has significant influence over
Shanghai Dingqun, and thus, it is considered as an associate of the Group.
193
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
10. Other equity instrument investment
2019
Accumulated Dividend income for the current year
changes in fair Equity instruments Equity instruments held Reasons designated to be
value of other Fair value terminated in the in the current year measured at fair value with
comprehensive current year changes included in other
income comprehensive income
Sinopharm Health Online Co., Ltd. 84,748,000.00 96,748,000.00 - - Non-trading equity instrument
Sinopharm Guoda Hubei Co., Ltd. 3,751,000.00 4,751,000.00 - - Non-trading equity instrument
Hunan Zhongbai Pharmaceutical Investment
Co., Ltd. 138,000.00 453,000.00 - - Non-trading equity instrument
Shanghai Guoda Shuguang Pharmacy Co., Ltd 8,094,240.00 8,365,000.00 - 50,000.00 Non-trading equity instrument
Shanghai Guoren Pharmacy Co., Ltd. 5,604,000.00 5,704,000.00 - 421,386.60 Non-trading equity instrument
102,335,240.00 116,021,000.00 - 471,386.60
194
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
10. Other equity instrument investment(Continued)
2018
Accumulated Dividend income for the current year Reasons designated to be
changes in fair Equity instruments Equity instruments measured at fair value with
value of other Fair value terminated in the held changes included in other
comprehensive current year in the current year comprehensive income
income
Sinopharm Health Online Co., Ltd. - 12,000,000.00 - - Non-trading equity instrument
Sinopharm Guoda Hubei Co., Ltd. - 1,000,000.00 - - Non-trading equity instrument
Hunan Zhongbai Pharmaceutical Investment
Co., Ltd. - 315,000.00 - 31,500.00 Non-trading equity instrument
Shanghai Guoda Shuguang Pharmacy Co.,
Ltd - 270,760.00 - 50,000.00 Non-trading equity instrument
Shanghai Guoren Pharmacy Co., Ltd. - 100,000.00 - 437,919.36 Non-trading equity instrument
- 13,685,760.00 - 519,419.36
195
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
11.Other non-current financial assets
31 December 2019 31 December 2018
Financial assets at fair value through profit or loss 140,000,000.00
140,000,000.00
As at 31 December 2019, the balance of other non-current financial asset is the fair value for the
Sinopharm Zhongjin medical industry fund (“Industry fund”) that the Company had subscribed. At
the 21st Meeting of the 7th board of directors which held on 6 January 2017, the Company
deliberated and passed the proposal on investment subscription of the Industry fund and related
party transaction of the company. The total investment which amounted to RMB200 million, will be
paid by 3 payments. In 2017, the Company made the first payment in the amount of RMB60 million.
However, as of 31 December 2017, the fund had neither obtained all the related licenses and
approval documentations, nor started operating, therefore, the first payment amounting to RMB60
million was designated as other non-current asset. In 2018, the Company made the second
payment in the amount of RMB80 million. As at 31 December 2019, the Company has made
payments accumulated to RMB140 million. The industry fund has obtained all the related licenses
and approval documentations in 2018, and also started operating. Since the cash flows obtained
by the Company from the investment of the fund includes both the contractual cash flowss
generated by the basic assets during the investment period and the cash flows generated by the
disposal of basic assets, which does not meet the requirement that the contractual cash flows
generated by the financial assets on a specific date should only include the payment of the
principal and the interest based on the outstanding principal amount. The Company classified the
industrial fund investment assets as financial assets measured at fair value through profit or loss,
which are presented as other non-current financial assets.
196
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
12. Investment properties
Subsequent measurement under the cost model:
2019
Buildings and constructions Land use rights Total
Original cost
Opening balance 242,555,189.91 22,719,102.03 265,274,291.94
Purchase - - -
Transfer from fixed assets 1,255,443.18 - 1,255,443.18
Transfer to intangible assets - - -
Transfer to fixed assets (200,000.00) - (200,000.00)
Closing balance 243,610,633.09 22,719,102.03 266,329,735.12
Accumulated
depreciation and
amortization
Opening balance (111,131,166.21) (7,948,629.76) (119,079,795.97)
Provision (6,473,856.29) (239,943.63) (6,713,799.92)
Transfer from fixed assets (395,846.48) - (395,846.48)
Transfer to intangible assets - - -
Transfer to fixed assets 60,065.55 - 60,065.55
Closing balance (117,940,803.43) (8,188,573.39) (126,129,376.82)
Provision for
impairment
Opening balance (1,300,000.00) - (1,300,000.00)
Closing balance (1,300,000.00) - (1,300,000.00)
Carrying amount
At end of year 124,369,829.66 14,530,528.64 138,900,358.30
At beginning of year 130,124,023.70 14,770,472.27 144,894,495.97
197
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
12. Investment properties (Continued)
2018
Buildings and constructions Land use rights Total
Original cost
Opening balance 245,932,518.64 23,370,084.72 269,302,603.36
Purchase 45,481.13 - 45,481.13
Transfer from fixed assets 5,087,242.78 - 5,087,242.78
Transfer to intangible assets - (650,982.69) (650,982.69)
Transfer to fixed assets (8,510,052.64) - (8,510,052.64)
Closing balance 242,555,189.91 22,719,102.03 265,274,291.94
Accumulated
depreciation and
amortization
Opening balance (106,139,314.25) (8,184,950.00) (114,324,264.25)
Provision (7,035,240.17) (75,098.69) (7,110,338.86)
Transfer from fixed assets (1,480,401.05) - (1,480,401.05)
Transfer to intangible assets - 311,418.93 311,418.93
Transfer to fixed assets 3,523,789.26 - 3,523,789.26
Closing balance (111,131,166.21) (7,948,629.76) (119,079,795.97)
Provision for impairment
Opening balance (1,300,000.00) - (1,300,000.00)
Closing balance (1,300,000.00) - (1,300,000.00)
Carrying amount
At end of year 130,124,023.70 14,770,472.27 144,894,495.97
At beginning of year 138,493,204.39 15,185,134.72 153,678,339.11
198
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
12. Investment properties (Continued)
During 2019, depreciation and amortization of investment properties were RMB6,713,799.92 (2018:
RMB7,110,338.86).
During 2019, properties with a carrying amount of RMB859,596.70 (original value:
RMB1,255,443.18, accumulated depreciation: RMB395,846.48) were leased out to a third party in
the form of operating leases. Since the date of change in purpose, and they have been transferred
from fixed assets to investment properties.
During 2019, a property with a carrying amount of RMB139,934.45 (original value: RMB200,000.00,
accumulated depreciation: RMB60,065.55) was transferred to an owner-occupied property. From
the date of transfer, the property was reclassified as fixed assets.
As at 31 December 2019, there were no investment properties of which the certificates of title have
not been obtained.
199
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
13. Fixed assets
31 December 2019 1 January 2019 31 December 2018
Fixed assets 612,599,944.11 594,067,973.91 607,933,827.67
Disposal of fixed assets - - -
612,599,944.11 594,067,973.91 607,933,827.67
200
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
13. Fixed assets (Continued)
2019
Machinery and Leasehold
Buildings Motor Vehicles Other equipment Total
equipment improvements
Original cost
Opening balance 489,661,268.82 185,444,104.09 89,613,300.13 294,575,902.89 54,661,564.43 1,113,956,140.36
Purchase 285,469.52 47,195,352.32 12,429,062.40 25,457,250.85 33,499,629.02 118,866,764.11
Transfer from construction in progress - 8,769,821.87 - 878,820.54 - 9,648,642.41
Transfer from investment properties 200,000.00 - - - - 200,000.00
Business combination not involving enterprises under common control - 196,365.43 365,001.36 322,978.10 608,679.42 1,493,024.31
Transfer to investment properties (1,255,443.18) - - - - (1,255,443.18)
Disposal of subsidiaries - - (305,010.00) (298,683.01) (124,535.84) (728,228.85)
Disposal or retirement (3,842,383.00) (2,628,608.89) (15,067,365.95) (6,001,398.49) (14,065,013.84) (41,604,770.17)
Closing balance 485,048,912.16 238,977,034.82 87,034,987.94 314,934,870.88 74,580,323.19 1,200,576,128.99
Accumulated depreciation
Opening balance (164,477,441.12) (85,085,743.31) (59,523,264.14) (173,741,971.45) (38,364,970.83) (519,888,166.45)
Provision (15,582,180.14) (30,506,506.49) (8,239,110.97) (23,191,050.44) (22,011,784.80) (99,530,632.84)
Transfer from investment properties (60,065.55) - - - - (60,065.55)
Transfer to investment properties 395,846.48 - - - - 395,846.48
Recovered from disposal of subsidiaries - - 298,484.02 136,696.63 52,796.55 487,977.20
Disposal or retirement 182,520.72 2,154,833.53 11,185,794.58 4,445,889.85 12,649,817.60 30,618,856.28
Closing balance (179,541,319.61) (113,437,414.27) (56,278,096.51) (191,045,213.01) (47,674,141.48) (587,976,184.88)
201
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
13. Fixed assets (Continued)
2019 (Continued)
Machinery and Leasehold
Buildings Motor Vehicles Other equipment Total
equipment improvements
Provision for impairment
Opening balance - - - - - -
Closing balance - - - - - -
Carrying amount
At end of year 305,507,592.55 125,539,620.55 30,756,891.43 123,889,657.87 26,906,181.71 612,599,944.11
At beginning of year 325,183,827.70 100,358,362.78 30,090,035.99 122,139,153.84 16,296,593.60 594,067,973.91
202
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
13. Fixed assets (Continued)
2018
Machinery and Leasehold
Buildings Motor Vehicles Other equipment Total
equipment improvements
Original cost
Opening balance 456,161,611.21 183,752,571.14 87,999,790.56 259,281,585.41 30,111,198.47 1,017,306,756.79
Purchase 33,284,634.30 23,347,438.62 10,265,993.33 41,281,602.46 24,790,021.29 132,969,690.00
Transfer from construction in progress 416,909.49 3,060,420.86 - 2,286,152.37 6,595,411.97 12,358,894.69
Transfer from investment properties 8,510,052.64 - - - - 8,510,052.64
Business combination not involving enterprises under common control - - 102,931.29 99,584.93 1,250.05 203,766.27
Transfer to investment properties (5,087,242.78) - - - - (5,087,242.78)
Disposal of subsidiaries - - (151,443.00) - (244,344.76) (395,787.76)
Disposal or retirement (3,624,696.04) (2,705,694.05) (8,603,972.05) (5,656,536.47) (6,591,972.59) (27,182,871.20)
Closing balance 489,661,268.82 207,454,736.57 89,613,300.13 297,292,388.70 54,661,564.43 1,138,683,258.65
Accumulated depreciation
Opening balance (149,119,755.22) (73,601,067.33) (59,221,772.87) (154,689,144.23) (28,964,583.12) (465,596,322.77)
Provision (15,341,234.41) (22,747,402.07) (7,596,679.69) (23,835,198.48) (15,155,803.18) (84,676,317.83)
Transfer from investment properties (3,523,789.26) - - - - (3,523,789.26)
Transfer to investment properties 1,480,401.05 - - - - 1,480,401.05
- - 151,443.00 3,826.90 235,829.86 391,099.76
Disposal or retirement 2,026,936.72 1,706,685.96 7,143,745.42 4,778,544.36 5,519,585.61 21,175,498.07
Closing balance (164,477,441.12) (94,641,783.44) (59,523,264.14) (173,741,971.45) (38,364,970.83) (530,749,430.98)
203
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
13. Fixed assets (Continued)
2018 (Continued)
Machinery and Leasehold
Buildings Motor Vehicles Other equipment Total
equipment improvements
Provision for impairment
Opening balance - - - - - -
Closing balance - - - - - -
Carrying amount
At end of year 325,183,827.70 112,812,953.13 30,090,035.99 123,550,417.25 16,296,593.60 607,933,827.67
At beginning of year 307,041,855.99 110,151,503.81 28,778,017.69 104,592,441.18 1,146,615.35 551,710,434.02
204
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in
Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
13. Fixed assets (Continued)
Fixed assets held under finance leases are presented as follows:
2018
Original cost Accumulated depreciation Provision for impairment Carrying amount
Machinery 22,010,632.48 (9,556,042.13) - 12,454,590.35
Other equipment 2,716,485.81 (1,305,222.40) - 1,411,263.41
24,727,118.29 (10,861,264.53) - 13,865,853.76
As at 31 December 2019 and 31 December 2018, the Group has not owned any fixed assets for operating
leases.
As at 31 December 2019, the fixed assets falling to accomplish certification of title are presented as follows:
Book value Reason for not obtaining certification of title
As at 31 December 2019, the Company has not yet obtained the
certification of title for No.13 Jingxing North Street, Tiexi District,
Houses and buildings 28,356,440.00 Shenyang. The transferor, the State-owned Assets Supervision and
Administration Commission, was still processing the case and had
provided a relevant notification.
As at 31 December 2019 and 31 December 2018, there were no fixed assets that were temporarily idle.
205
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
14. Construction in progress
31 December 2019 31 December 2018
Construction in progress 31,582,575.84 36,412,614.61
31 December 2019 31 December 2018
Carrying balance Impairment Carrying amount Carrying balance Impairment Carrying amount
Warehouse improvement project 1,232,957.94 - 1,232,957.94 806,272.40 - 806,272.40
New office building project 110,090.53 - 110,090.53 188,251.26 - 188,251.26
Supply chain extension project 8,081,340.80 - 8,081,340.80 12,617,953.89 - 12,617,953.89
Software project 13,197,683.52 - 13,197,683.52 12,930,498.53 - 12,930,498.53
Other projects 8,960,503.05 - 8,960,503.05 9,869,638.53 - 9,869,638.53
31,582,575.84 - 31,582,575.84 36,412,614.61 - 36,412,614.61
206
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
14. Construction in progress (Continued)
Changes of significant construction in progress in 2019 are presented as follows:
Proportion
of
Decrease At end of year Source of funds investment
At beginning of to budget
Project name Increase
the year (%)
Transferred to
Transferred to Transferred to long term prepaid Other
fixed assets intangible assets expense
Warehouse improvement project 806,272.40 3,859,186.68 (1,143,477.76) - (2,289,023.38) - 1,232,957.94 Self-raised funds 67.37
New office building project 188,251.26 110,090.53 - - (188,251.26) - 110,090.53 Self-raised funds 43.33
Supply chain extension project 12,617,953.89 8,728,170.28 (8,459,732.15) (4,245,282.90) - (559,768.32) 8,081,340.80 Self-raised funds 71.99
Software project 12,930,498.53 13,216,765.17 (45,432.50) (12,904,147.68) - - 13,197,683.52 Self-raised funds 99.98
Other construction projects 9,869,638.53 446,074.08 - - (1,355,209.56) - 8,960,503.05 Self-raised funds 5.37
36,412,614.61 26,360,286.74 (9,648,642.41) (17,149,430.58) (3,832,484.20) (559,768.32) 31,582,575.84
207
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
14. Construction in progress (Continued)
Changes of significant construction in progress in 2019 are presented as follows: （Continued）
Including:
Accumulated amount of interest Capitalization
Project name Budget Progress (%)
interest capitalized capitalized in rate (%)
current year
Warehouse improvement project 7,008,129.53 67.37 - - -
New office building project 688,251.26 43.33 - - -
Supply chain extension project 30,933,538.69 71.99 - - -
Software project 26,151,831.20 99.98 - - -
Other construction projects 206,728,926.07 5.37 - - -
- -
208
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
14. Construction in progress (Continued)
Changes of significant construction in progress in 2018 are presented as follows:
Proportion
of
Decrease At end of year Source of funds investment
At beginning of to budget
Project name Increase
the year (%)
Transferred Transferred to
Transferred to to intangible long term
fixed assets assets prepaid expense
Warehouse improvement project 1,009,314.93 9,284,604.35 - - (9,487,646.88) 806,272.40 Self-raised funds 65.94
New office building project 765,882.63 146,970.43 (724,601.80) - - 188,251.26 Self-raised funds 100.00
Supply chain extension project 8,193,935.70 16,374,550.40 (11,634,292.89) (316,239.32) - 12,617,953.89 Self-raised funds 66.56
Software project 3,926,271.33 9,004,227.20 - - - 12,930,498.53 Self-raised funds 54.98
Other construction projects 9,051,854.40 1,508,407.48 - - (690,623.35) 9,869,638.53 Self-raised funds 5.23
22,947,258.99 36,318,759.86 (12,358,894.69) (316,239.32) (10,178,270.23) 36,412,614.61
209
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
14. Construction in progress (Continued)
Changes of significant construction in progress in 2018 are presented as follows: (Continued)
Including:
Accumulated amount of interest Capitalization
Project name Budget Progress (%)
interest capitalized capitalized in rate (%)
current year
Warehouse improvement project 15,616,610.85 65.94 - - -
New office building project 1,224,601.80 100.00 - - -
Supply chain extension project 52,673,236.26 65.56 - - -
Software project 12,956,849.38 54.98 - - -
Other construction projects 207,178,844.09 5.23 - - -
- -
210
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
15. Right-of-use assets
2019
Houses and buildings Machinery, transport and office equipment Others Total
Cost
Opening balance 1,817,160,059.39 14,379,897.19 2,418,809.35 1,833,958,765.93
Increase 814,925,685.77 90,197.76 - 815,015,883.53
Disposal (49,556,361.06) - - (49,556,361.06)
Closing balance 2,582,529,384.10 14,470,094.95 2,418,809.35 2,599,418,288.40
Accumulated amortization
Opening balance - - - -
Accrual (650,986,768.21) (4,075,450.60) (95,734.70) (655,157,953.51)
Disposal 11,200,798.12 - - 11,200,798.12
Closing balance (639,785,970.09) (4,075,450.60) (95,734.70) (643,957,155.39)
211
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
15. Right-of-use assets (Continued)
2019 (Continued)
Houses and buildings Machinery, transport and office equipment Others Total
Provision for impairment
Opening balance - - - -
Closing balance - - - -
Book value
The end of the year 1,942,743,414.01 10,394,644.35 2,323,074.65 1,955,461,133.01
The beginning of year 1,817,160,059.39 14,379,897.19 2,418,809.35 1,833,958,765.93
212
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
16. Intangible assets
31 December 2019 1 January 2019 31 December 2018
Disposal of fixed assets 319,946,727.04 318,693,082.72 319,207,126.15
319,946,727.04 318,693,082.72 319,207,126.15
2019 Land use rights Software Trademarks Favorable leases Distribution network Franchis Total
Original cost
Opening balance 62,083,143.97 142,108,155.42 65,977,850.00 93,242,000.00 112,117,142.86 710,000.00 476,238,292.25
Purchase - 13,442,842.51 - - - - 13,442,842.51
Business combination not involving enterprises
under common control - 888,462.22 - - - - 888,462.22
Transfer from construction in progress - 17,149,430.58 - - - - 17,149,430.58
Closing balance 62,083,143.97 173,588,890.73 65,977,850.00 93,242,000.00 112,117,142.86 710,000.00 507,719,027.56
Accumulated amortization
Opening balance (27,889,638.96) (68,273,563.72) (196,850.16) (19,782,823.36) (40,692,333.33) (710,000.00) (157,545,209.53)
Provision (968,938.20) (18,706,589.77) - (4,945,705.88) (5,605,857.14) - (30,227,090.99)
Closing balance (28,858,577.16) (86,980,153.49) (196,850.16) (24,728,529.24) (46,298,190.47) (710,000.00) (187,772,300.52)
213
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
16. Intangible assets (Continued)
2019 (Continued) Land use rights Software Trademarks Favorable leases Distribution network Franchise Total
Provision for impairment
Opening balance - - - - - - -
Disposal of subsidiaries - - - - - - -
Closing balance - - - - - - -
Carrying amount
At end of the year 33,224,566.81 86,608,737.24 65,780,999.84 68,513,470.76 65,818,952.39 - 319,946,727.04
At beginning of the year 34,193,505.01 73,834,591.70 65,780,999.84 73,459,176.64 71,424,809.53 - 318,693,082.72
214
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
16. Intangible assets (Continued)
2018 Land use rights Software Trademarks Favorable leases Distribution network Franchise Total
Original cost
Opening balance 60,481,989.28 126,128,809.36 65,977,850.00 93,242,000.00 112,117,142.86 710,000.00 458,657,791.50
Purchase 2,160,172.00 16,310,053.09 - - - - 18,470,225.09
Business combination not involving enterprises
under common control - 7,754.51 - - - - 7,754.51
Transfer from construction in progress - 316,239.32 - - - - 316,239.32
Transfer from investment properties 650,982.69 - - - - - 650,982.69
Disposal (1,210,000.00) - - - - - (1,210,000.00)
Closing balance 62,083,143.97 142,762,856.28 65,977,850.00 93,242,000.00 112,117,142.86 710,000.00 476,892,993.11
Accumulated amortization
Opening balance (26,667,841.47) (55,408,075.33) (196,850.16) (14,837,117.48) (35,086,476.18) (710,000.00) (132,906,360.62)
Provision (910,378.56) (13,006,145.82) - (4,945,705.88) (5,605,857.15) - (24,468,087.41)
Transfer from investment properties (311,418.93) - - - - - (311,418.93)
Disposal - - - - - - -
Closing balance (27,889,638.96) (68,414,221.15) (196,850.16) (19,782,823.36) (40,692,333.33) (710,000.00) (157,685,866.96)
215
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
16. Intangible assets (Continued)
2018 (Continued) Land use rights Software Trademarks Favorable leases Distribution network Franchise Total
Provision for impairment
Opening balance - - - - - - -
Closing balance - - - - - - -
Carrying amount
At end of the year 34,193,505.01 74,348,635.13 65,780,999.84 73,459,176.64 71,424,809.53 - 319,207,126.15
At beginning of the year 33,814,147.81 70,720,734.03 65,780,999.84 78,404,882.52 77,030,666.68 - 325,751,430.88
As at 31 December 2019 and 31 December 2018, no intangible assets were formed through internal research and development.
As at 31 December 2019 and 31 December 2018, there were no intangible assets of which the certificates of title have not been obtained.
216
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
17. Goodwill
Decrease
Increase during the year
Opening Business combination Closing
31 December 2019
balance combinations not balance
Merger of holdings not under under common
common control control r
Pharmaceutical distribution
Jiangmen Renren Medical Co., Ltd.
(“Sinopharm Jiangmen”) 27,392,317.73 - - - 27,392,317.73
Sinopharm Holding Shenzhen
Yanfeng Co., Ltd. (“Sinopharm
Yanfeng”) 16,868,644.87 - - - 16,868,644.87
Sinopharm Holding Zhaoqing Co.,
Ltd. (“Sinopharm Zhaoqing”) 2,594,341.53 - - - 2,594,341.53
Sinopharm Holding Shaoguan Co.,
Ltd. (“Sinopharm Shaoguan”) 1,686,496.80 - - - 1,686,496.80
Sinopharm Holding Meizhou Co.,
Ltd. (“Sinopharm Meizhou”) 1,610,819.66 - - - 1,610,819.66
Sinopharm Holding Huizhou Co.,
Ltd. (“Sinopharm Huizhou”) 923,184.67 - - - 923,184.67
Sinopharm Holding Zhanjiang Co.,
Ltd. (“Sinopharm Zhanjiang”) 282,135.55 - - - 282,135.55
Sinopharm Holding Dongguan Co.,
Ltd. (“Sinopharm Dongguan”) 1,499.02 - - - 1,499.02
South Pharma & Trade 2,755,680.62 - - - 2,755,680.62
Foshan Nanhai 88,877,850.51 - - - 88,877,850.51
Sinopharm Holding Zhuhai Co.,
Ltd.(“Sinopharm Zhuhai”) 6,772,561.47 6,772,561.47
Sinopharm Holding Maoming Co.,
Ltd.(“Sinopharm Maoming”) 66,417.07 - - - 66,417.07
Sinopharm Holding Guoda ForMe
Medicines (Shanghai) Co., Ltd.
(“ForMe Medicines’’) 3,033,547.53 - - - 3,033,547.53
217
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
17. Goodwill (Continued)
Increase Decrease
Business
combination Closing
31 December 2019 (Continued) Opening balance combinations balance
not under
Merger of holdings not common
under common control control
Pharmaceutical retail
Sinopharm Hebei Lerentang Pharmacy
Chain Store Co., Ltd.(“Hebei
Lerentang”) 29,482,149.57 - - - 29,482,149.57
Xiaoyi Guoda Wanmin Baicaotang
Pharmacy Chain Store Co., Ltd.
(“Xiaoyi Wanmin”) 15,866,680.00 - - - 15,866,680.00
Shanxi Guoda Wanmin Pharmacy Chain
Store Co., Ltd. (“Shanxi Wanmin”) 65,025,000.00 - - - 65,025,000.00
Sinopharm Holding Guoda ForMe
Pharmacy Chain Store Co., Ltd. (“ForMe
Pharmacy Chain Store”) 19,405,450.23 - - - 19,405,450.23
Sinopharm Holding Guoda Pharmacy Chain
Store Shanghai Co., Ltd. 5,028,638.00 - - - 5,028,638.00
Sinopharm Holding Guoda Yangzhou
Dadesheng Pharmacy Chain Store Co.,
Ltd. 7,979,000.00 - - - 7,979,000.00
Zhejiang Guoda Pharmacy Co., Ltd. 3,045,183.85 - - - 3,045,183.85
Guoda Shenyang Tianyitang
Pharmacy Chain 1,687,942.92 - - - 1,687,942.92
Sinopharm Holding Guoda Nanjing
Pharmacy Chain Store Co., Ltd. 11,598,341.12 - - - 11,598,341.12
Fujian Guoda Pharmacy Chain Store Co.,
Ltd. 1,567,250.76 - - - 1,567,250.76
Sinopharm Holding Guoda Shandong
Pharmacy Chain Store Co., Ltd. 29,110,409.46 - - - 29,110,409.46
Sinopharm Holding Guoda Shenyang
Pharmacy Chain Store Co., Ltd. (“Guoda
Shenyang”) 41,047,958.08 - - - 41,047,958.08
Liyang Guoda People Pharmacy Chain
Store Co., Ltd. 107,275,095.74 - - - 107,275,095.74
Sinopharm Holding Hunan Guoda
Minshengtang Pharmacy Chain Co., Ltd. 41,165,574.64 - - - 41,165,574.64
Quanzhou Guoda Pharmacy Chain Store
Co., Ltd. (“Guoda Quanzhou”) 41,298,622.59 - - - 41,298,622.59
Sinopharm Holding Guoda Henan
Pharmacy Chain Store Co., Ltd. 22,666,179.77 - - - 22,666,179.77
Guoda Neimenggu 70,485,777.00 - - - 70,485,777.00
Sinopharm Guoda Pharmacy Jiangmen
Chain Co., Ltd. 77,350,000.00 - - - 77,350,000.00
Sinopharm Holding Guoda Shanxi Yiyuan
Pharmacy Chain Store Co., Ltd. 9,080,100.00 - - - 9,080,100.00
Shenzhen Guanganli Pharmacy Chain
Store Co., Ltd. store acquisition 13,420,000.00 - - - 13,420,000.00
Beijing Golden Elephant Pharmacy
Medicine Chain Company Limited 64,140,124.36 - - - 64,140,124.36
Guoda Taishan 26,826,120.55 - - - 26,826,120.55
Sinopharm Guoda Taiyuan Tongxinli
Pharmacy Co., Ltd.（Taiyuan Tongxinli） 2,818,647.85 - - - 2,818,647.85
Chaoyang Yongxingtang Pharmacy Chain
Store Co., Ltd (“Chaoyang
Yongxingtang”) stores’ acquisition - - 25,973,399.17 - 25,973,399.17
Inner Mongolia Tongren Pharmacy Chain
Store Co., Ltd. (“Inner Mongolia
Tongren”) stores’ acquisition - - 13,494,000.00 - 13,494,000.00
Guoda Pu’er - 71,064,684.79 - - 71,064,684.79
858,547,800.60 71,064,684.79 39,467,399.17 - 969,079,884.56
218
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
17. Goodwill (Continued)
Increase Decrease
Opening Consolidation by Consolidation by merger Closing
31 December 2018 Merger of holdings not merger under under common control
balance balance
under common common
control control
Pharmaceutical distribution
Sinopharm Jiangmen 27,392,317.73 - - - 27,392,317.73
Sinopharm Yanfeng 16,868,644.87 - - - 16,868,644.87
Sinopharm Zhaoqing 2,594,341.53 - - - 2,594,341.53
Sinopharm Shaoguan 1,686,496.80 - - - 1,686,496.80
Sinopharm Meizhou 1,610,819.66 - - - 1,610,819.66
Sinopharm Huizhou 923,184.67 - - - 923,184.67
Sinopharm Zhanjiang 282,135.55 - - - 282,135.55
Sinopharm Dongguan 1,499.02 - - - 1,499.02
South Pharma & Trade 2,755,680.62 - - - 2,755,680.62
Foshan Nanhai 88,877,850.51 - - - 88,877,850.51
Sinopharm Zhuhai 6,772,561.47 6,772,561.47
Sinopharm Maoming 66,417.07 - - - 66,417.07
ForMe Medicines 3,033,547.53 - - - 3,033,547.53
Pharmaceutical retail
Shijiazhuang Lerentang Yikang Pharmacy
Chain Store Co., Ltd. 29,482,149.57 - (29,482,149.57)
Hebei Lerentang - - 29,482,149.57 - 29,482,149.57
Xiaoyi Wanmin 15,866,680.00 - - - 15,866,680.00
Shanxi Wanmin 65,025,000.00 - - - 65,025,000.00
ForMe Pharmacy Chain Store 19,405,450.23 - - - 19,405,450.23
Sinopharm Holding Guoda Pharmacy
Chain Store Shanghai Co., Ltd. 5,028,638.00 - - - 5,028,638.00
Sinopharm Holding Guoda Yangzhou
Dadesheng Pharmacy Chain Store
Co., Ltd. 7,979,000.00 - - - 7,979,000.00
Zhejiang Guoda Pharmacy Co., Ltd. 3,045,183.85 - - - 3,045,183.85
Sinopharm Holding Guoda Nanjing
Pharmacy Chain Store Co., Ltd. 11,598,341.12 - - - 11,598,341.12
Fujian Guoda Pharmacy Chain Store Co.,
Ltd. 1,567,250.76 - - - 1,567,250.76
Sinopharm Holding Guoda Shandong
Pharmacy Chain Store Co., Ltd. 29,110,409.46 - - - 29,110,409.46
Guoda Shenyang 41,047,958.08 - - - 41,047,958.08
Liyang Guoda People Pharmacy Chain
Store Co., Ltd. 107,275,095.74 - - - 107,275,095.74
Sinopharm Holding Hunan Guoda
Minshengtang Pharmacy Chain Co.,
Ltd. 41,165,574.64 - - - 41,165,574.64
Guoda Quanzhou 41,298,622.59 - - - 41,298,622.59
Sinopharm Holding Guoda Henan
Pharmacy Chain Store Co., Ltd. 22,666,179.77 - - - 22,666,179.77
Guoda Neimenggu 70,485,777.00 - - - 70,485,777.00
Sinopharm Guoda Pharmacy Jiangmen
Chain Co., Ltd. 77,350,000.00 - - - 77,350,000.00
Sinopharm Holding Guoda Shanxi Yiyuan
Pharmacy Chain Store Co., Ltd. 9,080,100.00 - - - 9,080,100.00
Shenzhen Guanganli Pharmacy Chain
Store Co., Ltd. store acquisition 13,420,000.00 - - - 13,420,000.00
Beijing Golden Elephant Pharmacy
Medicine Chain Company Limited
(“Beijing Golden Elephant”) 63,546,507.81 - 593,616.55 - 64,140,124.36
Beijing Yangqiao Rongzhi Golden
Elephant Pharmacy Company Limited 593,616.55 - - (593,616.55) -
219
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
17. Goodwill (Continued)
Increase Decrease
31 December 2018 (Continued) Opening balance Consolidation by Consolidation
Merger of holdings not merger under by merger under Closing balance
under common control common control common control
Pharmaceutical retail (Continued)
Guoda Taishan 26,826,120.55 - - - 26,826,120.55
Taiyuan Tongxinli - 2,818,647.85 - - 2,818,647.85
855,729,152.75 2,818,647.85 30,075,766.12 (30,075,766.12) 858,547,800.60
Changes in provision for impairment of goodwill are presented as follows:
2019 Opening balance Increase Decrease Closing balance
Provision Disposal
Pharmaceutical retail
Guoda Quanzhou 25,000,000.00 - - 25,000,000.00
2018 Opening balance Increase Decrease Closing balance
Provision Disposal
Pharmaceutical retail
Guoda Quanzhou 25,000,000.00 - - 25,000,000.00
The carrying value of goodwill is apportioned according to the proportion of each CGU or CGU
group at fair value of the total amount of goodwill at fair value. It is shown as follows:
31 December 2019 31 December 2018
Pharmaceutical distribution 152,865,497.03 152,865,497.03
Pharmaceutical retail 791,214,387.53 680,682,303.57
944,079,884.56 833,547,800.60
220
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
17. Goodwill (Continued)
The Group had acquired the management right of 12 stores of Inner Mongolia Tongren in March
2019, which formed goodwill amounting to RMB13,494,000. Refer to Note VI (1.2) for more details.
The Group had acquired the management right of 31 stores of Chaoyang Yongxingtang in May
2019, which formed goodwill amounting to RMB25,973,399.17. Refer to Note VI (1.3) for more
details.
The Group had acquired 60% shares of Pu'er Songmao Jiantang Pharmaceutical Co., Ltd. in
November 2019, which formed goodwill amounting to RMB71,064,684.79. Refer to Note VI (1.4)
for more details.
The recoverable amount of an asset group or a group of asset groups is determined based on a
financial budget approved by management covering a five-year period. The cash flows beyond the
five-year period are extrapolated using the inflation rate.
Key assumptions were used for the calculation of the present values of future cash flow
projections of the asset group consisting of pharmaceutical distribution and pharmaceutical retail
as of 31 December 2019. Key assumptions made by management on projections of cash flows
used in impairment testing are described as follows:
Pharmaceutical
Pharmaceutical retail
distribution
Revenue growth rate in the budget period 2.00%-40.00% 1.41%-35.00%
Sustainable growth rate 3.00% 3.00%
Gross margin 3.70%-6.94% 20.36%-41.22%
Discount rate 12.40%-15.00% 13.00%-15.00%
The budgeted gross margin and the revenue growth rate in the budget period are determined
based on the past performance and expectation for market development. The discount rates used
are pre-tax discount rates after reflecting specific risks of the relevant asset groups. The
recoverable amount of the asset group consisting of pharmaceutical distribution and
pharmaceutical retail was determined according to the key assumptions.
