The 2012 Third Quarterly Report of Livzon Pharmaceutical Group Inc.
The 2012 Third Quarterly Report of Livzon Pharmaceutical Group Inc.
I. Important notice
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.
All directors attended the shareholders’ meeting that examined this report.
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.
II. Brief introduction of the Company
(II) Financial highlights
2012.9.30 2011.12.31 Increase or decrease (%)
Total assets (RMB Yuan) 5,463,602,547.19 4,602,908,981.74 18.70%
Owners’ equity attributable
to the shareholders of listed 2,917,553,597.53 2,843,169,706.20 2.62%
company (RMB Yuan)
Share capital (Share) 295,721,852.00 295,721,852.00 0%
Net asset per share
attributable to the
9.87 9.61 2.71%
shareholders of listed
company (RMB Yuan/share)
Increase or decrease Increase or decrease
July to September compared with the January to compared with the
2012 same period of September 2012 same period of
previous year (%) previous year (%)
Total operating
1,024,017,114.12 29.23% 2,909,014,289.56 28.50%
income(RMB Yuan)
Net profit attributable to
shareholders of listed 114,925,845.48 91.57% 343,630,861.87 22.35%
company(RMB Yuan)
Net cash flows from
operating activities (RMB -- -- 529,219,276.51 29.70%
Yuan)
Net cash flows per share
from operating activities -- -- 1.79 29.71%
(RMB Yuan/share)
Basic profit per share (RMB
0.39 95% 1.16 22.11%
Yuan/share)
Diluted profit per share
0.39 95% 1.16 22.11%
(RMB Yuan/share)
Weighed yield rate of net Up 1.66 percentage po Up 1.29 percentage p
3.93% 11.93%
asset（%） ints oints
Weighed yield rate of net
assets after deduction of Up 1.05 percentage po Up 1.01 percentage
3.80% 11.41%
non-recurring profit and loss ints points
（%）
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The 2012 Third Quarterly Report of Livzon Pharmaceutical Group Inc.
The items of non-recurring profit and loss (January to September 2012)
Amount from the
Items of non-recurring profit and loss year beginning to Note
end of report period
Profit and loss in disposal of non-circulation assets -2,619,231.64
Governmental allowance accrued to the current profit
and loss (except those that are closely related to the
normal operation businesses of company, comply
15,039,354.11
with the national policies, and are continuously
granted based on the certain standard quota or
certain quantity)
Except the effective hedge business related to the
normal operation business of the company, the profit
and loss in the changes of fair values caused by the
holding of tradable financial assets and tradable 6,392,098.36
financial liabilities as well as the investment returns in
disposal of tradable financial assets, tradable
financial liabilities and saleable financial assets
Other net non-operating income and payment except
529,231.20
the above items
Other profit and loss items that comply with the non-
0.
recurring profit and loss definition
Subtotal 19,341,452.03
Minus: effect of equities attributable to the minority of
3,554,087.31
shareholders
Minus: effect of income tax 761125.26
Total 15,026,239.46 --
(II) Table about total quantity of all shareholders and shareholding particulars of top ten
shareholders at the end of report period
Total quantity of
shareholders at the end of The shareholder quantity amounted to 23,004 (including 8,296 B-share holders)
report period
Shares held by top ten shareholders without trading restriction
Quantity of shares Share type and quantity
without trading
Shareholder name restriction at the
end of report Type Quantity
period
Joincare Pharmaceutical Group
77,510,167 RMB Common share 77,510,167
Industry Co., Ltd
Tiancheng Industry Co., Ltd Domestically-listed shares
50,660,052 50,660,052
for overseas investors
Domestically-listed shares
GAOLING FUND,L.P. 10,258,112 10,258,112
for overseas investors
Domestically-listed shares
First Shanghai Securities Co., Ltd 10,219,770 10,219,770
for overseas investors
Agricultural Bank of China – LOF 6,968,803 RMB Common share 6,968,803
Shenzhen Haibin Pharmaceutical Co.,
5,892,943 RMB Common share 5,892,943
Ltd
Agricultural Bank of China –Greatwall
Anxin Huibao Mixed Securities 5,700,000 RMB Common share 5,700,000
Investment Fund
Industrial and Commercial Bank of 4,783,021 RMB Common share 4,783,021
China – Jiashi Strategic Growth Mixed-t
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The 2012 Third Quarterly Report of Livzon Pharmaceutical Group Inc.
ype Securities Investment Fund
Bank of Communications – Greatwall
Jiufu Core Growth Stock-type 4,725,389 RMB Common share 4,725,389
Securities Investment Fund (LOF)
Agricultural Bank of China - Invesco
Great Wall Internal Demand Growth II 4,422,792 RMB Common share 4,422,792
Stock-type Securities Investment Fund
III. Major events
(I) Great changes and reasons of main financial statement items and financial indexes of the
Company
√ Applicable □ Inapplicable
1. Items in the Balance Sheet
Items in the
Change
Balance 2012.9.30 2011.12.31 Reason
Sheet rate
Accounts The main reason is the increase of sales
742,315,684.79 562,146,013.18 32.05%
receivable incomes.
