China National Accord Medicines Corporation Ltd.
Annual Report 2014
March 2015
Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of China National Accord Medicines Corporation Ltd. (hereinafter
referred to as the Company) hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the whole contents.
Other directors attending the Meeting for annual report deliberation except for the followed:
|||||
|-|-|-|-|
|Name of director absent|Title for absent director|Reasons for absent|Attorney|
|Wei Yulin|director|Official business|Li Zhiming|

The profit distribution plan that deliberated and approved by the Board is: based on total stock issued 362,631,943 shares, distributed 2.00 Yuan (tax included) bonus in cash for every 10-share hold by all shareholders, 00 shares bonus issued (tax included) and no capitalizing of common reserves carried out.
Yan Zhigang, Principal of the Company, Wei Pingxiao, person in charger of accounting works and Zhou Feifei, person in charge of accounting organ (accounting principal) hereby confirm that the Financial Report of 2014 Annual Report is authentic, accurate and complete.
Contents
Annual Report 2014 ........................................................................................................................... 1 Section I Important Notice, Contents and Paraphrase ................................................................. 2 Section II Company Profile ............................................................................................................... 7 Section III Accounting data and summary of finnaical indexes .................................................. 9 Section IV Report of the Board of Directors ............................................................................... 13 Section V Important Events .......................................................................................................... 35 Section VI Changes in shares and particular about shareholders .............................................. 49 Section VII PreferredStock…………………………………………………………………….60 Section VIII Particulars about Directors, Supervisors,Senior Executives and Employees ...... 60 Section IX Corporate Governance ............................................................................................... 773 Section X Internal Control .............................................................................................................. 80 Section XI Financial Report ............................................................................................................ 83 Section XII Documents available for reference ........................................................................... 215
Paraphrase
||||
|-|-|-|
||Refers||
|Items||Contents|
||to||
|Listed Company, Company, the Company,|Refers||
|||China National Accord Medicines Corporation Ltd.|
|Sinopharm Accord, the Group|to||
||Refers|Sinopharm Group Co., Ltd.; Controlling shareholder of the|
|Sinopharm Holding|||
||to|Company|
||Refers||
|“Twelfth Five-Year”||Year of 2011 to 2015|
||to||
||Refers||
|Company Law||Company Law of the People’s Republic of China|
||to||
||Refers||
|Securities Law||Securities Law of the People’s Republic of China|
||to||
|Yuan, 10 thousand Yuan, 100 million|Refers||
|||RMB, RMB 10 thousand, RMB 100 million|
|Yuan|to||
|Terminology:|||
||Refers||
|Direct selling||A sales method of selling drug to the hospital directly|
||to||
||Refers||
|GMP certificate||Good Manufacture Practice of Drugs certificate|
||to||
||Refers||
|GSP certificate||Good Supply Practice certificate|
||to||
||Refers|That is CMS, and information system processing workflow &|
|Supply Chain Management|||
||to|procurement, inventory & sales documents|
|Abbreviation|||
||Refers||
|Sinopharm||China National Pharmaceutical Group Corporation|
||to||
||Refers||
|Sinopharm (CNCM LTD)||China National Medicines Corporation Ltd.|
||to||
||Refers||
|Sinopharm Holding Guangzhou||Sinopharm Holding Guangzhou Co., Ltd.|
||to||
||Refers||
|Sinopharm Holding Guangxi||Sinopharm Holding Guangxi Co., Ltd.|
||to||
||Refers||
|Sinopharm Holding Liuzhou||Sinopharm Holding Liuzhou Co., Ltd.|
||to||
||Refers||
|Zhijun Pharmaceutical||Shenzhen Zhijun Pharmaceutical Co., Ltd.|
||to||
||Refers||
|China National Zhijun (Suzhou)||China National Zhijun (Suzhou) Pharmaceutical Co., Ltd.|
||to||

||||
|-|-|-|
||Refers||
|Zhijun Pharmacy Trade||Shenzhen Zhijun Pharmacy Trade Co., Ltd.|
||to||
||Refers||
|Sinopharm Shenzhen Chinese Medicine||Sinopharm Holding Shenzhen Chinese Medicine Co., Ltd.|
||to||
||Refers||
|Main Luck Pharmaceutical||Shenzhen Main Luck Pharmaceuticals Inc.|
||to||

Major Risk Warning
It is likely to existing risks in aspect of industrial competition,operation&
management, market and national policy, and majority investors are advised to exercise caution of investment risks.
Section II Company profile
I. Company information
|||||
|-|-|-|-|
|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||||
||China National Accord Medicines Corporation Ltd.|||
|Company(if applicable)||||
|Short form of foreign name||||
|of the Company(if|Sinopharm Accord|||
|applicable)||||
|Legal representative|Yan Zhigang|||
||Accord Pharm. Bldg., No. 15, Ba Gua Si Road, Futian District, Shenzhen, Guangdong|||
|Registrations add.||||
||Province|||
|Code for registrations add|518029|||
||Accord Pharm. Bldg., No. 15, Ba Gua Si Road, Futian District, Shenzhen, Guangdong|||
|Offices add.||||
||Province|||
|Codes for office add.|518029|||
|Company’s Internet Web||||
||http://www.szaccord.com.cn|||
|Site||||
|E-mail|investor@szaccord.com.cn|||

II. Person/Way to contact
||||
|-|-|-|
||Secretary of the Board|Rep. of security affairs|
|Name|Chen Changbing||
||Accord Pharm. Bldg., No. 15, Ba Gua||
|Contact add.|Si Road, Futian District, Shenzhen,||
||Guangdong Province||
|Tel.|+(86)755 25875195||
|Fax.|+(86)755 25195435||
||0028@szaccord.com.cn;||
|E-mail|||
||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||
||http://www.szse.cn; http://www.cninfo.com.cn|
|CSRC||
|Preparation place for annual report|Secretariat of the Board of Directors|

IV. Registration changes of the Company
|||||||
|-|-|-|-|-|-|
||||Registration NO.|||
||Date for|Place for||No. of taxation||
||||for enterprise legal||Organization code|
||registration|registration||registration||
||||license|||
|Initial registration|1986-08-02|Shenzhen. P.R.C|4403011001677|440301192186267|19218626-7|
|Registration at end||||||
||2012-11-06|Shenzhen. P.R.C|440301103040048|440301192186267|19218626-7|
|of report period||||||

V. Other relevant information
CPA engaged by the Company
|||
|-|-|
|Name of CPA|Pricewaterhouse Zhongtian Certified Public Accountants Co., Ltd. (LLP)|
||11/Floor,PWC Center, Building 2#, Corporate Avenue, No.202 Hubin Rd., Luwan|
|Offices add. for CPA||
||District, Shanghai, P.R.C|
|Signing Accountants|Chen Yuntao, Tan Pianpian|

Sponsor engaged by the Company for performing continuous supervision duties in reporting period
√Applicable□Not applicable
|||||
|-|-|-|-|
|||Name of sponsor|Continuous supervision|
|Name of the sponsor|Offices add. for the sponsor|||
|||representative|period|
||27/F-28/F, Building 2,|||
|China International Capital|International Trade|||
|||Chen Jie, Ru Tao|2014 -2016|
|Corporation Limited|Mansion, No.1 Jianguomen|||
||Outer Street, Beijing|||

Financial consultant engaged by the Company for performing continuous supervision duties in reporting period□ Applicable√ Not applicable
Section III. Accounting data and summary of financial indexes I. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting error correction or not
√ Yes□ No
||||||||
|-|-|-|-|-|-|-|
|||||Changes over|||
|||2013|||2012||
|||||last year|||
||2014||||||
|||Before the|After the|After the|Before the|After the|
|||adjustment|adjustment|adjustment|adjustment|adjustment|
|Operating income|23,954,331,028.05|21,199,466,399.|21,199,466,399.21||18,011,759,1|18,011,759,1|
|||||12.99%|||
|(RMB)||21|||78.26|78.26|
|Net profit attributable to|652,497,176.03||520,488,198.80||||
||||||475,792,491.|475,792,491.|
|shareholders of the||520,488,198.80||25.36%|||
||||||12|12|
|listed company(RMB)|||||||
|Net profit attributable to|||||||
|shareholders of the|||||||
||||||448,238,374.|448,238,374.|
|listed company after|611,245,652.69|505,828,794.23|505,828,794.23|20.84%|||
||||||59|59|
|deducting non-recurring|||||||
|gains and losses(RMB)|||||||
|Net cash flow arising|-796,697,032.43||465,028,099.83||||
||||||323,955,332.|323,955,332.|
|from operating||465,028,099.83||-271.32%|||
||||||76|76|
|activities(RMB)|||||||
|Basic earnings per|1.90||1.81||||
|||1.81||4.97%|1.65|1.65|
|share (RMB/Share)|||||||
|Diluted earnings per|1.90||1.81||||
|||1.81||4.97%|1.65|1.65|
|share (RMB/Share)|||||||
|Weighted average|||||||
||16.41%|26.00%|26.00%|-9.59%|30.51%|30.51%|
|ROE|||||||
|||||Changes over|||
|||End of 2013||end of last|End of 2012||
||End of 2014|||year|||
|||Before the|After the|After the|Before the|After the|
|||adjustment|adjustment|adjustment|adjustment|adjustment|
||12,828,941,540.90|11,057,896,941.|11,057,896,941.31||9,295,839,93|9,295,839,93|
|Total assets (RMB)||||16.02%|||
|||31|||9.64|9.64|
|Net assets attributable|4,764,607,822.09||2,244,757,658.03||||
|to shareholder of||2,244,757,658.0|||1,775,943,02|1,775,943,02|
|||||112.25%|||
|listed||3|||8.96|8.96|
|company(RMB)|||||||

II. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ 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.
III. Items and amounts of extraordinary profit (gains)/loss
√Applicable□Not applicable
In RMB
||||||
|-|-|-|-|-|
|Item|2014|2013|2012|Note|
||2,262,989.96|||Mainly because Subsidiary --Sinopharm Holding Liuzhou,has a new property changeddue to the relocation bygovernment|
|Gains/losses from the disposal of|||||
|non-current asset (including the|||-8,347,047.7||
|||3,029,150.67|||
|write-off that accrued for impairment of|||3||
|assets)|||||
||31,534,869.05|||Mainly due to the followsubsidies received: theenterprise supporting fundRMB 6.06 million allocatedfrom Nanning Economic andTechnological DevelopmentZone, medicine reservesappropriate RMB 3 million,special funds RMB 2.28million from Shenzhen Highand New-TechnologyIndustry, house removalclaim RMB 2.7 million,industrialization project oftechnological achievementtransfer RMB 2 million,patent grant RMB 1.66million of Shenzhen Longhua|
|Governmental subsidy reckoned into|||||
|current gains/losses (not including the|||||
|subsidy enjoyed in quota or ration||23,465,438.4|57,227,812.3||
|according to national standards, which||2|3||
|are closely relevant to enterprise’s|||||
|business)|||||

||||||
|-|-|-|-|-|
|||||New District Developmentand Finance Bureau, specialfund supporting RMB 1.2million of strategic emergingindustry, the RMB 1.15million amortized in Periodfrom deferred incomerecognized byinternationalizationdevelopment projects ofCephalosporins solidpreparation and brandcultivation subsidy RMB onemillion for strategic emergingindustry etc.|
|Current net gains/losses of the|||||
|subsidiaries from period-begin to|||||
|consolidated date occurred from|||-240,695.14||
|enterprise merger under the common|||||
|control|||||
|Switch back of provision for|3,518,118.71||||
|depreciation of account receivable||1,672,973.37|1,815,099.41||
|which was singly taken depreciation test|||||
||750,000.00|||Mainly refers to the hostedservices offering toSinopharm Holding andChina NationalPharmaceutical Foreign TradeCo., Ltd.|
|Trustee fee revenue from trust for|||||
|||333,333.33|||
|investment|||||
||16,116,561.38|||The RMB 11.86 millioncompensation of Chebeilawsuit that accrued last yearwas released according to thelatest lawsuit results|
|Other non-operating income and|||||
|||-9,876,088.2|-17,026,479.||
|expenditure except for the|||||
|||8|08||
|aforementioned items|||||
|Less: Impact on income tax|11,767,755.13|3,851,467.99|5,790,568.53||
|Impact on minority shareholders’|1,163,260.63||||
|||113,934.95|84,004.73||
|equity (post-tax)|||||
||41,251,523.34|14,659,404.5|27,554,116.5||
|Total||||--|
|||7|3||

Concerning the extraordinary profit (gain)/loss defined byQ&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 inQ&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 inQ&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss
Section IV. Report of the Board of Directors
I. Introduction
The State commenced comprehensive and penetrating reform in 2014 when the Twelfth-Five Year Plan accelerated to improve efficiency, revealing transformation in development. The national macro-economy and pharmaceutical industry has developed into new normal. In detail, increase in sales of pharmaceutical industry has declined obviously, and scale growth of pharmaceutical circulating industry has trended to slow down as compared to the corresponding period. Steady growth, excellent structure and high quality will remain the operation targets for pharmaceutical industry in future for rather a long time. Under this background, the Company successfully delivered higher growth in efficiency than scale through focusing on the core sectors and making stable progress under the general strategy of “further innovation, steady growth and better compliance”. As such, the expectation for enhancement in quality and efficiency made at the beginning of this year was accomplished
In 2014, the Company realized operating income of RMB23.954 billion, representing a year-on-year increase of12.99%; net profit attributable to shareholders of listed company of RMB652 million, representing a year-on-year increase of25.36%. The Company has continued to keep growth.
As for distribution segment, operating income was RMB22.295 billion, representing a year-on-year increase of14.32%; net profit of RMB354 million, representing a year-on-year increase of17.83%.
As for pharmaceutical segment, operating income was RMB1.672 billion, representing a year-on-year decrease of2.26%; net profit of RMB227million, representing a year-on-year increase of8.43%.
The major works done throughout the year:
1. Complete the works relating to non-public issuance which strengthens the capital strengths of the Company. The Company raised funds of RMB1.93 billion through private equity financing to controlling shareholders, which improves our structure of assets and liabilities and increases our capital strengths for future development.
2. Further increase benchmarking management, drive forward innovation and continue to enhance capability and efficiency of management. With comprehensive benchmarking management and improved system management, the profit margin of distribution segment increased to2.13% and the performance of Zhijun Pharmaceutical team increased by19%. The Company carried out innovation targeting to improving its response to various changes. In particular, the Company established 36 innovation practice projects, managing to reflect those innovative ideas in its business development.
3. Strengthen idea of compliance. Ensure operation in compliance with all relevant rules and regulations by multiple means. By capitalizing the opportunity that Sinopharm Group was conducting the special activity for compliance operation, the Company also organized special activity for learning and discussing compliance operation, so as to intensify the idea of “compliance operation represents the core
competitiveness”. Meanwhile, various measures were adopted to increase review on internal control and audit inspection to ensure compliance operation.
4. Facilitate operation innovation and develop growth potential of the traditional leading business.
As for distribution segment, the Company further emphasized on establishment of smart supply chain. Throughout the year, the Company increased 76 new VMI stocking projects and entered into contracts for 8 smart supply chain projects, realizing the overall extension of supply chain to the upper and downstream; as its bills platform, flowing system and inventory analysis platform were put into operation, the Company realized first system connect with Guangdong Medicine Exchange, indicating continuous optimization of its supply chain system. The distribution segment established supply chain performance merits examination system, pursuant to which, quantization standards of smart supply chain was determined which facilitated enhancement of supply chain efficiency.
As for pharmaceutical segment, the Company actively turned to refined marketing model instead of the extensive marketing model (namely tendering process with no follow-up action; follow-up action with no cap ) by capitalizing the opportunity of tender offered by Guangdong Base Drug Catalogue. Meanwhile, the segment emphasized on differentiation from other competitors in the tender of Base Drug Catalogue. The Company was the only participator winning the bidding for Guangdong Base Drug Catalogue in terms of sugar-free cefixime granules, helping the Company to maintain good price for this product. Besides, through fully utilization of the data resources gathered from the tendering platform, the Company made active progress in developing refined markets. In particular, the coverage rate of its sugar-free cefixime granules in the basic hospitals of Guangdong reached52%, and its sales also recorded a year-on-year increase of 15.2 times.
5. Accelerate share of resources so as to benefit from integration
As for distribution segment, standardized operation establishment between Guangdong and Guangxi provinces and unified operation system were driven forward by the Company through establishing standards, optimizing procedures, unifying operation and intensifying inspection. In addition, the Company also completed integration of three warehouses in Foshan, commenced logistics center management project, prepared operation manual for key posts, and promoted implementation of such manual in Guangdong and Guangxi.
As for pharmaceutical segment, the Company established integrated industrial platform with the essential factors of flattening, professionalization and integration, and continued to perfect the system during the actual operation. The sectors of finance, purchase, sale and quality have been running steadily with GS system, and the Company realized management over the major data of four enterprises. In the production center, the Company set up production& sales connection platform, assisting the Company to realize general connection among the production output of domestic preparation, chemical API and massive health care, so as to ensure market supply effectively. The integration of industry chain was further promoted with the general mating rate reaching90%, representing a year-on-year increase of 12.1 percentage points.
6. Intensify structure adjustment to improve theCompany’s profit-making ability and risk-prevention capability
The distribution segment, by catering to the new development in medical reform, continued to optimize its business and variety structure, namely to increase the proportion of sales of hospital terminals and domestic products. In 2014, the direct sales accounted for72%, with a year-on-year increase of 2 percentage points; sales of domestic products accounted for49%, with a year-on-year increase of 1 percentage point. As the Company became general agency for another 33 varieties throughout the year, its variety resources were diversified accordingly.
The pharmaceutical segment made active response to the negative effects arising from restricted usage of antibiotics and control over ephedrine-included preparations. Particularly, it recorded sales over RMB100 million for 8 varieties across the year, among which, 4 were oral varieties namely Dalifen, Cefuroxime Axetil Tablets, Digen, Cefuroxime Axetil Capsule. The sales of oral solid medicines produced by Zhijun Pharmaceutical accounted for55%, representing a year-on-year increase of one percentage point; meanwhile, the Company also speeded up structure transformation of products line as for pharmaceuticalR&D. currently, the Company undertakes research and development for over 130 varieties and the CDE process number exceeds 60, among which, the special medicine sector accounts for60% and three types of new medicine account for42%, which provides product support for industrial transformation.
7. To speed up penetration into basic markets in response to the national medical reform
As for distribution segment, the Company set up a branch in Shantou which currently owns 30 distribution subsidiaries in total, helping the Company to cover business operation in 35 municipal cities in Guangdong and Guangxi provinces. In these two provinces, there are 11 DTC pharmacies operated by the Company where chain management system and platform are being constructed gradually. It also continues to perfect coverage of logistics network. In particular, Shantou Logistics Center and Shantou Distribution Center have been running officially.
As for pharmaceutical segment, the Company accelerated construction of its second-tier distribution system to further expand sales network into the basic terminal markets taking into its own product characteristics, aiming to explore the growth potential of vast market and flexibly respond to the negative effects of bidding market.
8. To emphasize on business transformation and update and development of new business, so as to form new point of growth
Distribution segment experienced rapid development for its business. In detail, medical equipment business recorded a year-on-year increase of18% in sales since it finished construction of management platform; vaccine business recorded a year-on-year increase of19% in sales, besides, the Company made breakthrough
|||
|-|-|
||vaccine products, which laid foundation for building the Company as a CDC comprehensive product|
|and service provider in vaccine business. Bidding results of basic drug met the ideal expectation of the||
|Company. The total number of entrusted specifications received by the Company from Guangdong and||
|Shenzhen exceed 10,000, which brought in a year-on-year increase of 73% in overall sales of basic drug.||
|B2B network update was completed with more than 400 customers on line, which substantially realized||
|e-business model for commercial sales. The export sales revenue from industrial own brands increased by||
|51% as compared to the previous year, forming scale sales in the international major markets. In addition to||

||
|-|
|enhancement of its industrial international brands, the Company also promoted development of domestic|
|market effectively. Dalixin won the bidding in terms of quality level in Zhejiang province. As such, the|
|Company realized joint development of both international and domestic markets. Dajiankang, the core|
|business of industrial segment, kick off advertisement for the brand “Meiyitian” with the celebrity Wang|
|Likun, bringing in a year-on-year increase of 6% in sales throughout the year.|

||
|-|
|9. To actively propel quality recognition and base construction and to explore new development space|
|The distribution segment actively promoted recognition for the new GSP version, with 30 distribution|
|subsidiaries and 5 DTC pharmacies being the first batch of entities approving such recognition. The|
|Company innovatively carried out recognition of new GSP version under the pattern of sharing logistics,|
|which set a good example for this industry.|

||
|-|
|The pharmaceutical segment carried out international recognition and new GSP version recognition at the|
|same time. Zhijun Pharmaceutical received EU recognition certificates for its powder injection production|
|line II and III respectively. Zhijun Pharmaceutical was granted extension of new GSP version recognition|
|certificate for its non-cephalosporins solid workshop and Zhijun Suzhou was granted with new version GMP|
|certificate for its newly-built powder injection workshop. New progress was made in constructing|
|pharmaceutical base in Pingshan. In detail, the major plant of Pingshan base was completed successfully and|
|relocation of the oral liquid production line of Shenzhen CTM was also completed. Meanwhile, change of|
|business license registration of Shenzhen CTM was completed. The chemical laboratory in Pingshan base|
|was put into operation. Besides, production quality system and GMP system were also constructed to prepare|
|recognition of new GMP version. In addition, the Company’s social responsibility system SA8000|
|recognition passed site inspection in October and was granted with recognition certificate.|

II. Main business analysis
1. Introduction
||||||
|-|-|-|-|-|
||Current Period|Same period last year|y-o-y changes|Reasons for changes|
|Operation revenue|23,954,331,028.05|21,199,466,399.21|12.99%||
|Operation cost|22,002,628,769.91|19,436,081,887.14|13.21%||
|Sales expenses|522,383,083.15|486,390,181.25|7.40%||
|Administrative|474,317,573.25|422,405,979.87|||
||||12.29%||
|expenses|||||
|Financial expenses|123,129,102.91|164,405,341.20|-25.11%||
|Income tax expenses|159,442,270.43|124,882,778.24|27.67%||
|R&D input|81,206,093.52|80,047,194.42|1.45%||
||-796,697,032.43|465,028,099.83||Mainly because|
|Net cash flow arising||||purchase-to-pay and|
|from operation|||-271.32%|taxes are growth|
|activities||||year-on-year in the|
|||||Period|
|Net cash flow arising|-315,355,519.45|-131,241,842.13||Mainly because more|
|from investment|||-140.29%|investment for|
|activities||||Pingshan Base Project|

||||||
|-|-|-|-|-|
|||||in the Period, than the|
|||||investment cash|
|||||out-flow increased|
|||||year-on –year|
||868,310,366.06|-156,566,167.75||Mainly because|
|||||amount for targeted|
|Net cash flow arising||||placement received in|
|from financing|||-654.60%|the Period, and no|
|activities||||such business occurred|
|||||at same period of last|
|||||year|
||-243,736,347.61|177,200,310.92||Mainly because cash|
|Net increase of cash||||flow from operation|
||||-237.55%||
|and cash equivalent||||activities declined|
|||||y-o-y|

2. Revenue
Explanation
In reporting period, the Company achieved RMB 23.9 billion in operation revenue with a year-on-year growth of 12.99 percent; net profit attributable to shareholders of listed company was RMB 653 million, a year-on-year growth of 25.38 percent. The Company continues to maintaining growth trend of “steady development”.
Income from physical sales is over than income from labors
√ Yes□ No
|||||||
|-|-|-|-|-|-|
|Industry||||||
||Item|Unit|2014|2013|Y-o-y changes|
|classification||||||
|||10 thousand||||
||Sales||39,714|38,842|2.24%|
|||branches/box||||
|Chemical agent||||||
|||10 thousand||||
|(Zhijun + Zhijun|Yielding capacity||44,389|37,204|19.31%|
|||branches/box||||
|Suzhou)||||||
|||10 thousand||||
||Inventory||9,109|6,851|32.96%|
|||branches/box||||
||Sales|KG|212,233|209,357|1.37%|
|Chemical Raw||||||
||Yielding capacity|KG|248,726|247,067|0.67%|
|Medicine||||||
||Inventory|KG|42,046|20,772|102.42%|
|||10 thousand||||
||Sales||1,207|1,164|3.69%|
|||branches/box||||
|Chinese patent||10 thousand||||
||Yielding capacity||1,247.0135|1,133|10.07%|
|drugs||branches/box||||
|||10 thousand||||
||Inventory||175.98|181.00|2.77%|
|||branches/box||||
|||10 thousand||||
||Sales||4.57|3.48|31.32%|
|Massive health||branches/box||||
||Yielding capacity|10 thousand|13.63|4.17|226.86%|

|||||||
|-|-|-|-|-|-|
|||branches/box||||
|||10 thousand||||
||Inventory||4.19|2.87|45.99%|
|||branches/box||||
|||10 thousand||||
||Sales||2,632|1,448|81.77%|
|||branches/box||||
|||10 thousand||||
|International trade|Yielding capacity||2,854|1,309|118.03%|
|||branches/box||||
|||10 thousand||||
||Inventory||290|88|229.55%|
|||branches/box||||

Reasons for y-o-y relevant data with over30% changes
√Applicable□Not applicable
In 2014, due to the sales of new business (massive health and international trade) increased, the sales, yielding capacity and inventory of related products increased y-o-y.
Material orders in hands
□ Applicable√ Not applicable
Material changes or adjustment for products or services of the Company in reporting period
□ Applicable√ Not applicable
Major sales of the Company
|||
|-|-|
|Total top five clients in sales (RMB)|1,578,006,772.82|
|Proportion in total annual sales volume for top five||
||6.61%|
|clients||

Information of top five clients of the Company
□ Applicable√ Not applicable
Other situation of main clients
□ Applicable√ Not applicable
3. Cost
Industry classification
In RMB
||||||||
|-|-|-|-|-|-|-|
|||2014||2013|||
|Industry||||||Y-o-y|
||Item||Ratio in||Ratio in||
|classification||Amount||Amount||changes|
||||operation cost||operation cost||
|Pharmaceutical|||||||
||Sales cost|952,511,232.92|4.33%|984,311,353.46|5.08%|-3.23%|
|manufacturing|||||||
|Medicine||21,007,553,553.6||18,378,091,996.|||
||Sales cost||95.54%||94.79%|14.31%|
|commerce||7||46|||
|Logistic &|Transportation||||||
|||24,999,668.41|0.11%|22,278,364.39|0.11%|12.22%|
|storage service|& storage cost||||||
|Leasing & other|||||||
||Service cost|3,589,006.63|0.02%|3,457,945.81|0.02%|3.79%|
|income|||||||
|||21,988,653,461.6||19,388,139,660.|||
|Total|||100.00%||100.00%|13.41%|
|||3||12|||

Main suppliers of the Company
|||
|-|-|
|Total purchase amount from top five suppliers||
||4,191,627,011.30|
|(RMB)||
|Proportion in total annual purchase amount for top||
||19.06%|
|five suppliers||

Information of top five suppliers of the Company
□ Applicable√ Not applicable
Other situation of main suppliers
□ Applicable√ Not applicable
4. Expenses
Sales expense has a y-o-y growth of 7.40 percent, a y-o-y 12.29 percent up in administrative expenses, financial expenses decreased 25.11 percent y-o-y and income tax expenses has increased 27.67 percent y-o-y, all expense ratio down year-on-year, every expenses are in a good controlling
5. Expenses ofR&D
Subordinate industrial enterprises of the Company persist inR&D investment and improve the innovative ability. The expenses ofR&D in the Period was RMB 81,216,093.52 (Y2013: RMB 80,047,194.42), accounts for 1.67 percent in net assets and 0.34 percent in current operating revenue (takes 5.03 percent in revenue from
pharmaceutical), which all reckoned into gains/losses (Y2013: RMB 79,430,320.22 and RMB 616,874.20 reckoned into current gains/losses and recognized as development expenditure respectively), there is noR&D expenditure recognized as intangible assets.
6. Cash flow
In RMB
|||||
|-|-|-|-|
|Item|2014|2013|Y-o-y changes|
|Subtotal of cash in-flow|24,692,507,689.55|21,496,624,309.71||
||||14.87%|
|from operation activity||||
|Subtotal of cash out-flow|25,489,204,721.98|21,031,596,209.88||
||||21.19%|
|from operation activity||||
|Net cash flow from|-796,697,032.43|465,028,099.83||
||||-271.32%|
|operation activity||||
|Subtotal of cash in-flow|29,525,701.57|32,979,138.26||
||||-10.47%|
|from investment activity||||
|Subtotal of cash out-flow|344,881,221.02|164,220,980.39||
||||110.01%|
|from investment activity||||
|Net cash flow from|-315,355,519.45|-131,241,842.13||
||||-140.29%|
|investment activity||||
|Subtotal of cash in-flow|2,495,098,201.62|1,658,371,052.80||
||||50.45%|
|from financing activity||||
|Subtotal of cash out-flow|1,626,787,835.56|1,814,937,220.55|-10.37%|

|||||
|-|-|-|-|
|from financing activity||||
|Net cash flow from|868,310,366.06|-156,566,167.75||
||||654.60%|
|financing activity||||
|Net increased amount of|-243,736,347.61|177,200,310.92||
||||-237.55%|
|cash and cash equivalent||||

Reasons for y-o-y relevant data with over30% changes
√Applicable□Not applicable
(1) Net cash flow from operation activity: fell 271.32 percent year-on-year, mainly because sales increased in the Period, purchase-to-pay and taxes are growth year-on-year;
(2) Subtotal of cash out-flows from investment activity: year-on-year growth of 110.01 percent, mainly because more investment for Pingshan Base Project in the Period, than the investment cash out-flow increased year-on–year; (3) Net cash flow from investment activity: 140.29 percent declined mainly because more investment for Pingshan Base Project in the Period, than the investment cash out-flow increased year-on–year;
(4) Subtotal of cash in-flow from financing activity: year-on-year growth of 50.45 percent, mainly because amount for targeted placement received in the Period;
(5) Net cash flow from financing activity: year-on-year growth of 654.60 percent, mainly because money for capital increased received in the Period due to private placement implemented, and there is no such business occurred at same period of last year;
(6) Net increased amount of cash and cash equivalent: fell 237.55 percent year-on-year, mainly because net cash flow from operation activities declined 271.32 percent on a y-o-y basis and the net cash flow from financing activities shows 654.60 percent growth y-o-y.
√Applicable□Not applicable
Suffered by economic environment and industry policies, turnover for receivables slows down while for payables speeding up, which causes a differences between the operational net cash flow and net profit
III. Composition of main business
In RMB
||||||||
|-|-|-|-|-|-|-|
|||||||Increase/decrea|
|||||Increase/decrea|Increase/decrea||
||||Gross|||se of gross|
||Operating revenue|Operating cost||se of operating|se of operating||
||||profit ratio|||profit ratio|
|||||revenue y-o-y|cost y-o-y||
|||||||y-o-y|
|By industries|||||||
|Pharmaceutical|||||||
||22,195,808,452.75|21,007,553,553.67|5.35%|14.40%|14.31%|0.07%|
|manufacturing|||||||
|Medicine|||||||
||1,641,881,896.69|952,511,232.92|41.99%|-0.54%|-3.23%|1.62%|
|commerce|||||||
|Logistic &|||||||
||32,110,291.44|24,999,668.41|22.14%|-0.95%|12.22%|-9.14%|
|storage service|||||||
|Income from|||||||
|leasing&|11,409,980.79|3,589,006.63|68.55%|17.44%|3.79%|4.14%|
|training service|||||||
|By region|||||||

||||||||
|-|-|-|-|-|-|-|
|Domestic sales|23,795,050,638.49|21,922,486,279.20|7.87%|13.11%|13.32%|-0.17%|
|Oversea sales|86,159,983.18|66,167,182.43|23.20%|46.32%|53.55%|-3.62%|

 Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on latest oneyear’s scope of period-end
□ Applicable√ Not applicable
IV. Assets and liability analysis
1. Major changes of assets
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of 2014||End of 2013||||
||||||Ratio|Notes of major|
|||Ratio in total||Ratio in total|||
||Amount||Amount||changes|changes|
|||assets||assets|||
||867,562,115.54||1,113,562,211.65||||
|Monetary fund||6.76%||10.07%|-3.31%|No major changes|
|Account|7,018,312,673.19||5,675,658,506.78||||
|||54.71%||51.33%|3.38%|No major changes|
|receivable|||||||
||2,322,333,262.87||1,831,267,290.00||||
|Inventory||18.10%||16.56%|1.54%|No major changes|
|Investment real|73,836,850.51||77,269,718.14||||
|||0.58%||0.70%|-0.12%|No major changes|
|estate|||||||
|Long-term|157,604,846.85||135,341,010.52||||
|equity||1.23%||1.22%|0.01%|No major changes|
|investment|||||||
|Fix assets|745,557,829.35|5.81%|766,741,590.63|6.93%|-1.12%|No major changes|
|Construction in|330,218,696.56||126,606,806.01||||
|||2.57%||1.14%|1.43%|No major changes|
|progress|||||||

2. Major changes of liability
In RMB
||||||||
|-|-|-|-|-|-|-|
||2014||2013||||
||||||Ratio|Notes of major|
|||Ratio in total||Ratio in total|||
||Amount||Amount||changes|changes|
|||assets||assets|||
|Short-term|1,517,954,528.88||2,744,941,589.11||||
|||11.83%||24.82%|-12.99%|No major changes|
|loans|||||||
|Long-term|39,695,448.00||||||
|||0.31%||0.00%|0.31%|No major changes|
|loans|||||||

3. Assets and liability measure by fair value
□ Applicable√ Not applicable
4. Main overseas assets
□ Applicable√ Not applicable
V. Analysis of core competitiveness
1. Perfect distribution network
The Company owns an integrated distribution networks for pharmaceutical in Guangdong and Guangxi province, and completely covers second grade class-A or above medical institutions and major chain drugstores in the above two provinces. Furthermore, the Company offering medicine delivery services for the third terminal, represented by many monomer drugstores, community health service network, clinic and new rural cooperative medical system. Sinopharm Accord fully explore advantages of distribution network, provides customers with value-added services and creating client value.
2. Leading edge intelligent supply chain
Distribution of the Company core with an intelligent supply chain, by means of promoting the jointly managed inventory and intellectualized inventory management in hospital pharmacy, supply chain services extends effectively with resources sharing and effective coordination in upstream-and-downstream achieved
3. High-efficiency management& control integration
The Company continues to promoted an integrated operation system in Guangdong and Guangxi province in aspect of medicine distribution, focus on promoting integration both in procurement and foundation operation in Guangdong and Guangxi province; accelerate the move towards collaboration in business of apparatus, consumables, vaccine etc. within Guangdong and Guangxi, realized a synchronous of management in areas of Guangdong and Guangxi. Firmly committed to the guidelines of delayering, specialization and integration in aspect of pharmaceutical industry, optimize the platform structure of “three centers and three bases”, the integrated operational standards for industry improved constantly.
4. Rich product resources
In aspect of pharmaceutical distribution, the Company building an extensive cooperation with thousands of venders and commercial enterprise in China, establishing a stable business relationship with hundreds of importers and joint venture companies, owns variety resources of products. In aspect of pharmaceutical industry, the Company take more eyes on pharmacy of anti-infection, respiratory system, digestive system and angiocarpy as well as massive health, and possess an international-standards-qualify modern pharmaceuticalR&D manufacturing base, established many production lines (E.U.-certified) for powder-injection and oral solid dosage forms and the production line of active ingredient. By means of building a strictly mechanism for quality management and controlling, the Company has created multiple brands that takes top place in market shares. 5. Unique-influence Sinopharm brand
Brand of the Company and distribution, industry child-brand and controlling shareholder and actualcontroller’s brand come down in one continuous line, depending on powerful force of central enterprises, theCompany’s popularity and influence are prominent day by day in the industry.
VI. Investment analysis
1. Situation of equity investment
(1) Investment
√Applicable□Not applicable
||||
|-|-|-|
|Situation of investment|||
|Investment in the Period (RMB)|Same period of last year (RMB)|Range of changing|
|7,490,000.00|0.00|100.00%|
|Situation of the invested company|||
|||Equity proportion in invested|
|Name|Main business||
|||company for Listed company|
||Wholesale of drugs and medical||
|Sinopharm Holding Shantou Co., Ltd.||70.00%|
||devices etc.||

(2) Holding equity of financial enterprise
□ Applicable√ Not applicable
The Company has no equity of financial enterprise held in the Period
(3) Securities investment
□ Applicable√ Not applicable
The Company has no securities investment in the Period
(4)Explanation on equity of other listed company held
□ Applicable√ Not applicable
The Company had no equity of other listed company held in Period.
2. Trust management, derivative investment and entrust loans
(1) Trust financing
□ Applicable√ Not applicable
The Company has no trust financing in the Period
(2) Investment of derivatives
□ Applicable√ Not applicable
The Company has no derivatives investment in the Period
(3) Entrustment loan
□ Applicable√ Not applicable
The Company has no entrustment loan in the Period
3. Application of raised proceeds
√Applicable□Not applicable
(1)Overall application of raised proceeds
√Applicable□Not applicable
In 10 thousand Yuan
|||
|-|-|
|Total raised capitals|194,175.99|
|Total raised capital invested in reporting period|194,161.72|
|Total accumulative raised capital invested|194,161.72|
|Total fund raised has purpose of uses changed in||
||0|
|Period||
|Cumulative fund raised has purpose of uses||
||0|
|changed in total||
|Ratio of cumulative fund raised has purpose of||
||0.00%|
|uses changed||
|Explanation on General usage of raised capital||
|(I) Actually amount of fund raised and fully funded results: in accordance with the Zheng Jian Xu Ke [2014] No. 232||
|“Approval of Reply on Private Placement under the name of China National Accord Medicines Corporation Ltd.”, the||
|Company privately offering 74,482,543 shares in March 2014 with issued price of RMB26.07 each, total funds raise||
|amounting to RMB 1,941,759,896.01, after deducted issuance costs RMB12,694,482.54(including sponsors costs,||
|registration fee for placement and other trading expenses), net fund raised actually amounting to||
|RMB1,929,065,413.47. The above mentioned funds have fully funded up to 14 March 2014, and Pricewaterhouse||
|Zhongtian Certified Public Accountants Co., Ltd. (LLP) has issued the capital verification report Pricewaterhouse||
|Zhongtian Yan Zi (2014) No. 132 after verification. (II) Fund raised used in the Period and balance at period-end: the||
|Company open an account in Shenzhen Greatwall branch of Ping An Bank Co., Ltd., the funded capital amounting to||
|RMB 1,941,759,896.01. The debts of the Company and its subordinate subsidiaries (“the Group” for short) paid with||
|fund raised in the Period and current capital complement amounting to RMB 1,928,995,921.76 in total up to 31||
|December 2014. Placement costs have RMB 12,620,000 paid and bank handling charge costs RMB 1,241.5. Balance||
|of the account shows RMB 1,233,800.87 up to 31 December 2014, including interest received RMB 1,091,068.12 and||
|fund raised balance RMB 142,732.75.||

(2) Situation of committed project of raised proceeds
√Applicable□Not applicable
In 10 thousand Yuan
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||Projects||||Amount o|fInvestmen|||||
|Committed||||||||||Project|
||changed|Total|Total||accumulat|t program|||||
|investment projects||||Amount|||Predicted|Realized|Reach the|f easibility|
||or not c|ommitted|nvestmen||ed|till the|||||
|and capital invested||||invested|||useable|interests|predicted|was|
||(includin|nvestmen|t after||nvestmen|period-en|||||
|in areas with fund||||iin report|||date of|in|interest or|changed|
||g|of raised a|djustmen||t till the|d|||||
|raising out of the||||period|||project|Period|not|hugely or|
||changed|capitals|(1)||eriod-end|(3)=(2)/(1|||||
|plan||||p||||||not|
||partially||||(2)|)|||||

||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
||)||||||||||
|Committed investment projects|||||||||||
|Loans payment to||143,405.|143,405.|143,405.|143,405.||||||
||No|||||100.00%||||No|
|Bank||92|92|92|92||||||
|Current capital||49,500.6|49,500.6|49,493.7|49,493.7||||||
||No|||||99.99%||||No|
|supplementation||2|2|9|9||||||
|Issue expense|||||||||||
||No|1,269.45|1,269.45|1,262|1,262|99.41%||||No|
|payment|||||||||||
|Subtotal of|||||||||||
|||194,175.|194,175.|194,161.|194,161.||||||
|committed|--|||||--|--|0|--|--|
|||99|99|71|71||||||
|investment projects|||||||||||
|Capital invested in areas with fund raising out of the plan|||||||||||
|||194,175.|194,175.|194,161.|194,161.||||||
|Total|--|||||--|--|0|--|--|
|||99|99|71|71||||||
|Situation about not|||||||||||
|coming up to|||||||||||
|schemed progress or|||||||||||
||Fund raised are invested on scheme||||||||||
|expected revenue|||||||||||
|and the reason(In|||||||||||
|specific project)|||||||||||
|Explanation on|||||||||||
|major changes on|Not applicable||||||||||
|project feasibility|||||||||||
|Amount, usage and|Not applicable||||||||||
|progress of using for|||||||||||
|fund raising out of|||||||||||
|the plan|||||||||||
|Change of|Not applicable||||||||||
|implementation|||||||||||
|place of investment|||||||||||
|project of raised|||||||||||
|capitals|||||||||||
|Regulation of|Not applicable||||||||||
|implementation|||||||||||
|ways of investment|||||||||||
|project of raised|||||||||||
|capitals|||||||||||
|Preliminary|Applicable||||||||||
|investment and|Till end of 20th March 2014, the pre-invested self-owned fund have been replaced by the fundraised for returning the bank loans RMB 1,109,059,245.49 for the Company and its subsidiaries(“the Group”), which was deliberated and approved by the “proposal of pre-invested self-ownedfund replaced by the fund raised” in 2nd extraordinary meeting of 6th session of the Board||||||||||
|replacement of|||||||||||
|investment project of|||||||||||
|raised capitals|||||||||||

|||
|-|-|
||Meeting 2014. The above mentioned self-owned fund invested in advance for purpose of fundraised has been verified by Pricewaterhouse Zhongtian Certified Public Accountants Co., Ltd.(LLP) with verification report Pricewaterhouse Zhongtian Te Shen Zi (2014) No. 855 verified|
|Temporarily|Not applicable|
|supplement for the||
|current capitals with||
|idle raised capitals||
|Amount and reason|Applicable|
|for surplus of raised|On 31 December 2013, account balance of raised capitals was RMB 1,233,800.87 (includingbalance of raised capitals was RMB 142,732.75 and interest income was RMB 1,091,068.12)|
|capitals when||
|implementing||
|projects||
|Usage of the retained||
|raised fund and||
|what is expected to|Paying the placement expenses paid in advance and supplement current capital|
|invested with those||
|fund||
|Issues or other||
|conditions found in|Use of the fund raised are strictly execute in line with the “tri-party supervision agreement for|
|use of fund raised|fund raised”, and no related issues or other conditions been found|
|and disclosure||

(3)The changed project of raised proceeds
□ Applicable√ Not applicable
The Company has no project of raised proceeds changed in the Period
4. Main subsidiaries and stock-jointly companies
√Applicable□Not applicable
Particular about main subsidiaries and stock-jointly companies
In RMB
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Company|||Main products|Register|Total||Operating|Operating||
||Type|Industries||||Net Assets|||Net profit|
|name|||or service|capital|assets||revenue|profit||
||||Production for|||||||
||||raw medicine|||||||
||||of chemical|||||||
||||products,|||||||
|Shenzhen|||processing for|||||||
||||Chinese|||||||
|Zhijun||||||||||
||Subsidiar|Manufact|traditional|200,000,0|1,206,515,|574,033,2|1,374,938,|292,448,0|264,516,9|
|Pharmaceu|||patent|||||||
||y|ure||00.00|066.43|10.18|041.12|05.98|30.24|
|tical Co.,|||medicine,|||||||
||||production of|||||||
|Ltd.||||||||||
||||chemical|||||||
||||material of|||||||
||||medicine;|||||||
||||Import and|||||||
||||export trade|||||||

|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||are treated by|||||||
||||authorized|||||||
||||certificates.|||||||
||||Chinese|||||||
||||traditional|||||||
||||patent|||||||
||||medicine,|||||||
||||chemical|||||||
||||preparations,|||||||
||||antibiotics,|||||||
||||bio-chemical|||||||
||||medicine,|||||||
||||biological|||||||
||||medicine,|||||||
||||diagnosis|||||||
||||medicine,|||||||
|Sinopharm||||||||||
||||biological|||||||
|Holding|Subsidiar|Commerc||1,000,000,|5,342,109,|1,221,840,|13,383,93|192,157,1|143,070,7|
||||medicine with|||||||
|Guangzho|y|e||000.00|798.07|230.97|9,150.84|04.16|68.70|
||||features of|||||||
|u Co., Ltd.||||||||||
||||treatment and|||||||
||||diagnosis,|||||||
||||shaped packing|||||||
||||food, chemical|||||||
||||products, and|||||||
||||various|||||||
||||commodity and|||||||
||||technique hold|||||||
||||by self-support|||||||
||||and agency as|||||||
||||well as import|||||||
||||& export of|||||||
||||technology|||||||

Notes of main subsidiaries and stock-jointly companies
No special condition need to explain
Particular about subsidiaries obtained or disposed in report period
√Applicable□Not applicable
|||||
|-|-|-|-|
||Purpose of getting and|||
|||The way of getting and|Influence on overall product|
|Name of company|treating subsidiary in the|||
|||treating subsidiary in the|and performance|
||reporting|||
|||reporting||
|Sinopharm Holding Shantou|Improve the distribution|Acquisition of the Company|Without bad impact on the|
|Co., Ltd.|network|70% stake|Company|

5. The significant progress of non-raised proceeds investment
√Applicable□Not applicable
In 10 thousand Yuan
|||||||||
|-|-|-|-|-|-|-|-|
||||Accumulation|||||
||Total|Amount|of actual|Progress||Date for|Index for|
|Name of the|||||Earnings of the|||
||investment|invested in|investment|of the||disclosed (if|disclosed (if|
|project|||||project|||
||amount|the Period|ended of the|project||applicable)|applicable)|
||||Period|||||
||||||The project|||
||||||covers|||
||||||approximately|||
||||||73352 M2 in|||
||||||total, positioning|||
||||||as the production|||
||||||base of essential||Juchao|
||||||medicines and||website:|
||||||special drugs, a||“Sinopharm|
|Pingshan||||||||
||||||manufacture base||Accord:|
|Medicine|88,137|28,944.67|35,809.67|45.00%||2014-03-22||
||||||of modern||Notice of|
|R&D Base||||||||
||||||traditional||Investment|
||||||Chinese medicine||Increased”;|
||||||preparations and||No.: 2014-18|
||||||massive health|||
||||||products as well|||
||||||as the|||
||||||international|||
||||||co-ordination|||
||||||processing base.|||
|Total|88,137|28,944.67|35,809.67|--|--|--|--|

 VII. Prediction of business performance from January–March 2015
Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or the warning of its material change compared with the corresponding period of the last year and explanation on reason□ Applicable√ Not applicable
VIII. Special purpose vehicle controlled by the Company
□ Applicable√ Not applicable
IX. Prospect for future development of the Company
Looking forward for 2015, the pharmaceutical market conditions will become more complicated under the new normal. Several factors including continuous effect of medical reform policies, medical insurance
expense control, cancellation of cost-adding policy and anti-commercial bribe will continue to restrict the
sales of medicines sold by hospital terminals in 2015. Besides, various levels of medical treatment will lead
to diversification of terminals which is expected to propel development of basic market. It will be more flexible for consumers to buy prescription drugs via internet sales. With release of the pricing reform, price of drugs will be more market-oriented. And the implementation of the new Environment Protection Law will force pharmaceutical manufactures to make business transform, especially the API enterprises. Challenged by the complicated market condition, the Company shall remind itself to strengthen the awareness of Three Responsibilities applicable to central enterprises when focusing on stable construction and development. Taking into account the current conditions and tasks, the Company determines the operation strategy for 2015, namely‘get used to new normal, grasp new opportunity and realize new development”.
“get used to new normal” means to get used to the requirements of new economic normal, particularly to speed up transformation of development methods, propel transformation and upgrade and continue to improve operating efficiency. The Company strives to reach the goal of development with stable speed, good quality, optimized structure and under-control risks.
“Grasp new opportunity” means to actively explore development of the Group as a whole and regional development as well since strategic opportunities arise from further adjustment of medicine economy. Besides, it means to further capitalize the development opportunity under the background of new medical reform, aiming to expand theCompany’s traditional business and form pattern for its innovative business. “realize new development” means to make new breakthrough at the new beginning points including China National Pharmaceutical Group Corporation being one of the top 500 enterprises, sales of Sinopharm Holdings amounting to RMB 200 billion and sales of Sinopharm Accord approaching to RMB 30 billion. The Company strives to develop in a more balanced and reasonable structure with more outstanding efficiency and leading position.
(1)As a whole, the Company will focus on works relating to Six Guarantees according to its annual operation subject and operation tasks. The first guarantee is to prepare the thirteenth five year plan for plan guarantee; second is to implement the mix ownership reform for system guarantee; third is to enhance management ability on an overall basis for operation guarantee; fourth is to improve training value for human resources guarantee; five is to optimize capital efficiency for capital guarantee; six is to strengthen party related works for culture guarantee.
(2) As for distribution segment, the smart supply chain construction is further carried out to increase efficiency and benefits of supply chain and facilitate overall operation synergy effect. The segment continues to expand business coverage for preparation of the upcoming B2C and O2O business. It shall also accelerate implementation of the integration projects, expecting to improve integration operation in Guangdong and Guangxi, release the scale effects of traditional business, continue to extend supply chain products and services and consolidate its leading position in pharmaceutical distribution industry in these two provinces. (3)The pharmaceutical segment continues to improve industrial integration platform operation through managing the industrial projects. Refined marketing is emphasized by the Company, particularly to cultivate
|||
|-|-|
||cephalosporins products and marketing ability for non-cephalosporins and|
|non-penicillin new products. In order to drive R&D industrialization, the Company procures Pingshan base||

||
|-|
|to run operation as scheduled. Furthermore, the growth of industrial scale speeds up, which lays foundation|
|for industrial platform.|

