The 2011 First Quarterly Report of Livzon Pharmaceutical Group Inc.
Stock code: 000513, 200513 Stock abbreviation: Livzon Group, Livzon B Announcement No: 2011-13
The 2011 First Quarterly Report of Livzon Pharmaceutical Group Inc.
§1 Important notice
1.1 The Board of Directors (BOD), Board of Supervisors (BOS), directors, supervisors, and senior executives
hereby guarantee that the data in the present report contain no false representation, misleading statements and
serious omissions, and shall be severally and jointly liable for the authenticity, accuracy and completeness of the
content.
1.2 The first quarterly report has not been audited by any accountants firms.
1.3 Mr. Zhu Baoguo, principal of the Company, Mr. An Ning, the principal in charge of accounting, and Ms. Si
Yanxia, the principal of the Accounting Department hereby declare: We guarantee the authenticity and
completeness of the Financial Report in this quarterly report.
§2 Brief introduction of the Company
2.1 Financial highlights
Unit :( RMB) Yuan
End of this report Increase or decrease
End of previous Year
period (%)
Total assets (RMB Yuan) 3,855,913,664.24 3,661,991,627.95 5.30%
Owners’ equity attributable to the shareholders of listed
2,640,631,605.39 2,517,438,110.24 4.89%
company (RMB Yuan)
Share capital (share) 295,721,852.00 295,721,852.00 0.00%
Net assets per share attributable to the shareholders of listed
8.93 8.51 4.94%
company (RMB Yuan/share)
End of this report Same period in Increase or decrease
period previous year (%)
Total operating income (RMB Yuan) 749,385,019.01 649,272,090.29 15.42%
Net profit attributable to the shareholders of listed company
125,815,417.35 126,624,416.91 -0.64%
(RMB Yuan)
Net cash flows from operating activities (RMB Yuan) 118,304,818.20 168,502,351.48 -29.79%
Net cash flows per share from operating activities (RMB
0.40 0.57 -29.82%
Yuan/share)
Basic profit per share (RMB Yuan/share) 0.43 0.43 0.00%
Diluted profit per share (RMB Yuan/share) 0.43 0.43 0.00%
Down 0.84
Weighed average yield rate of net assets (%) 4.88% 5.72%
percentage points
Weighed average yield rate of net assets after deduction of Down 1.01
4.46% 5.47%
non-recurring profit and loss (%) percentage points
Items of non-recurring profit and loss
√ Applicable □ Inapplicable
Unit :( RMB) Yuan
Amount from the year
Items of non-recurring profit and loss beginning to end of report Remarks
period
Profit and loss in disposal of non-circulation assets 302,414.96
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The 2011 First Quarterly Report of Livzon Pharmaceutical Group Inc.
Governmental allowance accrued to the current profit and loss, except
those that are closely related to the normal operation businesses of Financial allowance that
10,110,594.20
company, comply with the national policies, and are continuously granted the company has got.
based on the certain standard quota or certain quantity
Except the effective hedge business related to the normal operation
The profit and loss in the
business of the company, the profit and loss in the changes of fair values
changes of fair values of
caused by the holding of tradable financial assets and tradable financial 1,561,018.53
tradable financial assets
liabilities as well as the investment returns in disposal of tradable financial
held by the company.
assets, tradable financial liabilities and saleable financial assets
Other net non-operating income and payment except the above items 1,209,605.53
Subtotal 13,183,633.22
Minus: Effect of income tax 1,791,505.08
Effect of the minority of shareholders’ equities 488,889.13
Total 10,903,239.01
2.2 Table about total quantity of all shareholders and shareholding particulars of top ten shareholders
without trading restriction at the end of report period
Unit: share
Total quantity of shareholders at the end of report The shareholder quantity of the company amounted to 21,634 (including 8,146
period B-share holders)
Shares held by top ten tradable shareholders without trading restriction
Quantity of tradable shares without
Shareholder name (full name) trading restriction at the end of report Type
period
Domestic non-state-owned legal
Joincare Pharmaceutical Group Industry Co., Ltd 77,510,167
person
Tiancheng Industry Co., Ltd 45,769,070 Foreign legal person
First Shanghai Securities Co., Ltd 10,914,566 Foreign legal person
GAOLING FUND,L.P. 9,035,892 Foreign legal person
Dacheng Value Growth Securities Investment Fund 8,726,267 Others
Agricultural Bank of China- Greatwall Anxin Return Mixed
6,200,020 Others
Securities Investment Fund
Domestic non-state-owned legal
Shenzhen Haibin Pharmaceutical Co., Ltd 5,892,943
person
Bank of Communications- Great Wall Jiufu Core Growth
5,005,625 Others
Stock-type Securities Investment Fund (LOF)
Bank of Communications – Bosera New Growth Stock-type
4,426,638 Others
Securities Investment Fund
Agricultural Bank of China – LOF 3,855,422 Others
§3 Major events
3.1 Great changes and reasons of main financial statement items and financial indexes of the Company
√ Applicable □ Inapplicable
3.1.1 Major changes of items in balance sheet
Amount at the
Amount at the end
beginning of Increase or
Item of period (RMB Cause
period (RMB decrease
Yuan)
Yuan)
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The 2011 First Quarterly Report of Livzon Pharmaceutical Group Inc.