Other
The main reason is the increase of advance
accounts 59,213,582.77 44,488,052.86 33.10%
money in the sales business.
receivable
Engineering The main reason is the increase of expenses in
under 841,353,722.78 148,841,628.16 465.27% the new factory construction and technical
construction improvement.
The main reason is that the technical
Engineering improvement equipment purchased by Limin
3,543,796.60 2,536,926.00 39.69%
goods Pharmaceutical Factory has not been installed
for the time being.
The main reasons include:1) the increase of raw
Accounts materials purchased by all production
310,282,503.70 207,941,294.31 49.22%
payable enterprises;2) the increase of unsettled
engineering projects in the headquarters.
The main reason is that the difference between
Capital the equities of the minority of shareholders in
227,795,132.23 348,093,136.41 -34.56%
reserve Limin Pharmaceutical Factory and net asset
shares offset the capital reserve.
The main reason is the interests of short-term
Interests
5,538,181.90 16,841,492.68 -67.12% financing bonds of RMB 400 million Yuan that
payable
has been due.
2. The items in the Profit Statement from the year beginning to the end of report period
January to January to
Items in the Profit Change
Statement
September September Reason
2012 2011 rate
The main reason is the increase of city construction
Operating tax and 28,300,021.2
40,442,078.86 42.90% tax and education surtax that are withdrawn due to
surtax 2
the increase of sales incomes.
1,062,612,062.7 658,489,170. The main reason is the increase of relevant business
Sales expense 61.37%
2 63 investments due to the increase of sales incomes.
Asset depreciation 10,790,557.0 The main reason is the increase of bad debt loss
18,031,136.93 67.10%
loss 1 and depreciation loss of inventory.
Profits from the - The main reason is the increase of changes of fair
changes of fair 4,800,246.93 15,329,948.1 131.31% values of tradable financial assets held by the
values 8 company.
The main reason is the increase of investment
Investment returns 1,668,506.76 1,142,974.78 45.98%
returns from associated enterprises.
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The 2012 Third Quarterly Report of Livzon Pharmaceutical Group Inc.
The main reason is the decrease of governmental
Non-operating 27,503,971.0
15,945,423.03 -42.03% allowance that is accrued to the profit and loss in this
incomes 7
period.
3. Items in the Cash Flow Statement
Items in the Cash January to January to Change
Flow Statement September 2012 September 2011
Reason
rate
Cash received from
2,979,324,386.9 2,229,443,047.4 The reason is the expansion of sales
sales of goods or 33.64%
4 5 business and increase of sales incomes.
rendering of services
The main reason is that the company has
increased the export rebate amount due to
Tax refunding 15,341,233.91 6,213,246.47 146.91%
the increase of product export in
Xinbeijiang Company.
The reason is the increase of governmental
financial allowance received by the group
Other cash received
as well as the research expense about
related to operating 193,038,701.95 83,981,322.58 129.86%
Shenqi and technical improvement
activities
engineering deposit received by Limin
Pharmaceutical Factory.
Other cashes paid to 1,251,391,775.8 The reason is the increase of payments
644,907,743.38 94.04%
operating activities 3 due to the expansion of sales business.
Cash paid to acquire
and construct fixed
The main reason is the increase of cashes
assets, intangible 669,948,180.40 209,089,094.21 220.41%
paid for Ningxia Industrial Park project.
assets and other long-
term assets
The main reason is that, in last
year,Dankang Company and Wenshan
Cash received from Livzon Company received the investments
- 11,270,000.00 -100.00%
investors from other shareholders, but from January
to September of this year, they have not
received any investments.
502,257,886.6 The main reason is the increase of short-
Cash from loans 172,745,504.00 190.75%
term loans of banks.
4
The main reason is the repayment of short-
620,250,531.1
Repayments of loans 299,293,208.34 107.24% term financing bonds of RMB 400 million
6 Yuan that has been due.
Cash paid for
The main reason is the increase of cashes
distribution of 199,049,650.2
dividends, profits and
56,998,779.07 249.22% paid by the company while implementing
2 the 2011 profit distribution plan.
repayment of interests
(II) Analysis and particulars of major events, their effects and resolutions
1. Non-standard opinions
□ Applicable √ Inapplicable
2. Particulars about the company providing the funds to its controlling shareholders or its
associated parties, or proving the guaranty to foreign parties by violating the specified
procedures
□ Applicable √ Inapplicable
3. Particulars about execution and performance of key contracts about routine operation
□ Applicable √ Inapplicable
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The 2012 Third Quarterly Report of Livzon Pharmaceutical Group Inc.
4. Others
□ Applicable √ Inapplicable
(III) Performance of commitments by the Company or shareholders holding over 5% of total
shares that occur in the report period or continue to the report period
(I) Commitments
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 in order to 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 deduct a percentage for
Yiyang according to 10% of sales amount during the first three years when this product begins to be sold. And deduct a
percentage according to 8% of sales amount during the next five years. And deduct a percentage according to 6% of sales
amount from the remaining time to July 22, 2014 (the expiry date of agreement). Since 2009, the company has begun to sell
the products and pay a specified percentage of sales volume to Yiyang as a commission 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 (It has 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 Jimishaxing pellet 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. Since 2008, the
company has begun to sell the products and pay a specified royalty to LG Company in accordance with the agreement.