X. Explanation on “Qualified Opinion” from the Certified Public Accountants in the report period by the Board of Directors
□ Applicable√ Not applicable
XI. Explanation on changes on accounting policies, accounting estimation and calculation compare with lastyear’s financial report
√Applicable□Not applicable
Changes of significant accounting policies and accounting estimate
1. Changes of significant accounting policies
Ministry of Finance issued the follow standards in 2014, that is “Accounting Standard for Business Enterprises No. 39– Fair Value Measurements”, “Accounting Standard for Business Enterprises No. 40– Joint Arrangements”, “Accounting Standard for Business Enterprises No. 41– Equity Disclosure in Other Body” and revised the “Accounting Standard for Business Enterprises No. 2– Long-term Equity Investment”, “Accounting Standard for Business Enterprises No. 9–Employee Benefits”, “Accounting Standard for Business Enterprises No. 30–Presentation of Financial Statements”, “Accounting Standard for Business Enterprises No. 33– Consolidated Financial Statements” and “Accounting Standard for Business Enterprises No. 37– Presentation of Financial Instruments”, being requested, except the “Accounting Standard for Business Enterprises No. 37– Presentation of Financial Instruments” executed since financial statement of 2014, others should put into force since 1 July 2014. A number of the statement items have been presented in lien with the above mentioned standards, financial information during a comparison have adjusted correspondingly, and the consolidated andCompany’s Balance Sheet dated 1 January 2013 have been presented in line with the application guide of “Accounting Standard for Business Enterprises No. 30–Presentation of Financial Statements”:
(1) Deferred income presented independently in consolidated balance sheet, reduce RMB 176,531,418.18 and RMB 168,180,160.90 accordingly in “other current liability” listed in consolidated balance sheet dated 31 December 2013 and 1 January 2013, no impact on parentcompany’s balance sheet
(2) As for the early retirement benefits which expected to paid over one year since balance sheet date, the “payable wages” has re-classify to “long-term wages payable”. The “long-term wages payable” should present independently on consolidated andCompany’s balance sheet dated 31 December 2013 and 1 January 2013, the “payable wages” will reduce accordingly to RMB 3,619,000.00 and RMB 4,892,000.00, RMB 205,000.00 and RMB 407,000.00.
(3) Accrued liabilities listed in consolidated balance sheet independently, reduce RMB 22,040,000.00 of “other current liability” in consolidated balance sheet dated 31 December 2013, no impact on parentcompany’s balance sheet.
2. Changes of significant accounting estimate
Significant accounting estimate of the Company has no change in the Period
XII. Particular about major accounting errors correction that needs retroactive re-statement in reporting period
□ Applicable√ Not applicable
No particular about major accounting errors correction that needs retroactive re-statement for the Company in the reporting.
XIII. Explanation on changes of consolidation range compare with lastyear’s financial report√Applicable□Not applicable
Enterprise newly established: Sinopharm Holding Beihai Co., Ltd.
Enterprise newly acquired: Sinopharm Holding Shantou Co., Ltd.
XIV. Profit and dividend distribution
Formulation, execution or adjustment for profit distribution policy in reporting period
√Applicable□Not applicable
On 18 April 2014, the profit distribution plan for year of 2013 was deliberated and approved by annual general meeting of 2013, that is taking total 362,631,943 shares as the radix, distributed RMB 1.80 (tax included) for each 10 shares in cash. The announcement of 2013 interest distribution implementation was released on 22 May 2014 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 2013 was completed, and dividend for public shares was distributed to the account of shareholders dated 28 May 2014 (A-share) and 30 May 2014 (B-share) respectively.
|||
|-|-|
|Special explanation on cash dividend policy||
|Satisfy regulations of General Meeting or requirement of||
||Y|
|Article of Association (Y/N):||
|Well-defined and clearly dividend standards and||
||Y|
|proportion (Y/N):||
|Completed relevant decision-making process and||
||Y|
|mechanism (Y/N):||
|Independent directors perform duties completely and play||
||Y|
|a proper role (Y/N):||
|Minority shareholders have opportunity to express||
|opinions and demands totally and their legal rights are|Y|
|fully protected (Y/N):||
|Condition and procedures are compliance and transparent||
||Y|
|while the cash bonus policy adjusted or changed (Y/N):||

Statement on profit distribution plan and capitalization of capital reserve plan of the Company in latest three years (including the reporting period)
(1) Profit distribution plan for year of 2012
Taking the total 288,149,400 shares as of 31 December 2012 as the radix, cash bonus of RMB
1.80(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 2013
Taking total 362,631,943 shares as the radix, cash bonus of RMB 1.8 (before tax) each 10 shares will be distributed to whole shareholders. This profit distribution did not convert capital reserve into share capital.
(3) Profit distribution plan for year of 2014
Taking total 362,631,943 shares as the radix, cash bonus of RMB 2.0 (before tax) each 10 shares will be distributed to whole shareholders. This profit distribution did not convert capital reserve into share capital.
Cash dividend in latest three years
In RMB
|||||||
|-|-|-|-|-|-|
|||Net profit|Ratio in net profit|||
|||attributable to|attributable to|||
||||||Proportion of the|
||Amount for cash|shareholders of|shareholders of|Amount reckoned||
|Year for bonus|||||amount reckoned|
|||||into cash bonus||
||bonus (tax|listed company in|listed company||into cash bonus|
|shares||||from cash||
||included)|consolidation|contained in||from cash|
|||||repurchase||
||||||repurchase|
|||statement for|consolidation|||
|||bonus year|statement|||
|2014|72,526,388.60|652,497,176.03|11.12%|0.00|0.00%|
|2013|65,273,749.74|520,488,198.80|12.54%|0.00|0.00%|
|2012|51,866,892.00|475,792,491.12|10.90%|0.00|0.00%|

 The Company gains profits in reporting period and the retained profit of parent company is positive but no plan of cash dividend proposed
□ Applicable√ Not applicable
XV. Preplan of profit distribution and capitalization from capital public reserve
√Applicable□Not applicable
|||
|-|-|
|Bonus stocks for every 10 shares (Share)|0|
|Dividends for every 10 shares (RMB) (Tax||
||2.00|
|included)||
|Shares increase by transferring for every 10 shares||
||0|
|(Share)||
|Equity base for distribution plan (Share)|362,631,943|
|Total cash bonus (RMB) (Tax included)|72,526,388.60|
|Distributable profit (RMB)|1,594,838,169.39|
|Ratio of cash bonus in total profit distributed|100.00%|
|Cash bonus policy:||
|Other||
|Profit distribution or explanation on Capitalizing of Common Reserves||
|Taking total 362,631,943 shares as the radix, cash bonus of RMB 2.0 (before tax) each 10 shares will be distributed to whole||
|shareholders. This profit distribution did not convert capital reserve into share capital.||

XVI. Social responsibility
√Applicable□Not applicable
The “Social Responsibility Report for year of 2014” was deliberated and approved by 5th meeting of 7th session of the Board, found more details in “Social Responsibility Report 2014 of China National Accord Medicines Corporation Ltd.” released on 21 March 2015 in Juchao Website (http://www.cninfo.com.cn)
The listed company and subsidiaries is in the range of heavy pollution industry that regulated by State environment protection departments
□Yes√ No□Not applicable
The listed company and subsidiaries owes other major social safety issues
□Yes√ No□Not applicable
Administrative penalty occurred in reporting period
□Yes√ No□Not applicable
XVII. In the report period, reception of research, communication and interview
√Applicable□Not applicable
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||||Contents discussed|
|Time|Place|Way|Type|Reception||||||and material|
|||||||||||provided|
|||||China Merchants Securities,|||||||
|||||Haitong Securities, CCB Principal|||||||
|||||Asset Management||||, Huarong|||
|||||Securities, Zhongdian Xinan|||||||
|||||Investment Management Co., Ltd.,|||||||
|||||Yuance Investment Management|||||||
|||||Co., Ltd., EverBright Securities,|||||||
|||||Mingyuan Investment, Dingfeng|||||||
|||||Asset, Qingxi Assets Management|||||||
|||||||||||Attended the|
|||||Co., Ltd., Huashang Fund|||||||
|||||||||||general meeting of|
|||||Management, Shanghai Daweide|||||||
|||||||||||shareholders and|
|||||Investment Co., Ltd., Anbang|||||||
|||||||||||knew the influence|
||Accord Pharm.|Field||Asset, Greenwoods Asset|||||||
|2014-02-18|||Institution|||||||of medical reform|
||Bldg.|research||Management, Shenzhen Jingshi|||||||
|||||||||||policy to the|
|||||Investment Management Co., Ltd.,|||||||
|||||||||||development of the|
|||||Goldstate securities||||, First Capital,|||
|||||||||||industry. No|
|||||Shangcheng Asset Management、|||||||
|||||||||||material provided|
|||||Tianfeng|Securities, Shenzhen||||||
|||||Branch of Dongguan Securities,|||||||
|||||CPIC Asset Management, China|||||||
|||||Southern Asset Management,|||||||
|||||Marco Polo Zhizhen Assets|||||||
|||||Management Co., Ltd.,|||||China Asset||
|||||Management||,|Anhui Guofu||||
|||||Industrial Investment Fund|||||||
|||||Management||,|First State Cinda||||

|||||||||
|-|-|-|-|-|-|-|-|
||||||Fund Management|, ,Hongguan||
||||||Assets Co., Ltd., Shanghai Qinyuan|||
||||||Investment Management Co., Ltd.,|||
||||||GF Securities, Industrial Securities,|||
||||||Fortune SG Fund Management and|||
||||||Sinolink Securities|||
||||||||Knew the influence|
||||||||of medical reform|
||||||Essence Fund, CITIC Securities,|||
||Accord Pharm.|Field|||||policy to the|
|2014-04-18||||Institution|China AMC, China Merchants|||
||Bldg.|research|||||development of the|
||||||Securities|||
||||||||industry. No|
||||||||material provided.|
||||||||Knew the influence|
||||||||of medical reform|
|||Telephone||||||
||Accord Pharm.||||||policy to the|
|2014-06-18||communic||Institution|Guotai Junan|||
||Bldg.||||||development of the|
|||ation||||||
||||||||industry. No|
||||||||material provided.|
||||||||Attended the|
||||||||general meeting of|
||||||||shareholders and|
||Accord Pharm.|Field||||||
|2014-10-27||||Institution|Elitimes||knew the|
||Bldg.|research||||||
||||||||fundamentals of|
||||||||the Company. No|
||||||||material provided|
|Reception (times)|||4|||||
|Number of hospitality|||39|||||
|Number of individual reception|||0|||||
|Number of other reception|||0|||||
|Disclosed, released or let out major||||||||
||||No|||||
|undisclosed information||||||||

Section V. Important Events
I. Significant lawsuits and arbitrations of the Company
□ Applicable√ Not applicable
No lawsuit or arbitration of the company in the annual.
II. Question from media
□ Applicable√ Not applicable
No universal questioned by media in reporting period
III. 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 the Period.
IV. Bankruptcy reorganization
□ Applicable√ Not applicable
In reporting period, the Company has no bankruptcy reorganization occurred.
V. Transaction in assets
1. Assets acquisition
√Applicable□Not applicable
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||The|||||
|||||||proportio|||||
|||||||n of the||Associati|||
|||||||net||ons with|||
|||Transacti|||Impact on|profits|Related|counterpa|||
|Counterp|||||||||||
||Purchase|on price||Impact on|gains/loss|that these|transactio|rty|Date of||
|arty and|||Progress|||||||Index of|
||d or||||||||||
|ultimate||(in 10||operation|es of the|assets|n|(Applicab|disclosure||
||placed||(Note 2)|||||||disclosure|
|controllin||thousand||(Note 3)|Company|contribute|confirme|le for|(Note5)||
||assets||||||||||
|g party|||||||||||
|||Yuan)|||(Note4)|d to the|d (Y/N)|related|||
|||||||listed||transactio|||
|||||||company||n)|||
|||||||in total|||||
|||||||profits|||||
|Sinophar|Acquisiti||The|Without||||||Juchao|
|m|on of the||acquisitio|bad||||Not||website,|
||||||RMB||||2013-12-||
|Holding|Company|749|n|impact on||0.00%|No|applicabl||“Resoluti|
||||||17,900||||20||
|Shantou|70%||complete|operation||||e||on Notice|
|Co., Ltd.|stake||d|of the||||||of 23rd|

|||
|-|-|
|Company|Meeting|
||of 6th|
||Session|
||of|
||Sinophar|
||m|
||Accord”;|
||No.:|
||2013-42|

 2. Sales of assets
□ Applicable√ Not applicable
The Company did not sell assets in the Period
3. Enterprise merger
□ Applicable√ Not applicable
No enterprise merger for the Company in reporting period
VI. Implementation and its influence of equity incentive
□ Applicable√ Not applicable
The company had not yet made the plan of equity incentive in the reporting.
VII. Significant related transaction
1. Related transaction with daily operation concerned
(1) Related transaction with daily operation concerned found more in “VIII. Related party and related transactions” in “Section XI. Financial Report”;
(2) Related transactions are settled by cash, notes etc.; disclosure date was March 22nd 2014, disclosure index was the Juchao Website; announcement No.: 2014-17;
(3) According to “daily related transaction between the Company and its subordinate and the related parties in 2014” , deliberated and approved inshareholders’ general meeting on March 21, 2014 ,the sales and purchase of related parties accounted for86% and78.77% of its total estimated amount of the whole year respectively during the reporting period; loan interest paid of related parties accounted for54.61% of the total amount expected for the whole year, buyer discount interest cost of the notes for related party accounted for18.23% of the total amount expected for the whole year, discount interest cost of the notes for related party accounted for8.64% of the total amount expected for the whole year, the housing rental income of related party accounted for114.90% of the total amount expected for the whole year, expenses for housing and equipment rental of related party accounted for95.53% of total amount expected for the whole year, revenue for service providing from related party accounted for91.08% of total amount expected for the whole year and the expenses for service receiving by related pary accounted for137.19% of total amount expected for the whole year.
2. Related transaction incurred by purchase or sales of assets
□ Applicable√ Not applicable
No related transaction incurred by purchase or sales of assets in Period
3. Related transaction from jointly investment outside
□ Applicable√ Not applicable
No related transaction from jointly investment outside occurred in Period
4. Credits and liability of related party
(1) There are no non-operation related liabilities and debts relations;
(2) Related liabilities and debts connection with daily operation concerned found more in “VIII. Related party and related transactions” in “Section XI. Financial Report”;
5. Other related transactions
□ Applicable√ Not applicable
No other related transactions for the Company in reporting period
VIII. Significant contracts and its implementation
1. Trust, contracting and lease
(1) Trust
√Applicable□Not applicable
Explanation on trust
1. As subordinate companies of majority shareholder, Foshan Nanhai Medicine Co., Ltd. and Guangdong Dong Fang Uptodate& Special Medicines Co., Ltd. both operate pharmaceutical distribution business within
Guangdong, which partially overlaps with the pharmaceutical distribution business and geographical location of the Company and constitutes peer competition. In July 2013, to solve the problem of peer competition, majority shareholder entrusted Sinopharm Accord and Sinopharm Accord agreed to take over the management of the above two companies.
2. As a subordinate enterprise of the de facto controller, Guangdong South Pharmaceutical Foreign Trade Co., ltd. operates pharmaceutical distribution business within Guangdong, which partially overlaps with the
pharmaceutical distribution business and geographical location of the Company and constitutes peer competition. In September 2013, to solve the problem of peer competition, majority shareholder entrusted Sinopharm Accord and Sinopharm Accord agreed to take over the management of the above company.
Items generated over10% gains/losses in total profit in reporting period for the Company
□ Applicable√ Not applicable
The Company had no trust items generated over10% gains/losses in total profit in reporting period
(2) Contract
□ Applicable√ Not applicable
The Company had no contract in the reporting period.
(3) Leasing
□ Applicable√ Not applicable
The Company had no leasing in the reporting period.
2. Guarantees
√Applicable□Not applicable
In 10 thousand Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Particulars about the external guarantee of the Company (Barring the guarantee for the controlling subsidiaries)|||||||||
||Related||Actual date of||||Complet||
|||||||||Guarant|
|Name of the|Announce||happening|Actual|||e||
|||Guarantee|||Guarantee|Guarantee||ee for|
|Company|ment||(Date of|guarantee|||impleme||
|||limit|||type|term||related|
|guaranteed|disclosure||signing|limit|||ntation||
|||||||||party|
||date||agreement)||||or not||
|Shenzhen Zhijun|||||||||
||2014-03-2|||||2014.6.12-|||
||||||General||||
|Pharmacy Trade||3,150|2014-06-12|0|||No|Yes|
||2||||assurance|2015.6.11|||
|Co., Ltd.|||||||||
|China National|||||||||
||2013-08-2|||||2014.3.12-|||
||||||General||||
|Accord Medicines||30,000|2014-03-12|12,000|||No|Yes|
||0||||assurance|2015.3.11|||
|Corporation Ltd.|||||||||
|China National|||||||||
||2014-03-2|||||2014.5.30-|||
||||||General||||
|Accord Medicines||25,000|2014-05-30|8,302.28|||No|Yes|
||2||||assurance|2015.5.30|||
|Corporation Ltd.|||||||||
|China National|||||||||
||2014-03-2|||||2014.5.13-|||
||||||General||||
|Accord Medicines||25,000|2014-05-13|5,500|||No|Yes|
||2||||assurance|2015.2.11|||
|Corporation Ltd.|||||||||
|China National|||||||||
||2013-08-2|||||2014.4.4-2|||
||||||General||||
|Accord Medicines||20,000|2014-04-04|3,524.97|||No|Yes|
||0||||assurance|022.4.4|||
|Corporation Ltd.|||||||||
|China National|||||||||
||2014-03-2|||||2014.7.17-|||
||||||General||||
|Accord Medicines||40,000|2014-07-17|532.83|||No|Yes|
||2||||assurance|2020.7.17|||
|Corporation Ltd.|||||||||
|Total approving external||||Total actual occurred|||||
|guarantee in report period||93,150||external guarantee in report||62,446.19|||
|(A1)||||period (A2)|||||
|Total approved external||||Total actual balance of|||||
|guarantee at the end of report||143,150||external guarantee at the||29,860.08|||
|period ( A3)||||end of report period (A4)|||||
|Guarantee of the Company for the subsidiaries|||||||||
||Related||Actual date of||||Complet||
|||||||||Guarant|
|Name of the|Announce||happening|Actual|||e||
|||Guarantee|||Guarantee|Guarantee||ee for|
|Company|ment||(Date of|guarantee|||impleme||
|||limit|||type|term||related|
|guaranteed|disclosure||signing|limit|||ntation||
|||||||||party|
||date||agreement)||||or not||
|Sinopharm||||||2014.12.12|||
||2014-08-1||||General||||
|Holding||5,000|2014-12-12|||-2015.10.3|No|Yes|
||6||||assurance||||
|Guangzhou Co.,||||||1|||

||||||||||
|-|-|-|-|-|-|-|-|-|
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|2014-08-1||||General|2014.9.19-|||
|||40,000|2014-09-19|25,803.73|||No|Yes|
|Guangzhou Co.,|6||||assurance|2015.9.18|||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|2014-08-1||||General|2014.9.16-|||
|||25,000|2014-09-16|24,109.22|||No|Yes|
|Guangzhou Co.,|6||||assurance|2015.9.15|||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|2014-03-2||||General|2014.7.16-|||
|||35,000|2014-07-16|4,147.89|||No|Yes|
|Guangzhou Co.,|2||||assurance|2015.7.15|||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|2014-03-2||||General|2014.5.20-|||
|||35,000|2014-05-20|17,398.33|||No|Yes|
|Guangzhou Co.,|2||||assurance|2015.5.20|||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|2014-03-2||||General|2014.4.30-|||
|||30,000|2014-04-30|26,570.32|||No|Yes|
|Guangzhou Co.,|2||||assurance|2015.4.30|||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|2014-03-2||||General|2014.6.25-|||
|||40,000|2014-06-25|29,171.54|||No|Yes|
|Guangzhou Co.,|2||||assurance|2015.6.8|||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|2014-03-2||||General|2014.8.19-|||
|||10,000|2014-08-19|527.84|||No|Yes|
|Guangzhou Co.,|2||||assurance|2015.8.18|||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|2014-08-1||||General|2014.12.9-|||
|||10,000|2014-12-09|591.91|||No|Yes|
|Guangzhou Co.,|6||||assurance|2015.12.8|||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|2014-03-2||||General|2014.5.20-|||
|||3,500|2014-05-20|2,002.89|||No|Yes|
|Guangdong|2||||assurance|2015.5.20|||
|Yuexing Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding|2014-03-2||||General|2014.5.13-|||
|||3,000|2014-05-13|2,513.43|||No|Yes|
|Guangdong|2||||assurance|2015.5.12|||
|Yuexing Co., Ltd.|||||||||
|Sinopharm|||||||||
||2014-03-2||||General|2014.7.16-|||
|Holding||5,000|2014-07-16|4,627.39|||No|Yes|
||2||||assurance|2015.7.15|||
|Guangdong|||||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|Yuexing Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding|2014-08-1||||General|2014.9.19-|||
|||5,000|2014-09-19||||No|Yes|
|Guangdong|6||||assurance|2015.9.18|||
|Yuexing Co., Ltd.|||||||||
|Sinopharm|||||||||
||2014-03-2||||General|2014.7.16-|||
|Holding Foshan||1,000|2014-07-16|7.02|||No|Yes|
||2||||assurance|2015.7.15|||
|Co., Ltd.|||||||||
|Sinopharm||||||2014.10.25|||
||2014-03-2||||General||||
|Holding Guangxi||6,000|2014-10-25|650||-2015.10.2|No|Yes|
||2||||assurance||||
|Co., Ltd.||||||5|||
|Sinopharm|||||||||
||2014-03-2||||General|2014.6.26-|||
|Holding Guangxi||20,000|2014-06-26|13,073.42|||No|Yes|
||2||||assurance|2015.6.26|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
||2014-03-2||||General|2014.7.16-|||
|Holding Guangxi||30,000|2014-07-16|3,383.04|||No|Yes|
||2||||assurance|2015.7.15|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
||2014-03-2||||General|2014.4.19-|||
|Holding Guangxi||15,000|2014-04-19|8,263.95|||No|Yes|
||2||||assurance|2015.4.18|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
||2014-03-2||||General|2014.9.19-|||
|Holding Guangxi||10,000|2014-09-19|9,223.17|||No|Yes|
||2||||assurance|2015.9.18|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
||2014-03-2||||General|2014.7.1-2|||
|Holding Jiangmen||1,000|2014-07-01||||No|Yes|
||2||||assurance|015.6.30|||
|Renren Co., Ltd.|||||||||
|Sinopharm|||||||||
||2014-03-2||||General|2014.7.16-|||
|Holding Jiangmen||3,000|2014-07-16||||No|Yes|
||2||||assurance|2015.7.15|||
|Renren Co., Ltd.|||||||||
|Sinopharm|||||||||
||2014-08-1||||General|2014.11.6-|||
|Holding Liuzhou||9,000|2014-11-06|5,483.43|||No|Yes|
||6||||assurance|2015.7.15|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
||2014-03-2||||General|2014.4.29-|||
|Holding Liuzhou||5,000|2014-04-29|2,715.77|||No|Yes|
||2||||assurance|2015.4.28|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
||2014-08-1||||General|2014.9.9-2|||
|Holding Liuzhou||4,000|2014-09-09|3,518.28|||No|Yes|
||6||||assurance|015.9.8|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
||2014-03-2||||General|2014.9.17-|||
|Holding Zhanjiang||1,500|2014-09-17|24.08|||No|Yes|
||2||||assurance|2015.7.15|||
|Co., Ltd.|||||||||
|China National|||||||||
||2014-03-2||||General|2014.8.28-|||
|Zhijun (Suzhou)||6,000|2014-08-28|4,946.93|||No|Yes|
||2||||assurance|2015.8.27|||
|Pharmaceutical|||||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|Co., Ltd.|||||||||
|China National|||||||||
|Zhijun (Suzhou)|2014-03-2||||General|2014.5.27-|||
|||5,000|2014-05-27|4,057.84|||No|Yes|
|Pharmaceutical|2||||assurance|2015.5.27|||
|Co., Ltd.|||||||||
|China National|||||||||
|Zhijun (Suzhou)|2014-03-2||||General|2014.7.16-|||
|||3,000|2014-07-16|850.16|||No|Yes|
|Pharmaceutical|2||||assurance|2015.7.15|||
|Co., Ltd.|||||||||
|China National|||||||||
|Zhijun (Suzhou)|2014-03-2||||General|2014.6.25-|||
|||4,000|2014-06-25|1,260|||No|Yes|
|Pharmaceutical|2||||assurance|2014.8.21|||
|Co., Ltd.|||||||||
|China National|||||||||
|||||||2013.11.25|||
|Zhijun (Suzhou)|2013-03-2||||General||||
|||3,000|2013-11-25|1,773||-2014.11.2|No|Yes|
|Pharmaceutical|1||||assurance||||
|||||||5|||
|Co., Ltd.|||||||||
|Shenzhen Zhijun|||||||||
||2014-03-2||||General|2014.8.25-|||
|Pharmaceutical||20,000|2014-08-25|4,242.35|||No|Yes|
||2||||assurance|2014.8.25|||
|Co., Ltd.|||||||||
|Shenzhen Zhijun|||||||||
||2014-03-2||||General|2014.7.16-|||
|Pharmaceutical||5,000|2014-07-16|278.61|||No|Yes|
||2||||assurance|2015.7.15|||
|Co., Ltd.|||||||||
|Shenzhen Zhijun|||||||||
||2014-03-2||||General|2014.10.8-|||
|Pharmaceutical||2,000|2014-10-08||||No|Yes|
||2||||assurance|2015.10.8|||
|Co., Ltd.|||||||||
|Shenzhen Zhijun|||||||||
||2014-03-2||||General|2014.10.8-|||
|Pharmacy Trade||1,000|2014-10-08||||No|Yes|
||2||||assurance|2015.10.8|||
|Co., Ltd.|||||||||
|Sinopharm||||||2014.10.27|||
||2014-08-1||||General||||
|Holding Shenzhen||2,000|2014-10-27|1,946.67||-2015.10.2|No|Yes|
||6||||assurance||||
|Yanfeng Co., Ltd.||||||7|||
|Sinopharm|||||||||
||2014-03-2||||General|2014.7.16-|||
|Holding Shenzhen||7,000|2014-07-16|1,935.6|||No|Yes|
||2||||assurance|2015.7.15|||
|Yanfeng Co., Ltd.|||||||||
|Sinopharm|||||||||
||2014-03-2||||General|2014.5.13-|||
|Holding Shenzhen||2,000|2014-05-13|1,990|||No|Yes|
||2||||assurance|2015.2.12|||
|Yanfeng Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding|2014-03-2||||General|2014.7.16-|||
|||1,000|2014-07-16|308.56|||No||
|Shaoguang Co.,|2||||assurance|2015.7.15|||
|Ltd.|||||||||
|Sinopharm|2014-03-2||||General|2014.7.16-|||
|||1,000|2014-07-16|423.06|||No|Yes|
|Holding Shenzhen|2||||assurance|2015.7.15|||

|||||
|-|-|-|-|
|Medicine Co., Ltd.||||
|||Total amount of actual||
|Total amount of approving||||
|||occurred guarantee for||
|guarantee for subsidiaries in|411,000||786,487.58|
|||subsidiaries in report||
|report period (B1)||||
|||period (B2)||
|Total amount of approved||Total balance of actual||
|guarantee for subsidiaries at||guarantee for subsidiaries||
||414,000||207,819.41|
|the end of reporting period||at the end of reporting||
|(B3)||period (B4)||
|Total amount of guarantee of the Company( total of two abovementioned guarantee)||||
|Total amount of approving||Total amount of actual||
|guarantee in report period|504,150|occurred guarantee in|848,933.77|
|(A1+B1)||report period (A2+B2)||
|Total amount of approved||Total balance of actual||
|guarantee at the end of report|557,150|guarantee at the end of|237,679.49|
|period (A3+B3)||report period (A4+B4)||
|The proportion of the total amount of actually guarantee||||
|||49.88%||
|in the net assets of the Company (that is A4+ B4)||||
|Including:||||
|Amount of guarantee for shareholders, actual controller||||
|||0||
|and its related parties(C)||||
|The debts guarantee amount provided for the guaranteed||||
|parties whose assets-liability ratio exceed 70% directly or||168,281.80||
|indirectly(D)||||
|Proportion of total amount of guarantee in net assets of||||
|||37,255.54||
|the Company exceed 50%(E)||||
|Total amount of the aforesaid three guarantees(C+D+E)||205,537.34||

 Explanation on guarantee with composite way
Nil
(1) Guarantee outside against the regulation
□ Applicable√ Not applicable
No guarantee outside against the regulation in Period
3. Other significant contract
□ Applicable√ Not applicable
The Company had no other significant contract in Period.
4. Other material transactions
□ Applicable√ Not applicable
The Company had no other material transactions in the reporting period.
IX. Implementation of commitments
1.Commitments made by the Company or shareholders holding above5% shares of the Company in reporting period or extending to reporting period
√Applicable□Not applicable
|||||||
|-|-|-|-|-|-|
|||||Commit||
||||Commitment||Implemen|
|Commitment||||||
||Accepter|Contents||ment||
|s|||time||tation|
|||||period||

|||||||
|-|-|-|-|-|-|
|Share||||||
|Merger||||||
|Reform||||||
|||As a large pharmaceutical commercial enterprise||||
|||whose business involves pharmaceutical wholesale||||
|||and retail, Sinopharm Holding may overlap with the||||
|||Company in geographical segmentation during its||||
|||future business development. To avoid the potential||||
|||peer competition brought by such geographical||||
|||overlap, Sinopharm Holding undertakes that, upon||||
|||the transfer of shares of Sinopharm Holding||||
|||Guangzhou it held to Accord Pharma, “1. it will not||||
|Commitment||||||
|||newly-establish or broaden within Guangdong any||||
|s in report of||||Long-ter|Normally|
||Sinopharm|business operation that actually compete with that of||||
|acquisition|||2005-06-21|m|implement|
||Holding|Accord Pharma, or set up any new subsidiaries or||||
|or equity||||effective||
|||subordinate enterprises who engage in such business.||||
|change||||||
|||2. It will enter into business delineation with Accord||||
|||Pharma 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||||
|||Accord Pharma in the production and R&D of||||
|||pharmaceutical products.”||||
|Commitment||||||
|s in assets||||||
|reorganizatio||||||
|n||||||
|||Sinopharm Holding has undertaken in the Letter of|||Controllin|
|||Undertaking from Sinopharm Group Co. Ltd. on|||g|
|||Avoiding Peer Competition that, “I. the Company and|||sharehold|
|||the enterprises it wholly-owns, controls or has de|||er is|
|||facto control over (excluding Sinopharm Accord and|||implement|
|Commitment||its controlled enterprises, similarly hereinafter) do not|||in real|
|s make in||exist any business or operation that would constitute||Long-ter|earnest,|
||Sinopharm|||||
|initial public||substantive peer competition with Sinopharm Accord|2013-09-05|m|Sinophar|
||Holding|||||
|offering or||and its controlled enterprises. II. the Company and||effective|m Accord|
|re-financing||the enterprises it wholly-owns, controls or has de|||will|
|||facto control over will not engage in, participate in or|||actively|
|||carry out in Guangdong and Guangxi any business or|||urged the|
|||activities that would constitute substantive|||controllin|
|||competition with the pharmaceutical commercial|||g|
|||businesses of Sinopharm Accord. III. The Company|||sharehold|

||||||
|-|-|-|-|-|
||and the enterprises it wholly-owns, controls or has de|||er and|
||facto control over will not engage in, participate in or|||actual|
||carry out any business or activities that would|||controller|
||constitute substantive competition with the|||to fulfill|
||pharmaceutical industrial businesses of Sinopharm|||commitme|
||Accord. IV. The Company will not make use of its|||nts|
||control over Sinopharm Accord to damage the legal||||
||interests of Sinopharm Accord and other shareholders||||
||(especially minority shareholders). The Letter of||||
||Undertaking takes effect since the date of issue and||||
||will remain effective during the entire period when||||
||the Company has been the controlling shareholder or||||
||connected party of Sinopharm Accord. During the||||
||validity of the Undertaking, the Company will||||
||indemnify in time Sinopharm Accord from any loss||||
||which may arise out of the Company’s violation of||||
||the Undertaking.”||||
||Sinopharm Holding has undertaken in the Letter of||||
||Undertaking from Sinopharm Group Co. Ltd. on||||
||Standardization of the Connected Transactions with||||
||China National Accord Medicines Corporation Ltd.|||Controllin|
||that, “I. during the period when the Company takes|||g|
||control over Sinopharm Accord, the Company and|||sharehold|
||the companies or enterprises it directly or indirectly|||er is|
||controls (hereinafter referred to as “Connected|||implement|
||Party”) will strictly standardize the connected|||in real|
||transactions with Sinopharm Accord and its|||earnest,|
||controlled enterprises. II. for those connected|||Sinophar|
||transactions beyond avoidance or out of reasonable|||m Accord|
||causes, the Company and Connected Party will enter||Long-ter|will|
|Sinopharm|||||
||into standardized connected transaction agreement|2013-09-05|m|actively|
|Holding|||||
||with Sinopharm Accord according to law.||effective|urged the|
||Sinopharm Accord will perform approval procedure|||controllin|
||according to relevant laws, rules and regulations,|||g|
||other standardization documents and its constitutional|||sharehold|
||documents, and fulfill its obligation to disclose|||er and|
||information on connected transactions. III. For those|||actual|
||connected transactions beyond avoidance or out of|||controller|
||reasonable causes, the Company and Connected Party|||to fulfill|
||will determine the prices of connected transactions|||commitme|
||based on the prices of same or similar transactions|||nts|
||entered into by independent third parties of no||||
||connection while following the principles of open,||||
||fair and just to ensure the fairness. IV. when the||||

||||||
|-|-|-|-|-|
||board or shareholders’ meeting of Sinopharm Accord||||
||votes on the relevant connected transactions||||
||involving the Company and other enterprises it||||
||controls, the Company will perform obligations||||
||including that necessary interested directors and||||
||shareholders shall be abstained from voting according||||
||to relevant regulations, and follow the legal||||
||procedures for approval of connected transactions and||||
||fulfill its information disclosure obligation. V. the||||
||Company guarantees to attend shareholders’ meeting||||
||according to the constitutional documents of||||
||Sinopharm Accord, exercise its corresponding rights||||
||and assumed its corresponding obligations in an||||
||equitable manner, not to take advantage of its||||
||standing as controlling shareholder to seek unjust||||
||interests, or to use connected transactions to illegally||||
||transfer capital or profit out of Sinopharm Accord, or||||
||to prejudice the legal interests of Sinopharm Accord||||
||and other shareholders (especially minority||||
||shareholders). VI. The Letter of Undertaking takes||||
||effect since the date of issue and will remain effective||||
||during the entire period when the Company has been||||
||the controlling shareholder or connected party of||||
||Sinopharm Accord. During the validity of the||||
||Undertaking, the Company will indemnify in time||||
||Sinopharm Accord from any loss that may arise out||||
||of the Company’s violation of the Undertaking.”||||
||”Sinopharm Group has undertaken in the Letter of|||Controllin|
||Undertaking from China National Pharmaceutical|||g|
||Group Corporation on Avoiding the Peer Competition|||sharehold|
||with China National Accord Medicines Corporation|||er is|
||Ltd. that, “I. in the coming five years, Sinopharm|||implement|
||Group intends to take appropriate measures including|||in real|
||replacement or acquisition of assets or equity|||earnest,|
||||Long-ter||
|Sinopharm|reorganization to solve the problem of peer|||Sinophar|
|||2013-10-16|m||
|Group|competition between Weiqida and Sinopharm|||m Accord|
||||effective||
||Accord. II. apart from the matters disclosed in the|||will|
||past and in the Letter of Undertaking, the Company|||actively|
||and the enterprises it wholly-owns, controls or has de|||urged the|
||facto control over (excluding Sinopharm Accord and|||controllin|
||its controlled enterprises, similarly hereinafter) do not|||g|
||directly engage in, participate in or carry out within|||sharehold|
||the PRC any business or activities that would|||er and|

||||||
|-|-|-|-|-|
||constitute substantive competition with the|||actual|
||production and operation of Sinopharm Accord. The|||controller|
||relative undertakings in respect of avoiding peer|||to fulfill|
||competition given by the Company in the past remain|||commitme|
||valid. III. The Company will not take advantage of|||nts|
||its control over Sinopharm Accord to damage the||||
||legal interests of Sinopharm Accord and other||||
||shareholders (especially minority shareholders). IV.||||
||The Letter of Undertaking takes effect since the date||||
||of issue and will remain effective during the entire||||
||period when the Company has been the de facto||||
||controller or connected party of Sinopharm Accord.”||||
||Sinopharm Group has undertaken in the Letter of||||
||Undertaking from China National Pharmaceutical||||
||Group Corporation on Standardization of the||||
||Connected Transactions with China National Accord||||
||Medicines Corporation Ltd that, “I. during the||||
||period when the Company takes control over||||
|||||Controllin|
||Sinopharm Accord, the Company and the companies||||
|||||g|
||or enterprises it directly or indirectly controls||||
|||||sharehold|
||(hereinafter referred to as “Connected Party”) will||||
|||||er is|
||strictly standardize the connected transactions with||||
|||||implement|
||Sinopharm Accord and its controlled enterprises. II.||||
|||||in real|
||for those connected transactions beyond avoidance or||||
|||||earnest,|
||out of reasonable causes, the Company and||||
|||||Sinophar|
||Connected Party will enter into standardized||||
|||||m Accord|
||connected transaction agreement with Sinopharm||||
||||Long-ter|will|
|Sinopharm|Accord according to law. Sinopharm Accord will||||
|||2013-09-22|m|actively|
|Group|perform approval procedure according to relevant||||
||||effective|urged the|
||laws, rules and regulations, other standardization||||
|||||controllin|
||documents and its constitutional documents, and||||
|||||g|
||fulfill its obligation to disclose information on||||
|||||sharehold|
||connected transactions. III. For those connected||||
|||||er and|
||transactions beyond avoidance or out of reasonable||||
|||||actual|
||causes, the Company and Connected Party will||||
|||||controller|
||determine the prices of connected transactions based||||
|||||to fulfill|
||on the prices of same or similar transactions entered||||
|||||commitme|
||into by independent third parties of no connection||||
|||||nts|
||while following the principles of open, fair and just to||||
||ensure the fairness. IV. when the board or||||
||shareholders’ meeting of Sinopharm Accord votes on||||
||the relevant connected transactions involving the||||
||Company and other enterprises it controls, the||||
||Company will perform obligations including that||||

||||
|-|-|-|
|||necessary interested directors and shareholders shall|
|||be abstained from voting according to relevant|
|||regulations, and follow the legal procedures for|
|||approval of connected transactions and fulfill its|
|||information disclosure obligation. V. the Company|
|||guarantees not to take advantage of its standing as|
|||actual controller to seek unjust interests, or to use|
|||connected transactions to illegally transfer capital or|
|||profit out of Sinopharm Accord, or to prejudice the|
|||legal interests of Sinopharm Accord and other|
|||shareholders (especially minority shareholders).”VI.|
|||The Letter of Undertaking takes effect since the date|
|||of issue and will remain effective during the entire|
|||period when the Company has been the actual|
|||controller or connected party of Sinopharm Accord.|
|Other|||
|commitment|||
|s to minority|||
|shareholders|||
|of the|||
|Company|||
|Completed|||
|on time or|Yes||
|not|||

2. Concerning assts 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
X. Appointment and non-reappointment (dismissal) of CPA
Accounting firm appointed
|||
|-|-|
||Pricewaterhouse Zhongtian Certified Public Accountants Co., Ltd.(LLP)|
|Name of domestic accounting firm||
|Remuneration for domestic accounting firm (10||
||210|
|thousand Yuan)||
|Continuous life of auditing service for||
||5|
|domestic accounting firm||
|Name of domestic CPA|Chen Yuntao, Tang Pianpian|
|Name of foreign accounting firm (if applicable)|N/A|
|Remuneration for foreign accounting firm (10||
||0|
|thousand Yuan) (if applicable)||

|||
|-|-|
|Continuous life of auditing service for foreign||
||0|
|accounting firm (if applicable)||
|Name of foreign CPA (if applicable)|N/A|

 Whether re-appointed accounting firms in this period or not
□ Yes√ No
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√Applicable□Not applicable
The Company engaged Pricewaterhouse Coopers Zhongtian LLP as the audit body for internal control, and auditing charge for internal control amounting as RMB 0.3 million.
XI. Explanation from the Board and Supervisory Committee (if applicable) for “Qualified Opinion” from the CPA
□ Applicable√ Not applicable
XII. Penalty and rectification
□ Applicable√ Not applicable
The Company had no penalty or rectification in the reporting period.
XIII. Suspension and delisting after disclosure of annual report
□ Applicable√ Not applicable
XIV. Explanation on other significant events
□ Applicable√ Not applicable
No explanation on other significant events for the Company in reporting period.
XV. Significant events of the subsidiaries
□ Applicable√ Not applicable
XVI. Corporate bond offering
□ Applicable√ Not applicable
Section VI. Changes in Shares and Particulars about Shareholders I. Changes in Share Capital
1. Changes in Share Capital
In shares
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before the Change||Increase/Decrease in the Change (+, -)|||||After the Change||
||||||Capitaliz|||||
||||New|||||||
|||Proportio||Bonus|ation of||||Proportio|
||Amount||shares|||Others|Subtotal|Amount||
|||n||shares|public||||n|
||||issued|||||||
||||||reserve|||||
||||74,482,5||||74,481,8|74,484,5||
|I. Restricted shares|2,651|0.00%||0|0|-663|||20.54%|
||||43||||80|31||
|2. State-owned legal|||74,482,5||||74,482,5|74,482,5||
||0|0.00%||0|0|0|||20.54%|
|person’s shares|||43||||43|43||
|3. Other domestic||||||||||
||2,651|0.00%|0|0|0|-663|-663|1,988|0.00%|
|shareholding||||||||||
|Including: Domestic||||||||||
||2,651|0.00%|0|0|0|-663|-663|1,988|0.00%|
|legal person shares||||||||||
||288,146,|||||||288,147,||
|II. Unrestricted shares||100.00%|0|0|0|663|663||79.46%|
||749|||||||412||
||233,261,|||||||233,261,||
|1. RMB Ordinary shares||80.95%|0|0|0|663|663||64.32%|
||149|||||||812||
||54,885,6|||||||54,885,6||
|2. Domestically listed||||||||||
|||19.05%|0|0|0|0|0||15.14%|
|foreign shares|00|||||||00||
||288,149,||74,482,5||||74,482,5|362,631,||
|III. Total shares||100.00%||0|0|0|||100.00%|
||400||43||||43|943||

Reasons for share changed
√Applicable□Not applicable
The shares changed mainly because on 21 March 2014, the private offering to substantial shareholder Sinopharm Group Co., Ltd. was completed with 74,482,543 restricted shares increased. Found more details in “Sinopharm Accord: Release Situation of Private Offering of A-share and Listing Announcement” released on Juchao website (http://www.cninfo.com.cn) dated 20 March 2014
Approval of share changed
□ Applicable√ Not applicable
Ownership transfer of share changed
□ Applicable√ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of Company in latest year and period
||||
|-|-|-|
|Item|2014||
||Before placement|After placement后|

||||
|-|-|-|
|Fully diluted EPS attributable toshareholders of listed company(RMB)|2.26|1.80|
|Fully diluted BVPS attributableto shareholders of listed company(RMB)|9.84|13.14|

Total shares of the Company increased to 362,631,943 shares from 288,149,400 shares via the privately placement, registered capial changed correspondingly. Shares hold by controlling sharehodler comes to 184,942,291 shares with51.00% occupied from 110,459,748 shares, a38.33% of the total shares took. Net assets of the Company increased 1,929,065,413.47 Yuan due to the privately placement and overall asset-liability ratio reduced by62.19%.
√Applicable□Not applicable
Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators
□ Applicable√ Not applicable
2. Changes of restricted shares
√Applicable□Not applicable
In share
||||||||
|-|-|-|-|-|-|-|
||Number of|Number of|Number of new|Number of|||
|Shareholders’||||||Released|
||shares restricted|shares released|shares restricted|shares restricted|Restriction reasons||
|name||||||date|
||at Period-begin|in the Year|in the Year|at Period-end|||
||||||The shares changed||
||||||mainly because on 21||
||||||March 2014, the||
||||||private offering to||
|Sinopharm|||||substantial||
|Holding Co.,|0|0|74,482,543|74,482,543|shareholder|2017-3-21|
|Ltd.|||||Sinopharm Group||
||||||Co., Ltd. was||
||||||completed with||
||||||74,482,543 restricted||
||||||shares increased.||
|Chen|||||||
||2,651|663|0|1,988|Executive shares|2015-1-1|
|Changbing|||||||
|Total|2,651|663|74,482,543|74,484,531|--|--|

II. Securities issue and listing
1. Previous security offering in latest three years at period-end
√Applicable□Not applicable
||||||||
|-|-|-|-|-|-|-|
||||||Numbers||
|Stock/derivative||Offering price|Circulation|||End of trading|
||Offering date|||Listing date|approved for||
|securities||(or interest rate)|number|||date|
||||||trading||
|Common stock|||||||
|A share|2014-03-21|26.07|74,482,543|2014-03-21|0||
|Convertible corporate bond, separable-traded convertible bond and corporate bonds|||||||
|Warrant|||||||

Explanation on security offering in previous three years
On 21 March 2014, the private offering to substantial shareholder Sinopharm Group Co., Ltd. was completed with 74,482,543 restricted shares increased. Found more details in “Sinopharm Accord: Release Situation of Private Offering of A-share and Listing Announcement” released on Juchao website (http://www.cninfo.com.cn) dated 20 March 2014.
2. Changes of total shares and shareholders structure as well as explanation on changes of assets and liability structure
√Applicable□Not applicable
The total shares increased in 2014 mainly because on 21 March 2014, the private offering to substantial
shareholder Sinopharm Group Co., Ltd. was completed with 74,482,543 restricted shares increased. Found more details in “Sinopharm Accord: Release Situation of Private Offering of A-share and Listing Announcement” released on Juchao website (http://www.cninfo.com.cn) dated 20 March 2014.
3. Existing 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
|||||||
|-|-|-|-|-|-|
|||||Total preference||
|Total common||Total common||shareholders with||
|||shareholders at||||
|shareholders in||||voting rights||
||13,867|end of the 5th|14,782||0|
|reporting||trading day before||recovered at end of||
|||annual report||||
|period-end||||reporting period (if||
|||disclosed||||
|||||applicable) (see||

|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||||||||Note 8)|||
|Particulars about shares held above 5% by shareholders or the top ten shareholders||||||||||
||||Total|||||Number of share pledged/frozen||
||||||Shares|||||
|||Proporti|sharehol|||Shares of||||
|||||Changes|of|||||
|Full name of|Nature of|on of|ders at|||unrestrict||||
|||||in report|restricte|||||
|Shareholders|shareholder|shares|the end|||ed shares||State of share|Amount|
|||||period|d shares|||||
|||held|of report|||held||||
||||||held|||||
||||period|||||||
|SinopharmHolding Co.,Ltd.|State-ownedCorporation|51.00%|184,942,291|74,482,543|74,482,543|110,459,748||||
|NationalCouncil forSocial SecurityFund-116|Domestic nonstate-ownedCorporation|2.14%|7,755,083|||||||
|NationalCouncil forSocial SecurityFund-106|Domestic nonstate-ownedCorporation|2.01%|7,298,555|||||||
|HTHK/CMGFSGUFP-CMGFIRST STATECHINAGROWTH FD|Foreign lCorporation|1.94%|7,032,720|||||||
|ICBC—HarvestStrategyGrowth MixStock Fund|Domestic nonstate-ownedCorporation|1.32%|4,771,947|||||||
|New China LifeInsurance Co.,Ltd. – Bonus –Individualbonuses --018L-FH002Shen|Domestic nonstate-ownedCorporation|1.16%|4,199,772|||||||
|BOC—Harvesttheme selectedmix securitiesinvestment fund|Domestic nonstate-ownedCorporation|1.05%|3,789,933|||||||
|BOC-Harvestresearchselected stocksecuritiesinvestment fund|Domestic nonstate-ownedCorporation|0.99%|3,586,151|||||||
|GUOTAI|Foreign l|0.89%|3,240,93|||||||

|||||||
|-|-|-|-|-|-|
|JUNANSECURITIES(HONGKONG)LIMITED|Corporation||2|||
|ChinaMerchantsSecurities (HK)Co., Limited|Foreign lCorporation|0.88%|3,185,193|||
|||ICBC—Harvest Strategy Growth Mix Stock Fund, BOC—Harvest theme selected||||
|||mix securities investment fund and BOC-Harvest research selected stock securities||||
|||investment fund have the same custodian as Harvest Fund Management Co., Ltd.; it||||
|Explanation on associated||||||
|relationship among the aforesaid||is unknown that there exists no associated relationship or belongs to the consistent||||
|shareholders||actionist among the other tradable shareholders regulated by the Management||||
|||Measure of Information Disclosure on Change of Shareholding for Listed||||
|||Companies.||||
|Particular about top ten shareholders with un-restrict shares held||||||
|||||Type of shares||
|Shareholders’ name||Unrestricted shares held at period-end||||
|||||Type|Amount|
|Sinopharm Holding Co., Ltd.||110,459,748||RMB common||
||||||110,459,748|
|||||shares||
|National Council for SocialSecurity Fund-116||7,755,083||RMB common||
||||||7,755,083|
|||||shares||
|National Council for SocialSecurity Fund-106||7,298,555||RMB common||
||||||7,298,555|
|||||shares||
|HTHK/CMG FSGUFP-CMGFIRST STATE CHINAGROWTH FD||7,032,720||Domestically||
|||||listed foreign|7,032,720|
|||||shares||
|ICBC—Harvest Strategy GrowthMix Stock Fund||4,771,947||RMB common||
||||||4,771,947|
|||||shares||
|New China Life Insurance Co.,Ltd. – Bonus – Individualbonuses - -018L-FH002 Shen||4,199,772||||
|||||RMB common||
||||||4,199,772|
|||||shares||
|BOC—Harvest theme selectedmix securities investment fund||3,789,933||RMB common||
||||||3,789,933|
|||||shares||
|BOC-Harvest research selectedstock securities investment fund||3,586,151||RMB common||
||||||3,586,151|
|||||shares||
|GUOTAI JUNANSECURITIES(HONGKONG)LIMITED||3,240,932||Domestically||
|||||listed foreign|3,240,932|
|||||shares||
|China Merchants Securities (HK)Co., Limited||3,185,193||Domestically||
|||||listed foreign|3,185,193|
|||||shares||
|Expiation on associated||ICBC—Harvest Strategy Growth Mix Stock Fund, BOC—Harvest theme selected||||
|relationship or consistent actors||mix securities investment fund and BOC-Harvest research selected stock securities||||

|||
|-|-|
|within the top 10 un-restrict|investment fund have the same custodian as Harvest Fund Management Co., Ltd.; it|
|shareholders and between top 10|is unknown that there exists no associated relationship or belongs to the consistent|
|un-restrict shareholders and top|actionist among the other tradable shareholders regulated by the Management|
|10 shareholders|Measure of Information Disclosure on Change of Shareholding for Listed|
||Companies.|