221
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
18. Long-term prepaid expenses
2019 Opening balance Additions Amortization Other decrease Closing balance
Fixed asset improvement
expenditure 249,458,261.87 121,956,819.11 (86,002,425.40) (2,970,454.66) 282,442,200.92
Acquisition expenditure to
obtain the right to operate 57,617,166.63 15,785,422.51 (16,870,583.63) - 56,532,005.51
Others 4,253,277.96 28,371,430.56 (5,099,503.83) (37,272.11) 27,487,932.58
311,328,706.46 166,113,672.18 (107,972,512.86) (3,007,726.77) 366,462,139.01
2018 Opening balance Increase Amortization Other decrease Closing balance
Fixed asset improvement
expenditure 199,209,837.80 123,968,928.79 (72,027,492.28) (1,693,012.44) 249,458,261.87
Acquisition expenditure to
obtain the right to operate 49,013,331.48 24,687,711.48 (16,083,876.33) - 57,617,166.63
Others 4,023,881.51 1,973,696.15 (1,744,299.70) - 4,253,277.96
252,247,050.79 150,630,336.42 (89,855,668.31) (1,693,012.44) 311,328,706.46
222
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
19. Deferred tax assets/liabilities
Deferred tax assets and deferred tax liabilities before offsetting are as follows:
31 December 2019 31 December 2018
Deductible temporary Deductible temporary
differences Deferred tax assets differences Deferred tax assets
Deferred tax assets
Provision for
impairment of
assets 113,202,938.51 26,745,819.50 68,153,222.07 15,676,020.10
Accrued expenses 101,057,882.46 24,536,658.05 94,108,769.33 22,301,617.95
Effect of the new
lease standard 52,885,419.73 12,482,780.70 - -
Deferred revenue 32,719,558.79 7,996,709.35 30,188,142.13 7,547,758.26
Deductible tax loss 30,789,517.62 7,536,230.76 77,791,621.20 19,311,837.06
Accrued payroll 11,868,705.75 2,454,711.04 64,598,625.74 15,656,015.32
Others 22,161,103.74 4,560,780.36 6,238,492.18 1,467,765.00
364,685,126.60 86,313,689.76 341,078,872.65 81,961,013.69
31 December 2019 31 December 2018
Taxable temporary Taxable temporary
differences Deferred tax liabilities differences Deferred tax liabilities
Deferred tax liabilities
Fair value
adjustment for a
business
combination not
involving
enterprises under
common control 216,027,393.92 54,006,848.47 227,900,345.39 56,975,086.34
Changes in fair
value of financial
assets through
other
comprehensive
income 102,335,240.00 25,583,810.00 - -
Fixed asset less
than RMB5
million deducted
at once 77,440,115.98 19,250,299.21 26,766,360.08 6,691,590.04
Changes in asset
valuation due to
change in
company policy 20,286,498.64 5,071,624.66 21,858,742.02 5,464,685.51
Others 26,521,667.38 5,487,577.71 26,741,840.89 5,520,603.73
442,610,915.92 109,400,160.05 303,267,288.38 74,651,965.62
223
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
19. Deferred tax assets/liabilities (Continued)
Deferred tax assets and liabilities are presented after being offset against each other are as
follows:
31 December 2019 31 December 2018
Deferred tax Deferred tax
The amount of assets/liabilities - The amount of assets/liabilities -
offset net offset net
Deferred tax assets 25,682,673.77 60,631,015.99 7,046,803.74 74,914,209.95
Deferred tax liabilities 25,682,673.77 83,717,486.28 7,046,803.74 67,605,161.88
The deductible temporary differences and deductible losses that were not recognised as
deferred tax assets are presented as follows:
31 December 2019 31 December 2018
Deductible temporary differences 1,480,000.00 1,480,000.00
Deductible losses (Note) 49,106,535.92 29,391,422.33
50,586,535.92 30,871,422.33
Note: For those loss-making subsidiaries, as it is not considered probable that taxable profits
will be available against which the tax losses can be utilized, the Group has not
recognised deferred tax assets arising from accumulated losses amounting to
RMB49,106,535.92 which are tax deductibles under the tax law.
The aforesaid unrecognised deductible losses will be due in:
31 December 2019 31 December 2018
2019 - 2,864,062.85
2020 4,725,707.87 4,725,707.87
2021 2,563,056.08 2,563,056.08
2022 7,261,117.97 7,261,117.97
2023 11,977,477.56 11,977,477.56
2024 22,579,176.44 -
49,106,535.92 29,391,422.33
224
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
20. Other non-current assets
31 December 2019 1 January 2019 31 December 2018
Specially approved reserving
materials 55,550,834.89 47,576,273.75 47,576,273.75
Prepayment for project and
equipment 21,713,763.10 10,592,645.36 10,592,645.36
Prepayment for a rental fee 90,372.40 - 14,196,944.60
77,354,970.39 58,168,919.11 72,365,863.71
21. Provision for impairment of assets
Reversal of Increases Decreases
1 January 2019 write-off in Increase due to 31 December 2019
previous years Current Reversal Write-off
reorganization
Provision for bad debts 59,443,388.46 62,630.60 75,240,127.77 57,180.49 (22,076,637.16) (8,157,143.90) 104,569,546.26
Provision for bad debts
of accounts receivable 39,521,434.74 22,080.00 25,098,772.50 56,980.49 (20,246,309.59) (3,823,540.02) 40,629,418.12
Provision for bad debts
of other receivables 19,921,953.72 40,550.60 50,141,355.27 200.00 (1,830,327.57) (4,333,603.88) 63,940,128.14
Provision for inventories 8,313,195.29 5,356.03 4,362,375.48 139,294.62 (3,110,765.80) (1,403,955.27) 8,305,500.35
Impairment of investment
properties 1,300,000.00 - - - - - 1,300,000.00
Impairment of goodwill 25,000,000.00 - - - - - 25,000,000.00
Impairment of long-term
equity investments 396,638.32 - 1,857,279.52 - - - 2,253,917.84
94,453,222.07 67,986.63 81,459,782.77 196,475.11 (25,187,402.96) (9,561,099.17) 141,428,964.45
225
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
21. Provision for impairment of assets (Continued)
Reversal of Increases Decreases
1 January 2018 write-off in Increase due to 31 December 2018
previous years Current Reversal Write-off
reorganization
Provision for bad debts 59,036,515.28 221,031.35 19,607,811.63 80,000.00 (19,309,332.08) (192,637.72) 59,443,388.46
Provision for bad debts
of accounts receivable 43,925,465.41 221,031.35 12,467,357.34 - (16,899,781.64) (192,637.72) 39,521,434.74
Provision for bad debts
of other receivables 15,111,049.87 - 7,140,454.29 80,000.00 (2,409,550.44) - 19,921,953.72
Provision for inventories 6,840,110.55 - 5,422,984.90 - (2,678,379.54) (1,271,520.62) 8,313,195.29
Impairment of investment
properties 1,300,000.00 - - - - - 1,300,000.00
Impairment of goodwill 25,000,000.00 - - - - - 25,000,000.00
Impairment of long-term
equity investments 396,638.32 - - - - - 396,638.32
92,573,264.15 221,031.35 25,030,796.53 80,000.00 (21,987,711.62) (1,464,158.34) 94,453,222.07
22. Short-term borrowings
31 December 2019 31 December 2018
Credit borrowings 1,388,979,951.89 2,438,612,672.71
Discounted notes 64,038,348.12 170,013,427.11
1,453,018,300.01 2,608,626,099.82
As at 31 December 2019, the annual interest rate for the above borrowings was 4.44% (31 December
2018: 4.65%).
As at 31 December 2019 and 31 December 2018, there were no short-term borrowings of the Group that
were overdue but not yet paid.
226
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
23. Notes payable
31 December 2019 31 December 2018
Commercial acceptance bills 40,343,723.78 13,843,479.73
Bank acceptance bills 5,515,353,833.75 3,402,912,202.07
5,555,697,557.53 3,416,755,681.80
At 31 December 2019, the total amount of notes payable that were due but not yet paid was nil (31
December 2018: nil).
24. Accounts payable
Accounts payable are interest-free and will be paid normally between 1 and 6 months.
31 December 2019 31 December 2018
Payment for goods 6,554,105,124.13 6,468,535,961.17
At 31 December 2019, significant accounts payable aged over one year was analyzed below:
Amount Reason
Payment for goods 331,837,741.84 Not yet settled
25. Contract liabilities
31 December 2019 31 December 2018
Contract liabilities 302,650,567.97 255,590,612.37
Contract liabilities are advance payments received. Contract obligations are normally performed,
and revenue is recognised, within 6 months of receiving such advance payments by customers.
227
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
26. Employee benefits payable
At beginning of At end of the
2019 the year Increase Decrease year
Short-term employee
benefits 226,152,409.27 2,005,462,891.39 (1,980,782,154.51) 250,833,146.15
Post-employment
benefits (defined
contribution plan) 5,248,146.99 181,128,052.90 (181,714,446.08) 4,661,753.81
Termination benefits 465,851.14 1,431,023.12 (1,564,052.56) 332,821.70
231,866,407.40 2,188,021,967.41 (2,164,060,653.15) 255,827,721.66
At beginning of At end of the
2018 the year Increase Decrease year
Short-term employee
benefits 209,320,163.70 1,759,137,844.89 (1,742,305,599.32) 226,152,409.27
Post-employment
benefits (defined
contribution plan) 5,596,277.12 176,477,341.94 (176,825,472.07) 5,248,146.99
Termination benefits 740,085.72 1,555,451.66 (1,829,686.24) 465,851.14
215,656,526.54 1,937,170,638.49 (1,920,960,757.63) 231,866,407.40
228
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
26. Employee benefits payable (Continued)
Short-term employee benefits:
At beginning of
2019 year Increase Decrease At end of year
Salaries, bonuses,
allowances and grants 210,723,820.21 1,745,458,052.03 (1,719,091,854.24) 237,090,018.00
Staff welfare 1,750,750.89 62,496,131.37 (62,856,557.73) 1,390,324.53
Social security contribution 1,622,271.12 95,074,567.23 (95,194,678.92) 1,502,159.43
Including: Medical insurance 1,362,150.59 85,088,807.47 (85,202,240.35) 1,248,717.71
Work injury insurance 30,755.69 2,904,043.69 (2,906,528.63) 28,270.75
Maternity insurance 229,364.84 7,081,716.07 (7,085,909.94) 225,170.97
Housing funds 1,063,993.02 70,390,806.56 (70,062,809.27) 1,391,990.31
Labor union funds and
employee education funds 9,956,772.12 30,048,327.90 (31,605,806.94) 8,399,293.08
Other short-term benefits 1,034,801.91 1,995,006.30 (1,970,447.41) 1,059,360.80
226,152,409.27 2,005,462,891.39 (1,980,782,154.51) 250,833,146.15
At beginning of
2018 year Increase Decrease At end of year
Salaries, bonuses,
allowances and grants 193,078,506.49 1,526,865,265.07 (1,509,219,951.35) 210,723,820.21
Staff welfare 2,602,805.92 51,777,145.01 (52,629,200.04) 1,750,750.89
Social security contribution 1,363,649.32 89,203,979.18 (88,945,357.38) 1,622,271.12
Including: Medical
insurance 1,130,984.41 79,707,594.13 (79,476,427.95) 1,362,150.59
Work injury insurance 10,541.55 3,335,240.34 (3,315,026.20) 30,755.69
Maternity insurance 222,123.36 6,161,144.71 (6,153,903.23) 229,364.84
Housing funds 929,089.33 59,408,331.39 (59,273,427.70) 1,063,993.02
Labor union funds and
employee education funds 10,178,562.87 28,172,099.55 (28,393,890.30) 9,956,772.12
Other short-term benefits 1,167,549.77 3,711,024.69 (3,843,772.55) 1,034,801.91
209,320,163.70 1,759,137,844.89 (1,742,305,599.32) 226,152,409.27
229
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
26. Employee benefits payable (Continued)
Defined contribution plan:
At beginning of
2019 year Increase Decrease At end of year
Basic pension
insurance 1,755,160.16 169,936,884.74 (170,089,263.47) 1,602,781.43
Unemployment
insurance 122,350.65 5,168,661.43 (5,210,052.28) 80,959.80
Contribution to
a pension
fund 3,370,636.18 6,022,506.73 (6,415,130.33) 2,978,012.58
5,248,146.99 181,128,052.90 (181,714,446.08) 4,661,753.81
At beginning of
2018 year Increase Decrease At end of year
Basic pension
insurance 1,739,623.34 166,757,467.61 (166,741,930.79) 1,755,160.16
Unemployment
insurance 221,831.21 4,731,258.82 (4,830,739.38) 122,350.65
Contribution to
a pension
fund 3,634,822.57 4,988,615.51 (5,252,801.90) 3,370,636.18
5,596,277.12 176,477,341.94 (176,825,472.07) 5,248,146.99
230
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
26. Employee benefits payable (Continued)
Termination benefits:
At beginning of
2019 year Increase Decrease At end of year
Retirement
benefits
payable – within
1 year (Note
V(34)) 408,057.61 631,005.86 (791,197.41) 247,866.06
Other termination
benefits (i) 57,793.53 800,017.26 (772,855.15) 84,955.64
465,851.14 1,431,023.12 (1,564,052.56) 332,821.70
At beginning of
2018 year Increase Decrease At end of year
Retirement
benefits
payable – within
1 year (Note
V(34)) 559,065.67 980,356.18 (1,131,364.24) 408,057.61
Other termination
benefits (i) 181,020.05 575,095.48 (698,322.00) 57,793.53
740,085.72 1,555,451.66 (1,829,686.24) 465,851.14
(i) For year 2019, the Group provided other termination benefits for severing labor relations of
RMB800,017.26 as at 31 December 2018, and the unpaid balance as at the year end was
RMB84,955.64. (2018: Other termination benefits for severing labor relations of
RMB575,095.48, and the unpaid balance at the year end was RMB57,793.53).
231
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
27. Tax payable
31 December 2019 31 December 2018
Corporate Income taxes 127,549,708.68 115,226,820.39
Value-added tax 86,412,534.51 90,356,534.09
City maintenance and construction surtax 6,746,231.85 6,854,426.95
Stamp duty 6,071,030.95 5,854,355.91
Water conservancy fund 5,488,930.64 5,421,280.43
Educational surcharge 4,898,828.26 4,937,147.17
Individual income tax 4,203,699.48 3,954,139.24
Property tax 532,454.30 1,123,276.37
Land use tax 11,137.20 209,179.29
Others 8,203,832.27 8,043,252.88
250,118,388.14 241,980,412.72
28. Other payables
31 December 2019 1 January 2019 31 December 2018
Interest payable 23,632,632.90 10,894,278.99 10,894,278.99
Dividend payable 6,389,320.96 6,389,320.96 6,389,320.96
Other payables 1,726,836,507.16 1,511,129,733.38 1,511,140,990.34
1,756,858,461.02 1,528,413,333.33 1,528,424,590.29
Interest payable
31 December 2019 31 December 2018
Factoring interest on accounts receivable 23,632,632.90 10,894,278.99
232
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
28. Other payables (Continued)
Dividend payable
31 December 2019 31 December 2018
Shanghai Fosun Pharmaceutical (Group)
Co., Ltd. (“Fosun Pharm”) 4,835,511.58 4,835,511.58
Dividend payable to Zhang Zhenfang 1,389,639.31 1,389,639.31
Meiluo Pharmaceutical Co., Ltd. 164,170.07 164,170.07
6,389,320.96 6,389,320.96
As at 31 December 2019 and 31 December 2018, the Group had no significant dividend aged more
than one year and not yet paid.
Other payables
31 December 2019 1 January 2019 31 December 2018
Payables for factoring programs 849,490,467.87 724,272,060.30 724,272,060.30
Deposits 422,017,144.86 334,821,325.72 334,821,325.72
Accrued expenses 129,552,787.78 131,493,977.43 131,493,977.43
Payables arising from acquisition of
subsidiaries 72,193,635.62 78,702,980.00 78,702,980.00
Payables for construction in progress and
equipment 55,430,961.14 79,380,923.99 79,380,923.99
Equity subscription 46,023,136.00 10,000,000.00 10,000,000.00
Payables to individuals 29,757,769.47 22,730,210.22 22,730,210.22
Payables for rentals 26,348,921.76 29,287,578.50 29,298,835.46
Temporary loans 15,800,000.00 15,800,000.00 15,800,000.00
Payables for land transfer payments 12,597,500.00 18,071,000.00 18,071,000.00
Collection of others 11,844,558.24 7,525,379.59 7,525,379.59
Payables to related parties 9,028,812.08 5,436,532.76 5,436,532.76
Others 46,750,812.34 53,607,764.87 53,607,764.87
1,726,836,507.16 1,511,129,733.38 1,511,140,990.34
233
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
28. Other payables (Continued)
At 31 December 2019, significant other payables over 1 year are as follows:
Amount payable Reason for outstanding
Non-controlling interests in South
Pharma & Trade Fu Yuequn and
other 10 natural persons 54,722,980.00 Payment conditions not met
Taishan Qunkang Drugstore Co.,
Ltd. 13,860,000.00 Payment conditions not met
Shenyang Tiexi District State-owned
Assets Supervision and
Administration Bureau 12,597,500.00 Payment conditions not met
Liuzhou Shengli Drugstore 9,195,734.90 Payment conditions not met
Shenzhen No.1 Construction
Engineering Co., Ltd. 8,605,625.20 Payment conditions not met
Guangxi Zhongding Medicine
Consulting Co., Ltd. 6,836,433.21 Payment conditions not met
105,818,273.31
29. Non-current liabilities due within one year
31 December 2019 1 January 2019 31 December 2018
Long-term borrowings
due within 1 year 31,638,984.25 - -
Long-term payables
due within 1 year
(Note V(33)) - - 5,861,324.37
Lease liabilities due
within 1 year
(Note V(32)) 569,788,109.37 538,430,817.03 -
601,427,093.62 538,430,817.03 5,861,324.37
30. Other current liabilities
31 December 2019 31 December 2018
Output VAT to be recognised 749,710.19 292,465.75
234
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
31. Long-term borrowings
31 December 2019 31 December 2018
Entrusted loans - 31,638,984.25
At 31 December 2019, the total amount of remaining entrusted loans is RMB31,638,984.25 (31
December 2018: RMB31,638,984.25). CNPGC entrusted Sinopharm Group Finance Co., Ltd. to
provide the loan. Borrowings due within one year have been reclassified to non-current liabilities
due within one year.
At 31 December 2019, the weighted average annual interest rate of the entrusted loans was
4.04% (31 December 2018: 4.04%).
32. Lease liabilities
31 December 2019 1 January 2019
Lease payment 1,918,972,963.90 1,803,679,783.76
Unrecognised financing expenses (166,777,769.45) (157,711,546.81)
Less: Lease liabilities due within 1 year
(Note V(29)) 569,788,109.37 538,430,817.03
1,182,407,085.08 1,107,537,419.92
33. Long-term payables
31 December 2019 1 January 2019 31 December 2018
Long-term payables - - 3,763,978.52
Payables for specific projects 800,000.00 800,000.00 800,000.00
800,000.00 800,000.00 4,563,978.52
Long-term payables
31 December 2019 1 January 2019 31 December 2018
Finance lease payables - - 9,625,302.89
Less: Amount due within one year
(Note V(29)) - - 5,861,324.37
- - 3,763,978.52
235
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
33. Long-term payables (Continued)
Payables for specific projects
2019
At beginning of year Increase Decrease At end of year
Special funds granted by the
government 800,000.00 - - 800,000.00
2018
At beginning of year Increase Decrease At end of year
Special funds granted by the
government 800,000.00 - - 800,000.00
Payables for specific projects are research fundings granted by the government, which are
designated as payables for specific projects when granted.
34. Long-term employee benefits payable
31 December 2019 31 December 2018
Early retirement benefits payable 1,680,866.06 2,458,057.61
Less: Retirement benefits payable
within 1 year (Note V (26)) 247,866.06 408,057.61
1,433,000.00 2,050,000.00
Some employees of the Group have enrolled into early retirement. The primary actuarial
assumptions adopted at the end of the reporting period are presented as follows:
31 December 2019 31 December 2018
Discount rate 3.25% 3.50%
Growth rate of wages 6.00% 6.00%
The total post-employment benefits recognised in profit or loss of the current year are shown
below:
2019 2018
Included in administrative expenses (49,994.14) 1,172,356.18
Included in finance costs 64,000.00 81,000.00
14,005.86 1,253,356.18
236
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
35. Deferred income
2019 Opening balance Increase Decrease Closing balance
Government grants 91,491,170.40 3,477,445.94 (6,264,343.46) 88,704,272.88
2018 Opening balance Increase Decrease Closing balance
Government grants 96,725,183.34 - (5,234,012.94) 91,491,170.40
As at 31 December 2019, deferred income from government grants is as follows:
Government grants Opening balance Addition in Amount Amount Closing Asset related/
program the year included in included in balance income related
non-operating other income in
income in the the year
year
Resettlement
compensation (Note) 75,555,441.17 - (2,698,408.56) - 72,857,032.61 Asset related
Guangxi Logistics Project 6,453,426.58 - - (408,073.08) 6,045,353.50 Asset related
Guangzhou Logistics
standardization project 2,815,012.55 - - (546,246.84) 2,268,765.71 Asset related
Comprehensive
experimental modern
service industry
subsidies 1,500,000.00 - - (300,000.00) 1,200,000.00 Asset related
Shared logistics center
(completed) 252,058.35 - - (18,800.40) 233,257.95 Asset related
Asset/income
Other projects 4,915,231.75 3,477,445.94 - (2,292,814.58) 6,099,863.11 related
91,491,170.40 3,477,445.94 (2,698,408.56) (3,565,934.90) 88,704,272.88
237
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
35. Deferred income (Continued)
As at 31 December 2018, deferred income from government grants is as follows:
Government grants Opening balance Addition in Amount Amount Closing Asset related/
program the year included in included in balance income related
non-operating other incomes
income in the in the year
year
Resettlement
compensation (Note) 78,253,849.73 - (2,698,408.56) - 75,555,441.17 Asset related
Guangxi Logistics Project 6,949,832.98 - - (496,406.40) 6,453,426.58 Asset related
Guangzhou logistics
standardization project 3,361,259.39 - - (546,246.84) 2,815,012.55 Asset related
Comprehensive
experimental modern
service industry
subsidies 1,800,000.00 - - (300,000.00) 1,500,000.00 Asset related
Shared logistics center
(completed) 270,858.75 - - (18,800.40) 252,058.35 Asset related
Asset/income
Other projects 6,089,382.49 - - (1,174,150.74) 4,915,231.75 related
96,725,183.34 - (2,698,408.56) (2,535,604.38) 91,491,170.40
Note: Due to the implementation of urban planning for old town reconstruction in Nanning, the operating
center of Guangxi Logistics which was located in Longteng Road District, Nanning City, was to be
reconstructed in another place. According to the agreement signed between Guangxi Logistics
and the real estate developer, Guangxi Logistics would obtain a compensation of
RMB120,250,000.00, including cash of RMB50,000,000.00 and a property in construction equal to
a value of RMB70,250,000.00. Cash compensation of RMB50,000,000.00 was received in May
2012. In year 2015, construction properties with a value of RMB70,250,000.00 were built and
delivered, and had been recognised as investment properties.
The compensation relating to the capital expenditure in the reconstruction of the new logistic
center in another place, amounting to RMB93.32 million, was recognised as deferred revenue,
and would be amortized and recognised in the income statement within the expected useful lives
using the straight-line method, and the other cash compensation, of which the amount
approximates to RMB26.93 million, was recognised in the income statement in 2012.
238
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
36. Other non-current liabilities
31 December 2019 31 December 2018
Governmental medical reserve funds 46,723,743.31 45,427,343.31
Product promotion accumulative points
programme 26,478,986.49 23,813,832.87
Others 53,785.13 -
73,256,514.93 69,241,176.18
Governmental medical reserve funds were received by the Group from the national and local governments for
purchasing medical products (including medicines) required to respond to serious disasters, epidemics and
other emergencies.
The Product promotion accumulative points programme refers to those product-originated accumulative points
that remain more than one year surplus before the expiration date.
37. Share capital
2019 At beginning of Increase during the current year At end of the year
the year
Issue of new share Others Subtotal
Listed shares without
restriction of trading:
-A shares, listed 307,744,355.00 - - - 307,744,355.00
-B shares, listed 54,884,475.00 - - - 54,884,475.00
Listed shares with
restriction of trading:
-State-owned legal
person shares 60,380,743.00 - - - 60,380,743.00
-Legal person
registered within
China shares 5,114,297.00 - - - 5,114,297.00
-Natural person
registered within
China shares 3,113.00 - - - 3,113.00
428,126,983.00 - - - 428,126,983.00
2018 At beginning of Increase during the current year At end of the year
the year
Issue of new share Others Subtotal
Listed shares without
restriction of trading:
-A shares, listed 307,744,355.00 - - - 307,744,355.00
-B shares, listed 54,885,600.00 - (1,125.00) (1,125.00) 54,884,475.00
Listed shares with
restriction of trading:
-State-owned legal
person shares 60,380,743.00 - - - 60,380,743.00
-Legal person
registered within
China shares 5,114,297.00 - - - 5,114,297.00
-Natural person
registered within
China shares 1,988.00 - 1,125.00 1,125.00 3,113.00
428,126,983.00 - - - 428,126,983.00
239
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
38. Capital surplus
At beginning of the
2019 year Increase Decrease At end of the year
Share premium 2,118,174,787.27 - - 2,118,174,787.27
Other capital surplus -
Significant reorganization 1,173,907,763.19 - - 1,173,907,763.19
Transfer of capital surplus recognised
under the previous accounting system 2,650,322.00 - - 2,650,322.00
Other changes in equity of invested
units under the equity method (a) (94,032,514.34) 42,022,530.06 - (52,009,984.28)
Others (b) 1,120,284,623.39 - - 1,120,284,623.39
4,320,984,981.51 42,022,530.06 - 4,363,007,511.57
At beginning of the
2018 year Increase Decrease At end of the year
Share premium 2,118,174,787.27 - - 2,118,174,787.27
Other capital surplus -
Significant reorganization 1,173,907,763.19 - - 1,173,907,763.19
Transfer of capital surplus recognised
under the previous accounting system 2,650,322.00 - - 2,650,322.00
Other changes in equity of invested
units under the equity method (a) (113,303,807.47) 19,271,293.13 - (94,032,514.34)
- 1,120,284,623.39 - 1,120,284,623.39
3,181,429,064.99 1,139,555,916.52 - 4,320,984,981.51
(a) There was an increase of RMB42,022,530.06 in the current year’s other capital reserves of the
invested entity and this was due to the increase of the book value of a long-term equity investment of
the Group’s associate company, Shyndec Pharma, which resulted in a capital surplus of
RMB42,022,530.06.
There was an increase of RMB19,271,293.13 in other capital reserves of the invested entity in 2018
and this was due to the decrease of the book value of a long-term equity investment of the Group’s
associate company, Shyndec Pharma, which resulted in a capital surplus of RMB139,312.34. Since
the subsidiary of Shyndec Pharma failed to complete the Valuation Adjustment Mechanism, Shyndec
Pharma’s shares that the Group holds changed, which resulted in an increase of RMB19,410,605.47
in the capital surplus.
(b) There was an increase of RMB1,120,284,623.39 in the current year’s other capital reserves and this
was due to the introduction of a strategic investor, Walgreens Boots Alliance (Hong Kong)
Investments Limited, from the Group’s subsidiary, Guoda Pharmacy. WBA investor increased capital
by RMB2,766,700,000.00, which resulted in a capital premium of RMB1,120,284,623.39.
240
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
39. Other comprehensive income
Accumulated balance of other comprehensive income attributable to shareholders of the parent
company in the consolidated balance sheet
1 January 2019 Increase or decrease 31 December 2019
Change in the fair value of other equity
investments - 46,050,708.96 46,050,708.96
Other comprehensive income using the
equity method that may be
reclassified to profit or loss - (133,366.19) (133,366.19)
- 45,917,342.77 45,917,342.77
The current occurrence amount of other comprehensive income in the consolidated income statement is as
follows:
Attributable to
Occurrence shareholders of Attributable to
amount before Minus： owners of the non-controlling
tax Income tax parent interests
Other comprehensive income
items which will not be
reclassified subsequently to
profit or loss
Change in the fair value of other
equity investments 102,335,240.00 25,583,810.00 46,050,708.96 30,700,721.04
Other comprehensive income that
may be reclassified to profit or
loss
Other comprehensive income
using the equity method that
may be reclassified to profit or
loss (133,366.19) - (133,366.19) -
102,201,873.81 25,583,810.00 45,917,342.77 30,700,721.04
241
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
40. Surplus reserves
31 December 2019 31 December 2018
Statutory surplus reserves 214,063,491.50 214,063,491.50
According to the provisions of the Company Law and the Company’s articles of association, the
Company appropriates statutory surplus reserves at 10% of the net profit. Where the accumulated
amount of surplus reserves reaches 50% or more of the Company’s registered capital, additional
appropriation is not needed. After the appropriation of statutory surplus reserves, the Company
may appropriate discretionary surplus reserves. When approved, the discretionary surplus reserves
can be used to recover accumulated losses or increase share capital. The accumulated amount of
the statutory surplus reserves of the Group has already reached 50% of the registered capital.
According to the Company’s articles of association, the Group did not extract the surplus reserves
anymore.
41. Retained earnings
31 December 2019 31 December 2018
Retained earnings at the end of the prior year 6,655,257,147.27 5,572,952,806.39
Add: Net profit attributable to the parent 1,271,289,183.01 1,210,742,435.78
Less: Withdrawal from the surplus reserves - -
Cash dividends payable for ordinary shares (a) 171,250,793.20 128,438,094.90
Retained earnings at end of year 7,755,295,537.08 6,655,257,147.27
(a) Pursuant to the resolution of the General Meeting of the Shareholders on 17 May 2019, the
Company paid a cash dividend of RMB4.00 for every 10 shares to all shareholders. The
cash dividend was calculated on the basis of 428,126,983 shares in issue, with an
aggregate amount of RMB171,250,793.20.
242
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
42. Operating revenue and cost
2019 2018
Revenue Cost Revenue Cost
Principal operations 51,672,871,710.12 46,245,490,002.68 42,778,939,792.90 37,991,076,562.19
Other operations 372,892,433.09 46,918,837.85 343,445,728.33 33,032,068.96
52,045,764,143.21 46,292,408,840.53 43,122,385,521.23 38,024,108,631.15
Revenue is as follows:
2019 2018
Revenue from contracts with customers 51,970,971,594.52 43,040,868,416.94
Rentals 74,792,548.69 81,517,104.29
52,045,764,143.21 43,122,385,521.23
Disaggregation of revenue from contracts with customers is as follows:
2019 2018
Place of business
China 51,970,971,594.52 43,040,868,416.94
Type of major activities
Pharmaceutical distribution 38,886,408,981.79 31,866,749,848.53
Retail pharmacy 13,000,514,605.28 11,110,718,685.75
Others 84,048,007.45 63,399,882.66
51,970,971,594.52 43,040,868,416.94
Type of major goods
Pharmaceuticals 48,181,069,748.36 40,634,670,075.31
Medical devices and disposables 2,756,591,633.83 1,589,598,645.85
Diagnostic reagents 692,370,435.53 548,790,740.10
Medical equipments 256,891,769.35 204,409,073.02
Others 84,048,007.45 63,399,882.66
51,970,971,594.52 43,040,868,416.94
243
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
42. Operating revenue and cost (Continued)
Disaggregation of revenue from contracts with customers is as follows: (Continued)
2019 2018
Timing of revenue recognition
At a point in time
Sale of goods 51,886,923,587.07 42,977,468,534.28
Over time
Providing services 40,334,878.35 26,942,724.22
Storage and logistics 43,713,129.10 36,457,158.44
51,970,971,594.52 43,040,868,416.94
Revenue recognised that was included in contract liabilities at the beginning of the year:
2019 2018
Sale of goods 255,590,612.37 216,938,239.32
The Group has recognised contract liabilities in total of RMB302,650,567.97 through the sale of
goods and provision of services in the current year. The expected revenue recognition time for the
Group’s contract obligations above is in year 2020.
Information about the Group’s performance obligations is summarised below:
(1) Revenue is recognised when control of the goods has transferred and payment is generally due
within 30 to 210 days from delivery;
(2) Revenue is recognised in the service duration and the payment is generally due within 30 to
210 days since the service is completed.
244
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
43. Taxes and surcharges
2019 2018
City maintenance and construction tax 52,815,864.80 47,477,033.41
Educational surcharge 37,750,316.05 32,650,733.37
Stamp duty 36,114,032.58 32,467,464.05
Property tax 7,420,032.75 6,961,154.31
Land tax 1,021,455.29 830,516.37
River & embankment maintenance fee 778,070.25 250,164.71
Vehicle and vessel use tax 144,023.76 159,260.61
Others 249,900.06 215,812.19
136,293,695.54 121,012,139.02
44. Selling expenses
2019 2018
Employee benefits 1,600,018,824.19 1,388,569,241.35
Depreciation expenses of right-of-use assets 624,933,188.71 -
Rental expenses 124,901,006.05 667,385,735.96
Amortization of long-term deferred expenses 94,423,270.18 79,264,643.73
Transportation expenses 92,959,071.86 72,790,376.76
Technical service fee 80,597,774.81 122,040,418.95
Depreciation expenses of fixed assets 69,824,366.45 57,211,707.70
Utilities 66,594,129.68 58,460,806.07
Promotion and marketing expenses 50,135,450.66 44,772,075.33
Office allowance 44,962,674.71 37,866,925.91
Entertainment expenses 32,702,753.92 28,339,849.02
Property management fee 29,632,095.50 26,325,349.03
Storage expenses 26,872,236.68 26,735,260.77
Repairing fees 12,941,004.95 12,410,974.80
Conference expenses 11,996,153.12 9,254,374.47
Travel allowances 9,773,557.45 9,659,289.87
Market development fee 6,347,031.83 7,741,076.04
Others 75,789,077.41 113,961,780.01
3,055,403,668.16 2,762,789,885.77
245
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
45. Administrative expenses
2019 2018
Employee benefits 577,208,734.38 540,166,368.56
Office allowance 29,676,021.12 25,785,743.03
Depreciation expenses of fixed assets 27,124,509.45 25,989,962.32
Depreciation expenses of right-of-use
assets 22,873,594.08 -
Technical service fee 20,634,230.67 17,309,623.25
Amortization of intangible assets 19,679,232.79 16,833,469.40
Rental expenses 16,718,745.74 34,452,292.21
Entertainment expenses 15,897,238.79 15,124,722.99
Agency service fee 15,872,236.21 19,335,780.45
Promotion and marketing expenses 12,495,124.13 9,239,323.28
Amortization of long-term deferred expenses 12,267,769.44 9,609,145.68
Travel allowance 11,579,577.92 11,970,208.11
Vehicle management expenses 7,770,897.50 9,508,891.07
Repairing fee 6,592,921.58 4,726,047.17
Utilities 5,930,248.65 5,740,238.76
Property management fee 5,511,193.47 3,993,814.78
Others 34,182,707.61 33,552,677.13
842,014,983.53 783,338,308.19
46. Finance costs
2019 2018
Interest expenses 271,718,934.85 140,315,267.43
Less: Interest income 139,842,489.11 81,119,506.63
Cash discount from purchase 43,252,757.88 42,424,361.51
Exchanges (loss) / gain (390,756.61) 325,611.60
Others 31,740,023.54 34,393,009.70
119,972,954.79 51,490,020.59
A breakdown for interest income is as follows:
2019 2018
Cash 139,842,489.11 81,119,506.63
246
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
47. Other income
2019 2018
Government grants related to daily operating activities 42,905,261.49 27,012,475.30
Taxation service charge refund 508,168.93 1,445,926.01
43,413,430.42 28,458,401.31
Government grants relevant to daily operation：
2019 2018 Related to asset/income
Guangzhou logistics standardization project 546,246.84 546,246.84 Related to asset
Guangxi logistics project 408,073.08 496,406.40 Related to asset
Grants for a comprehensive experimental unit of the
modern service industry 300,000.00 300,000.00 Related to asset
Third-party medicine modern logistics public information
platform 18,800.40 18,800.40 Related to asset
Others 1,699,402.11 1,174,150.74 Related to asset
2,972,522.43 2,535,604.38
Job stablization grants 8,704,495.35 2,371,741.63 Related to income
Tax return 7,944,738.61 9,153,184.19 Related to income
Government support funding 6,302,515.34 2,632,800.00 Related to income
VAT reduction for small-scale taxpayers 6,159,608.34 449,851.78 Related to income
Government grants for medicine reserve expenses 3,417,500.00 3,220,625.00 Related to income
Enterprise economy award 2,555,293.34 1,535,325.00 Related to income
Economic contribution award 300,000.00 150,000.00 Related to income
Others 4,548,588.08 4,963,343.32 Related to income
39,932,739.06 24,476,870.92
42,905,261.49 27,012,475.30
48. Investment income
2019 2018
Long-term equity investment income under the
equity method 331,171,902.87 319,903,890.47
Investment income from disposal of long-term equity
investments 919,446.05 (526,137.60)
Dividend income from other equity investments
that are still held 471,386.60 519,419.36
Investment income from the derecognition of financial
assets measured at amortised cost (86,377,492.55) (61,372,718.53)
246,185,242.97 258,524,453.70
247
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
49. Credit impairment losses
2019 2018
Impairment loss on accounts receivable 4,852,462.91 (4,432,424.30)
Impairment loss on other receivables 48,311,027.70 4,730,903.85
53,163,490.61 298,479.55
50. Impairment losses
2019 2018
Provision for inventories 1,251,609.68 2,744,605.36
Long-term equity investment provision 1,857,279.52 -
3,108,889.20 2,744,605.36
51. Gain on disposal of assets
2019 2018
Gain on disposal of intangible assets - 3,892,019.91
Gain on disposal of fixed assets 688,411.84 3,500,527.65
Gain on disposal of right-of-use assets 1,862,763.18 -
2,551,175.02 7,392,547.56
52. Non-operating income
2019 2018
Gain from writing off the unnecessary payment 16,601,380.58 5,000,021.34
Government grants irrelevant to daily operation 5,015,608.56 2,698,408.56
Others 3,969,927.00 5,016,923.61
25,586,916.14 12,715,353.51
Government grants are as follows:
2019 2018 Related to asset/income
Resettlement Compensation of Guangxi
Logistics 2,698,408.56 2,698,408.56 Asset related
Guangxi Logistics’ (“Water supply, power
supply, heating and property
management”) financial subsidies 2,317,200.00 - Income related
5,015,608.56 2,698,408.56
248
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
53. Non-operating expenses
2019 2018
Penalty expenses 1,067,800.75 1,097,787.61
Donation expenses 450,000.00 449,466.05
Loss on damage in non-current assets needed to be
scrapped 210,249.05 345,180.28
Others 2,748,199.10 2,872,416.21
4,476,248.90 4,764,850.15
54.Government grants
The government grants, which are offset against the carrying amounts of the related assets and expenses as
set out below, are presented on a net basis.