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
The controlling shareholder Joincare Pharmaceutical Group Industry Co., Ltd made the following commitments while handling
the formalities to cancel trading restriction of shares: 1. If 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. If 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, 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 its shareholding quantity of this company.
(IV) Forecast about operating performance in 2012
Warning and relevant reasons for the forecast that the accumulative net profit from the
beginning of 2012 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
(V) Particulars about Other Major events
1. Particulars about Securities investment
√ Applicable □ Inapplicable
Percentag Profit and
Initial
Holding Book Values e of total loss during
Securities Securities Securities investment
No. quantity at the end of investment the report
Type Code abbreviation amount in the
(share) period period
(RMB Yuan) securities (RMB Yuan)
at the end
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The 2012 Third Quarterly Report of Livzon Pharmaceutical Group Inc.
of period
(%)
Kunlun 16,658,993.4 1,517,470.5
1 Stock 00135 6,572,245.42 1,500,000 34.62%
Energy 0 2
Shenzhen
2 Stock 00152 9,433,160.41 17,000,000 7,368,558.20 15.31% 761,287.61
International
China
National
3 Stock 00883 2,679,795.77 560,000 7,281,869.28 15.13% 229,512.53
Offshore Oil
Corporation
Phoenix 19,497,517.5
4 Stock 02007 2,570,317 6,348,211.08 13.19% -20,067.03
Island 9
Baili
5 Stock 01880 2,192,064.14 428,000 4,914,378.52 10.21% 320,442.46
Company
Rainbow
6 Stock 00438 5,846,077.61 5,016,000 1,230,655.54 2.56% -163,997.37
group
China Railway
7 Stock 00390 Engineering 1,499,254.24 314,000 870,536.68 1.81% 52,223.86
Group Co.
China Railway
8 Stock 01186 Construction 1,007,642.38 114,000 647,026.47 1.34% 49,515.68
Corporation
Sinotrans
9 Stock 00368 1,760,268.15 260,500 372,823.69 0.77% -21,174.31
Shipping
Penghua
10 Stock 206001 150,000.00 619,572.96 509,660.72 1.06% -37,731.99
Fund
Other securities investment at the end of this period 831,913.03 -- 1,919,682.78 3.99% 0.00
Profit and loss of sold Securities investment during
-- -- -- -- 577.83
the report period
51,469,938.7 48,122,396.3 2,688,059.7
Total -- 100%
4 6 9
Remarks about securities investment: in above securities investment, the investment amount of H-share of H-share
market of Hongkong has been converted to RMB amount at the exchange rate issued on September 30, 2012.
2. Investments in derivative products
□ Applicable √ Inapplicable
3. Holding particulars about derivative products during the report period
□ Applicable √ Inapplicable
4. List of Activities in which the Company receives the investigation, communication and
interview, etc during the report period
Reception Recepti Recept Objects Discussion topics and
Types of
date on ion provided materials
objects
place mode
Headquar Local
Greatwall Fund Operation status of the Company;
August 27, 2012 ters investigat Agency
Management Co., Ltd provide no text materials
ion
Headquar Local Invesco Great Wall Fund
ters Operation status of the Company;
August 27, 2012 investigat Agency Management Company
provide no text materials
ion Limited
August 28, 2012 Headquar Local inv Agency Shanghai Great Wisdom Operation status of the Company; p
6
The 2012 Third Quarterly Report of Livzon Pharmaceutical Group Inc.
ters estigation Co., Ltd rovide no text materials
Headquar Local
September 21, Industrial Securities Operation status of the Company;
ters investigat Agency
2012 Co.,Ltd provide no text materials
ion
5. Remarks about issuing the company bonds
Did the company issue the bonds?
□ Yes √ No
Remarks: On April 13, 2012, the 2011 annual shareholders’ meeting examined and approved the Proposal Of The
Company Complying With The Conditions For Issuing The Company Bonds, The Proposal Of The Company Issuing The
Company Bonds, The Proposal Of Requesting The Shareholders’ Meeting To Authorize The Board Of Directors To Fully
Handle The Issuing Of The Company Bonds and agreed that the company would issue the company bonds with the total
amount of no more than RMB 1 billion Yuan and also agreed about relevant authorization affairs(for more details, please
see the announcements passed at the 2011 annual shareholders’ meeting). At present, the company has not launched
the issuing of company bonds, and has not submitted the issuing application to China Securities Regulatory Commission.
IV. Appendix
(I) Financial Statements
1． Consolidated Balance Sheet
Prepared by: Livzon Pharmaceutical Group Inc.