Whether top ten common shareholders or top ten common shareholders with un-restrict shares held have a buy-back agreement dealing in reporting period
□ Yes√ No
The top ten common shareholders or top ten common shareholders with un-restrict shares held of the Company have no buy-back agreement dealing in reporting period.
2. Particulars about controlling shareholder of the Company
Legal person
|||||||
|-|-|-|-|-|-|
||Legal|||||
|Controlling|person/perso|Date of|Organization|Register||
||||||Main operation business|
|shareholders|n in charge|foundation|code|capital||
||of the unit|||||
||||||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|
|||||RMB||
|Sinopharm Holding|||||scope), medicine IVD Reagents,|
||Wei Yulin|2003-01-08|74618434-4|2,767,095,08||
|Co., Ltd.|||||vaccine, anabolic agents, Peptide|
|||||9||
||||||hormone and medical equipment.|
||||||III: injection puncture instruments,|
||||||hygienic materials & dressings,|
||||||medical polymer materials and|
||||||products, categories II: medical|
||||||X-ray ancillary equipment and|
||||||components; food marketing|
||||||management (non-physical way),|
||||||and domestic trade (other than|
||||||special licensing), logistics,|
||||||cosmetics, stationeries 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. [In right of|
|||exequatur to run if refers to|
|||permission operation]|
||Future development strategy: The future development strategy of Sinopharm Holding mainly||
||includes the following aspects: (1) to further enhance its network layout and take advantage of||
||the opportunities create by new Healthcare Reform; (2) continue to build a strong background,||
||strengthen the functions of various business headquarters and carry out in-depth research on the||
||synergies among diversified businesses; (3) continue to promote the sustainable development||
||of various business segments and build the profitable advantages of industry chain; (4) to||
||enhance policy research in respect of new Healthcare Reform, improve response capability,||
|Future development|||
||take advantage of opportunities and build up overall service capability; (5) to establish a new||
|strategy|||
||model of operation innovation and service innovation for retail business and promote the||
||integrated development of retail industry; Sinopharm Holding will utilize the golden||
||opportunity created by the Healthcare Reform to enhance its strategic goal, while at the same||
||time, adhering to its three core strategies of operation-driven, capital-driven and||
||innovation-driven, and will create a new Sinopharm by the end of the Twelfth Five-Year Plan||
||period and become Asia’s number one and an integrated pharmaceutical and healthcare service||
||provider with international competitive edge.||
||1. Results of operations: Sinopharm Group Co. Ltd., a core enterprise subordinated to CNPGC||
||Group, has ranked first among the pharmaceutical commercial enterprises in the PRC in terms||
||of sales for the consecutive seven years since 2005. In 2011, it was named the first||
||pharmaceutical distributor in domestic market that achieved over RMB100 billion in sales.||
|Operation results,|Since then, it has maintained a leading position among the pharmaceutical commercial||
|financial status, cash|enterprises in terms of sales, and a strong market position as the largest distributor of||
|flow etc.|pharmaceutical and healthcare products and a leading supply chain service provider in the PRC.||
||2. Financial condition: As at 30 September 2014, Sinopharm Holding recorded turnover of||
||RMB 146,835.82 million and net profit attributable to the parent company of RMB 2,148.50||
||million. 3. Cash flow: As at 30 September 2014, net cash flows from operating activities of||
||Sinopharm Holding amounted to RMB 1,673.30 million.||
|Equity of other|||
|domestic/oversea|||
|listed company|||
||Sinopharm Group Co., Ltd. hold 44.01 percent equity of China National Medicines Corporation||
|control by controlling|||
||Ltd (Stock code: 600511) up to the end of Period||
|shareholder as well as|||
|stock-joint in report|||
|period|||

Changes of controlling shareholders in reporting period
□ Applicable√ Not applicable
The Company had no changes of controlling shareholders in reporting period
3. Particulars about actual controller of the Company
Legal person
|||||||
|-|-|-|-|-|-|
||Legal|||||
|Actual controlling||Date of|Organization|||
||person/person in|||Register capital|Main operation business|
|shareholders||foundation|code|||
||charge of the unit|||||
||||||Entrusted management|
||||||and assets reorganization|
||||||of pharmaceutical|
||||||enterprises, consultant|
||||||service of medicine|
||||||industry investment|
||||||project, holding|
||||||exhibition and fair of|
|China National|||||surgical appliance, the|
|||||RMB||
||||||wholesale of Chinese|
|Pharmaceutical|She Lulin|1987-03-26|10000588-8|||
|||||10,259,024,000|medicine, Chinese patent|
|Group Corporation||||||
||||||medicines, Chinese|
||||||medicine herb in pieces,|
||||||chemical material|
||||||medicine, a chemical|
||||||agent, antibiotics,|
||||||biochemical,|
||||||biological(operation|
||||||period runs in right of|
||||||exequatur).|
||Sinopharm Group will go all out to promote the overall construction of the five platforms of the|||||
||Group, namely integrated operation platform of modern logistics and distribution, integrated|||||
||scientific technological innovation platform of production, study and research, integrated|||||
||platform of international operation, pharmaceutical and healthcare industry platform, and|||||
||integrated platform with efficient management and control and synergies, thereby forming five|||||
||networks with full coverage, namely nationwide pharmaceutical logistics, distribution and|||||
||delivery network, nationwide pharmaceutical retail chain network, nationwide anesthetic drugs|||||
||distribution network, nationwide biological products marketing and cold chain distribution|||||
||network, and nationwide medical devices and consumables distribution network, and|||||
||promoting the overall development of the eleven businesses of the Group, namely modern|||||
|Future development||||||
||pharmaceutical logistics and distribution, pharmaceutical retail, biological products, chemical|||||
|strategy||||||
||pharmaceutical manufacturing, modern Chinese medicine, diagnostic reagents and chemical|||||
||reagents, scientific instruments and medical devices, pharmaceutical science and research and|||||
||engineering design, international pharmaceutical operation and overseas industry,|||||
||pharmaceutical exhibition and media, and pharmaceutical and healthcare industry, constructing|||||
||an innovative enterprise with pharmaceutical and healthcare industry as its core competitive|||||
||edge. CNPGC aims to be established as a large pharmaceutical and healthcare group with full|||||
||coverage of the pharmaceutical industry chain, and with its leadership in the industry and|||||
||international competitive edge, and to become the first pharmaceutical and healthcare|||||
||enterprise in the PRC to be listed in Global Top 500 Enterprises during the Twelfth Five-Year|||||
||Plan period.|||||
|Operation results,|1. Results of operations: China National Pharmaceutical Group Corporation is the largest|||||
|financial status, cash|state-owned pharmaceutical and healthcare group with the fullest industry chain coverage and|||||

国药集团一致药业股份有限公司2014年年度报告全文
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|flow etc.|the strongest comprehensive strength administered directly by the State-owned Assets|||||||||
||Supervision and Administration Commission of the State Council. Sinopharm Group, which is|||||||||
||primarily engaged in the distribution, retail, R&D and production of healthcare-related products|||||||||
||for prevention and treatment and diagnosis and nursing, and it is the first and only|||||||||
||pharmaceutical enterprise in China in the top 500 world ranking. 2. Financial condition: As at|||||||||
||30 September 2014, Sinopharm Group received operating income of RMB 181,419,840,000|||||||||
||and total profit of RMB 6,671,818,500. 3. Cash flow: As at 30 September 2014, net cash flows|||||||||
||from operating activities of Sinopharm Group amounted to RMB 2,638,353,500.|||||||||
|||Name|||Name of listed||Total shareholders|Ratio||
||||||company with||(10 thousand|||
||||||shares held||shares)|||
||||China|Jianmin Group||132.35||0.86%||
||||National|||||||
||||Pharmaceutic|||||||
||||al Group|||||||
||||Corporation|||||||
||||China|SinopharmHolding||272.84||0.10%||
||||National|||||||
||||Pharmaceutic|||||||
|Equity of|||al Group|||||||
|domestic/oversea||||||||||
||||Corporation|||||||
|listed company||||||||||
|control by actual||||||||||
||||Sinopharm|SinopharmHolding||157155.60||56.79%||
|controller in report||||||||||
|period|||Holding|||||||
||||Industrial|||||||
||||Investment|||||||
||||Co., Ltd.|||||||
||||Sinopharm|Sinopharm||21070.15||44.01%||
||||Holding|||||||
||||Sinopharm||Sinopharm|18494.23||51%||
||||Holding||Accord|||||
||||Sinopharm||JLPC||321.93||2.12%|
||||Shanghai||Modern||11975.63||41.62%|
||||Institute of||Pharmaceutical|||||

|||||||
|-|-|-|-|-|-|
||Pharmaceutic|||||
||al Industry|||||
||Chinese|Hengrui Medicine||7300.00|4.88%|
||Medicine|||||
||Industry Co.,|||||
||Ltd.|||||
||Chinese|Tianrun Holding||688.00|5.81%|
||Medicine|||||
||Industry Co.,|||||
||Ltd.|||||
||Sinopharm|Jianmin Group||70.00|0.45%|
||TCM|||||
||Sinopharm|UGC||784.43|3.51%|
||TCM|||||
|Biosino|||Tiantan|27472.50|53.30%|
||||Biological|||
||Sinopharm|China TCM||101602.30|40.10%|
||Group H.K.|||||
||Co., Ltd.|||||

Changes of actual contr ollers in reporting period
□ Applicable√ Not applicable
The Company had no changes of actual controllers in reporting period
Property right and controlling relationship between the actual controller and the Company is as follow
The State-owned Assets Supervision& Administration Commission of the State Council
100%
National Council for Social China National Pharmaceutical Security Fund&public Shanghai Fosun Pharmaceutical
Group Corporation shareholder
(Group) Co., Ltd.
49% 51% 43.11%
Sinopharm Industry
Investment Co., Ltd.
0.10%
56.79%
Sinopharm Holding Co., Ltd.
51%
China National Accord Medicines Corporation Ltd.
Actual controller controlling the Company by entrust or other assets management
□ Applicable√ Not applicable
4. Particulars about other legal person shareholders with over10% shares held
□ Applicable√ Not applicable
IV. Share holding increasing plan proposed or implemented in reporting period from
shareholder of the Company and its concerted action person
□ Applicable√Not applicable
As far as the Company know, there are no share holding increasing plan proposed or implemented in Period from shareholder of the Company and its concerted action person
Section VII. Preferred Stock
□ Applicable√ Not applicable
The Company had no preferred stock in the Period.
Section VII. Particulars about Directors, Supervisors, Senior Executives and Employees
I. Changes of shares held by directors, supervisors and senior executives
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||||Increasin|Decreasin||
||||||||Shares|||Shares|
||||||Start|||g shares|g shares||
|||||||End date|held at|||held at|
|||Working|||dated of|||held in|held in||
||Title||Sex|Age||of office|period-be|||period-en|
|Name||status|||office|||this|this||
|||||||term|gin|||d|
||||||term|||period|period||
||||||||(Share)|||(Share)|
|||||||||(Share)|(Share)||
|Chen|Secretary||||||||||
|||Currently|||2015-01-|2017-09-|||||
|Changbin|of the||M|47|||2,651|0|0|2,651|
|||in office|||13|12|||||
|g|Board||||||||||
|Total|--|--|--|--|--|--|2,651|0|0|2,651|

 II. Post-holding
Major working experience of incumbent directors, supervisors and senior executive in latest five years
1. Members of the Board
Chairman– Mr. Li Zhiming, college graduation, a senior economist, and he served as the follow post in latest 5 years: party secretary, chairman and GM of Xingjiang Medicine Group and had a concurrent post of party secretary, chairman and GM of Xinjiang Special and Ethnic Drugs Company from January 2008 to February 2009; chairman, GM and party secretary of Sinopharm Group Xinjiang Pharmaceutical Co., Ltd. from February 2009 to May 2013; deputy president of Sinopharm Group Co., Ltd. from May 2020 to November 2013; he hold a
concurrent post of General Counsel of Sinopharm Group Co., Ltd. from October 2012 to January 2014; a deputy party secretary, discipline inspection commission secretary and labor union chairman of Sinopharm Group Co., Ltd. from November 2012 to November 2013; president of Sinopharm Group Co., Ltd. since November 2013; meanwhile, served as Chairman of China National Medicines Corporation Ltd from August 2010 to October 2011; chairman of Sinopharm Holding Tianjin Co., Ltd. from August 2010 to December 2013; chairman of Sinopharm
Holding Heilongjiang Co., Ltd. from November 2010 to April 2013; chairman of Sinopharm Holding Shenyang
Co., Ltd. from October 2011 to April 2013; chairman of Sinopharm Holding Jilin Co., Ltd. from October 2011 to
April 2013; chairman of Sinopharm Holding Inner Mongolia Co., Ltd. from March 2011 to December 2013; serves as chairman of Sinopharm Holding Ningxia Co., Ltd. since June 2011; chairman of Sinopharm Holding Shaanxi Co., Ltd. since October 2011; chairman of Sinopharm Holding Gansu Co., Ltd. since October 2011; he had a concurrent post of chairman of Sinopharm Holding Shanxi Co., Ltd. from October 2011 to December 2013; serves as chairman of Sinopharm Holding Qinghai Co., Ltd. since October 2011; he took post of chairman of Sinopharm Holding Mudan River Co., Ltd. from October 2011 to April 2013; serves as chairman of Sinopharm Group Shanxi Co., Ltd. since March 2012; chairman and party secretary of Sinopharm Group Xinjiang
Pharmaceutical Co., Ltd. since May 2013; president of Sinopharm Group Co., Ltd. since November 2013; Director of Sinopharm Group Hong Kong Co., Ltd. since January 2014 and chairman of China National
Medicines Corporation Ltd since February 2014; he serves as executive director of Sinopharm Holding Sub Marketing Center Co., Ltd. since January 2014 and serves as chairman of 6th and 7th session of the Board for the Company since February 2014.
Deputy Chairman--- Ms. Cui Dieling, MBA, an engineer. She served as the follow post in latest 5 years: GM of Business Division of Shanghai Parma Group Antibiotic, GM of Shanghai Asia Pioneer pharmacy Co., Ltd. and Chairman of Shanghai Xinya Pharmacy Co., Ltd. from December 2008 to December 2010; Chairman of
HSDRUG from December 2010 to March 2011; Chief of Industrial Development and Management Center of Sinopharm Group Co., Ltd. from March 2011 to December 2013; assistant president of Sinopharm Group Co., Ltd. since December 2012; Chairman of Sinopharm A-THINK Pharmaceutical Co., Ltd. since October 2011;
Chairman of Xingsha Pharmaceuticals (Xiamen) Co., Ltd. since December 2011; she served as Chairman of 6th Session of Supervisory Committee for the Company from October 2011 to August 2012; Director of 6th session of the Board since August 2012, Chairman of Sinopharm Group Sanyi Pharmaceutical (Wuhu) Co., Ltd. since July 2012; had current post of chairman of Sinopharm Group Chemical Reagent Co., Ltd. since December 2013 and deputy chairman of 6th and 7th session of the Board for the Company since February 2014.
Chairman—Mr. WeiYulin, MBA, a senior economist, Licensed Pharmacist, pharmacist-in-charge and CCOM; he served as the follow post in latest 5 years: Chairman of Sinopharm Holding Beijing Huahong Co., Ltd. from August 2008 to November 2011; he serves as President and Party Secretary of Sinopharm Group Co., Ltd. since December 2009; Chairman of Beijing Tianxing Puxin Biological Medical Co., Ltd from April 2010 to November 2011; Chairman of Yujia Medical Consultancy Co., Ltd. from September 2010 to November 2011; serves as Chairman of Sinopharm Holding H.K. Co., Ltd since January 2011; Chairman of Sinopharm Le-Ren-Tang Medicine Co., Ltd. from April 2011 to June 2013 and deputy chairman of Sinopharm Le-Ren-Tang Medicine Co., Ltd. since June 2013; Chairman of Sinopharm Group Chemical Reagent Co., Ltd. from December 2011 to December 2013 and Chairman of the 6th Session of the Board of the Company from October 2011 to February 2014; He Serves as Director of Sinopharm Holding Guoda Pharmacy Co., Ltd since August 2012; Chairman and Party Secretary of Sinopharm Group Co., Ltd. since November 2013 and Director of 6th and 7th session of the Board for the Company since February 2014.
Director——Mr. Ma Wanjun, EMBA. He served as the follow post in latest 5 years: GM of Shanghai Sinopharm Waigaoqiao Medicine Co., Ltd. from October 2006 to December 2009; deputy GM of Operation Center of Sinopharm Group Co., Ltd. from December 2009 to September 2010; Director of Sinopharm Holding Shenyang Co., Ltd from January 2010 to November 2011; he serves as Chairman of Guangdong Dong Fang Uptodate& Special Medicines Co., Ltd. since March 2010; Director of Sinopharm Holding Suzhou Co., Ltd from May 2010 to November 2011; Chairman of Sinopharm Holding Jiangsu Co., Ltd from May 2010 to November 2011; Director of Wenzhou Biomedicine-Appliances Supplies Co., Ltd. from July 2010 to November 2011; deputy President of Sinopharm Group Co., Ltd. since September 2010; Chairman of Sinopharm Holding Henan Co., Ltd from October 2010 to January 2013; Director of Sinopharm Holding Changzhou Co., Ltd from December 2010 to November 2011; Director of Shanghai Bionuo Enterprise Management Co., Ltd. from December 2010 to
November 2011; general counsel of Sinopharm Group Co., Ltd. from May 2011 to October 2012; he serves as Director of Sinopharm Le-Ren-Tang Medicine Co., Ltd. since April 2011; Director of Sinopharm Group Shaanxi Co., Ltd. from April 2011 to September 2011; Director of China National Medicines Corporation Ltd since October 2011; Director of Yujia Medicine Service Co., Ltd. since November 2011; Chairman of Sinopharm Health Industry (Shanghai) Co., Ltd. since November 2011; Director of 6th and 7th Session of the Board for the Company since March 2011; Chairman of Sinopharm Holding Health Development (Shanghai ) Co., ltd since May 2012; Chairman of Sinopharm Holding Fujian Co., Ltd and Sinopharm Holding Fuzhou Co., Ltd since August 2012; he serves as executive Director of Sinopharm Holding Henan Co., Ltd. since January 2013 and executive Director of Shanghai Tongyu Information Technology Co., Ltd. since April 2013.
Director– Mr. Jiang Xiuchang, a university background, senior economists and senior accountant. He served as the follow post in latest 5 years: CFO of China National Medicines Corporation Ltd. from December 2006 to May 2010; CFO of Sinopharm Group Co., Ltd. since May 2010; he acts as deputy President of Sinopharm Group Co., Ltd. since July 2013 and hold concurrent post of Supervisor of Sinopharm Holding Guoda Pharmacy Co., Ltd since June 2010; Supervisor of Yujia Medicine Co., Ltd. since September 2010; Director of China National Medicines Corporation Ltd since February 2011; Director of Sinopharm Le-Ren-Tang Medicine Co., Ltd since April 2011; Director of Sinopharm Holding H.K. Co., Ltd since November 2011; Director of Sinopharm Group Financial Co., Ltd since November 2011; Director of Sinopharm Group Shaanxi Co., Ltd. from April 2011 to September 2011; Supervisor of Sinopharm Sub Marketing Center Co., Ltd. since April 2011; Supervisor of Sinopharm Holding Beijing Co., Ltd. and Director of Sinopharm Group Financial Co., Ltd since November 2011; he serves as Director of 6th and 7th session of the Board for the Company since March 2011, Chairman of
Sinopharm Holding Jiangxi Co., Ltd. since June 2013; Chairman of Sinopharm Holding Shanxi Co., Ltd., deputy Chairman of Sinopharm Group Shanxi Co., Ltd., Chairman of Sinopharm Holding Tianjin Co., Ltd. and Chairman of Sinopharm Holding Inner Mongolia Co., Ltd. since December 2013.
Director—Mr.Yan Zhigang, MBA, senior engineers and Licensed Pharmacist. He served as the follow post in latest 5 years: Deputy GM of the Company from January 2005 to December 2008; GM of the Company since December 2008; Director of the 5th, 6th and 7th session of the Board since February 2009; he acts Director of
Sinopharm A-THINK Pharmaceutical Co., Ltd. since June 2010; and took executive director of Sinopharm Holding Guangzhou Co., Ltd. since February 2014.
Independent Director --- Mr. He Zhiyi, Doctor Degree of Fudan University, Post doctorate of Beijing University, Professor and PH.D adviser. Currently, he works as the vice Dean of New Huadu Business School. He acted as vice Dean of Antai College ofEconomics& Business Administration of SJTU; the professor, PH.D adviser and Dean Assistant of Guanghua Administration College of Beijing University and Office Director of Administration Case Research of Beijing University; He use to took advance study and visiting scholar in Sweden IMD, GM school of Management and Kellogg school of Management, Northwestern University of USA. He also worked as the deputy dean ofDevelopment& Research of Poverty-zone of Beijing University, executive director of Chinese Enterprise Research Center of Beijing University, executive editor of Business Comments of Beijing University magazine, vice-chairman and secretary of the Chinese Federation for Corporate Social Responsibility,
vice-chairman and secretary of CNEMA and Director of IFSAM etc. Mr. He Zhiyi owes rich experience, and also served as position in government, GM in State-owned enterprises, Chairman of joint-stock enterprises, President of Beijing University Xiaochang Business Co., Ltd and Director of Office of Industrial Management, funded by school. He serves as Independent Director of the Board for the Company since June 2010.
Independent Director --- Mr.Xiong Chuxiong, a doctor degree, professor and a CPA. He graduated from
Accounting Dept. of Southwestern University of Finance& Economics and Accounting Dept. of Xiamen
University successively. After obtained the PhD. Economics in Xiamen University in 1992, he was assigned to teach in accounting majors of Shenzhen University. He used to be a visiting scholar in University of Manchester, U.K. currently; he works as professor in Shenzhen University. He serves as Independent Director of the 6th and 7th Session of the Board for the Company since April 2011.
IndependentDirector—Mr. Xiao Shengfang, attorney, a postgraduate of Civil& Commercial Law of Renmin University of China and MBA of Jinan University. Currently serves as director of Guangdong Sino-Win Law Firm, and served social position of: Director of Guangdong Lawyers Association, Standing director of Guangzhou Lawyers Association, legal consultant ofPeople’s Government of Guangzhou City; member of lawyers advisory group of organizing committee of 16th Asian Games, Guangzhou, vice director of professional committee of Labor Law& Social Security Law, China Lawyers Association. He serves as Independent Director of 6th and 7th Session of the Board for the Company since April 2011.
2. Members of supervisors:
Chairman of Supervisory Committee--- Mr. Feng Yifeng, University background, a CPA and ACCA. He served as a senior manager of PWC Zhongtian CPA from July 2002 to June 2010; and he serves as director of financial manage dept. of Sinopharm Holding Co., Ltd. since June 2010, and during the period, serves as Director of Sinopharm Holding Fujian Co., Ltd., subordinate of Sinopharm Holding, Sinopharm A-THINK Pharmaceutical
Co., Ltd. and Sinopharm Holding Hainan Co., Ltd.; serves as supervisor of Sinopharm Group Chemical Reagent Co., Ltd. , Sinopharm Holding Henan Co., Ltd., Sinopharm Holding Changzhou Co., Ltd., Sinopharm Holding Wuxi Co., Ltd., Sinopharm Holding Gansu Co., Ltd. and Sinopharm Group Sanyi Pharmaceutical (Wuhu) Co., Ltd. He serves as chairman of the 6th and 7th session of supervisory committee of the Company since August 2012.Supervisor——Ms. Guan Xiaohui, Master of Accounting, Certified Public Accountant and Economist. She serves as vice CFO of Shanghai Fosun Pharmaceutical (Group) Co., Ltd. since November 2004; serves as supervisor of 5th, 6th and 7th Session of Supervisory Committee of the Company since September 2007.
EmployeeSupervisor——Mr. Wang Huaiqin, 3-years regular college graduate, political commissar, assistant accountant. He served as the Chairman of First Union since September 2005 to March 2009; member of Party Committee, deputy secretary of discipline& inspection committee and chairman of Union of the Company since September 2008; serves as employee supervisor of 5th, 6th and 7th Session of Supervisory Committee of the Company since September 2007.
3. Senior executives:
General Manager-- Mr. Yan Zhigang, referring to the aforesaid introduction of members of directors for details Deputy GeneralManger——Mr. Lin Zhaoxiong, senior MBA, Pharmacist-in-charge. He worked in Sinopharm Holding Guangzhou Co., Ltd. with successively taking the posts of deputy general manger and manager of Pharmacy Department, and manger of Pharmaceutical Company and majordomo of Operation Management Department from Jan. 1999 to Dec. 2003; deputy general manager of Sinopharm Holding Guangzhou Co., Ltd from Jan. 2004 to Dec. 2006; he serves as GM of Sinopharm Holding Guangzhou Co., Ltd. since December 2006 and deputy GM of the Company since December 2008.
Deputy GeneralManger——Mr. Lin Min, senior MBA, Pharmaceutical Engineer, Licensed Pharmacist, worked in China National Pharmaceutical Group Guangzhou Corporation with successively taking the posts of assistant to manager, deputy general manger of Pharmacy Department and deputy general manger of purchasing in
Pharmaceutical Company from Jan. 2001 to Nov. 2003; supervisor of Guangzhou pharmacy sales of Sinopharm Holding Guangzhou Co., Ltd from Nov. 2003 to Jan. 2005; general manager of Sinopharm Holding Liuzhou Co., Ltd from March 2006 to Nov. 2007; took deputy general manager of Sinopharm Holding Guangzhou Co., Ltd from Jan. 2005 to Dec. 2008; serves as deputy GM of the Company since December 2008.
Deputy GeneralManger——Mr. Lin Xinyang, MBA, Licensed Pharmacist, he took the turns of deputy GM of Nanfang Pharm. Co., deputy GM of China Medicine 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.
Deputy GeneralManger——Mr. Deng Baojun, an MBA, senior engineer and Licensed Pharmacist, he took the position of deputy general manager of Shenzhen Zhijun Pharmaceutical Co., Ltd. from August 2003 to December 2008; took the position as General Manager of Shenzhen Zhijun Pharmaceutical Co., Ltd. since December 2008; serves as general manager of pharmaceutical business department of China National Accord Medicines
Corporation Ltd. since December 2010 and took deputy GM of the Company.
Deputy GeneralManger—— Mr. Pan Rangren, a postgraduate, IFM and assistant accountant. He serves as vice secretary of the Party general branch, deputy GM, standing deputy GM and labor union chairman of Shenzhen Zhijun Pharmaceutical Co., Ltd. from November 2005 to April 2011; he serves as deputy GM of pharmaceutical division under the name of China National Accord Medicines Corporation Ltd. since December 2010; took Party secretary and standing deputy GM of Shenzhen Zhijun Pharmaceutical Co., Ltd. from April 2011 to December 2013; he serves as GM of China National Zhijun (Suzhou) Pharmaceutical Co., Ltd. since August 2013; serves as Party secretary and GM of Shenzhen Zhijun Pharmaceutical Co., Ltd. since January 2014 and deputy GM of the Company since December 2014.
Chief FinancialOfficer——Mr. Wei Pingxiao, MBA, an accountant, took the turns of Financial department of State-owned Beijing Electronic Tube Plant, Modern Electronic Shenzhen Industrial Company, China Electronic Industrial Headquarter since August 1985; and 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 charger of AMOI and director of its subsidiary since April 1993; and he hold the post of CFO of the Company since December 2004.
Secretary of theBoard——Mr. Chen Changbing, Master Degree. He served as secretary of the Board of 3rd and 4th Session of the Board for the Company since December 2000; and serves as Chief of Planning Investment Management Dept. and Secretary of the Board of 5th, 6th and 7th Session of the Board for the Company since September 2007.
Post-holding inshareholder’s unit
√Applicable□Not applicable
|||||||
|-|-|-|-|-|-|
||||||Receiving|
||||||remuneration from|
||||Start date of|End date of||
|Name|Name of shareholder’s units|Position||||
||||office term|office term|shareholder’s units|
||||||(Y/N)|
|||President||||
|||Executive||||
|Wei Yulin|Sinopharm Group Co., Ltd.|director|2013-11-01|2016-11-01|Y|
|||CPC||||
|||secretary||||

|||||||
|-|-|-|-|-|-|
|Li Zhiming|Sinopharm Group Co., Ltd.|President|2013-11-01|2016-11-01|Y|
|||Deputy||||
|||president||||
|||General||||
|Ma Wanjun|Sinopharm Group Co., Ltd.||2011-05-01||Y|
|||counsel||||
|||Secretary of||||
|||the Board||||
|Jiang||||||
||Sinopharm Group Co., Ltd.|CFO|2010-06-01||Y|
|Xiuchang||||||
|||Assistant||||
|||president||||
|||director of||||
|||Industry||||
|Cui Dieling|Sinopharm Group Co., Ltd.||2011-03-01||Y|
|||developmen||||
|||t &||||
|||managemen||||
|||t center||||
|||Financial||||
|Feng Yifeng|Sinopharm Group Co., Ltd.|managemen|2010-06-01||Y|
|||t dept.||||

Post-holding in other unit
√Applicable□Not applicable
|||||||
|-|-|-|-|-|-|
||||Start date of|End date of|Receiving|
|Name|Name of shareholder’s unit|Position||||
||||office term|office term|remuneration from|
||||||other units(Y/N)|
|Wei Yulin|Sinopharm Holding H.K. Co., Ltd|Chairman|2011-01-01||N|
||Sinopharm Group Chemical Reagent|||||
|Wei Yulin||Chairman|2011-12-01||N|
||Co., Ltd.|||||
||Sinopharm Le-Ren-Tang Medicine|||||
|Wei Yulin||Chairman|2011-04-01||N|
||Co., Ltd.|||||
||Sinopharm Holding Guoda Pharmacy|||||
|Wei Yulin||Director|2012-08-01||N|
||Co., Ltd|||||
||Sinopharm Group Xinjiang|||||
|Li Zhiming||Chairman|2013-05-01||N|
||Pharmaceutical Co., Ltd.|||||
|Li Zhiming|Sinopharm Holding Ningxia Co., Ltd|Chairman|2011-06-01||N|
|Li Zhiming|Sinopharm Holding Shaanxi Co., Ltd.|Chairman|2011-10-01||N|
|Li Zhiming|Sinopharm Holding Gansu Co., Ltd.|Chairman|2011-10-01||N|
|Li Zhiming|Sinopharm Holding Qinghai Co., Ltd.|Chairman|2011-10-01||N|
||China National Medicines Corporation|||||
|Li Zhiming||Chairman|2011-10-01||N|
||Ltd|||||
|Li Zhiming|Sinopharm Holding H.K. Co., Ltd|Director|2014-01-01||N|
||Sinopharm Holding Sub Marketing|Executive||||
|Li Zhiming|||2014-01-01||N|
||Center Co., Ltd.|Director||||

||||||
|-|-|-|-|-|
||Guangdong Dong Fang Uptodate &||||
|Ma Wanjun||Chairman|2010-03-01|N|
||Special Medicines Co., Ltd.||||
|Ma Wanjun|Sinopharm Holding Henan Co., Ltd|Chairman|2010-10-01|N|
|||Executive|||
|Ma Wanjun|Sinopharm Holding Henan Co., Ltd||2013-01-01|N|
|||Director|||
||Sinopharm Holding Changzhou Co.,||||
|Ma Wanjun||Director|2010-12-01|N|
||Ltd||||
||Shanghai Bionuo Enterprise||||
|Ma Wanjun||Director|2010-12-01|N|
||Management Co., Ltd.||||
||Sinopharm Le-Ren-Tang Medicine||||
|Ma Wanjun||Director|2011-04-01|N|
||Co., Ltd.||||
|Ma Wanjun|Sinopharm Group Shanxi Co., Ltd.|Director|2011-04-01|N|
||China National Medicines Corporation||||
|Ma Wanjun||Director|2011-10-01|N|
||Ltd||||
|Ma Wanjun|Yujia Medicine Service Co., Ltd.|Director|2011-11-01|N|
||Sinopharm Health Industry (Shanghai)||||
|Ma Wanjun||Chairman|2011-11-01|N|
||Co., Ltd.||||
||Sinopharm Holding Health||||
|Ma Wanjun||Chairman|2012-05-01|N|
||Development (Shanghai) Co., ltd.||||
|Ma Wanjun|Sinopharm Holding Fujian Co., Ltd|Chairman|2012-08-01|N|
|Ma Wanjun|Sinopharm Holding Fuzhou Co., Ltd|Chairman|2012-08-01|N|
|Jiang|Sinopharm Holding Guoda Pharmacy||||
|||Supervisor|2010-06-01|N|
|Xiuchang|Co., Ltd||||
|Jiang|||||
||Yujia Medicine Service Co., Ltd.|Supervisor|2010-09-01|N|
|Xiuchang|||||
|Jiang|China National Medicines Corporation||||
|||Director|2011-02-01|N|
|Xiuchang|Ltd||||
|Jiang|Sinopharm Le-Ren-Tang Medicine||||
|||Director|2011-04-01|N|
|Xiuchang|Co., Ltd.||||
|Jiang|||||
||Sinopharm Holding H.K. Co., Ltd|Director|2011-11-01|N|
|Xiuchang|||||
|Jiang|||||
||Sinopharm Group Financial Co., Ltd|Director|2011-11-01|N|
|Xiuchang|||||
|Jiang|||||
||Sinopharm Group Shanxi Co., Ltd.|Director|2011-04-01|N|
|Xiuchang|||||
|Jiang|Sinopharm Holding Sub Marketing||||
|||Supervisor|2011-04-01|N|
|Xiuchang|Center Co., Ltd.||||
|Jiang|||||
||Sinopharm Holding Beijing Co., Ltd|Supervisor|2011-11-01|N|
|Xiuchang|||||
||Sinopharm A-THINK Pharmaceutical||||
|Cui Dieling||Chairman|2011-10-01|N|
||Co., Ltd.||||
||Sinopharm Xingsha Pharmaceuticals||||
|Cui Dieling||Chairman|2011-12-01|N|
||(Xiamen) Co., Ltd.||||

|||||||
|-|-|-|-|-|-|
||Sinopharm Group Sanyi|||||
|Cui Dieling||Chairman|2012-07-01||N|
||Pharmaceutical (Wuhu) Co., Ltd.|||||
|||Chairman of||||
||China National Medicines Corporation|||||
|Cui Dieling||Supervisory|2011-12-01||N|
||Ltd|||||
|||Committee||||
|Feng Yifeng|Sinopharm Holding Fujian Co., Ltd|Director|2012-04-01||N|
||Sinopharm A-THINK Pharmaceutical|||||
|Feng Yifeng||Director|2012-05-01||N|
||Co., Ltd.|||||
|Feng Yifeng|Sinopharm Holding Hainan Co., Ltd|Director|2012-05-01||N|
||Sinopharm Group Chemical Reagent|||||
|Feng Yifeng||Supervisor|2012-05-01||N|
||Co., Ltd.|||||
|Feng Yifeng|Sinopharm Holding Henan Co., Ltd|Supervisor|2012-06-01||N|
||Sinopharm Holding Changzhou Co.,|||||
|Feng Yifeng||Supervisor|2010-12-01||N|
||Ltd|||||
|Feng Yifeng|Sinopharm Holding Wuxi Co., Ltd|Supervisor|2012-12-01||N|
|Feng Yifeng|Sinopharm Holding Gansu Co., Ltd.|Supervisor|2012-05-01||N|
||Sinopharm Holding Health|||||
|Feng Yifeng||Supervisor|2012-05-01||N|
||Development (Shanghai) Co., ltd.|||||
||Sinopharm Group Sanyi|||||
|Feng Yifeng||Supervisor|2012-07-01||N|
||Pharmaceutical (Wuhu) Co., Ltd.|||||
||Shenzhen Main Luck Pharmaceuticals|||||
|Yan Zhigang||Chairman|2010-05-01||N|
||Inc.|||||
||Sinopharm A-THINK Pharmaceutical|||||
|Yan Zhigang||Director|2010-06-01||N|
||Co., Ltd.|||||
||Sinopharm Holding Guangzhou Co.,|Executive||||
|Yan Zhigang|||2014-02-01|2014-12-31|N|
||Ltd.|Director||||
|He Zhiyi|Newhuadu Business School|Vice dean|2009-01-01||Y|
|Xiong||||||
||Shenzhen University|Professor|||Y|
|Chuxiong||||||
|Xiong|Shenzhen Zhongjin Lingnan|Independent||||
||||2011-04-01||Y|
|Chuxiong|Nonferrous Co., Ltd.|Director||||
|Xiong|Shenzhen International Enterprise Co.,|Independent||||
||||2010-07-01||Y|
|Chuxiong|Ltd.|Director||||
|Xiong||Independent||||
||Hytera Communications Co., Ltd.||2010-01-01||Y|
|Chuxiong||Director||||
|Xiao||||||
||Guangdong Sino-Win Law Firm|Director|||Y|
|Shengfang||||||

III. 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 2013 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.
Remuneration for directors, supervisors and senior executives in reporting period
In 10 thousand Yuan
|||||||||
|-|-|-|-|-|-|-|-|
|||||||Total||
||||||Total||Remuneration|
|||||||remuneration||
||||||remuneration||actually|
|||||Post-holding||||
|Name|Title|Sex|Age|||obtained from||
|||||status|obtained from||obtained at|
|||||||shareholder’s||
||||||the Company||period-end|
|||||||unit||
|||||Currently in||||
|Li Zhiming|Chairman|M|51|||||
|||||office||||
||Deputy|||Currently in||||
|Cui Dieling||F|49|||||
||Chairman|||office||||
|||||Currently in||||
|Wei Yulin|Director|M|57|||||
|||||office||||
|||||Currently in||||
|Ma Wanjun|Director|M|45|||||
|||||office||||
|Jiang||||Currently in||||
||Director|M|51|||||
|Xiuchang||||office||||
|||||Currently in||||
|Yan Zhigang|Director, GM|M|55||190|0|190|
|||||office||||
||Independent|||Currently in||||
|He Zhiyi||M|59||8|0|8|
||Director|||office||||
|Xiong|Independent|||Currently in||||
|||M|59||8|0|8|
|Chuxiong|Director|||office||||
|Xiao|Independent|||Currently in||||
|||M|45||8|0|8|
|Shengfang|Director|||office||||
|Feng Yifeng|Chairman of|M|36|Currently in||||

|||||||||
|-|-|-|-|-|-|-|-|
||Supervisory|||office||||
||Committee|||||||
|||||Currently in||||
|Guan Xiaohui|Supervisor|F|44|||||
|||||office||||
|||||Currently in||||
|Wang Huiqin|Supervisor|M|57||54|0|54|
|||||office||||
|Lin||||Currently in||||
||Deputy GM|M|47||152|0|152|
|Zhaoxiong||||office||||
|||||Office||||
|Tan Guoshu|Deputy GM|M|60||133|0|133|
|||||leaving||||
|||||Currently in||||
|Lin Min|Deputy GM|M|50||133|0|133|
|||||office||||
|||||Currently in||||
|Lin Xinyang|Deputy GM|M|50||133|0|133|
|||||office||||
|||||Currently in||||
|Deng Baojun|Deputy GM|M|53||152|0|152|
|||||office||||
|||||Currently in||||
|Pan Rangren|Deputy GM|M|50||133|0|133|
|||||office||||
|||||Currently in||||
|Wei Pingxiao|CFO|M|51||133|0|133|
|||||office||||
|Chen|Secretary of|||Currently in||||
|||M|47||56|0|56|
|Changbing|the Board|||office||||
|Total|--|--|--|--|1,293|0|1,293|

 Delegated equity incentive for directors, supervisors and senior executives in reporting period
□ Applicable√ Not applicable
IV. Post-leaving and dismissals for directors, supervisors and senior executives
||||||
|-|-|-|-|-|
|Name|Title|Type|Date|Reasons|
|Shi Jinming|Director|Office leaving|2014-01-09|Director resignation|
|Li Zhiming|Director|Election|2014-02-18|Director supplement|
|Li Zhiming|Chairman|Election|2014-02-27|Elected by the Board|
||Deputy||||
|Cui Dieling||Election|2014-02-27|Elected by the Board|
||Chairman||||
|||End-of-tour|||
|Tan Guoshu|Deputy GM||2014-12-08|Retired|
|||outgoing|||
|Pan Rangren|Deputy GM|Election|2014-12-08|Appointed by the Board|

V. Changes of core technology team or key technicians in reporting period (not including directors, supervisors and senior executives)
Nil.
VI. Particulars of workforce
The Company has 4,594 practitioners at end of 2014 in total, annual average practitioners number was 4,431; average labor for dispatching was 541, total working hours over more than 1.13 million, laboring remuneration paid amounting as RMB 31.56 million in total, there are 722 people in retired are enjoying partial holiday expenses paid by the Company.
Professional structure for year of 2014:
Category Number Ratio
|||
|-|-|
|1219|29.77%|
|1066|24.06%|
|722|16.29%|
|181|4.08%|
|206|4.65%|
|937|21.15%|
|4431|100%|

Education background for year of 2014:
Education Number Ratio
|||
|-|-|
|159|3.57%|
|1480|33.40%|
|1207|27.24%|
|1586|35.79%|

graduate or below
|||
|-|-|
|4431|100%|

Section IX. Corporate Governance
I. Basic situation of corporate governance
Articles of Association are formulated at governance level. In compliance with requirements of Articles, rules of procedures forshareholders’ meeting, board and board of supervisors, working system of strategy committee, nomination committee, internal risk control and audit committee, remuneration and evaluation committee, general manager and secretary to board, corporate governance system regarding information disclosure, connected transactions, fund raising, performance of social responsibilities, inside information and informant management, investor relation management, engagement of accounting firm and prevention of occupation by major shareholders and connected parties of capital of listing companies are also established.
During the Reporting Period, the Article of Association and Rules of Procedure of Shareholders Meeting have been revised according to regulatory requirements and governance needs. The effective implementation of corporate governance system ensures the effective performance of duties and responsibilities of respective committees, thereby facilitating the board of supervisors to play a supervisory role and offering help for the board to make scientific decisions.
Is there any difference between the corporate government, the Company Laws and relevant regulations from CSRC
√ Yes□ No
Explanation on difference existed among the corporate governance, Corporation Law and related regulations of China Securities Regulatory Commission
As a state-holding listed enterprise, the Company executed relevant regulations of state-owned assets management by controlling shareholder and actual controller. Details are as:
|||||||
|-|-|-|-|-|-|
|Serial|Information submittedobject|Relationship with thelisted company|Type|Basis for submitted|Submittedcycle|
|1|Sinopharm Group Co.,Ltd.|First largestshareholder|Financialstatement|Needs of consolidated statementof largest shareholder|Regular|
|2|China NationalPharmaceutical GroupCorporation|Actual controller|AssetsEvalutionReport ect.|Management method ofstate-owned property righttransfer and equity investmentmanagement of China NationalPharmaceutical Group Corp.|Temporary|

According to requirements of the "Notice on Strengthening Supervision on Condition that Listing Corporation Offering Undisclosed Information to Shareholders and Actual Controllers" and the "Appending Notice on Strengthening Supervision and Governance on Non-normative Behavior such as Listing Corporation Offering Undisclosed Information to Shareholders and Actual Controllers issued by the Shenzhen securities regulatory
bureau, in September of 2007, the Company's board of directors and board of supervisors approved the "Bill on
Implementing Staff Report of Insider Trading Information and Governance on Non-standard Special Information
Disclosure" which agreed that the Company implements enforcement of secrecy and staff report system for
insider trading information when conducting relevant provisions of the management of state-owned assets, regularly submitting the financial statements to major shareholders and reporting to the major shareholder about state-owned assets disposal.
Progress of special activity in relation to corporate governance and determination and implementation of insider registration management system
The “Management Mechanism of inside Information and Insiders for Sinopharm Accord” was formulated by the Company, responsibilities, range of insiders, regulation of information privacy, information approval, registration& filing for insiders and accountability are well-defined in the Mechanism. Self-evaluation of the internal control of the Company shows that the Company was strictly, in line with regulations, performed the management of information privacy during the Period.
II. In the report period, the Company held annual general meeting (AGM) and extraordinary general meeting
1. AGM in the report period
|||||||
|-|-|-|-|-|-|
|Session of||||||
||Date|Name of meeting motion|Situation|Date of disclosure|Index of disclosure|
|meeting||||||
|||“Report of the Board for year of||||
|||2013”, “Report of Supervisory||||
|||Committee for year of 2013”,||||
|||“Annual Report and Summary of||||
|||2013” , “Profit Distribution Plan for||||
|||year of 2013” , “Application of||||
|||Comprehensive Credit Line Limit||||
||||||Juchao|
|||and Guarantee Arrangement for the||||
||||||Website—(http://|
|||year of 2014 ”,”proposal of fund||||
||||||www.cninfo.com.c|
|Annual||transfer between the Company and||||
||||||n) “Resolution|
|general|2014 -04-18|controlling subsidiary through|All pass|2014-04-19||
||||||Notice of Annual|
|meeting 2013||entrust loans”, ”Joint liability||||
||||||General Meeting|
|||assurance guarantee offering to||||
||||||2013” No.:|
|||wholly-owned subsidiary”, ”Daily||||
||||||2014-23|
|||related transaction with related||||
|||party from the Company and its||||
|||subordinate enterprise for year of||||
|||2014”, “Re-engagement of Auditing||||
|||Institution for Annual Report and||||
|||Internal Control” and “proposal of||||
|||Article of Association Revised”||||

2. Extraordinary general meeting in the report period
|||||||
|-|-|-|-|-|-|
|Session of||||||
||Date|Name of meeting motion|Situation|Date of disclosure|Index of disclosure|
|meeting||||||
|First|2014-02-18|“proposal of Article of|All pass|2014-02-19|Juchao|

|||||||
|-|-|-|-|-|-|
|extraordinary||Association Revised”;|||Website—(http://|
|general||“proposal of co-opted|||www.cninfo.com.c|
|meeting of||Director”|||n) “Resolution|
|2014|||||Notice of First|
||||||extraordinary|
||||||general meeting of|
||||||2014” No.:|
||||||2014-06|
|||”Adjustment of Bank Credit||||
|||Limited and Guarantee||||
|||Arrangement for year of||||
||||||Juchao|
|||2014”, “Financial service||||
||||||Website—(http://|
|||offering from Sinopharm||||
|Second|||||www.cninfo.com.c|
|||Group Financial Co., Ltd for||||
|extraordinary|||||n) “Resolution|
|||the Company”, “proposal of||||
|general|2014-09-12||All pass|2014-09-13|Notice of Second|
|||Article of Association||||
|meeting of|||||extraordinary|
|||Revised”, “proposal of Rules||||
|2014|||||general meeting of|
|||of Procedure of Shareholders||||
||||||2014” No.:|
|||Meeting Revised”, ”General||||
||||||2014-41|
|||Election of the Board” and||||
|||“General Election of||||
|||Supervisory Committee”||||
||||||Juchao|
||||||Website—(http://|
|Third|||||www.cninfo.com.c|
|||”Increasing registered capital||||
|extraordinary|||||n) “Resolution|
|||for subordinate 16||||
|general|2014-10-27||All pass|2014-10-28|Notice of Third|
|||wholly-owned subseries by||||
|meeting of|||||extraordinary|
|||Sinopharm Accord”||||
|2014|||||general meeting of|
||||||2014” No.:|
||||||2014-52|

3. Request for extraordinary general meeting by preferred stockholders whose voting rights restore□ Applicable√ Not applicable
III. Responsibility performance of independent directors in report period
1. The attending of independent directors to Board meetings and general meeting
||||||||
|-|-|-|-|-|-|-|
|The attending of independent directors|||||||
||Times of Board|||||Absent the|
|Independent|meeting||Times of|Times of|||
|||Times of|||Times of|Meeting for the|
||supposed to||attending by|entrusted|||
|director||Presence|||Absence|second time in|
||attend in the||communication|presence|||
|||||||a row (Y/N)|
||report period||||||

||||||||
|-|-|-|-|-|-|-|
|He Zhiyi|10|1|8|1|0|N|
|Xiong Chuxiong|10|2|8|0|0|N|
|Xiao Shengfang|10|2|8|0|0|N|
|Times of the attending of|||||||
|independent directors to general||4|||||
|meeting|||||||

Explanation of absent the Board Meeting for the second time in a row
2. Objection for relevant events from independent directors
Whether independent directors come up with objection aboutcompany’s relevant matters or not
□ Yes√ No
Independent directors has no objections for relevant events in reporting period
3. Other explanation about responsibility performance of independent directors
Whether the opinions from independent directors have been adopted or not
√Yes□ No
Explanation of independent directors on accepted or unaccepted suggestions
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 IV. Responsibility performance of subordinate special committee of the Board in report 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 3 independent|

 non-executive directors and 3 directors, including the convener (professional accountant) is an independent director. In accordance with relevant provisions of China Securities Regulatory Commission and Shenzhen Stock
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 2014, approved proposal of financial accounting report, summary report of annual audit work of CPA and rehiring PWC Zhongtian CPA 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 is 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 3 directors, including 2 independent directors; convener is He Zhiyi, 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. Andthey’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 2014, the remuneration and appraisal committee carried out the performance evaluation of executives according to the 2013 Annual operation standard and performance.
2. It proposed the "2015 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 2014 annual report. And it issued the following opinions:
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 2014 annual report about personnel salary of the directors, supervisors and senior management is real and accurate.
V. Works from Supervisory Committee
Whether the Company has risks or not in reporting period that found in supervisory activity from supervisory committee
□ Yes√ No
Supervisory committee has no objection about supervision events in reporting period
VI. Independency of the Company relative to controllingshareholders’ 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.
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 andshareholders’ 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. VII. Horizontal Competition
√Applicable□Not applicable
1. As subordinate companies of majority shareholder, Foshan Nanhai Medicine Co., Ltd. and Guangdong Dong Fang Uptodate& Special Medicines Co., Ltd. both operate pharmaceutical distribution business within Guangdong, which partially overlaps with the pharmaceutical distribution business and geographical location of the Company and constitutes peer competition. In July 2013, to solve the problem of peer competition, majority shareholder entrusted Sinopharm Accord and Sinopharm Accord agreed to take over the management of the above two companies.
2. As a subordinate enterprise of the actual controller, Guangdong South Pharmaceutical Foreign Trade Co., ltd. operates pharmaceutical distribution business within Guangdong, which partially overlaps with the pharmaceutical distribution business and geographical location of the Company and constitutes peer competition. In September 2013, to solve the problem of peer competition, majority shareholder entrusted Sinopharm Accord and Sinopharm Accord agreed to take over the management of the above company.
3. As a subordinate pharmaceutical enterprise of the actual controller, the primary business of Sinopharm Group Weiqida Pharmaceutical Co., Ltd. is similar to the pharmaceutical industrial products of the Company, which constitutes peer competition.
To solve the peer competition, Sinopharm Group issued in October 2013 the Letter of Undertaking from China National Pharmaceutical Group Corporation on Avoiding the Peer Competition with China National Accord Medicines Corporation Ltd. and undertook that, in the coming five years, Sinopharm Group intends to take appropriate measures (including the disposal of assets, equity injection and stoppage of production etc.) to solve the problem of peer competition between Weiqida and Sinopharm Accord.
VIII. Appraisal and incentive mechanism for senior executives
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. TheCompany’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.
Section X. Internal control
I. Internal control (IC) construction
During the Reporting Period, the Company continued to perfect governance structure and further improve internal management pursuant to Company Law of the PRC, Securities Law of the PRC, the Standard of Corporate Governance for PRC Listed Companies and the Basic Standard for Enterprise Internal Control jointly issued by the Ministry of Finance and CSRC, and Guidelines of Shanghai Stock Exchange for Internal Control of Listed Companies. Currently, a relatively complete internal control system has been established to basically cover all control aspects in operation including management control, finance control and production and operation.
Meanwhile, the Company organized annual revision and irregular improvement for internal control system based on the changes in organizational structure, responsibilities, business environment and market environment, and exercised strict control over authorization and approval through self-assessment on internal control, field auditing surveillance, special auditing, analysis and standardized procedures for all types of systems (including OAoffice\NCfinance\overallbudget\CMSdistribution\WMS distribution andlogistics\ERP), thereby ensuring the effective implementation of internal control system and laying a sound foundation for theCompany’s normal operation.
A. Corporate management control
During the reporting period, in line with the needs of internal governance in aspect of management, the Company revised relevant director composition and discussion rules for the Board in Article of Association. Effective execution of the above governance system guarantees relevant committees fulfill their duties completely, and in favor of yielding supervision role for supervisory committee, help a lot in scientific decision-making for the Board.
In line with needs, cadres management system, engineering audit, housing management, training mechanism management, auxiliary employees management, office environment and dressing management as well asworkers’ congress co-chair are increased in aspect of management. And priority in revising and improving procedures of the follow mechanisms as foreign investment enterprise governance, total risk management, IT management, engineering projects, technical innovation projects, contract management, business vehicles reform, performance, remuneration, welfare management, attendance and vocation ect.
B. Financial management control
In reporting period, the Company laid special stress on revising and improving the follow mechanism procedures: cash rising, financing guarantee, expenses management, expense budget, account reimbursement/filing/keeping, capital loss processing, management of financial information system, management of finance director,subsidiary’s profit distribution and NC capital system etc. C. Production and operation control
Distribution business of the Company in reporting period mainly on the construction of intelligent supply chain, service transformation, business innovation, new GSP certification optimized and improvement for vary mechanism procedures, consolidate the integration of controlling& management platform for distribution. The pharmaceutical business mainly on R& D& manufacturing three major center and functional management organization optimization, information integration platform, international certification and construction of new GMP certification, controlling and management system improvement, creating a new platform for the industrial development and management controlling specialized in management horizontal and
specialties in labor division.
II. Declaration of board of directors on internal control responsibilities
国药集团一致药业股份有限公司
2014年 12月31日
合并资产负债表
(除特别注明外，金额单位为人民币元)
Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of 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 reports.
Pursuit to regulation of normative system of enterprise IC, board of the directors is responsible for establishing and completing the effective implementation of IC. Supervisory committee and the Board supervised the construction and execution of IC; and managers are in charge of organizing and leading normal operation of the IC for the Company.
Target of IC:
1. Strictly abide by relevant laws and regulations of the State, guarantee a legal compliance of enterprise operation;
2. Take precautions against both operation and moral risks by strengthening an effective control in business links;
3. Improving operational efficiency and results, promoting a smoothly realization forenterprise’s development strategy;
4. Prevent and find out and correct vary mistakes and corrupt practice timely, guarantee a safety and completion assets;
5. Accountinginformation’s timeliness, authenticity, accuracy and integrity guarantee, improve quality for theCompany’s financial report.
Owing to limitations the IC have, the Company offer reasonable guarantee for the above mentioned controlling targets only. Furthermore, due to the fact that any change in external situation may result in improper internal control or reduced compliance of control policy and procedure, there is certain risk to conjecture the effectiveness of internal control in future based on the assessment on internal control.
III. Basis of establishing internal control over financial reporting
|||
|-|-|
||Basic Norms of Internal|
|Control and relevant rules of Rules Governing the Listing of Shares on Shenzhen Stock Exchange||
|and Internal Control Guidelines of Listed Companies in Shenzhen Stock Exchange, organized an||
|assessment for internal control.||

