China National Accord Medicines Corporation Ltd.
Semi-Annual Report 2018
August 2018
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.
Lin Zhaoxiong, Principal of the Company, Wei Pingxiao, person in charger of accounting works and Wang Ying, person in charge of accounting organ
(accounting principal) hereby confirm that the Financial Report of Semi -
Annual Report 2018 is authentic, accurate and complete.
All directors are attended the Board Meeting for report deliberation.
The Company plans not to pay cash dividends, bonus and carry out capitalizing of common reserves.
Contents
Section I Important Notice and Paraphrase .................................................................................... 1 Section II Company Profile and Main Financial Indexes .............................................................. 5 Section III Summary of Company Business .................................................................................. 8 Section IV Discussion and Analysis of Business ............................................................................ 12 Section V Important Events ............................................................................................................ 28 Section VI Changes in Shares and Shareholders .......................................................................... 49 Section VII Preferred Stock ............................................................................................................ 55 Section VIII Particulars about Directors, Supervisors and Senior Executives .......................... 55 Section IX Corporate Bonds ........................................................................................................... 56 Section X Financial Report ............................................................................................................. 57 Section XI Documents Available for Reference ........................................................................... 223
Paraphrase
||||
|-|-|-|
|Items|Refers to|Contents|
|Listed Company, Company, the Company,|||
||Refers to|China National Accord Medicines Corporation Ltd.|
|Sinopharm Accord, the Group|||
|Sinopharm|Refers to|China National Pharmaceutical Group Corporation|
|Sinopharm Holding|Refers to|Sinopharm Group Co., Ltd; Controlling shareholder of the Company|
|Company Law|Refers to|Company Law of the People’s Republic of China|
|Securities Law|Refers to|Securities Law of the People’s Republic of China|
|Yuan, 10 thousand Yuan, 100 million Yuan|Refers to|RMB, RMB 10 thousand, RMB 100 million|
|Terminology:|Refers to||
|||The first invoice refers to the invoice from the manufacturer to the|
|||distributor, and the second invoice refers to the invoice from the|
|Two Invoices System|Refers to|distributor to the medical service provider. By this way, circulation links|
|||have been greatly reduced and the number of distributors for each|
|||medicine category shall not exceed two.|
|||It is a kind of operation activity that the medical organization has|
|||medicine enterprise with strong management ability and larger risk|
|||appetites to operate and manage their drugstores in the form of contracts|
|||with payment, which has clearly stated the relationship of right and duty|
|Pharmacy Trust|Refers to|between hospitals and pharmacy owners and operators, ensuring|
|||preservation and appreciation of hospital and pharmacy property and|
|||creating a kind of management activity with considerable social benefit|
|||and economic benefit, under the condition that there is no change in the|
|||ownership of drugstores|
|GPO|Refers to|Group purchasing organizations|
|Direct selling|Refers to|A sales method of selling drug to the hospital directly|
|GSP certificate|Refers to|Good Supply Practice certificate|
|||That is CMS, and information system processing workflow &|
|Supply Chain Management|Refers to||
|||procurement, inventory & sales documents|
|Abbreviation:|Refers to||
|Sinopharm Holding Guangzhou|Refers to|Sinopharm Holding Guangzhou Co., Ltd.|
|Guoda Drugstore|Refers to|Sinopharm Holding Guoda Drugstore Co., Ltd.|
|Sinopharm Holding Guangxi|Refers to|Sinopharm Holding Guangxi Co., Ltd.|
|Foshan Nanhai|Refers to|Foshan Nanhai Pharmaceutical Group Co., Ltd.|

||||
|-|-|-|
|Southern Pharmaceutical Foreign Trade|Refers to|Guangdong Southern Pharmaceutical Foreign Trade Co., Ltd.|
|Zhijun Pharmaceutical|Refers to|China National Zhijun (Shenzhen) Pharmaceutical Co., Ltd.|
|Zhijun Pharmacy Trade|Refers to|Shenzhen Zhijun Pharmacy Trade Co., Ltd.|
|Pingshan Pharmaceutical|Refers to|China National Zhijun (Shenzhen) Pingshan Pharmaceutical Co., Ltd.|
|Main Luck Pharmaceuticals|Refers to|Shenzhen Main Luck Pharmaceuticals Inc.|

Section II Company Profile and Main Finnaical Indexes
I. Company profile
|||||
|-|-|-|-|
|Short form of the stock|Sinopharm Accord ; Accord B|Stock code|000028, 200028|
|Stock exchange for listing|Shenzhen Stock Exchange|||
|Name of the Company (in|国药集团一致药业股份有限公司|||
|Chinese)||||
|Short form of the Company||||
||国药一致|||
|(in Chinese)||||
|Foreign name of the Company||||
||China National Accord Medicines Corporation Ltd.|||
|(if applicable)||||
|Short form of foreign name of||||
||Sinopharm Accord|||
|the Company (if applicable)||||
|Legal representative|Lin Zhaoxiong|||

II. Person/Way to contact
||||
|-|-|-|
||Secretary of the Board|Representative of security affairs|
|Name|Chen Changbing|Wang Zhaoyu|
||Accord Pharm. Bldg., No. 15, Ba Gua Si|Accord Pharm. Bldg., No. 15, Ba Gua Si|
|Contact add.|Road, Futian District, Shenzhen,|Road, Futian District, Shenzhen,|
||Guangdong Province|Guangdong Province|
|Tel.|+(86)755 25875195|+(86)755 25875222|
|Fax.|+(86)755 25195435|+(86)755 25195435|
|E-mail|gyyzinvestor@sinopharm.com|gyyz0028@sinopharm.com|

III. Others
1. Way of contact
Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period or not
□ Applicable√ Not applicable
Registrations address, offices address and codes as well as website and email of the Company has no change in reporting period, found more details in Annual Report 2017
2. Information disclosure and preparation place
Whether information disclosure and preparation place changed in reporting period or not
□ Applicable√ Not applicable
The newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparation
place for semi-annual report have no change in reporting period, found more details in Annual Report 2017
IV. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data
□Yes√ No
|||||
|-|-|-|-|
||||Increase/decrease in this|
||Current period|Same period of last year||
||||report y-o-y|
|Operating revenue (RMB)|20,779,166,699.67|20,524,807,669.57|1.24%|
|Net profit attributable to shareholders of|641,727,034.93|556,125,318.19||
||||15.39%|
|the listed Company(RMB)||||
|Net profit attributable to shareholders of||||
|the listed Company after deducting non-|623,296,339.34|546,253,390.00|14.10%|
|recurring gains and losses(RMB)||||
|Net cash flow arising from operating|225,357,709.20|228,337,431.40||
||||-1.30%|
|activities(RMB)||||
|Basic earnings per share (RMB/Share)|1.50|1.30|15.38%|
|Diluted earnings per share (RMB/Share)|1.50|1.30|15.38%|
|Weighted average ROE|6.62%|6.41%|0.21%|
||||Increase/decrease in this|
||End of current period|End of last period|report-end over that of last|
||||period-end|
|Total assets (RMB)|24,013,015,677.32|22,343,643,527.77|7.47%|
|Net assets attributable to shareholder of|9,910,258,628.12|9,396,572,345.88||
||||5.47%|
|listed Company(RMB)||||

V. 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 both IAS (International Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable√ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under both foreign accounting rules and Chinese GAAP (Generally Accepted Accounting Principles)
VI. Items and amounts of extraordinary profit (gains)/loss
√ Applicable□ Not applicable
In RMB
||||
|-|-|-|
|Item|Amount|Note|
||4,254,942.60|The income from disposal ofintangible assets by subsidiarySinopharm Holding Guangxi|
|Gains/losses from the disposal of non-current asset (including the|||
|write-off that accrued for impairment of assets)|||

||||
|-|-|-|
|||Logistic Co., Ltd.|
|Governmental subsidy calculated into current gains and|11,938,416.85|The vary taxation subsidiary andfinancial incentive received in theperiod|
|losses(while closely related with the normal business of the|||
|Company, excluding the fixed-amount or fixed-proportion|||
|governmental subsidy according to the unified national standard)|||
||729.29|Income from acquisition ofsubsidiary Sinopharm HoldingGuangzhou Huadu Co., Ltd. inthe period|
|Investment costs while acquiring subsidiaries, joint ventures and|||
|associated enterprise, less than fair value of the identifiable net|||
|assets from invested enterprise which should be enjoined|||
||4,203,173.20|The bad debt provision ofreceivables which has accrualindependently of a prior year wascollected in the period|
|Reversal of impairment reserve for account receivable with|||
|separate impairment testing|||
|Gains/losses on entrusted loans|1,549,650.99||
|Other non-operating income and expenditure except for the|2,377,946.75||
|aforementioned items|||
|Less: impact on income tax|5,505,057.19||
|Influenced amount of minority shareholders’ equity (after tax)|389,106.90||
|Total|18,430,695.59|--|

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 III Summary of Company Business
I. Main businesses of the Company in the reporting period
Whether the Company needs to comply with the disclosure requirements of the particular industry
Reference disclosure
Retailing industry
The Company complies with the disclosure requirement of “Information Disclosure Guidelines for the Shenzhen Stock Exchange No. 8- Listing Company Engaged in Retailing Industry”
In the reporting period, the main business of Sinopharm Accord includes pharmaceutical distribution and pharmaceutical retail, specifically as follows:
(i) In the pharmaceutical distribution field, the Company continues to integrate the distribution and logistics business, deeply penetrates into the end markets, improves the multistep distribution network, creates intelligent supply chain, and devotes to become a provider for pharmaceutical and healthcare products and services with the strongest influence, the highest share, the most complete variety, the best service, and the fastest delivery in south district of China.
1. TheCompany’s pharmaceutical distribution business is established in Guangdong and Guangxi, the network construction of Guangdong and Guangxi has completed in 2013 with business extended to the county-level regions, furthermore, we speed up integration of the three tier companies in 2014. In year of 2015, the Company achieved an operation all over the network, the network has further expansion in first half of 2018, including 1785 A-grade hospitals, 3433 community-oriented primary cares and 1538 retail terminal clients.
2. Pharmaceutical distribution business has achieved the first scale in Guangdong and Guangxi and the leading position in market segment of Guangdong and Guangxi. In terms of traditional business, relying on the network layout of distribution, accelerated the optimization of terminal network construction, and ranked top 3 in the market competition of hospital direct marketing in 31 prefecture-level cities; in terms of logistics network construction, transformed from the traditional commercial trade services to the professional supply chain services, established the first third-party logistics in Guangdong and Guangxi.
3. While steadily developing the traditional business, the Company actively carried out innovative business: comprehensively carried out instrument business, adopted advanced supply chain management methods and modern technology, possessed professional medical supply chain companies, expanded 4D business, and created SPD core competitiveness; developed retail diagnosis and treatment business, complied with the general trend of separating pharmacies from medical institutions, integrated national retail resources, developed a variety of retail pharmacy models, and provided patients with professional, high-quality, convenient and affordable medicine, pharmacy and distribution services. By the first half of 2018, the Company has 51 types of pharmacies in social pharmacies, dispensaries at the grassroots level, pharmacies for chronic disease management, and drug stores. (ii) In the pharmaceutical retail field, Guoda Drugstore is a pharmaceutical retail enterprise that ranks the first in
the sales volume throughout the country, and is one of the few enterprises in China with national direct sales drug retail network. The retail chain network of Guoda Drugstore spreads over 19 provinces, autonomous regions and municipalities, covers nearly 70 large and medium-sized cities,.
By the end of first half of 2018, Guoda Drugstore has operated 4004 stores, covering 19 provinces, autonomous regions and municipalities, entering nearly 70 large and medium sized cities, which has formed a drugstore networks covering eastern and northern China, southern coastal cities, and gradually expanded into northeast, central plains and inland cities, the sales scale of which has exceeded 10 billions, ranking the first within industry. Guoda , the business of which were mainly relying on modern retail drugstores, has been putting great attention on the development of professional service system with medical resources as core competitiveness, building a group of stores with professional commercial activities, which are able to provide retails and therapy services that integrating medical service and health-care products sales and cooperate with hospitals; at the same time, the Company has been vigorously developing new business, exploring and expanding new sales channels, improving professional services, being dedicated to transit from a traditional medical retail into an innovative service enterprise. By means of conventional products retail management, improving major brands and exploring business cooperation with supplier, accelerating the establishment of DTP business and continuous health care service system, Guoda has built industry-leading professional service ability. Besides, the leading scale of Guoda is regarded as one of the core competitiveness, for the reason that the advantage in scale has reduced its procurement cost and enhanced its negotiation advantages.
II. Major changes in main assets
1. Major changes in main assets
|||
|-|-|
|Major assets|Note of major changes|
||Increased 106.1159 million Yuan over that of period-begin with 6.38% up, mainly|
|Equity assets||
||because the investment income from joint ventures increased|
||Decreased 1.6079 million Yuan over that of period-begin with 0.29% down, mainly due|
|Fixed assets||
||to the depreciation of fixed assets|
||Decreased 10.9347 million Yuan over that of period-begin with 3.36% down, mainly due|
|Intangible assets||
||to the amortization of intangible assets|
||Increased 7.8586 million Yuan over that of period-begin with 34.25% up, mainly due to|
|Construction in progress||
||the ERP system update from headquarter of Guoda Drugstore|

2. Main overseas assets
□ Applicable√ Not applicable
III. Core competitiveness analysis
Whether the Company needs to comply with the disclosure requirements of the particular industry
Reference disclosure
Retailing industry
As an enterprise with both wholesale and retail business, Sinopharm Accord has the following competitive advantages:
1. Strong network coverage and layout
Take the lead in scale and cover the countrywide retail network: Guoda Drugstore is a pharmaceutical retail enterprise with sales volume ranking first for five consecutive years throughout the country, established 28 regional chain enterprises, with retail network spreading over 19 provinces and municipalities and autonomous regions and covering nearly 70 cities.
Leading layout and complete distribution network in Guangdong and Guangxi: the Company has complete pharmaceutical distribution networks in Guangdong and Guangxi, which comprehensively cover the medical institutions above second grade and the large-scale chain drugstores in Guangdong and Guangxi, and provide drug distribution services for numerous drugstores, community health care service networks, clinics and the third terminals represented by new rural cooperative medical system. The Company is a leading provider of drug distribution and supply chain services in Southern China.
2. Abundant variety resources
Guoda Drugstore operates nearly 120,000 merchandises. With its relatively comprehensive purchasing network and years of experience in commodity management, Guoda Drugstore has established a merchandise system with wide coverage, high professionalization, and rich varieties.
In the pharmaceutical distribution, the Company has established extensive cooperative relations with thousands of domestic manufacturers and commercial enterprises and established stable business relationships with hundreds of import and joint venture manufacturers, and has rich variety resources.
3. Complete logistics and distribution system
Guoda Drugstore has a nationwide modern logistics and distribution system, and has established the logistics and distribution network covering all the stores throughout the country, including Shanghai National Logistics Center and 23 provincial and municipal distribution centers.
Accord distribution adopts supply chain management and warehouse management solutions system, it has built large-scale first-grade logistics centers in Guangzhou, Nanning, Shenzhen and other places and established distribution centers in Guangdong and Guangxi which has formed ladder logistics and distribution networks, it is the first enterprise in Guangdong and Guangxi that has achieved the third-party logistics qualification and has the professional pharmaceutical logistics capabilities with the largest scale, the most extensive network, and the most complete modes in southern China.
4. The advantages of medical insurance resources
Regarding medicine retails, the subsidiaries of Guoda Drugstore have featured generally higher medical insurance acquiring ability, with higher medical insurance sales ratio and steady operation.
5. The advantages of Compliance: the Company had a big lead under an increasingly stringent regulatory environment for the reason that it has kept emphasizing legalization and compliance in the process of operation and management.
6. Unique-influence Sinopharm brand
Brand of the Company and distribution, industry child-brand and controlling shareholder and 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.
Section IV. Discussion and Analysis of Business
1. Introduction
In the first half of 2018, Sinopharm Accord focused on a clear development strategy and clear goals, transformed both foreground and background, innovated together, and took serious measures to business landing, and made steady growth in business performance, and showed potential in business models.
(i) Performance completion in first half of 2018
Sinopharm Accord achieved a revenue from operation amounted as 20.779 billion Yuan with a y-o-y growth1.24%; the net profit attributable to parent Company comes to 642 million Yuan with15.39% up on a y-o-y basis. The pharmaceutical distribution has operation revenue of 15.879 billion Yuan with y-o-y growth of0.79%; net profit attributable to parent Company has 333 million Yuan with y-o-y growth of8.93%. As for the pharmaceutical retail, the Company gains 5.144 billion Yuan in operation revenue, a y-o-y growth of5.23% and the net profit attributable to parent Company amounted as 139 million Yuan, a40.66% up on a y-o-y basis. (ii) Analysis of policy environment
2018 is a year of domestic adjustment and increasing international pressure. On the one hand, the domestic economy has significant resilience characteristics; on the other hand, the advance of the US interest rate hike cycle has led to a tendency of shock upstream of global capital costs. The evolution of trade friction is accompanied by unexpected changes in the external environment, and financial deleverage and other complex external environment have brought more pressure in business operation.
1. Industry growth rate continued to slow down, and the trend of leading concentration ratio remained unchanged In the first quarter of 2018, the growth of drug distribution and sales increased by7.9%, a decline of0.5% on a year-on-year basis; the growth of drug retail and sales increased by9.1%, and an increase of0.1% on a year-on- year basis. The growth rate of large pharmaceutical wholesale enterprises slowed down noticeably, the main business income of top 100 wholesale enterprises increased by8.4% in 2017, a decline of5.6% on a year-on-year basis; the top 100 market share was70.7%, a decline of0.2% on a year-on-year basis; the market share of 4 leading enterprises was37.6%, a rise of 0.2% on a year-on-year basis.
2. The total number of medical institutions was expanding, and the process of rational allocation of medical resources was accelerating
Under the policy promoting, more than 19,000 new-level medical and health institutions have been added, and the growth rate of the number of medical treatments and inpatient number has far exceeded that of class hospitals, and the medical resources are constantly leaning toward the basic level.
(iii) The main work completed by the Company in the first half of 2018
1. Built new dynamic organizational capability and consolidated the foundation of transformation
In the first half of the year, the Company introduced the third-party organizations, initiated the research work at headquarters, distribution, and Guoda, and provided research basis for organizational optimization through research and analysis. Among them, distribution implemented the integration of departments and regions at different levels through organizational structure optimization and re-design, region penetrated deeply, and platform concentrated on profession; retail promoted the organizational structure design of Guoda so as to match with the business internationalization.
2. Integrated wholesale and retail, and dug deep into resource advantages
During the reporting period, theCompany’s catalogue management of wholesale and retail integration variety increased from 33 brands to 77 brands, and the number of articles increased from 255 to 430. Through the planning for wholesale and retail integration suppliers, seven suppliers were promoted to boost the wholesale and retail integration project, at the same time, further promoted the wholesale and retail cooperation project of Guoda Drugstore.
3. Implemented information technology projects, and strengthened new competence of technology
The Company attached great importance to the construction of IT talent team, increased recruitment efforts, comprehensively strengthened the “informatization” orientation, and established a matching performance incentive mechanism. During the reporting period, the Company optimized the basic management by information technology, created a dual information platform of “Hospital Supply Chain Management” and “Retail Professional Supply Chain Management”, and promoted the new business model through the integration of technology: (1) In terms of business flow, the retail direct sales mobile order APP popped up online; the self-owned pharmacy online prescription APP ensured the prescription to be undertaken; the settlement management completed the third-party payment platform and the medical insurance settlement docking of five regions; the first-level
inventory management of instrument consumables popped up online.
(2) In terms of logistics, the APP of Android version was developed, and the non-pharmaceutical system online implementing of six warehouses in Guangzhou, Foshan and Zhuhai were completed; the third-party logistics construction added six third-party cargo owners.
(3) In terms of the initial introduction of AI intelligence, the AGV machine site investigation has been completed, and the system flow and docking plan have been initially confirmed; the vending machine has been put into use in some areas and would be distributed in other parts of the country in succession; the unmanned pharmacy has completed the prototype test and would be put into operation as soon as possible.
4. Organized the full docking with Walgreens Boots Alliance, and the projects were implemented smoothly After many times of communication and combining the research on the market, the new term of board of directors of the joint-ventured Guoda Drugstore reached a consensus on the strategic planning for the next 3-5 years and formed specific strategic measures.
5. Distribution focused on four major directions, transformation and innovation for development
(1) Primary care:
The Company actively responded to the “two-vote system”, made overall plans, made variety planning, resource docking and channel merging; improved the supply chain efficiency by building invoice management system, procurement tax refund process optimization, multi-warehouse operation inventory management, etc.; in order to meet the business needs, the Company established standardized prepayment and cash deposit operation procedures to effectively control payment risks.
In response to the “GPO”, various regions and multiple channels actively proposed suggestions for the GPO program, and signed strategic cooperation framework agreements with Taishan, HeYuan, Maoming and other places; actively affected the variety catalogue of Foshan implementation plans, and strived to supplement the key varieties, improved the maximum match between the varieties and the implementation catalog; the GPOs in Shenzhen and Dongguan entered the implementation stage, and the Company maintained active communication and responded well.
The Company directly faced the pharmacy custody at various regions, actively participated in the bidding of various custody projects, strengthened the front-end business management, actively interpreted and responded to the bidding work, formulated the bidding tools, and formed the standardization process of the universal template+ customized solution; and insisted on the individualized response in the hospitals in trust, integrated the varieties and business resources, adjusted the cooperation models, and maintained the share and improved the gross profit. (2) Retail diagnosis and treatment:
During the reporting period, there were 51 retail clinics, including 10 ones newly established in Guangdong and two ones newly established in Guangxi in the first half of the year. Foshan Pharmacy and Foyi Pharmacy became the specific pharmacies in Foshan City. Shenzhen Pharmacy and Zhaoqing Pharmacy won the first batch of “Guangdong Provincial Demonstration Pharmacies”.
1) Integrated management synergy, and improved profitability
The Company continued to improve the pharmacy system process and standard operation, carried through the
foreground-background integrated management in the operation, procurement, information, quality management, logistics, and brand; refined and strengthened the daily operation management, carried out more than 60 audits in the first half of the year; the Company enriched the retail categories through commodity negotiations, reasonably planned the varieties on the basis of hospital nature and local disease spectrum, and created superior prescription categories.
2) All regions exerted their strength and innovated the cooperation methods
With the help of the “Internet+ Medical” project, the Company joined hands with Tencent and has signed the “Internet+ Smart Hospital” framework agreement with the three-level hospitals in Nanning, Baise and Guilin; Sinopharm Group Guangxi and Guangxi Fudi Finance Investment Group signed the “Healthy Baise” Project Cooperation Agreement, and opened a hospital pharmacy.
(3) Retail direct sales:
The B2B platform completed the background upgrade, and the online marketing terminal customers reached 789; docked to Guoda platform, integrated the marketing resources of Guoda, exported the standardized services, and carried out deep distribution projects to achieve full coverage of network sales.
(4) Instrument consumables:
All regions promoted in an all-round way, won the bidding of 10 medical projects, newly increased 4 SPD projects, and promoted the project landing of 3 hospitals in the province; promoted the deployment of 4D services, established the top three hospitals in the reagent business; and established a medical joint venture model for instrument maintenance service in Haizhu District; the disinfection supply business actively carried out business promotion and gradually put into supply.
6. Guoda Drugstore ensured stock and made increment, and elaborately operated new features
(1) Accelerated the distribution speed according to strategic deployment
As of the end of the reporting period, the total number of Guoda Drugstore reached 4,004, and accumulatively had a net increase of 169 stores in the first half of the year, including 163 direct-sale stores. The distribution points of advantageous areas were scattered, strengthened the regional management, formulated the implementation plan of the store transfer shop model, carried out help guidance on the spot, and grasped the local policies through analysis and continued to follow up. Guoda Drugstore pre-judged the policy changes and market trends, and increased the expansion speed of stores around hospitals. In the first half of the year, 29 new stores around hospitals were added, and there were totally 332 stores around hospitals as of the end of the reporting period. (2) Dug the potential benefits of stock stores and created specialized pharmacies with chronic diseases as the core 1) Optimized store management and managed the loss-making stores
Guoda Drugstore concerned and helped regional companies to improve their marketing capabilities, formulated assessment plans and budgets, gradually increased the proportion of high-margin sales, took measures to control retail prices, monitored the rationality of price adjustments and pricing and corrected errors, and carried out daily monitoring and maintenance to the prices of centralized purchasing varieties throughout the country.
2) Established records and set up warehouses, implemented chronic disease services and membership management
Guoda Drugstore focused on promoting chronic disease work in various regions, organized the preparation of pharmaceutical service manuals, and tried out the chronic disease learning cases at online platforms within 17 companies across the country, meanwhile, the DTP pharmacies upgraded the service models which is centering on patients.
(3) Implemented the integration strategy of wholesale and retail, and strengthened the fine management of merchandize purchase
Implemented the provincial-level platform construction of Guoda Drugstore step by step, docked the project of wholesale and retail integration, implemented the strategic requirements, completed the docking with manufacturers, and sought a new cooperation mode; carried through the fine management to merchandize purchase and sales, promoted the application planning guidebook and tapped the potential in inter-regional benchmarking; focused on the category inside, used the benchmarking method of same type of commodity to find the superior goods, and increased the sales quota of superior goods.
(4) Accelerate the exploration of e-commerce business new model
Guoda Drugstore has negotiated cooperation with a number of internet hospitals and reached a nationwide cooperation agreement with Yaofangyun. At present, the cooperation in Ningxia and Xiamen has already been implemented.
The Company is required to comply with the disclosure requirements of the Industry Information Disclosure Guide of the Shenzhen Stock Exchange No. 8 - Listed Companies Engaged in Retail-Related Businesses.
1. The entity business operations and the business condition of the stores during the reporting period:
As of the end of June 2018, Guoda had 2,965 direct-operated stores, with sales revenue of 4.04 billion Yuan, a year-on-year growth of10.6%, and the same stores had an increase of5.0% on a year-on-year basis, 1,039 franchise stores with distribution revenue of 580 million Yuan, an increase of9.7% on a year-on-year basis.
|||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|Region|||||Direct-sale|||||Franchised outlet||||
||||||store|||||||||
|||Numbersof thestore||Sales income(in 10 thousandYuan)||y-o-y||Numbersofthe store|||Dispatching|y-o-y||
||||||||||||income|||
||||||||||||(10 thousand|||
||||||||||||Yuan)|||
|North||1,369||209,772.98||13.52%||305||23,545.05||21.97%||
|EastChina||759||95,094.95||6.06%||580||27,203.89||0.48%||
|SouthChina||387||57,263.51||7.14%||60||4,264.78||8.86%||
|CentralChina||241||21,621.69||13.28%||94||2,736.92||17.43%||
|Northwest||209||21,043.89||10.18%||-||-||0.00%||
||Total||2,965||404,797.02||10.57%||1,039||57,750.64||9.73%|