Unit: RMB Yuan
Item Balance at the end of period Balance at the beginning of period
Current assets:
Currency capital 1,315,919,065.91 1,447,743,555.70
Reserve for settlement
Lending to banks
Tradable financial assets 48,122,396.36 44,343,013.65
Notes receivable 124,344,121.86 171,033,783.72
Accounts receivable 742,315,684.79 562,146,013.18
Advance money 200,341,806.28 213,817,751.28
Receivable premium
Receivable reinsurance
Receivable reserve for reinsurance
contracts
Interests receivable
Dividend receivable
Other receivables 59,213,582.77 44,488,052.86
Purchase of resold financial assets
Inventory 518,130,519.32 424,422,841.35
Non-current assets due within one year
Other current assets
Total of current assets 3,008,387,177.29 2,907,995,011.74
Non-current assets:
Release of loans and advance money
Saleable financial assets 9,626,270.64 9,238,787.30
Investment held to the maturity date
Long-term accounts receivable
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The 2012 Third Quarterly Report of Livzon Pharmaceutical Group Inc.
Long-term equity investment 119,688,732.08 118,529,007.91
Real estate for Investment
Fixed assets 1,118,594,810.75 1,090,566,880.22
Engineering under construction 841,353,722.78 148,841,628.16
Engineering goods 3,543,796.60 2,536,926.00
Liquidation of fixed assets
Production biology assets
Oil and gas assets
Intangible assets 204,041,345.10 170,385,550.58
Development expenses 1,510,153.51 1,510,153.51
Goodwill 103,040,497.85 103,040,497.85
Long-term deferred and prepaid
14,525,342.38 14,270,426.26
expenses
Assets with deferred income taxes 39,290,698.21 35,994,112.21
Other non-current assets
Subtotal of non-current assets 2,455,215,369.90 1,694,913,970.00
Total of assets 5,463,602,547.19 4,602,908,981.74
Current liabilities:
Short-term loans 538,285,555.74 251,324,743.01
Loans from central banks
Absorption of deposits and due from
banks
Borrowed capital
Tradable financial liability
Notes payable 201,382,615.68
Accounts payable 310,282,503.70 207,941,294.31
Advance accounts 28,301,105.66 39,028,703.01
Selling of repurchased financial assets
Payable formality fees and
commissions
Payroll payable 58,910,673.52 52,328,883.82
Tax payable 99,634,582.74 90,201,700.34
Interests payable 5,538,181.90 16,841,492.68
Dividend payable 2,531,984.46 2,531,984.46
Other accounts payable 675,403,688.03 460,447,555.37
Payable reinsurance payments
Reserve for insurance contracts
Acting trading securities
Acting underwriting securities
Non-current liabilities due within one
400,000.00 400,000.00
year
Other current liabilities 400,000,000.00 400,000,000.00
Total of current liabilities 2,320,670,891.43 1,521,046,357.00
Non-current liabilities
Long-term loan 1,200,000.00 1,200,000.00
Bonds payable
Long-term accounts payable
Special accounts payable
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The 2012 Third Quarterly Report of Livzon Pharmaceutical Group Inc.
Anticipation liability 59,785,075.35 67,143,287.92
Liabilities with the deferred income
2,243,430.43 1,901,504.87
taxes
Other non-current liabilities
Subtotal of non-current liabilities 63,228,505.78 70,244,792.79
Total of liabilities 2,383,899,397.21 1,591,291,149.79
Shareholders’ equities:
Share capital 295,721,852.00 295,721,852.00
Capital reserve 227,795,132.23 348,093,136.41
Minus: treasury share
Special reserve
Surplus reserve 479,211,417.19 479,211,417.19
General risk reserve
Porfit for the year 343,630,861.87
Undistributed profit 1,592,784,942.59 1,740,645,868.60
Conversion difference of foreign
-21,590,608.35 -20,502,568.00
currency financial statements
Subtotal of equities attributable to
2,917,553,597.53 2,843,169,706.20
the shareholders of parent company
Equities of the minority of
162,149,552.45 168,448,125.75
shareholders
Subtotal of owners’ equities
3,079,703,149.98 3,011,617,831.95
(shareholders’ equities)
Total of liabilities and owners’
5,463,602,547.19 4,602,908,981.74
equities (shareholders’ equities)
Legal representative: Zhu Baoguo Principal of the Financial Department: An Ning
Principal of the Accounting Department: Si Yanxia
2．Balance Sheet of Parent Company
Prepared by: Livzon Pharmaceutical Group Inc.
Unit: RMB Yuan
Item Balance at the end of period Balance at the beginning of period
Current assets:
Currency capital 1,235,577,599.86 1,321,193,456.29
Tradable financial assets
Notes receivable 14,671,762.58 11,041,114.87
Accounts receivable 334,082,401.15 255,482,126.08
Advance money 24,260,010.24 9,137,814.04
Interests receivable
Dividend receivable
Other accounts receivable 516,037,036.80 275,891,035.87
Inventory 83,117,428.46 110,291,112.80
Non-current assets due within one year
Other current assets
Total of current assets 2,207,746,239.09 1,983,036,659.95
Non-current assets:
Saleable financial assets 9,626,270.64 9,238,787.30
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The 2012 Third Quarterly Report of Livzon Pharmaceutical Group Inc.