IV Appraisal report of IC
|||
|-|-|
|Details of major defects in appraisal report that found in reporting period||
|According to the indentified situation for IC major defects in financial report and non-financial report, on base day of||
|IC’s appraisal report (31 December 2014), there is no major defects of IC in financial report and non-financial report||
|Date of appraisal report of||
|internal control disclosed|2015-03-21|
|(Full-text)||
|Index of appraisal report of||
||Juchao Website: (http://www.cninfo.com.cn); ”Self-evaluation Report of Internal|
|internal control||
||Control of China National Accord Medicines Corporation Ltd for year of 2014”|
|disclosed(Full-text)||

国药集团一致药业股份有限公司
2014年 12月31日
合并资产负债表
(除特别注明外，金额单位为人民币元)
V. Auditing report and authentication report of internal control
Auditing report of IC
|||
|-|-|
|Deliberation section of auditing report of IC||
|Sinopharm Accord, in line with Basic Norms of Enterprises Internal Control and relevant regulations, shows an||
|effectiveness internal control of financial report in all major aspects dated 31 December 2014||
|Disclosure date of audit report||
||2015-03-21|
|of internal control (full-text)||
|Index of audit report of internal|Juchao Website: (http://www.cninfo.com.cn); ”Audit Report of Internal Control of|
|control (full-text)|China National Accord Medicines Corporation Ltd.”|