The relocation project of new factory of Livzon
Pharmaceutical Factory has been partly
Engineering under
145,477,281.15 317,906,371.50 -54.24% completed, and the engineering under
construction
construction has been transferred to the fixed
assets.
The engineering goods of Limin Pharmaceutical
Engineering goods 4,126,139.10 25,195,844.94 -83.62% factory under the company has been transferred
to the engineering under construction.
The company issued the short-term bonds
Short-term loans 405,830,410.00 207,460,286.80 95.62%
during the report period.
Non-current
The company repaid the loans to banks during
liabilities due within 400,000.00 70,400,000.00 -99.43%
the report period.
one year
Long-term loans 1,200,000.00 66,796,116.23 -98.20% The company repaid the loans to banks.
The company obtained the special funds for
Deferred profit 43,532,140.59 28,556,183.49 52.44%
strategic new industry.
3.1.2 Major change of items in Profit Statement
Amount in this Amount in
Change
Item period (RMB previous period Cause
rate
Yuan) (RMB Yuan)
During the report period, the company has
withdrawn the City construction tax and educational
Operating tax and
8,351,082.68 1,061,215.85 686.94% expense surtax, and the enterprises in Guangdong
surtax
Province withdrew the local educational expense
surtax.
The sales income about preparations-type products
Sales expense 174,436,383.41 133,960,772.16 30.21%
has increased.
The interests income of deposits in banks has
Financial expense -1,365,483.72 1,272,933.71 -207.27%
increased.
Returns from the 1,541,484.96 3,398,436.32 During the report period, the prices of securities
-54.64%
changes of fair values market have fluctuated.
Non-operating income 11,690,162.11 3,459,766.27 During the report period, the governmental
237.89%
allowances have increased.
3.1.3 Major change of items in cash flow Statement
Amount in this Amount in
Change
Item period (RMB previous period Cause
rate
Yuan) (RMB Yuan)
The amount from tax refunding received by the
Tax refunding 4,537,980.89 130.37%
1,969,870.42 trading company under the Company has increased.
Other cash received
During the report period, the company obtained the
related to other 43,940,368.04 193.12%
14,990,719.05 financial allowances.
operating activities
The company funds are sufficient due to the bonds
Cash from loans 59,215,460.00 -46.09% financing, so the company has not increased any
109,851,250.00
new loans.
Cash received from During the report period, the company issued the
200,000,000.00 - -
the issuing of bonds short-item bonds.
During the report period, the loans that the
Repayments of loans 194,568,876.34 109,836,600.00 77.14%
company repaid to banks have increased.
3.2 Analysis and particulars of major events, their effects and resolutions
□ Applicable √ Inapplicable
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The 2011 First Quarterly Report of Livzon Pharmaceutical Group Inc.
3.2.1 Non-standard opinions
□ Applicable √ Inapplicable
3.2.2 Particulars about the Company providing the capitals to the controlling shareholders and their
associated parties or providing the external guaranty by violating the relevant regulations and procedures
□ Applicable √ Inapplicable
3.2.3 Particulars about the company signing and performing the major routine operation contracts.
□ Applicable √ Inapplicable
3.2.4 Others
√ Applicable □ Inapplicable
The 2010 second temporary shareholder’s meeting of Livzon Group was convened on July 30, 2010. The meeting examined and
passed the Proposal of the Company on Applying for the Issuing of the Short-Tem Financing Bonds. The meeting resolution was
published in Securities Times, China Securities Journal, and Juchao Website (Announcement No. 2010-22) on July 31, 2010. By the
end of report period, the company has completed the issuing of the 2011 first phase of short-term financing bonds of RMB 200
million Yuan, and the above capitals have been completely available on March 7, 2011.