Investment held to the maturity date
Long-term accounts receivable
Long-term equity investment 1,656,504,006.39 1,526,671,374.58
Real estate for Investment
Fixed assets 91,415,267.70 91,805,857.98
Engineering under construction
Engineering goods
Liquidation of fixed assets
Production biology assets
Oil and gas assets
Intangible assets 30,590,956.92 34,053,322.48
Development expenses 1,289,662.78 1,289,662.78
Goodwill
Long-term deferred and prepaid
expenses
Assets with deferred income taxes 13,154,004.29 12,369,049.28
Other non-current assets
Subtotal of non-current assets 1,802,580,168.72 1,675,428,054.40
Total of assets 4,010,326,407.81 3,658,464,714.35
Current liabilities:
Short-term loans 404,163,075.74 82,699,143.01
Tradable financial liability
Notes payable 481,482,615.68
Accounts payable 29,972,610.23 181,117,755.18
Advance accounts 6,515,499.51 11,373,981.60
Payroll payable 20,242,541.24 20,721,517.12
Tax payable 31,374,164.74 10,233,643.04
Interests payable 4,409,594.51 15,068,501.59
Dividend payable 20,174.46 20,174.46
Other accounts payable 1,163,194,251.11 1,390,842,714.00
Non-current liabilities due within one
year
Other current liabilities 400,000,000.00 400,000,000.00
Total of current liabilities 2,541,374,527.22 2,112,077,430.00
Non-current liabilities
Long-term loan
Bonds payable
Long-term accounts payable
Special accounts payable
Anticipation liability 15,907,258.92 24,138,969.42
Liabilities with the deferred income
taxes
Other non-current liabilities 1,070,435.98 1,012,313.47
Subtotal of non-current liabilities 16,977,694.90 25,151,282.89
Total of liabilities 2,558,352,222.12 2,137,228,712.89
Shareholders’ equities:
Share capital 295,721,852.00 295,721,852.00
Capital reserve 338,280,543.83 337,951,183.00
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The 2012 Third Quarterly Report of Livzon Pharmaceutical Group Inc.
Minus: treasury share
Special reserve
Surplus reserve 274,248,363.61 274,248,363.61
Profit for the year 78,269,749.40
General risk reserve
Undistributed profit 465,453,676.85 613,314,602.85
Conversion margin in foreign currency
statement
Subtotal of owner’s equities (or
1,451,974,185.69 1,521,236,001.46
shareholders’ equities)
Total of liabilities and owner’s
4,010,326,407.81 3,658,464,714.35
equities (shareholders’ equities)
Legal representative: Zhu Baoguo Principal of the Financial Department: An Ning
Principal of the Accounting Department: Si Yanxia
3. Consolidated Profit Statement in this report period
Prepared by: Livzon Pharmaceutical Group Inc. Unit: RMB
Yuan
Amount in same period of previous
Item Amount in this period
year
I. Total operating income 1,024,017,114.12 792,405,153.47
Including: operating income 1,024,017,114.12 792,405,153.47
Interests income
Earned premium
Formality fees and commission
incomes
II. Total operating cost 886,983,260.30 697,370,353.90
Including: operating cost 395,932,474.48 341,459,503.89
Interests payment
Formality fees and commission
payment
Refunded premium
Net amount for compensation payment
Net amount withdrawn for the reserve
of insurance contracts
Payments for the policy bonus
Amortized Reinsurance Expenditures
Operating tax and surtax 16,166,042.36 9,967,997.67
Sales expense 388,588,598.71 274,579,754.37
Management expense 82,212,107.88 74,541,335.77
Financial expense -801,453.78 -8,029,278.84
Loss from asset depreciation 4,885,490.61 4,851,040.99
Plus: returns from the changes of fair
values (the loss is listed beginning with 2,685,743.04 -15,373,818.88
“-”).
Investment returns (the loss is listed
-62,961.81 1,797,547.34
beginning with “-”).
Including: the investment returns from 1,017,790.33 -1,172,693.84
the associated enterprises and joint ent
11
The 2012 Third Quarterly Report of Livzon Pharmaceutical Group Inc.
erprises
Profits form currency exchange (the
loss is listed beginning with “-”).