Issued a modified audit opinions for internal control
□Y√N
Auditing report of internal control issued by CPA shows the same opinion as self-evaluation report issued by the Board
√ Y□ N
VI. Establishment and enforcement of Accountability Mechanism for Major Errors in Annual Report
The “Accountability Mechanism for Major Errors in Annual Report Disclosure” was deliberated and approved on 15th Meeting of 5th Session of the Board dated 20 March 2010, and has been published and implemented. No major errors are found in the Company during reporting period.
国药集团一致药业股份有限公司
2014年 12月31日
合并资产负债表
(除特别注明外，金额单位为人民币元)
Section XI Financial Report
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF THE AUDITORS FOR THE YEAR ENDED 31 DECEMBER 2014
[English translation for reference only. Should there be any inconsistency between the Chinese and English versions, the Chinese version shallprevail.]
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
CONSOLIDATED FINANCIAL STATEMENTS AND REPORT OF THE AUDITORS FOR THE YEAR ENDED 31 DECEMBER 2014
Page Report of the Auditors 1-2 Financial Statements of 2014
Consolidated balance sheets 1-2Company’s balance sheets 3-4 Consolidated andCompany’s income statements 5 Consolidated andCompany’s cash flow statements 6-7 Consolidated statement of changes inowners’ equity 8-9Company’s statement of changes inowners’ equity 10-11 Notes to financial statements 12-116 Supplementary information 1
[English Translation for ReferenceOnly]
Report of the Auditors
PwC ZT Shen Zi (2015) No. 22539 (Page 1 of 2) To the Shareholders of China National Accord Medicines Co., Ltd.
We have audited the accompanying financial statements of China National Accord Medicines Co., Ltd. (hereinafter the “Company”), which comprise the consolidated and company balance sheets as at 31 December 2014, and the consolidated and company income statements, the consolidated and company statements of changes inshareholder’s equity and the consolidated and company cash flow statements for the year then ended, and the notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management of National Accord is responsible for the preparation and fair presentation of these financial statements in accordance with the requirements of Accounting Standards for Business Enterprises, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with China Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on theauditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to theentity’s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
PwC ZT Shen Zi (2015) No. 22539 (Page 2 of 2) Opinion
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of the Company and of the Company and its subsidiaries(the “Group”) as at 31 December 2014, and their financial performance and cash flows of the Company and the Group for the year then ended in accordance with the requirements of Accounting Standards for Business Enterprises.
PricewaterhouseCoopers Zhong Tian LLP
Shanghai, thePeople’s Republic of China
20 March 2015
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Consolidated balance sheets
For the year ended 31 December 2014
(All amounts in Renminbi “RMB” unless otherwise stated)
ASSETS Note 31 December 2014 31 December 2013 1 January 2013 (Restated) (Restated) Current assets
Cash at bank and on hand IV(1) 867,562,115.54 1,113,562,211.65 953,992,070.61 Notes receivable IV(2) 618,995,440.09 739,061,141.72 650,860,240.37 Accounts receivable IV(3) 7,018,312,673.19 5,675,658,506.78 4,393,325,300.66 Advances to suppliers IV(4) 96,043,154.40 64,367,040.17 89,512,381.34 Other receivables IV(5) 28,574,927.90 29,620,899.71 32,985,425.60 Inventories IV(6) 2,322,333,262.87 1,831,267,290.00 1,734,679,063.78 Other current assets IV(7) 40,308,591.47 12,203,752.77 8,080,607.66 Total current assets 10,992,130,165.46 9,465,740,842.80 7,863,435,090.02 Non-current assets
Long-term equity investments IV(8) 157,604,846.85 135,341,010.52 121,019,845.50 Investment properties IV(9) 73,836,850.51 77,269,718.14 88,315,429.63 Fixed assets IV(10) 745,557,829.35 766,741,590.63 690,487,633.12 Construction in progress IV(11) 330,218,696.56 126,606,806.01 103,955,350.80 Intangible assets IV(12) 144,383,753.87 150,561,964.46 155,155,071.20 Development costs IV(12) 5,619,315.47 5,619,315.47 5,002,441.27 Goodwill IV(13) 79,378,833.15 85,228,833.15 85,228,833.15 Long-term prepaid expenses IV(14) 39,154,232.03 35,985,621.47 19,742,990.45 Deferred income tax assets IV(15) 85,146,479.50 68,895,938.25 49,509,529.97 Other non-current assets IV(17) 175,910,538.15 139,905,300.41 113,987,724.53 Total non-current assets 1,836,811,375.44 1,592,156,098.51 1,432,404,849.62 TOTAL ASSETS 12,828,941,540.90 11,057,896,941.31 9,295,839,939.64
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Consolidated balance sheets
For the year ended 31 December 2014
(All amounts in Renminbi “RMB” unless otherwise stated)
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Consolidated balance sheets (continued)
For the year ended 31 December 2014
(All amounts in Renminbi “RMB” unless otherwise stated)
LIABILITIES ANDOWNER’S Note 31 December 2014 31 December 2013 1 January 2013 EQUITY (Restated) (Restated) Current liabilities
Short-term borrowings IV(18) 1,517,954,528.88 2,744,941,589.11 1,687,810,294.37 Notes payable IV(19) 1,468,166,640.64 1,495,401,188.09 1,105,275,538.24 Accounts payable IV(20) 3,988,878,234.03 3,436,936,497.16 3,197,354,275.46 Advances from customers IV(21) 40,339,905.63 38,570,231.44 35,002,695.02 Employee benefits payable IV(22) 171,958,142.88 155,847,364.12 151,102,408.20 Taxes payable IV(23) 77,445,669.46 76,045,260.04 51,390,674.43 Interests payable IV(24) 6,666,712.19 13,065,850.14 13,035,821.07 Other payables IV(25) 412,347,201.51 496,102,247.39 413,831,307.40 Current portion of long-term
Borrowings IV(26) 4,000,000.00 7,800,000.00 71,127,275.00 Anticipation liabilities IV(27) - 22,040,000.00 - Other current liabilities - - 399,014,838.05 Total current liabilities 7,687,757,035.22 8,486,750,227.49 7,124,945,127.24 Non-current liabilities
Long-term borrowings IV(28) 39,695,448.00 - 82,205,562.71 Long-term payables - - 32,259.60 Payables for specific projects IV(29) 1,287,000.00 4,287,000.00 4,487,000.00 Deferred Income IV(30) 176,366,201.15 176,531,418.18 168,180,160.90 Long-term employee benefits payable IV(31) 2,896,000.00 3,619,000.00 4,892,000.00 Deferred income tax liabilities IV(15) 24,297,076.57 24,644,887.76 26,619,273.68 Other non-current liabilities IV(32) 45,427,343.31 45,427,343.31 45,427,343.31 Total non-current liabilities 289,969,069.03 254,509,649.25 331,843,600.20 Total liabilities 7,977,726,104.25 8,741,259,876.74 7,456,788,727.44OWNERS’ EQUITY
Share capital IV(33) 362,631,943.00 288,149,400.00 288,149,400.00 Capital surplus IV(34) 1,863,894,533.34 5,750,338.57 5,550,338.57 Surplus reserve IV(35) 181,315,971.50 144,855,634.40 99,360,384.15 Undistributed profits IV(36) 2,356,765,374.25 1,806,002,285.06 1,382,882,906.24 Total equity attributable to equity
holders of the Company 4,764,607,822.09 2,244,757,658.03 1,775,943,028.96 Minority interest IV(37) 86,607,614.56 71,879,406.54 63,108,183.24 Total owners' equity 4,851,215,436.65 2,316,637,064.57 1,839,051,212.20 TOTAL LIABILITIES ANDOWNERS’
EQUITY 12,828,941,540.90 11,057,896,941.31 9,295,839,939.64
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Company balance sheets
For the year ended 31 December 2014
(All amounts Renminbi “RMB” unless otherwise stated)
ASSETS Note 31 December 2014 31 December 2013 1 January 2013 (Restated) (Restated) Current assets
Cash at bank and on hand 257,173,314.81 218,342,947.03 160,633,355.13 Notes receivable 47,389,669.59 34,964,767.24 376,521.35 Accounts receivable XV(1) 513,791,982.48 427,376,566.55 364,688,936.84 Advances to suppliers 5,047,755.80 35,982.02 2,944,282.55 Other receivables XV(2) 1,111,423,809.76 1,160,527,938.29 971,859,991.32 Interest receivable 1,890,165.10 1,650,552.45 - Inventory 184,880,147.05 172,165,830.98 130,552,057.09 Other current assets 2,560,096.51 2,657,068.36 262,096.80 Total current assets 2,124,156,941.10 2,017,721,652.92 1,631,317,241.08 Non-current assets
Long-term equity investments XV(3) 2,772,004,341.23 1,583,340,504.90 1,469,049,339.88 Investment properties 5,272,980.96 7,060,731.46 7,392,314.49 Fixed assets 17,175,509.65 20,722,267.75 27,728,901.07 Construction in progress 299,290,846.13 54,974,475.13 545,247.24 Intangible assets 36,923,545.12 37,966,282.04 37,903,901.08 Long-term prepaid expenses 5,681,186.10 6,787,267.98 7,893,858.54 Deferred income tax assets 2,800,803.02 2,941,603.89 2,929,885.67 Other non-current assets 68,103,087.93 29,152,556.06 8,350,000.00 Total non-current assets 3,207,252,300.14 1,742,945,689.21 1,561,793,447.97 TOTAL ASSETS 5,331,409,241.24 3,760,667,342.13 3,193,110,689.05
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Company balance sheets (continued)
For the year ended 31 December 2014
(All amounts Renminbi “RMB” unless otherwise stated)
LIABILITIES ANDOWNER’S 31 December 2014 31 December 2013 1 January 2013 EQUITY (Restated) (Restated) Current liabilities
Short-term borrowings 202,000,000.00 1,079,500,000.00 452,004,475.38 Notes payable 274,584,574.89 247,283,090.92 176,012,796.90 Accounts payable 314,477,971.19 318,141,136.49 282,426,136.11 Advances from customers 322,008.81 291,691.40 477,717.18 Employee benefits payable 20,339,767.52 16,307,245.17 28,442,468.43 Taxes payable 13,695,533.72 1,509,173.93 715,642.50 Interests payable 86,831.07 1,834,864.78 7,091,864.58 Other payables 447,928,781.45 421,121,969.02 575,130,189.97 Other current liabilities - - 399,014,838.05 Total current liabilities 1,273,435,468.65 2,085,989,171.71 1,921,316,129.10 Non-current liabilities
Long-term borrowings 39,695,448.00 - - Payables for specific projects 800,000.00 800,000.00 1,000,000.00 Deferred income 5,000,000.00 - - Long-term employee benefits payable 226,000.00 205,000.00 407,000.00 Deferred income tax liabilities 3,773,319.00 3,773,319.00 3,773,319.00 Total non-current liabilities 49,494,767.00 4,778,319.00 5,180,319.00 Total liabilities 1,322,930,235.65 2,090,767,490.71 1,926,496,448.10OWNERS’ EQUITY
Share capital 362,631,943.00 288,149,400.00 288,149,400.00 Capital surplus 1,869,692,921.70 14,548,726.93 14,348,726.93 Surplus reserve 181,315,971.50 144,855,634.40 99,360,384.15 Undistributed profits 1,594,838,169.39 1,222,346,090.09 864,755,729.87 Total owners' equity 4,008,479,005.59 1,669,899,851.42 1,266,614,240.95 TOTAL LIABILITIES ANDOWNERS’
EQUITY 5,331,409,241.24 3,760,667,342.13 3,193,110,689.05 The accompanying notes form an integral part of these financial statements.
Legal Principal in charge Head of accounting
representative: of accounting : department:
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Consolidated and company income statements
For the year ended 31 December 2014
(All amounts in Renminbi “RMB” unless otherwise stated)
2014 2013 2014 2013 Item Note
Consolidated Consolidated Company Company I Sales IV(38) ,XV(4) 23,954,331,028.05 21,199,466,399.21 2,778,958,470.32 2,518,386,572.81 Less: Cost of sales IV(38), (43), XV(4) (22,002,628,769.91) (19,436,081,887.14) (2,661,191,051.06) (2,409,832,221.55) Taxes and surcharges IV(39) (46,741,611.03) (45,650,849.46) (7,884,152.19) (4,632,584.72) Selling and distribution (522,383,083.15) (50,541,074.90) expenses IV(40),(43) (486,390,181.25) (46,654,161.93) Administration expenses IV(41),(43) (474,317,573.25) (422,405,979.87) (56,548,260.89) (36,859,396.97) Financial expenses– net IV(42),(43) (123,129,102.91) (164,405,341.20) 86,040,210.41 (6,348,006.40) Asset impairment losses IV(43),(44) (54,059,556.00) (41,996,906.63) (121,866,804.17) (438,806.80) Add: Investment income IV(45),XV(5) 50,415,836.33 42,473,165.02 527,284,955.64 432,316,666.66 Including: Share of profits of
associates 50,415,836.33 42,473,165.02 50,415,836.33 42,473,165.02 II Operating profit 781,487,168.13 645,008,418.68 494,252,293.16 445,938,061.10 Add: Non-operating income IV(46) 49,881,058.60 36,964,713.17 3,720,411.34 9,707,048.59 Less: Non-operating expenses IV(47) (2,084,788.43) (22,870,954.38) (73,227.94) (2,050.00) Including: Loss on disposal
non-current assets (541,470.69) (357,911.01) (23,227.86) - III Total profit 829,283,438.30 659,102,177.47 497,899,476.56 455,643,059.69 Less: Income taxes expenses IV(48) (159,442,270.43) (124,882,778.24) (23,673,310.42) (690,557.22) IV Net profit 669,841,167.87 534,219,399.23 474,226,166.14 454,952,502.47 Attributable to equity holders
of the Company 652,497,176.03 520,488,198.80 474,226,166.14 454,952,502.47 Minority interest 17,343,991.84 13,731,200.43 - - V Other comprehensive
income - - - - VI Total comprehensive
income 669,841,167.87 534,219,399.23 474,226,166.14 454,952,502.47 Attributable to equity holders
of the Company 652,497,176.03 520,488,198.80 474,226,166.14 454,952,502.47 Minority interest 17,343,991.84 13,731,200.43 - - VII Earnings per share IV(49)
Basic earnings per share 1.90 1.81 N/A N/A Diluted earnings per share 1.90 1.81 N/A N/A The accompanying notes form an integral part of these financial statements.
Legal Principal in charge Head of accounting
representative: of accounting : department:
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Consolidated and company cash flows statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
2014 2013 2014 2013 Item Note
Consolidated Consolidated Company Company I. Cash flows from operating
activities:
Cash received from sales of
goods or rendering of
services 24,589,100,077.05 21,400,046,466.55 2,920,233,286.18 2,656,050,222.94 Refund of taxes and surcharges 7,684,100.85 7,839,165.67 - - Cash received relating to
other operating activities IV(50)(a) 95,723,511.65 88,738,677.49 23,134,788.02 23,527,672.03 Sub-total of cash inflows 24,692,507,689.55 21,496,624,309.71 2,943,368,074.20 2,679,577,894.97 Cash paid for goods and
services (24,004,157,438.02) (19,677,678,243.79) (2,890,702,190.08) (2,590,167,718.93) Cash paid to and on behalf of
employees (561,974,921.45) (501,918,206.39) (51,493,616.14) (49,821,490.43) Payments of taxes and
surcharges (532,911,240.08) (494,426,455.04) (34,440,144.29) (18,103,777.98) Cash paid relating to other
operating activities IV(50)(b) (390,161,122.43) (357,573,304.66) (27,519,021.28) (35,493,382.49) Sub-total of cash outflows (25,489,204,721.98 ) (21,031,596,209.88) (3,004,154,971.79) (2,693,586,369.83) Net cash flows from
operating activities IV(51)(a) (796,697,032.43) 465,028,099.83 (60,786,897.59) (14,008,474.86) II. Cash flows from investing
activities
Cash received from returns on
investments 28,152,000.00 28,152,000.00 590,255,378.22 453,046,506.41 Net cash received from
disposal of fixed assets,
intangible assets and other
long-term assets 1,373,701.57 4,827,138.26 8,220.00 65,000.00 Cash received from disposal of
subsidiaries and other
business units - - 4,665,051,089.73 1,616,152,164.08 Sub-total of cash inflows 29,525,701.57 32,979,138.26 5,255,314,687.95 2,069,263,670.49 Cash paid to acquire fixed
assets, intangible assets
and other long-term assets (342,669,442.11) (150,496,228.82) (255,285,127.72) (60,206,411.53) Cash paid to acquire
Investments - - (1,264,910,000.00) (100,000,000.00) Net cash paid to acquire
subsidiaries and other
business units IV(51)(b) (2,211,778.91) (13,724,751.57) (6,761,000.00) (12,372,731.71) Cash paid relating to other
investing activities - - (4,619,057,191.29) (1,748,600,000.00) Sub-total of cash outflows (344,881,221.02) (164,220,980.39) (6,146,013,319.01) (1,921,179,143.24) Net cash flows from
investing activities (315,355,519.45) (131,241,842.13) (890,698,631.06) 148,084,527.25
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Consolidated and company cash flows statements(continued)
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
2014 2013 2014 2013 Item Note
Consolidated Consolidated Company Company III. Cash flows from financing
activities
Cash received from investments 1,929,626,737.77 - 1,929,626,737.77 - Cash received from borrowings 533,871,463.85 791,774,722.93 238,095,448.00 605,000,000.00 Cash received relating to other
financing Activities IV(50)(c) 31,600,000.00 866,596,329.87 186,549,748.34 1,501,427,875.82 Sub-total of cash inflows 2,495,098,201.62 1,658,371,052.80 2,354,271,934.11 2,106,427,875.82 Cash repayments of borrowings (914,343,511.67) (1,187,511,626.83) (725,000,000.00) (792,000,000.00) Cash payments for interest
expenses and distribution of
dividends or profits (216,492,634.80) (222,292,874.22) (92,901,347.13) (118,808,721.08) Including: Cash payments for
dividends or profit to minority
shareholders of subsidiaries (5,825,783.82) (4,966,654.86) - - Cash payments relating to other
financing activities IV(50)(d) (495,951,689.09) (405,132,719.50) (546,054,690.55) (1,271,985,615.23) Sub-total of cash outflows (1,626,787,835.56) (1,814,937,220.55) (1,363,956,037.68) (2,182,794,336.31) Net cash flows from financing
activities 868,310,366.06 (156,566,167.75) 990,315,896.43 (76,366,460.49) IV. Effect of foreign exchange rate
changes on cash 5,838.21 (19,779.03) - - V. Net (decrease)/increase in cash (243,736,347.61) 177,200,310.92 38,830,367.78 57,709,591.90 Add: Cash at beginning of year IV(51)(c) 1,097,948,354.45 920,748,043.53 218,342,947.03 160,633,355.13 VI. Cash at end of year IV(51)(c) 854,212,006.84 1,097,948,354.45 257,173,314.81 218,342,947.03 The accompanying notes form an integral part of these financial statements.
Legal Principal in charge Head of accounting
representative: of accounting : department:
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Consolidated statement of changes inowners’ equity
For the year ended 31 December 2013
(All amounts Renminbi (RMB) unless otherwise stated)
Attributable to the shareholders of the Company Minority interest Totalowners’ equity Items Notes
Paid-in capital Capital surplus Surplus reserves Undistributed profits
Balance at 1 January 2013 288,149,400.00 5,550,338.57 99,360,384.15 1,382,882,906.24 63,108,183.24 1,839,051,212.20 Movements for the year ended 31
December 2013
Comprehensive income - - - 520,488,198.80 13,731,200.43 534,219,399.23 - Net profit - - - 520,488,198.80 13,731,200.43 534,219,399.23 - Other comprehensive income - - - - - - Capital contribution and
withdrawals by owners - - Others - 200,000.00 - (6,677.73) 6,677.73 200,000.00 Profit distribution
- Appropriation to surplus reserves IV(34) - - 45,495,250.25 (45,495,250.25) - - - Profit distribution to equity
owners IV(35) - - - (51,866,892.00) (4,966,654.86) (56,833,546.86) Balance at 31 December 2013 288,149,400.00 5,750,338.57 144,855,634.40 1,806,002,285.06 71,879,406.54 2,316,637,064.57
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Consolidated statement of changes inowners’ equity(continued)
For the year ended 31 December 2014
(All amounts Renminbi (RMB) unless otherwise stated)
Attributable to the shareholders of the Company Minority interest Totalowners’ equity Items Notes
Paid-in capital Capital surplus Surplus reserves Undistributed profits
Balance at 1 January 2014 288,149,400.00 5,750,338.57 144,855,634.40 1,806,002,285.06 71,879,406.54 2,316,637,064.57 Movements for the year ended 31
December 2014
Comprehensive income - - - 652,497,176.03 17,343,991.84 669,841,167.87 - Net profit - - - 652,497,176.03 17,343,991.84 669,841,167.87 - Other comprehensive income - - - - - - Capital contribution and withdrawals by
owners
- Capital contribution by owners IV(33) 74,482,543.00 1,855,144,194.77 - - - 1,929,626,737.77 - Increase due to acquisition of a
subsidiry - - - - 3,210,000.00 3,210,000.00 - Others IV(34) - 3,000,000.00 - - - 3,000,000.00 Profit distribution
- Appropriation to surplus reserves
IV(35) - - 36,460,337.10 (36,460,337.10) - - - Profit distribution to equity owners
IV(36) - - - (65,273,749.74) (5,825,783.82) (71,099,533.56) Balance at 31 December 2014 362,631,943.00 1,863,894,533.34 181,315,971.50 2,356,765,374.25 86,607,614.56 4,851,215,436.65 The accompanying notes form an integral part of these financial statements.
Legal Principal in charge Head of accounting
representative: of accounting : department:
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Company statement of changes inowners’ equity
For the year ended 31 December 2014
(All amounts Renminbi (RMB) unless otherwise stated)
Items Notes Paid-in capital Capital surplus Surplus reserves Undistributed profits Totalowners’ equity Balance at 1 January 2013 288,149,400.00 14,348,726.93 99,360,384.15 864,755,729.87 1,266,614,240.95 Movements for the year ended 31
December 2013
Comprehensive income - - - 454,952,502.47 454,952,502.47 - Net profit - - - 454,952,502.47 454,952,502.47 - Other comprehensive income - - - - - Capital contribution and withdrawals
by owners
- Others - 200,000.00 - - 200,000.00 Profit distribution
- Appropriation to surplus reserves - - 45,495,250.25 (45,495,250.25) - - Profit distribution to equity
owners - - - (51,866,892.00) (51,866,892.00) Balance at 31 December 2013 288,149,400.00 14,548,726.93 144,855,634.40 1,222,346,090.09 1,669,899,851.42
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Company statement of changes inowners’ equity(continued)
For the year ended 31 December 2014
(All amounts Renminbi (RMB) unless otherwise stated)
Items Notes Paid-in capital Capital surplus Surplus reserves Undistributed profits Totalowners’ equity Balance at 1 January 2014 288,149,400.00 14,548,726.93 144,855,634.40 1,222,346,090.09 1,669,899,851.42 Movements for the year ended 31
December 2014
Comprehensive income - - - 474,226,166.14 474,226,166.14 - Net profit - - - 474,226,166.14 474,226,166.14 - Other comprehensive income - - - - - Capital contribution and withdrawals
by owners
- Contribution of Paid-in capital 74,482,543.00 1,854,582,870.47 - - 1,929,065,413.47 - Others - 561,324.30 - - 561,324.30 Profit distribution
- Appropriation to surplus reserves
- - 36,460,337.10 (36,460,337.10) - - Profit distribution to equity
owners - - - (65,273,749.74) (65,273,749.74) Balance at 31 December 2014 362,631,943.00 1,869,692,921.70 181,315,971.50 1,594,838,169.39 4,008,479,005.59 The accompanying notes form an integral part of these financial statements.
Legal Principal in charge Head of accounting
representative: of accounting : department:
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
I Profile of company
China National Accord Medicines Co., Ltd. (hereinafter referred to as the “the Company”), formerly known as Shenzhen Health Mineral Water Co., Ltd., was approved by thePeople’s Government of Shenzhen with SFBF (1993) No.356 document to establish on 1 February 1993 through stock restructure as a company limited by shares. In March 1993, with the approval from the Shenzhen Branch of thePeople’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, theCompany’s share capital was RMB105 million. Through transfer of capital surplus to share capital and bonus issues for years, the share capital of the Company increased to RMB362,631,900. up to 31 December 2014.
In November 2000, the Company entered into an Assets Exchange Agreement with Shenzhen Investment Management Company, the original main shareholder of the Company, to exchange all the assets and liabilities of the Company as of 31 August 2000 for Shenzhen Investment ManagementCompany’s100% equity interests in 11 pharmaceutical companies and certain properties as well as51% equity interests in Shenzhen Tefa Modern Computer Co., Ltd. On December 29, 2000, the above assets exchange proposal was approved byshareholder’s voting in the second extraordinary general meeting in 2000. The transaction was completed on 8 January 2001.
On 18 February 2004, theCompany’s original main shareholder, Shenzhen Investment Management Company, entered into a Stock Transfer Agreement with Sinopharm Group Co., Ltd. (hereinafter referred to as “Sinopharm Group”) to transfer its43.33% shares in the Company to Sinopharm Group. The legal procedures of the above equity transfer were completed on 9 December 2004. At the same time, as approved by GZCQ (2004) No.525 document from the State-owned Assets Supervision and Administration Commission of the State Council and ZJGSZ (2004) No.94 document from the China Securities Regulatory Commission, the nature of these shares was transferred from state-owned stock to state-owned legal entity stock and Sinopharm Group became the top shareholder of the Company.
On 14 April 2006, theCompany’s proposal on reformation of segregated stocks was approved. To gain liquidity for the restricted stocks of the Company, the holders of the restricted stocks of the Company agreed to pay the following consideration: based on the stock registration as of 27 April 2006, the Company issued bonus shares on 28 April 2006 at the ratio of 3 shares to every 10 A-shares to liquidated A-share holders which went public on the same day. After this bonus issue, the total number of shares of the Company remained unchanged with corresponding changes in the composition of share holdings.
In March 14, 2014, the company issued 74,482,543ordinary shares (A shares) through the non public offering. Par value per share is RMB 1 yuan. The shares shall not be transferred within 36 months since the issued day. As of 31 December, 2014, the total share capital was 362,631,943.
The Company is registered with Shenzhen Administration for Industry& Commerce. Its business license number is 440301103040048 and the serial number of the license is N24657. The operation period of the Company is from 2 August 1986 to 2 August 2036. The registered capital of the Company is RMB362,631,900. The legal representative of the Company is Yan Zhigang.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
I Profile of company(continued)
The approved scope of business of the Company and its subsidiaries (together “the Group”) includes wholesale of traditional Chinese medicine preparations, bulk pharmaceutical drugs, chemical preparations, bulk antibiotic drugs, antibiotic preparations, biochemical drugs, biological products (including vaccines and in vitro diagnostic reagents), psychotropic drugs and preparations, narcotic drugs, toxic drugs for medical use, protein assimilation preparation and peptide hormones; trade of dietary supplement; research, development and consultation services of pharmaceutical packaging materials and pharmaceutical industry products; industrial investment holding; domestic trade (other than special licensing), sale of ambulances; trade of second-class and third- class medical equipments; project investment; property management and lease of self-owned properties; pharmacovigilance and medical information consulting; parking operation; logistics and related services; package agency business; logistic design; operating various types of goods and import and export of technology (not attached directory of import and export commodities), but excluded the import and export of goods and technology the State limits or prohibit the company.
Subsidiaries consolidated in the financial statements are listed in Note VI. New subsidiaries include Sinopharm Medicine Holding Shantou Co., Ltd. (hereafter referred as “Sinopharm Shantou”), and Sinopharm Medicine Holding Beihai Co., Ltd. (hereafter referred as “Sinopharm Beihai”) (Note V(1)(2)). These financial statements were authorised for issue by the board of directors of the Company on 20 March 2015.
II Summary of significant accounting policies and accounting estimates
(1) Basis of preparation
The group determines the specific accounting policies and accounting estimates according to the production management characteristics, shown mainly on the bad debt provision withdrawing method for account receivable(Note II(11)), measurement of inventory(Note II(12)), depreciation forPP&E and amortization for intangible asset(Note II(15), (18)), judgement basis for capitalization of development expenditure(Note II(18)), measurement model for investment property(Note II(14)), recognition timing of revenue(Note II(25)).
The financial statements were prepared in accordance with the Basic Standard and specific standards of the Accounting Standards for Business Enterprises issued by the Ministry of Finance on 15 February 2006 and those updated afterwards, and other relevant regulations issued thereafter (hereafter collectively referred to as the “Accounting Standards for Business Enterprises” or “CAS”), and the disclosure requirements in the Preparation Convention of Information Disclosure by Companies Offering Securities to the Public No.15– General Rules on Financial Reporting issued by the China Securities Regulatory Commission.
This financial statement is prepared on the basis of going concern.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(2) Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements of the Company for the year ended 31 December 2014 are in compliance with the Accounting Standards for Business Enterprises, and truly and completely present the financial position of the Group and the Company as of 31 December 2014 and the operating results, cash flows and other information of the Group and the Company for the year then ended.
(3) Accounting year
TheCompany’s accounting year starts on 1 January and ends on 31 December.
(4) Functional currency
The functional currency is Renminbi (RMB).
(5) Business combinations
(a) Business combinations involving enterprises under common control
The consideration paid and net assets obtained by the absorbing party in a business combination are measured at the carrying amount. The difference between the carrying amount of the net assets obtained from the combination and the carrying amount of the consideration paid for the combination is treated as an adjustment to capital surplus (share premium). If the capital surplus (share premium) is not sufficient to absorb the difference, the remaining balance is adjusted against retained earnings. Costs directly attributable to the combination are included in profit or loss in the period in which they are incurred. Transaction costs associated with the issue of equity or debt securities for the business combination are included in the initially recognised amounts of the equity or debt securities.
(b) Business combinations involving enterprises not under common control
The cost of combination and identifiable net assets obtained by the acquirer in a business combination are measured at fair value at the acquisition date. Where the cost of the combination exceeds theacquirer’s interest in the fair value of theacquirer’s identifiable net assets, the difference is recognised as goodwill; where the cost of combination is lower than theacquirer’s interest in the fair value of theacquirer’s identifiable net assets, the difference is recognised in profit or loss for the current period. Costs directly attributable to the combination are included in profit or loss in the period in which they are incurred. Transaction costs associated with the issue of equity or debt securities for the business combination are included in the initially recognised amounts of the equity or debt securities.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(6) Preparation of consolidated financial statements
The consolidated financial statements comprise the financial statements of the Company and all of its subsidiaries.
Subsidiaries are consolidated from the date on which the Group obtains control and are de-consolidated from the date that such control ceases. For a subsidiary that is acquired in a business combination involving enterprises under common control, it is included in the consolidated financial statements from the date when it, together with the Company, comes under common control of the ultimate controlling party. The portion of the net profits realised before the combination date is presented separately in the consolidated income statement.
In preparing the consolidated financial statements, where the accounting policies and the accounting periods of the Company and subsidiaries are inconsistent, the financial statements of the subsidiaries are adjusted in accordance with the accounting policies and the accounting period of the Company. For subsidiaries acquired from business combinations involving enterprises not under common control, the individual financial statements of the subsidiaries are adjusted based on the fair value of the identifiable net assets at the acquisition date.
All significant intra-group balances, transactions and unrealised profits are eliminated in the consolidated financial statements. The portion of asubsidiary’s equity and the portion of asubsidiary’s net profits, losses and comprehensive income for the period not attributable to the Company are recognised as minority interests and presented separately in the consolidated financial statements within equity, net profits and total comprehensive income respectively. Unrealised gain or loss from selling assets to subsidiaries fully offsets the net income attributable to equity holders of the company. Unrealised gain or loss from purchasing assets from subsidiaries offsets the net income attributable to equity holders of the company and atrributable to the minority interest by the distribution proportion regarding the company and the subsidiary Unrealised gain or loss from transaction between subsidiaries offsets the net income attributable to equity holders of the company and atrributable to the minority interest by the distribution proportion regarding the company and the selling side of the subsidiaries. If different recognition perspectives for the same transaction arise within different accounting identities setup, there is adjustment for the transaction from theGroup’s perspective. (7) Acquisition of minority interest in controlled subsidiaries
The Company acquires equity from the minority shareholders after taking control of the subsidiary, in the consolidated financial statement, thesubsidiary’s assets, liabilities should be measured from combination or acquisition date. The difference between the carrying amount of acquisition of minority interst and the net assets proportion calculated by original share percentage since the acquisition date should be recognised in capital surplus. If the capital surplus is insufficient to dilute, the retained earnings shall be adjusted. (8) Cash and cash equivalent
Cash and cash equivalent comprise cash on hand, deposits that can be readily drawn on demand, and short-term and highly liquid investments that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(9) Foreign currency translation
Foreign currency transactions are translated into RMB using the exchange rates prevailing at the dates of the transactions.
At the balance sheet date, monetary items denominated in foreign currencies are translated into RMB using the spot exchange rates on the balance sheet date. Exchange differences arising from these translations are recognised in profit or loss for the current period, except for those attributable to foreign currency borrowings that have been taken out specifically for the acquisition or construction of qualifying assets, which are capitalised as part of the cost of those assets. Non-monetary items denominated in foreign currencies that are measured at historical costs are translated at the balance sheet date using the spot exchange rates at the date of the transactions. The effect of exchange rate changes on cash is presented separately in the cash flow statement.
(10) Financial Instruments
(a) Financial assets
(i) Classification of financial assets
Financial assets are classified into the following categories at initial recognition: financial assets at fair value through profit or loss, receivables, available-for-sale financial assets and held-to-maturity investments. The classification of financial assets depends on theGroup’s intention and ability to hold the financial assets. The Group currently holds the financial assets including receivables. Receivables, including notes receivables, accounts receivable and other receivables, are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
(ii) Recognition and measurement
Financial assets are recognised at fair value on the balance sheet when the Group becomes a party to the contractual provisions of the financial instrument. The transaction expenses are included inreceivables’ original book value, which is measured at amortised cost using the effective interest method.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(10) Financial Instruments(continued)
(a) Financial assets(continued)
(iii) Impairment of financial assets
The Group assesses the carrying amounts of receivables other than those at fair value through profit or loss at each balance sheet date. If there is objective evidence that a financial asset is impaired, an impairment loss is provided for. The objective evidence are matters occur after the financial assets been recognised, affect its estimated future cash flow and could be measured accuractly by the Group. When an impairment loss on a financial asset carried at amortised cost has occurred, the amount of loss is provided for at the difference between theasset’s carrying amount and the present value of its estimated future cash flows (excluding future credit losses that have not been incurred). If there is objective evidence that the value of the financial asset recovered and the recovery is related objectively to an event occurring after the impairment was recognised, the previously recognised impairment loss is reversed and the amount of reversal is recognised in profit or loss.
(iv) Derecognition of financial assets
A financial asset is derecognised when any of the below criteria is met: (i) the contractual rights to receive the cash flows from the financial asset expire; (ii) the financial asset has been transferred and the Group transfers substantially all the risks and rewards of ownership of the financial asset to the transferee; or (iii) the financial asset has been transferred and the Group has not retained control of the financial asset, although the Group neither transfers nor retains substantially all the risks and rewards of ownership of the financial asset.
On derecognition of a financial asset, the difference between the carrying amount and the sum of the consideration received and the cumulative changes in fair value that had been recognised directly in equity, is recognised in profit or loss.
(b) Financial liabilities
Financial liabilities are classified into the following categories at initial recognition: financial liabilities at fair value through profit or loss and other financial liabilities. The financial liabilities of the Group mainly comprise other financial liabilities, including payables and borrowings
Payables, including notes payable, accounts payable and other payables, are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method.
Borrowings are recognised initially at fair value, net of transaction costs incurred, and subsequently carried at amortised costs using the effective interest method.
Other financial liabilities with maturities no more than one year are classified as current liabilities. Other financial liabilities with maturities over one year but are due within one year at the balance sheet date are classified as the current portion of non-current liabilities. Others are classified as non-current liabilities. A financial liability is derecognised or partly derecognised when the current obligation is discharged or partly discharged. The difference between the carrying amount of the financial liability or the derecognised part of the financial liability and the consideration paid is recognised in profit or loss.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(11) Receivables
Receivables comprise notes receivable, accounts receivable and other receivables. Accounts receivable arising from sale of goods or rendering of services are initially recognised at fair value of the contractual payments from the buyers or service recipients.
(a) Receivables with amounts that are individually significant and subject to separate assessment for provision for bad debts
Receivables with amounts that are individually significant are subject to assessment for impairment on the individual basis. If there exists objective evidence that the Group will not be able to collect the amount under the original terms, a provision for impairment of that receivable is made.
The criterion for determing individually significant amounts is that any individual amount is more than RMB5 million.
The method of providing for bad debts for those individually significant amounts is as follows: the amount of the present value of the future cash flows expected to be derived from the receivable below its carrying amount.
(b) Receivables that are subject to provision for bad debts on the grouping basis
Receivables with amounts that are not individually significant and those receivables that have been individually assessed for impairment and have not been found impaired are classified into certain groupings based on their credit risk characteristics.The provision for bad debts is determined based on the historical loss experience for the groupings of receivables with similar credit risk characteristics, taking into consideration of the current circumstances.
A provision for impairment of the receivables is made based on the ageing of receivables at the following percentage:
Provision ratios used for accounts Provision ratios used for other receivables receivables Within 1 year - - 1 to 2 years 5% 5% 2 to 3 years 10% 10% More than 3 years 20% 20% (c) Receivables with amounts that are not individually significant but subject to separate assessment for provision for bad debts
The reason for making separate assessment for provision for bad debts is that there exists objective evidence that the Group will not be able to collect the amount under the original terms of the receivable.
The provision for bad debts is determined based on the amount of the present value of the future cash flows expected to be derived from the receivable below its carrying amount.
(d) When the Group transfers the accounts receivable to the financial institutions without recourse, the difference between the proceeds received from the transaction and their carrying amounts and the related taxes is recognised in profit or loss for the current period.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(12) Inventories
(a) Classification
Inventories include raw materials, work in progress, finished goods, delegate processing supplies and turnover materials, and are measured at the lower of cost and net realisable value.
(b) Costing of inventories
Cost is determined on the weighted average method. The cost of finished goods and work in progress comprises raw materials, direct labour and an allocation of systematically allocated overhead expenditures incurred based on normal operating capacity.
(c) Basis for determining net realisable values of inventories and method for making provision for decline in the value of inventories
Provisions for declines in the value of inventories are determined at the excess amount of the carrying value of the inventories over their net realisable value. Net realisable value is determined based on the estimated selling price in the ordinary course of business, less the estimated costs to completion and estimated costs necessary to make the sale and related taxes.
(d) The Group adopts the perpetual inventory system.
(e) Amortisation methods of low value consumables and packaging materials
Turnover materials include low value consumables and packaging materials, which are expensed when issued.
(13) Long-term equity investments
Long-term equity investments comprise theCompany’s long-term equity investments in its subsidiaries and theGroup’s long-term equity investments in its associates.
Subsidiaries are the investees over which the Company is able to exercise control. Associates are the investees that the Group has significant influence on their financial and operating policies.
Investments in subsidiaries are measured using the cost method in theCompany’s financial statements, and adjusted by using the equity method when preparing the consolidated financial statements. Interests in associates are accounted for using the equity method.
(a) Determination of investment cost
For long-term equity investments acquired through a business combination: for long-term equity investments acquired through a business combination involving enterprises under common control, the investment cost shall be the absorbingparty’s share of the carrying amount ofowners’ equity of the party being absorbed at the combination date; for long-term equity investment acquired through a business combination involving enterprises not under common control, the investment cost shall be the combination cost.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(13) Long-term equity investments (continued)
(b) Subsequent measurement and recognition of related profit and loss
For long-term equity investments accounted for using the cost method, they are measured at the initial investment costs, and cash dividends or profit distribution declared by the investees are recognised as investment income in profit or loss.
For long-term equity investments accounted for using the equity method, where the initial investment cost of a long-term equity investment exceeds theGroup’s share of the fair value of theinvestee’s identifiable net assets at the acquisition date, the long-term equity investment is measured at the initial investment cost; where the initial investment cost is less than theGroup’s share of the fair value of theinvestee’s identifiable net assets at the acquisition date, the difference is included in profit or loss and the cost of the long-term equity investment is adjusted upwards accordingly.
For long-term equity investments accounted for using the equity method, the Group recognises the investment income according to its share of net profit or loss of the investee. The Group discontinues recognising its share of net losses of an investee after the carrying amount of the long-term equity investment together with any long-term interests that, in substance, form part of theinvestor’s net investment in the investee are reduced to zero. However, if the Group has obligations for additional losses and the criteria with respect to recognition of provisions under the accounting standards on contingencies are satisfied, the Group continues recognising the investment losses and the provisions. For changes inowners’ equity of the investee other than those arising from its net profit or loss, other comprehensive income, and profit distribution, the Group adjusts the book value of the investment and records capital surplus accordingly. The carrying amount of the investment is reduced by theGroup’s share of the profit distribution or cash dividends declared by an investee. The unrealised profits or losses arising from the intra-group transactions amongst the Group and its investees are eliminated in proportion to theGroup’s equity interest in the investees, and then based on which the investment gains or losses are recognised. For the loss on the intra-group transaction amongst the Group and its investees attributable to asset impairment, any unrealised loss is not eliminated.
(c) Basis for determing existence of control, jointly control or significant influence over investees
Control is the power to govern the financial and operating policies of the investee so as to obtain benefits from its operating activities. In determining whether the Company is able to exercise control over the investee, the effect of potential voting rights over the investee is considered, such as convertible debts and warrants currently exercisable, etc.
Significant influence is the power to participate in the financial and operating policy decisions of the investee, but is not control or joint control over those policies.
(d) Impairment of long-term equity investments
The carrying amount of long-term equity investments in subsidiaries and associates is reduced to the recoverable amount when the recoverable amount is less than the carrying amount (Note II (21)).
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(14) Investment properties
Investment properties, including land use rights that have already been leased out, buildings that are held for the purpose of leasing, and buildings that are being constructed or developed for the purpose of leasing in future, are measured initially at cost. Subsequent expenditures incurred in relation to an investment property are included in the cost of the investment property when it is probable that the associated economic benefits will flow to the Group and their costs can be reliably measured; otherwise, the expenditures are recognised in profit or loss in the period in which they are incurred.
The Group adopts the cost model for subsequent measurement of investment properties. Buildings and land use rights are depreciated or amortised to their estimated net residual values over their estimated useful lives. The estimated useful lives, the estimated net residual values that are expressed as a percentage of cost and the annual depreciation (amortisation) rates of investment properties are as follows:
Estimated residual Annual depreciation (amortisation) Estimated useful lives value rates Buildings 20-35 years 5% 2.71% to4.75% Land use rights 30-50 years - 2.00% to3.33% When an investment property is transferred to owner-occupied properties, it is reclassified as fixed asset or intangible asset at the date of the transfer. When an owner-occupied property is transferred out for earning rentals or for capital appreciation, the fixed asset or intangible asset is reclassified as investment properties at its carrying amount at the date of the transfer.
The investmentproperty’s estimated useful life, net residual value and depreciation (amortisation) method applied are reviewed and adjusted as appropriate at each year-end.
An investment property is derecognised on disposal or when the investment property is permanently withdrawn from use and no future economic benefits are expected from its disposal. The net amount of proceeds from sale, transfer, retirement or damage of an investment property after its carrying amount and related taxes and expenses is recognised in profit or loss for the current period.
The carrying amount of an investment property is reduced to the recoverable amount if the recoverable amount is below the carrying amount (Note II (21)).
(15) Fixed assets
(a) Recoginition and initial measurement of fixed assets
Fixed assets comprise buildings, machinery and equipment, motor vehicles, other equipment and leasehold improvements.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(15) Fixed assets (continued)
(a) Recoginition and initial measurement of fixed assets (continued)
Fixed assets are recognised when it is probable that the related economic benefits will flow to the Group and the costs can be reliably measured. Fixed assets purchased or constructed by the Group are initially measured at cost at the acquisition date. The fixed assets contributed by the State shareholders at the reorganisation of the Company into a corporation entity are recognised based on the revaluated amounts approved by the state-owned assets administration department.
Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it is probable that the associated economic benefits will flow to the Group and the related cost can be reliably measured. The carrying amount of the replaced part is derecognised. All the other subsequent expenditures are recognised in profit or loss in the period in which they are incurred.
(b) Depreciation methods of fixed assets
Fixed assets are depreciated using the straight-line method to allocate the cost of the assets to their estimated residual values over their estimated useful lives. For the fixed assets that have been provided for impairment loss, the related depreciation charge is prospectively determined based upon the adjusted carrying amounts over their remaining useful lives.
The estimated useful lives, the estimated residual values expressed as a percentage of cost and the annual depreciation rates are as follows:
Estimated useful Estimated residual Annual lives value depreciation rates Buildings
20-35 years 5% 2.71% to4.75% Machinery and equipment
10-14 years 5% 6.79% to9.50% Motor vehicles
5-10 years 5% 9.50% to19.00% Other equipment
5-10 years 5% 9.50% to19.00% Leasehold improvements
Within 5 years - Above20.00% The estimated useful life, the estimated net residual value of a fixed asset and the depreciation method applied to the asset are reviewed, and adjusted as appropriate at least at each year-end.
(c) The carrying amount of fixed assets is reduced to the recoverable amount when the recoverable amount is less than the carrying amount (Note II (21)).
(d) Disposal of fixed assets
A fixed asset is derecognised on disposal or when no future economic benefits are expected from its use or disposal. The amount of proceeds from disposal on sale, transfer, retirement or damage of a fixed asset net of its carrying amount and related taxes and expenses is recognised in profit or loss for the current period.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(16) Construction in progress
Construction in progress is measured at actual cost. Actual cost comprises construction costs, installation costs, borrowing costs that are eligible for capitalisation and other costs necessary to bring the fixed assets ready for their intended use. Construction in progress is transferred to fixed assets when the assets are ready for their intended use, and depreciation begins from the following month. The carrying amount of construction in progress is reduced to the recoverable amount when the recoverable amount is less than the carrying amount (Note II (21)).
(17) Borrowing costs
The borrowing costs that are directly attributable to the acquisition and construction of a fixed asset that needs a substantially long period of time for its intended use commence to be capitalised and recorded as part of the cost of the asset when expenditures for the asset and borrowing costs have been incurred, and the activities relating to the acquisition and construction that are necessary to prepare the asset for its intended use have commenced. The capitalisation of borrowing costs ceases when the asset under acquisition or construction becomes ready for its intended use and the borrowing costs incurred thereafter are recognised in profit or loss for the current period. Capitalisation of borrowing costs is suspended during periods in which the acquisition or construction of a fixed asset is interrupted abnormally and the interruption lasts for more than 3 months, until the acquisition or construction is resumed.
For the specific borrowings obtained for the acquisition or construction of a fixed asset qualifying for capitalisation, the amount of borrowing costs eligible for capitalisation is determined by deducting any interest income earned from depositing the unused specific borrowings in the banks or any investment income arising on the temporary investment of those borrowings during the capitalisation period.
For the general borrowings obtained for the acquisition or construction of a fixed asset qualifying for capitalisation, the amount of borrowing costs eligible for capitalisation is determined by applying the weighted average effective interest rate of general borrowings, to the weighted average of the excess amount of cumulative expenditures on the asset over the amount of specific borrowings. The effective interest rate is the rate at which the estimated future cash flows during the period of expected duration of the borrowings or applicable shorter period are discounted to the initial amount of the borrowings.
(18) Intangible assets
Intangible assets include land use rights, computer softwares, technology patents,trademarks and distribution network, which initially recognised at cost. Intangible assets contributed by state-owned shareholders during the company reorganisation were recorded based on the valuation amount approved by the state-owned assets supervision and management department.
(a) Land use rights
A land use right granted by government with a infinite useful life would not be amortised. Other land use rights are amortised on the straight-line basis over their approved useful period. If the acquisition costs of land use rights and the buildings located thereon cannot be reliably allocated between the land use rights and the buildings, all of the acquisition costs are recognised as fixed assets.
(b) Computer softwares
Computer softwares purchased by the Group are initially measured at cost, which are amortised on the straight-line basis over their approved useful period of 3 to 5 years.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(18) Intangible assets(continued)
(c) Trademarks and Technology Patents
Trademarks are amortised on the straight-line basis over their effective periods as stipulated by law of 5 to 10 years. Technology Patents are amortised on the straight-line basis over their effective useful period of 5 years.
(d) Distribution network
Distribution network includes customer relationships and distribution channels, which is amortised on the straight-line basis over its approved useful live of 20 years.
(e) Periodical review of useful life and amortisation method
For an intangible asset with a finite useful life, review of its useful life and amortisation method is performed at each year-end, with adjustment made as appropriate.
For an intangible asset without a definite useful life, review of its useful life are performed at each year-end. (f) Research and development
The expenditure on an internal research and development project is classified into expenditure on the research phase and expenditure on the development phase based on its nature and whether there is material uncertainty that the research and development activities can form an intangible asset at end of the project. Expenditure for investigation, evaluation and selection of production process researches is recognised in profit or loss in the period in which it is incurred. Expenditure on the designation, measurement of the final utilization of the production process before mass production, is capitalised only if all of the following conditions are satisfied:
 development of the production process has been fully demonstrated by the technical team;
 management has approved the budget of drug production development;
 market research analysis suggests that the products produced by the new production technology are able to be promoted;
 adequate technical, financial and other resources to complete the development and the ability to use or sell the intangible asset; and
 the expenditure attributable to the intangible asset during its development phase can be reliably measured.
Other development expenditures that do not meet the conditions above are recognised in profit or loss in the period in which they are incurred. Development costs previously recognised as expenses are not recognised as an asset in a subsequent period. Capitalised expenditure on the development phase is presented as development costs in the balance sheet and transferred to intangible assets at the date that the asset is ready for its intended use.
(g) Impairment of intangible assets
The carrying amount of intangible assets is reduced to the recoverable amount when the recoverable amount is less than the carrying amount (Note II (21)).
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(19) Long-term prepaid expenses
Long-term prepaid expenses include the expenditure for improvements to fixed assets under operating leases, and other expenditures that have been made but should be recgonised as expenses over more than one year in the current and subsequent periods. Long-term prepaid expenses are amortised on the straight-line basis over the expected beneficial period and are presented at actual expenditure net of accumulated amortisation.
(20) Governmental medical reserve funds and specially approved reserving materials
Appointed by the PRC Government, China National Pharmaceutical Group Corporation (“CNPGC") is responsible for purchasing, allocating and providing the governmental medical reserves, which include the medical products, traditional Chinese medicine and medical appliances for nation-wide emergency rescue and disaster relief. Appointed by the Government of Guangxi Province, Sinopharm Medicine Holding Guangxi Co., Ltd. (“Sinopharm Guangxi”), a subsidiary of the Company, is responsible for purchasing, allocating and providing the medical reserves, which include the medical products needed for common disease and emergencies triggered by major disasters, epidemics and other situations in Guangxi Province. In accordance with the regulation of CNPGC, as being the enterprise who bears the obligation for specially approved medical reserving materials, the medical reserve funds received from the PRC Government or local government are recognised in other Non-current liabilities. The Group reserves the specially approved medical reserving materials according to the reserve program (by category and by quantity), applies dynamic management and recognises in other non-current assets.
(21) Impairment of long-term assets
Fixed assets, construction in progress, intangible assets with finite useful lives, long-term prepaid expenses and investment properties measured using the cost model and long-term equity investments in subsidiaries, joint ventures and associates are tested for impairment if there is any indication that an asset may be impaired at the balance date. If the result of the impairment test indicates that the recoverable amount of the asset is less than its carrying amount, a provision for impairment and an impairment loss are recognised for the amount by which theasset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of anasset’s fair value less costs to sell and the present value of the future cash flows expected to be derived from the asset. Provision for asset impairment is determined and recognised on the individual asset basis. If it is not possible to estimate the recoverable amount of an individual asset, the recoverable amount of a group of assets to which the asset belongs is determined. A group of assets is the smallest group of assets that is able to generate independent cash inflows.
Goodwill that is separately presented in the financialstatements，intangible assets with infinite useful lives and capitalized development expenditures are tested at least annually for impairment, irrespective of whether there is any indication that it may be impaired. In conducting the test, the carrying value of goodwill is allocated to the related asset groups or groups of asset groups which are expected to benefit from the synergies of the business combination. If the result of the test indicates that the recoverable amount of an asset group or group of asset groups, including the goodwill allocated, is lower than its carrying amount, the corresponding impairment loss is recognised. The impairment loss is first deducted from the carrying amount of goodwill that is allocated to the asset group or group of asset groups, and then deducted from the carrying amounts of other assets within the asset groups or groups of asset groups in proportion to the carrying amounts of other assets.
Once the above asset impairment loss is recognised, it will not be reversed for the value recovered in the subsequent periods.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(22) 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 labour relation.
(a) Short-term employee benefits
Short-term employee benefits include wages or salaries, bonus, allowances and subsidies, staff welfare, medical insurance, work injury insurance, maternity insurance, housing funds, and union running costs and employee education costs. The employee benefits are recognised in the accounting period in which the service has been rendered by the employees, and as costs of assets or expenses to whichever the employee service is attributable.
(b) Post-employment benefits