2019 2018
Government grants related to assets
Offset against intangible assets - 1,210,000.00
Government grants related to income
Offset against finance costs (Note) 1,378,372.43 387,500.00
1,378,372.43 1,597,500.00
Note: In 2019, the Group received the loan discount fund of RMB1,041,600.00 from an industrial development
fund of Futian Development Service Center of Shenzhen, Guangdong Province and the loan discount fund of
RMB336,772.43 from the Pharmaceutical Reserve Materials fund of the Department of Finance of Guangxi
Zhuang Autonomous Region. According to the relevant provisions of “CAS 16”, the Group would offset the
above-mentioned loan discount fund which was received in 2019 against the finance costs of the current year.
For details of other government subsidies, please refer to Note V (35 & 47)
249
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
55. Expenses by nature
The operating costs, selling expenses and administrative expenses are classified by nature and
listed as follows:
2019 2018
Inventories of finished and work-in-progress
goods/Cost of inventories 46,272,149,768.83 38,010,404,118.17
Employee benefits 2,184,975,042.37 1,937,354,409.70
Depreciation and amortization 899,601,990.12 206,110,412.41
Rental expenses 141,619,751.79 701,838,028.17
Technical service fee 101,232,005.48 139,350,042.20
Transportation expenses 92,959,071.86 72,790,376.76
Utilities 74,917,949.13 66,988,900.15
Office telecom and internet expenses 74,638,695.83 63,652,668.94
Promotion and marketing expenses 68,977,606.62 61,752,474.65
Entertainment expenses 48,599,992.71 43,464,572.01
Property management fee 35,143,288.97 30,319,163.81
Travel allowance 30,448,970.18 29,081,374.94
Storage expenses 26,872,236.68 26,735,260.77
Repairing fee 19,533,926.53 17,137,021.97
Conference expenses 18,138,447.03 12,927,363.12
Agency service fee 15,872,236.21 19,335,780.45
Others 84,146,511.88 130,994,856.89
50,189,827,492.22 41,570,236,825.11
250
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
56. Income taxes
2019 2018
Current income tax 367,807,504.00 330,119,712.81
Deferred income tax 4,631,937.37 378,532.87
372,439,441.37 330,498,245.68
The reconciliation of income tax calculated based on applicable tax rates and total profit
presented in the consolidated financial statements to the income taxes is shown below:
2019 2018
Profit before income taxes 1,856,658,136.50 1,678,929,357.53
Income taxes calculated at applicable tax rates 464,164,534.12 419,732,339.38
Lower tax rates enacted by local authorities (28,039,776.17) (26,400,897.47)
Income not subject to tax (82,792,975.72) (80,379,054.34)
Expenses not deductible for tax 16,311,566.26 12,549,148.66
Deductible loss on unconfirmed deferred tax
assets at end of the year 5,644,794.11 2,994,369.39
Utilization of previously unrecognised tax losses 705,689.03 752,138.09
Adjustment of income tax expense of previous
years (3,554,390.26) 1,250,201.97
Income tax 372,439,441.37 330,498,245.68
57. Earnings per share
2019 2018
RMB/share RMB/share
Basic earnings per share
Continuing operations 2.97 2.83
Diluted earnings per share
Continuing operations 2.97 2.83
The basic earnings per share are calculated by dividing the consolidated net profit of the current year
attributable to the ordinary shareholders of the Company by the adjusted weighted average number of
ordinary shares outstanding.
In year 2019, the Company had no potential dilutive ordinary shares and the diluted earnings per share were
the same as the basic earnings per share.
251
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
57. Earnings per share (Continued)
The calculation of basic and diluted earnings per share is as follows:
2019 2018
Earnings 1,271,289,183.01 1,210,742,435.78
Consolidated net profit attributable to the
shareholders of the parent 1,271,289,183.01 1,210,742,435.78
Net profit attributable to the calculation of
earnings per share 1,271,289,183.01 1,210,742,435.78
Shares
Adjusted weighted average number of
ordinary shares outstanding 428,126,983.00 428,126,983.00
Basic and diluted earnings per share 2.97 2.83
58. Notes to items in the cash flow statement
Other cash receipts relating to operating activities
2019 2018
Interest income 139,464,471.82 79,501,556.12
Rent income 62,779,668.72 70,082,395.95
Government grants except tax return 31,971,665.11 15,323,686.73
Others 506,514,549.70 514,689,083.24
740,730,355.35 679,596,722.04
Other cash payments relating to operating activities
2019 2018
Rental expenses 177,149,079.15 732,157,191.98
Advertising expenses 74,638,695.83 61,752,474.65
Office expenses 68,977,606.62 49,240,163.51
Entertainment expenses 48,599,992.71 43,464,572.01
Bank charges 30,448,970.18 39,831,488.02
Travel expenses 29,123,133.47 29,081,374.94
Conference expenses 18,138,447.03 12,927,363.12
Others 725,948,768.25 757,256,302.59
1,173,024,693.24 1,725,710,930.82
252
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
58. Notes to items in the cash flow statement (Continued)
Other cash receipts relating to investing activities
2019 2018
Received entrusted loan interests 3,180,035.98 1,656,563.34
Receipts relating to plants and equipments of
Shyndec Pharma’s Pingshan base - 51,695,586.01
Received entrusted loan payments - 44,000,000.00
Others 8,444.09 1,440,936.05
3,188,480.07 98,793,085.40
Other cash payments relating to investing activities
2019 2018
Expense payment of ”Water supply, power supply,
1,093,125.00 -
heating and property management”
Entrusted borrowings paid to Zhijun Suzhou - 44,000,000.00
Others 1,504,625.74 37,042,904.53
2,597,750.74 81,042,904.53
Other cash receipts relating to financing activities
2019 2018
Factoring payable received 114,349,993.77 335,542,301.71
Financing restricted monetary funds received 134,955,774.35 135,678,166.90
Others - 12,818,350.59
249,305,768.12 484,038,819.20
Other cash payments relating to financing activities
2019 2018
Payment of the lease principal 708,869,138.96 -
Purchase of equity of minority shareholders - 54,722,980.00
Others 9,803,690.92 29,752,802.06
718,672,829.88 84,475,782.06
253
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
59. Supplementary information of the cash flow statement
(1) Supplementary information of the cash flow statement
Reconciliation of net profit to cash flows from operating activities
2019 2018
Net profit 1,484,218,695.13 1,348,431,111.85
Add: Provision for asset impairment 56,272,379.81 3,043,084.91
Depreciation of fixed assets and investment properties 106,244,432.76 91,786,656.69
Depreciation of right-of-use assets 655,157,953.51 -
Amortization of intangible assets 30,227,090.99 24,468,087.41
Amortization of long-term prepaid expenses 107,972,512.86 89,855,668.31
Gains on disposal of fixed assets (2,340,925.97) (7,047,367.28)
Finance costs 207,214,696.42 81,747,385.77
Investment income (246,185,242.97) (258,524,453.70)
Increase in deferred tax assets (4,532,447.06) (2,488,130.63)
Increase in deferred tax liabilities 9,164,384.43 2,768,712.60
Increase in inventories (524,154,050.42) (608,950,788.81)
Increase in operating receivables items (818,470,196.97) (1,663,980,387.42)
Increase in operating payable items 1,059,506,443.67 2,296,682,476.23
Increase in restricted operating cash with restriction (119,943,642.99) (75,185,703.66)
Net cash generated from operating activities 2,000,352,083.20 1,322,606,352.27
Movement of cash
2019 2018
Cash at the end of year 8,422,676,765.48 7,632,117,020.77
Less: Cash at the beginning of year 7,632,117,020.77 3,673,498,691.48
Net increase in cash 790,559,744.71 3,958,618,329.29
254
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
59. Supplementary information of the cash flow statement (Continued)
(2) Acquisition and disposal of subsidiaries and other operating units
Acquisition of subsidiaries and other operating units
2019 2018
Price of acquiring subsidiaries and other operating units 143,993,800.00 19,920,651.60
Including: Guoda Pu’er 90,000,000.00 -
Guoda Pharmacy Yongxingtang Chain Store
(Chaoyang) Co., Ltd. 30,000,000.00 -
Inner Mongolia Tongren 17,320,000.00 -
Guangzhou Medicine 6,660,000.00 -
Guoda Pharmacy (Chaoyang) Renai Pharmacy Co.,
Ltd. (“Chaoyang Renai”) 13,800.00 -
Sinopharm Guangzhou Huadu Co., Ltd.
(“Sinopharm Huadu”) - 16,380,000.00
Sinopharm Holding Guoda Shanxi Pharmaceutical
Co., Ltd. (Formerly as "Shanxi Zhongao
Pharmaceutical Co., Ltd.") - 450,651.60
Taiyuan Tongxinli - 3,090,000.00
Cash and cash equivalents paid for acquisitions of subsidiaries and
other operating units 106,262,760.00 19,920,651.60
Including: Guoda Pu’er 54,000,000.00 -
Guoda Pharmacy Yongxingtang Chain Store
(Chaoyang) Co., Ltd. 30,000,000.00 -
Inner Mongolia Tongren 15,600,000.00 -
Guangzhou Medicine 6,660,000.00 -
Chaoyang Renai 2,760.00 -
Sinopharm Huadu - 16,380,000.00
Sinopharm Holding Guoda Shanxi Pharmaceutical
Co., Ltd. - 450,651.60
Taiyuan Tongxinli - 3,090,000.00
Less: Cash and cash equivalents held by subsidiaries and other
operating units at the acquisition date 8,460,831.84 22,389,173.93
Including: Guoda Pu’er 3,160,882.96 -
Guangzhou Medicine 4,477,124.50 -
Chaoyang Renai 822,824.38 -
Guoda Taishan - 21,146,145.15
Shanxi Zhong’ao - 1,160,397.85
Taiyuan Tongxinli - 82,630.93
Net cash outflow/(inflow) on acquisition of the subsidiaries and
other operating units 97,801,928.16 (2,468,522.33)
255
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
59. Supplementary information of the cash flow statement (Continued)
(2) Acquisition and disposal of subsidiaries and other operating units (Continued)
Disposal of subsidiaries and other operating units
2019
Price of disposing of subsidiaries and other operating units 1,530,000.00
Including: Qinhuangdao Guoda Pharmacy Chain Store Co., Ltd. 1,530,000.00
Cash and cash equivalents received for disposals of subsidiaries
and other operating units 1,530,000.00
Less: Cash and cash equivalents held by former subsidiaries and
other operating units 738,535.24
Including: Qinhuangdao Guoda Pharmacy Chain Store Co., Ltd. 738,535.24
Net cash inflow on disposal of the subsidiaries and other
operating units 791,464.76
Cash
2019 2018
Cash on hand 5,077,406.65 5,587,191.18
Bank deposits on demand 8,417,599,358.83 7,626,529,829.59
Cash balance at the end of the year 8,422,676,765.48 7,632,117,020.77
256
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
V Notes to the consolidated financial statements (Continued)
60. Assets under restricted ownership or right to use
2019 2018 Note
Cash and cash equivalents 442,672,297.43 457,664,283.79 Note 1
Notes receivable that were
64,038,348.12 Note 2
discounted 170,013,427.11
Notes receivable that were
- 301,416.00 Note 3
endorsed
506,710,645.55 627,979,126.90
Note 1: At 31 December 2019, the Group had bank acceptance bills deposits, deposits for letters of
credit as well as fixed deposits or notice deposits of RMB442,672,297.43 (31 December 2018:
RMB457,664,283.79) (Note V(1)).
Note 2: At 31 December 2019, the Group had commercial acceptance bills receivable of
RMB64,038,348.12, discounted but not past due (31 December 2018: RMB170,013,427.11)
(Note V (2)).
Note 3: At 31 December 2019, the Group had commercial acceptance bills receivable of RMB0.00,
endorsed but not past due (31 December 2018: RMB301,416.00) (Note V (2)).
61. Foreign monetary items
31 December 2019 31 December 2018
Original Equivalent Original Equivalent to
currency Exchange rate to RMB currency Exchange rate RMB
Short-term
borrowings - - - - - -
United States
dollar (Note) - - - 10,585,564.96 6.9579 73,653,234.88
- 73,653,234.88
Note: According to a related contract, currency exchange will be settled with the applicable sale exchange
quotation on the date on which repayment is deducted.
257
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VI Changes in the scope of consolidation
1. Business combinations not involving enterprises under common control
1.1 Acquiring Guangzhou Medicine
In the current year, the Group acquired a 70% stake of Guangzhou Senmingyouhe Pharmaceutical Co.,
Ltd. for RMB6,660,000.00 to constitute a business combination involving enterprises not under common
control. After the acquisition, the company was renamed as Sinopharm Accord (Guangzhou) Medicine Co.,
Ltd. The acquisition was completed on 31 August 2019.
The fair values and carrying amounts of identifiable assets and liabilities and contingent liabilities of
Guangzhou Medicine on the acquisition date are presented as follows:
31 August 2019 31 August 2019
Fair value Carrying amount
Cash and bank balances 4,477,124.50 4,477,124.50
Accounts receivable 7,222,433.73 7,222,433.73
Advances to suppliers 153,846.66 153,846.66
Other receivables 74,747.62 74,747.62
Inventories 1,625,509.09 1,625,509.09
Other current assets 127,418.79 127,418.79
Fixed assets 86,346.76 86,346.76
Deferred tax assets 1,229.69 1,229.69
Accounts payable 3,163,385.02 3,163,385.02
Contract liabilities 12,208.44 12,208.44
Employee benefits payable 219,425.04 219,425.04
Tax payable 24,756.76 24,756.76
Other payables 834,595.87 834,595.87
Net assets 9,514,285.71 9,514,285.71
Less: Non-controlling interests 2,854,285.71 2,854,285.71
Net assets acquired 6,660,000.00 6,660,000.00
Amount exceeding the cost of merger recognised as
profit or loss in the current period -
6,660,000.00 (Note)
Note: The amount refers to the cash payment of RMB6,660,000.00 that the Group paid in acquisition.
Operating results and cash flows of Guangzhou Medicine for the period from the acquisition date to the
end of the year are presented as follows:
Period from 31 August 2019 to
31 December 2019
Operating revenue 7,137,510.03
Net profit 156,140.70
Net cash flows 2,293,658.52
258
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VIChanges in scope of consolidation (Continued)
1. Business combinations not involving enterprises under common control (Continued)
1.2Acquiring the management right of 12 stores of Inner Mongolia Tongren
In the current year, Sinopharm Holding Guoda Pharmacy Bayannur Co., Ltd., a subsidiary of the Group,
obtained the management right of 12 stores of Inner Mongolia Tongren with cash of RMB17,320,000.00.
The acquisition was completed on 31 March 2019.
The fair values and carrying amounts of identifiable assets and liabilities as well as contingent liabilities of
the management right of 12 stores of Inner Mongolia Tongren on the acquisition date are presented as
follows:
31 March 2019 31 March 2019
Fair value Carrying amount
Fixed assets 513,000.00 513,000.00
Intangible assets 106,800.00 106,800.00
Inventories 3,206,200.00 3,206,200.00
Net assets 3,826,000.00 3,826,000.00
Net assets acquired 3,826,000.00 3,826,000.00
Goodwill arising from acquisition 13,494,000.00
17,320,000.00 (Note)
Note: The amount refers to the cash payment of RMB17,320,000.00 the Group paid in acquisition.
Operating results and cash flows of the management right of 12 stores of Inner Mongolia Tongren for the
period from the acquisition date to the end of the year are presented as follows:
Period from 31 March 2019 to
31 December 2019
Operating revenue 21,959,113.73
Net profit 833,651.52
Net cash flows (4,225,240.76)
259
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VIChanges in scope of consolidation (Continued)
1. Business combinations not involving enterprises under common control (Continued)
1.3Acquiring the management right of 31 stores of Chaoyang Yongxingtang
In the current year, Guoda Yongxingtang, a subsidiary of the Group, obtained the management right of 31
stores of Chaoyang Yongxingtang with cash of RMB30,000,000.00. The acquisition was completed on 31
May 2019.
The fair values and carrying amounts of identifiable assets and liabilities as well as contingent liabilities of
the management right of 31 stores of Chaoyang Yongxingtang on the acquisition date are presented as
follows:
31 May 2019 31 May 2019
Fair value Carrying amount
Inventories 4,800,000.00 4,800,000.00
Fixed assets 248,797.14 248,797.14
Intangible assets 17,126.97 17,126.97
Deferred tax assets 346,441.10 346,441.10
Other non-current liabilities 1,385,764.38 1,385,764.38
Net assets 4,026,600.83 4,026,600.83
Net assets acquired 4,026,600.83 4,026,600.83
Goodwill arising from acquisition 25,973,399.17
30,000,000.00 (Note)
Note: The amount refers to the cash payment of RMB30,000,000.00 the Group paid in the acquisition.
Operating results and cash flows of the management right of 31 stores of Chaoyang Yongxingtang for the
period from the acquisition date to the end of the year are presented as follows:
Period from 31 May 2019 to
31 December 2019
Operating revenue 44,268,861.28
Net profit 1,260,375.96
Net cash flows (69,401.06)
260
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VIChanges in scope of consolidation (Continued)
1. Business combinations not involving enterprises under common control (Continued)
1.4Acquiring Guoda Pu’er
In the current year, Guoda Pharmacy, a subsidiary of the Group, acquired 60% shares of Pu'er Songmao
Jiantang Pharmaceutical Co., Ltd. with cash of RMB90,000,000.00. After the acquisition, the company
was renamed as Guoda Pharmacy (Pu’er) Songmao Co., Ltd. The acquisition was completed on 30
November 2019.
The fair values and carrying amounts of identifiable assets and liabilities and contingent liabilities of
Guoda Pu’er on the acquisition date are presented as follows:
30 November 2019 30 November 2019
Fair value Carrying amount
Cash and bank balances 3,160,882.96 3,160,882.96
Accounts receivable 11,146,573.20 11,146,573.20
Advances to suppliers 2,257,777.79 2,257,777.79
Other receivables 16,020,033.25 16,020,033.25
Inventories 30,951,227.65 30,951,227.65
Fixed assets 598,797.73 598,797.73
Intangible assets 764,535.25 764,535.25
Long-term prepaid expenses 4,962,412.84 4,962,412.84
Deferred tax assets 42,970.32 42,970.32
Accounts payable 25,863,250.94 25,863,250.94
Contract liabilities 780,565.05 780,565.05
Employee benefits payable 2,135,940.00 2,135,940.00
Tax payable 3,358,307.15 3,358,307.15
Other payables 6,208,289.17 6,208,289.17
Net assets 31,558,858.68 31,558,858.68
Less: Non-controlling interests 12,623,543.47 12,623,543.47
Net assets acquired 18,935,315.21 18,935,315.21
Goodwill arising from acquisition 71,064,684.79
90,000,000.00 (Note)
Note:
The amount refers to the cash payment of RMB90,000,000.00 the Group paid in acquisition.
Operating results and cash flows of Guoda Pu’er for the period from the acquisition date to the end of the
year are presented as follows:
Period from 30 November 2019 to
31 December 2019
Operating revenue 13,032,058.57
Net profit (227,234.08)
Net cash flows 2,228,990.37
261
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VIChanges in scope of consolidation (Continued)
1. Business combinations not involving enterprises under common control (Continued)
1.5Acquiring Chaoyang Renai
In 2019, Guoda Shenyang, the subsidiary of the Group, acquired 51% equity of Chaoyang Renai from
Chaoyang Mingyang Business Service Co., Ltd. with RMB13,800.00 and achieved the controlling stake of
Chaoyang Renai.The acquisition was completed on 31 October 2019.
The fair values and carrying amounts of identifiable assets and liabilities and contingent liabilities of
Chaoyang Renai on the acquisition date are presented as follows:
31 October 2019 31 October 2019
Fair value Carrying amount
Cash and bank balances 822,824.38 822,824.38
Accounts receivable 8,358.66 8,358.66
Advances to suppliers 77,059.76 77,059.76
Inventories 1,318,528.38 1,318,528.38
Fixed assets 46,082.68 46,082.68
Long-term prepaid expenses 95,977.68 95,977.68
Contract liabilities 13,020.00 13,020.00
Accounts payable 2,261,755.44 2,261,755.44
Employee benefits payable 10,560.00 10,560.00
Tax payable 33,073.49 33,073.49
Other payables 23,335.07 23,335.07
Net assets 27,087.54 27,087.54
Less: Non-controlling interests 13,272.89 13,272.89
Net assets acquired 13,814.65 13,814.65
Amount exceeding the cost of merger recognised as
profit or loss in the current period 14.65
13,800.00 (Note)
Note: The amount refers to the cash payment of RMB13,800.00 the Group paid in acquisition.
Operating results and cash flows of Chaoyang Renai for the period from the acquisition date to the end of
the year are presented as follows:
Period from 31 October 2019 to
31 December 2019
Operating revenue 4,289,886.90
Net profit 71,324.46
Net cash flows (270,002.50)
262
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VIChanges in scope of consolidation (Continued)
2. Disposal of subsidiaries
Proportion of
Total voting rights
shareholding ratio owned by the Reason for no
Place of Business of the Group Group longer being a
registration nature （%） （%） subsidiary
Qinhuangdao Guoda Pharmacy
Chain Store Co., Ltd. Qinhuangdao Commercial 51.00 51.00 Transfer
Hebei Lerentang, a subsidiary of the Group, signed an equity transfer agreement with Wengong to sell its
51% equity in Qinhuangdao Guoda Pharmacy Chain Store Co., Ltd. for RMB1,530,000.00.The disposal
was completed on 1 January 2019. Therefore, from 1 January 2019, the Group would no longer include
Qinhuangdao Guoda Pharmacy Chain Store Co., Ltd. in the scope of consolidation.
Relevant financial information of Qinhuangdao Guoda Pharmacy Chain Store Co., Ltd. is listed as follows:
1 January 2019 31 December 2018
Carrying amount Carrying amount
Current assets 2,846,730.64 2,846,730.64
Non-current assets 916,984.74 916,984.74
Current liabilities 2,561,667.49 2,561,667.49
Non-current liabilities 4,883.28 4,883.28
1,197,164.61 1,197,164.61
Less: Non-controlling interests 586,610.66 586,610.66
Fair value of remaining equity 610,553.95 610,553.95
Disposal gains and losses 919,446.05
Disposal consideration 1,530,000.00
263
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VIChanges in scope of consolidation (Continued)
3.Establishment of subsidiaries
31 December 2019 2019
Net assets Net profit
Liaoning Guoda Pharmaceutical Co., Ltd. (a) 24,028,617.28 4,028,617.28
Guoda Yongxingtang (b) 33,260,375.96 1,260,375.96
Sinopharm Holding Guangyi Health Management (Zhanjiang) Co., Ltd. (c) - -
Sinopharm Accord Medicial Supply Chain (Shenzhen) Co., Ltd. (d) 32,791,820.49 (538,179.51)
Sinopharm Holding Guozhi Pharmacy (Heyuan) Co., Ltd. (e) 3,800,554.06 (1,199,445.94)
（a）On 13 August 2019, the Group invested RMB20,000.00 thousand to establish Liaoning Guoda
Pharmaceutical Co., Ltd. As at the end of 2019, payment has been completed.
（b）On 30 April 2019, the Group and Chaoyang Bowei Consulting Service Co., Ltd. (“Bowei
Consulting”) accumulatively invested RMB19,380.00 thousand and RMB18,620.00
thousand to establish Chaoyang Yongxingtang respectively. After the establishment, the
Group held 51% of equity interest in the company. As at the end of 2019, the Group
invested RMB16,320.00 thousand and Bowei Consulting invested RMB15,680.00
thousand.
（c）On 26 March 2019, the Group and Zhanjiang Guangyi Pharmaceutical Technology
Development Co., Ltd. accumulatively invested RMB300.00 thousand and RMB200.00
thousand to establish Sinopharm Holding Guangyi Health Management (Zhanjiang) Co.,
Ltd., respectively. After the establishment, the Group held 60% of equity interest in the
company. As at the end of 2019, payment has not been completed yet.
（d）On 21 August 2019, the Group and Shenzhen Ketai Medicial Science and Technology Co., Ltd.
accumulatively invested RMB19,998.00 thousand and RMB13,332.00 thousand to
establish Sinopharm Accord Medicial Supply Chain (Shenzhen) Co., Ltd., respectively.
After the establishment, the Group held 60% of equity interest in the company. As at the
end of 2019, payment has been completed.
（e）On 14 August 2019, the Group and Heyuan Mairui Trading Co., Ltd. accumulatively invested
RMB3,500.00 thousand and RMB1,500.00 thousand to set up Sinopharm Holding Guozhi
Pharmacy (Heyuan) Co., Ltd., respectively. After the establishment, the Group held 70% of
equity interest in the company. As at the end of 2019, payment has been completed.
264
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VIChanges in scope of consolidation (Continued)
4. Cancellation of subsidiary
Registered Reason for
Principal capital no longer
place of Place of (RMB Nature of being a
business establishment ‘0,000) business Shareholding (%) subsidiary
Direct Indirect
Beijing
Jinxiang
Fuxing
Technology Cancellation
Co., Ltd. Beijing Beijing 100.00 Commercial - 80.00 of company
Sanhe Lixin
Jinxiang
Pharmacy Co., Cancellation
Ltd.(a) Langfang Langfang 1.00 Commercial - 100.00 of company
(a) As at December 2019, Sanhe Lixin Jinxiang Pharmacy Co., Ltd.’s cancellation was
approved, yet the procedures for industrial and commercial cancellation were still
processing. As of the date of the financial statements, the procedures for industrial and
commercial cancellation have not been completed.