III. Operating profit (the loss is listed
139,656,635.10 81,458,528.08
beginning with “-”)
Plus : non-operating income 3,385,329.24 5,252,988.04
Minus: non-operating payments 1,688,605.08 1,865,785.95
Including: loss in the disposal of non-
1,512,404.12 102,014.36
current assets
IV. Total profit (the loss is listed
141,353,359.26 84,845,730.17
beginning with “-”)
Minus: income tax expense 23,044,579.35 19,743,560.07
V. Net profit (the loss is listed
118,308,779.91 65,102,170.10
beginning with “-”)
Including: net profits of merged
enterprise before the merger
Net profit attributable to the owners of
114,925,845.48 59,991,797.25
parent company
Profit and loss of the minority of
3,382,934.43 5,110,372.85
shareholders
VI. Profit per share: -- --
(I) Basic profit per share 0.39 0.2
(II) Diluted profit per share 0.39 0.2
VII. Other comprehensive profit -1,523,140.49 -6,477,764.74
VIII. Total amount of comprehensive
116,785,639.42 58,624,405.36
profit
Subtotal of comprehensive profits
attributable to the owners of parent 113,402,704.99 53,514,032.51
company
Subtotal of comprehensive profits
attributable to the minority of 3,382,934.43 5,110,372.85
shareholders
Legal representative: Zhu Baoguo Principal of the Financial Department: An Ning
Principal of the Accounting Department: Si Yanxia
4. Profit Statement of Parent Company in this report period
Prepared by: Livzon Pharmaceutical Group Inc. Unit: RMB
Yuan
Amount in same period of previous
Item Amount in this period
year
I. Operating income 471,436,667.27 350,926,420.24
Minus: operating cost 209,389,748.05 184,610,686.13
Operating tax and surtax 5,723,238.46 2,924,561.91
Sales expense 215,296,438.44 140,356,232.00
Management expense 29,788,566.10 26,753,977.54
Financial expense 887,374.45 -8,074,313.87
Loss from asset depreciation 1,984,531.88 2,729,388.76
Plus: returns from the changes of fair
values (the loss is listed beginning with
“-”).
Investment returns (the loss is listed be -1,040,040.68 -540,987.52
12
The 2012 Third Quarterly Report of Livzon Pharmaceutical Group Inc.
ginning with “-”).
Including: the investment returns from
the associated enterprises and joint 43,028.21 -540,987.52
enterprises
II. Operating profit (the loss is listed
7,326,729.21 1,084,900.25
beginning with “-”)
Plus : non-operating income 709,580.12 25,663.33
Minus: non-operating payments 32,175.50 1,644,662.40
Including: loss in the disposal of non-
2,175.50 19,980.91
current assets
III. Total profit (the loss is listed
8,004,133.83 -534,098.82
beginning with “-”)
Minus: income tax expense 333,474.97 32,245.54
IV. Net profit (the loss is listed
7,670,658.86 -566,344.36
beginning with “-”)
V. Profit per share: -- --
(I) Basic profit per share
(II) Diluted profit per share
VI. Other comprehensive profit -26,680.83 -1,166,488.07
VII. Total amount of comprehensive
7,643,978.03 -1,732,832.43
profit
Legal representative: Zhu Baoguo Principal of the Financial Department: An Ning
Principal of the Accounting Department: Si Yanxia
5. Consolidated Profit Statement from the Beginning of Year to End of Report Period
Prepared by: Livzon Pharmaceutical Group Inc. Unit: RMB
Yuan
Amount in same period of previous
Item Amount in this period
year
I. Total operating income 2,909,014,289.56 2,263,842,654.10
Including: operating income 2,909,014,289.56 2,263,842,654.10
Interests income
Earned premium
Formality fees and commission
incomes
II. Total operating cost 2,493,758,176.28 1,906,952,893.51
Including: operating cost 1,144,684,910.76 1,018,552,911.16
Interests payment
Formality fees and commission
payment
Refunded premium
Net amount for compensation payment
Net amount withdrawn for the reserve
of insurance contracts
Payments for the policy bonus
Amortized Reinsurance Expenditures
Operating tax and surtax 40,442,078.86 28,300,021.22
Sales expense 1,062,612,062.72 658,489,170.63
Management expense 239,848,812.08 204,108,651.52
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The 2012 Third Quarterly Report of Livzon Pharmaceutical Group Inc.
Financial expense -11,860,825.07 -13,288,418.03
Loss from asset depreciation 18,031,136.93 10,790,557.01
Plus: returns from the changes of fair
values (the loss is listed beginning with 4,800,246.93 -15,329,948.18
“-”).
Investment returns (the loss is listed
1,668,506.76 1,142,974.78
beginning with “-”).
Including: the investment returns from
the associated enterprises and joint 1,159,724.22 -2,645,427.34
enterprises
Profits form currency exchange (the
loss is listed beginning with “-”).
III. Operating profit (the loss is listed
421,724,866.98 342,702,787.19
beginning with “-”)
Plus : non-operating income 15,945,423.03 27,503,971.07
Minus: non-operating payments 1,913,000.47 2,119,871.89
Including: loss in the disposal of non-
1,712,449.65 162,021.45
current assets
IV. Total profit (the loss is listed
435,757,289.54 368,086,886.37
beginning with “-”)
Minus: income tax expense 70,716,571.44 66,744,421.51
V. Net profit (the loss is listed
365,040,718.10 301,342,464.86
beginning with “-”)
Including: net profits of merged
enterprise before the merger
Net profit attributable to the owners of
343,630,861.87 280,853,492.84
parent company
Profit and loss of the minority of
21,409,856.23 20,488,972.02
shareholders
VI. Profit per share: -- --
(I) Basic profit per share 1.16 0.95
(II) Diluted profit per share 1.16 0.95
VII. Other comprehensive profit -758,679.51 -9,096,053.43
VIII. Total amount of comprehensive
364,282,038.59 292,246,411.43
profit
Subtotal of comprehensive profits
attributable to the owners of parent 342,872,182.36 271,757,439.41
company
Subtotal of comprehensive profits
attributable to the minority of 21,409,856.23 20,488,972.02
shareholders
Legal representative: Zhu Baoguo Principal of the Financial Department: An Ning
Principal of the Accounting Department: Si Yanxia
6. Profit Statement of Parent Company from the beginning of year to the end of report period
Prepared by: Livzon Pharmaceutical Group Inc.