The Company classifies post-employment benefit plans into either defined contribution plans and defined benefit plans. Defined contribution plans are post-employment benefit plans under which the Company pays fixed contributions into a separate fund and will have no obligation to pay further contributions; and defined benefit plans are post-employment benefit plans other than defined contribution plans. During the reporting period, the Company's post-employment benefits mainly include basic pensions, unemployment insurance and enterprise annuity, both of which belong to the defined contribution plans.
Basic pensions
TheCompany’s employees participate in the defined basic pension insurance plan set up and administered by local labour and social protection authorities. Basic pensions are provided monthly according to stipulated bases and proportions to local labour and social security institutions. When employees retire, local labour and social security institutions have a duty to pay the basic pension insurance to them. The amounts payable are recognised as liabilities based on the above provisions in the accounting period in which the service has been rendered by the employees, and as costs of assets or expenses to whichever the employee service is attributable.
(c) Termination benefits
The group recognizes the debt and the gain or loss, when offering compensation for terminating the labor contract before the due date, or encouraging the staff to resign voluntarily, at the earlier date when the group cannot unilaterally withdraw the labor relation plan or recognize the cost relating to recombinant involving the payment of termination benefits.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(22) Employee benefits(continued)
(c) Termination benefits(continued)
Retirement benefits
The group provides retirement benefits to employees who accept the internal retirement arrangements. Retirement benefits refer to the salary and social security contributions provided to those staff who voluntarily quit the job with approval from the management team, before the retirement age. The group offers retirement benefits from the date when the arrangement begins, to the date when the staff reaches the retirement age. The group accounts the retirement benefits referring to the accounting treatment for the termination benefits. Liability including salary and social security contributions is recognized when conditions of termination benefits recognition meet, regarding to the period from the staff leaves the position to the normal retirement date. Difference arising from the changes in actuarial assumptions for retirement benefits and adjustments in welfare standard, will be accounted in the current profits and losses.
Retirement benefits that are expected to be paid within one year from the balance sheet date is disclosed as current liability.
(23) Dividend distribution
Cash dividends distribution is recognised as a liability in the period in which it is approved by the annualshareholders’ meeting.
(24) Provisions
Provisions for product warranties, onerous contracts etc. are recognised when the Group has a present obligation, it is probable that an outflow of economic benefits will be required to settle the obligation, and the amount of the obligation can be measured reliably.
A provision is initially measured at the best estimate of the expenditure required to settle the related present obligation. Factors surrounding a contingency, such as the risks, uncertainties and the time value of money, are taken into account as a whole in reaching the best estimate of a provision. Where the effect of the time value of money is material, the best estimate is determined by discounting the related future cash outflows. The increase in the discounted amount of the provision arising from passage of time is recognised as interest expense.
The carrying amount of provisions is reviewed at each balance sheet date and adjusted to reflect the current best estimate.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(25) Revenue recognition
The amount of revenue is determined in accordance with the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of theGroup’s activities. Revenue is shown net of discounts and returns.
Revenue can be recognized on condition that the transaction-related economic interest is expected to be satisfied, the amount is able to reliably measured, and the following recognition conditions are met: (a) Sale of goods
Revenue from the sale of goods is recognised when significant risks and rewards of ownership of the goods are transferred to the buyer, the Company retains neither continuing managerial involvement to the degree usually associated with ownership nor effective control over the goods sold, and it is probable that the economic benefit associated with the transaction will flow to the Company and the relevant revenue and costs can be measured reliably.
(b) Rendering of services
The Group providesfreight，storage and other service to external parties. The freights are recognised as revenue right after the goods are transported to the place of delivery according to contracts or agreements, received and confirmed by the purchasers. Other revenue is determined in accordance with the amount provided in the service period stipulated in the contract.
(c) Transfer of asset use rights
Interest income is determined by using the effective interest method, based on the length of time for which theGroup’s cash is used by others.
Income from an operating lease is recognised on a straight-line basis over the period of the lease.
(d) Customer Loyalty Programme
The group, offers loyalty points programmes where points earned through the purchase of goods can only be redeemed for goods provided by Shenzhen Zhijun Pharmaceutical Co., Ltd. or other free goods. The fair value of the consideration received or receivable in respect of the initial sale is allocated between the award credits and the other components of the sale. Fair value of award points is measured on the basis of the value of the awards (that is, goods or services) for which they could be redeemed, the fair value of the award credits should take account of expected forfeitures as well as the discounts or incentives that would otherwise be offered to customers who have not earned award credits from an initial sale.
(26) Government grants
Government grants are transfers of monetary or non-monetary assets from the government to the Group at nil consideration, including refund of taxes and financial subsidies, etc.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(26) Government grants(continued)
A government grant is recognised when the conditions attached to it can be complied with and the government grant can be received. For a government grant in the form of transfer of monetary assets, the grant is measured at the amount received or receivable. For a government grant in the form of transfer of non-monetary assets, it is measured at fair value; if the fair value is not reliably determinable, the grant is measured at nominal amount.
A government grant related to an asset is grant received aimed to create long-term asset by contructing or other methods. And government grant related to income is any grant other than government grant related to an asset.
A government grant related to an asset is recognised as deferred income, and evenly amortised to profit or loss over the useful life of the related asset. Government grants measured at nominal amounts are recognised immediately in profit or loss for the current period.
For government grants related to income, where the grant is a compensation for related expenses or losses to be incurred by the Group in the subsequent periods, the grant is recognised as deferred income, and included in profit or loss over the periods in which the related costs are recognised; where the grant is a compensation for related expenses or losses already incurred by the Group, the grant is recognised immediately in profit or loss for the current period.
(27) Deferred tax assets and deferred tax liabilities
Deferred tax assets and deferred tax liabilities are calculated and recognised based on the differences arising between the tax bases of assets and liabilities and their carrying amounts (temporary differences). Deferred tax asset is recognised for the deductible losses that can be carried forward to subsequent years for deduction of the taxable profit in accordance with the tax laws. No deferred tax liability is recognised for a temporary difference arising from the initial recognition of goodwill. No deferred tax asset or deferred tax liability is recognised for the temporary differences resulting from the initial recognition of assets or liabilities due to a transaction other than a business combination, which affects neither accounting profit nor taxable profit (or deductible loss). At the balance sheet date, deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to apply to the period when the asset is realised or the liability is settled.
Deferred tax assets are only recognised for deductible temporary differences, deductible losses and tax credits to the extent that it is probable that taxable profit will be available in the future against which the deductible temporary differences, deductible losses and tax credits can be utilised.
Deferred tax assets and liabilities are offset when:
the deferred taxes are related to the same tax payer within the Group and the same taxation authority; and, that tax payer has a legally enforceable right to offset current tax assets against current tax liabilities.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(27) Deferred tax assets and deferred tax liabilities(continued)
Deferred tax liabilities are recognised for temporary differences arising from investments in subsidiaries and associates, except where the Group is able to control the timing of the reversal of the temporary difference, and it is probable that the temporary difference will not reverse in the foreseeable future. When it is probable that the temporary differences arising from investments in subsidiaries and associates will be reversed in the foreseeable future and that the taxable profit will be available in the future against which the temporary differences can be utilised, the corresponding deferred tax assets are recognised.
(28) Operating leases
Lease payments under an operating lease are recognised on a straight-line basis over the period of the lease, and are either capitalised as part of the cost of related assets or charged as an expense for the current period. (29) Segment information
The Group identifies operating segments based on the internal organisation structure, management requirements and internal reporting system, and discloses segment information of reportable segments which is determined on the basis of operating segments.
An operating segment is a component of the Group that satisfies all of the following conditions: (1) the component is able to earn revenues and incur expenses from its ordinary activities; (2) whose operating results are regularly reviewed by theGroup’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.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(30) Changes in significant accounting policies
In 2014, the Ministry of Finance of the PRC issued CAS 39 "Fair Value Measurement", CAS 40 "Joint arrangement", CAS 41 "Disclosure of Interests in Other Entities", and CAS 2 "Long-Term Equity Investments"(revised), CAS 9 "Employee Benefits" (revised), CAS 30 "Presentation of Financial Statements" (revised), CAS 33 "Consolidated Financial Statements" (revised) and CAS 37 "Presentation of Financial Instrument" (revised).
The Company has adopted the above new standards to prepare the financial statements for the year ended 31 December 2014.
Several financial statement line items have been presented in accordance with above standards, and comparative financial figures were also adjusted. Besides, the Balance Sheet as at 1 January 2013 had been presented in accordance with Accounting Standards for Business Enterprises No.30-Presentation of Financial Statements: (a) Deferred income is individually listed in the consolidated balance sheet. Amount of RMB176,531,418.18 and RMB168,180,160.90 will be deducted respectively from the Other non-current liability item on the consolidated balance sheets for the year ended 1 January 2013 and 31 December 2013.There’s no impact on thecompany’s balance sheet.
(b) Retirement benefits expected to be paid over one year since the balance sheet date is reclassified from employee benefit payable to long term employee benefit payable. Amount of RMB3,619,000.00 and RMB4,892,000.00 are listed on the long term employee benefit payable item on consolidated and company balance sheets for the year ended 1 January 2013 and RMB205,000.00 and RMB407,000.00 for the year ended 31 December 2013, and deduction of employee benefit payable are made accordingly.
(c) Estimated liabilities are listed on the consolidated balance sheet, and other current liability amounted RMB22,040,000.00 at 31 December 2013 is deducted.There’s no impact on thecompany’s balance sheet.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
II Summary of significant accounting policies and accounting estimates (continued)
(31) Critical accounting estimates
The Group continually evaluates the critical accounting estimates and key judgments applied based on historical experience and other factors, including expectations of future events that are believed to be reasonable. (a) Critical accounting estimates and key assumptions
The critical accounting estimates and key assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next accounting year are outlined below: (i) Accounting estimates on impairment of goodwill
The Group tests annually whether goodwill has suffered any impairment. The recoverable amount of asset groups and groups of asset groups is the present value of the future cash flows expected to be derived from them. These calculations require use of estimates (Note IV (13)).
If management revises the gross margin that is used in the calculation of the future cash flows of asset groups and groups of asset groups, and the revised gross margin is lower than the one currently used, the Group would need to recognise further impairment against goodwill and fixed assets.
If management revises the pre-tax discount rate applied to the discounted cash flows, and the revised pre-tax discount rate is higher than the one currently applied, the Group would need to recognise further impairment against goodwill and fixed assets.
If the actual gross margin/pre-tax discount rate is higher/lower thanmanagement’s estimates, the impairment loss of goodwill previously provided for is not allowed to be reversed by the Group.
(ii) Accounting estimates on impairment of accounts receivable
In accordance with theGroup’s accounting policy (Note II (11)), theGroup’s management tests annually whether receivables have suffered any impairment, Impairment of receivables has been assessed by taking into account thecustomers’ credit history and financial position together with the current market conditions. Even if theGroup’s management has made bad debt provision for the expected loss at its best estimate, there is a possibility that changes incustomers’ financial position or market conditions will alter the result.
(iii) Accounting estimates on impairment of inventories
In accordance with theGroup’s accounting policy (Note II (12) (c)), theGroup’s management estimates the net realizable value of the inventory. Net realisable value is determined based on the estimated selling price in the ordinary course of business, less the estimated costs to completion and estimated costs necessary to make the sale and related taxes. Even if theGroup’s management has made stock provision for the expected impairment at its best estimate, there is a possibility that changes in market conditions will alter the result.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
III Taxation
(1) The types and rates of taxes applicable to the Group are set out below:
Type Taxable base Tax rate Enterprise income tax Taxable income
(“EIT”) 15%、25% Value added tax Taxable value added amount (Tax payable is 0%、3%、6%、11%、13% or17% (“VAT”)(a) calculated using the taxable sales amount
multiplied by the effective tax rate less deductible
VAT input of current period)
Business tax Rental income, interest income and etc. 5% City maintenance and VAT and business tax
construction tax 7% (2) Tax preferences
In 2012, the subsidiary Sinopharm Shenzhen Medicine (“Shenzhen Medicine”) obtained the certificate of High and New Technology Enterprises with effective period of 3 years, 2012 to 2014.
In 2014, the subsidiary Shenzhen Zhijun Pharmaceutical Co., Ltd. (“Zhijun Medicine”) obtained the certificate of High and New Technology Enterprises with effective period of 3 years, 2014 to 2016.
Under the relevant regulations of article 28 of the Corporate Income Tax Law, the applicable tax rates for Zhijun Medicine and Shenzhen Medicine in year 2014 are15% (2013:15%).
In 2014, the subdidiary Sinopharm Guangxi Logistics Co., Ltd (“Guangxi Logistics”) got the approval from local tax bureau of Guangxi Province, and is entitled with a western development preferential tax rate of15% from 1 January 2014 to 31 December 2020.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements
(1) Cash at bank and on hand
31 December 2014 31 December 2013 Cash on hand
41,627.16 65,660.84 Cash at bank
854,170,379.68 1,097,882,693.61 Other cash balances
13,350,108.70 15,613,857.20 - deposits for bank acceptance notes 10,177,108.70 14,507,046.10 - depostis for letter of credit 3,173,000.00 1,106,811.10 867,562,115.54 1,113,562,211.65 As at 31 December 2014, there is no foreign cash at bank (31 December 2013: RMB134.32)
(2) Notes receivable
31 December 2014 31 December 2013 Trade acceptance notes 358,010,908.78 324,806,645.60 Bank acceptance notes 260,984,531.31 414,254,496.12 618,995,440.09 739,061,141.72 (a) As at 31 December 2014, pledged notes receivable of the group are as below:
31 December 2014 31 December 2013 Bank acceptance notes 3,012,833.60 26,286,066.66 The pledged notes receivables are used as guarantee for for issurance of bank acceptance notes.
(b) As at 31 December 2014, the endorsed or the discounted undue notes receivables of the group are analysed as below: Recognition terminated Recognition not terminated Trade acceptance notes - 95,810,566.63 Bank acceptance notes 894,896,948.98 - 894,896,948.98 95,810,566.63
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(3) Accounts receivable
31 December 2014 31 December 2013 Accounts receivable 7,043,152,204.29 5,700,717,918.33 Less: provision for bad debts (24,839,531.10) (25,059,411.55) 7,018,312,673.19 5,675,658,506.78 (a) The aging of accounts receivable and related provision for bad debts are analysed below:
31 December 2014 31 December 2013
Amount Provision for bad Amount
debts Provision for bad debts Within 1 year 7,015,198,063.08 (4,613,627.07) 5,666,484,029.89 (2,536,716.74) 1 to 2 years 7,309,007.23 (2,184,567.35) 11,872,413.00 (1,899,306.50) 2 to 3 years 4,971,803.29 (2,666,614.67) 4,156,756.90 (2,418,669.77) Over 3 years 15,673,330.69 (15,374,722.01) 18,204,718.54 (18,204,718.54) 7,043,152,204.29 (24,839,531.10) 5,700,717,918.33 (25,059,411.55) (b) The accounts receivable and related provision for bad debts by category are analysed below:
31 December 2014 31 December 2013
Carrying amount Bad debt provision Carrying amount Bad debt provision amount % of amount rate amount % of total amount rate total balance
balance
individually
significant are
subject to
separate
impairment
assessment 27,306,785.00 0.39% (17,714,727.50)64.87% 27,376,507.200.48% (17,791,726.54) 64.99% receivable
accounts within
similar credit
risk group 7,001,130,510.3899.40% (368,802.84)0.01% 5,647,154,773.7999.06% (479,964.75) 0.01% individually not
significant but
individually
evaluated for
impairment 14,714,908.91 0.21% (6,756,000.76)45.91% 26,186,637.34 0.46% (6,787,720.26) 25.92% 7,043,152,204.29100.00% (24,839,531.10)0.35% 5,700,717,918.33100.00% (25,059,411.55) 0.44% (c) As at 31 December 2014, impairment provision for accounts receivable individually significant are analysed as below: Bad debt
Carrying amount provision Rate Assessment for impairment Disputed receivable with higher Guangdong Liyuan risk of recoverability which has Pharmaceutical Co., Ltd. 14,517,375.00 (14,517,375.00) 100.00% filed a lawsuit Tibet Naqukanghui High uncertainty in Pharmaceutical Co., Ltd 12,789,410.00 (3,197,352.50) 25.00% recoverability 27,306,785.00 (17,714,727.50) 64.87%
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(3) Accounts receivable (continued)
(d) Provisions for impairment of the receivables which have a similar risk level are analysed below:
31 December 2014 31 December 2013
Carrying amount Bad debt provision Carrying amount Bad debt provision amount amount rate amount amount rate Within 1 year 6,994,884,844.28 - - 5,639,111,868.62 - - 1 to 2 years 5,345,460.81 (267,276.09) 5.00% 6,486,515.25 (324,325.76) 5.00% 2 to 3 years 785,143.09 (78,514.31) 10.00% 1,556,389.92 (155,638.99) 10.00% Over 3 years 115,062.20 (23,012.44) 20.00% - - 0.00% 7,001,130,510.38 (368,802.84) 0.01% 5,647,154,773.79 (479,964.75) 0.01% (e) Bad debt provision in this year is RMB8,020,881.70. Recovered or reversed bad debt amount adds up to RMB3,493,461.47. Important recovered or reversed bad debt items are listed below:
Reason for Original assessment for Recovered or Way of recovery recoverability or providing impairment reversed amount
reversal
Jilin Kaining Pharmaceutical Co.,
Ltd. Amount received Uncertainty in recovery 943,456.49 Amount received Jilin Yongtai Pharmaceutical Co.,
Ltd. Amount received Uncertainty in recovery 775,795.95 Amount received Shandong Famai Biological
Medicine Co., Ltd. Amount received Uncertainty in recovery 535,297.83 Amount received Guangzhou Yiyao Pharmaceutical Partial amount
Co., Ltd. received Uncertainty in recovery 200,000.00 Amount received Hubei Hengkang Shuanghe
Pharmaceutical Co., Ltd. Amount received Uncertainty in recovery 398,349.28 Amount received Zengcheng Zhongxin Hospital Amount received Uncertainty in recovery 192,448.31 Amount received Zengcheng Shitan Central Partial amount
Hospital received Uncertainty in recovery 79,960.00 Amount received Others Amount received Uncertainty in recovery 158,776.85 Amount received 3,284,084.71
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(3) Accounts receivable (continued)
(f) Accounts receivable written off in current year are analysed as below:
Nature of the Related party receivable Amount Reason transaction or not Guangdong Liyuan Account Disputes won but client has no
Pharmaceutical Co., Ltd.(i) receivable 1,169,085.93 property to implement No Shenzhen SecondPeople’s Account Recoverability in significant
Hospital(i) receivable 1,434,789.46 doubt due to long age No Pecking University Shenzhen Account Recoverability in significant
Hospital(i) receivable 670,476.15 doubt due to long age No Guangzhou Dashenlin Account Recoverability in significant
Pharmaceutical Co., Ltd.(i) receivable 773,956.27 doubt due to long age No Dashenlin Pharmaceutical Group Account Recoverability in significant
Co., Ltd(i) receivable 506,835.82 doubt due to long age No Account Recoverability in significant
Others(i) receivable 612,583.93 doubt due to long age No 5,167,727.56
(i) The above account receivables were assessed by relevant business department and legal department that the recovery possibility would be quite low. They were written off in this year after being reviewed by the financial department and approved by the borad of directors.
(g) As at 31 December 2014, the top five accounts receivable by customer are summariesd as below:
% of the total accounts Amount Bad debt provision amount receivable Total amount of the top five
accounts receivables 686,826,993.99 - 9.75%
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(3) Accounts receivable (continued)
(h) Analysis of account receivables that are terminated recognition due to financial asset transfer is as below:
In 2014, accounts receivable of RMB1,285,503,122.45 has been factored to financial institute(2013: RMB1,175,804,439.93). The corresponding loss is RMB26,857,356.57(2013: RMB18,588,098.68).
(4) Advances to suppliers
(a) The aging of advances to suppliers is analysed below:
31 December 2014 31 December 2013
amount % of total balance amount % of total balance Within 1 year 95,744,012.90 99.69% 63,940,204.79 99.34% 1 to 2 years 66,286.50 0.07% 344,224.38 0.53% 2 to 3 years 213,144.00 0.22% 42,900.00 0.07% Above 3 years 19,711.00
0.02% 39,711.00 0.06% 96,043,154.40 100.00% 64,367,040.17 100.00% (b) As at 31 December 2014, the top five advances to suppliers by customer are summarized as below:
Amount Proportion of total balance Total amount of top five advances to suppliers 41,861,717.57 43.59%
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(5) Other receivables
31 December 2014 31 December 2013 Deposit 11,871,118.11 8,338,022.65 Receivable of equity transaction(Note (c))
8,980,000.00 8,980,000.00 Petty cash advance to employees
6,131,979.57 5,772,436.51 Receivable due from related party
1,899,766.89 2,450,920.81 Others
11,504,228.47 14,955,273.23 40,387,093.04 40,496,653.20 Less: provision for bad debts (11,812,165.14) (10,875,753.49) 28,574,927.90 29,620,899.71 (a) The ageing of other receivables and related provision for bad debts are analysed below:
31 December 2014 31 December 2013 Within 1 year 24,857,054.91 24,095,302.72 1 to 2 years 1,183,560.15 967,739.44 2 to 3 years 463,325.73 763,087.00 Over 3 years 13,883,152.25 14,670,524.04 40,387,093.04 40,496,653.20 (b) Other receivables and related provision for bad debts by category are analysed below:
31 December 2014 31 December 2013
Carrying amount Bad debt provision Carrying amount Bad debt provision% of total % of total
amount amount amount rate amount amount amount rate Individually
significant are
subject to separate
impairment
assessment 8,980,000.0022.23% (8,980,000.00)100.00% 8,980,000.0022.17% (8,980,000.00)100.00% Receivable accounts
within similar
credit risk group 25,447,187.9163.01% (219,614.23) 0.86% 26,647,155.6965.80% (341,346.42) 1.28% Individually not
significant but
individually
evaluated for
impairment 5,959,905.1314.76% (2,612,550.91)43.84% 4,869,497.5112.03% (1,554,407.07)31.92% 40,387,093.04100.00% (11,812,165.14)29.25% 40,496,653.20100.00% (10,875,753.49)26.86%
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(5) Other receivables(continued)
(c) As at 31 December 2014, impairment provision for other receivables individually significant are analysed as below: Assessment for Amount Bad debt provision Rate impairment Shenzhen Yinghai Technology Uncertainty in Investment Co., Ltd. 8,980,000.00 (8,980,000.00) 100.00% recoverability (d) Provisions for impairment of the receivables which have a similar risk group are analysed below:
31 December 2014 31 December 2013
Carrying amount Bad debt provision Carrying amount Bad debt provision amount amount rate amount amount rate Within 1 year 23,496,588.96
- -
24,063,233.50 - - 1 to 2 years 926,047.22 (46,302.36) 5.00% 932,329.44 (46,110.87) 4.95% 2 to 3 years 315,984.73 (31,598.47) 10.00% 350,830.00 (35,083.00) 10.00% Over 3 years 708,567.00 (141,713.40) 20.00% 1,300,762.75 (260,152.55) 20.00% 25,447,187.91 (219,614.23) 0.86% 26,647,155.69 (341,346.42) 1.28% (e) Bad debt provision of Other receivables this year is RMB1,448,697.65,with the recovered or reversed amount to be RMB512,286.00. Important recovered or reversed items are listed below:
Recovered or
Reason for Assessment for reversed bad debt Way of recoverability impairment provisions recovery Nanning Economic and
Technological Development Zone Uncertainty in Amount Finance Bureau Amount received recoverability 173,927.00 received Uncertainty in Amount Others Amount received recoverability 60,107.00 received 234,034.00
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(5) Other Recevables(Continued)
(f) As at 31 December of2014，the top 5 parties that owe the largest amounts of other receivable balances are analysd as below:% of total Provision of bad Nature Balance Aging amount debt Shenzhen Yinghai Technology Receivable of equity
Investment Co., Ltd. transaction 8,980,000.00 Over 5 years 22.23% (8,980,000.00) Guangxi Autonomous Region Collective housing - Housing Reformed System Finance repair funds
Department 1,907,072.20 Over 5 years 4.72%
Indemnity for damaged - Guangdong Simpang Logistics Ltd. goods 1,530,090.73 Within 1 year 3.79%
Sinopharm Group Medicine deposit - Logistic Co.,Ltd. 1,215,000.00 Within 1 year 3.01%
GlaxoSmithKline (China) Operational - Investment Limited transactions 1,184,844.32 Within 1 year 2.93%
14,817,007.25 36.68% (8,980,000.00) (g) As of 31 December of2014，the group has no government grants that are recognized as account receivables. ( 31 December2013： Neither).
(6) Inventories
(a) Inventories by category are analysed as below:
31 December 2014 31 December 2013
Book value Provision Net book value Book value Provision Net book value Raw materials 144,596,922.64 (3,596,085.79) 141,000,836.85 125,355,376.95 (5,666,854.74) 119,688,522.21 Consigned
processing material 1,288,334.79 - 1,288,334.79 520,289.18 - 520,289.18 Finished goods 2,174,537,205.97 (14,519,470.94) 2,160,017,735.03 1,673,005,932.68 (17,091,438.82) 1,655,914,493.86 Work in progress 25,031,852.48 (6,537,971.20) 18,493,881.28 53,983,888.09 - 53,983,888.09 Low cost
consumables 1,551,729.58 (19,254.66) 1,532,474.92 1,178,172.88 (18,076.22) 1,160,096.66 2,347,006,045.46 (24,672,782.59) 2,322,333,262.87 1,854,043,659.78 (22,776,369.78) 1,831,267,290.00 (b) Provision for declines in value of inventories is analysed as below:
Decreases
Increases
31 December 2013 Reversal Written Off 31 December 2014 Raw materials 5,666,854.74 53,624.85 (410,396.76) (1,713,997.04) 3,596,085.79 Finished goods 17,091,438.82 15,942,069.59 (302,958.68) (18,211,078.79) 14,519,470.94 work in progress - 6,537,971.20 - - 6,537,971.20 Low cost
consumables 18,076.22 33,921.03 (18,287.03) (14,455.56) 19,254.66 22,776,369.78 22,567,586.67 (731,642.47) (19,939,531.39) 24,672,782.59 (c) Provision of inventories is determined according to the gap between the net realisable value and the inventory book value.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(7) Other Current Asset
31 December of 2014 31 December of 2013 VAT to be deducted 39,475,078.08 10,474,150.59 Corporate income tax to be deducted 808,216.55 244,354.28 Other 25,296.84 1,485,247.90 40,308,591.47 12,203,752.77 (8) Long-term equity investments
31 December of 2014 31 December of 2013 Associates - Without quoted price (a) 157,604,846.85 135,341,010.52 The Group has no liquidity restriction on its long-term equity investments.
(a) Associates
Increases/(Decreases)
Adjusted net Voting
Explanation for the profit or loss Cash dividends Equity rights
inconsistence between 31 December based on declared by interest held
equity interest held 2013 equity method associate31 December 2014 held(%) (%) and voting rights held NoteIV(45)
Board of the directors is the highest decision making organization, which is formed by 3 Shenzhen Wanle
shareholders of Wanle Medical Co.,
Medical evenly, each Ltd.(“Wanle
shareholder appoints 2 Medical”) 135,341,010.52 50,415,836.33 (28,152,000.00) 157,604,846.8535.19%33.33% directors set up the borad
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(9) Investment Properties
31 December Increase in Current Decrease in 31 December 2014 2013 year Current year
Cost 167,235,723.04 2,899,260.22 (271,577.07) 169,863,406.19 Buildings 148,052,856.82 252,310.20 (271,577.07) 148,033,589.95 Land use rights 19,182,866.22 2,646,950.02 - 21,829,816.24 Accumulated depreciation
amortisation (88,666,004.90) (6,188,486.47) 127,935.69 (94,726,555.68) Buildings (86,324,250.54) (5,208,211.01) 127,935.69 (91,404,525.86) Land use rights (2,341,754.36) (980,275.46) - (3,322,029.82) Net book value 78,569,718.14 75,136,850.51 Buildings 61,728,606.28 56,629,064.09 Land use rights 16,841,111.86 18,507,786.42 Provision for impairment
loss (1,300,000.00) - - (1,300,000.00) Buildings (1,300,000.00) - - (1,300,000.00) Land use rights - - - - Carrying amount 77,269,718.14 73,836,850.51 Buildings 60,428,606.28 55,329,064.09 Land use rights 16,841,111.86 18,507,786.42 In 2014, the amount of depreciation and amortization were RMB5,396,642.17(2013：RMB5,932,256.16).
In 2014, the Group changed the use of buildings with a carrying amount of RMB143,755.81(Cost: RMB252,310.20, accumulated depreciation:RMB108,554,39) and the use of land use right with a carrying amount of RMB1,963,660.11 (Cost:2,646,950.02, accumulated depreciation:RMB683,289.91) into leasing. The relative fixed assets and intangible assets were respectively transferred into investment properties at the date of change in use.
In 2014, the Group disposed buildings with a carrying amount of RMB143,641.38(Cost: RMB271,577.07, accumulated depreciation: RMB127,935.69). The gain of disposal was RMB2,118,150.22.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(10) Fixed Assets
31 December Transfer from Current year other Transfer to Current year 31 December 2013 Construction in additions investment disposals 2014 Progress properties
Cost 1,250,447,403.48 61,017,891.37 30,810,275.36 (252,310.20) (15,403,698.38) 1,326,619,561.63 Buildings 523,075,719.87 7,975,390.52 11,613,147.44 (252,310.20) (205,000.00) 542,206,947.63 Machinery and
equipment 453,238,323.34 36,491,100.91 6,079,036.61 - (5,434,904.00) 490,373,556.86 Motor vehicles 57,578,677.13 - 4,028,187.52 - (5,501,396.87) 56,105,467.78 Other 188,925,746.07 16,031,769.94 6,308,845.11 - (4,130,917.51) 207,135,443.61 Leasehold
improvements 27,628,937.07 519,630.00 2,781,058.68 - (131,480.00) 30,798,145.75 Accumulated
depreciation (478,365,887.71) - (91,762,488.65) 108,554.39 12,274,576.59 (557,745,245.38) Buildings (121,245,681.23) - (21,605,379.19) 108,554.39 108,701.72 (142,633,804.31) Machinery and
equipment (197,709,620.62) - (40,788,191.11) - 3,488,160.80 (235,009,650.93) Motor vehicles (32,273,157.01) - (5,621,159.73) - 4,834,236.19 (33,060,080.55) Other (111,889,907.22) - (20,207,639.79) - 3,721,656.51 (128,375,890.50) Leasehold
improvements (15,247,521.63) - (3,540,118.83) - 121,821.37 (18,665,819.09) Net book value 772,081,515.77 768,874,316.25 Buildings 401,830,038.64 399,573,143.32 Machinery and
equipment 255,528,702.72 255,363,905.93 Motor vehicles 25,305,520.12 23,045,387.23 Other 77,035,838.85 78,759,553.11 Leasehold
improvements 12,381,415.44 12,132,326.66 Provision for
diminution in value (5,339,925.14) - (19,144,827.73) - 1,168,265.97 (23,316,486.90) Buildings (2,405,177.30) - (55,416.23) - 10,624.36 (2,449,969.17) Machinery and
equipment (2,930,449.81) - (19,078,779.43) - 1,153,343.58 (20,855,885.66) Motor vehicles - - - - - - Other (1,948.24) - (2,873.43) - 1,948.24 (2,873.43) Leasehold
improvements (2,349.79) - (7,758.64) - 2,349.79 (7,758.64) Carrying amount 766,741,590.63 745,557,829.35 Buildings 399,424,861.34 397,123,174.15 Machinery and
equipment 252,598,252.91 234,508,020.27 Motor vehicles 25,305,520.12 23,045,387.23 Other 77,033,890.61 78,756,679.68 Leasehold
improvements 12,379,065.65 12,124,568.02
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(10) Fixed Assets(Continued)
In 2014, details of the depreciation are charged as below:
31 December 2014 31 December 2013 Cost of goods sold 48,414,103.15 44,656,023.05 Selling expenses 5,308,133.70 5,487,442.01 General and administrative expenses 32,653,670.24 27,534,817.22 Research and development expenses 5,386,581.56 6,835,143.68 91,762,488.65 84,513,425.96 As of 31 December 2014, there were machinery and equipments with a carrying amount of RMB894,881.66 (Cost:RMB55,544,750.19, accumulated depreciation:RMB34,005,040.80) subjected to a provision of impairment of RMB 20,644,827.73 by management because the machinery and equipments were left temporarily idle and expectedly no longer in use due to the strategic adjustments of productions.
(11) Construction in progress
31 December 2014 31 December 2013 Pingshan Pharmaceutical Research& Development
Manufacturing Base 298,665,439.18 54,720,588.89 Zhijun Production Workshop Technological Transformation
Project 14,214,138.81 21,852,704.06 Sewage Transformation Project etc 6,062,283.79 4,417,283.79 Peinan Project 3,398,466.80 11,438,747.84 Cephalosporin Powder Injection Preparation Workshop
Transformation Project - 19,393,066.62 Shenzhen Logistics Center Stage II Warehouse
Transformation Project - 4,555,429.58 Other projects 9,378,367.98 10,228,985.23 331,718,696.56 126,606,806.01Less：
Provision of impairment– Peinan Project (1,500,000.00) - 330,218,696.56 126,606,806.01
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(11) Construction in progress
Significant changes of construction in progress
Name of project Budget of project 31 December 2013 Current year additions Transfer out during 31 December 2014 Cost upConstruction in Accumulated Borrowing Weighted Financed current year to date out progress(%) capitalized cost average by of budget borrowing capitalized interest rate(%) cost in 2014 (%) Pingshan Pharmaceutical 881,370,000.00 54,720,588.89 243,944,850.29 - 298,665,439.18 34% 45% - 8,463,856.14 5.64% Working Research& Development capital Manufacturing Base and borrowing s Zhijun Production Workshop
Technological Working Transformation Project 99,566,000.00 21,852,704.06 16,608,795.80 (24,247,361.05) 14,214,138.81 48% 60% - - - capital Cephalosporin Powder
Injection Preparation
Workshop Transformation
Project 35,000,000.00 19,393,066.62 8,141,723.78 (27,534,790.40) - 79% 100% - - - Borrowing Working Peinan Project 40,000,000.00 11,438,747.84 - (8,040,281.04) 3,398,466.80 28% 70% - - - capital Shenzhen Logistics Center Working Stage II Warehouse capital Transformation Project 5,750,000.00 4,555,429.58 360,055.91 (4,915,485.49) - 81% 100% - - - Sewage Transformation Working Project etc. 6,300,000.00 4,417,283.79 1,645,000.00 - 6,062,283.79 87% 99% - - - capital Working Other projects - 10,228,985.23 2,628,370.69 (3,478,987.94) 9,378,367.98 - - - - - capital 1,067,986,000.00 126,606,806.01 273,328,796.47 (68,216,905.92) 331,718,696.56
In 2014, the amounts that construction in progress transferred into fixed asset and long term prepaid expense were 61,017,891.37 and 7,199,014.55 respectively.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(12) Intangible asset
Current year Current year
31December 2013 additions decreases 31December 2014 Cost 254,572,956.12 3,672,638.76 (2,654,642.33) 255,590,952.55 Land use rights 145,850,489.22 498,539.53 (2,646,950.02) 143,702,078.73 Computer software 20,982,653.94 3,158,714.61 (7,692.31) 24,133,676.24 Proprietary
technology 53,885,820.10 15,384.62 - 53,901,204.72 Trademarks 196,850.00 - - 196,850.00 Sales network 33,657,142.86 - - 33,657,142.86 Accumulated
amortization (101,010,991.66) (7,618,134.62) 686,879.79 (107,942,246.49) Land use rights (34,158,408.37) (3,262,041.62) 683,289.91 (36,737,160.08) Computer software (14,331,025.98) (2,351,316.84) 3,589.88 (16,678,752.94) Proprietary
technology (49,630,659.69) (321,919.02) - (49,952,578.71) Trademarks (196,850.00) - - (196,850.00) Sales network (2,694,047.62) (1,682,857.14) - (4,376,904.76) Net book value 153,561,964.46 147,648,706.06 Land use rights 111,692,080.85 106,964,918.65 Computer software 6,651,627.96 7,454,923.30 Proprietary
technology 4,255,160.41 3,948,626.01 Trademarks - - Sales network 30,963,095.24 29,280,238.10 Provision for
impairment loss (3,000,000.00) (264,952.19) - (3,264,952.19) Land use rights - - - - Computer software - (264,952.19) - (264,952.19) Proprietary
technology (3,000,000.00) - - (3,000,000.00) Trademarks - - - - Sales network - - - - Carrying amount 150,561,964.46 144,383,753.87 Land use rights 111,692,080.85 106,964,918.65 Computer software 6,651,627.96 7,189,971.11 Proprietary
technology 1,255,160.41 948,626.01 Trademarks - - Sales network 30,963,095.24 29,280,238.10 Amortization amount of intangible asset for 2014 is RMB7,618,134.62(2013:RMB8,732,645.01).
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(12) Intangible asset(Continued)
Expenditures on research and development incurred in 2014 are listed by projects asbelow:：
31 December Current year Current year decreases 31 December 2013 addtions Recognized in Recognized as 2014 profit and loss intangible asset
Projects of
cardiovascular and
cerebrovascular
diseases treatment
subtotal - 19,316,385.67 (19,316,385.67) - - Projects of respiratory
system diseases
treatment subtotal 18,117.29 16,114,618.66 (16,114,618.66) - 18,117.29 Projects of antibiotics
preparation and
powder injection
projects subtotal - 13,724,374.82 (13,724,374.82) - - Projects of digestive
system diseases
treatment etc. - 5,248,937.32 (5,248,937.32) - - Projects of antibiotics
crude drugs etc. 5,357,691.17 3,863,758.29 (3,863,758.29) - 5,357,691.17 Projects of chinese
patent medicine - 2,593,729.72 (2,593,729.72) - - Other projects 243,507.01 20,354,289.04 (20,354,289.04) - 243,507.01 5,619,315.47 81,216,093.52 (81,216,093.52) - 5,619,315.47 Expenditures on research and development incurred in 2014 amount to RMB81,216,093.52 (2013: RMB80,047,194.42),the total amount is recognised in profit or loss for the current period, (2013: RMB79,430,320.22 and RMB616,874.20 were recognized in profit and loss and as development cost respectively). No research and development costs are capitialized as intangible assets.
(13) Goodwill
31 December 2014 31 December 2013 Goodwill 85,228,833.15 85,228,833.15Minus：Provision of impairment loss– Sinopharm
Group Zhijun(Suzhou) Pharmaceutical Co.,Ltd. (Note
a) (5,850,000.00) - 79,378,833.15 85,228,833.15
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(13) Goodwill(Continued)
(a) Impairment
The goodwill allocated to the asset groups and combinations of asset groups are summarised by operating segments as follows: 31December 2014 31 December 2013 Pharmaceutical distribution-
Sinopharm Jiangmen 27,392,317.73 27,392,317.73 Sinopharm Yanfeng 16,868,644.87 16,868,644.87 Sinopharm Zhaoqing 2,594,341.53 2,594,341.53 Sinopharm Shaoguan 1,686,496.80 1,686,496.80 Sinopharm Meizhou 1,610,819.66 1,610,819.66 Sinopharm Huizhou 923,184.67 923,184.67 Sinopharm Zhanjiang 282,135.55 282,135.55 Sinopharm Dongguan 1,499.02 1,499.02 Pharmaceutical manufacturing -
Suzhou Zhijun 28,019,393.32 33,869,393.32 79,378,833.15 85,228,833.15 The recoverable amount of asset groups and groups of asset groups is calculated by using the estimated cash flows according to the five-year budget approved by management. The cash flows beyond the five-year period are calculated based on the inflation rates.
The main assumptions applied in calculating discounted future cash flows are as follows:
Pharmaceutical Pharmaceutical distribution manufacturing Gross margin 6% 13% Discount rate 15% 14.2% Management determines budgeted gross margin based on historical experience and forecast on market development. The discount rates determined by management are the pre-tax interest rates which reflect the risks specific to the related asset groups and groups of asset groups(Pharmaceutical distribution after-tax discount rate15%, Manufactruing afer-tax discount rate14.2%) . The above assumptions are used to assess the recoverable amount of each asset group and group of asset groups within the corresponding operating segment. As at 31 December 2014, management of the Group considered there was RMB5,850,000.00 impairment to goodwill recognised according to the impairment assessment.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(14) Long term prepaid expense
31 December Current year Current year Current year 31 December 2014 2013 additions amortization decreases
Leasehold
improvements 33,965,413.81 10,646,134.85 (7,522,411.81) (39,151.70) 37,049,985.15 Others 2,020,207.66 773,111.11 (689,071.89) - 2,104,246.88 35,985,621.47 11,419,245.96 (8,211,483.70) (39,151.70) 39,154,232.03 (15) Deferred income tax assets and deferred income tax liabilities
(a) Deferred income tax assets
31 December 2014 31 December 2013 Deferred income Deductible Deferred income Deductible tax assets temporary tax assets temporary differences differences Provision for impairment
of assets 20,930,880.12 85,594,942.59 13,022,902.06 62,556,106.17 Accrued expenses 9,771,547.36 56,704,614.52 9,323,398.38 51,691,587.96 Accrued payroll 13,595,697.03 59,051,247.05 14,401,729.27 70,542,501.21 Deferred revenue 13,634,799.37 82,178,700.44 13,056,138.55 84,518,146.08 Deductible losses 23,331,434.22 96,865,385.40 10,009,584.17 64,531,193.67 Accrued liabilities - - 5,510,000.00 22,040,000.00 Others 3,882,121.40 15,528,485.56 3,572,185.82 15,362,493.44 85,146,479.50 395,923,375.56 68,895,938.25 371,242,028.53Including：
Amount that expected to
be reversed in 1
year(including 1 year) 47,112,561.57 48,601,520.59
Amount that expected to
be reversed over 1 year 38,033,917.93 20,294,417.67
85,146,479.50 68,895,938.25
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(15) Deferred income tax assets and deferred income tax liabilities(Continued)
(b) Deferred income tax liabilities
31 December 2014 31 December 2013 Deferred income tax Deductible temporary Deferred income tax Deductible temporary liabilities differences liabilities differences Changes in fair value 10,821,134.82 43,284,539.27 11,613,211.10 46,452,844.40 Business combination
involving entities not
under common control 9,657,520.81 38,630,083.24 9,219,687.61 40,822,520.57 Others 3,818,420.94 15,273,683.76 3,811,989.05 15,351,076.30 24,297,076.57 97,188,306.27 24,644,887.76 102,626,441.27Including：
Amount that expected to be
reversed in 1 year(including
1 year) 1,359,533.75 1,359,533.75
Amount that expected to be
reversed over 1 year 22,937,542.82 23,285,354.01
24,297,076.57 24,644,887.76
(c) As at 31 December 2014, the Group has not recognised deferred tax assets in respect of deductible losses and other deductible temporary differences are listed as below.
31 December 2014 31 December 2013 Deductible losses(Note(i)) 1,627,172.87 1,627,172.87 (i) For those loss-making subsidiaries, as the large uncertainty of being able to gain enough taxable income to utilise the deductible losses in the future, the Group does not recognise deferred tax assets arising from accumulated losses amounting to RMB1,627,172.87 tax deductible under the tax law.
As at 31 December 2014, the unrecognised deferred tax assets in respect of deductible losses will be expired as following: 31 December 2014 31 December 2013 Year 2015 1,627,172.87 1,627,172.87
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(16) Provision of asset impairment
Reversal of
Current year decreases
written off
amount in
31 December previous Current year 31 December 2013 periods increases Reversal Written off 2014 Bad debt
provision 35,935,165.04 420,426.88 9,469,579.35 (4,005,747.47) (5,167,727.56) 36,651,696.24 Including:
Provision for
accounts
receivable 25,059,411.55 420,426.88 8,020,881.70 (3,493,461.47) (5,167,727.56) 24,839,531.10 Provision for
other
receivables 10,875,753.49 - 1,448,697.65 (512,286.00) - 11,812,165.14 Provision for
declines in
value of
inventories 22,776,369.78 - 22,567,586.67 (731,642.47) (19,939,531.39) 24,672,782.59 Provision for
fixed assets 5,339,925.14 - 19,144,827.73 - (1,168,265.97) 23,316,486.90 Provision for
investment
property
impairment 1,300,000.00 - - - - 1,300,000.00 Provision for
construction
in progress
impairment - - 1,500,000.00 - - 1,500,000.00 Provision for
intangible
assets
impairment 3,000,000.00 - 264,952.19 - - 3,264,952.19 Provision for
goodwill
impairment - - 5,850,000.00 - - 5,850,000.00 68,351,459.96 420,426.88 58,796,945.94 (4,737,389.94) (26,275,524.92) 96,555,917.92 (17) Other non-current assets
31 December 2014 31 December 2013 Medical reserve fund 42,039,659.05 44,071,813.66 Prepayment for project and equipment 63,620,879.10 23,336,486.75 Equity advance - 2,247,000.00 Non-monetary compensation of resettlement (Note
IV(30)) 70,250,000.00 70,250,000.00 175,910,538.15 139,905,300.41
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(18) Short term borrowings
(a) Bank borrowings are analysed by catagories as follows:
Currency 31 December 2014 31 December 2013 Unsecured borrowings (Note(i)) RMB 966,752,021.57 1,643,740,120.17 Guaranteed borrowings (Note(ii) RMB 459,757,465.32 551,532,001.78 Pledged borrowings RMB - 27,472,173.20 Discounted notes (Note IV(2)(b)) RMB 91,445,041.99 122,197,293.96 Entrusted borrowings RMB - 400,000,000.00 1,517,954,528.88 2,744,941,589.11 (i) On 31 December 2014, unsecured borrowings of RMB966,752,021.57 are guaranteed by the Company and its subsidiaries. (31 December 2013: unsecured borrowings of RMB1,323,740,120.17 are guaranteed by the Company and its subsidiaries, meanwhile, unsecured borrowings of RMB320,000,000.00 are borrowed from the Sinopharm Group Financial Co., Ltd. (“Group Financial Co.”).)
(ii) On 31 December 2014, bank borrowings of RMB459,757,465.32 (31 December 2013: RMB551,532,001.78) are guaranteed by Sinopharm Group.
On 31 December 2014, the weighted average interest rate of short-term borrowings is5.50% per annum (31 December 2013:5.83%).
(19) Notes payable
31 December 2014 31 December 2013 Trade acceptance notes 380,502,886.42 357,654,446.00 Bank acceptance notes 1,087,663,754.22 1,137,746,742.09 1,468,166,640.64 1,495,401,188.09 (20) Accounts payable
31 December 2014 31 December 2013 Trade payable 3,988,878,234.03 3,436,936,497.16 (a) As at 31 December 2014, accounts payable of RMB98,102,397.18 (31 December 2013: RMB92,581,168.79) were aged over 1 year. Such long aged accounts payable have not been settled because the transactions were not closed yet.
(21) Advances from customers
31 December 2014 31 December 2013 Sales received in advance
40,339,905.63 38,570,231.44 As at 31 December 2014, advances from customers of RMB1,483,286.56 (31 December 2013: RMB1,307,064.22) were aged over 1 year. Before the financial statement is approved, no such long aged advance has been settled.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(22) Employee benefits payable
31 December 2014 31 December 2013 Short term employee benefits payable 168,068,439.41 149,874,480.05 Defined contribution plans payable 2,166,584.27 1,374,236.23 Termination benefits payable 1,723,119.20 4,598,647.84 171,958,142.88 155,847,364.12 (a) Short term employee benefits payable
31 December Current year Current year 31 December 2013 additions reductions 2014 Wages and salaries, bonuses,
allowances and subsidies 134,064,138.60 459,143,513.38 (442,823,141.01) 150,384,510.97 Staff welfare 1,215,567.00 28,665,096.13 (28,907,104.11) 973,559.02 Social security contributions 131,767.71 18,093,366.06 (17,869,885.99) 355,247.78 Including:
Medical insurance 93,292.12 15,487,614.79 (15,280,730.52) 300,176.39 Work injury insurance 19,082.96 1,398,633.12 (1,389,043.55) 28,672.53 Maternity insurance 19,392.63 1,207,118.15 (1,200,111.92) 26,398.86 Housing funds 779,385.83 19,434,075.25 (19,670,684.33) 542,776.75 Labor union funds and
employee education funds 12,607,659.97 15,800,514.65 (13,468,472.75) 14,939,701.87 Others 1,075,960.94 1,398,192.51 (1,601,510.43) 872,643.02 149,874,480.05 542,534,757.98 (524,340,798.62) 168,068,439.41 (b) Defined contribution plans payable
Year 2014 Year 2013
Accrued Amount Ending balance Accrued Amount Ending balance Basic pensions 38,763,620.72 421,293.14 33,272,734.21 692,682.31 Supplementary pensions 4,174,875.83 1,700,871.21 4,310,236.52 593,860.97 Unemployment insurance 2,345,319.31 44,419.92 2,144,392.47 87,692.95 45,283,815.86 2,166,584.27 39,727,363.20 1,374,236.23 (c) Termination benefits payable
31 Decemeber 2014 31 December 2013 Retirement benefits payable– within 1 year
(NoteIV(31)) 1,115,000.00 1,190,240.00 Other dismission benefits(Note i) 608,119.20 3,408,407.84 1,723,119.20 4,598,647.84 (i) For year 2014, the amount that the group provided other termination benefits for severing labor relations was RMB223,425.95 , the amount that the group wrote off other termination benefits for needless payments of severing labor relation was RMB2,335,000.00.(2013:Other termination benefits for severing labor relations: RMB836,532.61).
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(23) Tax payable
31 Decemeber 2014 31 December 2013 Enterprise income tax payable 52,868,801.89 42,539,425.26 Value-added-tax payable 10,022,374.90 16,407,977.00 Water conservancy fund payable 4,825,434.57 4,830,062.90 Anti-flood fund payable 3,125,176.15 4,517,546.01 Individual income tax payable 1,514,928.86 1,224,396.25 Stamp duty tax payable 1,198,400.07 1,660,657.55 Real estate tax payable 923,420.99 1,110,392.16 Business tax payable 943,302.08 967,037.88 City maintenance and construction tax payable 787,872.30 1,296,993.82 Educational surcharge payable 571,654.75 933,092.63 Land use tax payable 426,390.62 129,500.80 Other tax payables 237,912.28 428,177.78 77,445,669.46 76,045,260.04 (24) Interest payable
31 December 2014 31 December 2013 Short term borrowing interests payable 6,610,192.22 13,065,850.14 Long term borrowing interests payable 56,519.97 - 6,666,712.19 13,065,850.14 (25) Other payable
31 December 2014 31 December 2013 Accrued selling and distribution expenses 187,784,029.00 179,075,786.05 Payables for construction in progress and equipment 70,267,980.15 66,609,945.42 Amount collected on behalf of third party 44,057,463.73 135,601,089.66 Deposit 19,495,588.90 19,990,983.83 Equity transaction payable 9,330,197.17 11,415,803.17 Compensation payment for suspension - 12,620,000.00 Others 81,411,942.56 70,788,639.26 412,347,201.51 496,102,247.39 (a) As at 31 December 2014, other payables of RMB77,105,050.07 (31 December 2013: RMB81,693,772.92) were aged over 1 year, which were mainly for deposits that the project quality margin and other deposits were about to be retured.
(26) Current portion of long-term borrowings
31 Decemeber 2014 31 December 2013 Promotion rewards program
- due within one year 4,000,000.00 7,800,000.00
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(27) Accured liabilities
31 December 2014 31 December 2013 Accured liabilities - 22,040,000.00 In March 2010, the Group signed a contract about real estate development project cooperation on theGroup’s Land (hereinafter referred to as "the Cooperative Contract")with a real estate development company (hereinafter referred to as "the Other Contract Party"). The project had never substantively started after the contract was signed. In 2012, the Group determined to terminate the contract based on development plannning. As of 31 December 2012, the management accrued compensation payable of RMB17.60 million based on communication with the Other Contract Party together with the best estimation of the case. The groupdidn’t pay the RMB11.02 million compensation in time, the Other Contract Party took legal proceeding against the Group to thePeople’s Court of Tianhe District to pay for the remaining compensation, late penalty and double the compensation. On 10 May 2013, the Group received the first civil judgement that the Group need to pay the Other Contract Party the remaining compensation RMB11.02 million, later penalty RMB11.02 million and the doubled compensation RMB11.02 million. The Group appeal against the judgement made byPeople’s Court of Tianhe District, as the Groupwasn’t satisfied with the judgement. As of 14 February 2014, the Group received the final civil judgement from IntermediatePeople’s Court of Tianhe District, that the late penalty of RMB11.02 million was rejected. As both parties are entitled to apply to People's Court for retrial within six months, Management believesit’s not able to make a reliable estimate of the final outcome of the contract dispute. Therefore, the Group accrued the provision and recognised non-operating expenses of RMB22.04 for prudence. At August 2014, arraignment of retrial period has expired,the Group did not recognized the retrial application of the Other Contract Party. Thus,the amount that rejected by the court at the second instance was recognized as non-operating income. The rest compensations and indemnities were implemented as the court required. (28) Long term borrowings
Currency 31 December 2014 31 December 2013 Unsecured borrowings RMB 8,095,448.00 - Entrusted borrowings (Note a) RMB 31,600,000.00 - 39,695,448.00 - (a) As at 31 December 2014, the entrusted borrowings of RMB31,600,000.00 was lent by Sinopharm Group through Group Financial Co.(31 December 2013: N/A)
As at 31 December 2014, the weighted average interest rate of long-term borrowings is5.62% per annum (31 December 2013:N/A).
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(29) Payables for specific projects
31 December 2013 Currrent year Reduction 31 December 2014 Sepecial funds granted by
Government 852,000.00 - 852,000.00 Government grants for ERP system construction 435,000.00 - 435,000.00 Industrial technology funds 3,000,000.00 (3,000,000.00) - 4,287,000.00 (3,000,000.00) 1,287,000.00 (30) Deferred income
31 December 2013 Current year Current year 31 December 2014 Reasons of additions reductions formation Government grants Government (Note a) 151,476,740.18 15,868,000.00 (14,225,573.35) 153,119,166.83 grants Promotion Fair value of Rewards Program 32,854,678.00 5,755,643.18 (11,363,286.86) 27,247,034.32 rewards 184,331,418.18 180,366,201.15
Less:Product promotion
points matured within one
year (Note IV(26)) (7,800,000.00) (4,000,000.00)
176,531,418.18 176,366,201.15
(a) Government grants
Amount
recognized as
31 December Current year non-operating 31 December Related to Government grants program 2013 addtions income for 2014 2014 income/assets Resettlement Compansation(i) 89,047,483.97 - (2,698,408.56) 86,349,075.41 Related to assets Cephalosporin Solid Preparations Related to Development Project 15,000,000.00 - (1,154,076.86) 13,845,923.14 assets Related to Guangxi Logistics Project 6,006,695.79 2,408,000.00 (330,643.61) 8,084,052.18 assets Stomach medicine domestic clinical Related to research and development project 5,000,000.00 - - 5,000,000.00 assets Pingshan pharmaceutical R& D base Related to engineering - 5,000,000.00 - 5,000,000.00 assets Cephalosporin Powder Injection Passing Related to assets EU-GMP Authentication 5,000,000.00 - (494,216.18) 4,505,783.82
New CephalosporinR&D Project 5,000,000.00 - (1,037,614.83) 3,962,385.17 Related to assets MedicalR&D Center II (in progress) 5,000,000.00 - (1,122,379.15) 3,877,620.85 Related to assets Cardiovascular system targeted drug Related to assets development programs - 3,000,000.00 - 3,000,000.00
A comprehensive experimental modern Related to assets service industry subsidies - 3,000,000.00 (300,000.00) 2,700,000.00
Enteric coated pellets industry research Related to assets and development project 2,700,000.00 - (191,162.60) 2,508,837.40
Cefpirome SulfateR&D Project 2,637,395.56 - (250,939.01) 2,386,456.55 Related to assets Shared Logistics Center(completed) 2,163,761.90 - (938,293.20) 1,225,468.70 Related to assets Cefixime Particles Prescription Process Related to assets Improvement and Industrial Project 2,000,000.00 - (2,000,000.00) -
New CephalosporinR&D Project 1,829,887.42 - (610,493.52) 1,219,393.90 Related to assets Other Projects(in progress) 10,091,515.54 2,460,000.00 (3,097,345.83) 9,454,169.71 Related to assets 151,476,740.18 15,868,000.00 (14,225,573.35) 153,119,166.83
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(30) Deferred income(Continued)
(a) Government grants(continued)
(i) Because the Nanning Government planned to reconstruction of the old urban area, a subsidiary of the company, Guangxi Logistics, which located in Nanning Longteng Road need to relocated. According to compensation agreement signed in May, 2012, the company obtained RMB120,250,000.00 compensation for the demolition carried out by the government, including cash compensation amounted RMB50,000,000.00 and another physical compensation amounted RMB70,250,000.00 would be received in year 2015 when completion( Note IV(17)). Amounting to RMB93,320,000.00 relating to capital expenditure for reconstruction was recognised as deferred income, which would be amortised to profit or loss over the useful life of the related asset; others was recognised in profit or loss in 2012.
(31) Long term employee benefits
31 December 2014 31 December 2013 Early retirement benefits payable 4,011,000.00 4,809,240.00 Less: early retirement benefits payable within 1 year (1,115,000.00) (1,190,240.00) 2,896,000.00 3,619,000.00 Numbers of employees processed early retirement in the Group, as at the balance sheet day, the accordingly actuarial assumptions that the Group calculate the early retirement employee benefits are shown as following:
31 December 2014 31 December 2013 Discount rate 3.75% 4.75% The growth rate of wages 4.00%-6.00% 4.00%-6.00% The amount that early retirement employee benefits recognized into/(Reversed into ) current profit and loss are shown as following:
Year 2014 Year 2013 General and Administrative expense 215,000.00 (270,000.00) Financial expense 199,000.00 223,000.00 414,000.00 (47,000.00) (32) Other non-current liabilities
31 December 2014 31 December 2013 Medical reserve funds 45,427,343.31 45,427,343.31 Certain medical reserves funds were received by the Group from the PRC government for it to purchase medical products (including medicines) required to respond to major disasters, epidemics and other emergencies
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(33) Share Capital
31 December 2014 31 December 2013 Listed shares without restriction of trading:
A shares, listed
233,261,812.00 233,261,149.00 B shares, listed
54,885,600.00 54,885,600.00 Listed shares with restriction of trading:
State owned legal person shares(a) 74,482,543.00 - Natural person shares 1,988.00 2,651.00 362,631,943.00 288,149,400.00 (a) On 28 Feburary 2014, the Company was permitted to issue ordinary shares (A share) to Sinopharm Group, a domestic investor according to Document[2014] No. 232 “The approval of non-public stock offering of China National Accord Medicine Coporation Ltd.” issued by China Securities Regulatory Commission. Face value of the stock is RMB 1 yuan. The number issued is 74,482,543 (The shares shall not be transferred within 36 months since the issued day.) and the issue price is RMB 26.07 Yuan.
Through the non-public offering of ordinary shares (A share), the Company has received funding of RMB 1,941,759,896.01, including the increase of equity of RMB74,482,543.00, and the increase of capital reserve of RMB 1,854,582,870.47 (expenses related to the issurance of RMB 12,694,482.54 has been deducted, while the interest income generated from purchasing funds during the freezing period of issurance). All increase of capital has been invested with cash in RMB.
These funds has been gathered by 14 March 2014, and verified by PricewaterhouseCoopers Zhong Tian LLP, Guangzhou Branch with the Document[2014] No.132 capital verification report from PricewaterhouseCoopers Zhong Tian LLP.
(34) Capital reserve
31 December 2013 Current year additions 31 December 2014 Capital surplus (Note a) - 1,855,144,194.77 1,855,144,194.77 Other Capital reserve -
Transition reserves from investment in
associates reclassified from capital surplus to
other comprehensive income 2,380,016.57 - 2,380,016.57 Transfer of capital surplus
recognised under the previous accounting
system 2,650,322.00 - 2,650,322.00 Others 720,000.00 3,000,000.00 3,720,000.00 5,750,338.57 1,858,144,194.77 1,863,894,533.34 (a) In 2014, the Company has RMB1,854,582,870.47 capital stock premium due to the non-publicly issued RMB common stocks(Note IV(33)), and RMB561,324.30 net gain due to the sale of spare stocks which included in capital reserve. 31 December 2012 Current year additions 31 December 2013 Other capital reserve-
Transition reserves from investment in
associates reclassified from capital surplus
to other comprehensive income 2,380,016.57 - 2,380,016.57 Transfer of capital surplus
recognised under the previous
accounting system 2,650,322.00 - 2,650,322.00 Others 520,000.00 200,000.00 720,000.00
5,550,338.57 200,000.00 5,750,338.57
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(35) Surplus reserve