South China: Guangdong, Guangxi;
Central China: Henan, Hunan;
Northwest: Ningxia, Xinjiang.
(1) Top 10 stores in sales
|||||||||
|-|-|-|-|-|-|-|-|
|Serial|Region|Name|Year forstartingbusiness|Operatingmode|Businessactivity|Actualoperatingarea (in M2)|Propertybelonging|
|1|TaiYuanShanxiProvince|Zhongli Branch|2002|Direct-sale|5+X|820.00|Rental|
|2|Hohhot InnerMongolia|Hohhot HQ|2003|Direct-sale|5+X|1,689.26|Rental|
|3|TaiYuanShanxiProvince|Er YuanBranch|2011|Direct-sale|5+X|600.00|Rental|
|4|ShenzhenGuangdongProvince|ShenzhenExhibitionHall|2006|Direct-sale|Modernpharmacy|260.00|Rental|
|5|ShijiazhuangHebei Province|Le Ren TangHQ|2010|Direct-sale|TCMdiagnosisshops|1,206.00|Rental|
|6|Beijing|JinxiangStore, Xidang|1997|Direct-sale|Modernpharmacy|773.16|Rental|
|7|ShijiazhuangHebei Province|KangningStore,Lerentang|2000|Direct-sale|TCMdiagnosisshops|280.00|Rental|
|8|YangzhouJiangsuProvince|BaiyulanStore, Jiangsu|1991|Direct-sale|Modernpharmacy|620.00|Rental|
|9|ShenzhenGuangdongProvince|ZhenxingStore|2002|Direct-sale|Modernpharmacy|200.00|Rental|
|10|ShenyangLiaoningProvince|ZhongjieStore|2002|Direct-sale|TCMdiagnosisshops|1,300.00|Rental|

(2) In first half of 2018, new 207 direct-sale shops are operates, and 44 shops closed with 163 shops net increased, the operating area has 27462 M2 icnreased, and has net increase of almost 200 million Yuan in sales
In M2
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|Region||Direct-sale store|||||Franchised outlet|||
|||Number of store||Total||Number of stores shut|Number of store||Number of stores shut|
|||increased||area||down|increased||down|
|North|108||15,206.60||-17||21|-2||
|East China|36||4,522.25||-13||6|-21||
|SouthChina|26||3,014.70||-5||7|-5||
|CentralChina|16||1,964.31||-5||13|-13||
|Northwest|21||2,754.46||-4||-|-||

|||||||
|-|-|-|-|-|-|
|Total|207|27,462.32|-44|47|-41|

2. In first half of 2018, online sales growth in a steady pace; totally 13 third party platform online one after another so far. Details are:
In 10 thousand Yuan
|||||||
|-|-|-|-|-|-|
||Cooperation platform||Trading Volume||Business revenue|
|T-Mall (Sinopharm On-line)||10,357.06||10,357.06||
|Yaofangwang (www.yaofangwang.com)||810.02||810.02||
|Yiyaowang (www.111.com.cn)||131.13||131.13||
|JD daojia (http://daojia.jd.com)||222.34||222.34||
|800FANG.CN(www.800pharm.com)||142.21||142.21||
|Meituan Waimai(waimai.meituan.com)||36.70||36.70||
|Yaopin Daojia||0.88||0.88||
|ele.me (www.ele.me/home)||67.90||67.90||
|Wanda E-business||1.80||1.80||
|Baidu takeout||13.53||13.53||
|BAHEAL Pharmaceutical Easy Referral||25.42||25.42||
|Other B2B E-business||648.03||648.03||
|We Chat Mall||89.52||89.52||
||Total||12,546.53||12,546.53|

 3. procurement, inventory and supplier from the headquarter: headquarter of the Company has total amount of 4.894 billion Yuan (tax included) for procurement for the first half of 2018, and inventory costs amounted as 960 million Yuan, details are:
In 10 thousand Yuan
||||||
|-|-|-|-|-|
||Category|Purchasing Amount (tax included)||Inventory cost|
|Health-care food||20,691|4,690||
|Convenience food||4,774|763||
|Kids||11,275|2,214||
|Gynecology||14,201|2,206||
|Liver and gall||7,869|1,439||
|Cold||10,031|2,324||
|Personal care||4,977|1,265||
|Orthopedics||16,893|4,895||
|Respiratory||16,942|3,398||
|Household conveniences||1,393|329||
|Family health products||17,834|4,633||
|Antipyretic analgesicss||4,106|695||
|Anti-infection||12,321|2,283||
|Anti-allergic||4,013|779||
|Temporary coding||818|212||
|Urination||10,221|2,248||
|Endocrine||16,970|3,092||

Other 117,208 8,970
||||||
|-|-|-|-|-|
|Clearing heat and detoxitating||16,043|3,357||
|Neurology||17,822|3,151||
|Drugs for external use||23,450|7,163||
|Vitamin-mineral||10,500|1,966||
|Five sense organs||15,252|3,383||
|Digestion||20,473|4,867||
|Heart brain||49,824|9,368||
|Chinese herbal pieces||20,283|4,837||
|Nourishing food||23,258|11,458||
||Total|489,441.54||95,981.09|

Top 5 suppliers:
In 10 thousand Yuan
|||||||||
|-|-|-|-|-|-|-|-|
||Ranks||Supplier||Procurement amount (tax included)||Purchase ratio|
|1||No. 1||8,577||12%||
|2||No. 2||6,727||9%||
|3||No. 3||5,808||8%||
|4||No. 4||5,134||7%||
|5||No. 5||4,672||6%||

4. Warehousing and logistics:
In the first half of 2018, logistics warehouses of Guoda Drugstore spread over 17 provinces, there were 27 large and small logistics warehouses and the total warehouse area was over 110,000 square meters. For the inventory management of Guoda Drugstore, the commodity department is responsible for monitoring the inventory dynamics of the headquarters and subsidiaries, and managing inventory on a monthly basis, providing inventory analysis and management reports, and giving suggestions on the optimization of inventory structure, while the operation department is responsible for the inventory turnover index of the monthly tracking business and providing business inventory assessment data, and the purchasing department is responsible for rational replenishment, ensuring smooth and stable supply channels, and effectively controlling the inventory turnover of commodity while ensuring the satisfaction rate of goods, and handling and resolving the dead stock and commodity with expiry date every month. .
In M2 (Square Metters)
|||||||
|-|-|-|-|-|-|
||Province||Reginal enterpreise||Warehouse area|
|Liaoning||Shenyang||14,200||
|Guangdong||GuangzhouShanzhenJiangmen||5,300||
|||||5,432||
|Shanxi||Shanxi WanminShanxi YiYuan||5,214||
|||||4,350||
|Jiangsu||DadeshengNanjing||4,840||

|||||
|-|-|-|-|
|||3,840||
|Fujian|Fujian|2,395||
||Quanzhou|1,100||
|Hebei|Hebei|3,772||
|Shandong|Shandong|5,800||
|Ningxia|Ningxia|3,330||
|Hunan|Hunan|3,353||
|Henan|Henan|3,500||
|Inner Mongolia|Inner Mongolia|1,870||
|Guangxi|Guangxi|1,950||
|Beijing|Beijing Guoda|4,943||
||Beijing Jinxiang|||
|Tianjin|Tianjin|1,700||
|Anhui|Anhui|1,000||
|Xinjiang|Xinjiang|3,842||
|Shanghai|Shanghai Fumei|20,000||
||Shanghai Guoda|||
||Hangzhou|1,000||
|Guoda HQ|HQ|8,000||
|Total|||112,531|

5. The commodity suppliers of Guoda Drugstore are mainly external suppliers, and also assisted by some Sinopharm affiliated enterprises and private brands. The sale for the first half of 2018 was as follows:
In 10 thousand Yuan
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Private brand||Property||Category||Turnover (tax included)||Ratio|
|1||Group-buying OEM||Health-care food||1,773||0.31%||
|2||Group-buying OEM||Kids||25||0.00%||
|3||Group-buying OEM||Gynecology||19||0.00%||
|4||Group-buying OEM||Cold||27||0.00%||
|5||Group-buying OEM||Personal care||23||0.00%||
|6||Group-buying OEM||Family health||1,754||0.30%||
|7||Group-buying OEM||Anti-infection||117||0.02%||
|8||Group-buying OEM||Anti-allergic&antidinic||35||0.01%||
|9||Group-buying OEM||Clearing heat and detoxitating||160||0.03%||
|10||Group-buying OEM||External use drugs||137||0.02%||
|11||Group-buying OEM||Five sense organs drugs||162||0.03%||
|12||Group-buying OEM||Chinese herbal pieces||1,515||0.26%||
|Total||||||5,745.35||0.99%||

 II. Main business analysis
Found more in I. Introduction in Discussion and Analysis of Business
Y-o-y changes of main financial data
In RMB
||||||
|-|-|-|-|-|
||Current period|Same period of last year|Y-o-y increase/decrease|Reasons for changes|
|Operating revenue|20,779,166,699.67|20,524,807,669.57|1.24%|No major changes|
|Operating costs|18,367,643,723.84|18,364,034,450.83|0.02%|No major changes|
|Sales expenses|1,273,588,756.07|1,110,446,938.17|14.69%|No major changes|
|Administration expenses|351,820,063.78|340,636,051.11|3.28%|No major changes|
|Finance expenses|57,541,544.32|44,498,778.76|29.31%|No major changes|
|Income tax expenses|164,486,734.32|160,041,107.63|2.78%|No major changes|
|R&D input|0.00|0.00|0.00%|No major changes|
|Net cash flow arising|225,357,709.20|228,337,431.40|||
||||-1.30%|No major changes|
|from operating activities|||||
||-18,211,602.74|-92,279,892.06||Increased 80.26% on a y-|
|||||o-y basis, mainly because|
|Net cash flow arising||||medical industry fund|
|from investment|||80.26%|subscription at same|
|activities||||period of last year while|
|||||no such amount occurred|
|||||in the period|
|Net cash flow arising|-288,243,874.04|-262,782,332.86|||
||||-9.69%|No major changes|
|from financing activities|||||
||-80,782,904.11|-126,724,793.52||Increased 36.25% on a y-|
|||||o-y basis, mainly because|
|Net increase of cash and||||the net cash flow arising|
||||36.25%||
|cash equivalent||||from investment|
|||||activities increased from|
|||||a year earlier|

Major changes on profit composition or profit resources in reporting period
□ Applicable√ Not applicable
No major changes on profit composition or profit resources occurred in reporting period.
Constitution of main business
In RMB
||||||||
|-|-|-|-|-|-|-|
|||||Increase or|Increase or|Increase or|
|||||decrease of|decrease of|decrease of gross|
||Operating||||||
|||Operating cost|Gross profit ratio|operating revenue|operating cost|profit ratio over|
||revenue||||||
|||||over same period|over same period|same period of|
|||||of last year|of last year|last year|
|According to industries|||||||
|Pharmaceutical|15,430,407,519.0|14,487,704,805.4|||||
||||6.11%|-0.69%|-1.53%|0.81%|
|wholesale|5|1|||||
|Pharmaceutical|||||||
||5,153,485,000.11|3,856,696,974.63|25.16%|6.99%|6.25%|0.52%|
|retail|||||||
|Logistics and|||||||
|warehousing|15,527,964.86|9,313,229.39|40.02%|14.36%|21.97%|-3.75%|
|services|||||||
|Leasing and other|179,746,215.65|13,928,714.41|92.25%|14.36%|3.54%|0.81%|
|According to products|||||||
||19,730,368,030.4|17,408,684,324.8|||||
|Drugs|||11.77%|0.61%|-1.34%|1.75%|
||2|8|||||
|Apparatus|922,013,116.87|864,692,352.96|6.22%|68.50%|70.15%|-0.91%|
|Other|126,785,552.38|94,267,046.00|25.65%|-65.39%|-55.16%|-16.97%|
|According to region|||||||
|Internal revenue|20,779,166,699.6|18,367,643,723.8|11.61%|1.24%|0.02%|1.08%|

|||
|-|-|
|7|4|

III. Analysis of non-main business
□ Applicable√ Not applicable
IV. Assets and liability
1. Major changes of assets composition
In RMB
||||||||
|-|-|-|-|-|-|-|
||End of current period||End of last period||||
||||||Ratio||
|||Ratio in total||Ratio in total||Notes of major changes|
||Amount||Amount||changes||
|||assets||assets|||
||3,943,595,560.58||4,191,655,438.||||
|Monetary fund||16.42%||18.76%|-2.34%|No major changes|
||||51||||
|Account|9,441,542,367.19||7,589,412,679.||||
|||39.32%||33.97%|5.35%|No major changes|
|receivable|||88||||
||4,245,354,625.22||3,781,858,238.||||
|Inventory||17.68%||16.93%|0.75%|No major changes|
||||12||||
|Investment|149,409,723.79||||||
|||0.62%|153,678,339.11|0.69%|-0.07%|No major changes|
|property|||||||
|Long-term equity|1,756,735,242.44||1,650,619,373.||||
|||7.32%||7.39%|-0.07%|No major changes|
|investment|||09||||
||550,102,564.29||||||
|Fix assets||2.29%|551,710,434.02|2.47%|-0.18%|No major changes|
|Construction in|30,805,874.11|||||Mainly due to the ERP system update|
|||0.13%|22,947,258.99|0.10%|0.03%||
|process||||||from Guoda Drugstore|
||2,051,139,651.67||1,561,354,521.|||Mainly by increase of short-term loans|
|Short-term loans||8.54%||6.99%|1.55%||
||||64|||of Holding Guangzhou|
|Long-term loans|31,600,000.00|0.13%|31,600,000.00|0.14%|-0.01%|No major changes|

2. Assets and liability measured by fair value
√Applicable□Not applicable
In RMB
|||||||||
|-|-|-|-|-|-|-|-|
|||Gain/loss of|Cumulative fair|||||
|||||Impairment|Amount|Amount for||
||Opening|changes in fair|value changes|||||
|Item||||accrual in the|purchased in|sold in the|Ending amount|
||amount|value in the|reckoned into|||||
|||||period|the period|period||
|||period|equity|||||
|Financial assets||||||||
|3. Financial||||||||
|assets available|13,685,760.00||||||13,685,760.00|
|for sale||||||||
|Total|13,685,760.00||||||13,685,760.00|
|Financial||||||||
||0.00||||||0.00|
|liability||||||||

Whether the main asset measurement attributes has major changes in the period
√Yes□No
Reasons for major changes in the measurement attributes of theCompany’s prime assets during the reporting
period and the impact on its operating results and financial status
According to the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement of Financial Instruments and the Accounting Standards for Business Enterprises No. 37 - Presentation of Financial Instruments, the board of directors of the Company decided to adopt the “financial assets measured at fair value through other comprehensive income ” to confirm this part of the assets.
This change had no impact on theCompany’s operating results and financial status.
3. Assets right restriction till end of reporting period
Nil
V. Investment
1. Overall situation
During the reporting period, the Company paid cash to acquire Sinopharm Holding Guangzhou Huadu Co., Ltd.(70% shareholding) to achieve the business mergers under non-identical control. The Company has newly established three-level subsidiaries, including Sinopharm Holding Foshan Supply Chain of Medical Consumables Co., Ltd.(70% shareholding), Sinopharm Holding Supplier Chain Service (Guangxi) Co., Ltd.(30.6% shareholding) and Sinopharm Holding Baiyi Drugstore Guangxi Co., Ltd.(51% shareholding), the Company also has newly established four-level subsidiary Shanghai Guoda Pharmacy Co., Ltd.(51% shareholding). For specific investment, please refer to Notes (VIII) of the financial report.
2. The major equity investment obtained in the reporting period
□ Applicable√ Not applicable
3. The major non-equity investment doing in the reporting period
□ Applicable√ Not applicable
4. Financial assets investment
(1) Securities investment
□ Applicable√ Not applicable
The Company had no securities investment in the reporting period.
(2) Derivative investment
□ Applicable√ Not applicable
The Company has no derivatives investment in the Period
VI. Sales of major assets and equity
1. Sales of major assets
□ Applicable√ Not applicable
There are no major assets sell in the period
2. Sales of major equity
□ Applicable√ Not applicable
VII. Analysis of main holding Company and stock-jointly companies
√Applicable□ Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over10%
In RMB
||||||||||
|-|-|-|-|-|-|-|-|-|
|Company|||Register|||Operating|Operating||
||Type|Main business||Total assets|Net Assets|||Net profit|
|name|||capital|||revenue|profit||
|||Retail and|||||||
|||distribution in|||||||
|||respect of|||||||
|Sinopharm|||||||||
|||pharmaceutical|||||||
|Holding|||||||||
||Subsidiar|products and|1,010,000,00|5,605,478,61|2,098,354,00|5,143,601,63|230,393,41||
|Guoda||||||||172,985,004.03|
||y|medical apparatus|0.00|8.09|6.83|6.87|7.53||
|Drugstore|||||||||
|||and instruments,|||||||
|Co., Ltd.|||||||||
|||wholesale and|||||||
|||retails of health|||||||
|||products|||||||
|||Chinese traditional|||||||
|||patent medicine,|||||||
|||chemical|||||||
|||preparations,|||||||
|||antibiotics, bio-|||||||
|||chemical|||||||
|||medicine,|||||||
|||biological|||||||
|||medicine,|||||||
|||diagnosis|||||||
|||medicine,|||||||
|Sinopharm|||||||||
|||biological|||||||
|Holding|Subsidiar||1,530,000,00|6,339,988,12|1,787,383,30|7,314,439,69|98,350,491||
|||medicine with||||||72,732,408.60|
|Guangzhou|y||0.00|3.82|9.36|7.76|.87||
|||features of|||||||
|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|||||||
|Sinopharm|Subsidiar|Sales of drugs,|500,000,000.|2,504,188,78|727,501,084.|2,076,759,81|76,022,896|65,903,710.92|

|||||||||
|-|-|-|-|-|-|-|-|
|Holding|y|medical apparatu|s 00|6.77|72|4.93|.58|
|Guangxi Co.,||and instruments|,,dssysrsrfs|||||
|Ltd.||freightage, storage||||||
|||loading an||||||
|||unloading, glas||||||
|||wares, cosmetic||||||
|||and dail||||||
|||merchandise;||||||
|||other busines||||||
|||services, othe||||||
|||professional||||||
|||consultation,||||||
|||various good||||||
|||agency and fo||||||
|||self-operation,||||||
|||import & export o||||||
|||technology, house||||||
|||leasing||||||

Particular about subsidiaries obtained or disposed in report period
√Applicable□ Not applicable
||||
|-|-|-|
||The method of obtaining and handling|The influence to the whole production and|
|Company|||
||subsidiaries during the report period|performance|
|||Expand local medicine retail business|
|Shanghai Guoda Pharmacy Co., Ltd.|Establishment|layout, and without major influence on|
|||performance of the Company|
|||Further expand the distribution business|
|Sinopharm Holding Foshan Supply Chain||for equipment consumables, and without|
||Establishment||
|of Medical Consumables Co., Ltd.||major influence on performance of the|
|||Company|
|||Further consolidated the pharmaceutical|
|Sinopharm Holding Guangzhou Huadu||distribution business in Guangxi &|
||Acquisition||
|Co., Ltd.||Guangdong and without major influence|
|||on performance of the Company|
|||Further expand distribution business and|
|Sinopharm Holding Supplier Chain Sercice|||
||Establishment|without major influence on performance of|
|(Guangxi) Co., Ltd.|||
|||the Company|
|||Expand local medicine retail business|
|Sinopharm Holding Baiyi Drugstore|||
||Establishment|layout, and without major influence on|
|Guangxi Co., Ltd.|||
|||performance of the Company|
|||Compressed the management hierarchy|
|Tangshan Le Ren Tang Drugstore Chain|||
||De-registration|and without major influence on|
|Co., Ltd.|||
|||performance of the Company|

Notes of main holding Company and stock-jointly companies
VIII. Structured vehicle controlled by the Company
□ Applicable√ Not applicable
IX. Prediction of business performance from January– September 2018
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
X. Risks and countermeasures
1. The management risks in sustainable expansion of marketing network of Guoda Drugstore
The marketing network of Guoda Drugstore has maintained stable growth trend in recent years through newly opened stores and extended mergers. The expansion of sales area and increase of stores have brought pressure on the site selection, distribution, cash management, marketing and human resource management of the stores of Guoda Drugstore. The Company will strengthen the management and construction in merchandise procurement, logistics and distribution, marketing and other links and establish corresponding management methods for each link so as to ensure the unified standards and management quality for store expansion.
2. Risks of intensifying market competition
At present, the market concentration ratio of domestic pharmaceutical retail market industry is relatively low, and the national and regional pharmaceutical retail enterprises have fierce market competition. As the country continues to introduce corresponding policies to encourage the integration of pharmaceutical retail industry, the major pharmaceutical retail enterprises in the industry have accelerated the pace of mergers and acquisitions, and continued to expand the marketing networks, improve the logistics center constructions, and innovate the business and profit models so that the sales scale and comprehensive strength continuously strengthen. At the same time, with the upgrading of consumption and the gradual opening of market, the foreign pharmaceutical distribution enterprises with powerful strength are entering the domestic pharmaceutical distribution markets through a variety of ways, so the industry competition is further intensifying. Sinopharm Accord will integrate the existing resources, create a two-wheel drive development model with integration of both wholesale and retail, deeply give full play to synergistic effect, directly face the end patients and consumers by varieties complementation, capital cooperation, supply chain collaboration, internationalization promotion and other measures, and achieve brand globalization through capital operation.
3. Risks of changes in industry policy
The development of pharmaceutical retail industry is regulated and influenced by the relevant national policies. The state has promulgated a series of documents such as Good Supply Practice and Control System for Prescription Drug and Over-The-Counter Drug (Pilot), which put forward specific requirements to the industry operation. Along with the gradual increase of management standards for management standard, the regulations are constantly being revised and improved and put forward higher requirements to the business operations. In addition, since the promotion and implementation of the new medical reform in 2009, the state has implemented the essential medicine system, public hospital reform, and drug centralized procurement bidding system throughout the country, and repeatedly introduced policies to reduce the drug retail price ceiling in order to reduce the burden of drug use. If the policies introduced in the process of implementing new medical reform impose restrictions on the industrial development and the product price of retail drug stores, the operation and profitability of Guoda Drugstore may have to face some challenges.
4. Risks of facing the horizontal competition
In the pharmaceutical retail field, SinopharmGroup’s affiliated distribution subsidiaries have also opened some social retail pharmacies, which constitute a certain degree of horizontal competition with the subordinate Guoda Drugstore. Sinopharm Group and Sinopharm have pledged to take effective measures to resolve the possible horizontal competition.
5. Risk of goodwill impairments
On June 30, 2018, the book value of goodwill in theGroup’s consolidated financial statements was RMB 830,729,152.75 and was allocated to the asset groups of distribution branches and retail branches. The Group conducts impairment test on goodwill annually in accordance with the provisions of the Accounting Standards for Business Enterprises. Disclosures relating to the impairments of goodwill are set out in Notes V. 22 and 32 and Notes VII. 27 of the financial statements
Section V. Important Events
I. In the report period, the Company held annualshareholders’ general meeting and extraordinaryshareholders’ general meeting
1.Shareholders’ General Meeting in the report period
|||||||
|-|-|-|-|-|-|
|||Ratio of investor||||
|Session of meeting|Type||Date|Date of disclosure|Index of disclosure|
|||participation||||
|Annual GeneralMeeting of 2017|||||Juchao Website—|
||||||(http://www.cninfo.co|
||AGM|63.00%|2018-04-17|2018-04-18|m.cn) “Resolution|
||||||Notice of AGM of|
||||||2017 No.: 2018-32|
|First extraordinarygeneral meeting of2018|||||Juchao Website—|
||||||(http://www.cninfo.co|
||||||m.cn) “Resolution|
||Extraordinary|||||
|||62.98%|2018-06-15|2018-06-16|Notice of First|
||general meeting|||||
||||||extraordinary general|
||||||meeting of 2018 No.:|
||||||2018-29|