265
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VII Interests in other entities
1. Interests in subsidiaries
The subsidiaries of the Group
Registered Shareholding
Principal
Place of Nature of capital Voting Ways of
Subsidiaries place of
incorporation business (RMB Direct Indirect proportion acquisition
business
0.000)
Sinopharm Guilin Guilin Guilin Commercial 2,000.00 - 100.00% 100.00% Establishment
Sinopharm Baise Baise Baise Commercial 3,500.00 - 100.00% 100.00% Establishment
Sinopharm Holding
Zhongshan Co.,
Ltd. Zhongshan Zhongshan Commercial 3,000.00 - 100.00% 100.00% Establishment
Sinopharm Guigang Guigang Guigang Commercial 2,000.00 - 100.00% 100.00% Establishment
Sinopharm Beihai Beihai Beihai Commercial 1,500.00 - 100.00% 100.00% Establishment
Sinopharm Holding
Guangzhou
Medical
Treatment Guangzhou Guangzhou Commercial 2,000.00 - 51.00% 51.00% Establishment
Business
Shenzhen Jianmin combinations
Pharmaceutical involving
Co., Ltd. entities under
(“Sinopharm common
Jianmin") Shenzhen Shenzhen Commercial 2,000.00 100.00% - 100.00% control
Sinopharm Holding
Shenzhen
Traditional & Business
Herbal Medicine combinations
Co., Ltd. involving
(“Sinopharm entities under
Traditional & common
Herbal Medicine") Shenzhen Shenzhen Commercial 1,500.00 100.00% - 100.00% control
Business
Sinopharm Holding combinations
Shenzhen involving
Logistics Co., entities under
Ltd. (“Shenzhen common
Logistics") Shenzhen Shenzhen Services 500.00 100.00% - 100.00% control
Business
combinations
involving
entities under
Sinopharm common
Guangzhou Guangzhou Guangzhou Commercial 355,325.00 100.00% - 100.00% control
Business
Sinopharm Holding combinations
Guangdong involving
Hengxing Co., entities under
Ltd. (“Sinopharm common
Hengxing") Guangzhou Guangzhou Commercial 9,600.00 - 100.00% 100.00% control
Business
combinations
involving
entities under
common
Sinopharm Yulin Yulin Yulin Commercial 1,000.00 - 100.00% 100.00% control
266
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VII Interests in other entities (Continued)
1. Interests in subsidiaries (Continued)
The subsidiaries of the Group (Continued)
Registered Shareholding
Principal place Place of Nature of Voting
Subsidiaries capital(RMB Ways of acquisition
of business establishment business Direct Indirect proportion
0.000)
Business combinations
involving entities under
Sinopharm Liuzhou Liuzhou Liuzhou Commercial 2,053.06 - 51.00% 51.00% common control
Guangdong Huixin
Investment Co., Ltd. Business combinations
(“Huixin involving entities under
Investment”) Guangzhou Guangzhou Services 500.00 - 100.00% 100.00% common control
Sinopharm Holding
Foshan Co., Ltd. Business combinations
(“Sinopharm involving entities under
Foshan") Foshan Foshan Commercial 4,100.00 - 100.00% 100.00% common control
Sinopharm Holding
Guangdong
Yuexing Co., Ltd. Business combinations
(“Sinopharm involving entities under
Yuexing”) Guangzhou Guangzhou Commercial 23,000.00 - 100.00% 100.00% common control
Sinopharm Holding
Guangdong
Logistics Co., Ltd. Business combinations
(“Guangdong involving entities under
Logistic”) Guangzhou Guangzhou Services 1,300.00 - 100.00% 100.00% common control
Business combinations
involving entities under
Sinopharm Guangxi Nanning Nanning Commercial 52,141.00 100.00% - 100.00% common control
Business combinations
involving entities under
Guangxi Logistic Nanning Nanning Services 710.07.00 - 100.00% 100.00% common control
Business combinations
involving entities under
Sinopharm Wuzhou Wuzhou Wuzhou Commercial 1,000.00 - 99.90% 99.90% common control
Business combinations
involving entities not
Sinopharm Dongguan Dongguan Dongguan Commercial 7,300.00 - 100.00% 100.00% under common control
Business combinations
involving entities not
Sinopharm Zhanjiang Zhanjiang Zhanjiang Commercial 13,100.00 - 100.00% 100.00% under common control
Business combinations
involving entities not
Sinopharm Yanfeng Shenzhen Shenzhen Commercial 3,000.00 51.00% - 51.00% under common control
Business combinations
involving entities not
Sinopharm Meizhou Meizhou Meizhou Commercial 4,800.00 - 100.00% 100.00% under common control
267
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VII Interests in other entities (Continued)
1． Interests in subsidiaries (Continued)
The subsidiaries of the Group (Continued)
Principal Registered Shareholding
Place of Nature of capital Voting
Subsidiaries place of Ways of acquisition
establishment business (RMB‘0,000) Direct Indirect proportion
business
Business combinations
involving entities not
Sinopharm Huizhou Huizhou Huizhou Commercial 3,800.00 - 100.00% 100.00% under common control
Business combinations
involving entities not
Sinopharm Zhaoqing Zhaoqing Zhaoqing Commercial 4,000.00 - 100.00% 100.00% under common control
Business combinations
involving entities not
Sinopharm Jiangmen (a) Jiangmen Jiangmen Commercial 6,000.00 - 100.00% 100.00% under common control
Business combinations
involving entities not
Sinopharm Shaoguan Shaoguan Shaoguan Commercial 360.00 - 70.00% 70.00% under common control
Sinopharm Holding
Shantou Co., Business combinations
Ltd.("Sinopharm involving entities not
Shantou” Shantou Shantou Commercial 2,100.00 - 100.00% 100.00% under common control
Business combinations
Foshan Nanhai Medicine involving entities under
Co., Ltd. Foshan Foshan Commercial 7,000.00 - 100.00% 100.00% common control
Foshan Nanhai Uptodate Business combinations
& Special Medicines involving entities under
Co., Ltd. Foshan Foshan Commercial 4,000.00 - 100.00% 100.00% common control
Business combinations
Foshan Nanhai Medicine involving entities under
Co., Ltd. Foshan Foshan Commercial 4,000.00 - 100.00% 100.00% common control
Business combinations
Guangdong Uptodate & involving entities under
Special Medicines Guangzhou Guangzhou Commercial 5,000.00 - 100.00% 100.00% common control
Business combinations
involving entities under
South Pharma & Trade Guangzhou Guangzhou Commercial 3,000.00 - 100.00% 100.00% common control
Business combinations
involving entities not
Sinopharm Zhuhai Zhuhai Zhuhai Commercial 3,000.00 - 100.00% 100.00% under common control
Business combinations
involving entities not
Sinopharm Maoming Maoming Maoming Commercial 200.00 - 100.00% 100.00% under common control
Sinopharm Holding
Guangzhou Medical
Technology Co., Ltd. Guangzhou Guangzhou Commercial 588.00 - 51.00% 51.00% Establishment
Sinopharm Holding
Guangzhou Medical
Supply Chain
Service Co., Ltd. (b) Guangzhou Guangzhou Commercial 2,000.00 - 51.00% 51.00% Establishment
Business combinations
Sinopharm Holding involving entities not
Heyuan Co., Ltd. Heyuan Heyuan Commercial 1,340.00 - 70.00% 70.00% under common control
Business combinations
involving entities under
Guoda Pharmacy Shanghai Shanghai Commercial 168,333.00 60.00% - 60.00% common control
Business combinations
involving entities under
Guoda Shanghai Shanghai Shanghai Commercial 3,000.00 - 100.00% 100.00% common control
268
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VII Interests in other entities (Continued)
1． Interests in subsidiaries (Continued)
The subsidiaries of the Group (Continued)
Subsidiaries Principal Place of Nature of Registered Shareholding Voting Ways of acquisition
place of establishment business capital proportion
business (RMB‘0,000) Direct Indirect
Beijing Guoda Business combinations
Pharmacy Chain involving entities under
Store Co., Ltd. Beijing Beijing Commercial 1,000.00 - 100.00% 100.00% common control
Tianjin Guoda Business combinations
Pharmacy Chain involving entities under
Store Co., Ltd. Tianjin Tianjin Commercial 1,000.00 - 80.00% 80.00% common control
Guangxi Guoda
Pharmacy Business combinations
Consulting Chain involving entities under
Store Co., Ltd. Nanning Nanning Commercial 300.00 - 100.00% 100.00% common control
Sinopharm Holding
Guoda Pharmacy Business combinations
Guangdong Co., involving entities under
Ltd. Shenzhen Shenzhen Commercial 5,000.00 - 100.00% 100.00% common control
Sinopharm Guoda
Pharmacy Business combinations
Guangxi Chain involving entities under
Co., Ltd. Liuzhou Liuzhou Commercial 200.00 - 100.00% 100.00% common control
Zhejiang Guoda Business combinations
Pharmacy Co., involving entities under
Ltd. Hangzhou Hangzhou Commercial 1,500.00 - 100.00% 100.00% common control
Sinopharm Holding
Guoda Yangzhou
Dadesheng Business combinations
Pharmacy Chain involving entities under
Store Co., Ltd. Yangzhou Yangzhou Commercial 4,400.00 - 93.68% 93.68% common control
Ningxia Guoda Business combinations
Pharmacy Chain involving entities under
Store Co., Ltd. Yinchuan Yinchuan Commercial 7,000.00 - 70.00% 70.00% common control
Sinopharm Holding
Guoda Nanjing Business combinations
Pharmacy Chain involving entities under
Store Co., Ltd. Nanjing Nanjing Commercial 800.00 - 60.00% 60.00% common control
Sinopharm Holding
Guoda Shandong Business combinations
Pharmacy Chain involving entities under
Store Co., Ltd. Linyi Linyi Commercial 2,900.00 - 55.00% 55.00% common control
Business combinations
involving entities under
Guoda Shenyang (c) Shenyang Shenyang Commercial 5,000.00 - 51.00% 51.00% common control
Fujian Guoda Business combinations
Pharmacy Chain involving entities under
Store Co., Ltd. Xiamen Xiamen Commercial 3,750.00 - 100.00% 100.00% common control
269
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VII Interests in other entities (Continued)
1． Interests in subsidiaries (Continued)
The subsidiaries of the Group (Continued)
Subsidiaries Principal place Place of Nature of Registered Shareholding Voting Ways of acquisition
of business establishment business capital proportion
(RMB‘0,000)
Direct Indirect
Business combinations
Anhui Guoda Pharmacy involving entities under
Chain Store Co., Ltd. Hefei Hefei Commercial 1,000.00 - 60.00% 60.00% common control
Business combinations
involving entities under
Guoda Quanzhou Quanzhou Quanzhou Commercial 2,000.00 - 51.00% 51.00% common control
Business combinations
involving entities under
Shanxi Wanmin Taiyuan Taiyuan Commercial 2,000.00 - 85.00% 85.00% common control
Sinopharm Holding Hunan
Guoda Minshengtang Business combinations
Pharmacy Chain Co., involving entities under
Ltd. Hengyang Hengyang Commercial 2,000.00 - 51.00% 51.00% common control
Liyang Guoda People Business combinations
Pharmacy Chain Store involving entities under
Co., Ltd. Liyang Liyang Commercial 2,500.00 - 80.00% 80.00% common control
Sinopharm Holding Guoda Business combinations
Henan Pharmacy involving entities under
Chain Store Co., Ltd. Pingdingshan Pingdingshan Commercial 1,500.00 - 60.00% 60.00% common control
Business combinations
involving entities under
Guoda Inner Mongolia Hohhot Hohhot Commercial 5,000.00 - 96.70% 96.70% common control
Business combinations
involving entities under
Hebei Lerentang Shijiazhuang Shijiazhuang Commercial 3,500.00 - 60.00% 60.00% common control
Sinopharm Guoda Business combinations
Pharmacy Jiangmen involving entities under
Chain Co., Ltd. Jiangmen Jiangmen Commercial 2,400.00 - 65.00% 65.00% common control
Sinopharm Holding Guoda
Shanxi Yiyuan Business combinations
Pharmacy Chain Store involving entities under
Co., Ltd. Taiyuan Taiyuan Commercial 1,000.00 - 80.00% 80.00% common control
Business combinations
Xinjiang New & Special involving entities under
Medicines Urumqi Urumqi Commercial 612.24 - 51.00% 51.00% common control
Business combinations
involving entities under
ForMe Medicines Shanghai Shanghai Commercial 6,655.00 - 97.00% 97.00% common control
Business combinations
ForMe Pharmacy Chain involving entities under
Store Shanghai Shanghai Commercial 5,000.00 - 99.76% 99.76% common control
270
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VII Interests in other entities (Continued)
1． Interests in subsidiaries (Continued)
The subsidiaries of the Group (Continued)
Subsidiaries Principal Place of Nature of Registered Shareholding Voting Ways of acquisition
place of establishment business capital proportion
business (RMB‘0,000) Direct Indirect
Beijing Golden
Elephant Pharmacy Business combinations
Medicine Chain involving entities under
Company Limited Beijing Beijing Commercial 4,222.22 - 53.13% 53.13% common control
Shanxi Tongfeng Business combinations
Pharmacy Logistics involving entities under
Co., Ltd. Taiyuan Taiyuan Commercial 500.00. - 100.00% 100.00% common control
Changzhi Guoda
Wanmin Pharmacy Business combinations
Chain Store Co., involving entities under
Ltd. Changzhi Changzhi Commercial 320.00 - 51.00% 51.00% common control
Shanxi Guoda Wanmin Business combinations
Clinic Management Medical involving entities under
Chain Co., Ltd. Taiyuan Taiyuan services 120.00 - 100.00% 100.00% common control
Shanghai Guoda Business combinations
Shanghong Qibao involving entities under
Pharmacy Co., Ltd. Shanghai Shanghai Commercial 100.00 - 51.00% 51.00% common control
Zhejiang Intlmedicine Business combinations
Pharmacy involving entities under
Dongshan Co., Ltd. Hangzhou Hangzhou Commercial 50.00 - 51.00% 51.00% common control
Shanghai Guoda Business combinations
Dongsheng involving entities under
Pharmacy Co., Ltd. Shanghai Shanghai Commercial 50.00 - 100.00% 100.00% common control
Sinopharm Guoda
Drug Store Business combinations
(Shenzhen) Chain involving entities under
Co., Ltd. Shenzhen Shenzhen Commercial 1,080.00 - 100.00% 100.00% common control
Sinopharm Holding
Guoda Pharmacy Business combinations
Guangzhou Chain involving entities under
Co., Ltd. Guangzhou Guangzhou Commercial 200.00 - 100.00% 100.00% common control
Shanghai Guodong
Chinese Traditional Business combinations
Medicine Clinic involving entities under
Co., Ltd. Shanghai Shanghai Medical clinic 20.00 - 100.00% 100.00% common control
Shanghai Guoda
Dongxin Pharmacy Business combinations
Chain Store Co., involving entities under
Ltd. Shanghai Shanghai Commercial 30.00 - 100.00% 100.00% common control
271
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VII Interests in other entities (Continued)
1． Interests in subsidiaries (Continued)
The subsidiaries of the Group (Continued)
Subsidiaries Principal place of Place of Nature of Registered Shareholding Voting Ways of
business establishment business capital proportion acquisition
(RMB‘0,000) Direct Indirect
Business
combinations
Shanghai Yutaitang Chinese involving entities
Traditional Medicine Clinic under common
Co., Ltd. Shanghai Shanghai Commercial 100.00 - 100.00% 100.00% control
Business
combinations
involving entities
Sanhe Liyang Golden Elephant under common
Pharmacy Co., Ltd. Langfang Langfang Commercial 1.00 - 100.00% 100.00% control
Business
combinations
Xiaoyi Guoda Wanmin involving entities
Baicaotang Pharmacy Chain under common
Store Co., Ltd. Xiaoyi Xiaoyi Commercial 622.22 - 70.00% 70.00% control
Business
combinations
Sinopharm Holding Guoda involving entities
Pharmacy Hulun Buir Co., under common
Ltd. Hulun Buir Hulun Buir Commercial 1000.00 - 51.00% 51.00% control
Business
combinations
involving entities
Shanghai ForMe Xuhui under common
Pharmacy Co., Ltd. Shanghai Shanghai Commercial 25.00 - 100.00% 100.00% control
Sinopharm Holding Ulanqab
Co., Ltd. Ulanqab Ulanqab Commercial 500.00 - 60.00% 60.00% Establishment
Business
combinations
involving entities
under common
Guoda Taishan. Taishan Taishan Commercial 990.00 - 70.00% 70.00% control
Business
combinations
Sinopharm Lerentang involving entities
Shijiazhuang Pharmaceutical under common
Co., Ltd. Shijiazhuang Shijiazhuang Commercial 200.00 - 100.00% 100.00% control
272
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VII. Interests in other entities (Continued)
1． Interests in subsidiaries (Continued)
The subsidiaries of the Group (Continued)
Subsidiaries Principal place Place of Nature of Registered capital Shareholding Voting Ways of
of business establishment business (RMB‘0,000) proportion acquisition
Direct Indirect
Sinopharm Holding Guoda Drug
Store Manchuria Co., Ltd. Manchuria Manchuria Commercial 50.00 - 51.00% 51.00% Establishment
Sinopharm Guoda Drug Store
Anshan Chain Co., Ltd. Anshan Anshan Commercial 600.00 - 51.00% 51.00% Establishment
Sinopharm Holding Guoda
Yongsheng Drug Store
（Shanghai） Co., Ltd. Shanghai Shanghai Commercial 80.00 - 55.00% 55.00% Establishment
Sinopharm Holding Foshan
Medical Consumables
Supply Chain Co., Ltd. Foshan Foshan Commercial 800.00 - 70.00% 70.00% Establishment
Sinopharm Holding Medical
Supply Chain Service
(Guangxi) Co., Ltd. Nanning Nanning Commercial 2000.00 - 30.60% 30.60% Establishment
Shanghai Guoda Haohai
Pharmacy Co., Ltd. Shanghai Shanghai Commercial 80.00 - 51.00% 51.00% Establishment
Sinopharm Holding Baiyi
Pharmacy Guangxi Co., Ltd. Nanning Nanning Commercial 200.00 - 51.00% 51.00% Establishment
Sinopharm Holding Hezhou Co.,
Ltd. Hezhou Hezhou Commercial 1000.00 - 100.00% 100.00% Establishment
Sinopharm Holding Guoda
Pharmacy Zhengzhou Chain
Store Co., Ltd Zhengzhou Zhengzhou Commercial 2000.00 - 60.00% 60.00% Establishment
Shanghai Guoda Ruijing
Pharmacy Co., Ltd. Shanghai Shanghai Commercial 80.00 - 55.00% 55.00% Establishment
Fujian Guoda Pharmaceutical
Co., Ltd. Xiamen Xiamen Commercial 1500.00 - 100.00% 100.00% Establishment
Sinopharm Holding Qinzhou
Co., Ltd. Qinzhou Qinzhou Commercial 1000.00 - 100.00% 100.00% Establishment
Sinopharm Holding Hechi Co.,
Ltd. Hechi Hechi Commercial 1000.00 - 100.00% 100.00% Establishment
Business
combinations
Sinopharm Huadu Guangzhou Guangzhou Commercial 1000.00 - 70.00% 70.00% involving
entities not
under common
control
Business
Sinopharm Holding Guoda combinations
Shanxi Pharmaceutical Co., Taiyuan Taiyuan Commercial 1000.00 - 100.00% 100.00% involving
Ltd. (d) entities not
under common
control
Business
combinations
Taiyuan Tongxinli Taiyuan Taiyuan Commercial 560.00 - 100.00% 100.00% involving
entities not
under common
control
273
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VII. Interests in other entities (Continued)
1． Interests in subsidiaries (Continued)
The subsidiaries of the Group (Continued)
Subsidiaries Principal place Place of Nature of Registered Shareholding Voting Ways of
of business establishment business capital proportion acquisition
(RMB‘0,000) Direct Indirect
Sinopharm Holding Guoda
Pharmacy Bayannur Co., Ltd.
(e) Bayannur Bayannur Commercial 2,000.00 - 80.00% 80.00% Establishment
Inner Mongolia Guoda
Pharmaceutical Co., Ltd. (f) Hohhot Hohhot Commercial 2,000.00 - 100.00% 100.00% Establishment
Guoda Yongxingtang. (g)
Chaoyang Chaoyang Commercial 3,800.00 - 51.00% 51.00% Establishment
Sinopharm Accord Medicial
Supply Chain (Shenzhen)
Co., Ltd. (h) Shenzhen Shenzhen Commercial 3,333.00 60.00% - 60.00% Establishment
Sinopharm Holding Guozhi
Pharmacy (Heyuan) Co.,
Ltd.(i) Heyuan Heyuan Commercial 500.00 - 70.00% 70.00% Establishment
Liaoning Guoda Pharmaceutical
Co., Ltd. (j) Shenyang Shenyang Commercial 2,000.00 - 100.00% 100.00% Establishment
Sinopharm Holding Guangyi
Health Management
(Zhanjiang) Co., Ltd. (k) Zhanjiang Zhanjiang Commercial 50.00 - 60.00% 60.00% Establishment
Business
combinations
involving entities
not under
Guangzhou Medicine (l) Guangzhou Guangzhou Commercial 200.00 - 70.00% 70.00% common control
Business
combinations
Chaoyang Renai (m) involving entities
not under
Chaoyang Chaoyang Commercial 50.00 - 51.00% 51.00% common control
Business
combinations
Guoda Pu’er (n) involving entities
not under
Pu’er Pu’er Commercial 500.00 - 60.00% 60.00% common control
274
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VII Interests in other entities (Continued)
1． Interests in subsidiaries (Continued)
The subsidiaries of the Group (Continued)
(a) On 13 March 2019, Sinopharm Jiangmen was renamed as “Sinopharm Holding (Jiangmen) Co., Ltd.
(b) On 26 July 2019, the registered capital of Sinopharm Guangzhou Medical Supply Chain Service Co.,
Ltd. was changed from RMB3,200.00 thousand to RMB20,000.00 thousand. After the change, the
Group subscribed RMB10,200.00 thousand of registered capita; Guorun Medicial Supply Chain
Service (Shanghai) Co., Ltd. subscribed RMB8,000.00 thousand of registered capital; and
Guangzhou Medical Union Supply Chain Investment Partnership LP subscribed RMB1,800 thousand
of registered capital. As at the end of 2019, payment has been completed.
(c) According to the resolution of the first shareholders' meeting in 2019, it was agreed to convert
RMB32,000.00 thousand of the undistributed profits of Sinopharm Holding Shenyang Chain Co., Ltd.
as of 31 December 2017 into registered capital according to the shareholding ratio of shareholders.
The industrial and commercial change was completed on 8 July 2019. The registered capital of
Sinopharm Shenyang was changed from RMB18,000.00 thousand to RMB50,000.00 thousand. After
the change, the Group subscribed RMB25,500.00 thousand of registered capital; Shenzhen Jiufeng
Investment Co., Ltd. subscribed RMB20,500.00 thousand of registered capital; and Shenyang
Pharmaceutical Co., Ltd. subscribed RMB4,000.00 thousand of registered capital. After the change,
the shareholding ratio of the Group to Guoda Shenyang remains unchanged.
(d) On 1 February 2019, Shanxi Zhong’ao Pharmaceutical Co., Ltd. was renamed as “Sinopharm
Holding Guoda Shanxi Pharmaceutical Co., Ltd.”
(e) On 5 November 2018, the Group and Hohhot Manshengyuan Trading Co., Ltd. accumulatively
invested RMB16,000.00 thousand and RMB4,000.00 thousand to set up Sinopharm Holding Guoda
Pharmacy Bayannur Co., Ltd., respectively. After the establishment, the Group held 80% of equity
interest in the company. As at the end of 2019, payment has been completed.
(f) On 17 September 2018, the Group invested RMB20,000.00 thousand to set up Inner Mongolia
Guoda Pharmaceutical Co., Ltd. As at the end of 2019, payment has been completed.
(g) On 30 April 2019, the Group and Bowei Consulting accumulatively invested RMB19,380.00
thousand and RMB18,620.00 thousand to establish Chaoyang Yongxingtang, respectively. After the
establishment, the Group held 51% of equity interest in the company. As at the end of 2019, the
Group invested RMB16,320.00 thousand and Bowei Consulting invested RMB15,680.00 thousand.
(h) On 21 August 2019, the Group and Shenzhen Ketai Medicial Science and Technology Co., Ltd.
accumulatively invested RMB19,998.00 thousand and RMB13,332.00 thousand to establish
Sinopharm Accord Medicial Supply Chain (Shenzhen) Co., Ltd., respectively. After the
establishment, the Group held 60% of equity interest in the company. As at the end of 2019,
payment has been completed.
275
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VII Interests in other entities (Continued)
1． Interests in subsidiaries (Continued)
The subsidiaries of the Group (Continued)
(i) On 14 August 2019, the Group and Heyuan Mairui Trading Co., Ltd. accumulatively invested
RMB3,500.00 thousand and RMB1,500.00 thousand to establish Sinopharm Holding Guozhi
Pharmacy (Heyuan) Co., Ltd., respectively. After the establishment, the Group held 70% of equity
interest in the company. As at the end of 2019, payment has been completed.
(j) On 13 August 2019, the Group invested RMB20,000.00 thousand to set up Liaoning Guoda
Pharmaceutical Co., Ltd. As at the end of 2019, payment has been completed.
(k) On 26 March 2019, the Group and Zhanjiang Guangyi Pharmaceutical Technology Development
Co., Ltd. accumulatively invested RMB300.00 thousand and RMB200.00 thousand to establish
Sinopharm Holding Guangyi Health Management (Zhanjiang) Co., Ltd., respectively. After the
establishment, the Group held 60% of equity interest in the company. As at the end of 2019,
payment has not been completed yet.
(l) On 17 June 2019, the Group acquired a 70% stake of Guangzhou Senmingyouhe Pharmaceutical
Co., Ltd. for RMB6,660.00 thousand to constitute a business combination involving enterprises not
under common control. After completing the acquisition, the company was renamed as Sinopharm
Accord (Guangzhou) Medicine Co., Ltd. The acquisition was completed on 31 August 2019. Since
then, the Group included Guangzhou Medicine in the scope of consolidation.
(m) On 22 October 2019, the Group acquired 51% equity of Chaoyang Renai from Chaoyang Mingyang
Business Service Co., Ltd. with RMB13,800.00 and obtained the controlling stake of Chaoyang
Renai, constituting a business combination involving enterprises not under common control. The
acquisition was completed on 31 October 2019. Since then, the Group included Chaoyang Renai in
the scope of consolidation.
(n) On 1 December 2019, the Group acquired 60% shares of Pu'er Songmao Jiantang Pharmaceutical
Co., Ltd. with RMB90,000,000.00. After completing the acquisition, the company was renamed as
Guoda Pharmacy (Pu’er) Songmao Co., Ltd. The acquisition was completed on 30 November
2019. Since then, the Group included Guoda Pu’er in the scope of consolidation.
276
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VII Interests in other entities (Continued)
1． Interests in subsidiaries (Continued)
Details of the Group’s subsidiaries that have material non-controlling interests are set out below:
2019
Percentage of Profit Accumulated balances
equity interest for this year Dividend paid to of
held by attributable to non-controlling non-controlling interests
non-controlling non-controlling interests at the date of the
interests interests balance sheet
Guoda
Pharmacy 40.00% 98,483,012.12 33,647,705.09 1,812,816,542.62
The major financial information of the subsidiaries in the table above is stated below. These amounts are
before elimination:
Guoda Pharmacy
2019
Current assets 7,653,548,590.59
Non-current assets 3,520,209,007.35
Total assets 11,173,757,597.94
Current liabilities 5,107,687,171.29
Non-current liabilities 1,073,060,666.37
Total liabilities 6,180,747,837.66
Operating revenue 12,753,608,498.70
Net profit 311,908,115.16
Total comprehensive income 388,659,545.16
Net cash flows from operating activities 1,342,032,291.80
277
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VIIInterests in other entities (Continued)
2. Interests in associates
Principal
place of Place of Nature of business Shareholding(%)
business incorporation Accounting
Direct Indirect
Associates
Main Luck Pharmaceutical Shenzhen Shenzhen Manufacturing 35.19 - Equity
Zhijun Suzhou Suzhou Suzhou Manufacturing 33.00 - Equity
Zhijun Medicine Shenzhen Shenzhen Manufacturing 49.00 - Equity
Zhijun Trade Shenzhen Shenzhen Commercial 49.00 - Equity
Zhijun Pingshan Shenzhen Shenzhen Manufacturing 49.00 - Equity
Shyndec Pharma Shanghai Shanghai Manufacturing 16.28 - Equity
Shanghai Dingqun Shanghai Shanghai Business services 2.53 - Equity
Shanghai Beiyi Shanghai Shanghai Commercial - 26.00 Equity
Shanghai Liyi Shanghai Shanghai Commercial - 35.00 Equity
Guangdong Jienuo Guangzhou Guangzhou Commercial - 29.00 Equity
Dongyuan Accord Heyuan Heyuan Commercial - 45.00 Equity
Shanghai Renbei Shanghai Shanghai Commercial - 30.00 Equity
Guangdong Jianhui Zhanjiang Zhanjiang Commercial - 10.00 Equity
Shyndec Pharma and Zhijun Medicine are important associates of the Group and are engaged in
the production as well as sale of pharmaceutical products. The Group adopted the equity method
for Shyndec Pharma and Zhijun Medicine.
278
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VII Interests in other entities (Continued)
2. Interests in associates (Continued)
The following table illustrates the summarised financial information in respect of Shyndec Pharma:
2019 2018
Current assets 9,676,372,530.32 8,470,191,403.19
Non-current assets 7,962,091,231.68 7,993,673,189.70
Total assets 17,638,463,762.00 16,463,864,592.89
Current liabilities 6,491,804,082.54 6,568,480,863.79
Non-current liabilities 1,943,465,618.97 1,452,099,931.65
Total liabilities 8,435,269,701.51 8,020,580,795.44
Non-controlling interests 1,615,724,166.23 1,637,029,480.44
Shareholders’ equity attributable to
shareholders of the parent
company 7,587,469,894.26 6,806,254,317.01
Group’s share of net assets by
proportion of ownership interests 1,235,240,098.79 1,098,566,852.51
Carrying amount of the investment 1,235,240,098.79 1,098,566,852.51
Operating revenue 12,199,106,725.48 11,320,781,393.69
Income taxes 144,388,214.81 223,956,645.87
Net profit 928,467,067.03 1,069,979,572.65
Total comprehensive income 927,647,864.36 1,069,979,572.65
Dividend received 16,714,220.15 8,448,213.90
279
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VII Interests in other entities (Continued)
2. Interests in associates (Continued)
The following table illustrates the summarised financial information in respect of Zhijun Medicine:
2019 2018
Current assets 1,295,003,085.13 1,111,485,098.64
Non-current assets 273,684,959.60 298,610,691.12
Total assets 1,568,688,044.73 1,410,095,789.76
Current liabilities 734,280,688.66 659,931,220.07
Non-current liabilities 16,900,060.78 24,953,965.28
Total liabilities 751,180,749.44 684,885,185.35
Shareholders’ equity attributable to
shareholders of the parent company 817,507,295.29 725,210,604.41
Group’s share of net assets by
proportion of ownership interests 400,578,574.68 355,353,196.15
Carrying amount of the investment 400,578,574.68 355,353,196.15
Operating revenue 1,888,143,854.90 1,762,587,352.62
Income taxes 34,538,098.81 36,760,959.44
Net profit 217,216,618.96 249,839,856.17
Total comprehensive income 217,216,618.96 249,839,856.17
Dividend received 61,210,764.76 58,111,254.57
280
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VIII Risks related to financial instruments
1.Classification of financial instruments
The carrying amounts of each category of financial instruments as at the date of financial
position are as follows:
2019
Financial assets at
fair value
Financial assets through profit or Financial assets at fair value through
Financial assets at
loss amortised cost other comprehensive income Total
Mandatorily Mandatorily
Designated
required required
Cash and cash
equivalents - 8,882,334,845.79 - - 8,882,334,845.79
Notes receivable - 793,301,688.64 - - 793,301,688.64
Accounts
receivable - 10,617,981,893.52 - - 10,617,981,893.52
Receivable
financing - - 446,342,588.46 - 446,342,588.46
Other receivables - 477,988,244.98 - - 477,988,244.98
Other non-current
financial assets 140,000,000.00 - - - 140,000,000.00
Other equity
instrument
investment - - - 116,021,000.00 116,021,000.00
140,000,000.00 20,771,606,672.93 446,342,588.46 116,021,000.00 21,473,970,261.39
Financial liabilities Financial liabilities at amortised cost
Short-term borrowings 1,453,018,300.01
Notes payable 5,555,697,557.53
Accounts payable 6,554,105,124.13
Other payables 1,756,858,461.02
Non-current liabilities due within 1 year 601,427,093.62
Lease liabilities 1,182,407,085.08
17,103,513,621.39
281
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VIII Risks related to financial instruments (Continued)
1.Classification of financial instruments (Continued)
2018
Financial assets at
fair value
Financial assets through profit or Financial assets at fair value through
Financial assets at
loss amortised cost other comprehensive income Total
Mandatorily Mandatorily
Designated
required required
Cash and cash
equivalents - 8,096,158,013.24 - - 8,096,158,013.24
Notes receivable - 789,536,654.23 - - 789,536,654.23
Accounts
receivable - 9,336,861,647.92 - - 9,336,861,647.92
Receivable
financing - - 567,775,275.40 - 567,775,275.40
Other receivables - 637,116,650.64 - - 637,116,650.64
Other non-current
financial assets 140,000,000.00 - - - 140,000,000.00
Other equity
instrument
investment - - - 13,685,760.00 13,685,760.00
140,000,000.00 18,859,672,966.03 567,775,275.40 13,685,760.00 19,581,134,001.43
Financial liabilities Financial liabilities at amortised cost
Short-term borrowings 2,608,626,099.82
Notes payable 3,416,755,681.80
Accounts payable 6,468,535,961.17
Other payables 1,528,424,590.29
Non-current liabilities due within 1 year 5,861,324.37
Long-term borrowings 31,638,984.25
Long-term payables 3,763,978.52
14,063,606,620.22
282
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VIII Risks related to financial instruments (Continued)
2. Transfer of financial assets
Transferred financial assets that are not derecognised in their entirety
As at 31 December 2019, the Group had endorsed commercial bills receivable (the "Endorsed
Bills") to certain of its suppliers in order to settle accounts payable due to such suppliers of
RMB 0.00 (31 December 2018: RMB301,416.00). During the year, the Group operated a
number of discounting business through several banks in China. At 31 December 2019, the
carrying value thereof was RMB64,038,348.12 (31 December 2018: RMB170,013,427.11). In
the opinion of the directors, the Group has retained the substantial risks and rewards, which
include default risks relating to such Endorsed Bills, and accordingly, it continued to recognize
the full carrying amounts of the Endorsed Bills and the associated accounts payable settled.
Subsequent to the Endorsement, the Group did not retain any rights of the use of the Endorsed
Bills, including the sales, transfer or pledge of the Endorsed Bills to any other third parties.
As at 31 December 2019, the total carrying value of accounts payable settled by the Group was
RMB64,038,348.12 (31 December 2018: RMB170,314,843.11).
283
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VIII Risks related to financial instruments (Continued)
2. Transfer of financial assets (Continued)
Transferred financial assets that are derecognised in their entirety in which continuing
involvement exists
As at 31 December 2019, the Group had endorsed commercial bills receivable (the "Endorsed
Bills") to certain of its suppliers in order to settle accounts payable due to such suppliers of
RMB867,007,837.74 (31 December 2018: RMB568,118,674.84). During the year, the Group
operated a number of discounting business through several banks in China. At 31 December
2019, the carrying value thereof was RMB1,413,116,120.20 (31 December 2018:
RMB705,143,849.35). The derecognised bills had a maturity of 1 to 12 months at the end of the
reporting period. In accordance with the Law of Negotiable Instruments, the holders of the
derecognised bills have a right of recourse against the Group if the accepting banks default (the
“Continuing Involvement”). In the opinion of the directors, the Group has transferred
substantially all risks and rewards relating to the derecognised bills. Accordingly, it has
derecognised the full carrying amounts of the derecognised bills and the associated accounts
payable. The maximum exposure to loss from the Group's Continuing Involvement in the
derecognised bills and the undiscounted cash flows to repurchase these derecognised bills is
equal to their carrying amounts. In the opinion of the directors, the fair values of the Group’s
Continuing Involvement in the derecognised bills are not significant.
During 2019, the Group has not recognised any gain or loss on the date of transfer. No gain or
loss was recognised from derecognised financial assets in which the Continuing Involvement
exists, both during the year or cumulatively.
During 2019, the Group has not recognised any gain or loss on the date of transfer of the
derecognised bills. No gains or losses were recognised from the Continuing Involvement, both
during the year or cumulatively.
As part of its normal business, the Group entered into an accounts receivable factoring without
recourse with banks and transferred certain accounts receivable to banks. In the opinion of the
directors, the Group has transferred substantially all risks and rewards under the arrangement.
Accordingly, it has derecognised the full carrying amounts of the associated accounts
receivable. The original carrying value of the derecognised accounts receivable transferred
under the Arrangement that have not been settled as at 31 December 2019 amounted to
RMB1,525,687,080.99 (31 December 2018: RMB827,745,640.19).
284
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VIII Risks related to financial instruments (Continued)
3. Risks of financial instruments
The main risks arising from the Group's financial instruments are credit risk, liquidity risk and
market risk (including currency risk and interest rate risk). The Group's principal financial
instruments comprise cash and bank balances, equity investments, debt investments,
borrowings, notes receivable, accounts receivable, notes payable and accounts payable. Risks
that related to these financial instruments and the Group's risk management strategies for
reducing these risks are as follows.
The Company’s board of directors is responsible for planning and establishing the risk
management framework of the Group, formulating risk management policies and related
guidelines of the Group and supervising the implementation of risk management measures. The
Group has already developed risk management policies to identify and analyse the risks faced
by the Group, which have clearly identified specific risks, covering a lot of aspects such as
market risk, credit risk and liquidity risk management. The Group regularly assesses the market
environment and changes in the Group’s business activities to determine whether or not to
update the risk management policies and systems. The risk management of the Group shall be
conducted by the operation and management department according to the policy approved by
the Company’s management. The operation and management department identifies, evaluates
and avoids related risks by means of close cooperation with other business units of the Group.
To avoid the risk concentrating on a single industry, a specific area or a specific counterparty, the
Group spreads financial instruments risk with diversified investments and business portfolio.
Credit risk
The Group only trades with recognised and creditworthy third parties. It is the Group’s policy that
all customers who wish to trade on credit terms are subject to credit verification procedures. In
addition, receivable balances are monitored on an ongoing basis and the Group’s exposure to
bad debts is not significant. For transactions that are not denominated in the functional currency
of the relevant operating unit, the Group does not offer credit terms without the special approval
of the credit control department of the Group.
Since cash and bank balances, bank acceptance bills receivable and derivative financial
instruments are placed in the well-established banks with high credit ratings, the credit risk of
these financial instruments is lower.
The other financial instruments of the Group include cash and bank balances and other
receivables. The credit risk of these financial assets results from default of counterparty. The
maximum credit exposure equals to the book value of these instruments.
285
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VIII Risks related to financial instruments (Continued)
3. Risks of financial instruments (Continued)
Credit risk (Continued)
The maximum exposure to credit risk of the Group at each balance sheet date is the total
amount charged to the customers less the amount of the impairment provision.
Since the Group trades only with recognised and creditworthy third parties, there is no
requirement for collateral. Credit risks are managed by customer/counterparty, by geographical
region and by industry sector. There are no significant concentrations of credit risk within the
Group as the customer bases of the Group’s accounts receivable are widely dispersed in
different sectors and industries. The Group does not hold any collateral or other credit
enhancements over its accounts receivable balances
Determination of significant increase in credit risk
At each reporting date, the Group determines whether the credit risk of a financial asset has
increased significantly since initial recognition. When determining whether the credit risk of a
financial asset has increased significantly since initial recognition, the Group considers
reasonable and supportable information that is relevant and available without undue cost or
effort. This includes both quantitative and qualitative information analysis, based on the Group’s
historical experience and informed credit assessment and including forward-looking information.
In order to determine the change of expected default risk during the financial instrument’s entire
lifetime, the Group compares the default risk of financial instrument on the balance sheet date
and on the initial recognition date based on single financial instrument or financial instrument
portfolio with similar default risk.
The Group determines that the credit risk of financial assets has significantly increased when one
or more quantitative or qualitative criteria are met:
(1) Quantitative criteria are mainly probability of default increasing more than a given % since
initial recognition;
(2) Qualitative criteria are mainly significant detrimental changes in the borrower’s operating or
financial conditions and early warning customer lists.
(3) The upper criterion is above 30 days of the borrowers default (including principal and
interests).
Definition of credit-impaired financial assets
In assessing whether a financial asset is credit-impaired, the Group considers both quantitative
and qualitative information in line with internal credit risk management. The Group assesses
whether a financial asset is credit-impaired by considering the following factors:
(1) Significant financial difficulty of the borrower or issuer;
(2) A breach of contract such as a default or past due event;
(3) The lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s
financial difficulty, having granted to the borrower concession(s) that the lender(s) would not
otherwise consider;
(4) It is becoming probable that the borrower will enter bankruptcy or other financial
reorganisation;
(5) The disappearance of an active market for security because of financial difficulties; and
(6) Financial assets purchased or sourced at large discounts indicating that credit losses have
occurred.
286
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VIII Risks related to financial instruments (Continued)
3. Risks of financial instruments (Continued)
Credit risk (Continued)
The impairment of financial assets may not be necessarily due to a single disparate event. The
combined effects of multiple events may result in financial assets being credit-impaired.
Parameter of the expected credit loss model
Based on whether there is a significant increase in credit risk and whether the financial assets
are credit-impaired, the Group recognizes impairment allowance for different assets using either
12-month expected credit losses or lifetime expected credit losses. The measurement of the ECL
model is a function of the probability of default, the loss given default (i.e. the magnitude of the
loss if there is a default) and the exposure at default. The Group establishes the model by
considering the quantitative analysis of historical statistics such as the counterparty rating, the
guarantee method, the collateral category, the repayment method, and also forward-looking
information.
Definitions:
(1)The probability of default is the probability that the debtor will not be able to meet its
repayment obligations within the following 12 months or throughout the remaining
duration. To reflect the macro-economic environment conditions, the Group’s assessment
of the probability of default is based on the calculation of the ECL model adjusted by
forward-looking information.
(2)The loss given default (i.e. the magnitude of the loss if there is a default) refers to the
Group's expectation of the extent of the loss of default risk exposure. The loss given
default varies depending on the type of counterparty, the way and priority of recourse,
and the type of collateral. The loss given default is the percentage of the risk exposure
loss at the time of default, calculated on the basis of the next 12 months or the entire
duration.
(3)The exposure at default refers to the amount that the Group should repay in the event of
default in the next 12 months or throughout the remaining period.
Both the assessment of a significant increase in credit risk and the calculation of the ECL involve
forward-looking information. The Group recognizes key economic ratios that influence credit risk
and the ECL by historical data analysis.