Unit: RMB Yuan
Amount in same period of previous
Item Amount in this period
year
I. Operating income 1,330,394,470.97 946,006,255.04
Minus: operating cost 618,489,681.40 546,206,247.87
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The 2012 Third Quarterly Report of Livzon Pharmaceutical Group Inc.
Operating tax and surtax 15,007,084.06 7,137,672.34
Sales expense 578,787,562.33 286,635,513.99
Management expense 78,844,140.80 70,515,637.96
Financial expense -1,050,434.13 -16,634,251.68
Loss from asset depreciation 11,596,805.04 5,052,638.17
Plus: returns from the changes of fair
values (the loss is listed beginning with
“-”).
Investment returns (the loss is listed
50,452,050.71 98,300,968.59
beginning with “-”).
Including: the investment returns from
the associated enterprises and joint -732,296.10 -1,576,039.41
enterprises
II. Operating profit (the loss is listed
79,171,682.18 145,393,764.98
beginning with “-”)
Plus : non-operating income 1,921,939.59 284,292.64
Minus: non-operating payments 51,495.58 1,670,070.99
Including: loss in the disposal of non-
4,133.00 25,573.39
current assets
III. Total profit (the loss is listed
81,042,126.19 144,007,986.63
beginning with “-”)
Minus: income tax expense 2,772,376.79 6,886,857.76
IV. Net profit (the loss is listed
78,269,749.40 137,121,128.87
beginning with “-”)
V. Profit per share: -- --
(I) Basic profit per share
(II) Diluted profit per share
VI. Other comprehensive profit 329,360.84 -1,765,395.59
VII. Total amount of comprehensive
78,599,110.24 135,355,733.28
profit
Legal representative: Zhu Baoguo Principal of the Financial Department: An Ning
Principal of the Accounting Department: Si Yanxia
7. Consolidated cash flow statement from the Beginning of Year to End of Report Period
Prepared by: Livzon Pharmaceutical Group Inc.
Unit: RMB Yuan
Amount in same period of previous
Item Amount in this period
year
I. Cash flows from operating
activities
Cash received from sales of goods or
2,979,324,386.94 2,229,443,047.45
rendering of services
Net increase from client deposits and
deposits from other banks
Net increase from the loans from
central banks
Net increase from the loans from other
financial institutions
Cash received from the premium of
original insurance contracts
Net cash amount received from the rei
15
The 2012 Third Quarterly Report of Livzon Pharmaceutical Group Inc.
nsurance business
Net increase from receivable deposits
from the insured and investments
Net increase from disposal of tradable
financial assets
Cash from receiving the interests,
formality fees and commissions
Net increase from the loans of banks
Net increase from the repurchase
business capitals
Tax refunding 15,341,233.91 6,213,246.47
Cash received related to other
193,038,701.95 83,981,322.58
operating activities
Subtotal of cash inflow from the
3,187,704,322.80 2,319,637,616.50
operating activities
Cash paid for purchase of goods or
742,838,101.48 714,017,294.94
receiving of services
Net increase of client loans and
advance money
Net increase of deposits in central
banks and other banks
Cash used for paying the
compensation expenses in the original
insurance contracts
Cash paid for the interests, formality
fees and commissions
Cash paid for the bonus of policies
Cash paid to and on behalf of
234,507,204.82 206,159,157.98
employees
Tax payments 429,747,964.16 346,524,302.40
Other cashes paid to operating
1,251,391,775.83 644,907,743.38
activities
Subtotal of cash outflow from
2,658,485,046.29 1,911,608,498.70
operating activities
Net cash flow from operating
529,219,276.51 408,029,117.80
activities
II. Cash flow from investment
activities:
Cash received from disposal of
1,979,144.92
investments
Cash received from investment returns 1,033,253.97 1,049,579.38
Net cash received from disposal of
fixed assets, intangible assets and 315,123.60 600,700.00
other long-term assets
Net cash received in disposal of the
subcompanies and other operating
units
Cash received related to other
investment activities
Subtotal of cash inflow from the
3,327,522.49 1,650,279.38
investment activities
Cash paid to acquire and construct
fixed assets, intangible assets and 669,948,180.40 209,089,094.21
other long-term assets
Cash paid to acquire investments 75,766,298.43 77,239,971.40
16
The 2012 Third Quarterly Report of Livzon Pharmaceutical Group Inc.