2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore□ Applicable√ Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
□ Applicable√ Not applicable
The Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either for the semi-annual year.
III. Commitments completed in Period and those without completed till end of the Period from actual controller, shareholders, related parties, purchaser and companies
√Applicable□ Not applicable
||||||||
|-|-|-|-|-|-|-|
|||Type of|||||
|Commitm||||Commitm|Commitm|Implement|
||Promise|commitme|Content of commitments||||
|ents||||ent date|ent term|ation|
|||nts|||||
|||Commitm|As a large pharmaceutical commercial enterprise whose business|||Normally|
|Commitments in|||involves pharmaceutical wholesale and retail, Sinopharm Holdingmay overlap with the Company in geographical segmentation||||
|report of|SinopharmGroup|ent ofshareholde|during its future business development. To avoid the potentialpeer competition brought by such geographical overlap,|2005-06-|Long-term|implement|
|acquisition||||21|effective||
|or equity|Co., Ltd|rs|Sinopharm Holding undertakes that, upon the transfer of shares of|||ing|
|change|||Sinopharm Holding Guangzhou it held to Accord Pharma, “1. itwill not newly-establish or broaden within Guangdong any||||
||||business operation that actually compete with that of Accord||||

||||||||
|-|-|-|-|-|-|-|
||||Pharma, or set up any new subsidiaries or subordinate enterprises||||
||||who engage in such business. 2. It will enter into business||||
||||delineation with Accord Pharma and Sinopharm Holding||||
||||Guangzhou, thereby giving the three parties clear geographical||||
||||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.”"||||
||||“Sinopharm Group and Sinopharm Foreign Trade made||||
||||commitments in the Report about China National Accord||||
||||Medicines Corporation Ltd. Purchasing Assets and Raising||||
||||Supporting Funds and Related Transactions by Asset Sale, Stock||||
||||Issuance and Cash Payment that the non-public offering of shares||||
||||of Sinopharm Accord obtained from this transaction shall not be||||
||||transferred within 36 months since the finish date of issuance and||||
||Sinopharm||||||
||Group||shall be unlocked after 36 months since the date of listing. Within||||
||Co.,||||||
||||6 months after the completion of this transaction, if the closing||||
||Ltd;China||||||
|||Commitm|||||
||National||price of the stock of Sinopharm Accord is less than the issue price|||Normally|
|||ent on||2016-05-|||
||Pharmace||||36 months|implement|
|||restricted|in continuous 20 trading days, or the closing price at the end of 6|31|||
||utical|||||ing|
|||shares|||||
||Foreign||months after the completion of this transaction is less than the||||
||Trade||||||
||||issue price, the lockup period of the stock of Sinopharm Group||||
||Corporatio||||||
||n||and Sinopharm Foreign Trade obtained from Sinopharm Accord||||
||||by this transaction will automatically prolong at least 6 months.||||
||||The shares derived from stock dividends allocation and capital||||
||||reserve increase transferring of Sinopharm Accord based on the||||
||||non-public offering of shares of Sinopharm Accord obtained by||||
|Commitm|||||||
||||this transaction should also abide by the above stock restricted||||
|ents in|||||||
|assets|||arrangements.”||||
|reorganiza|||||||
|tion|||"Ping An Asset Management Co., Ltd. made commitments in the||||
||||Report about China National Accord Medicines Corporation Ltd.||||
||||Purchasing Assets and Raising Supporting Funds and Related||||
||Ping’an||Transactions by Asset Sale, Stock Issuance and Cash Payment||||
|||Commitm|||||
||Assets||that the non-public offering of shares of Sinopharm Accord|||Normally|
|||ent on||2016-05-|||
||Managem||obtained from this transaction shall not be transferred within 36||36 months|implement|
|||restricted||31|||
||ent Co.,||months since the finish date of issuance and shall be unlocked|||ing|
|||shares|||||
||Ltd||after 36 months since the date of listing. After placement||||
||||completed, the shares of the listed Company increased due to||||
||||bonus shares and turning to increase capital should pursuit to the||||
||||restriction arrangement the above mentioned.||||
||||“Sinopharm Group made commitments in the Report about China||||
||||National Accord Medicines Corporation Ltd. Purchasing Assets||||
||||and Raising Supporting Funds and Related Transactions by Asset||||
||||Sale, Stock Issuance and Cash Payment that the 2016 annual net||||
|||Performan|profits of Foshan Nanhai, Guangdong Uptodate & Special||||
|||ce|Medicines and Guoda Drug Store should respectively be no less||||
||Sinopharm|commitme|than RMB 47,385,600.00, RMB 19,167,000.00, and RMB|||Normally|
|||nt and|98,466,100.00, while the 2017 annual net profits should|2016-05-|2018-12-||
||Group|||||implement|
|||compensat|respectively be no less than RMB 49,394,500.00, RMB|31|31||
||Co., Ltd|||||ing|
|||ion|20,209,700.00, and RMB 110,998,90.00, and the 2018 annual net||||
|||arrangeme|profits should respectively be no less than RMB 51,148,200.00,||||
|||nt|RMB 21,330,100.00, and RMB 131,275,500.00. Net profit refers||||
||||to the lower one between the after-tax net profit attributable to the||||
||||owners of parent Company planning to invest in the target||||
||||Company and the net profit attributable to the owners of parent||||
||||Company after deducting the non-recurring gains and losses. If||||

|||||||
|-|-|-|-|-|-|
|||the actual net profit of the target Company doesn’t reach the||||
|||committed net profit, Sinopharm Group will need to compensate||||
|||according to the stipulations of the "Profit Forecast Compensation||||
|||Agreement for the Stock Issuance and Assets Purchase.”||||
|||Sinopharm Foreign Trade made commitments in the Report about||||
|||China National Accord Medicines Corporation Ltd. Purchasing||||
|||Assets and Raising Supporting Funds and Related Transactions||||
|||by Asset Sale, Stock Issuance and Cash Payment that the 2016||||
|||annual net profits of Southern Pharmaceutical Foreign Trade||||
|China|Performan|||||
|||should be no less than RMB 39,880,700, while the 2017 annual||||
|National|ce|||||
|||net profits should be no less than RMB 47,323,200, and should||||
|Pharmace|commitme|||||
|||not less than RMB 55,364,600 in 2018. Net profit refers to the|||Normally|
|utical|nt and||2016-05-|2018-12-||
|||lower one between the after-tax net profit attributable to the|||implement|
|Foreign|compensat||31|31||
|||owners of parent Company planning to invest in the target|||ing|
|Trade|ion|||||
|||Company and the net profit attributable to the owners of parent||||
|Corporatio|arrangeme|||||
|||Company after deducting the non-recurring gains and losses. If||||
|n|nt|||||
|||the actual net profit of the Southern Pharmaceutical Foreign||||
|||Trade doesn’t reach the committed net profit, Sinopharm Foreign||||
|||Trade will need to compensate according to the stipulations of the||||
|||"Profit Forecast Compensation Agreement for the Stock Issuance||||
|||and Assets Purchase.”||||
|Fu||||||
|||“Fu Yuequn and other 10 natural person made commitments in||||
|Jiancheng;||||||
|||the Report about China National Accord Medicines Corporation||||
|Fu Yuequn||||||
|||Ltd. Purchasing Assets and Raising Supporting Funds and||||
|Gu||||||
|||Related Transactions by Asset Sale, Stock Issuance and Cash||||
|Chaoqun;||||||
|||Payment that the 2016 annual net profits of Southern||||
|Guo||||||
||Performan|Pharmaceutical Foreign Trade should be no less than RMB||||
|Shu’er;||||||
||ce|39,880,700, while the 2017 annual net profits should be no less||||
|Huang||||||
||commitme|than RMB 47,323,200, and should not less than RMB 55,364,600||||
|Qiufang;|||||Normally|
||nt and|in 2018. Net profit refers to the lower one between the after-tax|2016-05-|2018-12-||
|Li|||||implement|
||compensat|net profit attributable to the owners of parent Company planning|31|31||
|Hongbing;|||||ing|
||ion|to invest in the target Company and the net profit attributable to||||
|Liao Zhi;||||||
||arrangeme|the owners of parent Company after deducting the non-recurring||||
|Lin||||||
||nt|gains and losses. If the actual net profit of the Southern||||
|Wanqun;||||||
|||Pharmaceutical Foreign Trade doesn’t reach the committed net||||
|SunWei;||||||
|||profit, Fu Yuequn and other 10 natural person will need to||||
|Zhang||||||
|||compensate according to the stipulations of the "Profit Forecast||||
|Zhaohua;||||||
|||Compensation Agreement for the Stock Issuance and Assets||||
|Zhang||||||
|||Purchase.”||||
|Zhaotang||||||
|||“Sinopharm Accord made commitments in the Report about||||
|||China National Accord Medicines Corporation Ltd. Purchasing||||
|||Assets and Raising Supporting Funds and Related Transactions||||
|||by Asset Sale, Stock Issuance and Cash Payment that the net||||
|||profits attributable to the owners of parent Company after||||
|||deducting the non-recurring gains and losses committed by||||
|||Zhijun Pharmaceutical in 2016, 2017 and 2018 should be||||
|||respectively no less than RMB 222,671,700.00, RMB||||
||Performan|232,561,600.00, and RMB 241,878,700.00; the net profits||||
|China|ce|attributable to the owners of parent Company after deducting the||||
|||non-recurring gains and losses committed by Zhijun Pharmacy||||
|National|commitme|||||
|Accord|nt and|Trade in 2016, 2017 and 2018 should be respectively no less than|2016-05-|2018-12-|Normally|
|||RMB 2,379,600.00, RMB 2,335,100.00, and RMB 2,345,600.00;|||implement|
|Medicines|compensat||31|31||
|||the net profits attributable to the owners of parent Company after|||ing|
|Corporatio|ion|||||
|||deducting the non-recurring gains and losses committed by||||
|n Ltd.|arrangeme|||||
|||Pingshan Pharmaceutical in 2016, 2017 and 2018 should be||||
||nt|||||
|||respectively no less than RMB 39,716,300.00, RMB||||
|||43,033,500.00, and RMB 50,325,500.00. If the actual net profits||||
|||attributable to the owners of parent Company after deducting the||||
|||non-recurring gains and losses of Zhijun Pharmaceutical / Zhijun||||
|||Pharmacy Trade / Pingshan Pharmaceutical don’t reach the||||
|||committed net profits attributable to the owners of parent||||
|||Company after deducting the non-recurring gains and losses,||||
|||Sinopharm Accord should compensate in accordance with the||||
|||stipulations of the Profit Forecast Compensation Agreement for||||

|||||||
|-|-|-|-|-|-|
|||the Stock Issuance and Assets Purchase.”||||
|China||“The listed Company, controlling shareholders, the actual||||
|National||controllers made commitments in the Report about China||||
|Accord||National Accord Medicines Corporation Ltd. Purchasing Assets||||
|Medicines||and Raising Supporting Funds and Related Transactions by Asset||||
|Corporatio|Other|Sale, Stock Issuance and Cash Payment that the Company shall|||Normally|
||||2016-05-|Long-term||
|n Ltd.;|commitme|not violate the relevant regulations of Article 16 in Securities|||implement|
||||31|effective||
|Sinopharm|nts|Issuance and Underwriting Management Approach, and directly|||ing|
|Group||or indirectly providing financial assistance or compensation for||||
|Co.,||the subscription objects and its shareholders / partners / clients (if||||
|Ltd;Sinop||any) of this non-public offering does not exist and will not occur||||
|harm||in the future.”||||
|||“Ping An Asset Management Co., Ltd. has made commitments||||
|||that the unit intends to utilize Ping An Asset Xinxiang No.3 asset||||
|||management product and Ping An Asset Xinxiang No.7 asset||||
|||management product to fund and subscribe some non-public||||
|||offering of shares of Sinopharm Accord in this major asset||||
|Ping’an||||||
|||restructuring process, and has the ability to subscribe the shares,||||
|Assets|Other||||Normally|
|||the relevant capital sources are legitimate, there is no hierarchical|2016-03-|Long-term||
|Managem|commitme||||implement|
|||income and other structured arrangements, and there is no use of|24|effective||
|ent Co.,|nts||||ing|
|||leveraged funds. The unit does not receive financial assistance or||||
|Ltd||||||
|||compensation from Sinopharm Accord and its controlling||||
|||shareholders, or the actual controllers. The investors’ structure of||||
|||above-mentioned products does not change from the issue date of||||
|||the commitment letter to the end date of the lockup period of the||||
|||stock that the unit subscribes from Sinopharm Accord.”||||
|||“Sinopharm made commitments in the Report about China||||
|||National Accord Medicines Corporation Ltd. Purchasing Assets||||
|||and Raising Supporting Funds and Related Transactions by Asset||||
|||Sale, Stock Issuance and Cash Payment that 1. if the stock||||
|||intraday price of Sinopharm Accord on any trading day of the 30||||
|China||||Three||
|||trading days after the listing of newly increased shares in this|||There is|
|National||||years from||
||Increase|transaction is less than the issue price of newly increased shares|||no need|
|Pharmace||||the end of||
||holding|in this transaction, Sinopharm will accumulatively invest no more|2017-01-||for actual|
|utical||||increase||
||commitme|than RMB 150 million in these 30 trading days to increase the|06||controllers|
|Group||||holding (if||
||nt|holding by the stock trading system of the Shenzhen Stock|||to increase|
|Corporatio||||applicable||
|||Exchange (this increase of holding) until the earlier one of below|||holdings|
|n||||)||
|||two situations occurs: (1) the above-mentioned funds are use up;||||
|||(2) the intraday price of Sinopharm Accord is no less than the||||
|||issue price of newly increased shares in this transaction. 2.||||
|||Sinopharm shall not sell the shares obtained from this increase of||||
|||holding within 3 years after the end of this increase of holding.”||||
|||“Sinopharm Group made commitments in the Report about China||||
|||National Accord Medicines Corporation Ltd. Purchasing Assets||||
|||and Raising Supporting Funds and Related Transactions by Asset||||
|||Sale, Stock Issuance and Cash Payment that the Company shall||||
|||be the controlling shareholder of China National Accord||||
|||Medicines Corporation Ltd. (hereinafter referred to as Sinopharm||||
|||Accord) up to the issue date of this commitment letter, after the||||
||Commitm|completion of this major assets reorganization (hereinafter||||
|||referred to as “this reorganization”), Sinopharm Accord shall no||||
||ents on|||||
|||longer hold shares or operate relevant businesses of||||
||horizontal|||||
|Sinopharm|competitio|pharmaceutical industry, the main business will become the|2016-12-|Long-term|Normally|
|Group||national pharmaceutical retail and pharmaceutical distribution|||implement|
||n, relation||28|effective||
|Co., Ltd||business in Guangdong and Guangxi. In order to support the|||ing|
||transaction|||||
|||business development of Sinopharm Accord and avoid horizontal||||
||and capital|||||
|||competition with Sinopharm Accord and its controlling||||
||occupation|||||
|||enterprises, the Company made following irrevocable||||
|||commitments and promises:1, after the completion of this||||
|||reorganization, as for the social retail drugstore assets except for||||
|||Sinopharm Holding Guoda Drugstore Co., Ltd. and its||||
|||subsidiaries and branches owned or controlled by the Company,||||
|||the Company promised to take appropriate measures to solve the||||
|||horizontal competition problem in the pharmaceutical retail||||
|||business between the Company and Sinopharm Accord within 5||||

|||||||
|-|-|-|-|-|-|
|||years since the completion date of this reorganization. 2. The||||
|||Company's way of resolving horizontal competition problems||||
|||includes and is not limited to purchasing the social retail||||
|||drugstore assets subordinated to the Company by Sinopharm||||
|||Accord, taking the entrusted operation, leasing or contracting||||
|||operation by Sinopharm Accord and its controlling enterprises in||||
|||accordance with the methods permitted bu national laws to hold||||
|||or control the social retail drugstore assets, or transferring the||||
|||controlling stake of the social retail drugstore assets by the||||
|||Company. 3. If the shareholders of the social retail drugstore||||
|||assets (hereinafter referred to as "the third party") of the||||
|||Company or the enterprises controlled by the Company have or||||
|||are going to perform the preemptive rights under the same||||
|||conditions in accordance with relevant laws and corresponding||||
|||Articles of Association, then the above commitment will not be||||
|||applicable, but in this case, the Company should try its utmost to||||
|||urge the third party to waive its preemptive rights. If the||||
|||Company is unable to urge the third party to give up the||||
|||preemptive rights, the Company will urge the enterprises||||
|||controlled by the Company to transfer the social retail drugstore||||
|||assets to the third party to solve the horizontal competition||||
|||problem. 4. The pharmaceutical distribution assets currently||||
|||owned or controlled by the Company are distributed outside||||
|||Guangdong and Guangxi regions, there is no horizontal||||
|||competition with Sinopharm Accord, the Company will not||||
|||engage in the same or similar operation businesses to Sinopharm||||
|||Accord in Guangdong and Guangxi in the future, if the Company||||
|||and its holding enterprises obtain the new business opportunities||||
|||constituting substantial horizontal competition (hereinafter||||
|||referred to as competitive new business) within the||||
|||pharmaceutical distribution business scope of Sinopharm Accord||||
|||in Guangdong and Guangxi, the Company will send written||||
|||notice to Sinopharm Accord and try its utmost to firstly provide||||
|||the new business opportunities to Sinopharm Accord or its||||
|||holding enterprises according to the reasonable and fair terms and||||
|||conditions so as to avoid the horizontal competition with||||
|||Sinopharm Accord and its holding enterprises. 5. Since the issue||||
|||date of this commitment letter, the Company promises to||||
|||indemnify Sinopharm Accord for all actual losses, damages and||||
|||expenses caused by the Company in violation of any||||
|||commitments under this commitment letter. 6. This commitment||||
|||letter terminates when following circumstances occur (subject to||||
|||the earlier one): (1) the Company is no longer the controlling||||
|||shareholder of Sinopharm Accord; or (2) the shares of Sinopharm||||
|||Accord terminate the listing at the stock exchange.”||||
|||“Sinopharm made commitments in the Report about China||||
|||National Accord Medicines Corporation Ltd. Purchasing Assets||||
|||and Raising Supporting Funds and Related Transactions by Asset||||
|||Sale, Stock Issuance and Cash Payment that the Company shall||||
|||be the actual controller of China National Accord Medicines||||
|||Corporation Ltd. (hereinafter referred to as Sinopharm Accord)||||
||Commitm|up to the issue date of this commitment letter, after the||||
|China||completion of this major assets reorganization (hereinafter||||
||ents on|||||
|National||referred to as “this reorganization”), Sinopharm Accord shall no||||
||horizontal|||||
|Pharmace|competitio|longer hold shares or operate relevant businesses of|2016-12-|Long-term|Normally|
|utical||pharmaceutical industry, the main business will become the|||implement|
||n, relation||28|effective||
|Group||national pharmaceutical retail and pharmaceutical distribution|||ing|
||transaction|||||
|Corporatio||business in Guangdong and Guangxi. In order to support the||||
||and capital|||||
|n||business development of Sinopharm Accord and avoid horizontal||||
||occupation|||||
|||competition with Sinopharm Accord and its controlling||||
|||enterprises, the Company made following irrevocable||||
|||commitments and promises:1, after the completion of this||||
|||reorganization, as for the social retail drugstore assets except for||||
|||Sinopharm Group Guoda Pharmacy Co., Ltd. and its subsidiaries||||
|||and branches owned or controlled by the Company, the Company||||
|||promised to take appropriate measures to solve the horizontal||||

||||||||
|-|-|-|-|-|-|-|
||||competition problem in the pharmaceutical retail business||||
||||between the Company and Sinopharm Accord within 5 years||||
||||since the completion date of this reorganization. 2. The||||
||||Company's way of resolving horizontal competition problems||||
||||includes and is not limited to purchasing the social retail||||
||||drugstore assets subordinated to the Company by Sinopharm||||
||||Accord, taking the entrusted operation, leasing or contracting||||
||||operation by Sinopharm Accord and its controlling enterprises in||||
||||accordance with the methods permitted bu national laws to hold||||
||||or control the social retail drugstore assets, or transferring the||||
||||controlling stake of the social retail drugstore assets by the||||
||||Company. 3. If the shareholders of the social retail drugstore||||
||||assets (hereinafter referred to as "the third party") of the||||
||||Company or the enterprises controlled by the Company have or||||
||||are going to perform the preemptive rights under the same||||
||||conditions in accordance with relevant laws and corresponding||||
||||Articles of Association, then the above commitment will not be||||
||||applicable, but in this case, the Company should try its utmost to||||
||||urge the third party to waive its preemptive rights. If the||||
||||Company is unable to urge the third party to give up the||||
||||preemptive rights, the Company will urge the enterprises||||
||||controlled by the Company to transfer the social retail drugstore||||
||||assets to the third party to solve the horizontal competition||||
||||problem. 4. The pharmaceutical distribution assets currently||||
||||owned or controlled by the Company are distributed outside||||
||||Guangdong and Guangxi regions, there is no horizontal||||
||||competition with Sinopharm Accord, the Company will not||||
||||engage in the same or similar operation businesses to Sinopharm||||
||||Accord in Guangdong and Guangxi in the future, if the Company||||
||||and its holding enterprises obtain the new business opportunities||||
||||constituting substantial horizontal competition (hereinafter||||
||||referred to as competitive new business) within the||||
||||pharmaceutical distribution business scope of Sinopharm Accord||||
||||in Guangdong and Guangxi, the Company will send written||||
||||notice to Sinopharm Accord and try its utmost to firstly provide||||
||||the new business opportunities to Sinopharm Accord or its||||
||||holding enterprises according to the reasonable and fair terms and||||
||||conditions so as to avoid the horizontal competition with||||
||||Sinopharm Accord and its holding enterprises. 5. This||||
||||commitment letter terminates when following circumstances||||
||||occur (subject to the earlier one): (1) the Company is no longer||||
||||the actual controller of Sinopharm Accord; or (2) the shares of||||
||||Sinopharm Accord terminate the listing at the stock exchange.”||||
||||Sinopharm Holding made commitments in the Commitment||||
|||||||Controllin|
||||Letter About Sinopharm Group Co., Ltd. to Avoid Horizontal||||
|||||||g|
||||Competition: “First, the Company and the Company’s wholly-|||shareholde|
|||||||r is|
||||owned, controlling or other enterprises with actual control (in||||
|||||||implement|
||||addition to Sinopharm Accord and its controlling enterprises,|||in real|
|||||||earnest,|
|Commitm|||hereinafter the same) don’t have businesses and operations||||
|||||||Sinopharm|
|ents make|||||||
|||Commitm|constituting the substantial horizontal competition to Sinopharm|||Accord|
|in initial|||||||
||Sinopharm|ent of||2013-09-|Long-term|will|
|public|||Accord and its controlling enterprises. Second, the Company and||||
||Holding|shareholde||05|effective|actively|
|offering or|||||||
|||rs|the Company’s wholly-owned, controlling or other enterprises|||urged the|
|re-|||||||
|financing|||with actual control shall not engage, participate in or do|||controlling|
|||||||shareholde|
||||businesses and activities in Guangdong and Guangxi which|||r and|
|||||||actual|
||||constitute substantial competition to Sinopharm Accord and||||
|||||||controller|
||||pharmaceutical business services. Third, the Company and the|||to fulfill|
|||||||commitme|
||||Company’s wholly-owned, controlling or other enterprises with||||
|||||||nts|
||||actual control shall not engage, participate in or do businesses||||