As at 31 December 2019, there was no evidence of a significant increase in credit risk (31
December 2018: nil).
287
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VIII Risks related to financial instruments (Continued)
3. Risks of financial instruments (Continued)
Liquidity risk
The maturity analysis of the Group's financial liabilities as at the end of the reporting period, based on the contractual undiscounted cash flows, is as follows:
31 December 2019
Within 1 year 1 to 2 years 2 to 5 years Above 5 years Total
Short-term borrowings 1,473,390,678.14 - - - 1,473,390,678.14
Notes payable 5,555,697,557.53 - - - 5,555,697,557.53
Accounts payable 6,554,105,124.13 - - - 6,554,105,124.13
Other payables 1,756,858,461.02 - - - 1,756,858,461.02
Non-current liabilities due within 1 year 681,949,685.82 - - - 681,949,685.82
Lease liabilities - 495,038,444.79 638,255,984.49 135,810,836.52 1,269,105,265.80
16,022,001,506.64 495,038,444.79 638,255,984.49 135,810,836.52 17,291,106,772.44
288
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VIII Risks related to financial instruments (Continued)
3. Risks of financial instruments (Continued)
Liquidity risk (Continued)
The maturity analysis of the Group's financial liabilities as at the end of the reporting period, based on the contractual undiscounted cash flows, is as
follows:
31 December 2018
Within 1 year 1 to 2 years 2 to 5 years Above 5 years Total
Short-term borrowings 2,641,685,285.81 - - - 2,641,685,285.81
Notes payable 3,416,755,681.80 - - - 3,416,755,681.80
Accounts payable 6,468,535,961.17 - - - 6,468,535,961.17
Other payables 1,528,424,590.29 - - - 1,528,424,590.29
Non-current liabilities due within 1 year 9,930,322.41 - - - 9,930,322.41
Long-term payables - 4,424,279.85 563,159.02 - 4,987,438.87
Long-term borrowings - 32,897,114.17 - - 32,897,114.17
14,065,331,841.48 37,321,394.02 563,159.02 - 14,103,216,394.52
289
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
290
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VIII Risks related to financial instruments (Continued)
Market risk
Interest rate risk
The Group's interest rate risk arises from long-term borrowings from banks. Financial liabilities
issued at floating rates expose the Group to cash flow interest rate risk. Financial liabilities
issued at fixed rates expose the Group to fair value interest rate risk. The Group determines the
relative proportions of its fixed rate and floating rate contracts depending on the prevailing
market conditions. As at 31 December 2019, if the floating interest rates of the long-term
interest-bearing borrowings increased or decreased by 50 base points, while other factors did
not change, the Group’s net income would decrease or increase by RMB40,471.31 (31
December 2018: if the floating interest rates of the long-term interest-bearing borrowings
increased or decreased by 50 base points, while other factors did not change, the Group’s net
income would increase or decrease by RMB118,500.00).
The Group’s finance department at its headquarters continuously monitors the interest rate
position of the Group. Increases in interest rates will increase the cost of new borrowings and
the interest expenses with respect to the Group’s outstanding floating rate borrowings and,
therefore, could have a material adverse effect on the Group’s financial position. The Group’s
management layer would make adjustments with reference to the latest market conditions
which are interest rate swap agreements to mitigate its exposure to interest rate risk. During
2019 and 2018, the Group had not entered into any interest rate swap agreements.
For the year ended 31 December 2019, the Group had long-term interest-bearing borrowings
with floating interest rates amounting to RMB31,600,000.00 (31 December 2018:
RMB31,600,000.00).
Currency risk
The Group’s major operational activities are carried out in Mainland China and a majority of the
transactions are denominated in RMB. The Group is exposed to foreign exchange risk arising
from the recognised assets and liabilities as well as future transactions (denominated in foreign
currencies, primarily with respect to United States dollars and Hong Kong dollars). The Group’s
finance department at its headquarters is responsible for monitoring the amounts of assets and
liabilities, and transactions denominated in foreign currencies aim at mitigating the potential
foreign exchange risk to a large extent.
291
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
VIII Risks related to financial instruments (Continued)
4. Capital management
The Company’s primary objective for managing capital is to ensure that it maintains a strong credit
rating and a healthy capital ratio in order to support its business, bring shareholders investing
returns and benefit related parties. Management also aims to maintain a capital structure that
ensures that the lowest cost of capital is available to the entity.
Management adjusts the capital structure through adjusting dividend payments to shareholders,
returning capital to shareholders, issuing new shares or selling assets to reduce debts.
The Group’s total capital is the total shareholders’ equity in the balance sheet. The Group does not
adopt an asset ratio as a compulsory factor to govern capital investment.
The gearing ratios of the Group as at the end of the reporting periods were as follows:
2019 2018
Gearing ratio 54.18% 51.93%
292
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
IX Disclosure of fair value
1. Assets and liabilities at fair value
2019
Input applied in the measurement of fair value
Quoted Significant Significant Total
prices in observable unobservable
active inputs inputs
markets
Level 1 Level 2 Level 3
Continuous measurement of
fair value
Receivable financing - 446,342,588.46 - 446,342,588.46
Other investment in equity
instruments - 116,021,000.00 - 116,021,000.00
Other non-current financial
assets - - 140,000,000.00 140,000,000.00
- 562,363,588.46 140,000,000.00 702,363,588.46
2018
Input applied in the measurement of fair value
Quoted Significant Significant Total
prices in observable unobservable
active inputs inputs
markets
Level 1 Level 2 Level 3
Continuous measurement of
fair value
Receivable financing - 567,775,275.40 - 567,775,275.40
Other investment in equity - -
instruments 13,685,760.00 13,685,760.00
Other non-current financial
assets - 140,000,000.00 140,000,000.00
- 581,461,035.40 140,000,000.00 721,461,035.40
293
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
IX Disclosure of fair value (Continued)
2. Assets and liabilities disclosed at fair value
2018
Input applied in the measurement of fair value
Quoted Significant Significant Total
prices in observable unobservable
active inputs inputs
markets
Level 1 Level 2 Level 3
Long-term borrowings - 31,638,984.25 - 31,638,984.25
294
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
IX Disclosure of fair value (Continued)
3. Estimation of fair value
The following are the book value and fair value of financial instruments of the Group, excluding those that
have immaterial difference in book value and fair value:
Carrying amount Fair value
31 December 2019 31 December 2018 31 December 2019 31 December 2018
Financial liabilities
Long-term borrowings - 31,638,984.25 - 31,638,984.25
Management has assessed that the fair values of cash and cash equivalents, notes receivable, accounts
receivable, receivable financing, other receivables, short-term borrowings, notes payable, accounts payable,
other payables, non-current liabilities due within 1 year as well as other short-term financial assets and
liabilities. Due to the short remaining maturities of these instruments, the fair value approximated to the
carrying amount.
The financial controller of the Group takes the responsibility to formulate policies and procedures related to
financial instrument fair value measurements and directly reports to the CFO and the audit committee. On
each balance sheet date, the financial department analyses the variation of the fair value of financial
instruments and determines the inputs applicable to valuation. The valuation is required to be approved by the
CFO.
The fair values of financial assets and liabilities are the amounts at which the instrument could be exchanged
or debts could be settled in an arm’s length transaction between knowledgeable and willing parties, other than
in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values.
The fair values of short-term and long-term borrowings, and long-term payables have been calculated by
discounting the expected future cash flows using market rates of return currently available for other financial
instruments with similar terms, credit risk and remaining maturities. As at 31 December 2019, the Group’s
own non-performance risk for short-term and long-term borrowings was assessed to be insignificant.
For an equity instrument of listed entities, the market price is used to determine fair value. For an equity
instrument of non-listed entities, the recent equity transaction consideration or the market comparable
company model is used to estimate fair value. The Group believes that the estimated fair value by the
valuation method is rational, and also the most sufficient value at the balance sheet date.
4. Unobservable inputs
Other non-current financial assets were the fund shares of Qirui Port Investment Center LP of Ningbo
Meishan Bonded Port subscribed by the Group. For the determination of the fair value of the investment, after
referring to the net assets of Qirui Port Investment Center LP of Ningbo Meishan Bonded Port on 31
December 2019, which has implemented the new financial instrument standards, the result was calculated
and determined according to the fund share proportion owned by the company.
A financial instrument that is measured at fair value with measurement of level 3 is insensitive to reasonable
fluctuation of the unobservable inputs.
295
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
IX Disclosure of fair value (Continued)
5． Transfers between levels of fair value measurement
During the year, there were no transfers of fair value measurements between Level 1 and Level 2.
X Related party relationships and transactions
1. Parent
Proportion of Proportion of
Share ownership voting power
Registered capital interest in the in the
address Nature of business (RMB’0,000) Company Company
Industrial investment holding, trustee of a
pharmaceutical enterprise, asset
Sinopharm reorganization, distribution and retail of
Group Shanghai medicines and pharmaceutical products, etc. 297,165.62 56.06% 56.06%
The ultimate controlling party of the Company is CNPGC.
2. Subsidiaries
Refer to Note VII (1) for details of subsidiaries.
3. Associates
Refer to Note VII (2) for details of associates.
4. Other related parties
Related party relationships
Sinopharm Group Finance Co., Ltd. Controlled by CNPGC
Sinopharm Shantou Jinshi Pharmaceutical Co., Ltd. Controlled by CNPGC
Huayi Pharmaceutical Co., Ltd. Controlled by CNPGC
Beijing Huamiao Pharmaceutical Co., Ltd. Controlled by CNPGC
Sichuan Jiangyouzhongbafuzi Technology Development Co., Ltd. Controlled by CNPGC
Guizhou Tongjitang Pharmaceutical Co., Ltd. Controlled by CNPGC
Anhui Jingfang Pharmaceutical Co., Ltd. Controlled by CNPGC
Guangdong Medi-World Pharmaceutical Co., Ltd. Controlled by CNPGC
Shandong Lu Ya Pharmaceutical Co., Ltd. Controlled by CNPGC
Sinopharm Holding Fengliaoxing (Foshan) Traditional & Herbal Medicine Co.,
Ltd. Controlled by CNPGC
Winteam Pharmaceutical Group Ltd. Controlled by CNPGC
Foshan Dezhong Pharmaceutical Co., Ltd. Controlled by CNPGC
Sinopharm Group Guizhou Blood Products Co., Ltd. Controlled by CNPGC
Chengdu Rongsheng Pharmacy Co., Ltd. Controlled by CNPGC
Lanzhou Biotechnology Development Co., Ltd. Controlled by CNPGC
296
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
4. Other related parties (Continued)
Related party relationships
Beijing Huasheng Pharmaceutical Biotechnology Development Co., Ltd. Controlled by CNPGC
Shanghai Shangsheng Biological Products Co., Ltd. Controlled by CNPGC
Shantou Jinshi Powder Injection Co., Ltd. Controlled by CNPGC
Chengdu Institute of Biological Products Co.,Ltd. Controlled by CNPGC
China National Pharmaceutical Industry Co., Ltd. Controlled by CNPGC
Sinopharm Group Chengdu Xinlibang Biological Products Co., Ltd. Controlled by CNPGC
Sinopharm Weiqida Pharmaceutical Co., Ltd. Controlled by CNPGC
Sinopharm Xinjiang Pharmaceutical Co., Ltd. Controlled by CNPGC
Shanghai Modern Hasen (Shangqiu) Pharmaceutical Co., Ltd. Controlled by CNPGC
Sinopharm Group Rongsheng Pharmaceutical Co., Ltd. Controlled by CNPGC
Sinopharm Group Zhonglian Pharmaceutical Group Co., Ltd. Controlled by CNPGC
The Fourth Pharmaceutical Co., Ltd. of Zhonglian Group Controlled by CNPGC
Sinopharm Chuan Kang Pharmaceutical Co., Ltd. Controlled by CNPGC
China National Pharmaceutical Foreign Trade Corporation Controlled by CNPGC
Sinopharm Group Yibin Pharmaceuticals Co., Ltd. Controlled by CNPGC
Sinopharm Yixin Pharmaceutical Co., Ltd. Controlled by CNPGC
Sinopharm Holding Sanyi Medicine (Wuhu) Co., Ltd. Controlled by CNPGC
Sinopharm Wuhan blood products Co., Ltd. Controlled by CNPGC
Fujian Chengtian Jinling Pharmaceutical Co., Ltd. Controlled by CNPGC
Sinopharm Fengliaoxing (Foshan) Medicines Co., Ltd. Controlled by CNPGC
Lanzhou Institute of Biological Products Co., Ltd. Controlled by CNPGC
Shanghai Shyndec Pharmaceutical Marketing Co., Ltd. Controlled by CNPGC
Sinopharm Fengliaoxing Medical Hospital Co., Ltd. Controlled by CNPGC
Sinopharm Group Fengliaoxing Traditional Chinese Medical Center Foshan
Nanhai Co., Ltd. Controlled by CNPGC
Sinopharm Fengliaoxing Pharmacy (Foshan) Co., Ltd Controlled by CNPGC
Foshan Southern Fengliaoxing Medicial Hospital Co., Ltd Controlled by CNPGC
Sinopharm Industry Investment Co., Ltd. Controlled by CNPGC
Sinopharm Beijing Huamiao Pharmaceutical Co., Ltd. Controlled by CNPGC
Sinopharm Chongqing Pharmaceutical and Medical Industry Design Institute Controlled by CNPGC
China National of Traditional&Herbal Medicine Co., Ltd. Controlled by CNPGC
China Otsuka Pharmaceutical Co., Ltd. Associate of CNPGC
Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. Associate of CNPGC
Shanghai SinoMed Medicine Co., Ltd. Associate of CNPGC
297
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
4. Other related parties (Continued)
Related party relationships
Sinopharm ShanXi Ruifulai Pharmaceutical Co., Ltd. Associate of CNPGC
Changchun Changsheng Gene Pharmaceutical Co., Ltd. Associate of CNPGC
Sinopharm Holding Tianjin Co., Ltd. Controlled by Sinopharm Group
Shanghai Tongyu Information Technology Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Tianjin Binhai Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Guorun Medical Supply Chain Service (Shanghai) Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shanxi Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group Linfen Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group Southwest Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Biopharmaceutical (Tianjin) Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Zhihuiminsheng (Tianjin) Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shenyang Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Dalian Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Jinzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shanxi Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Hubei Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Hubei Guoda Pharmacy Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding (Hubei) Medicine Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Shanxi Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shanxi Lvliang Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shanxi Jincheng Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shanxi Mingdikang Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group Medicine Logistic Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Hunan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Yongzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Changde Co., Ltd. Controlled by Sinopharm Group
China National Medicines Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group Guorui Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Prospect Dentech (Beijing) Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Beijing Kangchen Bio-Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Beijing Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co., Ltd. Controlled by Sinopharm Group
298
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
4. Other related parties (Continued)
Related party relationships
Sinopharm Holding Beijing Huahong Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Zhejiang Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Sub Marketing Center Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Henan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Pingdingshan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Anhui Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Fuzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shandong Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Lunan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Rizhao Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Jinan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Dezhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Pu’er Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Yunnan Dongchang Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Hainan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Fujian Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Putian Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Zhangzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Quanzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Xiamen Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Fuzhou Medicial Device Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Ningxia Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Jiangxi Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Inner Mongolia Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Tongliao Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Ulanqab Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Bayannur Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Hulun Buir Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
299
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
4. Other related parties (Continued)
Related party relationships
Sinopharm Holding Xinjiang Special Drugs Kashgar Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Jilin Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Tonghua Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Jiangsu Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Yangzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Yangzhou Biological Products Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Taizhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Yangzhou Medical Treatment Equipment Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Suzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Wuxi Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Lianyungang Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Nanjing Wende Pharmaceutical Co.,Ltd. Controlled by Sinopharm Group
Sinopharm Holding Changzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Changzhou Medical Logistics Center Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Yancheng Co., Ltd. Controlled by Sinopharm Group
Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Heilongjiang Co., Ltd. Controlled by Sinopharm Group
Sinopharm Le-Ren-Tang Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Lerentang Hebei Medical Instrument Trade Co., Ltd. Controlled by Sinopharm Group
Sinopharm Lerentang Hebei Medicial Instrument Supply Chain Management
Co., Ltd Controlled by Sinopharm Group
Sinopharm Lerentang Hebei Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Lerentang Shijiazhuang Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Lerentang Xingtai Medicine Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Donghong Medical (Shanghai) Co., Ltd. Controlled by Sinopharm Group
Shanghai Merro Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Luzhou Medicine Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Dalian Hecheng Co., Ltd. Controlled by Sinopharm Group
300
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
4. Other related parties (Continued)
Related party relationships
Sinopharm Holding Changsha Co., Ltd. Controlled by Sinopharm Group
Pudong New Area of Shanghai Pharmaceutical Medicine Ltd. Controlled by Sinopharm Group
China National Medicial Device Shandong Co., Ltd. Controlled by Sinopharm Group
Sinopharm Liaoning Medicial Device Co., Ltd. Controlled by Sinopharm Group
Sinopharm Shanxi Medicial Device Co., Ltd. Controlled by Sinopharm Group
Sinopharm Shanghai Medicine Device Co., Ltd. Controlled by Sinopharm Group
Sinopharm Healthcare Management Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Hunan Medicial Development Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Shanxi Dajiuzhou Medicine Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Shanxi Runhe Medicine Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Anhui Huaning Medicine Co., Ltd Controlled by Sinopharm Group
Sinopharm Huixin Qingyuan (Beijing) Technology Development Co., Ltd. Controlled by Sinopharm Group
Shanghai International Pharmaceutical Trade Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shanxi Instrument Branch Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shanxi Jinzhong Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Shanxi Zhidekang Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Yantai Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Hainan Hongyi Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Guizhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Ordos Co., Ltd. Controlled by Sinopharm Group
Shanghai Meitai Medical Instruments Co., Ltd. Controlled by Sinopharm Group
Sinopharm Lerentang Qinhuangdao Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Lerentang Tangshan Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Sichuan Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm (Guangzhou) Medicial Device Co., Ltd Controlled by Sinopharm Group
China National Pharmaceutical Logistics Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Tianjin Binhai Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group Medicine Logistic Co., Ltd. Guangzhou Branch Controlled by Sinopharm Group
Sinopharm Holding Tianjin North Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm (Hubei) Hankou Pharmacy Ltd. Controlled by Sinopharm Group
Sinopharm Holding Hubei Hongyuan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Jiaozuo Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Wuhu Co., Ltd. Controlled by Sinopharm Group
301
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
4. Other related parties (Continued)
Related party relationships
Sinopharm Holding Liaocheng Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Yunnan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Honghe Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Chuxiong Co., Ltd. Controlled by Sinopharm Group
Yuxi Sinopharm Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Guanai Yuankang Pharmacy (Haikou) Co., Ltd. Controlled by Sinopharm Group
Sinopharm Guanai Jikun Pharmacy (Haikou) Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Gansu Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Longyan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Ningde Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Fuzhou Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Anshun Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Tongren Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Zunyi Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Qianxi'nan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Guizhou Medical Equiment Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Jilin Chain Store Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Siping Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Wenzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Chongqing Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Zhenjiang Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Nantong Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Huaian Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Xuzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Lerentang Healthcare Shijiazhuang Pharmacy Co., Ltd Controlled by Sinopharm Group
Sinopharm Lerentang Shijiazhuang Medicial Management Co., Ltd Controlled by Sinopharm Group
Sinopharm Lerentang Baoding Hongkang Medicial Chain Store Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Qinghai Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Chongqing Taimin Medicine Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Chengdu Co., Ltd. Controlled by Sinopharm Group
302
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
4. Other related parties (Continued)
Company name Related party relationships
Sinopharm Holding Deyang Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Hongrun Medical Business Service (Shanghai) Co., Ltd. Controlled by Sinopharm Group
Sinopharm Medical Instrument Guizhou Qiannan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group Guangdong Medicine Device Co., Ltd. Controlled by Sinopharm Group
China National Scientific Instruments & Materials Imp/Exp Shenzhen Co., Ltd. Controlled by Sinopharm Group
Sinopharm Guangdong Medical Examination Co., Ltd. Controlled by Sinopharm Group
Sinopharm Zhuhai Medical Instrument Co., Ltd. Controlled by Sinopharm Group
Sinopharm Medical Instrument Foshan Co., Ltd. Controlled by Sinopharm Group
Sinopharm Nanping Medical Instrument Co., Ltd. Controlled by Sinopharm Group
Sinopharm Group Guangxi Medical Equipment Co., Ltd. Controlled by Sinopharm Group
Sinopharm Lianrui Xinxiang (Beijing) Medicial Instrument Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Anhui Medicine Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Changxing Zhuanye Pharmacy (Haikou) Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Huangshi Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Xinxiang Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Liu'an Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Suzhou Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Jining Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Nanping Newforce Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Nanchang Chain Store Co., Ltd. Controlled by Sinopharm Group
Sinopharm Lerentang Hengshui Medicine Co., Ltd. Controlled by Sinopharm Group
Sinopharm Lerentang Baoding Medicine Co., Ltd. Controlled by Sinopharm Group
Fujian Sinopharm Medical Instrument Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Hunan Weian Chain Store Co., Ltd. Controlled by Sinopharm Group
Sinopharm Jienuo Medical Treatment Service Co., Ltd. Controlled by Sinopharm Group
Sinopharm Guangdong Medical Equipment Supply Chain Co., Ltd. Controlled by Sinopharm Group
Sinopharm Hebei Medical Instrument Co., Ltd. Controlled by Sinopharm Group
Sinopharm Anhui Medicial Device Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Huaideju Pharmaceutical (Xiamen) Co., Ltd. Controlled by Sinopharm Group
China National Pharmaceutical Group Shanghai Co., Ltd. Controlled by Sinopharm Group
Xinjiang Baitong Property Service Co., Ltd. Controlled by Sinopharm Group
Beijing Sinopharm Tianyuan Real Estate & Property Management Co., Ltd. Controlled by Sinopharm Group
Sinopharm Holding Guizhou Yitong Medicine Co., Ltd Controlled by Sinopharm Group
Sinopharm Holding Hubei Bokang Co., Ltd Controlled by Sinopharm Group
Sinopharm Lerentang Chengde Medicine Co., Ltd. Controlled by Sinopharm Group
303
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
4. Other related parties (Continued)
Company Name Related party relationships
Sinopharm Xinjiang Korla Pharmaceutical Co., Ltd. Controlled by Sinopharm Group
Yichang Humanwell Pharmaceutical Co., Ltd. Associate of Sinopharm Group
Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Co., Ltd. Associate of Sinopharm Group
Sinopharm Health Online Co., Ltd. Associate of Sinopharm Group
Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd. Associate of Sinopharm Group
Sinopharm Pharmacy (Shanghai) Co., Ltd. Associate of Sinopharm Group
Sinopharm Holding Pharmacy (Nanchang) Co., Ltd. Associate of Sinopharm Group
Sinopharm Holding (China) Finance Leasing Co., Ltd. Associate of Sinopharm Group
Shenzhen Wanwei Medicine Trading Co., Ltd. Subsidiary of Main Luck Pharmaceutical
Chongqing Yaoyou Pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm
Sichuan Hexin Pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm
Guilin South pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm
Shanghai Chaohui Pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm
Tibet Yaoyou Medicines Co.,Ltd. Subsidiary of Fosun Pharm
Shenyang Hongqi Pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm
Shanghai Transfusion Technology Co., Ltd. Subsidiary of Fosun Pharm
Jiangsu Wanbang Pharmaceutical Marketing & Distribution Co., Ltd. Subsidiary of Fosun Pharm
Jinzhou Ahon Pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm
Hunan Dongting Pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm
Jiangsu Huanghe Pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm
Suzhou Erye Pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm
Jiangsu Fuxing Pharmaceutical Trading Co., Ltd Subsidiary of Fosun Pharm
Jinzhou Ahon Pharmaceutical Co., Ltd Subsidiary of Fosun Pharm
Jiangxi Erye Medicine Marketing Co., Ltd. Subsidiary of Fosun Pharm
Chengdu List Pharmaceutical Co.,Ltd. Subsidiary of Fosun Pharm
Chongqing Haisiman Pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm
Shanghai Foshion Dental Technology Co., Ltd. Subsidiary of Fosun Pharm
Foshan Chancheng District Central Hospital Subsidiary of Fosun Pharm
Foshan Chanyixing Medicine Development Co Ltd. Subsidiary of Fosun Pharm
Foshan Chancheng Pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm
Shenzhen Qianda Medical Beauty Clinic Subsidiary of Fosun Pharm
Shenzhen Heng Sheng Hospital Subsidiary of Fosun Pharm
Foshan Shunde District Lecong Supply and Marketing group
Shunketang Medicine Co., Ltd. Subsidiary of Fosun Pharm
Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd. Non-controlling interest of a subsidiary
Henan Wanxitang Pharmacy Co., Ltd. Non-controlling interest of a subsidiary
Shenzhen Ketai Medicial Science and Technology Co., Ltd Non-controlling interest of a subsidiary
Pu'er Songmao Jiantang Pharmaceutical Co., Ltd. Non-controlling interest of a subsidiary
Zhang Zhenfang Non-controlling interest of a subsidiary
304
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
4. Other related parties (Continued)
Company Name Related party relationships
Shenyang Pharmaceutical Co., Ltd. Non-controlling interest of a subsidiary
Pingdingshan Pusheng Pharmaceutical Co., Ltd. Non-controlling interest of a subsidiary
Heyuan Mairui Trading Co., Ltd. Non-controlling interest of a subsidiary
Linyi Medical Group Co., Ltd. Non-controlling interest of a subsidiary
Hunan Minshengtang Investment Co., Ltd. Non-controlling interest of a subsidiary
Shenzhen Jiufeng Investment Co., Ltd. Non-controlling interest of a subsidiary
Lerentang Investment Group Co., Ltd. Non-controlling interest of a subsidiary
Guangdong Jiyuantang Development Co., Ltd. Non-controlling interest of a subsidiary
Hangzhou Xihu Business Group Corporation Non-controlling interest of a subsidiary
Sinopharm Guoda Taishan Qunkang Pharmacy Chain Store Co., Ltd. Non-controlling interest of a subsidiary
Controlled by non-controlling interest of a
Nanjing Yuanguang Trading Co., Ltd.
subsidiary
Shaoguan Wujiang District Muyang Medicine Information Consultant Controlled by non-controlling interest of a
Co., Ltd. subsidiary
Controlled by non-controlling interest of a
Taishan Xiangranhui Trade Co., Ltd.
subsidiary
Gu Haiqun Non-controlling interest of a subsidiary
Controller of non-controlling interest of a
Gu Jinhua
subsidiary
Family member of the non-controlling
Wang Yang
shareholder of a subsidiary
305
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties
(1)Related party transactions – goods and services
Purchase of goods and receiving of services from related parties
2019 2018
(RMB’0,000) (RMB’0,000)
Sinopharm Holding Sub Marketing Center Co., Ltd. 123,317.05 102,842.49
China National Medicines Co., Ltd. 57,097.31 47,447.25
Sinopharm Group Shanxi Co., Ltd. 41,636.50 30,206.49
Sinopharm Holding Shanxi Co., Ltd. 26,368.40 17,803.27
Jiangsu Wanbang Pharmacy Marketing Co., Ltd. 17,941.86 10,590.47
Sinopharm Le-Ren-Tang Medicine Co., Ltd. 16,472.43 15,730.42
Sinopharm Group Co., Ltd. 15,594.72 15,674.01
Sinopharm Holding Shenyang Co., Ltd. 14,095.03 12,615.36
Lanzhou Biological Technology Development Co., Ltd. 11,345.94 1,380.00
Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. 11,023.65 13,492.91
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd. 10,419.25 7,968.25
Sinopharm Holding Inner Mongolia Co., Ltd. 6,740.08 3,765.52
Sinopharm Holding Yangzhou Co., Ltd. 5,874.74 5,080.96
Chongqing Yaoyou Pharmaceutical Co., Ltd. 5,552.61 5,425.64
Sinopharm Holding Lunan Co., Ltd. 5,350.49 7,867.79
Sinopharm Holding Hubei Co., Ltd. 5,006.89 -
Sinopharm Holding Beijing Co., Ltd. 4,803.76 4,166.01
Jinzhou Ahon Pharmaceutical Co., Ltd. 4,750.43 4,655.26
Tibet Yaoyou Medicines Co.,Ltd. 4,374.73 1,863.03
Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd. 4,362.84 17,772.72
Winteam Pharmaceutical Group Ltd. 3,691.04 3,425.51
Main Luck Pharmaceutical 3,598.25 3,664.44
Sinopharm Holding Fujian Co., Ltd. 3,544.64 2,235.91
Jiangxi Erye Medicine Marketing Co., Ltd. 3,504.34 636.00
Sinopharm Holding Henan Co., Ltd. 3,209.58 1,345.69
Zhijun Pingshan 3,014.17 1,485.99
Sinopharm Holding Lerentang Pharmaceutical Co., Ltd. 2,864.87 3,425.05
306
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions – goods and services (Continued)
Purchase of goods and receiving of services from related parties (Continued)
2019 2018
(RMB’0,000) (RMB’0,000)
Sinopharm Holding Pingdingshan Co., Ltd. 2,799.59 2,966.11
Zhijun Pharmaceutical 2,741.69 1,550.59
Sinopharm Holding Jiangsu Co., Ltd. 2,694.29 2,478.08
Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical Co., Ltd. 2,572.82 961.00
Chengdu Rongsheng Pharmacy Co., Ltd. 2,557.70 1,544.99
Shenzhen Wanwei Medicine Trading Co., Ltd. 2,197.12 2,360.76
Sinopharm Holding Xiamen Co., Ltd. 2,192.31 1,641.68
Shyndec Pharma 2,186.24 545.56
Sinopharm Yixin Pharmaceutical Co., Ltd. 1,701.08 542.65
Sinopharm Lerentang Shijiazhuang Medicine Co., Ltd. 1,685.38 1,927.59
Sinopharm Group Medicine Logistic Co., Ltd. 1,644.77 1,374.70
Yichang Humanwell Pharmaceutical Co., Ltd. 1,612.15 988.76
Sinopharm Holding Changzhou Co., Ltd. 1,488.55 519.14
China Otsuka Pharmaceutical Co., Ltd. 1,483.80 809.96
Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd. 1,455.99 958.22
Sinopharm Holding Shandong Co., Ltd. 1,419.51 382.90
Sinopharm Holding Ningxia Co., Ltd. 1,417.91 1,303.98
Sinopharm Health Online Co., Ltd. 1,404.59 1,269.85
Sinopharm Holding Hunan Co., Ltd. 1,175.61 2,753.14
Shanghai Shangsheng Biological Products Co., Ltd. 1,174.87 1,225.55
China National Pharmaceutical Foreign Trade Corporation 1,172.51 1,376.71
Suzhou Erye Pharmaceutical Co., Ltd. 1,134.34 2,097.57
Sichuan Hexin Pharmaceutical Co., Ltd. 1,074.53 808.33
Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd. 969.83 575.07
Sinopharm Chuan Kang Pharmaceutical Co., Ltd. 823.16 1,063.26
Sinopharm Holding Beijing Kangchen Bio-Pharmaceutical Co., Ltd. 758.69 492.19
Sinopharm Holding Wuxi Co., Ltd. 684.26 501.02
307
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions – goods and services (Continued)
Purchase of goods and receiving of services from related parties (Continued)
2019 2018
(RMB’0,000) (RMB’0,000)
Beijing Huasheng Pharmaceutical Biotechnology Development Co., Ltd. 672.74 -
Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co., Ltd. 655.09 42.10
Pudong New Area of Shanghai Pharmaceutical Medicine Ltd. 618.72 459.70
Shanghai Chaohui Pharmaceutical Co., Ltd. 617.30 216.02
Sinopharm Holding Tongliao Co., Ltd. 607.65 172.34
Sinopharm Group Guorui Medicine Co., Ltd. 600.73 815.71
Shantou Jinshi Powder Injection Co., Ltd. 566.36 374.45
Sinopharm Holding Jinan Co., Ltd. 543.59 618.89
Sinopharm Lerentang Hebei Medical Instrument Trade Co., Ltd. 542.01 353.38
Sinopharm Holding Heilongjiang Co., Ltd. 492.73 220.67
Sinopharm Group Rongsheng Pharmaceutical Co., Ltd. 490.16 399.79
Sinopharm Holding Fuzhou Co., Ltd. 477.04 843.89
Sinopharm Holding Jinzhou Co., Ltd. 458.60 386.83
Guizhou Tongjitang Pharmaceutical Co., Ltd. 445.40 324.11
Sinopharm Holding Shanxi Lvliang Co., Ltd. 436.90 5.76
Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd. 372.99 289.84
Jiangsu Fuxing Pharmaceutical Trading Co., Ltd 362.48 134.98
Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd. 360.87 344.11
Sinopharm Holding Beijing Huahong Co., Ltd. 356.68 650.29
Sinopharm Holding Fengliaoxing (Foshan) Traditional & Herbal Medicine
341.21 295.73
Co., Ltd.