Net increase from the mortgage loan
Net cash paid to acquire the
subcompanies and other operating
units
Cash paid related to other investment
activities
Subtotal of cash outflow from
745,714,478.83 286,329,065.61
investment activities
Net amount of cash flow received
-742,386,956.34 -284,678,786.23
from the investment activities
III. Cash flow from financing
activities:
Cash received from investors 11,270,000.00
Including: cash received from the
investment of minority of shareholders
in the subcompanies
Cash from loans 502,257,886.64 172,745,504.00
Cash from the issuing of short-term
400,000,000.00
financing bonds
Cash received related to other
13,250,000.00 6,200,000.00
financing activities
Subtotal of cash inflow from the
515,507,886.64 590,215,504.00
financing activities
Repayments of loans 620,250,531.16 299,293,208.34
Cash paid for distribution of dividends,
199,049,650.22 56,998,779.07
profits and repayment of interests
Including: the dividends and profits
paid to the minority of shareholders by 56,998,779.07
the subcompanies
Cash payments related to other
1,600,000.00 1,600,000.00
financing activities
Loans to subcompanies 1,600,000.00
Sub-total of cash outflow from the
820,900,181.38 416,490,766.48
financing activities
Net cash flow from financing activities -305,392,294.74 173,724,737.52
IV. Effect of foreign exchange
fluctuation on cash and cash 1,237,771.65 -2,285,521.03
equivalents
V. Net increase of cash and cash
-117,322,202.92 353,388,327.13
equivalents
Plus: Balance of cash and cash
equivalents at the beginning of the 1,432,175,794.78 353,388,327.13
period
VI Balance of cash and cash
1,314,853,591.86 1,197,870,184.72
equivalents at the end of the period
Legal representative: Zhu Baoguo Principal of the Financial Department: An Ning
Principal of the Accounting Department: Si Yanxia
8. Cash Flow Statement of Parent Company from the Beginning of Year to End of Report Period
Prepared by: Livzon Pharmaceutical Group Inc.
Unit: RMB Yuan
Item Amount in this period Amount in same period of previous
17
The 2012 Third Quarterly Report of Livzon Pharmaceutical Group Inc.
year
I. Cash flows from operating
activities
Cash received from sales of goods or
1,359,174,946.52 946,025,305.81
rendering of services
Tax refunding 98,724.31
Cash received related to other
233,975,884.89 127,641,195.39
operating activities
Subtotal of cash inflow from the
1,593,150,831.41 1,073,765,225.51
operating activities
Cash paid for purchase of goods or
571,235,760.39 573,826,849.93
receiving of services
Cash paid to and on behalf of
56,116,061.68 55,110,014.24
employees
Tax payments 132,879,456.76 71,045,139.36
Other cashes paid to operating
791,906,389.61 376,964,672.72
activities
Subtotal of cash outflow from
1,552,137,668.44 1,076,946,676.25
operating activities
Subtotal of cash outflow from operating
41,013,162.97 -3,181,450.74
activities
Net cash flow from operating
activities
Cash received from disposal of
investments
Cash received from investment returns 151,818.90
Net cash received from disposal of
fixed assets, intangible assets and 168,000.00 187,095.00
other long-term assets
Net cash received in disposal of the
subcompanies and other operating
units
Cash received related to other
52,115,596.80 99,877,008.00
investment activities
Subtotal of cash inflow from the
52,435,415.70 100,064,103.00
investment activities
Cash paid to acquire and construct
fixed assets, intangible assets and 13,976,887.82 12,749,509.10
other long-term assets
Cash paid to acquire investments 75,766,298.43 362,969,971.40
Net cash paid to acquire the
subcompanies and other operating
units
Cash paid related to other investment
126,379.95
activities
Subtotal of cash outflow from
89,743,186.25 375,845,860.45
investment activities
Net amount of cash flow received
-37,307,770.55 -275,781,757.45
from the investment activities
III. Cash flow from financing
activities:
Cash received from investors
Cash from loans 477,852,886.64 85,070,944.00
Cash from the issuing of short-term 400,000,000.00
financing bonds
18
The 2012 Third Quarterly Report of Livzon Pharmaceutical Group Inc.
Cash received related to other
financing activities
Subtotal of cash inflow from the
477,852,886.64 485,070,944.00
financing activities
Repayments of loans 559,848,551.16 190,027,800.11
Cash paid for distribution of dividends,
191,663,827.91 33,954,051.97
profits and repayment of interests
Cash payments related to other
1,600,000.00 1,600,000.00
financing activities
Loans to subcompanies 201,119,907.85 -605,504,148.33
Sub-total of cash outflow from the
954,232,286.92 -345,968,244.28
financing activities
Net cash flow from financing activities -476,379,400.28 831,039,188.28
IV. Effect of foreign exchange
fluctuation on cash and cash 308,151.43 -2,480.27
equivalents
V. Net increase of cash and cash
-72,365,856.43 586,027,551.79
equivalents
Plus: Balance of cash and cash
equivalents at the beginning of the 1,306,877,982.24 586,027,551.79
period
VI Balance of cash and cash
1,234,512,125.81 1,107,348,040.48
equivalents at the end of the period
Legal representative: Zhu Baoguo Principal of the Financial Department: An Ning
Principal of the Accounting Department: Si Yanxia
(II) Auditing report
Auditing opinion: this financial statement has not been audited.
Livzon Pharmaceutical Group Inc.
Chairman: Zhu Baoguo
October 27, 2012
19