|||||||
|-|-|-|-|-|-|
|||and activities which constitute substantial competition to||||
|||Sinopharm Accord and pharmaceutical industry businesses.||||
|||Fourth, the Company shall not take advantage of the control to||||
|||Sinopharm Accord to damage the legitimate rights and interests||||
|||of Sinopharm Accord and other shareholders (especially medium||||
|||and small shareholders). This commitment letter takes effect from||||
|||the issue date, and remains in effect for the entire period when the||||
|||Company acts as the controlling shareholder or its related party of||||
|||Sinopharm Accord. Within the effective period of the||||
|||commitment, if the Company violates this commitment and||||
|||causes a loss to Sinopharm Accord, the Company will timely||||
|||make full compensation for Sinopharm Accord.”||||
|||Sinopharm Holding made commitments in the Commitment||||
|||Letter About Sinopharm Group Co., Ltd. to Regulate the Related||||
|||Transactions with China National Accord Medicines Corporation||||
|||Ltd.: “First, when the Company is controlling Sinopharm Accord,||||
|||the Company and the companies and enterprises directly and||||
|||indirectly controlled by the Company (“related party” for short)||||
|||will strictly regulate the related transactions with Sinopharm||||
|||Accord and its controlling enterprises. Second, for the related||||
|||transactions that cannot be avoided or have reasonable reasons to||||
|||occur, the Company and related party shall sign normative related||||
|||transaction agreement in accordance with relevant laws with||||
|||Sinopharm Accord. Sinopharm Accord implements the approval||||
|||procedures and fulfills the information disclosure obligations of||||
||||||Controllin|
|||the related transactions according to relevant laws, regulations,||||
||||||g|
|||rules, other normative documents and the constitutions of||||
||||||shareholde|
|||Sinopharm Accord. Third, for the related transactions that cannot||||
||||||r is|
|||be avoided or have reasonable reasons to occur, the Company and||||
||||||implement|
|||related party shall abide by the open, fair and just market||||
||||||in real|
|||principles and confirm the price of related transactions in||||
||||||earnest,|
|||accordance with the price that the independent third party without||||
||||||Sinopharm|
|||association sets for the same and similar transactions, and ensure||||
||Commitm||||Accord|
|||the fairness of the price of the related transactions. Fourth, when||||
|Sinopharm|ent of||2013-09-|Long-term|will|
|||the board of directors and the general meeting of stockholders of||||
|Holding|shareholde||05|effective|actively|
|||Sinopharm Accord vote on the related transactions involving the||||
||rs||||urged the|
|||Company and other enterprises controlled by the Company, the||||
||||||controlling|
|||Company shall fulfill the necessary obligations that the associated||||
||||||shareholde|
|||directors and associated shareholders abstain from voting in||||
||||||r and|
|||accordance with the relevant provisions, and abide by the legal||||
||||||actual|
|||procedures for approving related transactions and the information||||
||||||controller|
|||disclosure obligations. Fifth, the Company guarantees to||||
||||||to fulfill|
|||participate in the shareholders' general meeting, equally exercise||||
||||||commitme|
|||the corresponding rights and take the corresponding obligations||||
||||||nts|
|||in accordance with the constitutions of Sinopharm Accord, not to||||
|||take advantage of controlling shareholder status to seek improper||||
|||benefits or utilize related transactions to illegally transfer the||||
|||funds and profits of Sinopharm Accord, and not to damage the||||
|||legitimate rights and interests of other shareholders (especially||||
|||the medium and small shareholders) of Sinopharm Accord. Sixth,||||
|||this commitment letter comes into force from the issue date and||||
|||remains in effect for the entire period when the Company acts as||||
|||the controlling shareholder or its related party of Sinopharm||||
|||Accord. Within the effective period of the commitment, if the||||
|||Company violates this commitment and causes a loss to||||
|||Sinopharm Accord, the Company will timely make full||||
|||compensation for Sinopharm Accord.”||||
|China|Commitm|Sinopharm made commitments in the Commitment Letter About|2013-10-|Long-term|Controllin|
|National|ent of||16|effective|g|

|||||||
|-|-|-|-|-|-|
|Pharmace|actual|China National Pharmaceutical Group Corporation to Avoid|||shareholde|
|utical|controller||||r is|
|||Horizontal Competition with China National Accord Medicines||||
|Group|||||implement|
|Corporatio||Corporation Ltd.: “First, in the next five years, Sinopharm plans|||in real|
|n|||||earnest,|
|||to take appropriate measures (including assets replacement or||||
||||||Sinopharm|
|||acquisition, equity reorganization, etc.) to resolve the horizontal|||Accord|
||||||will|
|||competition between Sinopharm Weiqida and Sinopharm Accord.||||
||||||actively|
|||Second, in addition to the past matters and matters disclosed in|||urged the|
||||||controlling|
|||this commitment letter, the Company and the Company’s wholly-||||
||||||shareholde|
|||owned, controlling or other enterprises with actual control rights|||r and|
||||||actual|
|||(except for Sinopharm Accord and its controlling enterprises, the||||
||||||controller|
|||same as below) shall not directly engaged in, participate in or do|||to fulfill|
||||||commitme|
|||the businesses an activities constituting actual competition to the||||
||||||nts|
|||production and operation of Sinopharm Accord in China. The||||
|||relevant commitments about avoiding horizontal competition that||||
|||the Company made in the past still remain in effect. Third, the||||
|||Company shall not take advantage of the control relationship to||||
|||Sinopharm Accord to damage the legitimate rights and interests||||
|||of Sinopharm Accord and its shareholders (especially the medium||||
|||and small shareholders). Fourth, this commitment letter comes||||
|||into force from the issue date and remains in effect for the entire||||
|||period when the Company acts as the controlling shareholder or||||
|||its related party of Sinopharm Accord."||||
|||Sinopharm made commitments in the Commitment Letter About||||
|||Sinopharm Group Co., Ltd. to Regulate the Related Transactions||||
|||with China National Accord Medicines Corporation Ltd.: “First,||||
|||when the Company is controlling Sinopharm Accord, the||||
|||Company and the companies and enterprises directly and||||
|||indirectly controlled by the Company (“related party” for short)||||
|||will strictly regulate the related transactions with Sinopharm|||Controllin|
|||Accord and its controlling enterprises. Second, for the related||||
||||||g|
|||transactions that can not be avoided or have reasonable reasons to||||
||||||shareholde|
|||occur, the Company and related party shall sign normative related||||
||||||r is|
|||transaction agreement in accordance with relevant laws with||||
||||||implement|
|||Sinopharm Accord. Sinopharm Accord implements the approval||||
||||||in real|
|||procedures and fulfills the information disclosure obligations of||||
||||||earnest,|
|China||the related transactions according to relevant laws, regulations,||||
||||||Sinopharm|
|National|Commitm|rules, other normative documents and the constitutions of|||Accord|
|Pharmace|ent of|Sinopharm Accord. Third, for the related transactions that cannot|2013-09-|Long-term|will|
|utical||be avoided or have reasonable reasons to occur, the Company and||||
||actual||22|effective|actively|
|Group||related party shall abide by the open, fair and just market||||
||controller||||urged the|
|Corporatio||principles and confirm the price of related transactions in||||
||||||controlling|
|n||accordance with the price that the independent third party without||||
||||||shareholde|
|||association sets for the same and similar transactions, and ensure||||
||||||r and|
|||the fairness of the price of the related transactions. Fourth, when||||
||||||actual|
|||the board of directors and the general meeting of stockholders of||||
||||||controller|
|||Sinopharm Accord vote on the related transactions involving the||||
||||||to fulfill|
|||Company and other enterprises controlled by the Company, the||||
||||||commitme|
|||Company shall fulfill the necessary obligations that the associated||||
||||||nts|
|||directors and associated shareholders abstain from voting in||||
|||accordance with the relevant provisions, and abide by the legal||||
|||procedures for approving related transactions and the information||||
|||disclosure obligations. Fifth, the Company guarantees not to take||||
|||advantage of actual controller status to seek improper benefits or||||
|||utilize related transactions to illegally transfer the funds and||||
|||profits of Sinopharm Accord, and not to damage the legitimate||||

||||
|-|-|-|
|||rights and interests of other shareholders (especially the medium|
|||and small shareholders) of Sinopharm Accord. Sixth, this|
|||commitment letter comes into force from the issue date and|
|||remains in effect for the entire period when the Company acts as|
|||the actual controller or its related party of Sinopharm Accord.|
|Completed|||
|on time|Y||
|(Y/N)|||

IV. Appointment and non-reappointment (dismissal) of CPA
Financial report has been audit or not
□ Yes√ No
Not been audited.
V. Explanation from Board of Directors, Supervisory Committee for “Qualified Opinion” that issued by CPA
□ Applicable√ Not applicable
VI. Explanation from the Board for “Qualified Opinion” of lastyear’s
□ Applicable√ Not applicable
VII. Bankruptcy reorganization
□ Applicable√ Not applicable
No bankruptcy reorganization for the Company in Period.
VIII. Lawsuits
Material lawsuits and arbitration
□ Applicable√ Not applicable
No significant lawsuits and arbitrations occurred in the reporting period.
Other lawsuits
As of the date of disclosing this report, the Company has 23 cases of contract disputes in the daily operation, with total amount of RMB 16,408,700 involved; one labor dispute, involving a total amount of RMB 322,000; and 4 cases of equity transfer dispute, involving a total amount of RMB 64,329,000. The total amount involved in the above 28 cases was RMB 81,059,800, which neither formed the expected liabilities, nor had an effect on normal operation and management of the Company.
IX. Penalty and rectification
□ Applicable√ Not applicable
No penalty and rectification for the Company in Period.
X. Integrity of the Company and its controlling shareholders and actual controllers
√Applicable□ Not applicable
In the reporting period, integrity of the Company and its controlling shareholders and actual controllers is good and they do not have a relatively large amount of due existing debt with court's effective judgments.
XI. Implementation of theCompany’s stock incentive plan, employee stock ownership plan or other employee incentives
□ Applicable√ Not applicable
The Company has no equity incentive plan, employee stock ownership plans or other employee incentives in Period.
XII. Major related transaction
1. Related transaction with routine operation concerned
(1) Related transaction with routine operation concerned can be found in “12. Related party and related transaction” carried in Section X. Financial Report;
(2) The related transactions are settled in cash and by notes, found more in “Announcement on Expected Routine Related Transaction for Year of 2018” (Notice No.: 2018-8) released on Juchao Website dated 22 March 2018;
(3) The “Proposal of Expected Routine Related Transactions with Subordinate Enterprise for Year of 2018” was deliberated and approved by 30th session of 7th BOD held on 21 March 2018. During the reporting period, related sales takes22.39% in total expected amount for the whole year, and related procurement takes40.40% in total expected amount for the whole year.
2. Related transactions by assets acquisition and sold
□ Applicable√ Not applicable
No related transactions by assets acquisition and sold for the Company in reporting period.
3. Related transactions of mutual investment outside
□ Applicable√ Not applicable
No main related transactions of mutual investment outside for the Company in reporting period.
4. Contact of related credit and debt
□ Applicable√ Not applicable
The Company had no contact of related credit and debt in the reporting period.
5. Other related transactions
□ Applicable√ Not applicable
The Company had no other related transaction in the period
XIII. Non-operational fund occupation from controlling shareholders and its related party□ Applicable√ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.
XIV. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable√ Not applicable
No trusteeship for the Company in reporting period.
(2) Contract
□ Applicable√ Not applicable
No contract for the Company in reporting period.
(3) Leasing
□ Applicable√ Not applicable
No leasing for the Company in reporting period.
2. Major guarantees
√Applicable□ Not applicable
(1) Guarantees
In 10 thousand Yuan
||||||||||
|-|-|-|-|-|-|-|-|-|
|Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)|||||||||
||Related|||||||Guarante|
||||Actual date of||||||
|Name of the|Announce|||||||e for|
|||Guarantee|happening (Date|Actual|Guarantee|Guarantee|Implemen||
|Company|ment|||||||related|
|||limit|of signing|guarantee limit|type|term|ted (Y/N)||
|guaranteed|disclosure|||||||party|
||||agreement)||||||
||date|||||||(Y/N)|
|||||Total actual occurred external|||||
|Total approving external|||||||||
|||0||guarantee in report period||0|||
|guarantee in report period (A1)|||||||||
|||||(A2)|||||
|Total approved external||||Total actual balance of|||||
|guarantee at the end of report||0||external guarantee at the end||0|||
|period ( A3)||||of report period (A4)|||||
|Guarantee between the Company and the subsidiaries|||||||||
||Related||Actual date of|||||Guarante|
|Name of the|||||||||
||Announce|Guarantee|happening (Date|Actual|Guarantee|Guarantee|Implemen|e for|
|Company|||||||||
||ment|limit|of signing|guarantee limit|type|term|ted (Y/N)|related|
|guaranteed|||||||||
||disclosure||agreement)|||||party|

||||||||||
|-|-|-|-|-|-|-|-|-|
||date|||||||(Y/N)|
|Sinopharm|||||||||
||||||General|2017.10.12-|||
|Holding Shenzhen|2017-04-19|500|2017-10-12|310|||N|N|
||||||assurance|2018.10.11|||
|Jianmin Co., Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2017.10.12-|||
|Holding Shenzhen|2017-04-19|500|2017-10-12|33.72|||N|N|
||||||assurance|2018.10.11|||
|Medicine Co., Ltd|||||||||
|China National|||||||||
||||||General|2017.7.13-|||
|Accord Medicines|2017-04-19|25,000|2017-07-13|18,956.45|||N|N|
||||||assurance|2018.7.13|||
|Corporation Ltd.|||||||||
|China National|||||||||
||||||General|2017.11.23-|||
|Accord Medicines|2017-04-19|20,000|2017-11-23|10,942.49|||N|N|
||||||assurance|2018.5.22|||
|Corporation Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2017.10.17-|||
|Holding Shenzhen|2017-04-19|9,000|2017-10-17|3,008.65|||N|N|
||||||assurance|2018.10.11|||
|Yanfeng Co., Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2018.05.23-|||
|Holding Shenzhen|2018-03-22|5,000|2018-05-23|2,700|||N|N|
||||||assurance|2018.11.22|||
|Yanfeng Co., Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2018.06.13-|||
|Holding Shenzhen|2018-03-22|7,000|2018-06-13|5,500|||N|N|
||||||assurance|2019.06.12|||
|Yanfeng Co., Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2017.11.6-|||
|Holding Jiangmen|2017-04-19|1,000|2017-11-06|0|||N|N|
||||||assurance|2018.10.11|||
|Ren Ren Co., Ltd.|||||||||
|Foshan Nanhai|||||General|2017.7.31-|||
||2017-04-19|5,000|2017-07-31|0|||N|N|
|Medicine Co., Ltd.|||||assurance|2018.7.31|||
|Foshan Nanhai|||||General|2017.10.16-|||
||2017-04-19|5,000|2017-10-16|95.75|||N|N|
|Medicine Co., Ltd.|||||assurance|2018.10.11|||
|Foshan Nanhai|||||General|2017.12.1-|||
||2017-04-19|5,000|2017-12-01|2,061.73|||N|N|
|Medicine Co., Ltd.|||||assurance|2018.12.1|||
|Foshan Nanhai|||||||||
|Uptodate &|||||General|2017.7.31-|||
||2017-04-19|5,000|2017-07-31|0|||N|N|
|Special Medicines|||||assurance|2018.7.31|||
|Co. Ltd.|||||||||
|Foshan Nanhai|||||||||
|Uptodate &|||||General|2018.5.23-|||
||2018-03-22|5,000|2018-05-23|0|||N|N|
|Special Medicines|||||assurance|2019.5.22|||
|Co. Ltd.|||||||||
|Foshan Nanhai|||||||||
|Uptodate &|||||General|2017.10.16-|||
||2017-04-19|6,000|2017-10-16|273.92|||N|N|
|Special Medicines|||||assurance|2018.10.11|||
|Co. Ltd.|||||||||
|Foshan Nanhai|||||||||
|Uptodate &|||||General|2017.12.1-|||
||2017-04-19|5,000|2017-12-01|1,155.6|||N|N|
|Special Medicines|||||assurance|2018.12.1|||
|Co. Ltd.|||||||||
|Sinopharm|||||||||
|Holding|||||General|2018.5.20-|||
||2018-03-22|35,000|2018-05-20|9,885.95|||N|N|
|Guangzhou Co.,|||||assurance|2019.5.20|||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|||||General|2017.11.28-|||
||2017-04-19|30,000|2017-11-28|14,939.95|||N|N|
|Guangzhou Co.,|||||assurance|2018.11.28|||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|||||General|2017.7.24-|||
||2017-04-19|25,000|2017-07-24|888.51|||N|N|
|Guangzhou Co.,|||||assurance|2018.7.23|||
|Ltd.|||||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|Sinopharm|||||||||
|Holding|||||General|2018.6.7-|||
||2018-03-22|60,000|2018-06-07|30,679.04|||N|N|
|Guangzhou Co.,|||||assurance|2018.9.24|||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|||||General|2017.8.16-|||
||2017-04-19|15,000|2017-08-16|0|||N|N|
|Guangzhou Co.,|||||assurance|2018.8.16|||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|||||General|2017.10.13-|||
||2017-04-19|35,000|2017-10-11|3,183.8|||N|N|
|Guangzhou Co.,|||||assurance|2018.10.11|||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|||||General|2018.6.5-|||
||2018-03-22|40,000|2018-06-05|25,841.32|||N|N|
|Guangzhou Co.,|||||assurance|2019.6.4|||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|||||General|2018.5.9-|||
||2018-03-22|40,000|2018-05-09|30,143.62|||N|N|
|Guangzhou Co.,|||||assurance|2019.5.8|||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|||||General|2018.6.22-|||
||2018-03-22|20,000|2018-06-01|15,343.73|||N|N|
|Guangzhou Co.,|||||assurance|2019.6.21|||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|||||General|2018.5.29-|||
||2018-03-22|50,000|2018-05-29|19,018.56|||N|N|
|Guangzhou Co.,|||||assurance|2019.5.29|||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|||||General|2017.5.10-|||
||2017-04-19|20,000|2017-05-10|291.39|||N|N|
|Guangzhou Co.,|||||assurance|2018.5.9|||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|||||General|2018.6.13-|||
||2018-03-22|60,000|2018-06-13|11,470.2|||N|N|
|Guangzhou Co.,|||||assurance|2019.6-12|||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|||||General|2018.4.17-|||
||2018-03-22|80,000|2018-04-17|916.88|||N|N|
|Guangzhou Co.,|||||assurance|2019.4.16|||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|||||General|2018.5.20-|||
||2018-03-22|5,000|2018-05-20|2,905.31|||N|N|
|Guangdong|||||assurance|2019.5.20|||
|Yuexing Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding|||||General|2017.10.13-|||
||2017-04-19|5,000|2017-10-12|4,676.23|||N|N|
|Guangdong|||||assurance|2018.10.11|||
|Yuexing Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding|||||General|2018.1.5-|||
||2017-04-19|5,000|2018-01-05|676.55|||N|N|
|Guangdong|||||assurance|2018.10.31|||
|Yuexing Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding|||||General|2018.6.22-|||
||2018-03-22|5,000|2018-06-22|198.92|||N|N|
|Guangdong|||||assurance|2019.6.21|||
|Yuexing Co., Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2017.10.16-|||
|Holding Foshan|2017-04-19|1,500|2017-10-16|1,086.18|||N|N|
||||||assurance|2018.10.11|||
|Co., Ltd|||||||||
|Sinopharm|2017-04-19|3,000|2017-12-29|936.36|General|2017.12.29-|N|N|

||||||||||
|-|-|-|-|-|-|-|-|-|
|Holding|||||assurance|2018.12.29|||
|Guangdong|||||||||
|Hengxing Co., Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2017.10.26--|||
|Holding Zhaoqing|2017-04-19|2,000|2017-10-26||||N|N|
||||||assurance|2018.10.11|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2017.10.13-|||
|Holding Liuzhou|2017-04-19|9,000|2017-10-13|0|||N|N|
||||||assurance|2018.10.11|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2018.6.21-|||
|Holding Liuzhou|2018-03-22|5,000|2018-06-21|4,975.99|||N|N|
||||||assurance|2019.6.20|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2018.3.14-|||
|Holding Liuzhou|2017-04-19|6,000|2018-03-14|5,169.93|||N|N|
||||||assurance|2019.1.2|||
|Co., Ltd.|||||||||
|Guangdong|||||||||
|Southern|||||||||
||||||General|2018.7.1-|||
|Pharmaceutical|2018-03-22|15,000|2018-07-01|12,036.45|||N|N|
||||||assurance|2019.6.30|||
|Foreign Trade Co.,|||||||||
|Ltd.|||||||||
|Guangdong|||||||||
|Southern|||||||||
||||||General|2018.4.17-|||
|Pharmaceutical|2018-03-22|2,500|2018-04-17|184.97|||N|N|
||||||assurance|2019.4.16|||
|Foreign Trade Co.,|||||||||
|Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2017.11.15-|||
|Holding Guangxi|2017-04-19|20,000|2017-11-15|14,519.25|||N|N|
||||||assurance|2018.11.18|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2017.10.13-|||
|Holding Guangxi|2017-04-19|28,000|2017-10-13|4,397.31|||N|N|
||||||assurance|2018.10.11|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2017.11.9-|||
|Holding Guangxi|2017-04-19|25,000|2017-11-09|10,447.96|||N|N|
||||||assurance|2018.11.8|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2018.5.22-|||
|Holding Guangxi|2018-03-22|10,000|2018-05-22|9,978.85|||N|N|
||||||assurance|2018.11.22|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2017.9.4-|||
|Holding Guangxi|2017-04-19|10,000|2017-09-04|0|||N|N|
||||||assurance|2018.9.4|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2018.6.5-|||
|Holding Guangxi|2018-03-22|5,000|2018-06-05|2,999.86|||N|N|
||||||assurance|2019.6.5|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2018.6.5-|||
|Holding Guangxi|2018-03-22|5,000|2018-06-05|0|||N|N|
||||||assurance|2019.6.5|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2017.10.12-|||
|Holding Meizhou|2017-04-19|1,000|2017-10-12|0|||N|N|
||||||assurance|2018.10.11|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding|||||General|2017.10.12-|||
||2017-04-19|1,000|2017-10-12|0|||N|N|
|Zhongshan Co.,|||||assurance|2018.10.11|||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding|||||General|2018.6.14-|||
||2018-03-22|1,000|2018-06-14|0|||N|N|
|Zhongshan Co.,|||||assurance|2019.6.13|||
|Ltd.|||||||||
|Sinopharm|||||General|2017.10.12-|||
||2017-04-19|500|2017-10-12|500|||N|N|
|Holding Shantou|||||assurance|2018.10.11|||