Sinopharm Holding Changzhou Medical Logistics Center Co., Ltd. 326.60 1,094.70
Sinopharm Holding Zhihuiminsheng (Tianjin) Pharmaceutical Co., Ltd. 310.35 153.65
Sinopharm Holding Hubei Guoda Pharmacy Co., Ltd. 298.06 -
Sinopharm Holding Anhui Huaning Medicine Co., Ltd 293.73 -
Sinopharm Huixin Qingyuan (Beijing) Technology Development Co., Ltd. 281.25 -
Sinopharm Holding Yancheng Co., Ltd. 280.58 248.87
Sinopharm Weiqida Pharmaceutical Co., Ltd. 266.12 89.28
Hunan Dongting Pharmaceutical Co., Ltd. 266.01 91.25
308
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions – goods and services (Continued)
Purchase of goods and receiving of services from related parties (Continued)
2019 2018
(RMB’0,000) (RMB’0,000)
Sinopharm Group Southwest Medicine Co., Ltd. 249.68 116.31
Sinopharm Holding Donghong Medical (Shanghai) Co., Ltd. 245.00 115.92
Shanghai Beiyi 227.23 249.14
China National Pharmaceutical Industry Co., Ltd. 224.74 107.14
Shenyang Hongqi Pharmaceutical Co., Ltd. 224.12 356.58
Sinopharm Group Yibin Pharmaceuticals Co., Ltd. 193.12 81.80
Shanghai Tongyu Information Technology Co., Ltd. 189.92 142.34
Chengdu Institute of Biological Products Co.,Ltd. 183.22 66.32
Sinopharm Holding Hulun Buir Co., Ltd. 177.50 134.06
Sinopharm Holding Xinjiang Special Drugs Kashgar Pharmaceutical Co., Ltd. 173.96 113.90
Sinopharm Holding Tianjin Co., Ltd. 173.87 163.00
Sinopharm Holding Changsha Co., Ltd. 169.02 73.39
Sinopharm Healthcare Management Co., Ltd 167.58 -
Guangdong Medi-World Pharmaceutical Co., Ltd. 167.27 160.50
Shanghai Modern Hasen (Shangqiu) Pharmaceutical Co., Ltd. 163.79 118.51
Sinopharm Holding Dalian Co., Ltd. 158.66 146.37
Sinopharm Holding Shanxi Dajiuzhou Medicine Co., Ltd 151.95 -
Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd. 145.69 205.84
Sinopharm Holding Biopharmaceutical (Tianjin) Co., Ltd. 144.75 33.25
Sinopharm Holding Lianyungang Co., Ltd. 143.93 98.55
Sinopharm Holding Putian Co., Ltd. 138.62 173.77
Anhui Jingfang Pharmaceutical Co., Ltd. 126.38 92.62
Sinopharm Group Zhonglian Pharmaceutical Group Co., Ltd. 123.00 107.89
Sinopharm Holding Anhui Co., Ltd. 108.09 125.53
Shanghai International Pharmaceutical Trade Co., Ltd. 104.78 -
Sinopharm Group Guizhou Blood Products Co., Ltd. 104.57 -
Sinopharm Shantou Jinshi Pharmaceutical Co., Ltd. 103.81 57.34
Shanghai Merro Pharmaceutical Co., Ltd. 93.16 265.31
309
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions – goods and services (Continued)
Purchase of goods and receiving of services from related parties (Continued)
2019 2018
(RMB’0,000) (RMB’0,000)
Fujian Chengtian Jinling Pharmaceutical Co., Ltd. 87.34 60.62
Guilin South pharmaceutical Co., Ltd. 82.38 61.69
Sinopharm Holding Suzhou Co., Ltd. 82.16 1,123.00
Shanghai Transfusion Technology Co., Ltd. 80.09 -
Sinopharm Holding Quanzhou Co., Ltd. 80.05 79.67
Sinopharm Wuhan blood products Co., Ltd. 76.80 17.04
Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Co., Ltd. 73.28 204.05
Sinopharm Holding Yangzhou Medical Treatment Equipment Co., Ltd. 71.46 5.23
Sinopharm Holding Hainan Co., Ltd. 55.64 24.14
Sinopharm Xinjiang Pharmaceutical Co., Ltd. 50.64 34.82
Sinopharm Holding Bayannur Co., Ltd 48.83 -
Sinopharm Holding Yangzhou Biological Products Co., Ltd. 40.26 33.6
Sinopharm Holding Yunnan Dongchang Medicine Co., Ltd. 39.91 -
China National Medicial Device Shandong Co., Ltd.. 34.06 -
Sinopharm Holding Dalian Hecheng Co., Ltd. 30.60 33.17
Sinopharm Holding Zhejiang Co., Ltd. 30.09 44.13
Sinopharm Holding Dezhou Co., Ltd. 25.26 36.03
Sinopharm Holding Hunan Medicial Development Co., Ltd 24.49 -
Jiangsu Huanghe Pharmaceutical Co., Ltd. 19.94 28.64
Shandong Lu Ya Pharmaceutical Co., Ltd. 19.48 290.93
Jinzhou Ahon Pharmaceutical Co., Ltd 18.99 -
Sinopharm Holding Changde Co., Ltd. 18.04 -
China National Pharmaceutical Logistics Co., Ltd. 16.63 9.08
Sinopharm Holding (Hubei) Medicine Co., Ltd 15.20 -
Foshan Dezhong Pharmaceutical Co., Ltd. 14.19 -
Sinopharm Liaoning Medicial Device Co., Ltd. 11.50 -
Sinopharm Holding Shanxi Co., Ltd. 11.19 32.67
Sinopharm Holding Taizhou Co., Ltd. 8.89 16.31
Shanghai SinoMed Medicine Co., Ltd. 8.57 31.93
Sinopharm Holding Shanxi Mingdikang Medicine Co., Ltd. 7.50 2.72
Sinopharm Holding Sanyi Medicine (Wuhu) Co., Ltd. 6.17 8.20
310
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions – goods and services (Continued)
Purchase of goods and receiving of services from related parties (Continued)
2019 2018
(RMB’0,000) (RMB’0,000)
Sinopharm Holding Fuzhou Medicial Device Co., Ltd 4.07 -
Sinopharm Holding Pu’er Co., Ltd. 3.98 -
Sinopharm Holding Jiangxi Co., Ltd. 3.80 -
Sinopharm Holding Shanxi Runhe Medicine Co., Ltd 3.65 -
The Fourth Pharmaceutical Co., Ltd. of Zhonglian Group 3.54 11.88
Sichuan Jiangyouzhongbafuzi Technology Development Co., Ltd. 2.91 17.44
Sinopharm Holding Ulanqab Co., Ltd. 2.91 35.33
Sinopharm Lerentang Xingtai Medicine Co., Ltd 2.64 -
Sinopharm Holding Rizhao Co., Ltd. 2.20 24.76
Sinopharm Holding Nanjing Wende Pharmaceutical Co., Ltd. 1.70 15.28
Sinopharm Lerentang Hebei Medicial Instrument Supply Chain Management
1.60 -
Co., Ltd.
Sinopharm Holding Shanxi Jincheng Co., Ltd. 1.32 2.42
Sinopharm Holding Jilin Co., Ltd. 1.32 -
Sinopharm Group Linfen Co., Ltd. 1.28 -
Sinopharm Holding Luzhou Medicine Co., Ltd 1.01 -
Sinopharm Holding Tonghua Co., Ltd. 0.37 -
Guorun Medical Supply Chain Service (Shanghai) Co., Ltd. 0.16 -
Beijing Huamiao Pharmaceutical Co., Ltd. 0.10 0.26
Lanzhou Institute of Biological Products Co., Ltd. - 8,556.00
Sinopharm (Guangzhou) Medicial Device Co., Ltd. - 1,732.81
Sinopharm Holding Shanxi Instrument Branch Co., Ltd. - 1,523.54
Jiangsu Lianhuan Pharmaceutical Co.,Ltd. - 538.61
Shanghai Shyndec Pharmaceutical Marketing Co., Ltd. - 179.93
Sinopharm Holding Shanxi Jinzhong Co., Ltd. - 179.83
Shanghai Meitai Medical Instruments Co., Ltd. - 166.41
311
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions – goods and services (Continued)
Purchase of goods and receiving of services from related parties (Continued)
2019 2018
(RMB’0,000) (RMB’0,000)
Jingfukang Pharmaceutical Group Co., Ltd. - 144.26
Sinopharm Holding Yantai Co., Ltd. - 130.34
Sinopharm Lerentang Qinhuangdao Medicine Co., Ltd. - 91.62
Henan Wanxitang Pharmacy Co., Ltd. - 13.03
Sinopharm Holding Shanxi Zhidekang Medicine Co., Ltd. - 12.86
Qinghai Pharmaceutical Factory Co., Ltd. - 12.51
Sinopharm Holding Guizhou Co., Ltd. - 7.37
Sinopharm ShanXi Ruifulai Pharmaceutical Co., Ltd. - 5.32
Sinopharm Lerentang Tangshan Medicine Co., Ltd. - 4.76
Chongqing Haisiman Pharmaceutical Co., Ltd. - 3.29
Sinopharm Holding Hainan Hongyi Co., Ltd. - 3.15
Sinopharm Fengliaoxing (Foshan) Medicines Co., Ltd. - 2.86
Sinopharm Group Medicine Logistic Co., Ltd. Guangzhou Branch - 1.61
Sinopharm Holding Tianjin Binhai Pharmaceutical Co., Ltd. - 0.71
Zhijun Suzhou - 0.30
Sinopharm Sichuan Pharmaceutical Co., Ltd. - 0.24
Zhijun Trade - 0.03
Sinopharm Holding Ordos Co., Ltd. - (1.38)
Sinopharm Holding Yongzhou Co., Ltd. (0.01) 3.72
Sinopharm Prospect Dentech (Beijing) Co., Ltd. (0.19) 1.04
Sinopharm Holding Zhangzhou Co., Ltd. (0.41) 1.2
Sinopharm Group Chengdu Xinlibang Biological Products Co., Ltd. (0.95) -
Sinopharm Shanxi Medicial Device Co., Ltd. (10.59) -
Huayi Pharmaceutical Co., Ltd. (12.24) 159.06
Chengdu List Pharmaceutical Co.,Ltd. (174.98) -
477,727.07 405,277.59
312
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions – goods and services (Continued)
Sale of goods and rendering of services
2019 2018
(RMB’0,000) (RMB’0,000)
Sinopharm Group Co., Ltd. 20,583.75 13,127.67
Shanghai Beiyi 11,534.81 9,917.50
Foshan Chancheng Pharmaceutical Co., Ltd. 11,126.10 8,713.35
Sinopharm Holding Hainan Co., Ltd. 10,176.88 6,157.07
Sinopharm Holding Hainan Hongyi Co., Ltd. 3,239.54 4,734.71
Sinopharm Holding Beijing Huahong Co., Ltd. 2,824.47 1,921.41
Sinopharm Holding Wenzhou Co., Ltd. 2,806.78 2,052.01
Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd. 2,466.59 1,903.16
Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd. 2,279.09 2,069.07
Shenzhen Heng Sheng Hosital 2,231.25 1,711.70
Sinopharm Holding Beijing Co., Ltd. 2,202.63 1,441.53
Sinopharm Holding Sub Marketing Center Co., Ltd. 1,912.47 2,234.24
Sinopharm Holding Henan Co., Ltd. 1,868.25 1,684.79
Pudong New Area of Shanghai Pharmaceutical Medicine Ltd. 1,836.41 1,952.87
Sinopharm Le-Ren-Tang Medicine Co., Ltd. 1,772.13 1,596.99
Sinopharm Holding Nantong Co., Ltd. 1,555.67 1,608.96
Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd. 1,459.24 1,225.58
Sinopharm Holding Shandong Co., Ltd. 1,431.16 1,078.15
Sinopharm Sichuan Pharmaceutical Co., Ltd. 1,257.31 1,545.73
China National Medicines Co., Ltd. 1,203.24 1,023.03
Foshan Chancheng District Central Hospital 1,191.82 947.72
Sinopharm Holding Hubei Co., Ltd. 1,141.98 518.05
Sinopharm Holding Yangzhou Co., Ltd. 871.14 725.68
Sinopharm Holding Shanxi Co., Ltd. 840.82 190.23
Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd. 749.28 411.91
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd. 744.15 2,222.76
Shanghai Merro Pharmaceutical Co., Ltd. 698.54 323.19
Foshan Chanyixing Medicine Development Co Ltd. 679.73 432.38
Sinopharm Holding Anhui Co., Ltd. 616.25 255.38
Sinopharm Holding Yunnan Co., Ltd. 569.20 770.29
Sinopharm Holding Xuzhou Co., Ltd. 559.72 3.39
Sinopharm Group Shanxi Co., Ltd. 556.63 580.44
Shenzhen Ketai Medicial Science and Technology Co., Ltd 511.68 -
313
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions – goods and services (Continued)
Sale of goods and rendering of services (Continued)
2019 2018
(RMB’0,000) (RMB’0,000)
Sinopharm Holding Jinzhou Co., Ltd. 507.86 -
Sinopharm Holding Xinjiang Special Drugs Western
472.19 740.10
Pharmaceutical Co., Ltd.
Sinopharm Holding Tianjin Co., Ltd. 436.58 208.79
Sinopharm Holding Jilin Co., Ltd. 388.85 432.10
Sinopharm Holding Fujian Co., Ltd. 376.37 302.61
Shanghai Liyi 321.81 343.80
Sinopharm Holding Shenyang Co., Ltd. 302.88 79.41
Sinopharm Holding Hunan Co., Ltd. 293.58 253.22
Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai)
290.65 (1.44)
Co., Ltd.
Sinopharm Group Southwest Medicine Co., Ltd. 290.33 1,657.77
Sinopharm Holding Anhui Medicine Co., Ltd 284.08 -
Sinopharm Holding Donghong Medical (Shanghai) Co., Ltd. 265.68 68.89
Sinopharm Holding Dalian Co., Ltd. 264.99 242.63
Zhijun Medicine 263.83 186.77
Sinopharm Holding Dalian Hecheng Co., Ltd. 182.43 77.07
Yuxi Sinopharm Medicine Co., Ltd. 153.82 157.01
Sinopharm Holding Ningxia Co., Ltd. 132.74 71.31
Sinopharm Holding Yancheng Co., Ltd. 125.78 -
Sinopharm Holding Gansu Co., Ltd. 119.62 214.52
Sinopharm Holding Lianyungang Co., Ltd. 115.23 -
Sinopharm Holding Wuhu Co., Ltd. 113.26 40.22
Sinopharm Holding Jiangxi Co., Ltd. 97.36 69.07
Sinopharm Holding Honghe Co., Ltd. 85.55 13.47
Sinopharm Holding Shanxi Co., Ltd. 81.90 72.08
Sinopharm Holding Wuxi Co., Ltd. 79.86 84.68
Sinopharm Holding Jiaozuo Co., Ltd. 70.26 24.79
Sinopharm Holding Chengdu Co., Ltd. 69.53 97.59
Sinopharm Holding Inner Mongolia Co., Ltd. 64.87 29.70
Sinopharm Group Medicine Logistic Co., Ltd. 63.81 65.21
314
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions – goods and services (Continued)
Sale of goods and rendering of services
2019 2018
(RMB’0,000) (RMB’0,000)
Sinopharm Holding Tianjin North Medicine Co., Ltd. 63.64 26.69
Sinopharm Holding Tongren Co., Ltd. 61.49 16.66
Shenzhen Qianda Medical Beauty Clinic 61.44 17.73
Zhijun Trade 57.14 57.14
Sinopharm Holding Qinghai Co., Ltd. 57.04 41.59
Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd. 53.62 85.74
Sinopharm Group Guangdong Medicine Device Co., Ltd. 52.21 0.97
Sinopharm Holding Guizhou Co., Ltd. 47.90 236.34
Sinopharm Holding Jiangsu Co., Ltd. 36.65 -
Sinopharm Holding Fuzhou Co., Ltd. 30.12 5.08
Sinopharm Lianrui Xinxiang (Beijing) Medicial Instrument Co., Ltd 28.78 -
Sinopharm Holding Hongrun Medical Business Service (Shanghai) Co., Ltd. 28.72 2.26
Sinopharm Holding Changzhou Co., Ltd. 28.41 43.58
Sinopharm Holding Chongqing Co., Ltd. 26.53 28.21
Sinopharm Holding Pharmacy (Nanchang) Co., Ltd. 25.50 -
Sinopharm Holding Taizhou Co., Ltd. 25.38 -
Sinopharm Holding Hubei Hongyuan Co., Ltd. 24.17 18.54
Sinopharm Holding Chongqing Taimin Medicine Co., Ltd 23.35 -
Sinopharm Holding Guizhou Medical Equiment Co., Ltd. 21.31 19.15
Sinopharm (Hubei) Hankou Pharmacy Ltd. 19.53 -
Zhijun Pingshan 18.55 45.82
Sinopharm Holding Hunan Weian Chain Store Co., Ltd. 18.50 -
Sinopharm Holding Zunyi Co., Ltd. 17.76 35.43
Sinopharm Fengliaoxing Medical Hospital Co., Ltd. 17.57 10.65
Foshan Southern Fengliaoxing Medicial Hospital Co., Ltd 17.34 -
Sinopharm Fengliaoxing Pharmacy (Foshan) Co., Ltd 16.26 -
Sinopharm Guangdong Medical Examination Co., Ltd. 15.59 -
Sinopharm Group Guangxi Medical Equipment Co., Ltd. 15.54 3.16
Sinopharm Medical Instrument Guizhou Qiannan Co., Ltd. 15.47 6.65
Sinopharm Holding Ulanqab Co., Ltd. 14.51 27.10
315
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions – goods and services (Continued)
Sale of goods and rendering of services
2019 2018
(RMB’0,000) (RMB’0,000)
Sinopharm Holding Jilin Chain Store Co., Ltd. 14.03 18.32
Sinopharm Guangdong Medical Equipment Supply Chain Co., Ltd. 13.91 -
Sinopharm Lerentang Baoding Hongkang Medicial Chain Store Co., Ltd 10.99 -
China National Pharmaceutical Foreign Trade Corporation 10.27 -
Sinopharm Holding Longyan Co., Ltd. 10.11 9.09
Sinopharm Holding Anshun Co., Ltd. 8.77 -
Sinopharm Holding Changzhou Medical Logistics Center Co., Ltd. 8.67 40.59
Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. 8.55 8.01
Sinopharm Holding Chuxiong Co., Ltd. 8.51 3.84
Shanghai Foshion Dental Technology Co., Ltd. 7.98 -
Sinopharm Medical Instrument Foshan Co., Ltd. 7.94 1.03
Sinopharm Guanai Yuankang Pharmacy (Haikou) Co., Ltd. 7.68 1.24
Dongyuan Accord 6.62 -
Sinopharm Lerentang Healthcare Shijiazhuang Pharmacy Co., Ltd 4.85 -
Sinopharm Holding Liaocheng Co., Ltd. 3.72 2.60
Sinopharm Holding Deyang Co., Ltd. 3.68 -
Sinopharm Jienuo Medical Treatment Service Co., Ltd. 3.50 -
China Otsuka Pharmaceutical Co., Ltd. 2.07 -
Sinopharm Holding Quanzhou Co., Ltd. 2.06 (0.86)
Sinopharm Holding Qianxi’nan Co., Ltd. 2.02 -
Sinopharm Nanping Medical Instrument Co., Ltd. 2.00 0.93
Sinopharm Holding Putian Co., Ltd. 1.97 15.06
Sinopharm Holding Shanxi Jincheng Co., Ltd. 1.51 -
Sinopharm Zhuhai Medical Instrument Co., Ltd. 1.39 1,736.10
China National Scientific Instruments & Materials Imp/Exp Shenzhen
1.05 0.63
Co., Ltd.
Sinopharm Group Fengliaoxing Traditional Chinese Medical Center
1.01 0.15
Foshan Nanhai Co., Ltd.
Sinopharm Holding Siping Co., Ltd. 1.00 5.65
Sinopharm Holding Fengliaoxing (Foshan) Traditional & Herbal
0.87 1.07
Medicine Co., Ltd.
Sinopharm Holding Zhenjiang Co., Ltd. 0.84 -
Sinopharm Holding Huaian Co., Ltd. 0.71 12.87
Sinopharm Holding Changxing Zhuanye Pharmacy (Haikou) Co., Ltd. 0.51 -
316
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions – goods and services (Continued)
Sale of goods and rendering of services
2019 2018
(RMB’0,000) (RMB’0,000)
Sinopharm Holding Fuzhou Co., Ltd 0.46 -
Sinopharm Pharmacy (Shanghai) Co., Ltd. 0.37 -
Sinopharm Jienuo Medical Treatment Service Co., Ltd. 0.36 10.38
Sinopharm Holding Biopharmaceutical (Tianjin) Co., Ltd. 0.28 0.01
Sinopharm Lerentang Shijiazhuang Medicial Management Co., Ltd 0.27 -
Sinopharm Guanai Jikun Pharmacy (Haikou) Co., Ltd 0.09 -
Sinopharm Holding Zhejiang Co., Ltd. - 92.13
Sinopharm Holding Heilongjiang Co., Ltd. - 35.21
Sinopharm Holding Yongzhou Co., Ltd. - 28.54
Sinopharm Holding Nanping Newforce Co., Ltd. - 16.91
Sinopharm Holding Liu'an Co., Ltd. - 12.84
Sinopharm Holding Suzhou Co., Ltd. - 12.84
Sinopharm Holding Xinxiang Co., Ltd. - 7.76
Sinopharm Holding Huangshi Co., Ltd. - 4.52
Sinopharm Holding Hulun Buir Co., Ltd. - 3.79
Sinopharm Holding Jining Co., Ltd. - 1.90
Fujian Sinopharm Medical Instrument Co., Ltd. - 1.84
Sinopharm Lerentang Baoding Medicine Co., Ltd. - 1.30
Sinopharm Lerentang Hengshui Medicine Co., Ltd. - 1.21
Foshan Shunde District Lecong Supply and Marketing Group
- 1.14
Shunketang Medicine Co., Ltd.
Guizhou Tongjitang Pharmaceutical Co., Ltd. - 1.12
Sinopharm Holding Nanchang Chain Store Co., Ltd. - 0.54
Winteam Pharmaceutical Group Ltd. - 0.20
Sinopharm Holding Shanxi Instrument Branch Co., Ltd. - 0.11
Jiangsu Wanbang Pharmaceutical Marketing & Distribution Co., Ltd. - 0.09
Sinopharm Holding Lunan Co., Ltd. - (12.68)
Sinopharm Holding Ningde Co., Ltd. (2.04) 23.88
Sinopharm Holding Changsha Co., Ltd. (2.20) -
102,910.81 83,442.70
317
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(2) Related party asset trusteeship
2018
Beginning Trusteeship
Type of an asset under date of Ending date of Pricing basis for income
trusteeship trusteeship trusteeship trusteeship income recognised
(RMB‘0,000)
Ningbo Meishan
bonded port area
Qiling equity Other asset under 15 June 31 December Trusteeship
investment center LP trusteeship 2018 2020 agreement 51.69
(3) Related party transactions - leases
As the lessor
Type of
Income from leases in Income from leases in
assets under
2019 (RMB‘0,000) 2018 (RMB‘0,000)
leases
Zhijun Pharmaceutical Building 191.43 120.76
Zhijun Trade Building 57.14 57.14
Sinopharm Holding Hunan Weian Pharmacy
Medicine Chain Company Limited. Building 18.50 17.01
China National Medicines Co., Ltd. Building 4.80 4.57
271.87 199.48
As the lessee
Type of
Expenses from leases Expenses from leases
assets under
in 2019 (RMB‘0,000) in 2018 (RMB‘0,000)
leases
Beijing Golden Elephant Fosun Pharmaceutical
Co.,Ltd. Building 1,011.23 1,092.38
Sinopharm Group Medicine Logistic Co., Ltd. Equipment 750.00 750.00
Sinopharm Group Xinjiang Special Drugs
National Pharmaceutical Co., Ltd. Building 723.73 732.78
China National Pharmaceutical Group
Shanghai Co., Ltd. Building 719.72 747.27
Sinopharm Group Medicine Logistic Co., Ltd. Building 708.00 708.00
Lerentang Investment Group Co., Ltd. Building 644.81 540.00
Sinopharm Holding (China) Finance Leasing Co.,
Ltd. Building 638.56 -
Pingdingshan Pusheng Pharmaceutical Co., Ltd. Building 479.06 481.11
Sinopharm Holding Yangzhou Co., Ltd. Building 372.57 372.57
318
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(3) Related party transactions – leases (continued)
As the lessee (continued)
Expenses from Expenses from
Type of assets leases in 2019 leases in 2018
under leases (RMB‘0,000) (RMB‘0,000)
Pu'er Songmao Jiantang Pharmaceutical Co., Ltd. Building 198.48 -
Guangdong Jiyuantang Development Co., Ltd. Building 189.75 193.15
Linyi Medical Group Co., Ltd. Building 184.81 384.50
Nanjing Yuanguang Trading Co., Ltd. Building 149.91 169.97
Shaoguan Wujiang District Muyang Medicine Information
Consultant Co., Ltd. Building 97.47 94.03
Taishan Xiangranhui Trade Co., Ltd. Building 81.76 91.13
Zhang Zhenfang Building 80.50 80.50
Hunan Minshengtang Investment Co., Ltd. Building 53.12 453.25
Wang Yang Building 52.57 52.57
Sinopharm Holding Beijing Co., Ltd. Building 49.52 52.46
Sinopharm Holding Kashi New & Special Drugs Co., Ltd. Building 48.54 46.94
Shenyang Pharmaceutical Co., Ltd. Building 47.62 762.69
Sinopharm Holding Xinjiang Xinte Karamay
Pharmaceutical Co., Ltd. Building 46.13 36.85
Sinopharm Xinjiang Pharmaceutical Co., Ltd. Building 38.86 24.71
Gu Jinhua Building 35.76 35.76
Beijing Sinopharm Tianyuan Real Estate & Property
Management Co., Ltd. Building 31.54 30.84
China National Medicines Co., Ltd. Building 28.57 30.38
Hangzhou Xihu Business Group Corporation Building 27.89 26.56
Sinopharm Holding Rizhao Co., Ltd. Building 20.00 -
Shenzhen Jiufeng Investment Co., Ltd. Building 20.00 25.59
Gu Haiqun Building 19.04 17.45
Sinopharm Guoda Taishan Qunkang Pharmacy
Chain Store Co., Ltd. Equipment 13.74 14.85
Zhijun Pingshan Building 4.24 -
Sinopharm Holding Fujian Co., Ltd. Building 1.30 1.31
Sinopharm Group Shanxi Co., Ltd. Building - 62.74
Xinjiang Baitong Property Service Co., Ltd. Building - 10.82
Sinopharm Group Co., Ltd. Building - 6.54
7,568.80 8,129.70
319
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(4) Related party transactions - guarantees
The Group has no related party guarantees not yet fulfilled this year and in 2018.
(5) Related party transactions – borrowings and lendings
Borrowings
Amount
2019 Category (RMB‘0,000) Inception Maturity
Sinopharm Group Finance Discount on commercial 24 January 2019- 28 February 2019-
Co., Ltd. acceptance bills 38,966.99 23 July 2019 30 November 2019
Sinopharm Group Finance 17 April 2019- 17 July 2019-
Co., Ltd. Short-term borrowings 11,750.24 24 December 2019 24 June 2020
Sinopharm Group Finance Discount on bank 14 August 2019- 24 December 2019-
Co., Ltd. acceptance bills 4,394.67 21 November 2019 30 March 2020
CNPGC Long-term borrowings 3,160.00 24 May 2017 24 May 2020
58,271.90
Amount
2018 Category (RMB‘0,000) Inception Maturity
Sinopharm Group Finance Discount on commercial 6 February 2018- 25 March 2018-
Co., Ltd. acceptance bills 56,552.71 21 December 2018 31 May 2019
Sinopharm Group Finance Discount on bank 23 May 2018- 12 June 2018-
Co., Ltd. acceptance bills 12,435.12 29 November 2018 12 May 2019
CNPGC Long-term borrowings 3,160.00 24 May 2017 24 May 2020
Guorun Medical Supply
Chain Service (Shanghai)
Co., Ltd. Short-term borrowings 320.00 27 June 2018 18 October 2018
72,467.83
320
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(5) Related party transactions – borrowings and lendings (Continued)
Lendings
Amount
2018 Category (RMB‘0,000) Inception Maturity
Zhijun Suzhou Entrusted Loan 4,400.00 26 January 2018 25 January 2019
(6) Related party asset transfer
2019 2018
Type of transaction
(RMB‘0,000) (RMB‘0,000)
Sinopharm Group Co., Ltd. Purchase of an intangible asset 233.64 -
Shanghai Tongyu Information Technology Co., Ltd. Purchase of an intangible asset 67.33 28.30
Sinopharm Holding Tianjin Binhai Pharmaceutical Co., Ltd. Purchase of a fixed asset 43.94 43.07
Sinopharm Holding Tianjing Co., Ltd. Purchase of a fixed asset 4.11 -
349.02 71.37
321
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(7) Other related party transactions
Remuneration for key management personnel
2019 2018
(RMB‘0,000) (RMB‘0,000)
1,733.89 1,211.25
Interest expense
2019 2018
Category (RMB‘0,000) (RMB‘0,000)
Sinopharm Group Finance Co., Ltd. Payment of notes discounted interest 359.52 649.32
Sinopharm Group Finance Co., Ltd. Payment of loan interest 144.38 -
CNPGC Payment of loan interest 129.36 129.36
Sinopharm Holding (China) Finance
Leasing Co., Ltd. Payment of finance leasing interest - 114.13
Guorun Medical Supply Chain
Service (Shanghai) Co., Ltd. Interest on short-term borrowings - 5.07
633.26 897.88
Interest income
2019 2018
Category (RMB‘0,000) (RMB‘0,000)
Zhijun Suzhou Entrusted loan interest income 341.43 324.69
Sinopharm Group Finance Co., Ltd. Deposit interest income 17.92 57.27
359.35 381.96
Accounts receivable factoring without recourse
2019 2018
(RMB‘0,000) (RMB‘0,000)
Accounts Accounts
receivable Terminated receivable Terminated
factoring recognition loss factoring recognition loss
Sinopharm Holding (China)
Finance Leasing Co., Ltd. 5,407.82 128.67 21,436.14 273.04
Sinopharm Group Finance Co.,
Ltd. 3,888.97 53.12 - -
9,296.79 181.79 21,436.14 273.04
322
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
Notes (Expressed in RMB‘0,000):
(1) Related party transactions - sale of goods and rendering of services
(a)During the current year, the Group purchased goods from related parties at the market price amounting to
RMB474,211.74 (2018: RMB402,230.16).
(b)During the current year, the related parties rendered services to the Group at the market price amounting to
RMB3,515.33 (2018: RMB3,047.43).
(c)During the current year, the Group sold goods to related parties at the market price amounting to
RMB101,678.35 (2018: RMB82,255.02).
(d)During the current year, the Group rendered services to related parties at the market price amounting to
RMB1,232.46 (2018: RMB1,187.68).
(2)Asset trusteeship
During the current year, the Group had no trusteeship income (In 2018, Ningbo Meishan bonded port area
Qiling equity investment center LP entrusted part of its right of daily operation for the Group in the target
Company, Jilin Tianhe Pharmaceutical Technology Co., Ltd. The Group confirmed the trusteeship income of
RMB51.69 according to the trusteeship agreement.
(3) Related party transactions - leases
(a)During the current year, the Group leased buildings and equipment to related parties and recognised income of
RMB271.87 (2018: RMB199.48) according to the agreements.
(b)During the current year, the Group leased buildings and equipment from related parties and an expense of
RMB7,568.80 (2018: RMB8,129.70) was incurred according to the lease.
(4) Related party transactions - guarantees
(a)The Group had no related party guarantees that are not yet completed this year and in 2018.
(5) Related party transactions - borrowings
(a)During the current year, the Group borrowed RMB58,271.90 at annual interest rates ranging from 3.00% to
4.57% from related parties (2018: RMB72,467.83 at rates ranging from 3.70% to 5.40%).
(b)During the current year, the Group has not lent capital to related parties (2018: RMB4,400 to related parties at
an annual interest rate of 8.00%).
(6) Related party transactions - asset transfer
(a)During the current year, the Group purchased long-term assets from related parties at a negotiated price
amounting to RMB349.02 (2018: RMB71.37).
(b)During the current year, the Group has not sold any long-term assets to related parties (2018: nil).
(7) Other major related party transactions
(a)During the current year, the Group incurred emoluments (including those paid in cash, in kind and in other
forms) for key management personnel with an amount of RMB1,733.89 (2018: RMB1,211.25).
(b)During the current year, the Group has paid borrowing interest, entrusted loan interest, etc. to related parties in
the amount of RMB633.26 (2018: RMB897.88)
(c)During the current year, the Group has received deposit interest from related parties in the amount of RMB
359.35 (2018: RMB381.96).
(d)During the current year, the Group factored a small portion of accounts receivable at amortised cost to related
parties. The amount of accounts receivable derecognised was RMB9,296.79 (2018: RMB21,436.14), amount
of loss recognised through Investment income was RMB181.79 (2018: RMB273.04).
323
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
6. Commitments between the Group and related parties
As lessee
2019 2018
(RMB‘0,000) (RMB‘0,000)
China National Pharmaceutical Group Shanghai Co., Ltd. 753.01 4,552.56
Beijing Huafang Investment Co., Ltd. 31.10 -
Shenyang Pharmaceutical Co., Ltd. - 3,250.00
Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd. - 1,433.00
Linyi Medical Group Co., Ltd. - 880.35
Guangdong Jiyuantang Development Co., Ltd. - 854.72
Sinopharm Holding Yangzhou Co., Ltd. - 782.40
Hunan Minshengtang Investment Co., Ltd. - 699.98
Lerentang Investment Group Co., Ltd. - 677.00
Pingdingshan Pusheng Pharmaceutical Co., Ltd. - 505.16
Nanjing Yuanguang Trading Co., Ltd. - 297.00
Taishan Xiangranhui Trade Co., Ltd. - 270.41
Gu Jinhua - 257.05
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd. - 234.47
Shaoguan Wujiang District Muyang Medicine Information Consultant Co., Ltd. - 161.25
Sinopharm Group Co., Ltd. - 121.29
Sinopharm Holding Beijing Co., Ltd. - 120.00
Gu Haiqun - 87.81
Zhang Zhenfang - 80.50
Beijing Sinopharm Tianyuan Real Estate & Property Management Co., Ltd. - 71.22
China National Medicines Co., Ltd. - 63.00
Hangzhou Xihu Business Group Corporation - 60.04
Wang Yang - 55.20
Shenzhen Jiufeng Investment Co., Ltd. - 55.00
Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd. - 48.44
Sinopharm Guoda Taishan Qunkang Pharmacy Chain Store Co., Ltd. - 43.42
Sinopharm Holding Xinjiang Special Drugs Kashgar Pharmaceutical Co., Ltd. - 41.23
Sinopharm Xinjiang Pharmaceutical Co., Ltd. - 13.78
Xinjiang Baitong Property Service Co., Ltd. - 9.66
Sinopharm Holding Fujian Co., Ltd. - 1.38
784.11 15,727.32
Note: The commitments disclosed are related to the lease contracts signed but not yet executed in the current year, and all
of the operating lease contracts were disclosed in 2018.