3.3 Performance of commitments by the Company, shareholders and actual controllers
√Applicable □Inapplicable
(I) Commitments of the Company
1. In 2002, This Company signed the patent license agreement with Korea Yiyang Medicine Company. This agreement approves our
company’s exclusive and irrevocable right to use the patent PPI (proton pump inhibitor) compound and Yiyang patent in China
including Hong Kong and Macao for the purpose of production, processing and distribution. The transfer fee will be USD 2.50
million, and by December 31, 2008, the company has fully paid it. The company agrees to give Yiyang the commission of 10% of
sales amount during the first three years when this product begins to be sold, 8% of sales amount during the next five years, and 6%
of sales amount from the remaining time to July 22, 2014 (the expiry date of agreement). Since 2009, the company has started the
sales and paid the commissions in accordance with the agreement.
2. In 2005, the company signed the approval and supply agreement with Korea LG life science Ltd. (hereinafter referred to as LG
Company), and it grants Gemifloxacin Mesylate with the relevant certificates about intellectual properties and specifies that the
permission fees of the methanesulfonic acid spasmolytic and pellet will be USD1, 000,000 respectively (they have been fully paid by
December 31, 2006). This agreement specifies as follows:
Within the first five years from the validity date of the agreement, the company’s net sales volume of above final pellet products will
amount to 1.5 million bags (3 pellets in each bag) and LG Company will refund USD 500,000 after the taxation at one time within
two months after the company has submitted the net sales volume certificate. At the same time, during the validity period of the
agreement (by the end of 2015), the company should pay a royalty of 1.5% of net sales volume after the taxation to LG Company
during 30 days after each quarter. The company has begun the selling activities in 2008 and paid the royalties in accordance with the
agreements.
Within the first five years from the validity date of the agreement, the company will pay a royalty of 10% of net sales volume after
the taxation about injection products to LG Company within 30 days after each quarter. The company will pay a royalty of 6% of net
sales volume after the taxation about injection products to LG Company within 30 days after each quarter from the sixth business
year to the expiry date of agreement (by the end of 2019).
(II) Commitments of shareholders holding over 5% of total shares of the company
During the report period, the controlling shareholder Joincare made the following commitments while handling the restriction release
of shares with trading restriction: 1. When Joincare transfers its tradable shares of Livzon Group whose trading restriction has been
released, it will strictly comply with the relevant regulations of the Guiding Opinions on the Listed Companies’ Transfer of Original
Shares Released from Trading Restrictions ([2008] No. 15 announcement) issued by China Securities Regulatory Commission. (2)
Joincare plans to reduce its tradable shares of Livzon Group whose trading restriction has been released through the competing price
trading system in the stock exchange in the future and the reduced quantity of shares amounts to over 5% within 6 months from the
first reduction, then Joincare will disclose the reminder announcement about the selling affairs via Livzon Group in 2 trading days
before the first reduction.
During the report period, Joincare did not decrease the stocks issued by the company.
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The 2011 First Quarterly Report of Livzon Pharmaceutical Group Inc.
3.4 Warning and relevant reasons for the forecast that the accumulative net profit from the beginning of
2010 to the end of next report period may suffer from any loss or have any great changes over the same
period of previous year
□ Applicable √ Inapplicable
3.5 Particulars about Other Major events
3.5.1 Particulars about Securities investment
√ Applicable □ Inapplicable
Unit :( RMB) Yuan
Percentage of
Book Values at total Profit and loss
Initial investment Holding
Securities Securities Securities the end of investment in during the
No. amount (RMB quantity
Type Code abbreviation period (RMB the securities report period
Yuan) (share)
Yuan) at the end of (RMB Yuan)
period (%)
1 Stock 00135 Kunlun Energy 6,768,572.18 1,500,000 15,665,850.00 26.64% 431,760.90
Shenzhen
2 Stock 00152 9,714,948.71 17,000,000 9,736,410.00 16.55% 287,840.60
International
China National
3 Stock 00883 Offshore Oil 2,759,846.90 560,000 9,244,536.00 15.72% 549,944.86
Corporation
4 Stock 02007 Phoenix Island 20,079,949.37 2,450,000 7,015,942.50 11.93% 871,141.11
5 Stock 01880 Baili Company 2,257,545.69 428,000 5,140,487.58 8.74% 405,821.38
Rainbow
6 Stock 00438 6,020,712.22 5,016,000 5,069,671.20 8.62% -636,974.32
group
China Railway
7 Stock 00390 Engineering 1,544,040.12 314,000 1,327,621.83 2.26% -156,839.26
Group Co.