||||||||||
|-|-|-|-|-|-|-|-|-|
|Co., Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2017.10.12-|||
|Holding Huizhou|2017-04-19|1,000|2017-10-12|396.45|||N|N|
||||||assurance|2018.10.11|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2017.10.12-|||
|Holding Zhanjiang|2017-04-19|1,000|2017-10-12|11.16|||N|N|
||||||assurance|2018.10.11|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2017.10.12-|||
|Holding Zhuhai|2017-04-19|1,000|2017-10-12|0|||N|N|
||||||assurance|2018.10.11|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
||||||General|2017.10.12-|||
|Holding Dongguan|2017-04-19|2,000|2017-10-12|0|||N|N|
||||||assurance|2018.10.11|||
|Co., Ltd.|||||||||
|||||Total amount of actual|||||
|Total amount of approving|||||||||
|||||occurred guarantee for|||||
|guarantee for subsidiaries in||455,500||||523,821.28|||
|||||subsidiaries in report period|||||
|report period (B1)|||||||||
|||||(B2)|||||
|||||Total balance of actual|||||
|Total amount of approved|||||||||
|||||guarantee for subsidiaries at|||||
|guarantee for subsidiaries at the||789,500||||283,738.99|||
|||||the end of reporting period|||||
|end of reporting period (B3)|||||||||
|||||(B4)|||||
|Guarantee between the subsidiaries and the subsidiaries|||||||||
||Related|||||||Guarante|
||||Actual date of||||||
|Name of the|Announce|||||||e for|
|||Guarantee|happening (Date|Actual|Guarantee|Guarantee|Implemen||
|Company|ment|||||||related|
|||limit|of signing|guarantee limit|type|term|ted (Y/N)||
|guaranteed|disclosure|||||||party|
||||agreement)||||||
||date|||||||(Y/N)|
|Sinopharm|||||||||
|Holding Guoda|||||||||
|Drugstore|||||General|2017.11.1-|||
||2017-04-19|1,000|2017-11-01|0|||N|N|
|Yangzhou|||||assurance|2018.11.1|||
|Dadesheng Chain|||||||||
|Co., Ltd.|||||||||
|Fujian Guoda|||||||||
||||||General|2018.4.20-|||
|Drugstore Chain|2018-03-22|2,275|2018-04-20|977.96|||N|N|
||||||assurance|2019.4.19|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
|HoldingGuoda|||||||||
||||||General|2017.6.9-|||
|Drugstore|2017-04-19|3,000|2017-06-09|2,503.59|||N|N|
||||||assurance|2019.6.8|||
|Guangdong Co.,|||||||||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding Guoda|||||||||
||||||General|2017.6.1-|||
|Drugstore|2017-04-19|3,000|2017-06-01|2,124.69|||N|N|
||||||assurance|2018.6.1|||
|Guangdong Co.,|||||||||
|Ltd.|||||||||
|Taishan Sinopharm|||||||||
|Holding Guoda|||||||||
||||||General|2018.6.2-|||
|Qunkang|2018-03-22|500|2018-06-02|158|||N|N|
||||||assurance|2019.6.1|||
|Drugstore Chain|||||||||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding Guoda|||||General|2017.10.10-|||
||2017-04-19|2,000|2017-10-10|1,424.3|||N|N|
|Drugstore Guangxi|||||assurance|2018.10.9|||
|Chain Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding Guoda|||||||||
||||||General|2017.10.28-|||
|Drugstore|2017-04-19|2,000|2017-10-28|3.6|||N|N|
||||||assurance|2018.10.27|||
|Jiangmen Chain|||||||||
|Co., Ltd.|||||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|Sinopharm|||||||||
|Holding Guoda|||||General|2017.4.24-|||
||2017-04-19|3,000|2017-04-24|1,329.12|||N|N|
|Drugstore Inner|||||assurance|2018.4.23|||
|Mongolia Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding Guoda|||||General|2018.4.25-|||
||2018-03-22|3,000|2018-04-25|0|||N|N|
|Drugstore Inner|||||assurance|2019.4.24|||
|Mongolia Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding Guoda|||||General|2017.10.10-|||
||2017-04-19|6,000|2017-10-10|5,581.83|||N|N|
|Drugstore Inner|||||assurance|2018.10.9|||
|Mongolia Co., Ltd.|||||||||
|Shanxi Guoda|||||||||
||||||General|2017.5.1-|||
|Wanmin Drugstore|2017-04-19|3,000|2017-05-01|3,000|||N|N|
||||||assurance|2018.5.1|||
|Chain Co., Ltd.|||||||||
|Shanxi Guoda|||||||||
||||||General|2018.5.16-|||
|Wanmin Drugstore|2018-03-22|5,000|2018-05-16|0|||N|N|
||||||assurance|2019.5.15|||
|Chain Co., Ltd.|||||||||
|Shanxi Guoda|||||||||
||||||General|2017.6.1-|||
|Wanmin Drugstore|2017-04-19|3,000|2017-06-01|0|||N|N|
||||||assurance|2018.6.1|||
|Chain Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding Guoda|||||||||
||||||General|2017.9.1-|||
|Drugstore|2017-04-19|5,000|2017-09-01|4,668.36|||N|N|
||||||assurance|2018.9.1|||
|Shenyang Chain|||||||||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding Guoda|||||||||
||||||General|2018.4.23-|||
|Drugstore|2018-03-22|6,000|2018-04-23|1,367.09|||N|N|
||||||assurance|2019.4.22|||
|Shenyang Chain|||||||||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding Guoda|||||||||
||||||General|2017.6.1-|||
|Drugstore|2017-04-19|3,000|2017-06-01|0|||N|N|
||||||assurance|2018.6.1|||
|Shenyang Chain|||||||||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding Guoda|||||||||
||||||General|2017.6.28-|||
|Drugstore|2017-04-19|6,000|2017-06-28|1,328.76|||N|N|
||||||assurance|2018.6.28|||
|Shenyang Chain|||||||||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding Guoda|||||||||
||||||General|2017.8.23-|||
|Drugstore|2017-04-19|6,000|2017-06-29|5,161.54|||N|N|
||||||assurance|2018.8.23|||
|Shenyang Chain|||||||||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding Guoda|||||||||
||||||General|2017.10.10-|||
|Drugstore|2017-04-19|15,000|2017-10-10|10,540.16|||N|N|
||||||assurance|2018.10.9|||
|Shenyang Chain|||||||||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding Guoda|||||||||
||||||General|2017.5.15-|||
|Drugstore Shanxi|2017-04-19|6,000|2017-05-01|2,204.49|||N|N|
||||||assurance|2018.4.18|||
|YiYuan Chain Co.,|||||||||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding Guoda|||||||||
||||||General|2017.9.22-|||
|Drugstore Shanxi|2017-04-19|4,000|2017-09-22|3,516.88|||N|N|
||||||assurance|2018.9.21|||
|YiYuan Chain Co.,|||||||||
|Ltd.|||||||||

||||||||||
|-|-|-|-|-|-|-|-|-|
|Sinopharm|||||||||
|Holding Guoda|||||||||
||||||General|2017.12.29-|||
|Drugstore Shanxi|2017-04-19|2,800|2017-12-29|2,644.69|||N|N|
||||||assurance|2018.12.28|||
|YiYuan Chain Co.,|||||||||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding Guoda|||||||||
||||||General|2018.2.5-|||
|Drugstore Shanxi|2017-04-19|2,800|2018-02-05|2,784.47|||N|N|
||||||assurance|2019.2.4|||
|YiYuan Chain Co.,|||||||||
|Ltd.|||||||||
|Hunan Guoda|||||||||
|Minshentang|||||General|2017.10.20-|||
||2017-04-19|2,000|2017-10-20|1,327.71|||N|N|
|Drugstore Chain|||||assurance|2018.10.19|||
|Co., Ltd.|||||||||
|Ningxia Guoda|||||||||
||||||General|2018.1.12-|||
|Drugstore Chain|2017-04-19|2,000|2018-01-12|1,113|||N|N|
||||||assurance|2019.1.11|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding Guoda|||||||||
|Drugstore|||||General|2017.10.10-|||
||2017-04-19|2,000|2017-10-10|963.73|||N|N|
|Yangzhou|||||assurance|2018.10.9|||
|Dadesheng Chain|||||||||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding Guoda|||||||||
||||||General|2018.4.1-|||
|Drugstore|2018-03-22|2,000|2018-04-01|1,143.22|||N|N|
||||||assurance|2019.4.1|||
|Jiangmen Chain|||||||||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding Guoda|||||||||
||||||General|2018.4.1-|||
|Drugstore|2018-03-22|4,000|2018-04-01|3,073.28|||N|N|
||||||assurance|2019.4.1|||
|Shanghai Chain|||||||||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding Guoda|||||General|2018.5.11-|||
||2018-03-22|3,000|2018-05-11|247.38|||N|N|
|Drugstore Henan|||||assurance|2019.5.10|||
|Chain Co., Ltd.|||||||||
|Shanxi Guoda|||||||||
||||||General|2018.4.28-|||
|Wanmin Drugstore|2018-03-22|5,000|2018-04-28|2,247|||N|N|
||||||assurance|2019.4.27|||
|Chain Co., Ltd.|||||||||
|Sinopharm|||||||||
|Holding Guoda|||||||||
||||||General|2018.4.23-|||
|Drugstore Shanxi|2018-03-22|3,000|2018-04-23|2,999.57|||N|N|
||||||assurance|2019.4.22|||
|YiYuan Chain Co.,|||||||||
|Ltd.|||||||||
|Sinopharm|||||||||
|Holding Guoda|||||General|2018.4.24-|||
||2018-03-22|2,000|2018-04-24|300.74|||N|N|
|Drugstore Inner|||||assurance|2019.4.23|||
|Mongolia Co., Ltd.|||||||||
|China National|||||||||
|Hebei Lerentang|||||General|2018.4.12-|||
||2018-03-22|2,000|2018-04-12|467.56|||N|N|
|Medicine Chain|||||assurance|2019.4.11|||
|Co., Ltd.|||||||||
|Sinopharm|||||||||
|HoldingGuoda|||||||||
||||||General|2018.5.18-|||
|Drugstore|2018-03-22|3,000|2018-05-18|1,984.87|||N|N|
||||||assurance|2019.5.17|||
|Guangdong Co.,|||||||||
|Ltd.|||||||||
|Total amount of approving||||Total amount of actual|||||
|guarantee for subsidiaries in||40,775||occurred guarantee for||87,203.39|||
|report period (C1)||||subsidiaries in report period|||||

|||||
|-|-|-|-|
|||(C2)||
|||Total balance of actual||
|Total amount of approved||||
|||guarantee for subsidiaries at||
|guarantee for subsidiaries at the|123,375||67,187.59|
|||the end of reporting period||
|end of reporting period (C3)||||
|||(C4)||
|Total amount of guarantee of the Company( total of three abovementioned guarantee)||||
|Total amount of approving||Total amount of actual||
|guarantee in report period|496,275|occurred guarantee in report|611,024.67|
|(A1+B1+C1)||period (A2+B2+C2)||
|Total amount of approved||Total balance of actual||
|guarantee at the end of report|912,875|guarantee at the end of report|350,926.58|
|period (A3+B3+C3)||period (A4+B4+C4)||
|The proportion of the total amount of actually guarantee in the||||
|||35.41%||
|net assets of the Company (that is A4+ B4+C4)||||
|Including:||||

Explanation on guarantee with composite way
(2) Guarantee outside against the regulation
□ Applicable√ Not applicable
No guarantee outside against the regulation in Period.
3. Other material contracts
□ Applicable√ Not applicable
No other material contracts for the Company in reporting period.
XV. Social responsibility
1. Major environment protection
The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department voluntary disclosure
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Name of|||||||||
||Major|||Distribution||Executed||||
||||Quantity of||Emission|||Approved||
||Pollutants|Emission||of||Pollutant|Total||Excessive|
|Company||||||||||
||||Discharge||Concentrati|||Total||
|/subsidiary|and|Method||Discharge||Discharge|Emissions||Discharge|
||||Outlet||on|||Emissions||
||Particular|||Outlet||Standards||||
||Pollutants|||||||||
|||||||“Water||||
|||||||Pollution||||
|||||Discharge||Emission||||
|China||Tube||||||||
|||||Outlet of||Limits” of||||
|National|COD||1||21.91 mg/l||0.65|6.6|N|
|||Discharge||Waste||Guangdong||||
|Zhijun||||Water||Province||||
|||||||（DB44/26-||||
|||||||2001）||||
|||||Discharge||“Water||||
|China||Tube||||||||
|National|BOD||1|Outlet of|3.32 mg/l|Pollution|0.099|1.5|N|
|||Discharge||Waste||Emission||||
|Zhijun||||||||||
|||||Water||Limits” of||||

|||||||||||
|-|-|-|-|-|-|-|-|-|-|
|||||||Guangdong||||
|||||||Province||||
|||||||（DB44/26-||||
|||||||2001）||||
|||||||“Water||||
|||||||Pollution||||
|||||Discharge||Emission||||
|China||||||||||
|||Tube||Outlet of||Limits” of||||
|National|SS||1||2.46 mg/l||0.073|4.4|N|
|||Discharge||Waste||Guangdong||||
|Zhijun||||Water||Province||||
|||||||（DB44/26-||||
|||||||2001）||||
|||||||“Water||||
|||||||Pollution||||
|||||Discharge||Emission||||
|China||||||||||
||Ammonia|Tube||Outlet of||Limits” of||||
|National|||1||2.22 mg/l||0.066|0.7|N|
||Nitrogen|Discharge||Waste||Guangdong||||
|Zhijun||||Water||Province||||
|||||||（DB44/26-||||
|||||||2001）||||
|||||||“Water||||
|||||||Pollution||||
|||||Discharge||Emission||||
|China||||||||||
|||Tube||Outlet of||Limits” of||||
|National|Phosphate||1||0.02 mg/l||0.593|36.9|N|
|||Discharge||Waste||Guangdong||||
|Zhijun||||Water||Province||||
|||||||（DB44/26-||||
|||||||2001）||||
|||||||CLASS||||
|||||||GB3838-||||
|||||||2002IV||||
|||||Discharge||WATER||||
|Zhijun||Tube||Outlet of||QUALITY||||
||COD||1||8mg/L||0.6|2.63|N|
|Pingshan||Discharge||Waste||STANDAR||||
|||||Water||DS AND||||
|||||||GB21908-||||
|||||||2008 NEW||||
|||||||PROJECT||||
|||||||CLASS||||
|||||||GB3838-||||
|||||||2002IV||||
|||||Discharge||WATER||||
|Zhijun||Tube||Outlet of||QUALITY||||
||BOD||1||2.3mg/L||0.2|0.53|N|
|Pingshan||Discharge||Waste||STANDAR||||
|||||Water||DS AND||||
|||||||GB21908-||||
|||||||2008 NEW||||
|||||||PROJECT||||
|||||||CLASS||||
|||||||GB3838-||||
|||||||2002IV||||
|||||Discharge||WATER||||
|Zhijun||Tube||Outlet of||QUALITY||||
||SS||1||9mg/L||0.7|2.63|N|
|Pingshan||Discharge||Waste||STANDAR||||
|||||Water||DS AND||||
|||||||GB21908-||||
|||||||2008 NEW||||
|||||||PROJECT||||
|||||||CLASS||||
|||||Discharge||||||
|Zhijun|Ammonia|Tube||Outlet of||GB3838-||||
||||1||0.3mg/L|2002IV|0.02|0.18|N|
|Pingshan|Nitrogen|Discharge||Waste||||||
|||||||WATER||||
|||||Water||||||
|||||||QUALITY||||

||
|-|
|STANDAR|
|DS AND|
|GB21908-|
|2008 NEW|
|PROJECT|

Construction and operation of pollution prevention and control facilities
At present, the above-mentioned environmental pollution key monitoring units in which the Company has a shareholding have established pollution prevention and control facilities for wastewater. In the daily management process, enterprises establish management procedures and operating instructions for environmental protection facilities, and ensure the normal and compliant operation of anti-pollution facilities through system implementation and responsibility implementation. All enterprises are continuously investing funds and stepping up the transformation and improvement of pollution prevention and control facilities to ensure the stable operation of pollution prevention facilities and improve the disposal capacity of environmental protection facilities.
Environmental impact assessment of construction projects and other environmental protection administrative licenses
At present, the projects of all key monitoring units have carried out environmental impact assessments and obtained approvals. The projects to be built also carry out the relevant administrative review procedures according to the “three simultaneous” requirements of the environmental protection facilities of the construction project. Emergency plan for environmental emergencies
At present, the above-mentioned environmental pollution key monitoring units in which the Company has a shareholding have formulated the Emergency Plan for Environmental Emergencies and reported them according to the regulatory requirements of the local regulatory authorities. According to the management requirements of the emergency plan, the key units regularly carry out emergency plan drills to further provide theenterprises’ emergency response capability.
Environmental self-monitoring scheme
At present, the above-mentioned environmental pollution key monitoring units in which the Company has a shareholding have established environmental self-detection scheme and plan, and implemented self-inspection, third-party detection and other monitoring methods according to the government requirements. Relevant monitoring data and reports have been archived and saved.
Other environmental information that should be disclosed
The above two companies are joint stock companies of the Company. The Company and its holding subsidiaries are not listed as key pollutant discharge units announced by the environmental protection department.
Relevant information on environment protection
Nil
2. Execution of social responsibility of targeted poverty alleviation
The Company temporarily not to carry out a targeted poverty alleviation in the peirod, and there are no follow-up plans either.
XVI. Explanation on other significant events
√Applicable□ Not applicable
The proposal on the wholly-owned subsidiary Sinopharm Holding Guoda Drugstore Co.,Ltd., Bringing in Strategic Investors by Means of Capital Increase and Share Expansion was deliberated and approved on the 25th meeting of the 7th session of Board of Directors On Sep. 4th, 2017, and the wholly-owned subsidiary Sinopharm Holding Guoda Drugstore Co., Ltd (hereinafter referred to as “Guoda Drugstore”) has got the approval of bringing in one strategic investor by means of capital increase and share expansion, taking assets assessment report as the reference of pricing. The Company was publicly listed on the Shanghai United Assets and Equity Exchange on September 20, 2017, and collected an intentional investor, Walgreens Boots Alliance (NASDAQ Code: WBA), as the actual controller, it subscribed for the equity of Guoda Drugstore by taking its wholly-owned subsidiary established in Hong Kong, Walgreens Boots Alliance (Hong Kong) Investments Limited (hereinafter referred to as “WBAHKIL”), as the capital increase entity to subscribe the equity of Guoda Drugstore with the capital increase amount of RMB 2,766,700,000. It holds40% equity of Guoda Drugstore after the capital increase. At the beginning of December 2017, in accordance with the equity transaction rules, the Company, Guoda Drugstore and WBAHKIL jointly signed the Registration Capital Increase and Subscription Agreement.
On March 23, 2018, the Company received the Written Decision on Nonperformance of Further Review (SFLCSH[2018] No. 104) issued by the Ministry of Commerce of thePeople’s Republic of China, which was transferred from Walgreens Boots Alliance Investment Luxembourg Co., Ltd.
At the end of June 2018, Guoda Drugstore obtained the registration receipt for the establishment of a foreign- invested enterprise from the Commerce Commission ofJing’an District, Shanghai Municipality, and completed the industrial and commercial registration on June 28, 2018.
||||
|-|-|-|
|||Index for annoucement published on|
|Overview|Disclosure date||
|||website|
|Notice of Progress of the wholly-ownedsubsidiary of the Company, GuodaDrugstore has brought in strategicinvestors by means of capital increaseand share expansion:|||
|||Juchao Website|
||2018-03-24||
|||（http://www.cninfo.com.cn）|
|Notice of Progress of the wholly-ownedsubsidiary of the Company, GuodaDrugstore has brought in strategicinvestors by means of capital increaseand share expansion:|||
|||Juchao Website|
||2018-06-30||
|||（http://www.cninfo.com.cn）|

XVII. Significant event of subsidiary of the Company
√Applicable□ Not applicable
See “XVI. Explanation on other significant events
Section VI. Changes in Shares and Particulars about Shareholders I. Changes in Share Capital
1. Changes in Share Capital
In Share
|||||||||||
|-|-|-|-|-|-|-|-|-|-|
||Before the Change||Increase/Decrease in the Change (+, -)|||||After the Change||
||||||Capitalizat|||||
||||New|||||||
|||||Bonus|ion of||Subtot||Proportio|
||Amount|Proportion|shares|||Others||Amount||
|||||shares|public||al||n|
||||issued|||||||
||||||reserve|||||
|I. Restricted shares|65,497,028|15.30%||||||65,497,028|15.30%|
|2. State-owned legal||||||||||
||60,380,743|14.10%||||||60,380,743|14.10%|
|person’s shares||||||||||
|3. Other domestic||||||||||
||5,116,285|1.20%||||||5,116,285|1.20%|
|shareholding||||||||||
|Including: Domestic||||||||||
||5,114,297|1.19%||||||5,114,297|1.19%|
|legal person’s shares||||||||||
|Domestic nature||||||||||
||1,988|0.00%||||||1,988|0.00%|
|person shares||||||||||
|II. Unrestricted shares|362,629,955|84.70%||||||362,629,955|84.70%|
|1. RMB Ordinary||||||||||
||307,744,355|71.88%||||||307,744,355|71.88%|
|shares||||||||||
|2. Domestically listed||||||||||
||54,885,600|12.82%||||||54,885,600|12.82%|
|foreign shares||||||||||
|III. Total shares|428,126,983|100.00%||||||428,126,983|100.00%|

 Reasons for share changed
□Applicable√Not applicable
Approval of share changed
□Applicable√Not applicable
Ownership transfer of share changed
□ Applicable√ Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common shareholders of Company in latest year and period
□ Applicable√ Not applicable
Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators
□ Applicable√ Not applicable
2. Changes of restricted shares
□ Applicable√ Not applicable
II. Securities issuance and listing
□ Applicable√ Not applicable
III. Number of shareholders and share-holding
In Share
||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|
|||||||Total preference shareholders|||||
|Total common shareholders at||||||with voting rights recovered at|||||
|||19,539|||||||0||
|period-end||||||end of reporting period (if|||||
|||||||applicable) (see Note 8)|||||
|Particulars about shares held above 5% by common shareholders or top ten common shareholders|||||||||||
|||||Number|||||Number of share pledged/frozen||
||||||||Amount||||
|||||of||||Amount of|||
||||||||of||||
||||Proportion|common|Changes in|||un-|||
||Nature of||||||restricted||||
|Shareholders|||of shares|shares|reporting|||restricted|||
||shareholder||||||common||State of share|Amount|
||||held|held at|period|||common|||
||||||||shares||||
|||||period-||||shares held|||
||||||||held||||
|||||end|||||||
|SinopharmGroup Co., Ltd|State-ownedcorporate||56.06%|239,999,991|||55,057,700|184,942,291|||
|HTHK/CMGFSGUFP-CMGFIRST STATECHINAGROWTH FD|Overseas corporate||2.37%|10,141,182|||0|10,141,182|||
|China LifeInsurance Co.,Ltd. – tradition–generalinsuranceproducts -005L-CT001 Shen|Domestic nonstate-ownedcorporate||2.02%|8,654,592|||0|8,654,592|||
|China UnitedPropertyInsuranceCompany|Domestic nonstate-ownedcorporate||1.42%|6,092,905|||0|6,092,905|||

||||||||
|-|-|-|-|-|-|-|
|Limited –TraditionalInsuranceProducts|||||||
|China NationalPharmaceuticalForeign TradeCorp.|State-ownedcorporate|1.24%|5,323,043|5,323,043|0||
|GUOTAIJUNANSECURITIES(HONGKONG)LIMITED|Overseas corporate|1.19%|5,086,260|0|5,086,260||
|New China LifeInsurance Co.,Ltd. – Bonus –Individualbonuses - -018L-FH002Shen|Domestic nonstate-ownedcorporate|0.98%|4,199,772|0|4,199,772||
|# BeijingHaoqingFortuneInvestmentManagementCo., Ltd. –Haoqing ValueStable No.8InvestmentFund|Domestic nonstate-ownedcorporate|0.96%|4,118,716|0|4,118,716||
|UBS AGLONDONBRANCH|Overseas corporate|0.89%|3,818,884|0|3,818,884||
|Central HuijinInvestment Ltd.|State-ownedcorporate|0.89%|3,804,400|0|3,804,400||
|||Sinopharm Group Co., Ltd. and China National Pharmaceutical Foreign Trade Corporation|||||
|Explanation on associated||have the same actual controller, which is China National Pharmaceutical Group Corporation.|||||
|relationship among the aforesaid||It is unknown that there exists no associated relationship or belongs to the consistent actionist|||||
|shareholders||among the other tradable shareholders regulated by the Management Measure of Information|||||
|||Disclosure on Change of Shareholding for Listed Companies.|||||
|Particular about top ten common shareholders with un-restrict shares held|||||||
|Shareholders||Amount of un-restrict common shares held at period-||||Type of shares|

|||||
|-|-|-|-|
||end|Type|Amount|
|Sinopharm Group Co., Ltd|184,942,291|RMB ordinary||
||||184,942,291|
|||shares||
|HTHK/CMG FSGUFP-CMGFIRST STATE CHINA GROWTHFD|10,141,182|Domestically||
|||listed foreign|10,141,182|
|||shares||
|China Life Insurance Co., Ltd. –tradition –general insuranceproducts -005L-CT001 Shen|8,654,592|||
|||RMB ordinary||
||||8,654,592|
|||shares||
|China United Property InsuranceCompany Limited – TraditionalInsurance Products|6,092,905|||
|||RMB ordinary||
||||6,092,905|
|||shares||
|GUOTAI JUNANSECURITIES(HONGKONG)LIMITED|5,086,260|||
|||Overseas listed||
||||5,086,260|
|||foreign share||
|New China Life Insurance Co., Ltd.– Bonus – Individual bonuses - -018L-FH002 Shen|4,199,772|||
|||RMB ordinary||
||||4,199,772|
|||shares||
|# Beijing Haoqing FortuneInvestment Management Co., Ltd. –Haoqing Value Stable No.8Investment Fund|4,118,716|||
|||RMB ordinary||
||||4,118,716|
|||shares||
|UBS AG LONDON BRANCH|3,818,884|Domestically||
|||listed foreign|3,818,884|
|||shares||
|Central Huijin Investment Ltd.|3,804,400|RMB ordinary||
||||3,804,400|
|||shares||
|Bank of China – Harvest MedicalCare Securities Investment Fund|2,943,225|RMB ordinary||
||||2,943,225|
|||shares||
|Expiation on associated relationship||||
|or consistent actors within the top||||
||It is unknown that there exists no associated relationship or belongs to the consistent actionist|||
|10 un-restrict shareholders and||||
||among the other tradable shareholders regulated by the Management Measure of Information|||
|between top 10 un-restrict||||
||Disclosure on Change of Shareholding for Listed Companies.|||
|shareholders and top 10||||
|shareholders||||
|Explanation on shareholders||||
|involving margin business about top|Beijing Haoqing Fortune Investment Management Co., Ltd. – Haoqing Value Stable No.8|||
|ten common stock shareholders|Investment Fund holds shares of the Company through margin trading and negotiable|||
|with un-restrict shares held (if|securities account that is 4,118,716 shares in total.|||
|applicable) (see note4)||||

Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back
agreement dealing in reporting period
□Yes√ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no buy-back agreement dealing in reporting period.
IV. Changes of controlling shareholders or actual controller
Changes of controlling shareholders in reporting period
□ Applicable√ Not applicable
Changes of controlling shareholders had no change in reporting period.
Changes of actual controller in reporting period
□ Applicable√ Not applicable
Changes of actual controller in reporting period had no change in reporting period.
Section VII. Preferred Stock
□ Applicable√ Not applicable
The Company has no preferred stock in reporting period.
Section VIII. Directors, Supervisors and Senior Executives
I. Changes of shares held by directors, supervisors and senior executives
□ Applicable√ Not applicable
Shares held by directors, supervisors and senior executives have no changes in reporting period, found more details in Annual Report 2017.
II. Resignation and dismissal of directors, supervisors and senior executives
√ Applicable□ Not applicable
||||||
|-|-|-|-|-|
|Name|Title|Type|Date|Reasons|
||Independent|Expiration of the|||
|Xiong Chuxiong|||2018-04-17|Expiration of the office term for 7th BOD|
||director|term of office|||
||Independent|Expiration of the|||
|Xiao Shengfang|||2018-04-17|Expiration of the office term for 7th BOD|
||director|term of office|||
|||Expiration of the||Expiration of the office term for 7th Supervisory|
|Wang Huaiqin|Staff supervisor||2018-04-17||
|||term of office||Committee|
|Lian Wanyong|Director|Election|2018-04-17|New director of 8th BOD|
|Li Dongjiu|Director|Election|2018-04-17|New director of 8th BOD|
||Independent||||
|Ou Yongliang||Election|2018-04-17|New independent director of 8th BOD|
||director||||
||Independent||||
|Chen Shengqun||Election|2018-04-17|New independent director of 8th BOD|
||director||||
|Lang Baochun|Staff supervisor|Election|2018-04-17|New staff supervisor of 8th Supervisory Committee|

Section IX. Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when semi-annual report approved for released or fail to cash in full on due
No
Section X Financial Reporting
I.Report of the Auditors
Consolidated financial statements for the six months ended 30 June 2018haven’t been audited.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED BALANCE SHEET
As at 30 June 2018
(Expressed in Renminbi Yuan)
ASSETS Note V 30 June 2018 31 December 2017 Current assets
Cash and bank balances 1 3,943,595,560.58 4,191,655,438.51 Notes receivable 2 1,021,697,370.21 1,504,194,764.08 Accounts receivable 3 9,441,542,367.19 7,589,412,679.88 Advances to suppliers 4 456,680,224.23 516,778,117.47 Interest receivable 5 47,507.80 61,441.11 Other receivables 6 698,672,023.18 657,871,058.54 Inventories 7 4,245,354,625.22 3,781,858,238.12 Other current assets 8 91,769,652.56 78,947,644.62 Total current assets 19,899,359,330.97 18,320,779,382.33 Non-current assets
Financial assets available-for-sale 9 13,685,760.00 13,685,760.00 Long-term equity investments 10 1,756,735,242.44 1,650,619,373.09 Investment properties 11 149,409,723.79 153,678,339.11 Fixed assets 12 550,102,564.29 551,710,434.02 Construction in progress 13 30,805,874.11 22,947,258.99 Intangible assets 14 314,816,778.00 325,751,430.88 Goodwill 15 830,729,152.75 830,729,152.75 Long-term prepaid expenses 16 261,074,227.40 252,247,050.79 Deferred tax assets 17 76,070,138.33 79,472,883.06 Other non-current assets 18 130,226,885.24 142,022,462.75 Total non-current assets 4,113,656,346.35 4,022,864,145.44 Total assets 24,013,015,677.32 22,343,643,527.77 The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED BALANCE SHEET (Continued)
As at 30 June 2018
(Expressed in Renminbi Yuan)
LIABILITIES Note V 30 June 2018 31 December 2017 Current liabilities
Short-term borrowings 19 2,051,139,651.67 1,561,354,521.64 Notes payable 20 2,373,628,140.86 2,732,437,828.42 Accounts payable 21 7,230,024,480.35 6,144,221,000.10 Advances from customers 22 178,425,087.30 216,938,239.32 Employee benefits payable 23 150,685,442.26 215,656,526.54 Tax payable 24 223,351,730.76 223,752,900.24 Interest payable 25 10,378,213.91 7,311,819.65 Dividends payable 26 8,889,443.11 11,889,443.11 Other payables 27 1,024,176,704.11 1,011,128,397.26 Non-current liabilities due within one year 28 5,651,227.56 5,434,770.70 Other current liabilities 29 114,239.45 112,817.65 Total current liabilities 13,256,464,361.34 12,130,238,264.63 Non-current liabilities
Long-term borrowings 30 31,600,000.00 31,600,000.00 Long-term payables 31 6,604,575.84 9,332,537.14 Payable for specific projects 33 800,000.00 800,000.00 Deferred income 34 121,995,380.11 125,082,372.53 Long-term employee benefits payable 32 1,636,000.00 1,777,000.00 Deferred tax liabilities 18 69,864,262.88 71,883,253.02 Other non-current liabilities 35 45,427,343.31 45,427,343.31 Total non-current liabilities 277,927,562.14 285,902,506.00 Total liabilities 13,534,391,923.48 12,416,140,770.63 The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED BALANCE SHEET (Continued)
As at 30 June 2018
(Expressed in Renminbi Yuan)
SHAREHOLDERS’ EQUITY
Note V 30 June 2018 31 December 2017Shareholders’ equity
Share capital 36 428,126,983.00 428,126,983.00 Capital surplus 37 3,181,826,407.20 3,181,429,064.99 Other equity instruments - - Surplus reserve 38 214,063,491.50 214,063,491.50 Retained earnings 39 6,086,241,746.42 5,572,952,806.39Shareholders’ equity attributable
to shareholders of the parent 9,910,258,628.12 9,396,572,345.88 Non-controlling interests 568,365,125.72 530,930,411.26 Totalshareholders’ equity 10,478,623,753.84 9,927,502,757.14 Total liabilities andshareholders’
equity 24,013,015,677.32 22,343,643,527.77 The accompanying notes form an integral part of these financial statements
The financial statements have been signed by:
Legal representative: Financial controller: Head of Accounting Department
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
For the six months ended For the six months ended Note V
30 June 2018 30 June 2017 Operating revenue 40 20,779,166,699.67 20,524,807,669.57 Less: Operating costs 40 18,367,643,723.84 18,364,034,450.83 Tax and surcharge 41 56,620,527.25 63,185,620.86 Selling expenses 42 1,273,588,756.07 1,110,446,938.17 Administrative expenses 43 351,820,063.78 340,636,051.11 Finance costs 44 57,541,544.32 44,498,778.76 Impairment loss 45 (517,852.98) 96,757.16 Add: Investment income 46 162,693,771.35 146,726,039.90 Incl: Investment income from
162,662,271.35 146,676,039.90 associates
Gain on disposal of assets 47 4,281,164.61 485,085.66 Other income 48 10,589,212.57 7,958,493.67 Operating profits 850,034,085.92 757,078,691.91 Add: Non-operating income 49 5,498,951.11 6,056,142.83 Incl: Gain from disposal of non-current
- - assets
Less: Non-operating expenses 50 1,797,292.80 3,559,988.09 Incl: Loss from disposal of non-current
- - assets
Total profit 853,735,744.23 759,574,846.65 Less: Income taxes 51 164,486,734.32 160,041,107.63 Net profit 689,249,009.91 599,533,739.02 Incl: Net profit of acquiree before business
combinations involving enterprises under
common control - - Net Profit from continuing operations 689,249,009.91 599,533,739.02 Net profit attributable to shareholders of the parent
641,727,034.93 556,125,318.19 Profit or loss of non-controlling interests
47,521,974.98 43,408,420.83 Total comprehensive income 689,249,009.91 599,533,739.02 Incl: Total comprehensive income for the year
attributable to owners of the parent 641,727,034.93 556,125,318.19 Total comprehensive income for the year
attributable to non-controlling interests
47,521,974.98 43,408,420.83 Earnings per share
Basic earnings per share 1.50 1.30 Diluted earnings per share 1.50 1.30 The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED STATEMENT OF CHANGES INSHAREHOLDERS’ EQUITY
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
2018
Shareholders’ equity attributable to shareholders of the parent
Non-controlling Total equity interests
Other equity
Share capital instrument Capital surplus Surplus reserve Retained earnings Subtotal
Closing balance of the preceding year 428,126,983.00 - 3,181,429,064.99 214,063,491.50 5,572,952,806.39 9,396,572,345.88 530,930,411.26 9,927,502,757.14 Business combination involving
enterprises under common control - - - - - - - - Opening balance of the current year 428,126,983.00 - 3,181,429,064.99 214,063,491.50 5,572,952,806.39 9,396,572,345.88 530,930,411.26 9,927,502,757.14 Movements in the current year - - 397,342.21 - 513,288,940.03 513,686,282.24 37,434,714.46 551,120,996.70 (1) Total comprehensive income - - - - 641,727,034.93 641,727,034.93 47,521,974.98 689,249,009.91 (2) Capital paid and reduced by
owners - - 397,342.21 - - 397,342.21 26,721,512.76 27,118,854.97 1.Capital injection by owners - - - - - - 24,381,200.00 24,381,200.00
||||||||||
|-|-|-|-|-|-|-|-|-|
|2.Business combination involvingenterprises under common control|-|-|-|-|-|-|-|-|
|3.Others|-|-|397,342.21|-|-|397,342.21|2,340,312.76|2,737,654.97|

CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED STATEMENT OF CHANGES INSHAREHOLDERS’ EQUITY
For the year ended 31 December 2017
(Expressed in Renminbi Yuan)
Shareholders’ equity attributable to shareholders of the parent
2017 Non-controlling interests Total equity Other equity
Share capital instruments Capital surplus Surplus reserve Retained earnings Subtotal
Closing balance of the preceding year 362,631,943.00 65,495,040.00 3,151,518,024.92 181,315,971.50 4,689,189,642.51 8,450,150,621.93 463,832,912.18 8,913,983,534.11 Business combination involving enterprises
under common control
- - 1,200,000.00 - 1,076,241.59 2,276,241.59 1,517,494.39 3,793,735.98 Opening balance of the current year
362,631,943.00 65,495,040.00 3,152,718,024.92 181,315,971.50 4,690,265,884.10 8,452,426,863.52 465,350,406.57 8,917,777,270.09 Movements in the current year 65,495,040.00 (65,495,040.00) 28,711,040.07 32,747,520.00 882,686,922.29 944,145,482.36 65,580,004.69 1,009,725,487.05 (1) Total comprehensive income - - - - 1,057,791,930.67 1,057,791,930.67 98,946,915.42 1,156,738,846.09 (2) Capital paid and reduced by owners 65,495,040.00 (65,495,040.00) 28,711,040.07 - (1,075,583.99) 27,635,456.08 20,214,810.63 47,850,266.71 1.Capital injection by owners 5,114,297.00 (5,114,297.00) - - - - 14,873,000.00 14,873,000.00
|||||||||||||||||||
|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|-|
|2.Significant reorganization||60,380,743.00||(60,380,743.00)||(3,430,029.00)||-||-||(3,430,029.00)||-||(3,430,029.00)||
||2.Significant reorganization|||||||||||||||||
||3.Business combination involving|-||-||(1,200,000.00)||-||(1,075,583.99)||(2,275,583.99)||(1,517,055.99)||(3,792,639.98)||
||enterprises under common control|||||||||||||||||
|4.Business combination not involvingenterprises under common control||-||-||-||-||-||-||6,858,866.62||6,858,866.62||
||4.Business combination not involving|||||||||||||||||
||enterprises under common control||-||-||-||-||-||-||6,858,866.62||6,858,866.62|
||5.Others||-||-||33,341,069.07||-||-||33,341,069.07||-||33,341,069.07|