324
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
6. Commitments between the Group and related parties (Continued)
As lessor
2019 2018
(RMB‘0,000) (RMB‘0,000)
Zhijun Medicine 111.67 111.67
Sinopharm Holding Hunan Weian Pharmacy
Medicine Chain Company Limited. 36.43 56.08
Zhijun Trade 28.57 28.57
China National Medicines Corporation Ltd. 5.04 -
181.71 196.32
325
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
7. Amounts due from related parties
Accounts receivable
2019 2018
(RMB‘0,000) (RMB‘0,000)
Amount Provision for Amount Provision for
bad debts bad debts
Foshan Chancheng Pharmaceutical Co., Ltd. 4,259.62 25.95 3,988.81 23.50
Sinopharm Group Co., Ltd. 4,017.25 - 3,226.31 -
Shanghai Beiyi 2,719.44 - 1,196.65 -
Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd. 806.41 - 537.29 -
Sinopharm Holding Hainan Co., Ltd. 591.60 0.01 660.76 -
Pudong New Area of Shanghai Pharmaceutical Medicine Ltd. 407.83 - 383.93 -
Sinopharm Le-Ren-Tang Medicine Co., Ltd. 407.77 - 314.32 -
Sinopharm Health Online Co., Ltd. 389.02 - 654.36 -
Foshan Chancheng District Central Hospital 369.18 2.32 244.04 1.28
Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd. 365.89 - 398.65 -
Sinopharm Holding Hainan Hongyi Co., Ltd. 346.42 - 537.01 -
Shenzhen Heng Sheng Hosital 333.52 - 267.49 -
Sinopharm Holding Beijing Co., Ltd. 295.06 - 88.88 -
Sinopharm Holding Beijing Huahong Co., Ltd. 287.61 - 400.96 -
Sinopharm Holding Donghong Medical (Shanghai) Co., Ltd. 208.53 - 16.46 -
Foshan Chanyixing Medicine Development Co Ltd. 198.36 0.58 174.38 0.94
Sinopharm Group Distribution Co., Ltd. 184.95 - - -
Sinopharm Holding Hubei Co., Ltd. 156.04 - 6.83 -
Sinopharm Sichuan Pharmaceutical Co., Ltd. 155.84 - 108.19 -
Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co.,
Ltd. 134.91 - 98.65 -
Sinopharm Holding Henan Co., Ltd. 119.01 - 103.63 -
China National Medicines Co., Ltd. 98.51 - 145.42 -
Shanghai Merro Pharmaceutical Co., Ltd. 97.06 - 88.45 -
Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd. 90.87 - 117.86 -
Sinopharm Holding Xinjiang Special Drugs Western
Pharmaceutical Co., Ltd. 88.77 - 170.43 -
Sinopharm Holding Yangzhou Co., Ltd. 84.19 - 54.03 -
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical
Co., Ltd. 79.76 - 77.25 -
Sinopharm Holding Wenzhou Co., Ltd. 69.96 - 126.16 -
Sinopharm Group Shanxi Co., Ltd. 63.27 - 102.87 -
326
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
7. Amounts due from related parties (Continued)
Accounts receivable (continued)
2019 2018
(RMB‘0,000) (RMB‘0,000)
Amount Provision for Amount Provision for
bad debts bad debts
Sinopharm Holding Jilin Co., Ltd. 60.01 - 149.97 -
Sinopharm Holding Tianjin Co., Ltd. 57.49 - 20.04 -
Sinopharm Holding Shandong Co., Ltd. 53.33 - 21.10 -
Sinopharm Group Southwest Medicine Co., Ltd. 34.19 - 509.09 -
Sinopharm Holding Shanxi Co., Ltd. 33.02 - 6.84 -
Sinopharm Holding Yunnan Co., Ltd. 29.88 - 2.77 -
Sinopharm Holding Hunan Co., Ltd. 28.14 - 56.93 -
Sinopharm Holding Dalian Co., Ltd. 26.64 - 14.43 -
Yuxi Sinopharm Medicine Co., Ltd. 25.55 - 18.25 -
Sinopharm Holding Xuzhou Co., Ltd. 25.26 - 3.49 -
Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd. 24.99 - 1.75 -
Sinopharm Holding Dalian Hecheng Co., Ltd. 15.65 - 12.67 -
Sinopharm Holding Inner Mongolia Co., Ltd. 13.52 - 9.02 -
Sinopharm Holding Qinghai Co., Ltd. 8.80 - 9.63 -
Sinopharm Lerentang Chengde Medicine Co., Ltd. 8.06 - - -
Sinopharm Holding Changzhou Co., Ltd. 6.69 - - -
Sinopharm Holding Anhui Medicine Co., Ltd 6.68 - - -
Sinopharm Holding Ulanqab Co., Ltd. 6.39 - - -
Sinopharm Holding Fuzhou Co., Ltd. 6.36 - - -
Shanghai Liyi 5.89 - 7.64 -
Sinopharm Group Tianjin North Co., Ltd. 5.20 - 9.14 -
Sinopharm Holding Chengdu Co., Ltd. 5.00 - - -
Sinopharm Holding Hongrun Medical Business Service (Shanghai)
Co., Ltd. 4.54 - 0.13 -
Foshan Southern Fengliaoxing Medicial Hospital Co., Ltd 4.26 - - -
Sinopharm Holding Jiangxi Co., Ltd. 3.84 - - -
Sinopharm Holding Jiangsu Co., Ltd. 3.50 - - -
Sinopharm Holding Nantong Co., Ltd. 2.46 - 6.65 -
Sinopharm Lerentang Tangshan Medicine Co., Ltd. 1.68 - - -
Sinopharm Holding Fengliaoxing (Foshan) Traditional & Herbal
Medicine Co., Ltd. 0.95 - - -
327
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
7. Amounts due from related parties (Continued)
Accounts receivable (continued)
2019 2018
(RMB‘0,000) (RMB‘0,000)
Amount Provision for Amount Provision for
bad debts bad debts
Sinopharm Holding Ningde Co., Ltd. 0.76 - - -
Sinopharm Holding Honghe Co., Ltd. 0.61 - - -
Sinopharm Lerentang Healthcare Shijiazhuang Pharmacy Co.,
Ltd 0.59 - - -
Sinopharm Fengliaoxing Medical Hospital Co., Ltd. 0.45 - 1.68 0.01
Sinopharm Holding Zunyi Co., Ltd. 0.31 - - -
Sinopharm Pharmacy (Shanghai) Co., Ltd. 0.21 - - -
Zhijun Medicine 0.15 - 0.11 -
Sinopharm Lerentang Shijiazhuang Medicial Management Co.,
Ltd 0.11 - - -
Sinopharm Group Fengliaoxing Traditional Chinese Medical
Center Foshan Nanhai Co., Ltd. 0.05 - 0.07 -
Sinopharm Holding Anhui Co., Ltd. - - 22.14 -
Sinopharm Holding Gansu Co., Ltd. - - 17.69 -
Sinopharm Holding Wuxi Co., Ltd. - - 15.76 -
Sinopharm Holding Changzhou Medical Logistics Center Co.,
Ltd. - - 14.46 -
Sinopharm Group Medicine Logistic Co., Ltd. - - 13.97 -
Sinopharm Holding Shenyang Co., Ltd. - - 12.31 -
Sinopharm Jienuo Medical Treatment Service Co., Ltd. - - 12.04 -
Hubei Medical Group Co., Ltd. - - 6.20 -
Sinopharm Holding Shanxi Co., Ltd. - - 5.85 -
Sinopharm Holding Heilongjiang Co., Ltd. - - 5.00 -
Zhijun Pingshan - - 3.96 -
Sinopharm Holding Guizhou Co., Ltd. - - 1.60 -
Sinopharm Medical Instrument Foshan Co., Ltd. - - 1.19 -
Sinopharm Xinxiang Chain Store Co., Ltd. - - 0.21 -
Sinopharm Guanai Yuankang Pharmacy (Haikou) Co., Ltd. - - 0.15 -
17,937.86 28.86 15,284.00 25.73
328
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
7. Amounts due from related parties (Continued)
Notes receivable
2019 2018
(RMB‘0,000) (RMB‘0,000)
Amount Provision for Amount Provision for
bad debts bad debts
Sinopharm Holding Hainan Co., Ltd. 2373.10 - 1,203.54 -
Sinopharm Holding Henan Co., Ltd. 198.39 - 103.26 -
Sinopharm Holding Hainan Hongyi Co., Ltd. 190.14 - 1,023.45 -
Sinopharm Holding Shandong Co., Ltd. 175.46 - 124.17 -
Sinopharm Holding Nantong Co., Ltd. 161.00 - - -
Sinopharm Holding Guizhou Yitong Medicine Co., Ltd 143.28 - - -
Zhijun Suzhou 97.39 - - -
Sinopharm Holding Shanxi Co., Ltd. 61.78 - 107.79 -
Sinopharm Holding Xinjiang Special Drugs Western
Pharmaceutical Co., Ltd. 50.00 - - -
Sinopharm Holding Yunnan Co., Ltd. 19.22 - - -
Sinopharm Holding Hubei Bokang Co., Ltd 18.35 - - -
Sinopharm Holding Yancheng Co., Ltd. 13.42 - - -
Sinopharm Holding Shanxi Co., Ltd. 11.47 - - -
Sinopharm Le-Ren-Tang Medicine Co., Ltd. 8.86 - 114.84 -
Sinopharm Holding (China) Finance Leasing Co., Ltd. - - 20,245.61 -
Sinopharm Holding Sub Marketing Center Co., Ltd. - - 314.44 -
Sinopharm Holding Shenyang Co., Ltd. - - 42.25 -
Sinopharm Holding Fujian Co., Ltd. - - 40.00 -
Sinopharm Holding Anhui Co., Ltd. - - 39.01 -
Sinopharm Holding Shanxi Co., Ltd. - - 35.95 -
Sinopharm Holding Jilin Co., Ltd. - - 27.41 -
Sinopharm Holding Chengdu Co., Ltd. - - 20.13 -
Sinopharm Holding Ningxia Co., Ltd. - - 17.66 -
Sinopharm Holding Gansu Co., Ltd. - - 16.32 -
3,521.86 - 23,475.83 -
329
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
7. Amounts due from related parties (Continued)
Other receivables
2019 2018
(RMB‘0,000) (RMB‘0,000)
Amount Provision for Amount Provision for
bad debts bad debts
Zhijun Suzhou 4,536.03 4,536.03 4,584.66 -
Pu'er Songmao Jiantang Pharmaceutical Co., Ltd. 688.68 - - -
Sinopharm Holding Fujian Co., Ltd. 276.08 - 0.55 -
Sinopharm Group Medicine Logistic Co., Ltd. 173.71 - 249.42 -
Henan Wanxitang Pharmacy Co., Ltd. 104.31 - 109.90 -
Shyndec Pharma 98.39 - 791.34 -
Shanghai Dingqun 83.49 - - -
Zhijun Pharmaceutical 22.27 0.06 10.98 0.06
Sinopharm Group Xinjiang Special Drugs National
Pharmaceutical Co., Ltd. 10.00 - 10.00 -
Sinopharm Lerentang Hebei Medical Instrument Trade Co., Ltd. 4.85 - 4.85 -
Sinopharm Holding (China) Finance Leasing Co., Ltd 2.87 - - -
Zhijun Trade 2.54 - - -
Sinopharm Guangdong Medical Equipment Supply Chain Co.,
Ltd. 2.31 - - -
Zhijun Pingshan 1.85 - - -
Sinopharm Group Zhonglian Pharmaceutical Group Co., Ltd. 0.50 0.10 0.50 0.10
Sinopharm Health Online Co., Ltd. - - 8.18 -
Sinopharm Holding Jiaozuo Co., Ltd. - - 3.02 -
Sinopharm Group Medicine Logistic Co., Ltd. Guangzhou Branch - - 1.87 -
6,007.88 4,536.19 5,775.27 0.16
330
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
7. Amounts due from related parties (Continued)
Advances to suppliers
2019 2018
(RMB‘0,000) (RMB‘0,000)
Provision for Provision for
Amount bad debts Amount bad debts
Sinopharm Holding Shanxi Co., Ltd. 334.72 - 333.03 -
Jiangxi Erye Medicine Marketing Co., Ltd. 278.64 - 72.98 -
Sinopharm Group Co., Ltd. 148.66 - 230.83 -
Sinopharm Holding Sub Marketing Center Co., Ltd. 120.47 - - -
Shyndec Pharma 75.85 - 5.78 -
Chongqing Yaoyou Pharmaceutical Co., Ltd. 74.25 - 93.13 -
Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd. 59.98 - 0.18 -
Chengdu Rongsheng Pharmacy Co., Ltd. 55.54 - 141.66 -
Jiangsu Fuxing Pharmaceutical Trading Co., Ltd 49.97 - 0.01 -
Sinopharm Group Guorui Medicine Co., Ltd. 39.96 - - -
China National Medicines Co., Ltd. 20.49 - 7.88 -
Shantou Jinshi Powder Injection Co., Ltd. 13.80 - - -
Sinopharm Holding Beijing Co., Ltd. 13.00 - 12.38 -
Anhui Jingfang Pharmaceutical Co., Ltd. 10.22 - 4.56 -
Chengdu Institute of Biological Products Co.,Ltd. 9.75 - 4.87 -
Beijing Sinopharm Tianyuan Real Estate & Property
Management Co., Ltd. 9.53 - 7.89 -
Sinopharm Group Yibin Pharmaceuticals Co., Ltd. 8.25 - 1.57 -
China National Pharmaceutical Foreign Trade Corporation 7.20 - - -
Guizhou Tongjitang Pharmaceutical Co., Ltd. 6.58 - 22.72 -
Guilin South pharmaceutical Co., Ltd. 5.42 - 1.10 -
Suzhou Erye Pharmaceutical Co., Ltd. 3.31 - - -
Zhijun Medicine 2.98 - 13.94 -
Shanghai Tongyu Information Technology Co., Ltd. 2.35 - - -
Sinopharm Holding Hunan Co., Ltd. 1.70 - - -
Winteam Pharmaceutical Group Ltd. 1.40 - 0.93 -
Sinopharm Holding Chengdu Co., Ltd. 1.32 - - -
Xinjiang Baitong Property Service Co., Ltd. 1.31 - 1.69 -
Shandong Lu Ya Pharmaceutical Co., Ltd. 1.14 - 0.14 -
China National Pharmaceutical Industry Co., Ltd. 0.55 - - -
Sinopharm Holding Hubei Co., Ltd. 0.47 - - -
Sinopharm Holding Yangzhou Co., Ltd. 0.13 - - -
Lanzhou Biological Technology Development Co., Ltd. 0.06 - - -
Jinzhou Ahon Pharmaceutical Co., Ltd. 0.02 - 1.65 -
331
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
7. Amounts due from related parties (Continued)
Advances to suppliers (continued)
2019 2018
(RMB‘0,000) (RMB‘0,000)
Amount Provision for Amount Provision for
bad debts bad debts
Sinopharm Group Shanxi Co., Ltd. - - 389.10 -
Hunan Minshengtang Investment Co., Ltd. - - 334.93 -
Sinopharm Group Xinjiang Special Drugs National
Pharmaceutical Co., Ltd. - - 164.33 -
Linyi Medical Group Co., Ltd. - - 77.54 -
Sinopharm Holding Shanxi Lvliang Co., Ltd. - - 66.00 -
Shanghai Shyndec Pharmaceutical Marketing Co., Ltd. - - 60.94 -
Sinopharm Group Guizhou Blood Products Co., Ltd. - - 53.60 -
Sinopharm Chuan Kang Pharmaceutical Co., Ltd. - - 34.68 -
Sinopharm Xinjiang Korla Pharmaceutical Co., Ltd. - - 28.25 -
Shenyang Hongqi Pharmaceutical Co., Ltd. - - 23.72 -
Nanjing Yuanguang Trading Co., Ltd. - - 16.97 -
Shanghai Modern Hasen (Shangqiu) Pharmaceutical Co., Ltd. - - 10.35 -
Sinopharm Xinjiang Pharmaceutical Co., Ltd. - - 4.54 -
Taishan Xiangranhui Trade Co., Ltd. - - 3.95 -
Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. - - 0.12 -
Sinopharm Holding Fujian Co., Ltd. - - 0.02 -
1,359.02 - 2,227.96 -
Other non-current assets 2019 2018
(RMB‘0,000) (RMB‘0,000)
Hunan Minshengtang Investment Co., Ltd. - 351.92
Amounts due from related parties are interest-free and unsecured with no fixed term on repayment, except that
notes receivable from related parties have fixed terms of repayment, and entrusted loans from related parties have
fixed terms of repayment with interest.
332
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties
Accounts payable
2019 2018
(RMB‘0,000) (RMB‘0,000)
Sinopharm Holding Sub Marketing Center Co., Ltd. 6,621.91 10,426.28
China National Medicines Co., Ltd. 4,001.77 4,835.29
Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. 3,172.37 1,047.00
Jiangsu Wanbang Pharmaceutical Marketing & Distribution Co., Ltd. 2,401.57 1,503.86
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd. 1,716.24 1,825.99
Sinopharm Holding Hubei Co., Ltd. 1,384.40 -
Sinopharm Group Co., Ltd. 1,281.99 1,373.23
Sinopharm Group Shanxi Co., Ltd. 853.24 94.51
Sinopharm Lerentang Hebei Pharmaceutical Co., Ltd. 818.88 840.23
Zhijun Pingshan 661.86 355.05
Sinopharm Holding Yangzhou Co., Ltd. 645.32 763.04
Chongqing Yaoyou Pharmaceutical Co., Ltd. 600.41 350.68
Sinopharm Holding Beijing Kangchen Bio-Pharmaceutical Co., Ltd. 595.17 91.72
Sinopharm Holding Pingdingshan Co., Ltd. 531.68 360.33
Shenzhen Main Luck Pharmaceutical Co., Ltd. 528.48 856.57
Sinopharm Holding Jiangsu Co., Ltd. 485.71 674.53
Winteam Pharmaceutical Group Ltd. 431.46 629.45
Zhijun Medicine 401.24 292.21
Sinopharm Holding Inner Mongolia Co., Ltd. 399.74 222.59
Jinzhou Ahon Pharmaceutical Co., Ltd. 388.56 242.29
Sinopharm Lerentang Shijiazhuang Medicine Co., Ltd. 386.97 18.37
Sinopharm Holding Fujian Co., Ltd. 343.43 448.46
Sinopharm Holding Beijing Co., Ltd. 339.70 747.80
Sinopharm Lerentang Hebei Medical Instrument Trade Co., Ltd. 327.92 151.90
Sinopharm Holding Changzhou Co., Ltd. 320.14 148.46
Sinopharm Holding Henan Co., Ltd. 297.06 144.12
Shenzhen Wanwei Medicine Trading Co., Ltd. 280.99 421.91
China Otsuka Pharmaceutical Co., Ltd. 259.84 157.17
Sinopharm Holding Ningxia Co., Ltd. 235.44 300.77
Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd. 234.13 96.69
Sinopharm Holding Shenyang Co., Ltd. 225.70 401.60
Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical Co., Ltd. 197.89 79.54
Sichuan Hexin Pharmaceutical Co., Ltd. 180.11 45.45
Sinopharm Huixin Qingyuan (Beijing) Technology Development Co., Ltd.. 156.56 -
Sinopharm Holding Hubei Guoda Pharmacy Co., Ltd. 149.40 -
333
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Accounts payable (continued)
2019 2018
(RMB‘0,000) (RMB‘0,000)
Sinopharm Holding Xiamen Co., Ltd. 140.81 171.08
Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd. 140.07 105.07
Yichang Humanwell Pharmaceutical Co., Ltd. 125.17 193.61
Sinopharm Holding Wuxi Co., Ltd. 123.56 49.27
Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd. 120.95 175.52
Sinopharm Holding Anhui Huaning Medicine Co., Ltd 119.03 -
Shyndec Pharma 105.98 51.15
Jiangsu Fuxing Pharmaceutical Trading Co., Ltd 102.14 54.91
Tibet Yaoyou Medicines Co.,Ltd. 99.85 834.66
Sinopharm Yixin Pharmaceutical Co., Ltd. 99.82 17.59
Sinopharm Holding Shanxi Dajiuzhou Medicine Co., Ltd 86.55 -
Sinopharm Holding Fengliaoxing (Foshan) Traditional & Herbal Medicine Co.,
Ltd. 84.89 125.43
Sinopharm Group Zhonglian Pharmaceutical Group Co., Ltd. 83.70 56.05
Sinopharm Holding Jinzhou Co., Ltd. 82.23 53.10
Sinopharm Holding Yunnan Dongchang Medicine Co., Ltd. 81.10 -
Shanghai Chaohui Pharmaceutical Co., Ltd. 80.74 31.18
Sinopharm Holding Fuzhou Co., Ltd. 80.22 32.87
Hunan Dongting Pharmaceutical Co., Ltd. 77.36 26.54
China National Pharmaceutical Industry Co., Ltd. 73.60 36.38
Sinopharm Chuan Kang Pharmaceutical Co., Ltd. 73.57 47.25
Sinopharm Holding Heilongjiang Co., Ltd. 71.19 92.21
Sinopharm Holding Yancheng Co., Ltd. 68.89 19.02
Sinopharm Group Guorui Medicine Co., Ltd. 66.14 105.71
Fujian Chengtian Jinling Pharmaceutical Co., Ltd. 63.97 50.56
Suzhou Erye Pharmaceutical Co., Ltd. 62.30 27.83
Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd. 60.68 16.55
Chengdu Institute of Biological Products Co.,Ltd. 56.16 37.08
Sinopharm Holding Tongliao Co., Ltd. 54.07 87.26
Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd. 50.24 113.38
Beijing Huasheng Pharmaceutical Biotechnology Development Co., Ltd. 49.04 0.06
Pudong New Area of Shanghai Pharmaceutical Medicine Ltd. 47.39 9.15
Sinopharm Group Rongsheng Pharmaceutical Co., Ltd. 46.41 39.89
Sinopharm Group Yibin Pharmaceuticals Co., Ltd. 46.18 15.00
Jiangsu Huanghe Pharmaceutical Co., Ltd. 43.37 26.12
334
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Accounts payable (continued)
2019 2018
(RMB‘0,000) (RMB‘0,000)
Sinopharm Holding Hulun Buir Co., Ltd. 42.89 36.44
Shanghai Transfusion Technology Co., Ltd. 39.66 35.21
Guizhou Tongjitang Pharmaceutical Co., Ltd. 37.96 34.28
Shanghai International Pharmaceutical Trade Co., Ltd. 37.46 -
Sinopharm Holding Beijing Huahong Co., Ltd. 36.10 149.86
Anhui Jingfang Pharmaceutical Co., Ltd. 33.47 16.52
Shenyang Hongqi Pharmaceutical Co., Ltd. 31.51 119.18
Sinopharm Holding Changsha Co., Ltd. 28.83 -
Sinopharm Holding Donghong Medical (Shanghai) Co., Ltd. 28.59 21.3
Guangdong Medi-World Pharmaceutical Co., Ltd. 26.04 29.76
Shanghai Merro Pharmaceutical Co., Ltd. 23.04 9.03
Sinopharm Holding Putian Co., Ltd. 22.54 0.71
Sinopharm Shantou Jinshi Pharmaceutical Co., Ltd. 22.48 10.27
Huayi Pharmaceutical Co., Ltd. 22.41 96.14
Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co., Ltd. 21.99 8.45
China National Medicial Device Shandong Co., Ltd. 21.62 -
Jinzhou Ahon Pharmaceutical Co., Ltd 21.46 -
Sinopharm Holding Shandong Co., Ltd. 20.77 1.09
Chengdu Rongsheng Pharmacy Co., Ltd. 20.30 194.73
Sinopharm Holding Pu’er Co., Ltd. 17.98 -
Chengdu List Pharmaceutical Co.,Ltd. 17.89 -
Sinopharm Holding Dezhou Co., Ltd. 17.22 23.36
Sinopharm Holding Bayannur Co., Ltd 16.95 -
Sinopharm Holding Changzhou Medical Logistics Center Co., Ltd. 16.45 308.04
Sinopharm Holding Lianyungang Co., Ltd. 15.62 27.61
Sinopharm Holding Anhui Co., Ltd. 14.98 1.86
Sinopharm Holding Dalian Co., Ltd. 13.72 18.25
Sinopharm Holding Xinjiang Special Drugs Kashgar Pharmaceutical Co., Ltd. 13.25 35.07
Sinopharm Holding Yangzhou Medical Treatment Equipment Co., Ltd. 13.17 5.59
Shantou Jinshi Powder Injection Co., Ltd. 12.45 24.54
Sinopharm Liaoning Medicial Device Co., Ltd. 11.99 -
335
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Accounts payable (continued)
2019 2018
(RMB‘0,000) (RMB‘0,000)
Sinopharm Holding Hunan Medicial Development Co., Ltd 11.85 -
Sinopharm Holding Yangzhou Biological Products Co., Ltd. 11.62 5.02
The Fourth Pharmaceutical Co., Ltd. of Zhonglian Group 9.22 9.71
Foshan Dezhong Pharmaceutical Co., Ltd. 7.38 9.88
Sinopharm Holding Jinan Co., Ltd. 5.82 18.93
Sinopharm Holding Taizhou Co., Ltd. 5.55 9.95
Sinopharm Holding Shanxi Mingdikang Medicine Co., Ltd. 5.31 2.72
Shandong Lu Ya Pharmaceutical Co., Ltd. 5.28 5.28
Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Co., Ltd. 4.74 25.51
Sinopharm Holding Shanxi Runhe Medicine Co., Ltd. 4.03 -
Sinopharm Holding Jiangxi Co., Ltd. 3.80 -
Sinopharm Holding Nanjing Wende Pharmaceutical Co.,Ltd. 3.48 10.24
Sinopharm Holding Ulanqab Co., Ltd. 3.38 6.12
Sinopharm Holding Sanyi Medicine (Wuhu) Co., Ltd. 3.31 2.55
Beijing Huamiao Pharmaceutical Co., Ltd. 3.10 -
Shanghai Modern Hasen (Shangqiu) Pharmaceutical Co., Ltd. 3.10 5.71
Sinopharm Holding Biopharmaceutical (Tianjin) Co., Ltd. 2.32 2.05
Sinopharm Shanghai Medicine Device Co., Ltd. 1.65 1.66
Sinopharm Holding Dalian Hecheng Co., Ltd. 1.61 -
Sinopharm Holding Quanzhou Co., Ltd. 1.60 6.29
Sinopharm Holding Suzhou Co., Ltd. 1.37 187.18
Sinopharm Holding Shanxi Co., Ltd. 1.27 -
Sinopharm Holding Tianjin Co., Ltd. 1.20 1.56
Sinopharm Wuhan blood products Co., Ltd. 1.16 17.04
Sinopharm Industry Investment Co., Ltd. 1.13 -
Sinopharm Hebei Medical Instrument Co., Ltd. 1.05 -
Sinopharm Holding Lunan Co., Ltd. 0.76 7.16
Sinopharm Holding Rizhao Co., Ltd. 0.63 1.02
Sinopharm Anhui Medicial Device Co., Ltd. 0.52 -
Sinopharm Holding Tonghua Co., Ltd. 0.42 -
336
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Accounts payable (continued)
2019 2018
(RMB‘0,000) (RMB‘0,000)
Sinopharm Holding Zhihuiminsheng (Tianjin) Pharmaceutical Co., Ltd. 0.39 -
Changchun Changsheng Gene Pharmaceutical Co., Ltd. 0.30 0.15
Sinopharm Holding Shanxi Jincheng Co., Ltd. 0.21 0.38
Sinopharm Holding Ordos Co., Ltd. 0.18 0.18
Sinopharm Le-Ren-Tang Medicine Co., Ltd. 0.12 -
Guilin South pharmaceutical Co., Ltd. 0.12 0.12
Sinopharm Holding Huaideju Pharmaceutical (Xiamen) Co., Ltd. 0.11 0.11
Sinopharm Holding Zhangzhou Co., Ltd. 0.10 0.55
China National Pharmaceutical Foreign Trade Corporation 0.09 12.29
Sinopharm Fengliaoxing (Foshan) Medicines Co., Ltd. 0.07 0.01
Zhijun Trade 0.05 0.05
Sinopharm Holding Liaocheng Co., Ltd. 0.02 1.62
Shanghai Shyndec Pharmaceutical Marketing Co., Ltd. 0.01 0.01
Chongqing Haisiman Pharmaceutical Co., Ltd. 0.01 0.01
Sinopharm Holding Shanxi Instrument Branch Co., Ltd. - 630.92
Henan Wanxitang Pharmacy Co., Ltd. - 205.36
Jiangsu Lianhuan Pharmaceutical Co.,Ltd. - 132.13
Beijing Huamiao Pharmaceutical Co., Ltd. - 37.21
Jiangxi Erye Medicine Marketing Co., Ltd. - 26.26
Sinopharm Group Southwest Medicine Co., Ltd. - 19.50
Jingfukang Pharmaceutical Group Co., Ltd. - 18.44
Lanzhou Institute of Biological Products Co., Ltd. - 18.00
Sinopharm Holding Shanxi Zhidekang Medicine Co., Ltd. - 14.00
Shanghai SinoMed Medicine Co., Ltd. - 9.26
Sichuan Jiangyouzhongbafuzi Technology Development Co., Ltd. - 8.00
Sinopharm Holding Hainan Co., Ltd. - 7.27
Sinopharm ShanXi Ruifulai Pharmaceutical Co., Ltd. - 6.31
Sinopharm Holding Zhejiang Co., Ltd. - 5.85
Qinghai Pharmaceutical Factory Co., Ltd. - 3.30
Sinopharm Holding Yongzhou Co., Ltd. - 1.99
Sinopharm Xinjiang Pharmaceutical Co., Ltd. - 0.97
Sinopharm Holding Hunan Co., Ltd. - 0.77
Sinopharm Sichuan Pharmaceutical Co., Ltd. - 0.27
Sinopharm Prospect Dentech (Beijing) Co., Ltd. - 0.15
35,454.88 35,352.88
337
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Notes payable
2019 2018
(RMB‘0,000) (RMB‘0,000)
Sinopharm Holding Sub Marketing Center Co., Ltd. 14,738.71 23,006.74
Sinopharm Holding Shenyang Co., Ltd. 9,431.86 7,689.40
Sinopharm Group Shanxi Co., Ltd. 8,709.55 6,792.66
Sinopharm Le-Ren-Tang Medicine Co., Ltd. 8,149.93 2,207.62
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd. 4,165.56 1,388.77
China National Medicines Co., Ltd. 4,009.35 2,665.46
Jiangsu Wanbang Pharmaceutical Marketing & Distribution Co., Ltd. 3,110.02 481.74
Sinopharm Holding Inner Mongolia Co., Ltd. 2,990.22 2,045.98
Sinopharm Holding Shanxi Co., Ltd. 2,620.38 1,834.00
Lanzhou Biological Technology Development Co., Ltd. 1,794.00 300.00
Sinopharm Holding Fujian Co., Ltd. 1,208.06 701.10
Sinopharm Holding Lunan Co., Ltd. 1,065.84 859.63
Sinopharm Lerentang Hebei Pharmaceutical Co., Ltd. 704.76 1,465.05
Sinopharm Holding Xiamen Co., Ltd. 578.10 536.20
Sinopharm Lerentang Shijiazhuang Medicine Co., Ltd. 559.81 814.83
Shenzhen Wanwei Medicine Trading Co., Ltd. 514.88 240.24
Chongqing Yaoyou Pharmaceutical Co., Ltd. 437.16 553.83
Sinopharm Holding Hunan Co., Ltd. 340.61 311.41
Main Luck Pharmaceutical 236.09 287.74
Sinopharm Holding Jinzhou Co., Ltd. 231.53 161.13
Chengdu Rongsheng Pharmacy Co., Ltd. 202.50 267.35
Sinopharm Holding Changzhou Co., Ltd. 202.00 -
Sinopharm Holding Ningxia Co., Ltd. 150.00 141.38
Yichang Humanwell Pharmaceutical Co., Ltd. 131.34 -
Zhijun Medicine 108.71 32.57
Sinopharm Huixin Qingyuan (Beijing) Technology Development Co., Ltd.. 103.36 -
Sinopharm Holding Dalian Co., Ltd. 99.20 95.02
Sinopharm Holding Jinan Co., Ltd. 95.00 188.00
Guizhou Tongjitang Pharmaceutical Co., Ltd. 83.30 -
Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd. 67.87 35.66
Sinopharm Holding Yancheng Co., Ltd. 54.43 -
Zhijun Pingshan 52.97 -
338
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Notes payable (continued)
2019 2018
(RMB‘0,000) (RMB‘0,000)
Guangdong Medi-World Pharmaceutical Co., Ltd. 42.88 -
Anhui Jingfang Pharmaceutical Co., Ltd. 34.95 -
Jiangsu Fuxing Pharmaceutical Trading Co., Ltd 32.05 -
Shanghai Transfusion Technology Co., Ltd. 31.19 50.30
Sinopharm Lerentang Hebei Medical Instrument Trade Co., Ltd. 26.74 -
Sinopharm Holding Changzhou Medical Logistics Center Co., Ltd. 21.90 100.00
Shenyang Hongqi Pharmaceutical Co., Ltd. 21.13 60.22
Sinopharm Wuhan blood products Co., Ltd. 19.64 -
Sinopharm Holding Changsha Co., Ltd. 17.16 -
Sinopharm Group Rongsheng Pharmaceutical Co., Ltd. 16.92 22.33
Beijing Huasheng Pharmaceutical Biotechnology Development Co., Ltd. 14.04 -
Sinopharm Holding Fengliaoxing (Foshan) Traditional & Herbal Medicine Co.,
Ltd. 11.90 32.03
Foshan Dezhong Pharmaceutical Co., Ltd. 10.84 -
Sinopharm Yixin Pharmaceutical Co., Ltd. 10.75 39.41
Sinopharm Holding Heilongjiang Co., Ltd. 4.66 3.13
Sinopharm Holding Quanzhou Co., Ltd. 4.51 17.09
Sinopharm Lerentang Hebei Medicial Instrument Supply Chain Management
Co., Ltd 0.82 -
Lanzhou Institute of Biological Products Co., Ltd. - 623.62
Sinopharm Holding Shanxi Instrument Branch Co., Ltd. - 198.12
China OTSUKA Pharmaceutical Co., Ltd. - 179.36
Sinopharm Group Co., Ltd. - 118.36
Sinopharm Holding Yangzhou Co., Ltd. - 62.65
Sinopharm Holding Putian Co., Ltd. - 61.45
Sinopharm Group Guizhou Blood Products Co., Ltd. - 53.60
Jiangsu Lianhuan Pharmaceutical Co.,Ltd. - 52.21
Shyndec Pharma - 47.58
Chongqing Haisiman Pharmaceutical Co., Ltd. - 27.57
Jingfukang Pharmaceutical Group Co., Ltd. - 15.11
Winteam Pharmaceutical Group Ltd. - 11.13
Fujian Chengtian Jinling Pharmaceutical Co., Ltd. - 10.06
67,269.18 56,888.84
339
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Other payables
2019 2018
(RMB‘0,000) (RMB‘0,000)
Shanghai Dingqun 1,000.00 1,000.00
Sinopharm Group Medicine Logistic Co., Ltd. 575.57 227.83
Sinopharm Chongqing Pharmaceutical and Medical Industry Design Institute 517.32 594.30
Sinopharm Group Co., Ltd. 449.76 370.64
Sinopharm Holding Yangzhou Co., Ltd. 372.57 -
Zhang Zhenfang 311.50 231.00
Sinopharm Health Online Co., Ltd. 300.83 -
Sinopharm Group Shanghai Co., Ltd. 166.04 166.04
China National of Traditional&Herbal Medicine Co., Ltd. 130.00 130.00
Shanghai Beiyi 35.79 56.62
Foshan Chancheng District Central Hospital 26.50 -
Sinopharm Holding Tianjin Binhai Pharmaceutical Co., Ltd. 24.18 33.98
Sinopharm Holding Hunan Weian Pharmacy Medicine Chain Company Limited 10.22 3.00
Sinopharm Holding Sub Marketing Center Co., Ltd. 3.82 3.78
China National Pharmaceutical Logistics Co., Ltd. 2.08 1.03
Sinopharm Group Medicine Logistic Co., Ltd. Guangzhou Branch 2.00 1.87
Shandong Lu Ya Pharmaceutical Co., Ltd. 1.00 -
Gu Jinhua 0.21 -
Sinopharm Holding (China) Financing Lease Co., Ltd. - 442.50
Shenyang Pharmaceutical Co., Ltd. - 441.92
Pingdingshan Pusheng Pharmaceutical Co., Ltd. - 124.64
Heyuan Mairui Trading Co., Ltd. - 67.24
Shyndec Pharma - 32.80
Linyi Medical Group Co., Ltd. - 5.14
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd. - 4.18
3,929.39 3,938.51
340
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Contract liabilities
2019 2018
(RMB‘0,000) (RMB‘0,000)
Sinopharm Holding Nantong Co., Ltd. 32.00 14.32
Sinopharm Holding Yunnan Co., Ltd. 10.52 1.19
Sinopharm Holding Wenzhou Co., Ltd. 5.78 -
Sinopharm Holding Guizhou Co., Ltd. 4.70 -
Sinopharm Holding Hubei Hongyuan Co., Ltd. 2.52 -
Sinopharm Holding Gansu Co., Ltd. 2.25 -
Sinopharm Holding Hulun Buir Co., Ltd. 2.12 2.12
Sinopharm Holding Quanzhou Co., Ltd. 1.91 1.01
Sinopharm Group Guangdong Medicine Device Co., Ltd. 1.04 0.16
Sinopharm Holding Hunan Co., Ltd. 0.83 8.78
Sinopharm Group Guangxi Medical Equipment Co., Ltd. 0.54 -
China National Pharmaceutical Foreign Trade Corporation 0.12 0.15
Sinopharm Holding Chengdu Co., Ltd. 0.09 0.09
Sinopharm Holding Chongqing Co., Ltd. 0.08 0.08
Sinopharm Holding Guizhou Medical Equiment Co., Ltd. 0.06 -
Sinopharm Guangdong Medical Examination Co., Ltd. 0.06 -
Sinopharm Holding Inner Mongolia Co., Ltd. 0.01 2.30
Sinopharm Sichuan Pharmaceutical Co., Ltd. - 112.31
Sinopharm Health Online Co., Ltd. - 41.61
Sinopharm Holding Hunan Weian Chain Store Co., Ltd. - 6.73
Sinopharm Holding Jiangxi Co., Ltd. - 3.43
Sinopharm Zhuhai Medical Instrument Co., Ltd. - 0.37
Sinopharm Medical Instrument Guizhou Qiannan Co., Ltd. - 0.01
64.63 194.66
341
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
2019 2018
(RMB‘0,000) (RMB‘0,000)
Entrusted borrowings
Sinopharm Group (Note) 3,163.90 3,163.90
Note: Sinopharm Group entrusted Sinopharm Group Finance Co., Ltd. with this borrowing to the Group. The
entrusted borrowing includes the principal of RMB31,600.00 thousand and the outstanding interest receivable of
RMB39.00 thousand.