31 December 2013 Current year addition 31 December 2014 Statutory surplus reserve 144,855,634.40 36,460,337.10 181,315,971.50 31 December 2012 Current year addition 31 December 2013 Statutory surplus reserve 99,360,384.15 45,495,250.25 144,855,634.40 Based on “Company law of thePeople’s Republic of China” and the articles of association, the Group extracted10% of net profit as statutory surplus reserve. It is optional to extrate or not when the accumulated amount was up to50% of registered capital. The statutory surplus reserver could be used to cover the deficit or enhance the share capital after permission. Approved by the board of director, the Group extracted RMB36,460,337.10 in 2014(2013: extracted10% of net profit as RMB45,495,250.25). As of 31 December 2014, the accumulated amount of statutory surplus reserve of the Group has already reached50% of registered capital.
(36) Undistributed profits
Year 2014 Year 2013 amount amount Undistributed profits at the beginning of year 1,806,002,285.06 1,382,882,906.24 Add:net profit attributable to the shareholders of the
company 652,497,176.03 520,488,198.80 Less: Appropriation of statutory surplus reserve (Note IV(35)) (36,460,337.10) (45,495,250.25) Dividend(Note a) (65,273,749.74) (51,866,892.00) Other outflow - (6,677.73) Ending balance of undistributed profits 2,356,765,374.25 1,806,002,285.06 (a) Pursuant to the resolution of General Meeting on 18 April 2014, cash dividends of RMB65,273,749.74 (RMB1.8 per 10 shares) was paid based on the issued shares of 362,631,943.
(b) Pursuant to the resolution of board of directors of the company on 20 March 2015, cash dividends of RMB
72,526,388.60.(RMB2.00 per 10 shares) was proposed based on the issued shares of 362,631,943 after non-public offering. This proposed dividend is subject to the approval of General Meeting (Note XI(1)(a)).
(37) Minority Interest
Minority interests are analysed as below:
31December 2014 31 December 2013 Sinopharm Liuzhou 52,661,317.92 41,954,133.73 Sinopharm Yanfeng 24,504,402.61 23,410,777.54 Sinopharm Shaoguan 6,231,349.17 6,507,084.81 Sinophram Shantou 3,202,338.73 - SInophram Wuzhou 8,206.13 7,410.46 86,607,614.56 71,879,406.54
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(38) Sales and cost of sales
Year 2014 Year 2013 Revenue of main operations 23,881,210,621.67 21,095,622,536.26 Other operating income 73,120,406.38 103,843,862.95 23,954,331,028.05 21,199,466,399.21 Year 2014 Year 2013 Cost of main operations (21,988,653,461.63) (19,388,139,660.12) Other operating expenses (13,975,308.28) (47,942,227.02) (22,002,628,769.91) (19,436,081,887.14) (a) Revenue and cost of main operations
Revenue and cost of main operations analysed by industries are set outbelow:：
Year 2014 Year 2013
Revenue of Cost of main Revenue of Cost of main main operations operations main operations operations Pharmaceutical
distribution 22,195,808,452.75 (21,007,553,553.67) 19,402,722,544.21 (18,378,091,996.46) Pharmaceutical
manufacturing 1,641,881,896.69 (952,511,232.92) 1,650,765,125.89 (984,311,353.46) Logistics and
freights 32,110,291.44 (24,999,668.41) 32,419,391.74 (22,278,364.39) Rental and other
income 11,409,980.79 (3,589,006.63) 9,715,474.42 (3,457,945.81) 23,881,210,621.67 (21,988,653,461.63) 21,095,622,536.26 (19,388,139,660.12) (b) Other operating income and expenses
Year 2014 Year 2013
Other operating Other operating Other operating Other operating income cost incomec cost Sales of raw materials 6,285,125.39 (7,608,893.71) 34,507,631.23 (36,059,535.58) Rental income 20,198,026.58 (1,787,750.50) 21,814,029.35 (2,474,310.35) Rendering of services 44,375,462.81 (4,435,022.69) 40,922,202.37 (5,333,123.11) The income of disposal the
investment real estate 2,261,791.60 (143,641.38) 6,600,000.00 (4,075,257.98) 73,120,406.38 (13,975,308.28) 103,843,862.95 (47,942,227.02)
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(39) Tax and surcharges
Year 2014 Year 2013 City maintenance and construction tax 20,747,432.79 21,234,560.21 Educational surcharge 14,937,712.27 15,310,331.03 Business tax 7,812,532.51 5,959,369.73 Others 3,243,933.46 3,146,588.49 46,741,611.03 45,650,849.46 (40) Selling and distribution expenses
Year 2014 Year 2013 Employees payroll and welfare benefits 226,903,462.21 196,211,700.73 Transportation charges 63,762,955.95 66,447,565.86 Promotion and marketing expenses 47,447,305.94 41,726,848.42 Rental expenses 32,756,117.66 13,743,220.34 Travel allowances 30,121,257.98 25,675,829.98 Entertainment expenses 25,351,649.94 21,762,258.84 Conference expenses 14,135,165.64 23,315,375.60 Advertising expenses 10,121,312.49 19,833,923.71 Storage expenses 7,636,810.16 14,695,469.13 Depreciation expenses 5,308,133.70 5,487,442.01 Office allowances 5,023,632.28 6,983,018.23 Others 53,815,279.20 50,507,528.40 522,383,083.15 486,390,181.25
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(41) General and administrative expense
Year 2014 Year 2013 Employees payroll and welfare benefits
221,628,037.88 183,319,710.57 Research and development expenses
81,216,093.52 79,430,320.22 Depreciation expenses
32,653,670.24 27,534,817.22 Taxations
27,583,272.86 26,479,597.24 Entertainment expenses
10,878,456.42 12,543,177.38 Vehicle management expenses
8,144,306.69 6,995,195.97 Amortisation of intangible assets
7,618,134.62 8,732,645.01 Rental expenses
6,931,607.76 8,774,850.89 Utilities 5,571,319.82 4,304,998.97 Office allowances 5,502,356.50 8,885,859.94 Travel allowances
5,219,523.53 4,474,768.02 Maintenance and other charges
4,159,734.88 5,378,660.47 Conference expenses
1,557,242.31 6,911,872.66 Others 55,653,816.22 38,639,505.31 474,317,573.25 422,405,979.87 (42) Financial expense- net
Year 2014 Year 2013 Interest expenses 153,286,381.82 182,162,992.78 Less: interest income (9,118,766.24) (5,098,158.42) discount in cash (33,986,833.30) (23,837,106.81) Gain and loss from exchanges 115,730.39 127,141.13 Others 12,832,590.24 11,050,472.52 123,129,102.91 164,405,341.20
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(43) Expense by nature
The cost of operations, selling and distribution expenses, general and administrative expenses, financial expenses and impairment of assets are classified by nature and listed as following:
Year 2014 Year 2013 Inventories of finished and work-in process goods 21,003,079,328.16 18,438,525,571.56 Consumed raw materials and low value 739,232,331.96 762,509,032.15 consumables, etc
Employee benefits 588,455,999.79 509,835,898.87 Financial expenses 122,930,102.91 164,182,341.20 Depreciation and amortization expenses 112,988,749.14 104,670,385.09 Research and development expense 81,216,093.52 79,430,320.22 Transportation charges 63,843,529.68 66,519,199.00 Impairment of assets 54,059,556.00 41,996,906.63 Market development expenses 47,447,305.94 41,726,848.42 Utilities 47,009,899.30 36,434,138.29 Rental 39,687,725.42 22,518,071.23 Entertainment expenses 36,230,106.36 34,305,436.22 Travel allowance 35,388,022.61 30,207,089.50 taxation 27,583,272.86 26,479,597.24 Office expenses 10,583,292.62 15,959,786.12 Vehicles management expenses 12,869,932.56 11,511,344.44 Conference expenses 15,692,407.95 30,227,248.26 Advertisement expenses 10,214,102.10 19,900,108.71 Machine material expenses 10,118,628.22 9,276,528.45 Other expense 117,887,698.12 105,064,444.49 23,176,518,085.22 20,551,280,296.09 (44) Asset impairment loss
Year 2014 Year 2013 Declines in values of inventories 21,835,944.20 33,400,790.15 Impairment in fixed assets 19,144,827.73 5,339,925.14 Impairment in goodwill 5,850,000.00 - Bad debt 5,463,831.88 3,256,191.34 Impairment in construction in progress 1,500,000.00 - Impairment in intangible assets 264,952.19 - 54,059,556.00 41,996,906.63
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(45) Gain from investment
Year 2014 Year 2013 Share of profit of investees under equity method (Note a) 50,415,836.33 42,473,165.02 (a) The investment income from long-term investment under equity method represented the profit from Wanle Medical. The increase was due to improved business performance of that associate.
There is no significant restriction on the remittance of investment income to the Group.
(46) Non-operating income
Year 2014 Year 2013 Government grants (Note a) 31,534,869.05 23,465,438.42 Reversal of payments 11,786,275.78 - Write off payments 3,279,992.55 11,060,849.25 Gain on disposal of fixed assets 686,310.43 862,319.66 Others 2,593,610.79 1,576,105.84 49,881,058.60 36,964,713.17 Non-operating income is wholly classified as non-recurring profit in 2014.
(a) Government grants
Year 2014 Year 2013 Note - Government grants related to
assets
Resettlement compensation- Transfer from deferred amortization of assets 2,698,408.56 2,698,408.56 amortization income Transfer from deferred Others 11,527,164.79 3,754,923.49 amortization income - Government grants related to
income
Tax return 6,060,187.00 7,052,996.58 Tax return Government grants for medicine
reserve expenses 3,000,000.00 4,889,439.00 Fiscal interest discount Government-funded interest Subsidy for medical reserve discount 549,200.00 890,000.00
Subsidy for Others 7,699,908.70 4,179,670.79 contribution, etc. 31,534,869.05 23,465,438.42
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(47) Non-operating expenses
Year 2014 Year 2013 Compensation payment for termination of
contract(Note IV (27)) - 22,040,000.00 Fine and late fees 694,227.29 - Donations 557,412.36 - Losses on disposal of fixed assets 541,470.69 357,911.01 Others 291,678.09 473,043.37 2,084,788.43 22,870,954.38 Non-operating cost is wholly classified as non-recurring and loss in 2014.
(48) Income taxes expenses
Year 2014 Year 2013 Current income tax 175,545,757.34 146,243,572.44 Deferred income tax (16,103,486.91) (21,360,794.20) 159,442,270.43 124,882,778.24 The reconciliation from income tax calculated based on applicable tax rates and total profit presented in the consolidated financial statements to the income tax expenses is listed below:
Year 2014 Year 2013 Total profit 829,283,438.30 659,102,177.47 Income tax expenses calculated at applicable tax rates 207,320,859.57 164,775,544.37 Differences in preferential tax rates of certain companies (30,924,519.22) (22,933,988.22) Income not subject to tax (13,305,636.21) (11,292,893.40) Expenses not deductible for tax purposes 5,020,267.39 5,294,687.18 Utilisation of previously unrecognised tax losses - (7,140,406.49) Super deduction for development cost (4,431,741.60) (3,820,165.20) Gain and loss from the changes of tax rate (4,236,959.50) - Income tax 159,442,270.43 124,882,778.24
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(49) Earnings per share
(a) Basic earnings per share
Basic earnings per share is calculated by consolidated net profit attributable to shareholders of the Company dividing by the weighted average number of ordinary shares in issue:
Year 2014 Year 2013 Consolidated net profit attributable to shareholders of the
Company 652,497,176.03 520,488,198.80 Weighted average number of ordinary shares in issue 344,011,307.25 288,149,400.00 Basic earnings per share 1.90 1.81 Including:
Basic earnings per share on going 1.90 1.81 (b) Diluted earnings per share
Diluted earnings per share is calculated by dividing the consolidated net profit attributable to shareholders of the Company by the weighted average number of ordinary shares in issue, which both should be adjusted for the effects of all potential dilutive factors. The Company has no potential outstanding ordinary shares (2013: N/A), the diluted earnings per share equals the basic earnings per share.
(50) Notes to cash flow statements
(a) Cash received relating to other operating activities
Year 2014 Year 2013 Government grants except tax return 27,117,108.70 22,518,525.79 Rent income 20,198,026.58 21,814,029.35 Interest income 9,118,766.24 5,098,158.42 Others 39,289,610.13 39,307,963.93 95,723,511.65 88,738,677.49
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(50) Notes to cash flow statements(Continued)
(b) Cash paid relating to other operating activities
Year 2014 Year 2013 Rental expenses 39,687,725.42 22,518,071.23 Research and development expenses 38,583,648.88 26,861,483.23 Entertainment expenses 36,230,106.36 34,305,436.22 Travel expenses 35,340,781.51 30,150,598.00 Conference expenses 15,692,407.95 30,227,248.26 Bank charges 11,412,570.41 10,021,062.89 Office expenses 10,525,988.78 15,868,878.17 Advertising expenses 10,121,312.49 19,833,923.71 Other 192,566,580.63 167,786,602.95 390,161,122.43 357,573,304.66 (c) Cash received relating to other financing activities
Year 2014 Year 2013 Entrusted borrowings borrowed from CNPGC 31,600,000.00 - Entrusted borrowings borrowed from Sinopharm Group - 800,000,000.00 Others - 66,596,329.87 31,600,000.00 866,596,329.87 (d) Cash payments relating to other financing activities
Year 2014 Year 2013 Repayment of entrusted borrowings lent by Sinopharm
Group 400,000,000.00 400,000,000.00 Repayment of short-term financing bonds expenses - 5,132,719.50 Others 95,951,689.09 - 495,951,689.09 405,132,719.50
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(51) Supplementary information of cash flow statements
(a) Supplementary information of cash flow statements
Reconciliation of net profit to cash flows from operating activities
Year 2014 Year 2013 Net profit 669,841,167.87 534,219,399.23 Add: Provision for assets impairment 54,059,556.00 41,996,906.63 Depreciation of fixed assets and investment
properties 97,159,130.82 90,445,682.12 Amortisation of intangible assets 7,618,134.62 8,732,645.01 Amortisation of long-term prepaid
Expenses 8,211,483.70 5,492,057.96 Gains on disposal of fixed assets, and other
non-current assets (2,262,989.96) (3,029,150.67) Financial expenses 156,492,141.57 182,290,133.91 Investment income (50,415,836.33) (42,473,165.02) Increase of deferred tax assets (16,250,541.25) (19,386,408.28) Decrease of deferred tax liabilities (347,811.19) (1,974,385.92) Increase of inventory (510,869,762.46) (134,007,767.50) Increase in operating receivables (1,310,290,857.24) (1,401,599,294.21) Increase in operating payables 98,095,402.92 1,186,691,276.69 Decrease in operating cash with restriction 2,263,748.50 17,630,169.88 Net cash flow from operating activities (796,697,032.43) 465,028,099.83 Significant non-cash investing activities
Year 2014 Year 2013 Properties constructed with endorsed notes receivables 40,126,168.08 39,499,982.82 Movement of cash
Year 2014 Year 2013 Cash at end of year 854,212,006.84 1,097,948,354.45 Less: cash at beginning of year (1,097,948,354.45) (920,748,043.53) Net (decrease)/increase in cash (243,736,347.61) 177,200,310.92
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
IV Notes to the consolidated financial statements (continued)
(51) Supplementary information of cash flow statements(Continued)
(b) Acquisition of subsidiaries and operating unit
Year 2014 Year 2013 The consideration of acquisition
Including: Sinophram Shantou 5,243,000.00 - Less: Cash held by subsidiaries at the acquisition date
Including: Sinophram Shantou (5,116,827.09) - Add: Consideration of previous acquisition paid in
current period
Including： Sinopharm Zhaoqing 1,518,000.00 - Sinopharm Wuzhou 567,606.00 - Sinopharm Jiangmen - 5,900,000.00 Sinopharm Shaoguan - 4,074,000.00 Other - 1,503,751.57 Add: Equity money in advance
Including: Sinopharm Shantou - 2,247,000.00 Net cash outflow on acquisition of the subsidiaries and
business 2,211,778.91 13,724,751.57 (c) Cash
31 December 2014 31 December 2013 Cash at end of year 854,212,006.84 1,097,948,354.45 Including: Cash on hand 41,627.16 65,660.84 Call deposits with banks 854,170,379.68 1,097,882,693.61 Restricted cash 13,350,108.70 15,613,857.20 Cash at bank and on hand 867,562,115.54 1,113,562,211.65
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Alteration of consolidated financial statement scope
(1) Business combinations involving enterprises not under common control
(a) Business combinations involving enterprises not under common control for current year
The Timing of Cost of Equity Mode of Date of The basis of Revenue of the Net loss of the Net outflow of cash Net reduction acquired acquisition acquisition ratio acquisition acquisition determination at acquired party acquired party from operating of cash of party acquisition date from from activities of the the acquired acquisition date acquisition acquired party from party from to the year end date to the acquisition date to acquisition year end the year end. date to the year end Sinopharm 10 January, 7,490,000.00 70.00% Business 10 January, 10 January 2014 16,121,332.74 25,537.57 2,341,985.51 3,156,511.57 Shantou 2014 combinations 2014 is the date that
involving the Group
enterprises not obtained the
under control power of
common Sinopharm
control Shantou
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
V Alteration of consolidated financial statement scope(Continued)
(1) Business combinations involving enterprises not under common control(Continued)
(b) The cost of acquisition and recognition of goodwill are analysed as following:
Sinopharm Shantou Cost of acquisition -
Cash 7,490,000.00 Sum of cost of acquisition 7,490,000.00 Less: the fair value of identified net asset obtained (7,490,000.00) Goodwill - The fair value of transferred non-cash assets and the occurred liabilities were recognized from valuation techniques by the Group.
(c) The asset and liability conditions of the acquired party at the acquisition date are shown as following:
Sinopharm Shantou
Acquisition date Acquisition date 31 December of 2013 Fair value Book value Book value Cash at bank and on hand 5,116,827.09 5,116,827.09 5,116,827.09 Accounts receivable 7,735,212.93 7,735,212.93 7,735,212.93 Inventory - - - Long-term equity investments - - - Fixed assets - - - Deferred tax assets 494,865.53 494,865.53 494,865.53 Less: Short-term borrowings - - - Accounts payable (2,272,658.74) (2,272,658.74) (2,272,658.74) Taxes payable (374,246.81) (374,246.81) (374,246.81) Net assets 10,700,000.00 10,700,000.00 10,700,000.00 Less: Minority interest (3,210,000.00) (3,210,000.00) (3,210,000.00) Net assets acquired 7,490,000.00 7,490,000.00 7,490,000.00 (2) The range of business combinations changes caused by other reason
On 28 February 2014, Sinopharm Beihai was established By Sinopharm Guangxi, which is a subsidiary of the Company, by cash RMB5,000,000.00.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Shares and rights in other companies
(1) Subsidiaries
(a) The composition of the Group
Company name Place of Nature of
Place of operation Equity interest held(%) Mode of acquisition registration business
Direct Indirect
Sinopharm Holding Guilin Co., Ltd.
Guilin Guilin Commercial 100.00% Set up
(“Sinopharm Guilin”)
Sinopharm Holding Baise Co., Ltd. Set up
Baise Baise Commercial 100.00%
(“Sinopharm Baise”)
Sinopharm Holding Zhongshan Co., Ltd. Set up
Zhongshan Zhongshan Commercial 100.00%
(“Sinopharm Zhongshan”)
Sinopharm Holding Guigang Co., Ltd. Set up
Guigang Guigang Commercial 100.00%
(“Sinopharm Guigang”)
Sinopharm Beihai Beihai Beihai Commercial 100.00% Set up
Zhijun Pharm Business combinations involving enterprises Shenzhen Shenzhen Manufacturing 100.00%
under common control Sinopharm Holding Jianmin Co., Ltd. Business combinations involving enterprises Shenzhen Shenzhen Commercial 100.00%
(“Sinopharm Jianming”) under common control Sinopharm Holding Material Co., Ltd. Business combinations involving enterprises Shenzhen Shenzhen Commercial 100.00%
(“Sinopharm Material”) under common control Shenzhen Zhijun Pharmaceutical Trade Co., Business combinations involving enterprises Shenzhen Shenzhen Commercial 100.00%
Ltd. (“Zhijun Trade”) under common control Sinopharm Holding Shenzhen Logistics Co., Business combinations involving enterprises Shenzhen Shenzhen Service 100.00%
Ltd. (“Shenzhen Logistics”) under common control Sinopharm Holding Guangzhou Co., Ltd. Business combinations involving enterprises Guangzhou Guangzhou Commercial 100.00%
(“Sinopharm Guangzhou”) under common control
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Shares and rights in other companies(Continued)
(1) Subsidiaries(Continued)
(a) The composition of the Group(Continued)
Company name
Place of operation
Place of Nature of
Equity interest held(%) Mode of acquisition registration business
Direct Indirect
Sinopharm Holding Guangdong Hengxing
Business combinations involving enterprises Pharmaceutical Co., Ltd. (“Sinopharm Guangzhou Guangzhou Commercial 100.00%
under common control Hengxing ”)
Sinopharm Holding Yulin Co., Ltd.
Yulin Yulin Commercial 100.00%
Business combinations involving enterprises (“Sinopharm Yulin”) under common control Sinopharm Medicine Holding Liuzhou Co.,
Liuzhou Liuzhou Commercial 51.00%
Business combinations involving enterprises Ltd. (“Sinopharm Liuzhou”) under common control Guangxi Chinese Herbal Pieces
Liuzhou Liuzhou Manufacturing 51.00%
Business combinations involving enterprises under common control Guangdong Huixin Investment Co., Ltd.
Guangzhou Guangzhou Service 100.00%
Business combinations involving enterprises (“Huixin Investment”) under common control Sinopharm Holding Foshan Co., Ltd.
Foshan Foshan Commercial 100.00%
Business combinations involving enterprises (“Sinopharm Foshan”) under common control Sinopharm Holding Guangdong Yuexing Co.,
Guangzhou Guangzhou Commercial 100.00%
Business combinations involving enterprises Ltd. (“Sinopharm Yuexing”) under common control Sinopharm Holding Guangdong Logistics Co.,
Guangzhou Guangzhou Service 100.00%
Business combinations involving enterprises Ltd. (“Guangdong Logistics”) under common control Sinopharm Guangxi
Nanning Nanning Commercial 100.00%
Business combinations involving enterprises under common control Sinopharm Holding Guangxi Logistics Co.,
Nanning Nanning Service 100.00%
Business combinations involving enterprises Ltd. (“Guangxi Logistics”) under common control Sinopharm Shenzhen Medicine
Shenzhen Shenzhen Manufacturing 100.00%
Business combinations involving enterprises under common control Sinopharm Holding Wuzhou Co., Ltd. Business combinations involving enterprises Wuzhou Wuzhou Commercial 99.90%
(“Sinopharm Wuzhou”) under common control
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VI Shares and rights in other companies(Continued)
(1) Subsidiaries (continued)
(a) The composition of the Group(continued)
Company name Place of Place of Nature of
Equity interest held(%) Mode of acquisition operation registration business
Direct Indirect
Sinopharm Group Zhijun (Suzhou)
Business combinations involving enterprises Pharmaceutical Co. Ltd.( “Zhijun Suzhou Suzhou Manufacturing 100.00%
not under common control Suzhou”)
Sinopharm holding Dongguan Co., Business combinations involving enterprises Dongguan Dongguan Commercial 100.00%
Ltd.(“Sinopharm Dongguan”) not under common control Sinopharm Holding Zhanjiang Co., Business combinations involving enterprises Zhanjiang Zhanjiang Commercial 100.00%
Ltd.(“Sinopharm Zhanjiang”) not under common control Sinopharm holding Shenzhen Yanfeng Business combinations involving enterprises Shenzhen Shenzhen Commercial 51.00%
Co.,Ltd(“Sinopharm Yanfeng”) not under common control Sinopharm Holding Meizhou Co., Business combinations involving enterprises Meizhou Meizhou Commercial 100.00%
Ltd.(“Sinopharm Meizhou”) not under common control Sinopharm Holding Huizhou Co., Business combinations involving enterprises Huizhou Huizhou Commercial 100.00%
Ltd.(“Sinopharm Huizhou”) not under common control Sinopharm Holding Zhaoqing Co., Business combinations involving enterprises Zhaoqing Zhaoqing Commercial 100.00%
Ltd.(“Sinopharm Zhaoqing”) not under common control Sinopharm Holding Jiangmen Co., Business combinations involving enterprises Jiangmen Jiangmen Commercial 100.00%
Ltd.(“Sinopharm Jiangmen”) not under common control Sinopharm Holding Shaoguan Co., Ltd. Business combinations involving enterprises Shaoguan Shaoguan Commercial 70.00%
(“Sinopharm shaoguan”) not under common control Sinopharm Holding Shantou Co., Ltd. Business combinations involving enterprises Shantou Shantou Commercial 70.00%
(“Sinopharm Shantou”) not under common control (b) There is no subsidiary of significant minority interest in the Group.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VII Segment information
The reportable segments of the Group are the business units that provide different products or service. Different businesses require different technologies and marketing strategies, the Group, therefore, separately manages the production and operation of each reportable segment and evaluates their operating results respectively, in order to make decisions about resources to be allocated to these segments and to assess their performance.
The Group identified 3 reportable segments as follows:
- The Group, which is mainly engaged in investing and managing business;
- Pharmaceutical distribution, which is mainly engaged in distribution of medicine and pharmaceutical products to customers;
-
Pharmaceutical manufacturing, which is mainly engaged in the manufacture medicine.
Inter-segment transfers are measured by reference to sales to third parties.
The assets and liabilities are allocated based on the operations of the segment.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VII Segment information (continued)
(a) Segment information as at and for the year ended 31 December 2014 is as follows:
The Group Pharmaceutical distribution Pharmaceutical Elimination Total manufacturing
Revenue from external customers 5,364,516.62 22,294,891,231.68 1,654,075,279.75 - 23,954,331,028.05 Inter-segment revenue 2,609,400.00 469,251.11 18,259,142.62 (21,337,793.73) - Interest income 109,586,272.11 3,131,361.49 2,128,404.26 (105,727,271.62) 9,118,766.24 Interest expense (7,523,455.19) (242,161,105.59) (9,329,092.66) 105,727,271.62 (153,286,381.82) Share of profit of subsidiaries 476,869,119.31 - - (476,869,119.31) - Share of profit of associates 50,415,836.33 - - - 50,415,836.33 Impairment (121,038,941.30) (8,422,995.39) (39,747,619.31) 115,150,000.00 (54,059,556.00) Depreciation and amortizations (5,977,874.35) (36,826,711.14) (70,184,163.65) - (112,988,749.14) Gross profit 467,781,043.87 471,246,928.35 251,974,585.39 (361,719,119.31) 829,283,438.30 Income taxes (15,881,020.71) (117,652,091.12) (25,909,158.60) - (159,442,270.43) Net profit 451,900,023.16 353,594,837.23 226,065,426.79 (361,719,119.31) 669,841,167.87 Total assets 4,629,689,645.10 7,725,031,105.57 1,814,239,438.38 (1,340,018,648.15) 12,828,941,540.90 Total liabilities (531,149,514.89) (7,551,059,313.25) (1,077,931,077.41) 1,182,413,801.30 (7,977,726,104.25) Long-term equity investment in associates 157,604,846.85 - - - 157,604,846.85 Capital Expenditure 246,333,402.90 19,028,382.38 42,449,925.32 - 307,811,710.60
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VII Segment information (continued)
(b) Segment information as at and for the year ended 31 December 2013 is as follows:
The Group Pharmaceutical distribution Pharmaceutical Elimination Total manufacturing
Revenue from external customers 4,919,670.87 19,498,940,661.38 1,695,606,066.96 - 21,199,466,399.21 Inter-segment revenue
1,353,900.00 93,333.33 19,214,969.00 (20,662,202.33) - Interest income 63,102,516.46 3,737,408.46 2,832,809.52 (64,574,576.02) 5,098,158.42 Interest expense (53,933,806.00) (186,023,241.20) (6,780,521.60) 64,574,576.02 (182,162,992.78) Share of profit of subsidiaries 389,837,321.36 - - (389,837,321.36) - Share of profit of associates 42,473,165.02 - - - 42,473,165.02 Impairment (2,169.35) (2,671,011.14) (39,323,726.14) - (41,996,906.63) Depreciation and amortizations (5,539,418.46) (36,447,126.45) (62,683,840.18) - (104,670,385.09) Gross profit 417,837,773.46 390,994,148.85 240,107,576.52 (389,837,321.36) 659,102,177.47 Income taxes - (90,917,388.56) (33,965,389.68) - (124,882,778.24) Net profit 417,837,773.46 300,076,760.29 206,142,186.84 (389,837,321.36) 534,219,399.23 Total assets 2,890,561,097.18 9,111,898,250.44 1,864,292,078.47 (2,808,854,484.78) 11,057,896,941.31 Total liabilities (1,257,379,456.76) (7,714,448,512.66) (1,130,286,897.72) 1,360,854,990.40 (8,741,259,876.74) Long-term equity investment in associates 135,341,010.52 - - - 135,341,010.52 Capital Expenditure 58,164,251.26 38,260,411.29 116,382,589.95 - 212,807,252.50
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions
(1) The parent company
(a) General information of the parent company:
Place of Legal
Enterprise Type registration representative Principal business Industrial Investment Holding, Tr ustee of pharmaceutical enterpris e, Assets Reorganization, Distribu Company limited tion and retail of medicines and Sinopharm Group by shares Shanghai Wei Yulin pharmaceutical products, etc TheCompany’s ultimate controlling equity holder is CNPGC.
(b) Registered capital and changes in registered capital of the parent company
Current year
31 December 2013 Addition 31 December 2014(RMB’0,000) (RMB’0,000) (RMB’0,000) Sinopharm Group 256,829.35 19,880.16 276,709.51 (c) The proportions of equity interests and voting rights in the Company held by the parent company:
31 December 2014 31 December 2013% interest held % voting rights% interest held % voting rights Sinopharm Group 51.00 51.00 38.33 38.33 (2) Subsidiaries of the Company
The general background and other related information of the subsidiaries is set out in Note VI.
(3) Associates
Enterprise Place of Legal Principal Register% interest% voting Type Registration Representative business capital held rights Wanle Foreign Medicine
Medical capital Shenzhen Yan Zhigang manufacture USD 19,544,550 35.19%33.33%
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(4) Other related parties
Relationship with the Company Sino-Swed Pharmaceutical Corp.Ltd. Associate of CNPGC China Otsuka Pharmaceutical Co., Ltd. Associate of CNPGC Shanghai Sailun Biological Technology Co., Ltd. Associate of CNPGC Changchun Changsheng Gene Pharmaceutical Co., Ltd. Associate of CNPGC Shanghai Guoda Shuguang Pharmacy Co., Ltd. Associate of CNPGC Shenzhen Wanwei Medicine trading Co., Ltd. Subsidiary of Wanle Medical Yichang Humanwell Pharmaceutical Co., Ltd. Associate of Sinopharm Group Shanghai Wanli Medical Beauty Clinic Limited Associate of Sinopharm Group Shareholders have signigicant influence on Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (“Fosun Pharma”) Sinopharm Group Chongqing Yaoyou Pharmaceutical Co., Ltd. Subsdiary of Fosun Pharm Jiangsu Wanbang Pharmacy Marketing Co., Ltd. Subsdiary of Fosun Pharm Chongqing Haisiman Pharmaceutical Co., Ltd. Subsdiary of Fosun Pharm Hunan Dongting Pharmaceutical Co., Ltd. Subsdiary of Fosun Pharm Suzhou Erye Pharmaceutical Limited Company Subsdiary of Fosun Pharm Guilin South pharmaceutical Co., Ltd. Subsdiary of Fosun Pharm Handan Pharmaceutical Co., Ltd Subsdiary of Fosun Pharm Jiangsu Huanghe Pharmaceutical Co., Ltd Subsdiary of Fosun Pharm Shanghai Chaohui Pharmecurical Co., Ltd. Subsdiary of Fosun Pharm Foshan Chancheng District Central Hospital Subsdiary of Fosun Pharm Foshan Chanyixing Medicine Development Co Ltd Subsdiary of Fosun Pharm Wanbang Biopharmaceuticals Subsdiary of Fosun Pharm Shanghai Fosun Pharmaceutical Co., Ltd. Subsdiary of Fosun Pharm NanJing Iron& Steel Co., Ltd. Subsdiary of Fosun Pharm Nanjing Iron& Steel Group International Trade Co., Ltd Subsdiary of Fosun Pharm Shenyang Hongqi Pharmaceutical Co., Ltd. Subsdiary of Fosun Pharm Reed Sinopharm Exhibitions Co., Ltd. Controlled by CNPGC Sinopharm United Engineering Corporation Controlled by CNPGC Group Financial Co. Controlled by CNPGC Lanzhou Institute of Biological Products Co., Ltd. Controlled by CNPGC Guang dong South Pharmaceutical Foreign Trade Co., Ltd. Controlled by CNPGC Shanghai Shyndec Pharmaceutical Co., Ltd. Controlled by CNPGC China National Pharmaceutical Foreign Trade Co., Ltd. Controlled by CNPGC Chengdu Rongsheng Pharmacy Co., Ltd. Controlled by CNPGC Shanghai Institute of Biological Products Co., Ltd. Controlled by CNPGC Wuhan Institute of Biological Products Co., Ltd. Controlled by CNPGC China Traditional Chinese Medicine Co. Controlled by CNPGC Shanghai Institute of Pharmaceutical Industry Controlled by CNPGC Sinopharm Chongqing Pharmaceutical and Medical Industry Design
Institute Controlled by CNPGC Huayi Pharmaceutical Co., Ltd Controlled by CNPGC Guangdong Medi-World Pharmacertical Co., Ltd. Controlled by CNPGC Shandong Lu Ya Pharmaceutical Co., Ltd. Controlled by CNPGC Winteam Pharmaceutical Group Ltd. Controlled by CNPGC Sinopharm Group Shanghai Medicine Device Co., Ltd. Controlled by CNPGC Guizhou Tongjitang Pharmaceutical Co., Ltd. Controlled by CNPGC Anhui Jingfang Pharmaceutical Co., Ltd. Controlled by CNPGC Sichuan Jiang You Zhong Ba Science and Technology Development Co.,
Ltd. Controlled by CNPGC
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(4) Other related parties (continued)
Relationship with the Company Sinopharm Group Rongsheng Pharmaceutical Co., Ltd. Controlled by CNPGC Foshan Fengliaoxing Pharmaceutical Co., Ltd. Controlled by CNPGC Sinopharm Group Weiqida Medicine Co., Ltd. Controlled by CNPGC Qinghai Pharmaceutical Factory Co., Ltd. Controlled by CNPGC China National Pharmaceutical Industry Co., Ltd. Controlled by CNPGC Wuhan Zhonglian Pharmaceutical Group Co., Ltd. Controlled by CNPGC Beijing Huasheng Pharmaceutical Biotechnology Development Co., Ltd. Controlled by CNPGC Shanghai Modern Hasen (Shangqiu) Pharmacertical Co., Ltd. Controlled by CNPGC Guizhou Longlife Pharmacertical Co., Ltd. Controlled by CNPGC China Sinopharm International Corporation Controlled by CNPGC Beijing Tiantan Biological Products Co., Ltd. Controlled by CNPGC Changchun Institute of Biological Products Co., Ltd. Controlled by CNPGC Sinopharm Fortuneway Company Controlled by CNPGC Beijing Fusheng Tiandi Property Management Ltd. Controlled by CNPGC Sinopharm (Shanghai) E-Health Co,.Ltd. Controlled by CNPGC Heilongjiang Sinopharm Medical Herbs Co., Ltd. Controlled by CNPGC Qinghai Medical Pharmaceutical Material Co., Ltd. Controlled by CNPGC China National Scientific Instruments& Materials Imp/Exp Shenzhen CO.,
Ltd Controlled by CNPGC The Fourth Pharmaceutical Co., Ltd. of Zhonglian Group Controlled by CNPGC Foshan Fengliaoxing Pharmaceutical Co., Ltd. Controlled by CNPGC Foshan Dezhong Pharmaceutical Co., Ltd. Controlled by CNPGC Sinopharm Group Beijing Medical equipment Co., Ltd. Controlled by CNPGC China State Institute of Pharmaceutical Industry Controlled by CNPGC Sinopharm Group Guangdong Medicine Device Co., Ltd. Controlled by CNPGC China National Pharmaceutical Industry Medicine distribution Co. Ltd. Controlled by CNPGC Shanghai Xinshengyuan Pharmaceutical Co., Ltd. Controlled by CNPGC Sinopharm Group Southwest Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Shaanxi Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Macheng Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Shanxi Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Beijing Kangchen Bio-Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Henan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Shandong Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Ningxia Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Inner Mongolia Co., Ltd. Controlled by Sinopharm Group Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd. Controlled by Sinopharm Group Sinopharm Group Chemical Reagent Suzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Hubei Co., Ltd. Controlled by Sinopharm Group Sinopharm Group Guorui Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Guoda Drug Store(Shenzhen) Chain Co., Ltd. Controlled by Sinopharm Group Sinopharm Group Chemical Reagent Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Hainan Hongyi Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Zhangzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Guoda Drug Store Guangdong Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Beijing Huahong Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Hunan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Luoyang Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Fuzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Sanyi Medicine(Wuhu) Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Hainan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Beijing Co., Ltd. Controlled by Sinopharm Group
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(4) Other related parties (continued)
Relationship with the Company Sinopharm Holding Dezhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Yunnan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Chongqing Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jiangsu Co., Ltd. Controlled by Sinopharm Group Foshan Nanhai Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Heilongjiang Co., Ltd. Controlled by Sinopharm Group Sinopharm Yixin Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Group Xinjiang Special Drugs National Pharmaceutical
Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical
Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Zhejiang Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Tianjin Co., Ltd. Controlled by Sinopharm Group Sinopharm Le -Ren-Tang Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Gansu Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Wenzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Shiyan Co., Ltd. Controlled by Sinopharm Group Sinopharm Guoda Drug Store Guangxi Chain Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Yueyang Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Xiangtan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Puyang Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jiaozuo Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Shangqiu Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Zhoukou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Xinxiang Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Wenshan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Honghe Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Zunyi Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Qianxinan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Qiannanzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Medical Devices Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Yanbian Co., Ltd. Controlled by Sinopharm Group Shanghai Huyong Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Shanghai Nutraceuticals (Shanghai) Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Changzhou Co., Ltd. Controlled by Sinopharm Group Shanghai Donghong Medicine Co., Ltd. Controlled by Sinopharm Group Shanghai Yunnuo Marketing Consulting Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Sub Marketing Center Co., Ltd. Controlled by Sinopharm Group China National Medicines Co., Ltd. Controlled by Sinopharm Group Foshan Nanhai Uptodate& Special Medicines Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Guizhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jinzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Lishui Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Xinjiang New Kashi Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Yantai Co., Ltd. Controlled by Sinopharm Group Sinopharm Xinjiang Korla Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Siping Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Huaian Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jingmen Co., Ltd. Controlled by Sinopharm Group
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(4) Other related parties (continued)
Relationship with the Company Sinopharm Holding Qingdao Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Shenyang Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Anhui Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jilin Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jiangxi Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Guoda Drug Store Guangzhou Chain Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Dalian Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding (Yangzhou) Chinese Western Medicine Branch
Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Taizhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jinan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Qujing Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Putian Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Longyan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Sanming Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Ningde Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Xinyu Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Wuxi Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Shanxi Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Tianjin North Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Changde Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jiling Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Qinghai Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Nantong Co., Ltd. Controlled by Sinopharm Group Sinopharm Guoda Drug Store Jiangmen Chain Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Yangzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Nanping Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Quanzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Tongliao Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding ChiFeng Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Xuzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Lerentang Langfang Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Lunan Co., Ltd. Controlled by Sinopharm Group Shanghai Merro Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Sichuan Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jingzhou 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 Holding Wuhu Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Anqing Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Guoda Pharmacy Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Anyang Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Kaifeng Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding HongKong Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Fujian Co., Ltd. Controlled by Sinopharm Group Guangdong Dong Fang Uptodate& Special Medicines Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Suzhou Co., Ltd. Controlled by Sinopharm Group Shanxi Guoyi Drug Store Co., Ltd. Controlled by Sinopharm Group
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(4) Other related parties (continued)
Relationship with the Company Sinopharm Lerentang Qinhuangdao Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Lerentang Tangshan Medicine Co., Ltd. Controlled by Sinopharm Group Guoda Shenyang Tianyitang Pharmacy Chain Store Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Dandong Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Benzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Zhejiang Biological Product Co., Ltd. Controlled by Sinopharm Group Shanghai Tongyu Information Technology Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co., Ltd. Controlled by Sinopharm Group Sichuan Zhongwei Pharmaceutical Co. Ltd. Controlled by Sinopharm Group Sinopharm Jiankun (Beijing) Medicines Co., Ltd. Controlled by Sinopharm Group Sinopharm Group Medicine Logistic Co., Ltd. Controlled by Sinopharm Group Sinopharm Pharmaceutical Logistics Co., Ltd. Guangzhou Branch Controlled by Sinopharm Group Sinopharm Holding Liaocheng Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Huaideju Pharmaceutical (Xiamen) Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Guoda Drugstore Shenyang Chain Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Hunan Guoda Minshengtang Drug Store Chain Co.,
Ltd. Controlled by Sinopharm Group Sinopharm Holding Bengbu Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Huainan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Fuyang Co., Ltd. Controlled by Sinopharm Group Hetian Region Ankang Chain Drugstore Co., Ltd. Controlled by Sinopharm Group Foshan Nanhai Medicine Group Co., Ltd. Controlled by Sinopharm Group Wang Yang Family member of minority interest of subsidiary Jiang Meng Renren Medical instrument Co., Ltd. Controlled by subsidiary's key management Shaoguan Wujiang District Muyang Medicine Information Consultant
Co., Ltd. Controlled by minority interest of subsidiary
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(5) Related party transactions
(a) Purchase of goods
2014 2013 Amount% of same Amount % of same Related party Pricing policies (RMB’0,000) transaction (RMB’0,000) transaction Sinopharm Holding Sub Marketing Center Co., Market price 86,483.65 4.33% 91,957.89 4.75% Ltd.
Sinopharm Group Market price 52,042.45 2.60% 47,767.33 2.47% China National Medicines Co., Ltd. Market price 31,797.67 1.59% 26,779.33 1.38% Sino-Swed Pharmaceutical Corp.Ltd. Market price 7,987.68 0.40% 8,092.47 0.42% Shenzhen Wanwei Medicine trading Co., Ltd. Market price 6,963.97 0.35% 1,699.19 0.09% Guang dong South Pharmaceutical Foreign Trade Market price 5,517.77 0.28% 4,155.73 0.21% Co., Ltd.
Jiangsu Wanbang Pharmacy Marketing Co., Ltd. Market price 3,559.06 0.18% 2,376.53 0.12% Sinopharm Holding Hubei Co., Ltd. Market price 3,245.47 0.16% 64.59 0.00% Winteam Pharmaceutical Group Ltd. Market price 2,946.34 0.15% 2,593.43 0.13% Chengdu Rongsheng Pharmacy Co., Ltd. Market price 2,541.94 0.13% 3,180.69 0.16% Chongqing Yaoyou Pharmaceutical Co., Ltd. Market price 1,681.69 0.08% 1,565.79 0.08% Sinopharm Holding Guizhou Co., Ltd. Market price 1,549.58 0.08% 93.34 0.00% Wanle Medical Market price 1,521.59 0.08% 3,335.44 0.17% Lanzhou Institute of Biological Products Co., Ltd. Market price 1,401.60 0.07% 1,694.89 0.09% Sinopharm Holding Hunan Co., Ltd. Market price 1,008.98 0.05% 1,936.72 0.10% Chongqing Haisiman Pharmaceutical Co., Ltd. Market price 909.82 0.05% 968.00 0.05% Wuhan Institute of Biological Products Co., Ltd. Market price 908.17 0.05% 1,364.70 0.07% Foshan Nanhai Uptodate& Special Medicines Co., Market price 868.67 0.04% 236.65 0.01% Ltd.
Sinopharm Holding Macheng Co., Ltd. Market price 602.58 0.03% - 0.00% Guangdong Dong Fang Uptodate& Special Market price 555.59 0.03% 369.14 0.02% Medicines Co., Ltd.
Qinghai Pharmaceutical Factory Co., Ltd. Market price 465.61 0.02% - 0.00% Sinopharm Holding Beijing Co., Ltd. Market price 356.62 0.02% 227.13 0.01% Guizhou Tongjitang Pharmaceutical Co., Ltd. Market price 315.33 0.02% 330.95 0.02% Beijing Huasheng Pharmaceutical Biotechnology Market price 269.29 0.01% - 0.00% Development Co., Ltd.
Sinopharm Group Weiqida Medicine Co., Ltd. Market price 226.19 0.01% 512.35 0.03% Sinopharm Holding Beijing Huahong Co., Ltd. Market price 165.29 0.01% 82.34 0.00% Shanghai Shyndec Pharmaceutical Co., Ltd. Market price 152.89 0.01% 208.54 0.01% Sinopharm Holding Shanxi Co., Ltd. Market price 114.76 0.01% - 0.00% China National Pharmaceutical Foreign Trade Co., Market price 113.37 0.01% 242.15 0.01% Ltd.
Sinopharm Holding Beijing Kangchen Market price 102.52 0.01% - 0.00% Bio-Pharmaceutical Co., Ltd.
Sinopharm Group Rongsheng Pharmaceutical Co., Market price 101.35 0.01% 146.19 0.01% Ltd.
Sinopharm Group Southwest Medicine Co., Ltd. Market price 93.07 0.00% - 0.00% Anhui Jingfang Pharmaceutical Co., Ltd. Market price 91.19 0.00% 78.18 0.00% Sinopharm Group Chemical Reagent Co., Ltd. Market price 85.02 0.00% 93.36 0.00% China Otsuka Pharmaceutical Co., Ltd. Market price 81.19 0.00% 53.52 0.00% Foshan Nanhai Medicine Co., Ltd. Market price 76.58 0.00% 19.40 0.00% Sinopharm Holding Fujian Co., Ltd. Market price 53.29 0.00% 50.74 0.00% Guilin South pharmaceutical Co., Ltd. Market price 48.34 0.00% 43.66 0.00% Foshan Fengliaoxing Pharmaceutical Co., Ltd. Market price 47.90 0.00% - 0.00% Wuhan Zhonglian Pharmaceutical Group Co., Ltd. Market price 38.04 0.00% - 0.00% Sinopharm Group Guorui Medicine Co., Ltd. Market price 37.23 0.00% 12.55 0.00% China National Pharmaceutical Industry Co., Ltd. Market price 36.59 0.00% - 0.00% Shandong Lu Ya Pharmaceutical Co., Ltd. Market price 34.91 0.00% 67.22 0.00% To next page 217,200.84 10.87% 202,400.13 10.41%
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(5) Related party transactions (continued)
(a) Purchase of goods (continued)
2014 2013 Amount% of same Amount % of same Related party Pricing policies (RMB’0,000) transaction (RMB’0,000) transaction Continued 217,200.84 10.87% 202,400.13 10.41% Handan Pharmaceutical Co., Ltd Market price 27.62 0.00% 11.96 0.00% Shenyang Hongqi Pharmaceutical Co., Ltd. Market price 23.43 0.00% 8.38 0.00% Sinopharm Group Chemical Reagent Suzhou Co., Market price 19.46 0.00% 17.24 0.00% Ltd.
Shanghai Modern Hasen (Shangqiu) Market price 18.68 0.00% 18.93 0.00% Pharmacertical Co., Ltd.
Sinopharm Holding Hainan Co., Ltd. Market price 17.82 0.00% 81.83 0.00% Sinopharm Xingsha Pharmaceuticals (Xiamen) Market price 15.67 0.00% - 0.00% Co., Ltd.
Suzhou Erye Pharmaceutical Limited Company Market price 13.29 0.00% - 0.00% Sinopharm Holding Heilongjiang Co., Ltd. Market price 13.19 0.00% - 0.00% Hunan Dongting Pharmaceutical Co., Ltd. Market price 6.97 0.00% 7.86 0.00% Sinopharm Holding Inner Mongolia Co., Ltd. Market price 6.68 0.00% - 0.00% Sinopharm Holding Luoyang Co., Ltd. Market price 6.51 0.00% - 0.00% Sinopharm Yixin Medicine Co., Ltd. Market price 6.11 0.00% 31.46 0.00% Sinopharm Group Shanghai Medicine Device Co., Market price 5.53 0.00% 5.46 0.00% Ltd.
Sinopharm Guoda Drug Store(Shenzhen) Chain Market price 3.88 0.00% 3.03 0.00% Co., Ltd.
Yichang Humanwell Pharmaceutical Co., Ltd. Market price 3.73 0.00% 5.07 0.00% Sichuan Jiang You Zhong Ba Science and Market price 3.72 0.00% 4.25 0.00% Technology Development Co., Ltd.
Sinopharm Holding Jiangsu Co., Ltd. Market price 3.23 0.00% 199.51 0.01% Sinopharm Holding Henan Co., Ltd. Market price 2.08 0.00% - 0.00% Sinopharm Holding Hainan Hongyi Co., Ltd. Market price 1.65 0.00% 3.49 0.00% Sinopharm Holding Dezhou Co., Ltd. Market price 1.10 0.00% 9.51 0.00% Sinopharm Holding Shandong Co., Ltd. Market price 0.67 0.00% - 0.00% Sinopharm Holding Shanxi Co., Ltd. Market price 0.61 0.00% - 0.00% Jiangsu Huanghe Pharmaceutical Co., Ltd Market price 0.49 0.00% - 0.00% Sinopharm Holding Ningxia Co., Ltd. Market price 0.26 0.00% - 0.00% Sinopharm Holding Zhangzhou Co., Ltd. Market price - 0.00% 93.16 0.00% Shanghai Institute of Biological Products Co., Market price - 0.00% 67.55 0.00% Ltd.
Sinopharm Holding Fuzhou Co., Ltd. Market price - 0.00% 27.39 0.00% Sinopharm Holding Yunnan Co., Ltd. Market price - 0.00% 1.63 0.00% Sinopharm Holding Chongqing Co., Ltd. Market price - 0.00% 14.59 0.00% Sinopharm Holding Guoda Drug Store Market price - 0.00% (0.03) 0.00% Guangdong Co., Ltd.
Sinopharm Holding Sanyi Medicine(Wuhu) Co., Market price - 0.00% 0.17 0.00% Ltd.
Shanghai Guoda Shuguang Pharmacy Co., Ltd. Market price - 0.00% 60.54 0.00% Shanghai Sailun Biological Technology Co., Ltd. Market price - 0.00% 0.27 0.00% Guangdong Medi-World Pharmacertical Co., Ltd. Market price (0.03) 0.00% 0.01 0.00% Guizhou Longlife Pharmacertical Co., Ltd. Market price (0.77) 0.00% 0.77 0.00% Sinopharm Holding Suzhou Co., Ltd. Market price (1.16) 0.00% 24.07 0.00% Total 217,401.26 10.87% 203,098.23 10.42%
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(5) Related party transactions (continued)
(b) Sales of goods
2014 2013 Amount% of same Amount % of same Related party Pricing policies (RMB’0,000) transaction (RMB’0,000) transaction Foshan Nanhai Uptodate& Special Medicines Co., Market price 14,721.88 0.62% 13,116.18 0.62% Ltd.
Sinopharm Holding Hunan Co., Ltd. Market price 14,592.53 0.61% 12,950.93 0.61% Sinopharm Holding Hubei Co., Ltd. Market price 9,950.42 0.42% 6,514.45 0.31% Sinopharm Holding Hainan Co., Ltd. Market price 7,756.87 0.32% 6,301.39 0.30% Sinopharm Holding Beijing Co., Ltd. Market price 7,288.30 0.31% 5,742.64 0.27% Foshan Nanhai Medicine Co., Ltd. Market price 6,995.23 0.29% 5,347.73 0.25% Sinopharm Le -Ren-Tang Medicine Co., Ltd. Market price 6,965.02 0.29% 5,108.90 0.24% Sinopharm Holding Guoda Drug Store Guangdong Market price 6,559.60 0.27% 6,457.79 0.31% Co., Ltd.
Sinopharm Holding Shandong Co., Ltd. Market price 6,360.19 0.27% 6,517.00 0.31% Sinopharm Holding Beijing Huahong Co., Ltd. Market price 5,979.32 0.25% 6,703.26 0.32% Sinopharm Group Xinjiang Special Drugs National Market price 5,840.71 0.24% 4,813.17 0.23% Pharmaceutical Co., Ltd.
Sinopharm Group (Tianjin) Eastern Bokang Market price 5,397.07 0.23% 4,872.75 0.23% Pharmaceutical Co., Ltd.
Sinopharm Holding Sub Marketing Center Co., Market price 4,514.20 0.19% 2,695.15 0.13% Ltd.
Sinopharm Holding Ningxia Co., Ltd. Market price 4,216.48 0.18% 3,708.36 0.18% Sinopharm Holding Zhejiang Co., Ltd. Market price 4,199.83 0.18% 3,400.55 0.16% Sinopharm Sichuan Pharmaceutical Co., Ltd. Market price 3,271.61 0.14% - 0.00% Sinopharm Guoda Drug Store Guangxi Chain Co., Market price 3,149.68 0.13% 3,404.03 0.16% Ltd.
Sinopharm Group Southwest Medicine Co., Ltd. Market price 2,875.67 0.12% 4,349.37 0.21% Sinopharm Holding Wenzhou Co., Ltd. Market price 2,868.69 0.12% 1,849.14 0.09% Sinopharm Group Market price 2,633.35 0.11% 1,939.79 0.09% Sinopharm Holding Nantong Co., Ltd. Market price 2,628.01 0.11% 2,339.36 0.11% Sinopharm Holding Tianjin Co., Ltd. Market price 2,483.16 0.10% 3,512.12 0.17% Sinopharm Holding Xinjiang Special Drugs Market price 2,481.00 0.10% 2,076.55 0.10% Western Pharmaceutical Co., Ltd.
Sinopharm Holding Hainan Hongyi Co., Ltd. Market price 2,263.41 0.09% 2,436.80 0.12% Sinopharm Holding Jinzhou Co., Ltd. Market price 1,739.20 0.07% 1,706.13 0.08% Guangdong Dong Fang Uptodate& Special Market price 1,709.62 0.07% 1,613.77 0.08% Medicines Co., Ltd.
Sinopharm Holding Fuzhou Co., Ltd. Market price 1,634.12 0.07% 1,778.51 0.08% Chongqing Yaoyou Pharmaceutical Co., Ltd. Market price 1,553.21 0.07% 5,665.36 0.27% Sinopharm Holding Yunnan Co., Ltd. Market price 1,430.90 0.06% 1,491.70 0.07% Sinopharm Holding Shenyang Co., Ltd. Market price 1,415.97 0.06% 1,880.90 0.09% Sinopharm Holding Henan Co., Ltd. Market price 1,321.87 0.06% 949.23 0.04% Sinopharm Holding Shanxi Co., Ltd. Market price 1,022.16 0.04% 843.17 0.04% Foshan Chancheng District Central Hospital Market price 971.42 0.04% 197.37 0.01% Sinopharm Holding Yangzhou Co., Ltd. Market price 939.62 0.04% 746.68 0.04% Sinopharm Holding Shanxi Co., Ltd. Market price 900.33 0.04% 606.44 0.03% Sinopharm Holding Chongqing Co., Ltd. Market price 858.13 0.04% 1,712.96 0.08% Sinopharm Guoda Drug Store Jiangmen Chain Co., Market price 818.22 0.03% 474.17 0.02% Ltd.
Sinopharm Holding Heilongjiang Co., Ltd. Market price 816.18 0.03% 771.42 0.04% Sinopharm Holding Guizhou Co., Ltd. Market price 812.84 0.03% 412.79 0.02% Sinopharm Holding Fujian Co., Ltd. Market price 706.91 0.03% 234.38 0.01% Sinopharm Holding Xuzhou Co., Ltd. Market price 598.05 0.03% 596.86 0.03% China Sinopharm International Corporation Market price 520.32 0.02% 132.85 0.01% To next page 155,761.30 6.52% 137,972.10 6.56%
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(5) Related party transactions (continued)
(b) Sales of goods (continued)
2014 2013 Amount% of same Amount % of same Related party Pricing policies (RMB’0,000) transaction (RMB’0,000) transaction continued 155,761.30 6.52% 137,972.10 6.56% China National Medicines Co., Ltd. Market price 514.98 0.02% 759.93 0.04% Guang dong South Pharmaceutical Foreign Trade Market price 510.12 0.02% 195.28 0.01% Co., Ltd.
Sinopharm Holding Qingdao Co., Ltd. Market price 388.02 0.02% 60.80 0.00% Sinopharm Holding Wuxi Co., Ltd. Market price 364.26 0.02% 325.34 0.02% Sinopharm Holding Gansu Co., Ltd. Market price 348.14 0.01% 2,251.13 0.11% Sinopharm Holding Yancheng Co., Ltd. Market price 319.84 0.01% 238.93 0.01% Sinopharm Holding Jilin Co., Ltd. Market price 313.31 0.01% 335.12 0.02% Sinopharm Holding Qinghai Co., Ltd. Market price 303.66 0.01% 144.32 0.01% Sinopharm Holding Inner Mongolia Co., Ltd. Market price 257.60 0.01% 196.02 0.01% Sinopharm Holding Tianjin North Medicine Co., Market price 234.31 0.01% 186.83 0.01% Ltd.
Sinopharm Holding Guoda Pharmacy Co., Ltd. Market price 204.77 0.01% 274.73 0.01% Sinopharm Lerentang Tangshan Medicine Co., Ltd. Market price 198.90 0.01% 102.29 0.00% Sinopharm Holding Taizhou Co., Ltd. Market price 177.78 0.01% 202.77 0.01% Sinopharm Holding Dalian Co., Ltd. Market price 165.83 0.01% 234.08 0.01% Sinopharm Holding Quanzhou Co., Ltd. Market price 163.54 0.01% 19.86 0.00% Sinopharm Holding Longyan Co., Ltd. Market price 117.99 0.00% 113.73 0.01% Shanghai Donghong Medicine Co., Ltd. Market price 116.65 0.00% 30.02 0.00% Sinopharm Holding Lunan Co., Ltd. Market price 115.35 0.00% 214.30 0.01% Sinopharm Holding Beijing Kangchen Market price 106.25 0.00% 0.53 0.00% Bio-Pharmaceutical Co., Ltd.
Sinopharm Holding Shaanxi Co., Ltd. Market price 99.23 0.00% 691.90 0.03% Sinopharm Holding Ningde Co., Ltd. Market price 98.06 0.00% 106.94 0.01% Sinopharm Holding Anqing Co., Ltd. Market price 81.18 0.00% 26.27 0.00% Sinopharm Holding Putian Co., Ltd. Market price 80.36 0.00% 46.45 0.00% Shanghai Merro Pharmaceutical Co., Ltd. Market price 68.61 0.00% - 0.00% Sinopharm Holding Changde Co., Ltd. Market price 61.24 0.00% 120.04 0.01% Sinopharm Holding Changzhou Medical logistics Market price 60.35 0.00% 124.48 0.01% center Co., Ltd.
Sinopharm Holding Jiangsu Co., Ltd. Market price 46.81 0.00% 132.67 0.01% Sinopharm Holding Yantai Co., Ltd. Market price 46.53 0.00% 53.16 0.00% Sinopharm Holding Suzhou Co., Ltd. Market price 46.14 0.00% 147.54 0.01% Sinopharm Holding Shanghai Likang Pharmaceutical Market price 39.16 0.00% 137.13 0.01% Co., Ltd.
Sinopharm Holding Sanming Co., Ltd. Market price 31.69 0.00% 17.10 0.00% Sinopharm Holding Anhui Co., Ltd. Market price 31.24 0.00% 12.68 0.00% Sinopharm Lerentang Qinhuangdao Medicine Co., Market price 27.73 0.00% 15.32 0.00% Ltd.
Foshan Chanyixing Medicine Development Co Ltd Market price 21.48 0.00% - 0.00% China National Scientific Instruments& Materials Market price 20.33 0.00% 8.88 0.00% Imp/Exp Shenzhen CO., Ltd
Sinopharm Holding HongKong Co., Ltd. Market price 18.27 0.00% 6.19 0.00% Qinghai Medical Pharmaceutical Material Co., Ltd. Market price 15.09 0.00% - 0.00% Sinopharm Holding Jiangxi Co., Ltd. Market price 12.70 0.00% 54.43 0.00% Sinopharm Holding ChiFeng Co., Ltd. Market price 10.39 0.00% 10.39 0.00% Sinopharm Holding Huaian Co., Ltd. Market price 8.89 0.00% 19.35 0.00% Jiang Meng Renren Medical instrument Co., Ltd. Market price 8.55 0.00% 84.29 0.00% Sinopharm Holding Jinan Co., Ltd. Market price 7.62 0.00% 94.35 0.00% Sichuan Zhongwei Pharmaceutical Co. Ltd. Market price 6.36 0.00% 0.00% Sinopharm Holding (Yangzhou) Chinese Western Market price 5.86 0.00% 137.76 0.01% Medicine Branch Co., Ltd.
Guoda Shenyang Tianyitang Pharmacy Chain Store Market price 5.54 0.00% - 0.00% Co., Ltd.
To next page 161,642.01 6.71% 145,905.43 6.95%
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(5) Related party transactions (continued)
(b) Sales of goods (continued)
2014 2013 Amount % of same Amount % of same Related party Pricing policies (RMB’0,000) transaction (RMB’0,000) transaction Continued 161,642.01 6.71% 145,905.43 6.95% Sinopharm Holding Puyang Co., Ltd. Market price 5.00 0.00% 0.41 0.00% Beijing Fusheng Tiandi Property Management Ltd. Market price 4.58 0.00% 2.81 0.00% Shanxi Guoyi Drug Store Co., Ltd. Market price 4.36 0.00% 6.01 0.00% Sinopharm Holding Changzhou Co., Ltd. Market price 3.94 0.00% 14.87 0.00% China National Pharmaceutical Foreign Trade Co., Market price 2.56 0.00% - 0.00% Ltd.
Sinopharm Holding Zhangzhou Co., Ltd. Market price 2.24 0.00% 3.35 0.00% Sinopharm Holding Xinjiang Xinte Karamay Market price 2.16 0.00% 4.74 0.00% Pharmaceutical Co., Ltd.
Sinopharm Holding Jining Co., Ltd. Market price 2.15 0.00% - 0.00% Sinopharm Holding Anyang Co., Ltd. Market price 2.09 0.00% 1.79 0.00% Sinopharm United Engineering Corporation Market price 2.05 0.00% 3.20 0.00% Heilongjiang Sinopharm Medical Herbs Co., Ltd. Market price 1.77 0.00% 7.74 0.00% Sinopharm Holding Zhoukou Co., Ltd. Market price 1.51 0.00% 1.18 0.00% Sinopharm Holding Dezhou Co., Ltd. Market price 1.44 0.00% - 0.00% Sinopharm Xinjiang Korla Pharmaceutical Co., Ltd. Market price 1.43 0.00% 1.66 0.00% Sinopharm Holding Beijing Tianxing Puxin Market price 0.96 0.00% - 0.00% Biological Medical Co., Ltd.
Sinopharm Holding Wuhu Co., Ltd. Market price 0.92 0.00% 25.39 0.00% Sinopharm Holding Tongliao Co., Ltd. Market price 0.86 0.00% 0.45 0.00% Huayi Pharmaceutical Co., Ltd Market price 0.75 0.00% - 0.00% Sinopharm Holding Kaifeng Co., Ltd. Market price 0.64 0.00% 0.61 0.00% Group Financial Co. Market price 0.60 0.00% 5.36 0.00% Sinopharm Holding Dandong Co., Ltd. Market price 0.54 0.00% - 0.00% Sinopharm Holding Chenzhou Co., Ltd. Market price 0.47 0.00% - 0.00% Sinopharm Holding Nanping Co., Ltd. Market price 0.45 0.00% 0.51 0.00% Shanghai Wanli Medical Beauty Clinic Limited Market price 0.44 0.00% - 0.00% Sinopharm Holding Qianxinan Co., Ltd. Market price 0.40 0.00% 0.21 0.00% Shanghai Nutraceuticals (Shanghai) Co., Ltd. Market price 0.33 0.00% 0.64 0.00% Sinopharm Holding Xinxiang Co., Ltd. Market price 0.27 0.00% 0.42 0.00% Shanghai Tongyu Information Technology Co., Ltd. Market price 0.26 0.00% - 0.00% Sinopharm (Shanghai) E-Health Co,.Ltd. Market price 0.20 0.00% 0.88 0.00% Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Market price 0.13 0.00% 0.26 0.00% Ltd.
Sinopharm Holding Jingmen Co., Ltd. Market price 0.12 0.00% 0.81 0.00% Shanghai Nuoyun Marketing Consulting Co., Ltd. Market price 0.08 0.00% 63.39 0.00% Sinopharm Holding Zhejiang Biological Product Market price 0.04 0.00% - 0.00% Co., Ltd.
Sinopharm Group Weiqida Medicine Co., Ltd. Market price - 0.00% 498.44 0.02% Shanghai Chaohui Pharmecurical Co., Ltd. Market price - 0.00% 414.36 0.02% Sinopharm Lerentang Langfang Medicine Co., Ltd. Market price - 0.00% 20.78 0.00% Reed Sinopharm Exhibitions Co., Ltd. Market price - 0.00% 10.43 0.00% Sinopharm Holding Guoda Drug Store Guangzhou Market price - 0.00% 8.35 0.00% Chain Co., Ltd.
Sinopharm Holding Shiyan Co., Ltd. Market price - 0.00% 2.30 0.00% Sinopharm Holding Qujing Co., Ltd. Market price - 0.00% 2.00 0.00% Sinopharm Holding Jingzhou Co., Ltd. Market price - 0.00% 0.24 0.00% Sinopharm Holding Xinyu Co., Ltd. Market price - 0.00% (2.32) 0.00% To next page 161,687.75 6.71% 147,006.70 6.99%
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(5) Related party transactions (continued)
(b) Sales of goods (continued)
2014 2013 Amount % of same Amount % of same Related party Pricing policies
(RMB’0,000) transaction (RMB’0,000) transaction Continued 161,687.75 6.71% 147,006.70 6.99% CNPGC Market price - 0.00% 13.69 0.00% Sinopharm Holding Xinjiang New Kashi Market price - 0.00% 7.30 0.00% Pharmaceutical Co., Ltd.
Sinopharm Jiankun (Beijing) Medicines Co., Ltd. Market price - 0.00% 7.21 0.00% Sinopharm Holding Zunyi Co., Ltd. Market price - 0.00% 3.57 0.00% Sinopharm Fortuneway Company Market price - 0.00% 3.27 0.00% Changchun Institute of Biological Products Co., Market price - 0.00% 3.25 0.00% Ltd.
Sinopharm Holding Shangqiu Co., Ltd. Market price - 0.00% 1.12 0.00% Sinopharm Holding Xiangtan Co., Ltd. Market price - 0.00% 0.71 0.00% Shanghai Shyndec Pharmaceutical Co., Ltd. Market price - 0.00% 0.66 0.00% Sinopharm Holding Yueyang Co., Ltd. Market price - 0.00% 0.58 0.00% Sinopharm Holding Lishui Co., Ltd. Market price - 0.00% 0.48 0.00% Sinopharm Holding Qiannanzhou Co., Ltd. Market price - 0.00% 0.38 0.00% Sinopharm Yixin Medicine Co., Ltd. Market price - 0.00% 0.33 0.00% Sinopharm Holding Siping Co., Ltd. Market price - 0.00% 0.29 0.00% Sinopharm Holding Yanbian Co., Ltd. Market price - 0.00% 0.28 0.00% Lanzhou Institute of Biological Products Co., Ltd. Market price - 0.00% 0.27 0.00% Sinopharm Holding Wenshan Co., Ltd. Market price - 0.00% 0.26 0.00% Beijing Tiantan Biological Products Co., Ltd. Market price - 0.00% 0.25 0.00% Sinopharm Holding Medical Devices Co., Ltd. Market price - 0.00% 0.22 0.00% Sinopharm Holding Honghe Co., Ltd. Market price - 0.00% 0.11 0.00% Shanghai Huyong Pharmaceutical Co., Ltd. Market price - 0.00% 0.09 0.00% Sinopharm Holding Jiaozuo Co., Ltd. Market price - 0.00% 0.05 0.00% Total 161,687.75 6.71% 147,051.07 6.99% (c) Lease
The Group as leaser:
Type of Rental assets Contract beginning Contract income Leasers Lessees use for date terminated date(RMB’0,000) Sinopharm Liuzhou Sinopharm Guoda Drug Store Guangxi Building 1 January 2013 31 December 2015 161.33 Chain Co., Ltd.