8 Stock 00968 Little sheep 573,540.48 212,000 923,139.69 1.57% 46,664.04
9 Stock 01688 Alibaba 895,837.96 78,000 876,377.97 1.49% -25,152.69
China Railway
10 Stock 01186 Construction 1,037,742.78 114,000 775,813.32 1.32% -118,468.56
Corporation
Other securities investment at the end of this
2,667,391.34 - 3,040,183.95 5.17% -94,719.53
period
Profit and loss of sold Securities investment
- - - - 0.00
during the report period
Total 54,320,127.75 - 58,816,034.04 100% 1,561,018.53
Explanation about securities investment: The above securities investments are the investments in the H-share market. The amounts of
H-share investment have been converted to RMB at the exchange rate at the end of report period.
3.5.2 Shareholding particulars in other listed companies
√ Applicable □ Inapplicable
Securities Securities Initial investment Percentage Book value at the
Change of
code abbreviation capital in total end of this period Profit and loss
owners’ interests
shares of during the
during the report
this report period
period
Company
Bank of
601328 2,450,179.00 0.002% 7,853,178.68 289,836.12
Communications
-
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The 2011 First Quarterly Report of Livzon Pharmaceutical Group Inc.
Huadong
000963 Medicine Co., 39,851.86 0.021% 2,408,001.70 - -601,542.63
Ltd
Total 2,490,030.86 10,261,180.38 - -311,706.51
3.5.3 Associated transactions related to routine operation
√ Applicable □ Inapplicable
3.5.3.1 Purchase of Commodities
Unit :( RMB) Yuan
January to March January to March
Name of Associated Party
2011 2010
Jiaozuo Joincare Pharmaceutical Group Industry Co., Ltd 31,226,581.22 59,915,025.59
Joincare Pharmaceutical Group Industry Co., Ltd 39,384.62 -
Shenzhen Haibin Pharmaceutical Co., Ltd - 1,095,512.82
Total 31,265,965.84 61,010,538.41
3.5.3.2 Sales of Commodities
Unit :( RMB) Yuan
January to March January to March
Name of Associated Party
2011 2010
Zhuhai Joincare Pharmaceutical Group Industry Co., Ltd 2,501.79 19.79
3.5.3.3 Provisions of labors
Unit :( RMB) Yuan
January to March January to March
Name of Associated Party
2011 2010
Guangdong Blue Treasure Pharmaceutical Co. Ltd 2,442,401.29 2,327,905.74
3.5.3.4 Leasing of Assets
Unit :( RMB) Yuan
January to March January to March
Name of Associated Party
2011 2010
Zhuhai Joincare Pharmaceutical Group Industry Co., Ltd 51,714.00 25,857.00
Health Pharmaceutical (China) Co., Ltd 24,987.00 24,987.00
Total 76,701.00 50,844.00
3.5.4 Activities that the Company receives the investigation, communication and interview, etc
Reception date Reception place Reception Objects Discussion topics and provided
mode materials
Local Production and operation status of the
January 18, 2011 Headquarters CLSA Asia-Pacific Markets
investigation Company
Local Franklin Templeton Sealand Fund Production and operation status of the
January 18, 2011 Headquarters
investigation Management Co., Ltd Company
Local UBS SDIC Fund Management Production and operation status of the
January 18, 2011 Headquarters
investigation Co., Ltd Company
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The 2011 First Quarterly Report of Livzon Pharmaceutical Group Inc.
3.6 Particulars about derivative investments
□ Applicable √ Inapplicable
3.6.1 Holding particulars about derivative investments at the end of report period
□ Applicable √ Inapplicable
Livzon Pharmaceutical Group Inc.
Chairman: Zhu Baoguo
April 23, 2011
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