Short-term borrowings
Sinopharm Group Finance Co., Ltd. 3,999.39 12,242.64
Other non-current liabilities
Sinopharm Group 3,506.17 3,506.17
Long-term payables
2018
Amount Include: within 1 year
(RMB‘0,000) (RMB‘0,000)
Sinopharm Holding (China) Finance Leasing Co., Ltd. 962.53 586.13
342
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
X Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Lease liabilities
2019
Amount Include: within 1 year
(RMB‘0,000) (RMB‘0,000)
Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd. 4,166.45 859.66
Pu'er Songmao Jiantang Pharmaceutical Co., Ltd. 1,724.74 131.26
Lerentang Investment Group Co., Ltd. 1,242.27 607.73
Linyi Medical Group Co., Ltd. 634.73 155.06
Guangdong Jiyuantang Development Co., Ltd. 493.39 184.80
Sinopharm Holding (China) Finance Leasing Co., Ltd. 386.17 234.82
Sinopharm Holding Yangzhou Co., Ltd. 366.61 366.61
Taishan Xiangranhui Trade Co., Ltd. 217.40 40.55
Gu Jinhua 195.64 28.29
Shenyang Pharmaceutical Co., Ltd. 148.19 43.77
Sinopharm Xinjiang Pharmaceutical Co., Ltd. 74.19 36.29
Sinopharm Group Co., Ltd. 67.47 50.24
Sinopharm Holding Beijing Co., Ltd. 63.37 50.28
Gu Haiqun 60.51 17.71
Shaoguan Wujiang District Muyang Medicine Information
Consultant Co., Ltd. 55.28 55.28
Zhijun Pingshan 42.44 8.56
Beijing Sinopharm Tianyuan Real Estate & Property
Management Co., Ltd. 35.70 35.70
Sinopharm Holding Rizhao Co., Ltd. 29.51 19.58
China National Medicines Co., Ltd. 28.11 28.11
Shenzhen Jiufeng Investment Co., Ltd. 19.29 19.29
10,051.46 2,973.59
Other payables are interest-free and unsecured with no fixed term on repayment, expect that
related parties borrowings, long-term payables, lease liabilities with fixed terms of repayment with
interest, and notes payable to related parties have fixed terms of repayment.
9. Cash deposit with a related party
2019 2018
(RMB‘0,000) (RMB‘0,000)
Sinopharm Group Finance Co., Ltd. 54.90 212.54
In years 2019 and 2018, the interest rates for the deposit ranged from 0.35% to 1.15% above the
benchmark interest rate.
343
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
XI Commitments and contingencies
1. Commitments
(1) Capital commitments
Capital expenditures contracted for at the balance sheet date but not recognised in the balance
sheet are analysed as follows:
31 December 2019 31 December 2018
(RMB‘0,000) (RMB‘0,000)
Capital commitments 42.16 42.16
Investment commitments (Note) 6,000.00 6,000.00
6,042.16 6,042.16
Note: According to the Sinopharm Holding document [Sinopharm Zongtou[2017]No.97], the
Company can subscribe fund shares from Ningbo Meishan bonded port area Qiling equity
investment center LP with RMB200.00 million to indirectly subscribe to the industry fund. The
investors contribute year by year in batch. The fund manager will send out payment notification to
investors according to the actual progress of the project. 30% of payment was paid in 2017,
amounting to RMB60.00 million, and 40% of payment was paid in 2018, amounting to RMB80.00
million. The remaining payment amount is RMB60.00 million.
(2) Operating lease commitments
The future minimum lease payments due under the signed irrevocable operating lease contracts
are summarized as follows:
31 December 2018
(RMB‘0,000)
Within 1 year 43,365.94
1 to 2 years 37,635.38
2 to 3 years 31,071.82
Over 3 years 37,142.17
149,215.31
2. Contingencies
As of the balance sheet date, no contingencies of the Group were required to disclose.
344
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
XII Events after the balance sheet date
1. Pursuant to the resolution of the General Meeting of the Shareholders on 20 April 2020, the
Company paid a cash dividend of RMB6.00 for every 10 shares to all shareholders, which is
calculated on the basis of 428,126,983 shares in issue, with an aggregate amount of
RMB256,876,189.80. This resolution had yet to be approved by the shareholders’ meeting.
2. Since the novel coronavirus epidemic began, the Group, as a central, provincial and municipal
drug reserve unit, has been actively responding and strictly implementing the provisions and
requirements of the parties and government at all levels for the prevention and control of the
virus epidemic and established the emergency leading groups and working groups. The Group
worked closely with the local government and arranged the emergency epidemic prevention
material dispatch and strengthened the storage and control of the epidemic prevention to
ensure the quality and safety of materials, demonstrating an important responsibility of a central
enterprise in the society.
Affected by the epidemic and relevant prevention measures, the operation progress of
pharmaceutical distribution and retail stores of the Group will be influenced to some extent in
the first quarter of 2020. The Group will continue to pay close attention to the trend of the
epidemic, promote the business transformation of the company, accelerate the development of
new business forms and new models, accelerate the layout of e-commerce and innovation
models, continuously improve the market share of the company, and strive to take multiple
measures to minimize the impact of the epidemic. The Group believes that the relevant
business will gradually resume with the novel coronavirus epidemic under control by degrees
and social production and operation returning to normal.
3. On 16 December 2019, Guoda Pharmacy, a subsidiary of the Company, signed the Stock
Transfer Agreement with Sinopharm Group, which was approved by shareholders in the Third
Extraordinary General Meeting on 13 November 2019. The agreement states that Guoda
Pharmacy purchased 75% of the stock of Pudong New Area of Shanghai Pharmaceutical
Medicine Ltd., a wholly-owned subsidiary of Sinopharm Group, with a total payment no more
than RMB163,115,049.98. Pudong New Area of Shanghai Pharmaceutical Medicine Ltd.
completed industrial and commercial change registration procedures and stock delivery on 2
January 2020 and paid the stock purchase price on 14 January 2020. The business
combination above constitutes a business combination under the same control.
4. On 20 December 2019, the Company signed the Stock Transfer Agreement with Ningbo
Meishan Bonded Port Area Qiling Equity Investment Center LP and Guoda Pharmacy, a
subsidiary of the Company, which was approved by shareholders in the Third Extraordinary
General Meeting on 13 November 2019. The agreement states that Guoda Pharmacy
purchased 100% of the stock of Shanghai Dingqun and 85% of the stock of Sinopharm Holding
Tianhe Jilin Pharmaceutical Co., Ltd. held by Ningbo Meishan Bonded Port Area Qiling Equity
Investment Center LP and the Company, with a total payment no more than
RMB93,424,000.00. Shanghai Dingqun completed industrial and commercial change
registration procedures and stock delivery on 7 January 2020 and paid the stock purchase price
on 21 Janurary 2020.
345
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
XIII Other significant events
1. Segment reporting
Operating segments
For management purposes, the Group is organized into business units based on its products
and services and has three reportable operating segments as follows:
a) The Head Office, which is mainly engaged in the investment and management of
businesses;
b) Pharmaceutical distribution segment, which is mainly engaged in the distribution of medicine
and pharmaceutical products to customers;
c) Retail pharmacy segment, which is the management of the operation of Guoda Pharmacy;
Management monitors the results of the Group’s operating segments separately for the purpose
of making decisions about resource allocation and performance assessment. Segment
performance is evaluated based on reportable segment profit, which is measured consistently
with the Group’s profit before tax.
Inter-segment sales and transfers are transacted with reference to the selling prices used in the
transactions carried out with third parties at the then prevailing market prices.
346
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
XIII Other significant events (Continued)
1. Segment reporting (Continued)
Operating segments (Continued)
2019:
Elimination between
Head Office Pharmaceutical distribution Retail Pharmacy Total
segments
Operating revenue 9,665,928.48 40,013,926,107.78 12,753,608,498.70 (731,436,391.75) 52,045,764,143.21
Including: Revenue from external 8,006,007.92 39,285,482,715.53 12,752,275,419.76 - 52,045,764,143.21
customers
Revenue from inter-segment 1,659,920.56 728,443,392.25 1,333,078.94 (731,436,391.75) -
transactions
Interest income 108,928,333.91 39,346,397.17 87,140,329.14 (95,572,571.11) 139,842,489.11
Interest expense (26,665,774.48) (274,477,177.66) (66,199,054.41) 95,623,071.70 (271,718,934.85)
Income from investments in 332,334,692.76 (2,233,828.42) 1,071,038.53 - 331,171,902.87
associates
Impairment losses (1,857,279.52) (332,209.46) (1,583,819.14) - (3,108,889.20)
Credit impairment losses (45,382,201.36) (5,137,165.27) (2,644,123.98) - (53,163,490.61)
Depreciation and amortization (1,519,764.30) (143,163,527.20) (754,918,698.62) - (899,601,990.12)
Gross profit 1,134,658,290.00 1,110,966,580.04 422,922,043.99 (811,888,777.53) 1,856,658,136.50
Income taxes 3,069,276.24 (264,494,788.78) (111,013,928.83) - (372,439,441.37)
Net profit 1,137,727,566.24 846,471,791.26 311,908,115.16 (811,888,777.53) 1,484,218,695.13
Total assets 12,874,025,306.77 20,332,642,113.61 11,173,757,597.94 (10,859,815,894.65) 33,520,609,123.67
Total liabilities (2,822,975,182.11) (14,417,324,193.49) (6,180,747,837.66) 5,260,275,929.82 (18,160,771,283.44)
Long-term equity investments in
associates 2,084,079,098.25 8,308,327.77 12,726,984.86 - 2,105,114,410.88
Accrual of other non-current assets
except long-term equity
investments 6,535,138.34 251,618,667.14 1,951,712,055.41 (1,116,517.76) 2,208,749,343.13
347
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
XIII Other significant events (Continued)
1. Segment reporting (Continued)
Operating segments (Continued)
2018 :
Head Office Pharmaceutical distribution Retail Pharmacy Elimination between segments Total
Operating revenue 9,273,843.07 32,757,389,882.07 10,878,025,717.94 (522,303,921.85) 43,122,385,521.23
Including: Revenue from external customers 7,639,065.85 32,237,174,455.73 10,877,571,999.65 - 43,122,385,521.23
Revenue from inter-segment transactions 1,634,777.22 520,215,426.34 453,718.29 (522,303,921.85) -
Interest income 86,156,915.62 36,903,104.11 42,112,312.72 (84,052,825.82) 81,119,506.63
Interest expense (24,418,425.35) (199,412,357.32) (537,310.58) 84,052,825.82 (140,315,267.43)
Investment income 319,909,375.15 (1,700,728.31) 1,695,243.63 - 319,903,890.47
Impairment losses - (2,029,159.28) (715,446.08) - (2,744,605.36)
Credit impairment losses 3,348.72 903,349.81 (1,205,178.08) - (298,479.55)
Depreciation and amortization (1,214,260.43) (70,320,317.76) (134,575,834.22) - (206,110,412.41)
Gross profit 693,877,930.80 935,088,852.44 410,585,068.82 (360,622,494.53) 1,678,929,357.53
Income taxes (2,797,055.83) (218,867,690.72) (108,833,499.13) - (330,498,245.68)
Net profit 691,080,874.97 716,221,161.72 301,751,569.69 (360,622,494.53) 1,348,431,111.85
Total assets 11,206,677,509.70 18,246,104,939.73 9,035,418,275.87 (9,557,900,205.33) 28,930,300,519.97
Total liabilities (2,203,816,484.92) (12,743,275,454.62) (4,059,201,016.82) 3,981,768,929.44 (15,024,524,026.92)
Long-term equity investments in associates 1,861,606,283.58 6,802,156.19 11,985,346.33 - 1,880,393,786.10
Accrual of other non-current assets except long-term equity
investments 78,652,882.95 34,828,145.45 68,564,604.37 - 182,045,632.77
348
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
XIII Other significant events (Continued)
2. Leases
(1)As lessor
The Group has entered into operating leases on some of its houses and buildings, and the lease
term is 1 year to 10 years. All leases include a clause to enable revision of the rental charge on
an annual basis according to prevailing market conditions. In 2019, the rental income
recognised by the Group on those houses and buildings was RMB74,792,548.69, for details of
which, please refer to Note V (42). Details of the underlying houses and buildings are disclosed
in Note V (12) Investment properties.
Operating leases
The profit or loss relating to operating leases is as follows:
2019
Lease income 74,792,548.69
Including: Income relating to variable lease payments not
included in the lease receivable -
The future minimum lease receivables due under the signed irrevocable operating lease
contracts are summarized as follows:
2019
Within 1 year, inclusive 45,076,135.68
1 to 2 years, inclusive 26,381,198.72
2 to 3 years, inclusive 18,340,448.75
3 to 4 years, inclusive 15,209,886.01
4 to 5 years, inclusive 11,051,502.87
Over 5 years 32,191,270.04
148,250,442.07
349
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
XIII Other significant events (Continued)
2. Leases (Continued)
(2)As lessee
2019
Interest expense on lease liabilities 74,483,788.01
Expenses relating to short-term leases accounted for applying
practical expedients 140,444,264.35
Expenses relating to leases of low-value assets accounted for applying
practical expedients (other than short-term leases) 324,213.61
Variable lease payments not included in the
measurement of lease liabilities 851,273.83
Income from subleasing right-of-use assets 34,838,940.81
Total cash outflow for leases 861,946,336.21
The Group has lease contracts for various items of houses and buildings, machinery, vehicles
and other equipment used in its operations. Leases of houses and buildings and machinery
generally have lease terms of 1 year to 6 years, while those of vehicles and other equipment
generally have lease terms of 1 year to 2 years. There are several lease contracts that include
extension and termination options and variable lease payments. Refer to “Potential future cash
outflows not included in the measurement of lease liabilities” for the impact of clauses relating to
variable lease payments on future potential cash outflows.
The potential future cash outflows that the Group does not include in the measurement of lease
liabilities mainly arise from variable lease payments, extension and termination options in lease
contracts, residual value guarantees, and risk exposures such as leases that have been
promised but not yet commenced.
Variable lease payments
Some of the property leases within the Group contain variable lease payment clauses that are
linked to sales generated from the underlying store. These clauses are used, when possible, in
order to match lease payments with stores generating higher cash flows. Lease payments and
clauses for 2019 are summarised as follows:
Stores Fixed payments Variable payments Total payments
Fixed payments only 4,612 743,508,117.38 - 743,508,117.38
Variable payments 8 1,513,349.01 851,273.83 2,364,622.84
A 20% increase in sales across all stores in the Group would be expected to increase total
lease payments by approximately 0.12%.
350
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
XIII Other significant events (Continued)
2. Leases (Continued)
(2)As lessee (Continued)
Leases that have been promised but not yet commenced
The leases that the Group has promised but have not yet commenced are expected to have
future cash outflows as follows:
2019
Within 1 year, inclusive 29,127,042.16
1 to 2 years, inclusive 19,572,477.03
2 to 3 years, inclusive 12,051,712.29
Over 3 years 12,969,470.09
73,720,701.57
Finance leases (Only applicable to 2018)
Finance leases: At 31 December 2018, the balance of the unrecognised finance charge was
RMB 840,006.58, which was amortised using the effective interest rate method over each
reporting period within the lease term. According to the leases entered into with the lessors, the
minimum lease payments under non-cancellable leases are presented as follows:
2018
Within 1 year, inclusive 7,304,197.88
1 to 2 years, inclusive 4,424,279.85
2 to 3 years, inclusive 563,159.02
Over 3 years -
12,291,636.75
351
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
XIII Other significant events (Continued)
2. Leases (Continued)
(2)As lessee (Continued)
Significant operating leases
The future minimum lease payments due under the signed irrevocable operating lease contracts
are summarized as follows:
2018
RMB‘0,000
Within 1 year, inclusive 43,365.94
1 to 2 years, inclusive 37,635.38
2 to 3 years, inclusive 31,071.82
Over 3 years 37,142.17
149,215.31
Other information relating to leases
For right-of-use assets, refer to Note V (15); for practical expedients of short-term leases and
leases of low-value assets, refer to Note III (29); and for lease liabilities, refer to Note V (32).
352
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
XIV Notes to key items of the company financial statements
1. Notes receivable
31 December 2019 31 December 2018
Commercial acceptance bills 14,900,068.42 34,154,774.75
As at 31 December 2019 and 31 December 2018, no notes receivable were pledged.
As at 31 December 2019 and 31 December 2018, no notes receivable endorsed or discounted by the Group to other
parties were not yet due at the balance sheet date.
As at 31 December 2019 and 31 December 2018, no notes receivable were converted into accounts receivable due
to the drawer’s inability to settle the notes on the maturity date.
2. Accounts receivable
The credit period for accounts receivable normally ranges from 0 to 90 days. Accounts receivable are interest-free.
The aging of accounts receivable and the related provision for bad debts are analysed below:
31 December 2019 31 December 2018
Within 1 year 571,867,829.15 631,236,593.94
1 to 2 years 11,250.20 -
Less: Provision for bad debts 334,294.70 -
571,544,784.65 631,236,593.94
Changes in provision for bad debts are presented as follows:
Opening balance Increases in the year Written off in the year Closing balance
2019 - 334,294.70 - 334,294.70
2018 117,320.70 - (117,320.70) -
353
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
XIV Notes to key items of the company financial statements (Continued)
2. Accounts receivable (Continued)
The carrying amount of accounts receivable that affected the changes in provision this year is as follows:
31 December 2019
Carrying amount Bad debt provisions
Amount Proportion Amount Proportion
Items for which provision for bad
debts is recognised separately 10,352,439.53 1.81% (334,294.70) 3.23%
Items for which provision for bad
debts is recognised by group
(credit risk characteristics) 561,526,639.82 98.19% - 0.00%
571,879,079.35 100.00% (334,294.70) 0.06%
31 December 2018
Carrying amount Bad debt provisions
Amount Proportion Amount Proportion
Items for which provision for bad
debts is recognised separately 17,846,941.30 2.83% - 0.00%
Items for which provision for bad
debts is recognised by group
(credit risk characteristics) 613,389,652.64 97.17% - 0.00%
631,236,593.94 100.00% - 0.00%
354
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
XIV Notes to key items of the company financial statements (Continued)
2. Accounts receivable (Continued)
At 31 December 2019, accounts receivable that are individually assessed for provisions are as follows:
Expected Credit Assessment for
Carrying amount Bad debt provision Loss Rate impairment
Receivables from Internal related parties,
subsidiaries of with lower-tier
the Group 10,018,144.83 - 0.00% recovery risk.
Debtor had
mismanagement,
subject to serious
financial difficulties,
and the expected
recoverability is very
Client A 323,044.50 (323,044.50) 100.00% low.
Debtor had
mismanagement,
subject to serious
financial difficulties,
and the expected
recoverability is very
Client B 11,250.20 (112,50.20) 100.00% low.
10,352,439.53 (334,294.70)
At 31 December 2018, accounts receivable that are individually assessed for provisions are presented as follows:
Expected credit Assessment for
Carrying amount Bad debt provision loss rate impairment
Receivables from Internal related parties,
subsidiaries of with lower-tier
the Group 17,846,941.30 - 0.00% recovery risk.
355
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
XIV Notes to key items of the company financial statements (Continued)
2. Accounts receivable (Continued)
The accounts receivable for which the Company recognised provision for bad debts using the aging analysis method are
presented as follows:
31 December 2019 31 December 2018
Expected credit Expected credit
Estimated Expected loss in entire Estimated Expected loss in entire
default amount credit loss rate lifetime default amount credit loss rate lifetime
Within 1 year 561,526,639.82 0.00% - 613,389,652.64 0.00% -
The bad debt provision amount for accounts receivable in 2019 was RMB334,294.70 (2018:nil), with the recovered or
reversed amount of nil (2018:nil). The write-off amount of accounts receivable in 2019 was nil (2018: RMB117,320.70).
The actual accounts receivable written off in 2018 are analysed as follows:
Occured by transactions
between related
Nature Amount Reason Fulfiled write-off procedures parties
The write-off procedures have
been fulfilled in accordance
with the internal rules and
Client A Payment for goods 116,855.40 Non-recoverable regulations. No
The write-off procedures have
been fulfilled in accordance
with the internal rules and
Client B Payment for goods 465.30 Non-recoverable regulations. No
117,320.70
In 2019, the Company factored a portion of accounts receivable at amortised cost to financial institutions. The amount of
accounts receivable derecognised is RMB463,579,520.41 (2018: RMB145,129,500.06), and the amount of loss recognised
through investment income is RMB4,379,465.57 (2018: RMB1,688,557.15).
As at 31 December 2019, the top five accounts receivable by customer are as follows:
Bad debt provision % of the total accounts
Amount amount receivable
Top 1 Account receivable 27,056,423.78 - 4.73%
Top 2 Account receivable 21,481,852.34 - 3.76%
Top 3 Account receivable 20,318,623.30 - 3.55%
Top 4 Account receivable 18,059,973.06 - 3.16%
Top 5 Account receivable 16,434,645.35 - 2.87%
103,351,517.83 - 18.07%
As at 31 December 2018, the top five accounts receivable by customer are as follows:
Bad debt provision % of the total accounts
Amount amount receivable
Top 1 Account receivable 56,790,226.23 - 9.00%
Top 2 Account receivable 49,842,887.24 - 7.90%
Top 3 Account receivable 48,119,276.57 - 7.62%
Top 4 Account receivable 39,009,115.37 - 6.18%
Top 5 Account receivable 25,049,643.33 - 3.97%
218,811,148.74 - 34.67%
356
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
XIV Notes to key items of the company financial statements (Continued)
3. Receivables financing
31 December 2019 31 December 2018
Bank acceptance bills 30,194,682.11 29,716,205.64
As at 31 December 2019 and 31 December 2018, no receivables financing were pledged.
Rceivables financing endorsed or discounted by the Company to other parties which were not yet due at
31 December 2019 and 31 December 2018 is as follows:
31 December 2019 31 December 2018
Derecognised Not derecognised Derecognised Not derecognised
Bank acceptance bills 47,476,793.43 - 47,235,156.38 -
As at 31 December 2019 and 31 December 2018, no receivables financing were converted into accounts
receivable due to the drawer’s inability to settle the notes on the maturity date.
4. Other receivables
31 December 2019 31 December 2018
Dividend receivable 834,914.61 -
Other receivables 1,928,106,680.77 1,538,283,800.17
1,928,941,595.38 1,538,283,800.17
Dividend receivable
31 December 2019 31 December 2018
Shanghai Dingqun 834,914.61 -
357
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
XIV Notes to key items of the company financial statements (Continued)
4. Other receivables (Continued)
Other receivables
The aging of other receivables is analysed below:
31 December 2019 31 December 2018
Within 1 year 1,927,753,257.85 1,530,024,652.29
1 to 2 years 44,499,674.36 8,167,507.65
2 to 3 years 1,177,951.87 67,906.60
Over 3 years 9,080,643.69 9,034,035.21
Less: Provision for bad debts 54,404,847.00 9,010,301.58
1,928,106,680.77 1,538,283,800.17
The other receivables by category are listed below:
31 December 2019 31 December 2018
Amounts due from subsidiaries 1,913,299,778.33 1,469,192,387.91
Receivable of equity transactions 8,980,000.00 8,980,000.00
Deposit 840,318.90 1,449,978.94
Others 59,391,430.54 67,671,734.90
Less: Provision for bad debts 54,404,847.00 9,010,301.58
1,928,106,680.77 1,538,283,800.17
358
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
XIV Notes to key items of the company financial statements (Continued)
4. Other receivables (Continued)
Changes in bad debt provision for the 12-month expected credit losses and lifetime expected
credit losses on other receivables are as follows:
Stage 3
Stage 1 Stage 2
Credit-impaired
12-month Lifetime
financial assets
expected expected
(Lifetime expected
credit losses credit losses
credit losses) Total
Balance at 1 January 2019 - 30,301.58 8,980,000.00 9,010,301.58
Balance at 1 January 2019 during the period - - - -
--Transfer to Stage 2 - - - -
--Transfer to Stage 3 - - - -
--Reverse to Stage 2 - - - -
--Reverse to Stage 1 - - - -
Provisions during the period - 35,375.27 45,360,333.35 45,395,708.62
Reversal during the period - (1,163.20) - (1,163.20)
Write-back during the period - - - -
Write-off during the period - - - -
Other - - - -
Balance at 31 December 2019 - 64,513.65 54,340,333.35 54,404,847.00
Stage 3
Stage 1 Stage 2
Credit-impaired
12-month Lifetime
financial assets
expected expected
(Lifetime expected
credit losses credit losses
credit losses) Total
Balance at 1 January 2018 - 20,286.35 9,973,703.95 9,993,990.30
Balance at 1 January 2018 during the period - - - -
--Transfer to Stage 2 - - - -
--Transfer to Stage 3 - - - -
--Reverse to Stage 2 - - - -
--Reverse to Stage 1 - - - -
Provisions during the period - 14,505.33 14,505.33
Reversal during the period - (4,490.10) (993,703.95) (998,194.05)
Write-back during the period - - - -
Write-off during the period - - - -
Other - - - -
Balance at 31 December 2018 - 30,301.58 8,980,000.00 9,010,301.58
359
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
XIV Notes to key items of the company financial statements (Continued)
4. Other receivables (Continued)
The bad debt provision amount for other receivables in 2019 was RMB45,395,708.62 (2018:RMB14,505.33),
with the recovered or reversed amount of RMB1,163.20 (2018: RMB998,194.05).
The write-off amount of other receivables in 2019 was nil (2018: nil).
As at 31 December 2019, the accumulated top five other receivables are analysed below:
% of the total
other Bad debt
Nature Amount Aging receivable provision
Sinopharm Guangzhou Entrusted loans 450,000,000.00 Within 1 year 22.70% -
Sinopharm Guangxi Entrusted loans 356,000,000.00 Within 1 year 17.96% -
Sinopharm Dongguan Entrusted loans 161,000,000.00 Within 1 year 8.12% -
Sinopharm Zhangjiang Entrusted loans 117,000,000.00 Within 1 year 5.90% -
Sinopharm Meizhou Entrusted loans 76,700,000.00 Within 1 year 3.87% -
1,160,700,000.00 58.55% -
As at 31 December 2018, the accumulated top five other receivables are analysed below:
% of the total
other Bad debt
Nature Amount Aging receivables provision
Sinopharm Guangxi Entrusted loans 201,000,000.00 Within 1 year 12.99% -
Sinopharm Yuexing Entrusted loans 190,700,000.00 Within 1 year 12.32% -
Sinopharm Dongguan Entrusted loans 131,000,000.00 Within 1 year 8.47% -
Sinopharm Zhangjiang Entrusted loans 124,000,000.00 Within 1 year 8.01% -
Sinopharm Meizhou Entrusted loans 76,700,000.00 Within 1 year 4.96% -
723,400,000,00 46.75% -
5. Long-term equity investments
31 December 2019 31 December 2018
Investments in subsidiaries (a) 5,614,677,427.58 5,594,679,427.58
Investments in associates (b) 2,124,009,098.25 1,878,157,264.66
7,738,686,525.83 7,472,836,692.24
Less: Provision for impairment of
long-term equity investments 39,930,000.00 39,930,000.00
7,698,756,525.83 7,432,906,692.24
360
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
XIV Notes to key items of the company financial statements (Continued)
5. Long-term equity investments (Continued)
(a) Subsidiaries
Increases
Original investment /( decrease) Equity interest held Voting rights held
cost 1 January 2019 in investment cost 31 December 2019 (%) (%)
Sinopharm Jianming 45,054,911.04 60,054,911.04 - 60,054,911.04 100.00 100.00
Sinopharm Shenzhen
Material 5,400,000.00 15,450,875.93 - 15,450,875.93 100.00 100.00
Shenzhen Logistics 900,000.00 5,019,062.68 - 5,019,062.68 100.00 100.00
Sinopharm Guangzhou 58,283,114.68 3,588,689,716.80 - 3,588,689,716.80 100.00 100.00
Sinopharm Guangxi 33,048,985.28 525,456,951.07 - 525,456,951.07 100.00 100.00
Sinopharm Yanfeng 38,207,800.00 38,207,800.00 - 38,207,800.00 51.00 51.00
Guoda Pharmacy 1,361,800,110.06 1,361,800,110.06 - 1,361,800,110.06 60.00 60.00
Sinopharm Accord Medicial
Supply Chain (Shenzhen)
Co., Ltd. 19,998,000.00 - 19,998,000.00 19,998,000.00 60.00 60.00
5,594,679,427.58 19,998,000.00 5,614,677,427.58
(b) Associates
Changes in the year
At beginning of the Other Cash dividend Amount of
year Profit or loss under the comprehensive Other changes or profits At end of the year provision for
(Carrying amount) Investment equity method income in equity declared (Book value) impairment
Main Luck
Pharmaceutical 265,316,653.68 - 87,216,213.59 - - (58,063,500.00) 294,469,367.27 -
Zhijun Suzhou 39,930,000.00 - - - - - - 39,930,000.00
Zhijun Medicine 355,353,196.15 - 106,436,143.29 - - (61,210,764.76) 400,578,574.68 -
Zhijun Trade 8,730,994.87 - 2,318,103.99 - - (773,841.25) 10,275,257.61 -
Zhijun Pingshan 86,292,927.33 - 46,881,613.08 - - (12,296,521.67) 120,878,018.74 -
Shyndec Pharma 1,098,566,852.51 - 111,498,302.56 (133,366.19) 42,022,530.06 (16,714,220.15) 1,235,240,098.79 -
Shanghai Dingqun 23,966,640.12 - (493,944.35) - - (834,914.61) 22,637,781.16 -
-
1,878,157,264.66 - 353,856,432.16 (133,366.19) 42,022,530.06 (149,893,762.44) 2,084,079,098.25 39,930,000.00
361
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
XIV Notes to key items of the company financial statements (Continued)
6. Operating revenue and cost
2019 2018
Revenue Cost Revenue Cost
Principal operations 4,084,112,471.45 3,901,326,725.78 3,462,663,349.53 3,306,117,780.86
Other operations 24,286,547.89 14,708,846.74 18,783,527.40 11,450,860.13
4,108,399,019.34 3,916,035,572.52 3,481,446,876.93 3,317,568,640.99
Revenue is as follows:
2019 2018
Revenue from contracts with customers 4,098,679,263.40 3,472,580,407.28
Rentals 9,719,755.94 8,866,469.65
4,108,399,019.34 3,481,446,876.93
Disaggregation of revenue from contracts with customers is as follows:
2019 2018
Place of business
China 4,098,679,263.40 3,472,580,407.28
Type of major activities
Pharmaceutical distribution 4,084,112,471.45 3,462,663,349.53
Others 14,566,791.95 9,917,057.75
4,098,679,263.40 3,472,580,407.28
Type of major goods
Pharmaceuticals 3,936,812,220.01 3,368,695,671.79
Medical devices and disposables 129,344,291.79 74,841,882.41
Diagnostic reagents 17,704,322.48 11,294,169.92
Medical equipments 251,637.17 7,831,625.41
Others 14,566,791.95 9,917,057.75
4,098,679,263.40 3,472,580,407.28
Timing of revenue recognition
At a point in time
Sale of goods 4,084,112,471.45 3,462,663,349.53
Over time
Providing services 14,566,791.95 9,917,057.75
4,098,679,263.40 3,472,580,407.28
362
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2019 Expressed in Renminbi Yuan
XIV Notes to key items of the company financial statements (Continued)
6. Operating revenue and cost (Continued)
Revenue recognised that was included in contract liabilities at the beginning of the year is as
follows:
2019 2018
Sale of goods 4,182,083.40 1,912,503.90
The Company has recognised contract liabilities in total of RMB7,293,184.46 through the sale of
goods and provision of services in the current year. The expected revenue recognition time for the
Company’s contract obligations above is in year 2020.
Information about the Company’s performance obligations is summarised below:
(1) Revenue is recognised when control of the goods has transferred and payment is generally
due within 30 to 210 days from delivery;
(2) Revenue is recognised in the service duration and the payment is generally due within 30 to
210 days since the service is completed.
7. Investment income
2019 2018
Gain on long-term equity investments under
the cost method 809,260,600.24 361,514,454.31
Gain on long-term equity investments under
the equity method 353,856,432.16 342,730,085.14
Income from the derecognition of financial
assets measured at amortised cost (4,379,465.57) (1,688,557.15)
1,158,737,566.83 702,555,982.30
363
Supplementary information to financial statements
1.Schedule of non-recurring profit or loss
Amount for 2019
Gains and losses on disposal of non-current assets,
including write-off of an accrued asset impairment 2,340,925.97
Government grants recognised in the income statement for the current year, except for those
closely related to the ordinary operation of the Company which the Group enjoyed
constantly according to the allotment standards or quantitative criteria of the country 49,299,242.48
The investment cost of an enterprise to acquire a subsidiary, an associate and a joint venture,
which is less than profits derived from the fair value of the identifiable net assets of the
invested unit when investing 14.65
Reversal of bad debt provision for accounts receivable that were tested for
impairment individually 1,310,345.38
Profit or loss from outward entrusted loans 3,460,037.16
Non-operating income and expenses other than the aforesaid items 17,179,002.78
Other 508,168.93
74,097,737.35
Impact on income tax (17,317,723.70)
Impact on non-controlling interests after tax (12,256,102.61)
44,523,911.04
Basis for preparation of the detailed list of non-recurring profit or loss items:
Under the requirements in Explanatory announcement No. 1 on information disclosure by companies
offering securities to the public – non-recurring profit or loss (2008) (“Explanatory announcement
No.1”) from the CSRC, non-recurring profit or loss refers to those arising from transactions and
events that are not directly relevant to ordinary business, or that are relevant to ordinary business, but
are so extraordinary that would have an influence on users of financial statements in making proper
judgements on the performance and profitability of an enterprise.
364
Supplementary information to financial statements (Continued)
2.Return on equity (“ROE”) and earnings per share (“EPS”)
Weighted
Basic EPS
2019 average ROE
(RMB)
(%)
(Note 1)
Net profit attributable to the ordinary shareholders of the parent 10.43 2.97
Net profit after deducting non-recurring profit or loss attributable
to the Company’s ordinary shareholders of the parent 10.06 2.87
Weighted
Basic EPS
2018 average ROE
(RMB)
(%)
(Note 1)
Net profit attributable to the ordinary shareholders of the parent 11.56 2.83
Net profit after deducting non-recurring profit or loss attributable
to the ordinary shareholders of the parent 11.22 2.75
The above-mentioned return on net assets and earnings per share were calculated according to the
Information Disclosure and Presentation Rules for Companies Making Public Offering of Securities No.9
– Calculation and Disclosure of Return on Net Assets and Earnings Per Share (revision 2010) issued by
the CSRC.
Note 1: There were no potential dilutive ordinary shares for the year ended 31 December 2019 (2018:
Nil), and hence, no presentation of diluted EPS were provided.
365
Section XIII. 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 auditing report with seal of the CPA and signature & seal of the registration accountant;
3. 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;
4. Original text of the annual report with signature of the Chairman;
5. The Place Where the document placed: Office of Secretariat of the Board of Directors, Sinopharm Accord
Bldg., No. 15, Ba Gua Si Road, Futian District, Shenzhen
China National Accord Medicines Corporation Ltd
Legal representative: Lin Zhaoxiong
22 April 2020
366