Huixin Investment Sinopharm Guoda Drug Building 1 January 2014 31 July 2014 56.05 Store(Shenzhen) Chain Co., Ltd.
Guangxi Logistic Sinopharm Guoda Drug Store Guangxi Building 1 January 2013 31 December 2015 38.01 Chain Co., Ltd.
Sinopharm Liuzhou Sinopharm Guoda Drug Store Guangxi Building 1 January 2014 31 December 2016 27.65 Chain Co., Ltd.
Huixin Investment Sinopharm Group Guangdong Building 18 September 2013 31 December 2015 27.03 Medicine Device Co., Ltd.
The Company Sinopharm Guoda Drug Building 1 June 2009 31 December 2015 10.25 Store(Shenzhen) Chain Co., Ltd.
Huixin Investment Sinopharm Holding Guoda Drug Store Building 1 August 2014 31 December 2016 9.75 Guangzhou Chain Co., Ltd.
Sinopharm Materials Sinopharm Guoda Drug Building 1 January 2014 31 December 2014 6.00 Store(Shenzhen) Chain Co., Ltd.
Huixin Investment China National Medicines Co., Ltd. Building 1 January 2014 31 December 2014 4.32 Huixin Investment China National Pharmaceutical Building 20 December 2013 31 December 2014 4.32 Industry Medicine distribution Co.
Ltd.
344.71
Rental income received from related parties is negotiated by both parties involved in the lease and by making reference to the market price.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(5) Related party transactions (continued)
(c) Lease (continued)
The Group as lessee:
Lease Type of assets Contract beginning Contract terminated expenses Lessees Leasers use for date date (RMB’0,000) Sinopharm Sinopharm Group Medicine Logistic Equipment 1 January 2014 31 December 2014 750.00 Guangzhou Co., Ltd.
Sinopharm Sinopharm Group Medicine Logistic Building 1 January 2014 31 December 2014 708.00 Guangzhou Co., Ltd.
Sinopharm Shaoguan Wujiang District Muyang Building 1 August 2012 31 July 2020 82.46 Shaoguan Medicine Information Consultant
Co., Ltd.
Sinopharm Wang Yang Building 1 January 2014 31 December 2014 55.20 Yanfeng
Sinopharm Foshan Nanhai Medicine Group Co., Building 1 March 2013 28 February 2015 22.18 Foshan Ltd.
Sinopharm Shaoguan Wujiang Distrct Muyang Building 1 August 2014 31 July 2020 6.22 Shaoguan Consulting Co., Ltd.
1,624.06 Lease charges paid to related parties are negotiated by both parties involved in the lease and by making reference to the market price.
(d) Guarantees provided
Guarantee Amount Beginning date of Maturity date of obligation Guarantor Guarantee (RMB’0,000) guarantee contract guarantee contract expired Sinopharm Group Sinopharm Guangzhou 45,975.75 03 June 2014 03 June 2015 No The Company Sinopharm Guangzhou 29,171.54 25 June 2014 08 June 2015 No The Company Sinopharm Guangzhou 26,570.32 30 April 2014 30 April 2015 No The Company Sinopharm Guangzhou 25,803.73 19 September 2014 18 September 2015 No The Company Sinopharm Guangzhou 24,109.22 16 September 2014 15 September 2015 No The Company Sinopharm Guangzhou 17,398.33 20 May 2014 20 May 2015 No The Company Sinopharm Guangxi 13,073.42 26 June 2014 26 June 2015 No Sinopharm Guangzhou& No The Company 12 March 2014 11 March 2015 Zhijun Medicine 12,000.00
The Company Sinopharm Guangxi 9,223.17 19 September 2014 18 September 2015 No Zhijun Medicine The Company 8,302.28 30 May 2014 30 May 2015 No The Company Sinopharm Guangxi 8,263.95 19 April 2014 18 April 2015 No Zhijun Medicine The Company 5,500.00 13 May 2014 11 February 2015 No The Company Sinopharm Liuzhou 5,483.43 06 November 2014 15 July 2015 No The Company Suzhou Zhijun 4,946.93 28 August 2014 27 August 2015 No The Company Sinopharm Yuexing 4,627.39 16 July 2014 15 July 2015 No The Company Zhijun Medicine 4,242.35 25 August 2014 25 August 2015 No The Company Sinopharm Guangzhou 4,147.89 16 July 2014 15 July 2015 No The Company Suzhou Zhijun 4,057.84 27 May 2014 27 May 2015 No Zhijun Medicine The Company 3,524.97 04 April 2014 04 April 2022 No The Company Sinopharm Liuzhou 3,518.28 09 September 2014 08 September 2015 No The Company Sinopharm Guangxi 3,383.04 16 July 2014 15 July 2015 No The Company Sinopharm Liuzhou 2,715.77 29 April 2014 28 April 2015 No The Company Sinopharm Yuexing 2,513.43 13 May 2014 12 May 2015 No The Company Sinopharm Yuexing 2,002.89 20 May 2014 20 May 2015 No The Company Sinopharm Yanfeng 1,990.00 13 May 2014 12 February 2015 No The Company Sinopharm Yanfeng 1,946.67 27 October 2014 27 October 2015 No The Company Sinopharm Yanfeng 1,935.60 16 July 2014 15 July 2015 No The Company Suzhou Zhijun 1,773.00 25 November 2013 24 November 2014 No The Company Suzhou Zhijun 1,260.00 25 June 2014 21 August 2014 No The Company Suzhou Zhijun 850.16 16 July 2014 15 July 2015 No The Company Sinopharm Guangxi 650.00 25 October 2014 25 October 2015 No The Company Sinopharm Guangzhou 591.91 09 December 2014 08 December 2015 No
Zhijun Medicine The Company 532.83 17 July 2014 17 July 2020 No
282,086.09
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VII Related party relationships and significant related party transactions (continued)
I
(5) Related party transactions (continued)
(d) Guarantees provided (continued)
Guarantee Amount Beginning date of Maturity date of obligation Guarantor Guarantee (RMB’0,000) guarantee contract guarantee contract expired continued 282,086.09
The Company Sinopharm Guangzhou 527.84 19 August 2014 18 August 2015 No The Company Sinopharm Shenzhen Medicine 423.06 16 July 2014 15 July 2015 No The Company Sinopharm Shaoguan 308.56 16 July 2014 15 July 2015 No The Company Zhijun Medicine 278.61 16 July 2014 15 July 2015 No The Company Sinopharm Zhanjiang 24.08 17 September 2014 15 July 2015 No The Company Sinopharm Foshan 7.02 16 July 2014 15 July 2015 No Total 283,655.26
(e) Financing
Category Amount Effective date Maturity date(RMB’0,000)
2014
Borrowed from-
Group Financial Co.(i) Short-term borrowings 13,000.00 3 November 2014 3 May 2015 Group Financial Co.(i) Short-term borrowings 3,000.00 3 November 2014 3 May 2015 Group Financial Co.(i) Short-term borrowings 2,000.00 3 November 2014 3 May 2015 CNPGC Entrusted borrowings 3,160.00 7 May 2014 7 May 2017 Group Financial Co Short-term borrowings 2,000.00 25 February 2014 28 February 2014 Group Financial Co Discount on bank acceptance notes 200.00 24 March 2014 17 June 2014 Group Financial Co Discount on bank acceptance notes 150.00 24 March 2014 21 May 2014 Group Financial Co Discount on bank acceptance notes 78.62 24 March 2014 24 May 2014 Group Financial Co Discount on bank acceptance notes 50.00 24 March 2014 24 May 2014 Group Financial Co Discount on bank acceptance notes 50.00 24 March 2014 24 May 2014 Group Financial Co Discount on bank acceptance notes 40.00 24 March 2014 24 August 2014 Group Financial Co Discount on bank acceptance notes 37.94 24 March 2014 19 May 2014 Group Financial Co Discount on bank acceptance notes 37.91 24 March 2014 24 August 2014 Group Financial Co Discount on bank acceptance notes 30.00 24 March 2014 19 June 2014 Group Financial Co Discount on bank acceptance notes 30.00 24 March 2014 19 May 2014 Group Financial Co Discount on bank acceptance notes 30.00 24 March 2014 19 May 2014 Group Financial Co Discount on bank acceptance notes 20.00 24 March 2014 22 April 2014 Group Financial Co Discount on bank acceptance notes 20.00 24 March 2014 22 April 2014 Group Financial Co Discount on bank acceptance notes 14.59 24 March 2014 23 May 2014 Group Financial Co Discount on bank acceptance notes 14.00 24 March 2014 12 August 2014 To next page 23,963.06
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(5) Related party transactions (continued)
(e) Financing (continued)
Category Amount Effective date Maturity date(RMB’0,000)
2014
Borrowed from-
continued 23,963.06
Group Financial Co Discount on bank acceptance notes 100.00 24 March 2014 13 August 2014 Group Financial Co Discount on bank acceptance notes 20.00 24 March 2014 17 June 2014 Group Financial Co Discount on bank acceptance notes 10.00 24 March 2014 14 July 2014 Group Financial Co Discount on bank acceptance notes 40.01 24 March 2014 17 April 2014 Group Financial Co Discount on bank acceptance notes 44.99 24 March 2014 17 April 2014 Group Financial Co Discount on bank acceptance notes 61.80 24 March 2014 27 August 2014 Group Financial Co Discount on bank acceptance notes 100.00 24 March 2014 27 August 2014 Group Financial Co Discount on bank acceptance notes 43.23 24 March 2014 28 May 2014 Group Financial Co Discount on bank acceptance notes 124.58 24 March 2014 7 June 2014 Group Financial Co Discount on bank acceptance notes 50.00 29 May 2014 26 June 2014 Group Financial Co Discount on bank acceptance notes 50.00 29 May 2014 26 June 2014 Group Financial Co Discount on bank acceptance notes 50.00 29 May 2014 26 June 2014 Group Financial Co Discount on bank acceptance notes 17.71 29 May 2014 26 June 2014 Group Financial Co Discount on bank acceptance notes 10.53 29 May 2014 20 June 2014 Group Financial Co Discount on bank acceptance notes 50.00 29 May 2014 29 June 2014 Group Financial Co Discount on bank acceptance notes 34.00 29 May 2014 18 June 2014 Group Financial Co Discount on bank acceptance notes 48.54 29 May 2014 28 June 2014 Group Financial Co Discount on bank acceptance notes 20.00 29 May 2014 25 June 2014 Group Financial Co Discount on bank acceptance notes 28.48 29 May 2014 17 October 2014 Group Financial Co Discount on bank acceptance notes 20.00 29 May 2014 25 July 2014 Group Financial Co Discount on bank acceptance notes 14.70 29 May 2014 24 July 2014 Group Financial Co Discount on bank acceptance notes 11.00 29 May 2014 23 October 2014 Group Financial Co Discount on bank acceptance notes 165.00 29 May 2014 26 September 2014 Group Financial Co Discount on bank acceptance notes 20.00 29 May 2014 28 July 2014 Group Financial Co Discount on bank acceptance notes 20.00 29 May 2014 28 July 2014 Group Financial Co Discount on bank acceptance notes 20.00 29 May 2014 28 July 2014 Group Financial Co Discount on bank acceptance notes 12.50 29 May 2014 17 October 2014 Group Financial Co Discount on bank acceptance notes 58.85 29 May 2014 24 July 2014 Group Financial Co Discount on bank acceptance notes 48.53 29 May 2014 20 June 2014 Group Financial Co Discount on bank acceptance notes 20.00 29 May 2014 14 October 2014 Group Financial Co Discount on bank acceptance notes 30.00 29 May 2014 22 October 2014 Group Financial Co Discount on bank acceptance notes 50.00 29 May 2014 22 October 2014 Group Financial Co Discount on bank acceptance notes 50.00 29 May 2014 22 October 2014 Group Financial Co Discount on bank acceptance notes 31.68 29 May 2014 24 July 2014 Group Financial Co Discount on bank acceptance notes 20.19 29 May 2014 14 July 2014 Group Financial Co Discount on bank acceptance notes 19.00 29 May 2014 23 October 2014 Group Financial Co Discount on bank acceptance notes 20.00 29 May 2014 20 August 2014 Group Financial Co Discount on bank acceptance notes 20.00 29 May 2014 20 August 2014 Group Financial Co Discount on bank acceptance notes 20.00 29 May 2014 20 August 2014 Group Financial Co Discount on bank acceptance notes 25.22 29 May 2014 20 August 2014 Group Financial Co Discount on bank acceptance notes 10.00 30 June 2014 17 October 2014 Group Financial Co Discount on bank acceptance notes 20.43 30 June 2014 19 August 2014 Group Financial Co Discount on bank acceptance notes 20.00 30 June 2014 22 October 2014 Group Financial Co Discount on bank acceptance notes 100.00 30 June 2014 17 October 2014 Group Financial Co Discount on bank acceptance notes 42.00 30 June 2014 23 October 2014 Group Financial Co Discount on bank acceptance notes 50.00 30 June 2014 16 November 2014 Group Financial Co Discount on bank acceptance notes 20.00 30 June 2014 27 August 2014 Group Financial Co Discount on bank acceptance notes 20.00 30 June 2014 27 August 2014 Group Financial Co Discount on bank acceptance notes 20.00 30 June 2014 27 August 2014 Group Financial Co Discount on bank acceptance notes 12.08 30 June 2014 27 August 2014 To next page 25,878.11
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(5) Related party transactions (continued)
(e) Financing (continued)
Category Amount Effective date Maturity date(RMB’0,000)
2014
Borrowed from-
continued 25,878.11
Group Financial Co Discount on bank acceptance notes 20.00 30 June 2014 27 August 2014 Group Financial Co Discount on bank acceptance notes 20.00 30 June 2014 27 August 2014 Group Financial Co Discount on bank acceptance notes 10.00 30 June 2014 27 August 2014 Group Financial Co Discount on bank acceptance notes 20.00 30 June 2014 29 November 2014 Group Financial Co Discount on bank acceptance notes 27.63 30 June 2014 29 November 2014 Group Financial Co Discount on bank acceptance notes 10.00 30 June 2014 28 August 2014 Group Financial Co Discount on bank acceptance notes 10.00 30 June 2014 28 August 2014 Group Financial Co Discount on bank acceptance notes 10.00 30 June 2014 28 August 2014 Group Financial Co Discount on bank acceptance notes 30.00 30 June 2014 29 August 2014 Group Financial Co Discount on bank acceptance notes 21.76 30 June 2014 29 August 2014 Group Financial Co Discount on bank acceptance notes 47.24 30 June 2014 30 August 2014 Group Financial Co Discount on bank acceptance notes 10.06 30 June 2014 15 August 2014 Group Financial Co Discount on bank acceptance notes 34.18 30 June 2014 30 August 2014 Group Financial Co Discount on bank acceptance notes 20.00 30 June 2014 15 November 2014 Group Financial Co Discount on bank acceptance notes 10.00 30 June 2014 19 November 2014 Group Financial Co Discount on bank acceptance notes 15.89 30 June 2014 30 July 2014 Group Financial Co Discount on bank acceptance notes 12.00 30 June 2014 27 November 2014 Group Financial Co Discount on bank acceptance notes 20.00 30 June 2014 10 October 2014 Group Financial Co Discount on bank acceptance notes 20.00 30 June 2014 13 November 2014 Group Financial Co Discount on bank acceptance notes 10.00 30 June 2014 15 October 2014 Group Financial Co Discount on bank acceptance notes 14.00 30 June 2014 9 September 2014 Group Financial Co Discount on bank acceptance notes 500.00 24 December 2014 26 February 2015 Group Financial Co Discount on bank acceptance notes 500.00 24 December 2014 26 February 2015 Group Financial Co Discount on bank acceptance notes 401.22 24 December 2014 26 February 2015 Group Financial Co Discount on bank acceptance notes 221.16 24 December 2014 25 May 2015 Group Financial Co Discount on bank acceptance notes 100.00 24 December 2014 27 February 2015 Group Financial Co Discount on bank acceptance notes 100.00 24 December 2014 27 February 2015 Group Financial Co Discount on bank acceptance notes 100.00 24 December 2014 27 February 2015 Group Financial Co Discount on bank acceptance notes 100.00 24 December 2014 27 February 2015 Group Financial Co Discount on bank acceptance notes 100.00 24 December 2014 27 February 2015 Group Financial Co Discount on bank acceptance notes 100.00 24 December 2014 27 February 2015 Group Financial Co Discount on bank acceptance notes 100.00 24 December 2014 27 February 2015 Group Financial Co Discount on bank acceptance notes 100.00 24 December 2014 27 February 2015 Group Financial Co Discount on bank acceptance notes 100.00 24 December 2014 27 February 2015 Group Financial Co Discount on bank acceptance notes 100.00 24 December 2014 27 February 2015 Group Financial Co Discount on bank acceptance notes 178.25 24 December 2014 27 February 2015 Group Financial Co Discount on bank acceptance notes 100.00 24 December 2014 28 February 2015 Group Financial Co Discount on bank acceptance notes 100.00 24 December 2014 28 February 2015 Group Financial Co Discount on bank acceptance notes 100.00 24 December 2014 28 February 2015 Group Financial Co Discount on bank acceptance notes 100.00 24 December 2014 28 February 2015 Group Financial Co Discount on bank acceptance notes 150.00 24 December 2014 27 March 2015 Group Financial Co Discount on bank acceptance notes 100.00 24 December 2014 28 February 2015 Group Financial Co Discount on bank acceptance notes 100.00 24 December 2014 28 February 2015 Group Financial Co Discount on bank acceptance notes 100.00 24 December 2014 28 February 2015 Group Financial Co Discount on bank acceptance notes 100.00 24 December 2014 28 February 2015 Group Financial Co Discount on bank acceptance notes 133.29 24 December 2014 9 March 2015 30,154.79
(i) The borrowing was pre-paid in 2014 in advance.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(5) Related party transactions (continued)
(e) Financing (continued)
Category Amount(RMB’0,000) Effective date Maturity date 2013
Borrowed from-
Sinopharm Group Entrusted borrowings 40,000.00 1 November 2013 30 April 2014 Sinopharm Group(i) Entrusted borrowings 40,000.00 6 August 2013 6 November 2013 Group Financial Co.(i) Short-term borrowings 3,000.00 4 March 2013 4 March 2014 Group Financial Co. Short-term borrowings 7,000.00 2 April 2013 2 April 2014 Group Financial Co. Short-term borrowings 4,300.00 27 May 2013 27 May 2014 Group Financial Co. Short-term borrowings 2,500.00 29 May 2013 29 May 2014 Group Financial Co. Short-term borrowings 5,500.00 3 July 2013 3 July 2014 Group Financial Co. Short-term borrowings 4,700.00 16 July 2013 16 July 2014 Group Financial Co. Short-term borrowings 5,000.00 26 July 2013 26 July 2014 Group Financial Co. Short-term borrowings 3,000.00 8 October 2013 8 October 2014 Group Financial Co. Discount on bank acceptance notes 500.00 28 June 2013 22 August 2013 Group Financial Co. Discount on bank acceptance notes 500.00 28 June 2013 30 August 2013 Group Financial Co. Discount on bank acceptance notes 350.00 28 June 2013 4 September 2013 Group Financial Co. Discount on bank acceptance notes 60.16 28 June 2013 7 September 2013 Group Financial Co. Discount on bank acceptance notes 235.77 19 November 2013 29 March 2014 Group Financial Co. Discount on bank acceptance notes 411.48 19 November 2013 3 January 2014 Group Financial Co. Discount on bank acceptance notes 50.17 19 November 2013 12 April 2014 Group Financial Co. Discount on bank acceptance notes 160.83 19 November 2013 12 January 2014 Group Financial Co. Discount on bank acceptance notes 230.64 19 November 2013 18 April 2014 Group Financial Co. Discount on bank acceptance notes 79.41 19 November 2013 18 January 2014 Group Financial Co. Discount on bank acceptance notes 100.00 19 November 2013 24 April 2014 Group Financial Co. Discount on bank acceptance notes 100.00 19 November 2013 25 January 2014 Group Financial Co. Discount on bank acceptance notes 350.00 19 November 2013 28 January 2014 Group Financial Co. Discount on bank acceptance notes 211.21 19 November 2013 29 January 2014 Group Financial Co. Discount on bank acceptance notes 58.05 19 November 2013 30 January 2014 Group Financial Co. Discount on bank acceptance notes 810.60 19 November 2013 31 January 2014 Group Financial Co. Discount on bank acceptance notes 508.53 19 November 2013 7 February 2014 119,716.85
(i) The borrowing was pre-paid in 2013 in advance.
(f) Remuneration of key management
2014(RMB’0,000) 2013(RMB’0,000) Remuneration of key management 1,215.00 1,076.00 (g) Interest expenses
Related party Type of transaction 2014 2013(RMB’0,000) (RMB’0,000) Sinopharm Group Interest paid for the loans from related party 572.44 939.56 Interest paid for the loans from Group
Group Financial Co. Financial Co 445.28 1,513.97 Sinopharm Holding Sub Marketing
Center Co., Ltd. Charges of discounted notes payable 261.70 864.16 CNPGC Interest paid for the loans from related party 113.29 - Group Financial Co. Charges of discounted notes payable 86.42 64.88 Sinopharm Group Charges of discounted notes payable 66.50 71.62 1,545.63 3,454.19
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(5) Related party transactions (continued)
(h) Interest income
2014 2013 Related party Type of transaction (RMB’0,000) (RMB’0,000) Group Financial Co. Deposit interest 77.07 1.21 (i) Rendering of service
Related party Type of transaction 2014 2013(RMB’0,000)(RMB’0,000) Sinopharm Group Medicine Logistic Co., Ltd. Transportation and warehousing charges 1,065.24 1,201.55 China National Medicines Co., Ltd. Transportation and warehousing charges 447.89 417.13 Foshan Nanhai Medicine Co., Ltd. Transportation and warehousing charges 435.37 11.65 Sinopharm Holding Guoda Drug Store Guangdong Co.,Ltd. Transportation and warehousing charges
420.17 354.05 Foshan Nanhai Uptodate& Special Medicines Co., Ltd. Transportation and warehousing charges 336.33 10.37 China National Medicines Co., Ltd. Dispatching and transportation charges 104.93 156.77 Sinopharm Group Entrusted revenue 50.00 25.00 Shenzhen Wanwei Medicine trading Co., Ltd. Consultation revenue 31.57 11.20 China National Pharmaceutical Foreign Trade Co., Ltd. entrusted revenue 25.00 8.33 Wanle Medical Consultation revenue 5.22 21.10 Sinopharm Holding Guoda Drug Store Guangzhou Chain Co., Parking fees 1.20 0.10 Ltd.
Winteam Pharmaceutical Group Ltd. Consultation revenue 0.63 - Sinopharm Group Medicine Logistic Co., Ltd. Dispatching and transportation charges - 85.15 Wanle Medical Dispatching and transportation charges - 0.16 2,923.55 2,302.56 (j) Purchase of service
Related party Type of transaction
2014(RMB’0,000) 2013(RMB’0,000) Sinopharm Chongqing Pharmaceutical and Medical Designing fee 398.15 345.40 Industry Design Institute
Sinopharm Chongqing Pharmaceutical and Medical Pinshan management fees 462.32 186.33 Industry Design Institute
Shanghai Xinshengyuan Pharmaceutical Co., Ltd. Research and development 226.42 - expenses
Sinopharm Group Medicine Logistic Co., Ltd. Dispatching and transportation 228.78 170.17 charges
Sinopharm Group Medicine Logistic Co., Ltd. Information system maintenance 20.19 - Shanghai Tongyu Information Technology Co., Ltd. CMS system maintenance 166.12 134.10 Sinopharm Holding Shenyang Co., Ltd. Dispatching and transportation 73.57 119.54 charges
Sinopharm Group Franchise fee 29.40 - Reed Sinopharm Exhibitions Co., Ltd. Exhibition expenses 9.59 13.75 Sinopharm Group Chemical Reagent Suzhou Co., Research and development 0.90 - Ltd. expenses
Shanghai Institute of Pharmaceutical Industry Research and development 648.15 436.00 expenses
Shanghai Institute of Pharmaceutical Industry Exhibition expenses - 9.72 2,263.59 1,415.01
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(6) Accounts receivable from and payables to related parties
31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Notes receivable Sinopharm Holding Hunan Co., Ltd. 394.05 407.58 Sinopharm Guoda Drug Store Guangxi Chain Co.,
Ltd. 337.98 10.80 Sinopharm Holding Hainan Co., Ltd. 332.61 208.67 Sinopharm Holding Hainan Hongyi Co., Ltd. 248.78 105.20 Chongqing Yaoyou Pharmaceutical Co., Ltd. 166.11 479.85 Sinopharm Holding Guoda Drug Store Guangdong
Co., Ltd. 98.94 309.88 Sinopharm Holding Shenyang Co., Ltd. 53.90 15.28 Sinopharm Holding Hubei Co., Ltd. 37.80 199.04 Sinopharm Holding Chongqing Co., Ltd. 36.60 20.05 Sinopharm Holding Tianjin Co., Ltd. 23.38 62.92 Sinopharm Holding Zhejiang Co., Ltd. 22.31 - Sinopharm Holding Shandong Co., Ltd. 20.00 848.54 NanJing Iron& Steel Co., Ltd. 20.00 - Sinopharm Holding Hunan Guoda Minshengtang
Drug Store Chain Co., Ltd. 18.40 8.60 Sinopharm Holding Yancheng Co., Ltd. 18.36 55.40 Sinopharm Holding Shaanxi Co., Ltd. 14.89 98.75 Sinopharm Holding Ningde Co., Ltd. 11.90 - Sinopharm Holding Anyang Co., Ltd. 10.00 - Nanjing Iron& Steel Group International Trade Co., - Ltd 10.00
Sinopharm Holding Fuyang Co., Ltd. 10.00 - Sinopharm Le -Ren-Tang Medicine Co., Ltd. 8.45 - Sinopharm Holding Huainan Co., Ltd. 4.22 - Sinopharm Holding Lunan Co., Ltd. 3.91 - Sinopharm Holding Yantai Co., Ltd. 3.65 3.02 China National Pharmaceutical Foreign Trade Co., - Ltd. 3.00
Sinopharm Holding Taizhou Co., Ltd. 1.28 - Shanghai Chaohui Pharmecurical Co., Ltd. - 150.50 Sinopharm Holding Beijing Huahong Co., Ltd. - 92.33 Sinopharm Holding Gansu Co., Ltd. - 71.31 Sinopharm Holding Guizhou Co., Ltd. - 71.08 China National Medicines Co., Ltd. - 66.50 Sinopharm Holding Fuzhou Co., Ltd. - 56.70 Sinopharm Holding Xuzhou Co., Ltd. - 52.67 Sinopharm Holding Bengbu Co., Ltd. - 15.00 Sinopharm Holding Yangzhou Co., Ltd. - 10.00 Sinopharm Holding Heilongjiang Co., Ltd. - 8.83 Sinopharm Holding Guoda Drugstore Shenyang - 4.01 Chain Co., Ltd.
1,910.52 3,432.51 31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Accounts receivable Sinopharm Holding Hunan Co., Ltd. 2,560.01 2,857.02 Foshan Nanhai Uptodate& Special Medicines Co.,
Ltd. 2,375.69 1,704.67 Sinopharm Holding Hubei Co., Ltd. 2,094.77 1,158.86 Sinopharm Holding Hainan Co., Ltd. 1,591.68 1,260.47 Sinopharm Group Xinjiang Special Drugs National
Pharmaceutical Co., Ltd. 1,490.16 1,381.80 Sinopharm Le -Ren-Tang Medicine Co., Ltd. 1,423.48 1,313.68 Sinopharm Holding Beijing Co., Ltd. 1,289.21 946.84 Sinopharm Sichuan Pharmaceutical Co., Ltd. 1,249.48 - To next page 14,074.48 10,623.34
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(6) Accounts receivable from and payables to related parties (continued)
31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Accounts receivable
Continued 14,074.48 10,623.34 Foshan Nanhai Medicine Co., Ltd.
1,197.98 634.33 Sinopharm Holding Shandong Co., Ltd.
1,021.65 2,051.41 Sinopharm Holding Guoda Drug Store Guangdong Co., Ltd.
970.47 1,100.37 Sinopharm Holding Beijing Huahong Co., Ltd.
789.07 1,347.20 Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd.
748.43 676.72 Sinopharm Group Southwest Medicine Co., Ltd.
685.94 642.34 Sinopharm Holding Zhejiang Co., Ltd.
675.65 753.76 Sinopharm Guoda Drug Store Guangxi Chain Co., Ltd.
658.91 467.60 Sinopharm Holding Tianjin Co., Ltd.
622.00 650.50 Sinopharm Holding Ningxia Co., Ltd.
590.46 352.55 Sinopharm Group
534.74 469.33 Sinopharm Holding Wenzhou Co., Ltd.
526.85 385.01 Sinopharm Holding Sub Marketing Center Co., Ltd.
459.21 397.32 Foshan Chancheng District Central Hospital
452.21 337.12 Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical 377.03 394.44 Co., Ltd.
Sinopharm Group Medicine Logistic Co., Ltd.
352.12 324.48 Sinopharm Holding Nantong Co., Ltd.
292.45 375.65 Sinopharm Holding Jinzhou Co., Ltd.
284.71 243.44 Sinopharm Holding Henan Co., Ltd.
276.24 214.39 Sinopharm Holding Hainan Hongyi Co., Ltd.
260.49 489.49 China National Medicines Co., Ltd.
238.89 250.94 Guangdong Dong Fang Uptodate& Special Medicines Co., Ltd.
235.01 331.81 Sinopharm Holding Chongqing Co., Ltd.
224.90 345.65 Sinopharm Holding Shanxi Co., Ltd.
185.47 144.57 Sinopharm Holding Shanxi Co., Ltd.
182.66 135.02 Sinopharm Holding Heilongjiang Co., Ltd.
164.27 193.73 Sinopharm Holding Yunnan Co., Ltd.
150.59 221.05 Sinopharm Holding Yangzhou Co., Ltd.
147.67 167.90 Sinopharm Holding Shenyang Co., Ltd.
135.85 217.46 Sinopharm Guoda Drug Store Jiangmen Chain Co., Ltd.
125.19 89.31 Sinopharm Holding Fuzhou Co., Ltd.
123.94 426.40 Sinopharm Holding Guizhou Co., Ltd.
89.68 52.09 Sinopharm Holding Fujian Co., Ltd.
86.47 45.52 Sinopharm Holding Xuzhou Co., Ltd.
82.54 69.25 Sinopharm Holding Wuxi Co., Ltd.
78.66 124.61 Sinopharm Holding Guoda Pharmacy Co., Ltd.
59.81 106.17 Sinopharm Holding Gansu Co., Ltd.
56.83 169.01 Sinopharm Holding Qingdao Co., Ltd.
56.60 63.35 Sinopharm Holding Yancheng Co., Ltd.
56.30 45.71 Sinopharm Holding Tianjin North Medicine Co., Ltd.
55.97 27.82 Sinopharm Holding Dalian Co., Ltd.
53.63 66.00 Sinopharm Holding Jilin Co., Ltd.
49.44 67.63 Sinopharm Holding Anhui Co., Ltd.
42.61 0.75 Sinopharm Holding Qinghai Co., Ltd.
34.47 28.70 Sinopharm Lerentang Tangshan Medicine Co., Ltd. 32.85 95.52 Sinopharm Holding Inner Mongolia Co., Ltd. 32.73 35.66 Sinopharm Holding Changzhou Medical logistics center Co., Ltd. 24.61 33.01 To next page 28,658.73 26,485.43
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(6) Accounts receivable from and payables to related parties (continued)
31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Accounts receivable Continued 28,658.73 26,485.43 Sinopharm Holding Taizhou Co., Ltd.
24.14 27.60 Sinopharm Holding Longyan Co., Ltd.
23.11 15.56 Shanghai Donghong Medicine Co., Ltd.
22.46 16.34 Sinopharm Holding Jiangsu Co., Ltd.
20.82 33.74 Sinopharm Holding Anqing Co., Ltd.
19.79 8.82 Sinopharm Holding Quanzhou Co., Ltd. 17.96 8.72 Sinopharm Holding Suzhou Co., Ltd. 17.71 25.19 Sinopharm Holding Changde Co., Ltd. 16.03 32.08 Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd. 12.83 30.01 Shanghai Yunnuo Marketing Consulting Co., Ltd. 10.00 10.07 Sinopharm Holding Shaanxi Co., Ltd. 8.49 137.78 Sinopharm Holding Yantai Co., Ltd. 8.05 17.68 Sinopharm Holding Ningde Co., Ltd. 7.04 10.62 Sinopharm Holding HongKong Co., Ltd. 6.30 - Sinopharm Holding Jiangxi Co., Ltd. 4.58 3.87 Sinopharm Holding Puyang Co., Ltd. 4.58 0.04 Sinopharm Holding (Yangzhou) Chinese Western Medicine Branch 4.43 5.23 Co., Ltd.
Guang dong South Pharmaceutical Foreign Trade Co., Ltd. 3.93 42.34 Jiang Meng Renren Medical instrument Co., Ltd. 3.90 - Sichuan Zhongwei Pharmaceutical Co. Ltd. 3.87 - Foshan Chanyixing Medicine Development Co Ltd 3.28 - Sinopharm Lerentang Qinhuangdao Medicine Co., Ltd. 3.07 5.70 Sinopharm Holding Changzhou Co., Ltd. 2.76 4.30 Qinghai Medical Pharmaceutical Material Co., Ltd. 2.55 - Shanxi Guoyi Drug Store Co., Ltd. 1.51 1.19 Sinopharm Holding Sanming Co., Ltd. 0.86 0.91 Sinopharm Holding Beijing Kangchen Bio-Pharmaceutical Co., Ltd. 0.77 0.62 Sinopharm Holding Zhoukou Co., Ltd. 0.58 - Shanghai Tongyu Information Technology Co., Ltd. 0.30 - Shanghai Nutraceuticals (Shanghai) Co., Ltd. 0.23 0.16 Sinopharm Holding Shangqiu Co., Ltd. 0.22 - Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co., 0.17 - Ltd.
Shenzhen Wanwei Medicine trading Co., Ltd. 0.12 - Chongqing Yaoyou Pharmaceutical Co., Ltd. - 333.73 Sinopharm Holding Putian Co., Ltd. - 17.30 Sinopharm Holding Huaian Co., Ltd. - 7.85 Sinopharm Holding Zunyi Co., Ltd. - 3.02 Sinopharm Holding Qujing Co., Ltd. - 2.34 Heilongjiang Sinopharm Medical Herbs Co., Ltd. - 1.20 Sinopharm Holding Shiyan Co., Ltd. - 1.09 Sinopharm Holding Anyang Co., Ltd. - 0.70 Sinopharm Holding Yueyang Co., Ltd. - 0.68 Sinopharm Jiankun (Beijing) Medicines Co., Ltd. - 0.80 Sinopharm United Engineering Corporation - 0.35 Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., - 0.34 Ltd.
Lanzhou Institute of Biological Products Co., Ltd. - 0.32 Sinopharm Holding Kaifeng Co., Ltd. - 0.14 Sinopharm Holding Xinxiang Co., Ltd. - 0.13 Sinopharm Holding Honghe Co., Ltd. - 0.13 Sinopharm Holding Wuhu Co., Ltd. - 0.12 Total 28,915.17 27,294.24
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(6) Accounts receivable from and payables to related parties (continued)
31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Other receivables Sinopharm Group Medicine Logistic Co., Ltd.
121.50
211.76 Sinopharm Group (a)
25.00
25.00 China National Pharmaceutical Foreign Trade 25.00 8.33 Corporation (a)
China National Medicines Co., Ltd.
18.47
- 189.97 245.09 (a) Balance of other receivables is caused by hosting service from the Company to the Sinopharm Group and China National Pharmaceutical Foreign Trade Corporation. According to the contract, total balance will be received in 2 months since the fisical year ends.
31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Advances to Sinopharm Chongqing Pharmaceutical and Medical 1,661.22 111.80 suppliers Industry Design Institute
Qinghai Pharmaceutical Factory Co., Ltd.
513.87 383.84 China National Scientific Instruments& Materials 180.61 - Imp/Exp Shenzhen CO., Ltd
Wuhan Institute of Biological Products Co., Ltd.
31.04 - Chengdu Rongsheng Pharmacy Co., Ltd.
11.86 0.05 Wanle Medical 4.56 - Sinopharm Group Chemical Reagent Co., Ltd.
2.73 0.02 Sinopharm Holding Suzhou Co., Ltd.
1.16 - China National Medicines Co., Ltd.
0.86 2.50 Sinopharm Holding Fujian Co., Ltd.
0.44 0.44 Sinopharm Holding Hunan Co., Ltd.
0.15 - Sinopharm Group Guorui Medicine Co., Ltd.
0.10 12.06 Foshan Nanhai Uptodate& Special Medicines Co., Ltd.
0.07 0.04 Beijing Huasheng Pharmaceutical Biotechnology 0.04 - Development Co., Ltd.
Sinopharm Holding Guizhou Co., Ltd.
0.04 0.04 Shanghai Institute of Pharmaceutical Industry
- 20.25 Foshan Nanhai Medicine Co., Ltd.
- 2.75 Sinopharm Holding Jiangsu Co., Ltd.
- 0.49 Hunan Dongting Pharmaceutical Co., Ltd.
- 0.31 2,408.75 534.59 Management consider that there is no recoverability risk in related to receivables due from other related party. Therefore, no provision has been made.
31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Notes payable Sinopharm Holding Sub Marketing Center Co., Ltd. 14,080.94 11,839.49 Sinopharm Group 7,284.35 2,611.93 China National Medicines Co., Ltd. 1,059.12 1,185.05 Chongqing Haisiman Pharmaceutical Co., Ltd. 207.19 242.08 Jiangsu Wanbang Pharmacy Marketing Co., Ltd. 201.32 216.49 Shenzhen Wanwei Medicine trading Co., Ltd. 129.19 - Guizhou Tongjitang Pharmaceutical Co., Ltd. 122.87 - Chongqing Yaoyou Pharmaceutical Co., Ltd. 91.88 173.88 Lanzhou Institute of Biological Products Co., Ltd. 60.00 186.00 To next page 23,236.86 16,454.92
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(6) Accounts receivable from and payables to related parties (continued)
31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Notes payable Continued 23,236.86 16,454.92 Anhui Jingfang Pharmaceutical Co., Ltd. 47.72 - Sinopharm Group Rongsheng Pharmaceutical Co., Ltd. 30.84 - Shanghai Shyndec Pharmaceutical Co., Ltd. 22.34 23.01 Sinopharm Holding Beijing Co., Ltd. 21.24 29.11 Sinopharm Group Chemical Reagent Suzhou Co., Ltd. 4.51 10.99 Wanle Medical - 73.21 23,363.51 16,591.24 31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Accounts payable Sinopharm Holding Sub Marketing Center Co., Ltd. 16,885.53 12,614.82 Sinopharm Group 6,811.41 3,811.48 China National Medicines Co., Ltd. 4,096.51 3,019.50 Sinopharm Holding Hubei Co., Ltd. 3,523.87 57.48 Shenzhen Wanwei Medicine trading Co., Ltd. 1,205.87 360.23 Guang dong South Pharmaceutical Foreign Trade Co., 800.01 436.16 Ltd.
Sino-Swed Pharmaceutical Corp.Ltd. 745.27 1,461.94 Jiangsu Wanbang Pharmacy Marketing Co., Ltd. 551.17 268.24 Lanzhou Institute of Biological Products Co., Ltd. 336.00 150.00 Winteam Pharmaceutical Group Ltd. 278.27 755.74 Chongqing Yaoyou Pharmaceutical Co., Ltd. 224.27 358.13 Foshan Nanhai Uptodate& Special Medicines Co., Ltd. 177.60 28.89 Chongqing Haisiman Pharmaceutical Co., Ltd. 146.25 139.17 Sinopharm Group Medicine Logistic Co., Ltd. 70.85 139.13 Guangdong Dong Fang Uptodate& Special Medicines 66.19 27.67 Co., Ltd.
Sinopharm Group Chemical Reagent Co., Ltd. 44.37 11.37 Foshan Fengliaoxing Pharmaceutical Co., Ltd. 43.79 - Sinopharm Holding Beijing Co., Ltd. 38.87 10.57 China National Pharmaceutical Foreign Trade Co., Ltd. 36.79 95.05 Sinopharm Holding Beijing Huahong Co., Ltd. 31.02 - Guizhou Tongjitang Pharmaceutical Co., Ltd. 28.27 36.49 Handan Pharmaceutical Co., Ltd 26.38 8.51 Sinopharm Group Southwest Medicine Co., Ltd. 22.22 - Shanghai Shyndec Pharmaceutical Co., Ltd. 22.09 61.81 China Otsuka Pharmaceutical Co., Ltd. 19.64 20.25 Wuhan Zhonglian Pharmaceutical Group Co., Ltd. 17.68 2.71 Shenyang Hongqi Pharmaceutical Co., Ltd. 9.78 0.55 Guilin South pharmaceutical Co., Ltd. 9.65 13.73 Suzhou Erye Pharmaceutical Limited Company 9.26 - Sinopharm Group Rongsheng Pharmaceutical Co., Ltd. 7.90 32.18 Sinopharm Holding Inner Mongolia Co., Ltd. 7.81 - Foshan Nanhai Medicine Co., Ltd. 6.28 - Foshan Dezhong Pharmaceutical Co., Ltd. 5.83 5.83 Sinopharm Group Chemical Reagent Suzhou Co., Ltd. 5.80 - Shandong Lu Ya Pharmaceutical Co., Ltd. 5.35 13.68 Hunan Dongting Pharmaceutical Co., Ltd. 4.76 4.90 To next page 36,322.61 23,946.21
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(6) Accounts receivable from and payables to related parties (continued)
31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Accounts payable Continued 36,322.61 23,946.21 Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd. 3.92 - Anhui Jingfang Pharmaceutical Co., Ltd. 3.15 11.78 Guangdong Medi-World Pharmacertical Co., Ltd. 3.06 3.05 Shanghai Modern Hasen (Shangqiu) Pharmacertical Co., Ltd. 2.98 1.38 Sinopharm Holding Jiangsu Co., Ltd. 2.78 - Guizhou Longlife Pharmacertical Co., Ltd. 2.69 3.46 Sinopharm Guoda Drug Store(Shenzhen) Chain Co., Ltd. 2.38 0.30 Sinopharm Holding Sanyi Medicine(Wuhu) Co., Ltd. 2.24 1.96 Changchun Changsheng Gene Pharmaceutical Co., Ltd. 1.79 1.79 Sinopharm Group Shanghai Medicine Device Co., Ltd. 1.66 3.02 Sinopharm Holding Liaocheng Co., Ltd. 1.62 1.62 Yichang Humanwell Pharmaceutical Co., Ltd. 1.58 0.05 Sinopharm Group Beijing Medical equipment Co., Ltd. 0.88 0.88 Shanghai Chaohui Pharmecurical Co., Ltd. 0.75 0.75 Wanle Medical 0.43 578.28 Sinopharm Holding Dezhou Co., Ltd. 0.43 6.84 Foshan Fengliaoxing Pharmaceutical Co., Ltd. 0.39 0.39 Shanghai Sailun Biological Technology Co., Ltd. 0.29 0.29 Jiangsu Huanghe Pharmaceutical Co., Ltd 0.28 - Sinopharm Holding Huaideju 0.11 0.11 Pharmaceutical (Xiamen)
Co., Ltd.
Chengdu Rongsheng Pharmacy Co., Ltd. 0.08 - The Fourth Pharmaceutical Co., Ltd. of Zhonglian Group 0.08 0.08 Beijing Huasheng Pharmaceutical Biotechnology Development 0.06 0.06 Co., Ltd.
Sinopharm Holding Hunan Co., Ltd. 0.02 233.13 Sinopharm Group Weiqida Medicine Co., Ltd. 0.02 56.72 Wanbang Biopharmaceuticals - 51.06 Sinopharm Holding Fujian Co., Ltd. - 31.75 Sinopharm Holding Chongqing Co., Ltd. - 17.07 Sinopharm Holding Hainan Co., Ltd. - 16.90 Sinopharm Pharmaceutical Logistics Co., Ltd. Guangzhou - 6.30 Branch
Sinopharm Holding Yunnan Co., Ltd. - 1.91 Sinopharm Holding Suzhou Co., Ltd. - 1.62 Shanghai Fosun Pharmaceutical Co., Ltd. - 0.02 36,356.28 24,978.78 31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Other payables Sinopharm Group 433.07 453.07 Sinopharm Chongqing Pharmaceutical and Medical Industry Design 173.00 216.83 Institute
China National Pharmaceutical Group Shanghai Co., Ltd. 166.04 166.04 China Traditional Chinese Medicine Co. 130.00 150.00 CNPGC 90.00 170.00 Sinopharm Group Chemical Reagent Co., Ltd. 22.00 - China State Institute of Pharmaceutical Industry 15.00 15.00 Sinopharm Group Shanghai Medicine Device Co., Ltd. 4.40 4.40 Sinopharm Holding Hainan Hongyi Co., Ltd. 2.00 - Sinopharm Holding Shanxi Co., Ltd. 1.50 1.50 To next page 1,037.01 1,176.84
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(6) Accounts receivable from and payables to related parties (continued)
31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Other payables Continued 1,037.01 1,176.84 Sinopharm Group Medicine Logistic Co., Ltd. 1.41 - Sinopharm Holding Tianjin Co., Ltd. 1.00 1.00 Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., 1.00 1.00 Ltd.
Sinopharm Group Southwest Medicine Co., Ltd. 0.50 0.50 Sinopharm Holding Hubei Co., Ltd. 0.50 0.50 Sinopharm Holding (Yangzhou) Chinese Western Medicine Branch 0.50 - Co., Ltd.
Sinopharm Holding Sub Marketing Center Co., Ltd. 0.50 0.50 Sinopharm Holding Wuxi Co., Ltd. 0.50 0.50 Sinopharm Le -Ren-Tang Medicine Co., Ltd. 0.50 0.50 Guangdong Dong Fang Uptodate& Special Medicines Co., Ltd. - 56.76 Sinopharm Holding Guoda Drug Store Guangzhou Chain Co., Ltd. - 30.00 China National Scientific Instruments& Materials Imp/Exp - 4.40 Shenzhen CO., Ltd
Sinopharm Holding Yangzhou Co., Ltd. - 0.50 Sinopharm Guoda Drug Store Guangxi Chain Co., Ltd. - 0.28 1,043.42 1,273.28 31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Advances from Sinopharm Le -Ren-Tang Medicine Co., Ltd. 32.91 - customers Guang dong South Pharmaceutical Foreign Trade Co., Ltd. 29.22 - Guangdong Dong Fang Uptodate& Special Medicines Co., Ltd. 18.72 - Sinopharm Holding Yangzhou Co., Ltd. 13.33 - Sinopharm Holding Guoda Pharmacy Co., Ltd. 12.92 - Sinopharm Guoda Drug Store Guangxi Chain Co., Ltd. 9.47 9.47 Sinopharm Holding Beijing Co., Ltd. 9.18 - Hetian Region Ankang Chain 6.31 - Drugstore Co., Ltd.
Sinopharm Holding Longyan Co., Ltd. 5.95 - Sinopharm Holding Anhui Co., Ltd. 4.43 - Sinopharm Holding Shanxi Co., Ltd. 3.83 - Sinopharm Holding Wenzhou Co., Ltd. 3.40 - Sinopharm Holding Suzhou Co., Ltd. 3.22 - Sinopharm Holding ChiFeng Co., Ltd. 3.04 - Sinopharm Holding Sub Marketing Center Co., Ltd. 2.47 - Sinopharm Holding Jilin Co., Ltd. 1.65 - Sinopharm Holding Shandong Co., Ltd. 1.63 - Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd. 1.26 - Sinopharm Holding Zhejiang Co., Ltd. 1.17 - Sinopharm Holding Xuzhou Co., Ltd. 1.15 - Sinopharm Holding Gansu Co., Ltd. 1.10 0.04 Sinopharm Holding Tianjin Co., Ltd. 0.86 - Sinopharm Holding Jiangsu Co., Ltd. 0.48 - Sinopharm Holding Heilongjiang Co., Ltd. 0.19 - Sichuan Zhongwei Pharmaceutical Co. Ltd. 0.18 - Sinopharm Holding Chongqing Co., Ltd. 0.08 - Sinopharm Holding Zhejiang Biological Product Co., Ltd. 0.05 - Sinopharm Sichuan Pharmaceutical Co., Ltd. 0.01 - Sinopharm Holding Fujian Co., Ltd. - 2.58 Sinopharm Holding Zhangzhou Co., Ltd. - 0.53 Sinopharm Holding Beijing Huahong Co., Ltd. - 0.10 Sinopharm Holding Changzhou Medical logistics center Co., Ltd. - 0.10 Sinopharm (Shanghai) E-Health Co,.Ltd. - 0.08 Wanle Medical - 0.01 168.21 12.91
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(6) Accounts receivable from and payables to related parties (continued)
31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Interests payable CNPGC 5.21 - Sinopharm Group - 68.44 Group Financial Co. - 52.80 5.21 121.24 31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Entrusted loans Sinopharm Group - 40,000.00 31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Other
non-current
liabilities Sinopharm Group 3,506.18 3,506.18 31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Short-term loans Group Financial Co. - 32,000.00 31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Cash at related
party Group Financial Co. 22.84 27.28 (7) Commitment with related parties
Undertaking contracted for at the balance sheet date but not recognised in balance sheet are anaylsed as follows: 31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Lease
-As a lessee
Shaoguan Wujiang Distrct Muyang Consulting Co., 640.52 194.42 Ltd.
Foshan Nanhai Medicine Co., Ltd. 3.70 25.87 644.22 220.29
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
VIII Related party relationships and significant related partytransactions (continued)
(7) Commitment with related parties (continued)
31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Lease
-As a leaser
Sinopharm Guoda Drug Store Guangxi Chain Co., Ltd. 275.25 333.88 Sinopharm Holding Guoda Drug Store Guangzhou Chain Co.,
Ltd. 54.03 - Sinopharm Group Guangdong Medicine Device Co., Ltd. 28.38 55.41 Sinopharm Guoda Drug Store(Shenzhen) Chain Co., Ltd. 10.25 25.90 Sinopharm Guoda Drug Store Co., Ltd. - 75.75 367.91 490.94 Guarantee
- Guaranteed by related party
Sinopharm Group 10,024.25 8,346.80 IX Contingencies
As at 31 December 2014, the Group has no
contingency.
X Commitments
(1) Capital commitments
Capital expenditures contracted for at the balance sheet date but not recognised in balance sheet are analysed as follows: 31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Buildings, machinery and equipment
14,228.32 21,398.14
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
X Commitments (continued)
(2) Operating lease commitments
The future minimum lease payments due under the signed irrevocable operating leases contracts are summarised as follows:
31 December 2014 31 December 2013(RMB’0,000) (RMB’0,000) Within one year
2,446.33
2,272.32 Between 1 and 2 years
2,407.97
2,120.22 Between 2 and 3 years
2,364.04
2,148.15 Over 3 years 16,372.28 15,782.29 23,590.62 22,322.98 XI Subsequent events after the balance sheet date
(1) Profit appropriation after the balance sheet date
Amount Proposed dividends (Note a) 72,526,388.60 (a) In accordance with the resolution at the Board ofDirectors’ meeting dated on 20 March 2015, Board of Directors proposed a dividend in the amount of RMB72,526,388.60 to the shareholders, which is not recorded as liability in the financial statements for the current year (Note IV(36)(b)).
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
XII Financial instrument and risk
The Group's activities expose it to a variety of financial risks: market risk (primarily foreign exchange risk and interest rate risk), credit risk and liquidity risk. The Group's overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group's financial performance.
(1) Market risk
(a) Foreign exchange risk
TheGroup’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, and future transactions denominated in foreign currencies, primarily with respect to US dollars. TheGroup’s finance department at its headquarters is responsible for monitoring the amount of assets and liabilities, and transactions denominated in foreign currencies. The Group may consider entering into forward exchange contracts or currency swap contracts to mitigate the foreign exchange risk. During 2014 and 2013, the Group did not enter into any forward exchange contracts or currency swap contracts.
The following table presents the structure analysis of theGroup’s financial assets and financial liabilities by currencies as at 31 December 2014 and 31 December 2013.
31 December 2014
USD Others Total Financial assets denominated in
foreign currency -
Accounts receivables 29,407,863.98 2,225,703.43 31,633,567.41 Financial assets denominated in
foreign currency -
Accounts payables 9,628,124.12 - 9,628,124.12 31 December 2013
USD Others Total Financial assets denominated in
foreign currency -
Cash at bank and on hand 134.32 - 134.32 Accounts receivables 15,235,271.67 487,635.45 15,722,907.12 15,235,405.99 487,635.45 15,723,041.44 Financial assets denominated in
foreign currency -
Accounts payables 6,252,017.33 - 6,252,017.33 As at 31 December 2014, if the currency had weakened/strengthened by 5% against the USD while all other variables had been held constant, theGroup’s net profit for the year would have been approximately RMB741,740.24 (2013: RMB336,877.07) lower/higher for various financial assets and liabilities denominated in USD.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
XII Financial instrument and risk (continued)
(1) Market risk (continued)
(b) Interest rate risk
The Group's interest rate risk arises from long-term borrowings from bank. 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 2014, theGroup’s long-term interest bearing borrowings are mainly denominated in RMB with floating interest rate in amount of RMB39,695,448.00 (31 December 2013: N/A).
Increases in interest rates will increase the cost of new borrowing and the interest expenses with respect to theGroup’s outstanding floating rate borrowings, and therefore could have a material adverse effect on theGroup’s financial position. TheGroup’s finance department at its headquarters continuously monitors the interest rate position of the Group and makes decisions with reference to the latest market conditions. The Group may enter into interest rate swap agreements to mitigate its exposure to interest rate risk. During 2014 and 2013, the Group did not enter into any interest rate swap agreements. For the year ended 31 December 2014, if interest rates on the floating rate long-term borrowings amounted to RMB39,695,448.00 had been5% higher/lower while all other variables had been held constant, theGroup’s net profit will decrease/increase RMB148,857.93(2013: N/A).
(2) Credit risk
Credit risk is managed on a Group basis. Credit risk mainly arises from cash at bank and on hand, accounts receivable, other receivables, notes receivable etc.
The Group expects that there is no significant credit risk associated with cash at bank since they are deposited at state-owned banks and other medium or large size listed banks. Management does not expect that there will be any significant losses from non-performance by these counterparties.
In addition, the Group has policies to limit the credit exposure on accounts receivable, other receivables and notes receivable. The Group assesses the credit quality of and sets credit limits on its customers by taking into account their financial position, the availability of guarantee from third parties, their credit history and other factors such as current market conditions. The Group will confirm with its client for the accouts receivable semi-annually, and assess the recoverability of each account receivable, by using individual evaluation and similar credit rist group method. The credit history of the customers is regularly monitored by the Group. In respect of customers with a poor credit history, the Group will use written payment reminders, or shorten or cancel credit periods, to ensure the overall credit risk of the Group is limited to a controllable extent.
(3) Liquidity risk
Cash flow forecasting is performed by each subsidiary of the Group and aggregated by theGroup’s finance department in its headquarters. TheGroup’s finance department at its headquarters monitors rolling forecasts of the Group's short-term and long-term liquidity requirements to ensure it has sufficient cash and securities that are readily convertible to cash to meet operational needs, while maintaining sufficient headroom on its undrawn committed borrowing facilities from major financial institution so that the Group does not breach borrowing limits or covenants on any of its borrowing facilities to meet the short-term and long-term liquidity requirements.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
XII Financial instrument and risk (continued)
(3) Liquidity risk (continued)
The financial liabilities of the Group at the balance sheet date are analysed by their maturity date below at their undiscounted contractual cash flows :
31 December 2014
Within 1year 1 to 2 years 2 to 5 years Over 5 years Total Short-term
loans 1,551,280,483.49 - - - 1,551,280,483.49 Notes payable 1,468,166,640.64 - - - 1,468,166,640.64 Accounts
payable 3,988,878,234.03 - - - 3,988,878,234.03 Interests
payable 6,666,712.19 - - - 6,666,712.19 Other payables 412,347,201.51 - - - 412,347,201.51 Long-term
loans 2,146,681.36 2,146,681.36 33,861,821.86 9,379,925.75 47,535,110.33 7,429,485,953.22 2,146,681.36 33,861,821.86 9,379,925.75 7,474,874,382.19 31 December 2013
Within 1year 1 to 2 years 2 to 5 years Over 5 years Total Short-term
loans 2,788,010,131.81 - - - 2,788,010,131.81 Notes payable 1,495,401,188.09 - - - 1,495,401,188.09 Accounts
payable 3,436,936,497.16 - - - 3,436,936,497.16 Interests
payable 13,065,850.14 - - - 13,065,850.14 Other payables 496,102,247.39 - - - 496,102,247.39 8,229,515,914.59 - - - 8,229,515,914.59 XIII Estimation of Fair Value
Financial assets and liabilities not measured at fair value mainly represent receivables, short-term loans, payables and long-term loans. The carrying amount of financial assets and liabilities not measured at fair value is a reasonable approximation of their fair value.
XIV Capital management
TheCompany’s primary objective when managing capital is to ensure that it maintains a strong credit rating and healthy capital ratio in order to support its business, maximizeshareholders’ value and benefit related parties. Management also aims to maintain a capital structure that ensures lowest cost of capital available to the entity.
Management is adjusting the capital structure through adjusting dividend payements to shareholders, return capital to shareholders, issue new shares or sell assets to reduce debts.
TheCompany’s total capital is the totalowners’equity in balance sheet. The Company does not adopt assets ratio as a compulsory factor to govern capital investment.
Assets ratio as at 31 December 2014 and 31 December 2013 are as follows:
31 December 2014 31 December 2013 Assets ratio (Note a) 62.19% 79.05% (a) The assers ration is calculated as the year end total liabilities divided by the total assets.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
XV Notes to the main items of financial statement of the Company
(1) Accounts receivable
31 December 2014 31 December 2013 Accounts receivable
513,791,982.48 428,545,652.48 Less: provision for bad debts - (1,169,085.93) 513,791,982.48 427,376,566.55 (a) The ageing of accounts receivable is analysed below:
31 December 2014 31 December 2013 Within 1 year 513,791,982.48 427,376,566.55 Over 3 years - 1,169,085.93 513,791,982.48 428,545,652.48 (b) The accounts receivable and related provision for bad debts by category are analysed below:
31 December 2014 31 December 2013
Carrying amount Bad debt provisions Carrying amount Bad debt provisions% of total % of total
amount balance amount rate amount balance amount rate Receivable
accounts within
similar credit
risk group 513,791,982.48100.00% - - 427,376,566.55 99.73% - - Individually not
significant but
individually
evaluated for
impairment - - - - 1,169,085.93 0.27% (1,169,085.93)100.00% 513,791,982.48100.00% - - 428,545,652.48100.00% (1,169,085.93) 0.27% (c) As at 31 December 2014, there is no accounts receivable individually not significant but individually evaluated for impairment.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
XV Notes to the main items of financial statement of the Company (continued)
(1) Accounts receivable (continued)
(d) As at 31 December 2014, the accumulated top five accounts receivable by customer are analysed as below:
% of the total accounts Amount Ageing receivable Accumulated top five accounts
receivable 148,196,050.11 - 28.84% (e) In 2014, accounts receivable of RMB238,547,898.31 are derecognised given that irrevocable factoring contracts agreed with financial institute (2013: RMB261,331,421.64).
(2) Other receivables
31 December 2014 31 December 2013 Amounts due from subsidiaries 1,107,496,851.78 1,156,486,010.97 Receivable from equity transaction 8,980,000.00 8,980,000.00 Deposit 1,371,849.80 979,997.96 Others 3,754,429.48 4,222,309.36 1,121,603,131.06 1,170,668,318.29 Less: provision for bad debts (10,179,321.30) (10,140,380.00) 1,111,423,809.76 1,160,527,938.29
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
XV Notes to the main items of financial statement of the Company (continued)
(2) Other receivables (continued)
(a) The aging of other receivables is analysed as follows:
31 December 2014 31 December 2013 Within 1 year 1,110,636,045.00 1,160,480,058.29 1 to 2 years 829,226.06 50,400.00 2 to 3 years - - Over 3 years 10,137,860.00 10,137,860.00 1,121,603,131.06 1,170,668,318.29 (b) Other receivables and related provision for bad debts by category are analysed below:
31 December 2014 31 December 2013 Carrying amount Bad debt provision Carrying amount Bad debt provision% of total % of total
amount amount amount rate amount amount amount rate Individually
significant are
subject to
separate
impairment
assessment 8,980,000.00 0.80% (8,980,000.00)100.00% 8,980,000.00 0.77% (8,980,000.00)100.00% Receivable accounts
within similar
credit risk group 1,111,465,271.0699.10% (41,461.30) 0.00% 1,160,530,458.29 99.13% (2,520.00) 0.00% Individually not
significant but
individually
evaluated for
impairment 1,157,860.00 0.10% (1,157,860.00)100.00% 1,157,860.00 0.10% (1,157,860.00)100.00% 1,121,603,131.06100.00% (10,179,321.30) 0.91% 1,170,668,318.29100.00% (10,140,380.00) 0.87% (c) As at 31 December 2014, impairment provision for other receivables individually significant is analysed as below. Bad debt
Amount provision Rate Assessment for impairment Shenzhen Yinghai Technology
Investment Co., Ltd. 8,980,000.00 (8,980,000.00) 100.00% Uncertainty in recoverbility (d) Provisions for impairment of the receivables which have a similar risk group are analysed below:
31 December 2014 31 December 2013 Carrying amount Bad debt provision Carrying amount Bad debt provision amount amount rate amount amount rate Within 1 year 1,110,636,045.00 - - 1,160,480,058.29 - - 1 to 2 years 829,226.06 41,461.30 5.00% 50,400.00 (2,520.00) 5.00% 2 to 3 years - - - - - - 1,111,465,271.06 41,461.30 0.00% 1,160,530,458.29 (2,520.00) 0.00%
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
XV Notes to the main items of financial statement of the Company (continued)
(2) Other receivables (continued)
(e) As at 31 December 2014, the accumulated top five other receivables by customer are analysed as below:
% of the total Bad debt Nature Amount Aging other receivable provision Entrusted
Sinopharm Yuexing borrowings 167,700,000.00 Within 1 year 14.95% - Entrusted
Suzhou Zhijun borrowings 108,149,000.00 Within 1 year 9.64% - Entrusted
Sinopharm Zhanjiang borrowings 93,000,000.00 Within 1 year 8.29% - Entrusted
Zhijun Medicine borrowings 90,360,000.00 Within 1 year 8.06% - Entrusted
Guangxi Logistics borrowings 88,840,000.00 Within 1 year 7.92% - 548,049,000.00 48.86% - (3) Long-term equity investments
31 December 2014 31 December 2013 Investments in subsidiaries (Note a)
2,735,399,494.38 1,447,999,494.38 Investments in associates (Note b)
157,604,846.85 135,341,010.52 2,893,004,341.23 1,583,340,504.90 Less: provision for impairment of long-term
equity investments (121,000,000.00) - 2,772,004,341.23 1,583,340,504.90 The long-term equity investments of the Company are not subject to restriction on conversion into cash.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
XV Notes to the main items of financial statement of the Company (continued)
(3) Long-term equity investments(continued)
(a) Subsidiaries
Original investment Increases Provision for Equity interest Voting rights held cost 31 December 2013 in investment cost impairment 31 December 2014 Impairment held(%) (%) Zhijun Medicine 73,903,284.87 204,903,284.87 - - 204,903,284.87 - 100 100 Sinopharm Jianming 45,054,911.04 45,054,911.04 15,000,000.00 - 60,054,911.04 - 100 100 Sinopharm Shenzhen
Material 5,400,000.00 6,450,875.93 9,000,000.00 - 15,450,875.93 - 100 100 Shenzhen Logistics 900,000.00 1,019,062.68 4,000,000.00 - 5,019,062.68 - 100 100 Sinopharm Guangzhou 58,283,114.68 435,440,323.63 600,000,000.00 - 1,035,440,323.63 - 100 100 Zhijun Medicine 3,006,866.42 3,006,866.42 8,110,000.00 - 11,116,866.42 - 100 100 Sinopharm Hengxing 8,421,544.08 35,763,288.00 10,000,000.00 - 45,763,288.00 - 100 100 Sinopharm Liuzhou 21,407,965.79 21,407,965.79 - - 21,407,965.79 - 51 51 Sinopharm Dongguan 2,742,000.00 9,942,000.00 8,000,000.00 - 17,942,000.00 - 100 100 Huixin Investment 109,416,937.72 64,416,937.72 - - 64,416,937.72 - 100 100 Guangdong
Logistics 1,269,502.30 5,596,006.21 5,000,000.00 - 10,596,006.21 - 100 100 Sinopharm Yuexing 16,459,326.27 43,459,326.27 70,000,000.00 - 113,459,326.27 - 100 100 Sinopharm Foshan 6,995,065.51 14,995,065.51 5,000,000.00 - 19,995,065.51 - 100 100 Suzhou Zhijun 134,250,000.00 265,900,000.00 - (121,000,000.00) 144,900,000.00 (121,000,000.00) 100 100 Sinopharm Guangxi 33,048,985.28 104,048,985.28 400,000,000.00 - 504,048,985.28 - 100 100 Sinopharm Zhanjiang 1,369,864.65 15,769,864.65 55,000,000.00 - 70,769,864.65 - 100 100 Sinopharm Yanfeng 38,207,800.00 38,207,800.00 - - 38,207,800.00 - 51 51 Sinopharm Meizhou 4,481,900.00 4,481,900.00 16,800,000.00 - 21,281,900.00 - 100 100 Sinopharm Shenzhen
Medicine 37,850,830.38 37,850,830.38 - - 37,850,830.38 - 100 100 Sinopharm Huizhou 20,939,177.19 5,644,200.00 11,000,000.00 - 16,644,200.00 - 100 100 Sinopharm Zhaoqing 5,060,000.00 5,060,000.00 13,000,000.00 - 18,060,000.00 - 100 100 Sinopharm Jiangmen 56,000,000.00 56,000,000.00 50,000,000.00 - 106,000,000.00 - 100 100 Sinopharm Zhongshan 10,000,000.00 10,000,000.00 - - 10,000,000.00 - 100 100 Sinopharm Shaoguan 13,580,000.00 13,580,000.00 - - 13,580,000.00 - 70 70 Sinopharm Shantou 7,490,000.00 - 7,490,000.00 - 7,490,000.00 - 100 100 1,447,999,494.38 1,287,400,000.00 (121,000,000.00) 2,614,399,494.38 (121,000,000.00)
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
(i)
XV Notes to the main items of financial statement of the Company (continued)
(3) Long-term equity investments (continued)
(b) Associates
Movement
Explanation for the inconsistence between Share of Equity interest Voting rights held equity interest held and 31 December 2013 profit or loss Dividend declared 31 December 2014 Impairment held(%) (%) voting rights held Board of the directors is the highest decision making organization, which is formed by 2 shareholders of Wanle Wanle Medical 135,341,010.52 50,415,836.33 (28,152,000.00) 157,604,846.85 - 35.19 33.33 Medical evenly
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Notes to financial statements
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
XV Notes to the main items of financial statement of the Company (continued)
(4) Sales and cost of sales
Year 2014 Year 2013 Revenue of main operations 2,768,601,035.27 2,508,735,021.86 Other operating income 10,357,435.05 9,651,550.95 2,778,958,470.32 2,518,386,572.81 Year 2014 Year 2013 Cost of main operations (2,656,710,908.84) (2,405,330,439.13) Other operating expenses (4,480,142.22) (4,501,782.42) (2,661,191,051.06) (2,409,832,221.55) (a) Other operating income and expenses
Year 2014 Year 2013
Other operating income Other operating Other operating Other operating expenses income expenses Rental income 6,538,716.62 (1,787,750.50) 5,597,637.54 (1,433,573.12) Rendering of services
3,818,718.43 (2,692,391.72) 4,053,913.41 (3,068,209.30) 10,357,435.05 (4,480,142.22) 9,651,550.95 (4,501,782.42) (5) Investment income
Year 2014 Year 2013 Gain on long-term equity investment under cost method 476,869,119.31 389,837,321.36 Gain on long-term equity investment under equity method 50,415,836.33 42,473,165.02 Gain on disposal of long-term equity investment - 6,180.28 527,284,955.64 432,316,666.66 There is no major restriction on the collection of the gain on investment.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Supplementary information
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
I Non-routine items
Year 2014 Year 2013 Gains on disposal of non-current assets 2,262,989.96 3,029,150.67 Government grants related to income 31,534,869.05 23,465,438.42 Receivables impairment reversal by individual assessment 3,518,118.71 1,672,973.37 Non-operating income recognised due to reversal of outstanding
legal issue 11,786,275.78
Non-operating expenses recognised due to provision of outstanding
legal issue - (22,040,000.00) Entrusted management custody fee income 750,000.00 333,333.33 Other non-operating income 4,330,285.60 12,163,911.72 54,182,539.10 18,624,807.51 Tax impact of above non-routine items (11,767,755.13) (3,851,467.99) Share of minority interests of above non-routine items after tax (1,163,260.63) (113,934.95) 41,251,523.34 14,659,404.57 Basis of preparation for non-routine items
According to the “Information Disclosures Requirement Interpretation for Listed Companies No.1 - non-routine gain andloss[2008]”, non-routine gain and loss represent those gain or loss that are not related to the daily operation of the Group or even if being related to the daily operation, separate disclosure of these items will help a better understanding of results and profitability of theGroup’s operation by considering their nature and frequency.
II Return on equity and earnings per share
Weighted average return Earnings per share
on equity(%) Basic earnings per share Diluted earnings per share Year 2014 Year 2013 Year 2014 Year 2013 Year 2014 Year 2013 Consolidated net profit
attributable to the
shareholders of the Company 16.41% 26.00% 1.90 1.81 1.90 1.81 Consolidated net profit
attributable to the
shareholders of the
Company, excluding
non-routine items 15.45% 25.36% 1.78 1.76 1.78 1.76 III Supplementary documents of changes in related accounting policies
According to the accounting standards issued by the Ministry of Finance in 2014, the Group retrospectively restated 2013 annual financial statement (Note II(30)) as well as the consolidated and company balance sheet of 1 January 2013.
CHINA NATIONAL ACCORD MEDICINES CO., LTD.
Supplementary information
For the year ended 31 December 2014
(All amounts in Renminbi (RMB) unless otherwise stated)
Section XII. Documents available for Reference
1. Accounting Statement carrying the signatures and seals of the legal representative, financial chief and person in charge of accounting;
2. Original ofAuditors’ Report carrying the seals of Certified Public Accountants, and signatures and seals of the CPAs;
3. Originals of all the documents and notifications of the Company ever disclosed in the report period in Securities Times, China Securities Journal and Hong Kong Commercial Daily designated by CSRC; 4. Original of the Annual Report carrying the signature of the Chairman of the Board.
5. The Place Where the document placed: Office of Secretariat of the Board of Directors, Accord
Pharm Bldg., No. 15, Ba Gua Si Road, Futian District, Shenzhen.