 (3) Profit distribution - - - 32,747,520.00 (174,029,424.39) (141,281,904.39) (53,581,721.36) (194,863,625.75) 1. Withdrawal of statutory surplus
reserve - - - 32,747,520.00 (32,747,520.00) - - - 2.Distribution to equity owners
- - - - (141,281,904.39) (141,281,904.39) (53,581,721.36) (194,863,625.75) 428,126,983.00 - 3,181,429,064.99 214,063,491.50 5,572,952,806.39 9,396,572,345.88 530,930,411.26 9,927,502,757.14 Closing balance of the current year
The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
For the six months ended For the six months ended Note V
30 June 2018 30 June 2017 1.CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from sales of good or rendering of
services 22,055,082,715.59 21,970,884,180.09 Tax refunds 1,593,193.21 5,740,675.89 Cash receipts related to other operating activities 52 311,984,787.60 98,022,828.67 Sub-total of cash inflows from operating activities 22,368,660,696.40 22,074,647,684.65 Cash paid for goods and services 19,799,894,631.80 19,734,413,196.28 Cash paid to and on behalf of employees 956,322,585.28 864,562,267.50 Cash paid for all types of taxes 548,616,793.36 601,078,629.47 Cash payments related to other operating
activities 52 838,468,976.76 646,256,160.00 Sub-total of cash outflows from operating
activities 22,143,302,987.20 21,846,310,253.25 Net cash flows from operating activities 53 225,357,709.20 228,337,431.40 2.CASH FLOWS FROM INVESTING ACTIVITIES
Cash received from recovery of investments - - Cash received from returns on investments 78,825,446.85 58,647,191.65 Net cash received from disposal of fixed assets,
intangible assets and other long-term assets 6,064,099.87 171,059.95 Net cash received from disposal of subsidiaries
and other business units - - Cash receipts related to other investing activities
52 48,766,145.15 87,027,340.19 Sub-total of cash inflows from investing activities 133,655,691.87 145,845,591.79 The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED CASH FLOW STATEMENT (Continued)
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
For the six months For the six months Note V ended 30 June ended 30 June 2018 2017 2.CASH FLOWS FROM INVESTING ACTIVITIES(Continued)
Cash paid for acquisition of fixed assets,
97,867,494.61 82,123,615.39 intangible assets and other long-term assets
Cash paid for acquisition of investments 10,000,000.00 71,120,000.00 Net cash paid for acquisition of subsidiaries and
52 - 14,706,789.56 other business units
Net cash paid from disposal of subsidiaries and other
52 - - business units
Cash payments related to other investing activities 52 43,999,800.00 70,175,078.90 Sub-total of cash outflows from investing activities 151,867,294.61 238,125,483.85 Net cash flows from investing activities (18,211,602.74) (92,279,892.06) 3.CASH FLOWS FROM FINANCING ACTIVITIES
Cash proceeds from investments by others 11,781,200.00 9,075,000.00 Incl: Cash received from capital contributions from
non-controlling shareholders of 11,781,200.00 9,075,000.00 subsidiaries
Cash received from borrowings 40,775,440.04 233,533,871.46 Cash receipts related to other financing activities 53 83,745,164.60 90,932,396.75 Sub-total of cash inflows from financing activities 136,301,804.64 333,541,268.21 Cash repayments for debts 79,670,200.30 201,503,745.30 Cash payments for distribution of dividends or profit
226,149,759.15 215,828,281.10 and interest expenses
Incl: Profit and dividends paid to non-controlling
40,392,215.98 30,408,202.08 shareholders of subsidiaries
Cash payments related to other financing activities 53 118,725,719.23 178,991,574.67 Sub-total of cash outflows from financing activities 424,545,678.68 596,323,601.07 Net cash flows from financing activities (288,243,874.04) (262,782,332.86) The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED CASH FLOW STATEMENT (Continued)
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
For the six months For the six months
Note V
ended 30 June 2018 ended 30 June 2017
4.EFFECT OF FOREIGN EXCHANGE RATE CHANGES
314,863.47 -
ON CASH AND CASH EQUIVALENTS
5.NET INCREASE IN CASH AND CASH EQUIVALENTS 53 (80,782,904.11) (126,724,793.52)
Add: Cash and cash equivalents at beginning of the
3,673,498,691.48 3,150,915,425.49
year
6.CASH AND CASH EQUIVALENTS AT END OF YEAR 53 3,592,715,787.37 3,024,190,631.97
The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY BALANCE SHEET
As at 30 June 2018
(Expressed in Renminbi Yuan)
ASSETS Note XIV 30 June 2018 31 December 2017
Current assets
Cash and bank balances 1,521,055,158.90 1,776,696,342.87
Notes receivable 63,423,575.48 64,799,618.07
Accounts receivable 1 553,496,096.71 480,467,760.92
Advances to suppliers 1,230,913.18 1,138,312.26
Interest receivable 1,861,132.76 1,844,294.10
Dividends receivable - -
Other receivables 2 1,629,938,110.28 1,516,037,945.71
Inventories 193,931,164.48 172,022,676.96
Other current assets 39,482.38 788,964.90
Total current assets 3,964,975,634.17 4,013,795,915.79
Non-current assets
Long-term equity investments 3 7,297,085,972.70 7,180,306,084.56
Investment properties 2,359,843.19 2,763,831.92
Fixed assets 17,398,259.52 13,831,103.54
Construction in progress - -
Intangible assets 1,501,299.51 1,287,775.78
Long-term deferred expenses 5,003,173.65 5,543,217.86
Deferred tax assets 3,293,246.89 2,764,724.75
Other non-current assets 67,397,698.11 71,808,611.00
Total non-current assets 7,394,039,493.57 7,278,305,349.41
Total assets 11,359,015,127.74 11,292,101,265.20
The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY BALANCE SHEET (Continued)
As at 30 June 2018
(Expressed in Renminbi Yuan)
LIABILITIES 30 June 2018 31 December 2017
Current liabilities
Short-term borrowings 694,424,900.71 707,000,000.00
Notes payable 227,485,804.97 239,563,961.30
Accounts payable 462,200,812.82 434,886,685.35
Advances from customers 3,941,540.07 1,912,503.90
Employee benefits payable 24,654,592.33 33,592,851.93
Tax payables 41,130,974.27 42,386,907.00
Interest payable 547,681.64 669,533.78
Other payables 1,056,082,762.67 1,415,053,655.18
Non-current liabilities due within one
- -
year
Other current liabilities 114,239.45 112,817.65
Total current liabilities 2,510,583,308.93 2,875,178,916.09
Non-current liabilities
Long-term borrowings 31,600,000.00 31,600,000.00
Payables for specific projects 800,000.00 800,000.00
Deferred income 1,824,963.62 2,054,250.00
Long-term employee benefits payable - -
Deferred tax liabilities 3,773,319.00 3,773,319.00
Total non-current liabilities 37,998,282.62 38,227,569.00
Total liabilities 2,548,581,591.55 2,913,406,485.09
The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY BALANCE SHEET (Continued)
As at 30 June 2018
(Expressed in Renminbi Yuan)
SHAREHOLDERS’ EQUITY 30 June 2018 31 December 2017
Shareholders’ equity
Share capital 428,126,983.00 428,126,983.00
Capital surplus 4,407,488,826.34 4,407,091,484.13
Surplus reserves 214,063,491.50 214,063,491.50
Other equity instruments - -
Retained earnings 3,760,754,235.35 3,329,412,821.48
Totalshareholders’ equity 8,810,433,536.19 8,378,694,780.11
Total liabilities andshareholders’ equity 11,359,015,127.74 11,292,101,265.20
The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY INCOME STATEMENT
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
For the six months For the six months
Note XIV
ended 30 June 2018 ended 30 June 2017
Operating revenue 4 1,687,621,355.83 1,658,600,818.96
Less: Operating costs 4 1,614,717,473.91 1,600,647,589.46
Tax and surcharge 2,016,368.93 5,062,317.16
Selling expenses 25,894,795.45 22,844,614.29
Administrative expenses 33,679,106.75 24,917,988.21
Finance costs (19,369,880.08) (37,042,967.55)
Impairment loss 623,542.31 (32,604.71)
Add: Investment income 5 534,840,744.46 508,360,741.85
Incl: Investment income from associates 173,326,290.14 155,838,740.45
Gain on disposal of assets - 1,087.38
Other income 1,299,345.14 641,300.00
Operating profits 566,200,038.16 551,207,011.33
Add: Non-operating income 33.08 184,531.96
Incl: Gain from disposal of
non-current assets - -
Less: Non-operating expenses 127,688.63 1,011,760.15
Incl: Loss from disposal of
non-current assets - -
Total profit 566,072,382.61 550,379,783.14
Less: Income taxes 6,292,873.84 21,856,015.57
Net profit
559,779,508.77 528,523,767.57
Net Profit from continuing operations 559,779,508.77 528,523,767.57
Total comprehensive income
559,779,508.77 528,523,767.57
The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY STATEMENT OF CHANGES INSHAREHOLDERS’ EQUITY
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
Other equity
2018 Share capital Capital surplus Surplus reserve Retained earnings Total equity instruments
Closing balance of the preceding year
428,126,983.00 - 4,407,091,484.13 214,063,491.50 3,329,412,821.48 8,378,694,780.11 Others
- - - - - - Opening balance of the current year 428,126,983.00 - 4,407,091,484.13 214,063,491.50 3,329,412,821.48 8,378,694,780.11 Movements in the current year
- - 397,342.21 - 431,341,413.87 431,738,756.08 (1) Total comprehensive income
- - - - 559,779,508.77 559,779,508.77 (2) Capital paid and reduced by owners
- - 397,342.21 - - 397,342.21 1. Capital injection by owners
- - - - - - 2. Significant reorganization
- - - - - - 3. Others
- - 397,342.21 - - 397,342.21 (3) Profit distribution
- - - - (128,438,094.90) (128,438,094.90) 1. Distribution to owners - - - - (128,438,094.90) (128,438,094.90) Closing balance of the current year 428,126,983.00 - 4,407,488,826.34 214,063,491.50 3,760,754,235.35 8,810,433,536.19 The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY STATEMENT OF CHANGES INSHAREHOLDERS’ EQUITY (Continued)
For the Year ended 31 December 2017
(Expressed in Renminbi Yuan)
Other equity
2017 Share capital Capital surplus Surplus reserve Retained earnings Total equity instruments
Closing balance of the preceding year 362,631,943.00 65,495,040.00 4,381,845,619.03 181,315,971.50 2,829,823,727.08 7,821,112,300.61 Others - - - - - - Opening balance of the current year 362,631,943.00 65,495,040.00 4,381,845,619.03 181,315,971.50 2,829,823,727.08 7,821,112,300.61 Movements in the current year 65,495,040.00 (65,495,040.00) 25,245,865.10 32,747,520.00 499,589,094.40 557,582,479.50 (1) Total comprehensive income - - - - 673,618,518.79 673,618,518.79 (2) Capital paid and reduced by owners 65,495,040.00 (65,495,040.00) 25,245,865.10 - - 25,245,865.10 1. Capital injection by owners 5,114,297.00 (5,114,297.00) - - - - 2. Significant reorganization - - - - - - 3. Others 60,380,743.00 (60,380,743.00) 25,245,865.10 - - 25,245,865.10 (3) Profit distribution - - - 32,747,520.00 (174,029,424.39) (141,281,904.39) 1. Transferred from surplus reserve - - - 32,747,520.00 (32,747,520.00) - 2. Distribution to owners - - - ( - (141,281,904.39) (141,281,904.39) Closing balance of the current year 428,126,983.00 - 4,407,091,484.13 214,063,491.50 3,329,412,821.48 8,378,694,780.11 The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY CASH FLOW STATEMENT
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
For the six months For the six months ended 30 June 2018 ended 30 June 2017 1.CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from sales of good or rendering
of services 1,787,065,555.60 1,691,499,935.88 Cash receipts related to other operating
activities 43,943,301.92 16,864,750.56 Sub-total of cash inflows from operating
activities 1,831,008,857.52 1,708,364,686.44 Cash paid for goods and services 1,655,107,446.18 1,590,317,986.60 Cash paid to and on behalf of employees 44,855,325.83 40,727,189.33 Cash paid for all types of taxes 18,706,775.51 28,888,466.38 Cash payments related to other operating
activities 36,183,479.25 17,091,927.42 Sub-total of cash outflows from operating
activities 1,754,853,026.77 1,677,025,569.73 Net cash flows from operating activities 76,155,830.75 31,339,116.71 2. CASH FLOWS FROM INVESTING ACTIVITIES
Cash received from returns of investments 187,137,437.23 202,011,829.53 Cash receipts related to other investing activities 857,940,000.00 1,979,269,200.00 Sub-total of cash inflows from investing activities 1,045,077,437.23 2,181,281,029.53 Cash paid for acquisition of fixed assets,
intangible assets and other long-term assets 6,044,462.78 3,921,020.07 Cash paid for investment 10,000,000.00 1,019,000,000.00 Net cash paid for purchasing subsidiaries and
other business - 16,840,000.00 Cash payments related to other investing
activities 1,051,642,980.00 1,424,861,720.90 Sub-total of cash outflows from investing
activities 1,067,687,442.78 2,464,622,740.97 Net cash flows from investing activities (22,610,005.55) (283,341,711.44) The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY CASH FLOW STATEMENT (Continued)
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
For the six months For the six months ended 30 June 2018 ended 30 June 2017 3. CASH FLOWS FROM FINANCING ACTIVITIES
Cash received from borrowings 10,000,000.00 41,600,000.00 Cash receipts related to other financing
8,065,884,436.80 7,272,687,714.06 activities
Sub-total of cash inflows from financing
8,075,884,436.80 7,314,287,714.06 activities
Cash repayments for debts 10,000,000.00 41,600,000.00 Cash payments for distribution of dividends or
144,898,008.66 143,087,008.08 profit and interest expenses
Cash payments related to other financing
8,230,488,300.78 7,131,182,482.56 activities
Sub-total cash outflows from financing activities 8,385,386,309.44 7,315,869,490.64 Net cash flows from financing activities (309,501,872.64) (1,581,776.58) 4.EFFECT OF FOREIGN EXCHANGE RATE
CHANGES ON CASH AND CASH 314,863.47 - EQUIVALENTS
5. NET INCREASE IN CASH AND CASH
(255,641,183.97) (253,584,371.31) EQUIVALENTS
Add: Cash and cash equivalents at beginning of
1,776,696,342.87 1,342,041,409.86 the year
6. CASH AND CASH EQUIVALENTS
1,521,055,158.90 1,088,457,038.55 AT END OF YEAR
The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
I Profile of the Company
(1) Historical development and basic information
As approved by thePeople’s Government of Shenzhen (SFBF (1993) No.356), China National Accord Medicines Corporation Ltd. (hereinafter referred to as the “the Company”), formerly known as Shenzhen Health Mineral Water Corp., Ltd., was registered as a joint stock liability limited company on 1 February 1993 through stock transformation. In March 1993, with the approval from the Shenzhen Branch of 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 convert capital surplus into share capital, bonus issues and issuance of shares for years, the share capital of the Company increased to RMB428,126,983 as at 30 June 2018.
In November 2000, the Company entered into an Assets Exchange Agreement with Shenzhen Investment Management Company, the original major shareholder of the Company, to exchange all the assets and liabilities of the Company as of 31 August 2000 for Shenzhen Investment ManagementCompany’s100% equity interests in 11 pharmaceutical companies and certain properties as well as51% equity interests in Shenzhen Tefa Modern Computer Co., Ltd. The above assets exchange proposal was approved by shareholders in the Second Extraordinary General Meeting on December 29, 2000. The transaction was completed on 8 January 2001.
On 18 February 2004, theCompany’s original major shareholder, Shenzhen Investment Management Company, entered into a Stock Transfer Agreement with Sinopharm Group Co., Ltd. (hereinafter referred to as “Sinopharm Group”) to transfer 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 the State-owned Assets Supervision and Administration Commission of the State Council (GZCQ (2004) No.525) and the China Securities Regulatory Commission (ZJGSZ (2004) No.94), the nature of these shares was changed from state-owned stock to state-owned legal entity stock and Sinopharm Group became the largest shareholder of the Company.
On 14 April 2006, 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-shareholders which went public on the same day. After this bonus issue, the total number of shares of the Company remained unchanged with corresponding changes in the composition of shareholdings.
On March 14 2014, the company issued 74,482,543 ordinary shares (A shares) through the non-public offering. Par value per share is RMB1 yuan. The shares shall not be transferred within 36 months since the issued day. The total number of shares of the Company was 362,631,943 since the date of issue.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
I Profile of the Company (Continued)
(1) Historical development and basic information (Continued)
As of 31 October 2016, the company issued RMB65,495,040.00 ordinary shares (A shares) through the non-public offering. Par value per share is RMB1 yuan. Through the non-public offering, the Company acquired the companies under common control, including Sinopharm Holding Guoda Pharmacy Co., Ltd. (“Guoda Pharmacy”), Foshan Nanhai Medicine Group Co., Ltd.(“Foshan Nanhai”),Guangdong South Pharmaceutical Foreign Trade Co., Ltd. (“South Pharma& Trade), Guangdong Dong Fang Uptodate& Special Medicines Co., Ltd. (“ Guangdong Uptodate& Special Medicines”) by issuing shares and raised supporting funds by issuing shares to Ping An Asset Management Co., Ltd.(“Ping An Asset Management”) to acquire non-controlling interest of South Pharma& Trade. The relevant shares were successfully issued and listed on 5 January 2017.
As of 30 June 2018, the total share capital was RMB428,126,983.
The Company is registered with Shenzhen Administration for Industry& Commerce. Its Uniform Social Credit Code is 91440300192186267U. The operation period of the Company is from 2 August 1986 to the long term. The registered capital of the Company is RMB428,126,983. The legal representative of the Company is Lin Zhaoxiong.
The approved scope of business of the Company and its subsidiaries (together “the Group”) includes: the wholesale of 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; material supply and marketing industry (other than special licensing); sale of ambulances; trade of second-class and third- class medical equipment; 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; import and export services (excluding projects that are prohibited by the country; limited projects has to be approved before operating).
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
I Profile of the Company (Continued)
(2) TheGroup’s parent and ultimate parent company is Sinopharm Group and China National Pharmaceutical Group Corporation respectively.
(3) These financial statements were authorized for issue by the board of directors of the Company on 24 Augustl 2018.
II Basis of preparation
The financial statements were prepared in accordance with the Basic Standard and specific standards of the Accounting Standards for Business Enterprises issued by the Ministry of Finance on 15 February 2006 and the specific accounting standards and the 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.
These financial statements are prepared on a going concern basis.
Except for certain financial instruments, the financial statements have been prepared using historical cost as the principle of measurement. Where assets are impaired, provisions for asset impairment are made in accordance with the relevant requirements.
The Group has made accounting policies and accounting estimates according to its own operation and production characteristics, which are mainly reflected in the bad debt provision for account receivables(NoteⅢ(10)), inventory costing methods(NoteⅢ(11)), depreciation methods for fixed assets and amortization method for intangible assets(NoteⅢ(14),Note III(17)), judgement basis for capitalization of development costs(NoteⅢ(17)) , impairment of long-term assets(NoteⅢ(20)), revenue recognition(NoteⅢ(24)).
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates
(1) Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements of the Company for the period ended 30 June 2018 are in compliance with the Accounting Standards for Business Enterprises, and truly and completely present the financial position of the Group and the Company as of 30 June 2018 and the operating results, cash flows and other information of the Group and the Company for the year then ended.
(2) Accounting year
TheCompany’s accounting year starts on 1 January and ends on 31 December.
(3) Functional currency
The functional currency is Renminbi (RMB).
(4) Business combinations
(a) Business combinations involving entities under common control
Assets and liabilities (including goodwill arising from ultimate controllingshareholder’s acquisition of the party being absorbed) that are obtained by the absorbing party in a business combination shall be measured at their carrying amounts at the combination date as recorded by the party being absorbed. The difference between the carrying amount of the net assets obtained and the carrying amount of the consideration paid for the combination (or the aggregate face value of shares issued as consideration) shall be adjusted to share premium under capital surplus. If the capital surplus is not sufficient to absorb the difference, any excess shall be adjusted against retained earnings. The transaction costs of issuing equity securities or debt securities for business combination are recognized at the initial recognition amount of equity securities 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 recognized 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 recognized 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 recognized amounts of the equity or debt securities.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(4) Business combinations (Continued)
Where the business combination not involving enterprises under common control which is achieved in stages, theacquirer’s previously held equity interests in the acquiree are remeasured at the fair value on the acquisition date, with the difference between fair value and carrying amount recognized as investment income for the current period. If theacquirer’s previously held equity interests of the acquiree involve other comprehensive income (“OCI”) under the equity method, the accounting treatment is conducted on the same basis as would have been required if the investee had directly disposed of the related assets or liabilities, and the changes inshareholders’ equity other than net profit or loss, OCI and profit distributions are charged to profit or loss for the current period on the acquisition date. For theacquirer’s previously held other equity instruments, the fair value of OCI accumulated before the acquisition date are transferred into retained earnings.
(5) Preparation of consolidated financial statements
The consolidated financial statements comprise the financial statements of the Company and all of its subsidiaries.
Subsidiaries are consolidated from the date on which the Group obtains control and are de- consolidated from the date that such control ceases. For a subsidiary that is acquired in a business combination involving enterprises under common control, it is included in the consolidated financial statements from the date when it, together with the Company, comes under common control of the ultimate controlling party. The portion of the net profits realized 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 unrealized 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 recognized as non-controlling interests and presented separately in the consolidated financial statements within equity, net profits and total comprehensive income respectively. Unrealized gain or loss from selling assets to subsidiaries fully offsets the net income attributable to equity holders of the company. Unrealized gain or loss from purchasing assets from subsidiaries offsets the net income attributable to equity holders of the company and attributable to the non-controlling interest by the distribution proportion regarding the Company and the subsidiary. Unrealized gain or loss from transaction between subsidiaries offsets the net income attributable to equity holders of the company and attributable to the non-controlling 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 an adjustment for the transaction from theGroup’s perspective.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(6) Acquisition of non-controlling interests in controlled subsidiaries
The Company acquires equity from the minority shareholders after taking control of the subsidiary, in the consolidated financial statements, thesubsidiary’s assets, liabilities should be measured from the combination or acquisition date. The difference between the carrying amount of acquisition of non- controlling interest and the net assets proportion calculated by the original share percentage since the acquisition date should be recognized in capital surplus. If the capital surplus is insufficient to dilute, the retained earnings shall be adjusted.
(7) Cash and cash equivalents
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.
(8) Foreign currency translation
Foreign currency transact 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 recognized in profit or loss for the current period, except for those attributable to foreign currency borrowings that have been taken out specifically for the acquisition or construction of qualifying assets, which are capitalized as part of the cost of those assets. Non-monetary items denominated in foreign currencies that are measured at historical 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.
(9) Financial instruments
(a) Financial assets
(i) Classification of financial assets
Financial assets are classified into the following categories at initial recognition, including: financial assets measured at amortised cost, financial assets measured at fair value through other comprehensive income, and financial assets measured at fair value through profit or loss. At initial recognition, the Group measures a financial assets at its fair value plus, in the case of a financial asset not at a fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset.
Transaction expenses of financial assets measured at fair value through profit or loss are expensed in profit or loss, and those of others are included inreceivables’ original book value.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(9) Financial instruments (Continued)
(a) Financial assets (Continued)
(ii) Recognition and measurement
Subsequent measurement of financial assets depends on theGroup’s business model for managing the asset and the cash flow characterisitics of the asset.
Financial assets measured at amortised cost
Assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. A gain or loss on a debt investment that is measured at amortised cost and is not part of a hedging relationship is recognized in profit or loss when the asset is derecognized or impaired. Interest income from thses financial asset is included in finance income using the effective interest rate method.
Financial assets measured at fair value through other comprehensive income
Where theGroup’s management has elected to present fair value gains and losses on equity investments in other comprehensive income, there is no subsequence reclassification of fair value gains and losses to profit or loss. Dividends from such investments continue to be recognized in investment income when theGroup’s right to receive payments is established.
Financial assets measured subsequently at fair value through profit or loss
For this kind of fincial asset, it measured subsequently at fair value, and the movement of fair value is recorded in profit or loss
(iii) Impairment of financial assets
The Group assesses the expected credit losses associated with its financial assets measured at amortised cost on a forward looking basis. The impairment methodology applied depends on whether there has been a significant increase in credit risk .
For trade receivables, the Group applies the simplified approach, which requires expected lifetime losses to be recognized from initial recognition of the receivables.
(iv) Derecognition of financial assets
A financial asset is derecognized when any of the following 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.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(9) Financial instruments (Continued)
(a) Financial assets (Continued)
(iv) Derecognition of financial assets (Continued)
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 recognized directly in equity is recognized in profit or loss.
(b) Financial liabilities
Financial liabilities are classified into the following categories at initial recognition, including financial liabilities measured at fair value through profit or loss, and other financial liabilities. Transaction expenses of financial liabilities measured at fair value through profit or loss are expensed in profit or loss, and those of others are included inreceivables’ original book value.
Subsequent measurement of financial liabilities depends on their catagories:
Other financial liabilities
For other fincial liabilities, it measured subsequently at amortized value.
(c) Offset of financial instruments
A financial asset and a financial liability shall be offset and the net amount presented in the balance sheet when both of the following conditions are satisfied: 1) the enterprise has a legal right to set off the recognized amounts and the legal right is currently enforceable; 2) the enterprise intends either to settle on a net basis or to realize the financial asset and settle the financial liability simultaneously.
(d) Transfer of financial assets
A financial asset is derecognized when the Group has transferred substantially all the risks and rewards of the asset to the referee. A financial asset is not derecognized when the Group retains substantially all the risks and rewards of the asset.
When the Group has neither transferred nor retained substantially all the risks and rewards of the asset, it either i) derecognizes the transferred asset when it has transferred control of the asset; or ii) continues to recognize the transferred asset to the extent of the Group's continuing involvement, in which case, the Group also recognizes an associated liability.
Continuing involvement that takes the form of a guarantee over the transferred financial asset is measured at the lower of the original carrying amount of the asset and the guarantee amount. The guarantee amount is the maximum amount of consideration that the Group could be required to repay. III Summary of significant accounting policies and accounting estimates (Continued)
(10) Receivables
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Receivables comprise notes receivable, accounts receivable and other receivables. Accounts receivable arising from the sale of goods or rendering of services are initially recognized 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 determining 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 receivable other receivables Within 1 year 0-5% 0-5% 1 to 2 years 5-10% 5-10% 2 to 3 years 10-30% 10-30% 3 to 4 years 20-50% 20-50% 4 to 5 years 20-80% 20-80% More than 5 years 20-100% 20-100% (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.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(10) Receivables (Continued)
(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 recognized in profit or loss for the current period.
(11) 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 realizable 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 labor and an allocation of systematically allocated overhead expenditures incurred based on the normal operating capacity.
(c) Basis for determining net realizable values of inventories and method for making provisions 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 realizable value. Net realizable value is determined based on the estimated selling price in the ordinary course of business, less the estimated costs to completion and estimated costs necessary to make the sale and related taxes.
(d) The Group adopts the perpetual inventory system.
(e) Amortization methods of low value consumables and packaging materials
Turnover materials include low value consumables and packaging materials, which are expensed when issued.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(12) 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 ofshareholders’ equity of the party being absorbed at the combination date; for long-term equity investments acquired through a business combination involving enterprises not under common control, the investment cost shall be the combination cost.
(b) Subsequent measurement and recognition of related profit or 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 recognized 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.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(12) Long-term equity investments (Continued)
For long-term equity investments accounted for using the equity method, the Group recognizes the investment income according to its share of net profit or loss of the investee. The Group discontinues recognizing 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 recognizing the investment losses and the provisions. For changes inshareholders’ 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 unrealized 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 recognized. For the loss on the intra-group transaction amongst the Group and its investees attributable to asset impairment, any unrealized loss is not eliminated.
(c) Basis for determining existence of control, joint 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.
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 III (21)).
(13) 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 properties are included in the cost of the Investment properties when it is probable that the associated economic benefits will flow to the Group and their costs can be reliably measured; otherwise, the expenditures are recognized in profit or loss in the period in which they are incurred.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(13) Investment properties (Continued)
The Group adopts the cost model for subsequent measurement of investment properties. Buildings and land use rights are depreciated or amortized to their estimated net residual values over their estimated useful lives. The estimated useful lives, the estimated net residual values that are expressed as a percentage of cost and the annual depreciation (amortization) rates of investment properties are as follows:
Estimated useful life Estimated residual value Annual depreciation (amortization) rates
Buildings 12-35 years 0-5% 2.71-7.92% Land use rights 30-50 years - 2.00-3.33% When an Investment properties is transferred to owner-occupied properties, it is reclassified as a 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 an investment property at its carrying amount at the date of the transfer.
The Investmentproperties’ estimated useful life, net residual value and depreciation (amortization) method applied are reviewed and adjusted as appropriate at each end of year.
An Investment properties is derecognized on disposal or when the Investment properties 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 properties after its carrying amount and related taxes and expenses is recognized in profit or loss for the current period.
The carrying amount of an Investment properties is reduced to the recoverable amount if the recoverable amount is below the carrying amount (Note III (20)).
(14) Fixed assets
(a) Recognition and initial measurement of fixed assets
Fixed assets comprise buildings, machinery and equipment, motor vehicles, other equipment and leasehold improvements.
Fixed assets are recognized 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 reorganization of the Company into a corporation entity are recognized 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 derecognized. All the other subsequent expenditures are recognized in profit or loss in the period in which they are incurred.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(14) Fixed assets (Continued)
(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 lives Estimated residual value Annual depreciation rates
Buildings 20-35 years 0-5% 2.71-5.00% Machinery and equipment 5-14 years 3-6% 6.79-19.40% Motor vehicles 3-10 years 0-5% 9.50-33.33% Other equipment 3-10 years 0-5% 9.50-33.33% Leasehold improvements within 5 years 0% 20% and above
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 end of year.
(c) The carrying amount of fixed assets is reduced to the recoverable amount when the recoverable amount is less than the carrying amount (Note III (20)).
(d) Recognition basis and measurement method for financing leased fixed assets.
Finance leases are leases with the whole risks and rewards related to the asset substantially transferred. Fixed assets leased under finance lease are recognized with at smaller value of the fair value and minimum lease payments. The difference between the book value and the minimum lease payments should be recognized as unrecognized financing charges (Note III (27) (b)).
Fixed assets leased under finance lease are depreciated using the same policy as that those fixed assets owned by the company. For those leased assets that the ownership of the assets can be ascertained by the expiration date, the assets should be depreciated within estimated useful lives. Otherwise, the assets should be depreciated within the shorter period of the leasing period and estimated useful lives.
(e) Disposal of fixed assets
A fixed asset is derecognized 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 recognized in profit or loss for the current period.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(15) Construction in progress
Construction in progress is measured at actual cost. Actual cost comprises construction costs, installation costs, borrowing costs that are eligible for capitalization 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 III (20)).
(16) 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 capitalized 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 capitalization of borrowing costs ceases when the asset under acquisition or construction becomes ready for its intended use and the borrowing costs incurred thereafter are recognized in profit or loss for the current period. Capitalization 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 capitalization, the amount of borrowing costs eligible for capitalization 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 capitalization period.
For the general borrowings obtained for the acquisition or construction of a fixed asset qualifying for capitalization, the amount of borrowing costs eligible for capitalization 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 an applicable shorter period are discounted to the initial amount of the borrowings. (17) Intangible assets
Intangible assets include land use rights, computer software, technology patents, trademarks and distribution network, which are initially recognized at cost. Intangible assets contributed by state-owned shareholders during the Company reorganization were recorded based on the valuation amount approved by the State-owned Assets Supervision and Management Department.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(17) Intangible assets (Continued)
Categories Useful lives Land use rights Between the approved useful period and theCompany’s operating period Software 3-5 years Trademarks 5-10 years Technology patents 5 years Distribution network 20 years Franchising rights 10 years Favorable leases 17-20 years A land use right granted by government with an infinite useful life would not be amortized. Other land use rights are amortized 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 recognized as fixed assets.
For an intangible asset with a finite useful life, review of its useful life and amortization method is performed at each end of year, with adjustments made as appropriate. For an intangible asset without a definite useful life, review of its useful life is performed at each end of year.
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 and new drugs researches is recognized in profit or loss in the period in which it is incurred. Expenditure on the designation, measurement of the final utilization of the production process and new drugs before mass production, is capitalized only if all of the following conditions are satisfied:
• development of the production process and new drugs has been fully demonstrated by the technical team;
• management has approved the budget of drug production development and new drugs;
• 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;
• the expenditure attributable to the intangible asset during its development phase can be reliably measured.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(17) Intangible assets (Continued)
Other development costs that do not meet the conditions above are recognized in profit or loss in the period in which they are incurred. Development costs previously recognized as expenses are not recognized as an asset in a subsequent period. Capitalized expenditure on the development phase is presented as development costs in the balance sheet and transferred to intangible assets at the date that the asset is ready for its intended use.
The carrying amount of intangible assets is reduced to the recoverable amount when the recoverable amount is less than the carrying amount (Note III (20)).
(18) Long-term prepaid expenses
Long-term prepaid expenses include the expenditure for improvements to fixed assets under operating leases, and other expenditures that have been made but should be recognized as expenses over more than one year in the current and subsequent periods. Long-term prepaid expenses are amortized on the straight-line basis over the expected beneficial period and are presented at actual expenditure net of accumulated amortization.
(19) Governmental medical reserve funds and specially approved reserving materials
Appointed by the PRC Government, CNPGC is responsible for purchasing, allocating and providing the governmental medical reserves, which include the medical products, traditional Chinese medicine and medical appliances for nation-wide emergency rescue and disaster relief. Appointed by the Government of Guangxi Province, 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 serious disasters, epidemics and other emergencies as well as endemic diseases 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 recognized as other non-current liabilities. The Group reserves the specially approved medical reserving materials according to the reserve program (by category and by quantity), applies dynamic management and recognizes as other non-current assets.
(20) 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 and associates are tested for impairment if there is any indication that an asset may be impaired at the balance sheet 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 recognized 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 recognized 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.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(20) Impairment of long-term assets (Continued)
Goodwill that is separately presented in the financialstatements，intangible assets with infinite useful lives and capitalized development costs 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 recognized. 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 amount of other assets within the asset groups or groups of asset groups in proportion to the carrying amount of other assets.
Once the above Impairment loss is recognized, it will not be reversed for the value recovered in the subsequent periods.
(21) Employee benefits
Employee benefits mainly include short-term employee benefits, post-employment benefits, termination benefits and other long-term employee benefits incurred in exchange for service rendered by employees or various forms of rewards or compensation due to severance of labor relation.
(a) Short-term employee benefits
Short-term employee benefits include wages or salaries, bonuses, allowances and subsidies, staff welfare, medical insurance, work injury insurance, maternity insurance, housing funds, and labor union funds and employee education funds. The employee benefits are recognized 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 (defined contribution plans)
The Company classifies post-employment benefit plans into either defined contribution plans or 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 labor and social protection authorities. Basic pensions are provided monthly according to stipulated bases and proportions to local labor and social security contribution. When employees retire, local labor and social security institutions have a duty to pay the basic pension insurance to them. The amounts payable are recognized 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.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(21) Employee benefits (Continued)
(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 of when the Group cannot unilaterally withdraw the labor relation plan and when the Group recognizes the cost relating to recombinant involving the payment of termination benefits.
(d) Retirement benefits
The Group provides retirement benefits to employees who accept the internal retirement arrangements. Retirement benefits refer to the salary and social security contribution 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 liability including salary and security contribution funds is recognized when conditions for recognition are 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 for in the current profits and losses.
Retirement benefits that are expected to be paid within one year from the balance sheet date are disclosed as current liabilities.
(22) Provisions
An obligation related to a contingency shall be recognized by the Group as a provision when all of the following conditions are satisfied, except contingent considerations and contingent liabilities assumed in a business combination not involving enterprises under common control:
(1) The obligation is a present obligation of the Group;
(2) It is probable that an outflow of economic benefits from the Group will be required to settle the obligation; and
(3) The amount of the obligation can be measured reliably.
The provisions are initially measured at the best estimate of the expenditure required to settle the related present obligation, taking into account factors pertaining to a contingency such as the risks, uncertainties and time value of money as a whole. The carrying amount of provisions is reviewed at the balance sheet date. Where there is clear evidence that the carrying amount of a provision does not reflect the current best estimate, the carrying amount is adjusted to the current best estimate.
Contingent liabilities of the acquiree obtained in a business combination shall be measured at fair value in initial recognition. After initial recognition, subsequent measurement is conducted using the higher of the
amount recognized by provisions and the amount of initial recognition deducting the accumulated amortization amount determined by the principles of revenue recognition.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(23) Dividend distribution
Cash dividend distribution is recognized as a liability in the period in which it is approved by shareholder at the annualshareholders’ meeting.
(24) Revenue recognition
Revenue is recognized when control of the goods or services has been transferred to customers.
Revenue from the sale of products directly to customers, is recognized when control the goods transferred, being when the products are accepted by customers. The customers have full dicretion over the products, and there is no un-fufilled obligation that could affect thecutomers’ acceptance of the products.
The Group provides freight, storage and other services to external parties. The freights are recognized on a percentage-of-completion basis, and determined on the time propotion method. Other revenue is determined in accordance with the amount provided in the service period stipulated in the contract. The Group shall recognise a refund liability if the Group receives consideration from a customer and expects to refund some or all of that consideration to the customer. A refund liability is measured at the amount of consideration received (or receivable) for which the entity does not expect to be entitled (ie amounts not included in the transaction price). The refund liability (and corresponding change in the transaction price and, therefore, the contract liability) shall be updated at the end of each reporting period for changes in circumstances.
The Group, offers a customer loyalty programme where points earned through the purchase of goods can only be redeemed for goods provided by Sinopharm Group Zhijun (Shenzhen) 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.
Determing whether revenue of the Group should be reported gross or net is based on a continuing assessment of various factors. Since the Group has sole discretion in determing the pricing, takes full responsibility of a good or service provided to the customers, and also is responsible for the risk associated with the goods before change of control over the goods, and thecustomers’ complaints and requests, the Group considers it controls the specified goods or services before their delivery to its customers and is a principal in the transactions. Accordingly, the Group recognizes revenue in the gross basis. Otherwise, the Group records the net amount earned as commissions from products sold or services provided.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(24) Revenue recognition (Continued)
When another party is involved in providing goods or services to a customer, the Group determines whether the nature of its promise is a performance obligation to provide the specified goods or services itself as a principal or to arrange for those goods or services to be provided by the other party as an agent. The Group determines whether it is a principal or an agent for each specified good or service promised to the customer. A specified good or service is a distinct good or service (or a distinct bundle of goods or services) to be provided to the customer. If a contract with a customer includes more than one specified good or service, an entity could be a principal for some specified goods or services and an agent for others.
Interest income is recognized and measured based on the loan period and the actual interest rate. Rental income is recognized and measured based to the straight-line method during the rental period. (25) Government grants
Government grants are transfers of monetary or non-monetary assets from the government to the Group at nil consideration, including refund of taxes and financial subsidies, etc.
A government grant is recognized 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 a grant received aimed to create a long-term asset by contracting or other methods. A government grant related to income is any grant other than government grants related to assets.
A government grant related to an asset is recognized as deferred income, and evenly amortized to profit or loss over the useful life of the related asset. Government grants measured at nominal amounts are recognized 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 recognized as deferred income, and included in profit or loss over the periods in which the related costs are recognized; where the grant is a compensation for related expenses or losses already incurred by the Group, the grant is recognized immediately in profit or loss for the current period.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(26) Income tax
Income tax comprises current and deferred tax. Income tax is recognized as income or an expense in profit or loss of the current period, or recognized directly inshareholders’ equity if it arises from a business combination or relates to a transaction or event which is recognized directly inshareholders’ equity.
The Group measures a current tax asset or liability arising from the current and prior period based on the amount of income tax expected to be paid by the Group or returned by tax authority calculated according to related tax laws.
Deferred tax assets and deferred tax liabilities are calculated and recognized based on the differences arising between the tax bases of assets and liabilities and their carrying amounts (temporary differences). Deferred tax asset is recognized 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 recognized for a temporary difference arising from the initial recognition of goodwill. No deferred tax asset or deferred tax liability is recognized 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 realized or the liability is settled.
Deferred tax assets are only recognized 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 utilized.
Deferred tax assets and liabilities are offset when:
 the deferred taxes are related to the same tax payer within the Group and the same taxation authority; and,
 that tax payer has a legally enforceable right to offset current tax assets against current tax liabilities.
Deferred tax liabilities are recognized 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 utilized, the corresponding deferred tax assets are recognized.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(27) Leases
Finance leases are leases with the whole risks and rewards related to the asset substantially transferred. The other kinds of leases are nominated operating leases.
(a) Operating leases
Lease payments under an operating lease are recognized on a straight-line basis over the period of the lease, and are either capitalized as part of the cost of related assets or charged as an expense for the current period.
Lease income under an operating lease is recognized on a straight-line basis over the period of the lease.
(b) Finance leases
Fixed assets leased under finance leases are recognized at the smaller value of the fair value and present value of the minimum lease payments. The difference between the book value and the minimum lease payments should be recognized as unrecognized financing charges, and amortized within the leasing period. The minimum lease payments net off the unrecognized financing charges should be classified as long-term payables.
(28) Discontinued operations
A discontinued operation is a component of an enterprise that either has been disposed of or is classified as held for sale, and is separately identifiable operationally and for financial reporting purpose, and satisfies one of the following conditions:
(1) Represents a separate major line of business or geographical area of operations;
(2) Is part of a single coordinated plan to dispose of a separate major line of business or geographical area of operation;
(3) Is a subsidiary acquired exclusively with a view to resale.
(29) Segment information
The Group identifies operating segments based on the internal organization structure, management requirements and internal reporting system, and discloses segment information of reportable segments which is determined on the basis of operating segments.
An operating segment is a component of the Group that satisfies all of the following conditions: (1) the component is able to earn revenues and incur expenses from its ordinary activities; (2) 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 CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(30) 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 the use of estimates (Note V (16)).
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 recognize 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 recognize 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 III (10)), 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 III (11) (c)), theGroup’s management estimates the net realizable value of the inventory. Net realizable value is determined based on the estimated selling price in the ordinary course of business, less the estimated costs to completion and estimated costs necessary to make the sale and related taxes. 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 CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(30) Critical accounting estimates (Continued)
(a) Critical accounting estimates and key assumptions (Continued)
(iv) Sales return
A refund liability is measured at the amount of consideration received (or receivable) for which the entity does not expect to be entitled (ie amounts not included in the transaction price). The refund liability (and corresponding change in the transaction price and, therefore, the contract liability) shall be updated at the end of each reporting period for changes in circumstances.
(v) Customer loyalty programme
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.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(30) Critical accounting estimates (Continued)
(b) Changes in accounting policies
Accounting policies of revenue were altered in accordance with the requirement of Notice on Issuing and Revising Accounting Standard No. 14– Revenue by Ministry of Finance. And those of financial instruments were also altered in accordance with the requirement of Notice on Issuing and Revising Accounting Standard No. 22– Recognization and Measurement of Financial Instruments, No. 23– Transfer of Financial Instruments, No. 24– Hedging Instruments, and No.37– Disclosures of Financial Instruments. The Group adopted these standards since January 1, 2018. The alteration of these accounting policies had no effect on the net profit of the Group as well as thestockholders’ equity of the Group.
||||
|-|-|-|
|The content and reasons of|||
||Procedures|Remarks|
|changes in accounting policies|||
|In 5th July 2017, Notice on Issuing|||
|and Revising Accounting Standard|||
|No. 14 – Revenue was announced|Agreed in the||
|||The Group adopted this new standard since 1st|
|by Ministry of Finance. The|meeting of board||
|||January 2018. The adoption of this standard did not|
|enterprises listed in Mainland and|of directors held|lead to the significant changes in revenue|
|||recognition. It had no effect on the net profit, total|
|abroad simultaneously should|in 22nd August||
|||assets and total liabilities of the Group.|
|adopt the standard since 1st|2018.|。|
|January 2018, while others should|||
|adopt it since 1st January 2020.|||

CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(30) Critical accounting estimates (Continued)
(b) Changes in accounting policies (Continued)
||||
|-|-|-|
|The content and reasons of|||
||Procedures|Remarks|
|changes in accounting policies|||
|||(1) The percentages of voting interests held by|
|||the Group in Shanghai Guoda Shuguang|
|||Pharmacy Co., Ltd, Shanghai Guoren|
|||Pharmacy Co., Ltd., Sinopharm Holding Hubei|
|||Guoda Pharmacy Co., Ltd., Hunan Zhongbai|
|||pharmaceutical investment Co., Ltd. and|
|||Sinopharm Health Online Co., Ltd. are 25%,|
|Notice on Issuing and Revising||10%, 10%, 6.31% and 8.06%, respectively.|
|Accounting Standard No. 22 –||However, the Group neither appoint the|
|||directors and key management for those 5|
|Recognization and Measurement||companies, nor involve in or affect the financial|
|of Financial Instruments, No. 23 –||or operating decision-making process or|
|||ordinary course of business of those|
|Transfer of Financial Instruments,|Agreed in the|companies. Therefore, the Group had no|
|No. 24 – Hedging Instruments, and|meeting of board|significant influence over the above companies|
|||and recognized its investments in those|
|No.37 – Disclosures of Financial|of directors held|companies as available-for-sale equity|
|Instruments were announced by|in 22nd August|instruments. The Group recorded these assets|
|||as available-for-sale financial assets. After|
|Ministry of Finance in 2017. The|2018.|adopting new standard, these assets were|
|enterprises listed in Mainland and||recorded in financial assets measured at fair|
|||value through other comprehensive income.|
|abroad simultaneously should||The alteration had no effect on the retained|
|adopt the standard since 1st||earnings, other comprehensive income and|
|||other data in comparative period.|
|January 2018, while others should||(2) According to the new standard, the Group|
|adopt it since 1st January 2019.||should assess the expected credit losses|
|||associated with its financial assets measured at|
|||amortized cost on a forward looking basis. The|
|||impairment methodology applied depends on|
|||whether there has been a significant increase in|
|||credit risk. The management considered that|
|||although the Group adopted new standard, it|
|||could still assess the provision of bad debt on|
|||the grouping basis. And it had no significant|
|||effect on the financial statements of the Group.|

CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
IV Taxation
1. Main categories and rates of taxes:
Categories Tax base Tax rate Corporate income tax (“CIT”) Taxable income 15%,20% or25% Taxable value added amount (Tax payable is calculated
using the taxable sales amount multiplied by the effective
Value added tax (“VAT”) tax rate less deductible VAT input of the current period) 0%,3%,5%,6%,10%,11%,16% or17% Revenue from rental income, interest income and etc.
Business tax (from 1 January 2016 to 30 April 2016) 5% City maintenance and
construction tax Amount of VAT 5% or7% Educational surcharge Amount of VAT 3% Local educational surcharge Amount of VAT 2% 2. Tax preferences
(a) In 2014, theGroup’s subsidiary Sinopharm Holding Guangxi Logistics Co., Ltd. (“Sinopharm Guangxi Logistics”) was approved by the Guangxi Local Tax Bureau to enjoy a tax discount applicable to corporations in the region of Western Development to pay income tax at a tax rate of15%. In2016，due to the real estate relocation income, the operatingrevenue’s proportion is below70%, which does not meet the requirements of the preferential tax rate, so Sinopharm Guangxi Logistics was subject to a corporate income tax rate of25% during the year.
From May to December of 2015, eight subsidiaries in Guangxi Province of the Group, including Sinopharm Guangxi, Sinopharm Holding Liuzhou Co., Ltd. (“Sinopharm Liuzhou”) , Sinopharm Holding Beihai Co., Ltd (“Sinopharm Beihai”), Sinopharm Holding Guilin Co., Ltd. (“Sinopharm Guilin”), Sinopharm Holding Guigang Co., Ltd. (“Sinopharm Guigang”), Sinopharm Holding Yulin Co., Ltd. (“Sinopharm Yulin”), Sinopharm Holding Baise Co., Ltd (“Sinopharm Baise”)and Sinopharm Holding Wuzhou Co., Ltd. (“Sinopharm Wuzhou”) were all approved by the Guangxi Local Tax Bureau to enjoy a tax concession of Western Development at a preferential CIT rate of15%. The applicable period for Sinopharm Guangxi, Sinopharm Liuzhou and Sinopharm Beihai is 1 January 2014 to 31 December 2020, and that for the other 5 subsidiaries is 1 January 2015 to 31 December 2020.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
IV Taxation (Continued)
2. Tax preferences (Continued)
(b) The Urumqi Head Office, Changji Branch and Karamay Branch of Sinopharm Holding Xinjiang New& Special Medicines Chain Store Co., Ltd. (“Xinjiang New& Special Medicines”), a subsidiary of the Group, shall pay tax at a rate of15% by jurisdictions According to the Circular of the Ministry of Finance, the State Administration of Taxation, the General Administration of Customs on Issues Concerning Tax Policies for the Further Development of the Western Regions (Cai shui[2011] No.58), enterprises from encouraged industries in the Western Regions, could enjoy a reduced CIT rate of15% from 1 January 2011 to 31 December 2020. According to the reply to Registration Form for Items Enjoying Preferential Treatments in Corporate Income Tax by local tax authorities, in 2016 and 2017, the Urumqi Head Office, Changji Branch and Karamay Branch of Xinjiang New& Special Medicines were subject to a reduced CIT rate of15%.
According to Ning cai (shui) fa[2012] No.957, Ningxia Guoda Pharmacy Chain Store Co., Ltd., a subsidiary of the Group, was qualified for the enterprise from encouraged industries of Western Development. Therefore, in 2016 and 2017, the company was exempt from the local retained portion of the corporate income tax(40%), and therefore subject to a CIT rate of15%.
According to Cai shui[2011] No.58 and Notices on Tax Reduction and Exemption (Hu shi hui guo shui deng zi[2014] No. 37), Sinopharm Holding Guoda Neimenggu Pharmacy Chain Store Co., Ltd., a subsidiary of the Group, was entitled to the preferential tax rate for the further development of the Western Regions. Therefore the company is entitled to a preferential CIT rate of15%.
According to the tax reduction and exemption conditions under the Circular of Local Taxation Bureau of the Autonomous Region on Printing and Distributing the Administration and Implementation Measures for Preferential Corporate Income Tax (Gui di shui fa[2009] No. 150), Sinopharm Holding Guoda Guangxi Pharmacy Chain Store Co., Ltd., received the Written Decision on Approval and Confirmation of Preferential Tax from local taxation bureau of Liuzhou city on 21 May 2015, which approved that the company was subject to a CIT rate of15% in 2016 and 2017. (c) The Corporate Income Tax Law of the People's Republic of China stipulates in Article 28 that, small low-profit enterprises are subject to corporate income tax at a rate of20%. The Implementation Rules for the Corporate Income Tax Law of the People's Republic of China stipulate in Article 92 that, small low-profit enterprises refer to enterprises operating in industries not restricted or prohibited by the State and satisfying following conditions: 1. For industrial enterprises, the annual taxable income does not exceed RMB300,000; the number of employees does not exceed 100 and the total assets does not exceed RMB30 million; 2. for other industries, the annual taxable income does not exceed RMB300,000; the number of employees does not exceed 80 and the total assets does not exceed RMB10 million.
In addition, according to the Circular on Issues Concerning the Preferential Policies for Corporate Income Tax for Small Low-profit Enterprises (Cai shui[2015] No. 34), Announcement of the State Administration of Taxation on Issues concerning the Implementation of the Further Expansion of the Scope of Small Low-profit Enterprises (Cai shui[2015] No.99), small low-profit enterprises with annual taxable income of RMB300,000 or less enjoy a tax reduction of50% of the income and pays income tax at a rate of20%. That is, the applicable corporate income tax rate is10%.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements
1. Cash and bank balances
30 June 2018 31 December 2017 Cash on hand 3,721,460.75 6,208,674.32 Cash at banks 3,588,994,326.62 3,667,290,017.16 Other cash balances 350,879,773.21 518,156,747.03 3,943,595,560.58 4,191,655,438.51 At 30 June 2018, other cash balances were consisted of letter credit deposits amounting to
RMB228,116.00 (31 December 2017: RMB258,800.00), bank acceptance notes deposits amounting to RMB350,651,657.21 (31 December 2017: RMB514,638,979.04). At the peiod end, there was no pledge loans deposits (31 December 2017: RMB3,258,967.99).
2. Notes receivable
30 June 2018 31 December 2017 Trade acceptance notes 750,395,988.43 584,211,909.22 Bank acceptance notes 271,301,381.78 919,982,854.86 1,021,697,370.21 1,504,194,764.08 At 30 June 2018 and 31 December 2017, there were no notes receivable that were pledged
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
2. Notes receivable (Continued)
Notes receivable endorsed or discounted by the Group to other parties which were not yet due at 30 June 2018 and 31 December 2017 are as follows:
30 June 2018
Derecognized Not derecognized Trade acceptance notes - 209,881,899.63 Bank acceptance notes 706,198,208.44 - 706,198,208.44 209,881,899.63 As at 30 June 2018 and 31 December 2017, notes that were converted into accounts receivable due to thedrawer’s inability to settle the note on maturity date are as follows:
30 June 2018 Bank acceptance notes 868,060.00 Trade acceptance notes 14,804,431.01 15,672,491.01 3. Accounts receivable
The accounts receivable by category are analyzed below:
30 June 2018 31 December 2017
Gross carrying amount Provision for bad debt Gross carrying amount Provision for bad debt Amount Proportion Amount Proportion Amount Proportion Amount Proportion Individually
significant
items for
which
provision for
bad debt is
recognized
separately 575,496,544.28 6.07% 11,858,368.75 2.06% 497,346,019.41 6.52% 11,968,509.21 2.41% Items for
which
provision for
bad debt is
recognized by
group 8,860,337,753.97 93.43% 28,158,497.05 0.32% 7,106,178,799.9393.09% 26,069,970.29 0.37% Not
individually
significant
Items for
which
provision for
bad debt is
recognized
separately 47,417,171.54 0.50% 1,692,236.80 3.57% 29,813,325.95 0.39% 5,886,985.91 19.75% 9,483,251,469.79 100.00% 41,709,102.60 0.44% 7,633,338,145.29100.00% 43,925,465.41 0.58%
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
3. Accounts receivable (Continued)
At 30 June 2018, accounts receivable that are individually significant and individually assessed for provisions are as follows:
Accounts receivable(by Carrying Bad debt
company) amount provision Rate Assessment for impairment Receivable of medical Part of the medical insurance insurance receivable takes longer to 425,708,736.16 282,897.53 0.07% collect, and has risk of default Receivable of E-Business Receivable of E-Business with no 47,432,657.88 - 0.00% risk of recoverability Receivable of Franchises Receivable of Franchises with no 43,303,952.30 16,292.93 0.04% risk of recoverability Sinopharm Group Co., Ltd. Receivable due from a related party with low risk of 30,140,408.15 - 0.00% recoverability Daton Xin Jian Kang Receivable due from a fixed Hospital cooperative hospital with no 17,351,611.50 - 0.00% risk of recoverability Receivable of medical Part of the medical insurance insurance receivable takes longer to 11,559,178.29 11,559,178.29100.00% collect, and has risk of default Total
575,496,544.28 11,858,368.75
- - The accounts receivable for which the Group recognized provision for bad debt using the aging analysis method are presented as follows
30 June 2018
Carrying amount Bad debt provision Amount Amount Proportion Within 1 year 8,817,097,861.51 24,372,754.71 0.28% 1 to 2 years 33,418,766.48 1,918,465.80 5.74% 2 to 3 years 5,871,978.85 660,521.6411.25% Over 3 years 3,949,147.13 1,206,754.9030.56% 8,860,337,753.97 28,158,497.05 0.32%
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
3. Accounts receivable (Continued)
The provision for bad debt was RMB7,628,609.34 in 30 June 2018, including RMB9,827,439.11 recovered or reversed. Important recovered or reversed bad debt items are listed below:
Recovered or Way of reversed amount recovery Guangdong Tasly Yue Jian Pharmaceutical Co., 4,083,065.20 Amount Ltd. received due to the lawsuit Tianjin Social Security Fund Management Centre 200,000.00 Amount reversed YunfuPeople’s Hospital 172,831.60 Amount receivedPeople’s Hospital of Deqing County 96,757.20 Amount received Zhaoqing Chinese Medical Hospital 84,623.81 Amount received Health Centre of Heshan City Yayao Town 54,698.00 Amount received Others 140,430.23 Amount received 4,832,406.04
Accounts receivable written off in 30 June 2018 are analysed below:
Company Amount Shenzhen Bainian Out-patient Department
28,571.84 Nature of the Procedure performed Related party transaction or Company receivable Amount Reason not Shenzhen Bainian Out- Receivables Written off according to
patient Department of goods sold
28,571.84
Non-recoverable company policy No As at 30 June 2018, the top five accounts receivable by customer are summarised below: Bad debt provision% of the total accounts Amount amount receivable The top five accounts
receivable total 648,539,647.93 1,806,641.25 6.84% In 30 June 2018, accounts receivable of RMB1,703,007,115.68 have been factored to a financial institute.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
4. Advances to suppliers
(a) The aging of advances to suppliers is analyzed below:
30 June 2018 31 December 2017
Amount % of total balance Amount % of total balance Within 1 year 451,853,929.99 98.95% 507,613,407.19 98.23% 1 to 2 years 3,573,044.24 0.78% 7,410,774.78 1.43% 2 to 3 years 1,253,250.00 0.27% 1,753,935.50 0.34% Above 3 years - 0.00% - 0.00% 456,680,224.23 - 516,778,117.47 - The prepayment aged for more than a year is mainly the advance made by South Pharma& Trade to suppliers for equipment to be resold to the hospitals amounting to RMB4,826,294.24 (31 December 2017: RMB9,164,710.28) as the hospital equipment procurement is a large project and takes a long time to complete.
(b) As at 30 June 2018, the top five advances to suppliers by customer are summarized below:
Amount Proportion of total balance Total amount of top five advances to suppliers
47,114,151.95 10.32% 5. Interest receivable
30 June 2018 31 December 2017 Fixed deposits
- - Entrusted Loans
47,507.80 61,441.11 47,507.80 61,441.11
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
6. Other receivables
(a) Other receivables and related provision for bad debts by category are analyzed below:
30 June 2018 31 December 2017
Bad debt Bad debt Carrying amount provision Carrying amount provision Amount % Amount % Amount % Amount % Individually significant
and subject to
separate
impairment
assessment 217,091,197.8530.37% 9,268,199.704.27% 355,636,071.6252.84% 8 ,980,000.002.53% Receivable accounts
with similar credit
risk 485,835,323.2967.95% 4,122,008.680.85% 282,169,420.6541.93% 2 ,782,712.610.99% Individually not
significant but
individually
evaluated for
impairment 12,028,679.441.68% 2,892,969.0224.05% 35,176,616.145.23% 3 ,348,337.269.52% 714,955,200.58100.00% 1 6,283,177.402.28% 672,982,108.41100.00% 15 ,111,049.872.25% (b) As at 30 June 2018, impairment provision for other receivables individually significant are analyzed as below:
Bad debt
Amount provision Rate Assessment for impairment Shanghai Shyndec Receivable due from a related party with low Pharmaceutical Co., Ltd. risk of recoverability (“Morden Pharma”) 101,166,758.92 - -
Deposit Cash deposit, no risk of recoverable, no 95,782,045.77 288,199.70 0.30% provision Shanghai Roche Price reduction compensation for DTP Pharmaceutical Co., Ltd. 11,162,393.16 - - medicine Shenzhen YinghaiTechnology The ageing is over 5 years Investment Co., Ltd 8,980,000.00 8,980,000.00 100.00%
217,091,197.85 9,268,199.70 -
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
6. Other receivables (Continued)
(c) Provisions for impairment of the receivables which are within a similar risk group are analyzed below:
30 June 2018
Carrying amount Bad debt provision
amount Amount Rate Within 1 year 456,116,259.07 2,147,110.50 0.47% 1 to 2 years 10,122,384.98 152,153.35 1.50% 2 to 3 years 4,810,948.33 436,170.53 9.07% Above 3 years 14,785,730.91 1,386,574.30 9.38% 485,835,323.29 4,122,008.68 0.85% (d)
Nature
30 June 2018 31 December 2017 Deposits
271,993,381.60 226,111,186.83 Receivable due from related parties
114,539,922.50 127,922,489.88 Petty cash advance to employees
16,905,695.03 13,392,873.34 Entrusted borrowings
44,000,000.00 44,000,000.00 Receivable of equity transactions
8,980,000.00 8,980,000.00 Others
258,536,201.45 252,575,558.36 714,955,200.58 672,982,108.41 (e) Bad debt provision of other receivables in 2018 was RMB2,284,955.11 (2017: RMB747,448.78), with the recovered or reversed amount of RMB1,112,827.58 (2017: 929,511.16 ).
(f) There were no other receivables written off in the current year.
(g) As at 30 June2018，the top 5 parties that owed the largest amounts of other receivable balances are analyzed below:
Nature Amount Age % of total amount Provision of bad debt Within 2
Morden Pharma Recivables of merge 101,166,758.92 year 14.15% - Guangdong Pharmaceutical Pharmaceutical trading platform Within 1
electronic trading platform repayment not yet cleared 90,619,946.24 year 12.67% - Sinopharm Group Zhijun (Suzhou) Entrusted borrowings
Pharmaceutical Co., Ltd. Within 1
(“Zhijun Suzhou”) 44,000,000.00 year 6.15% - TCM-Integrated Cancer Center of Deposit of logistics extension Within 1
Southern Medical University services project 30,000,000.00 year 4.20% - Shenyang Social Security Within 1
Administration Medical insurance deposi 26,870,049.18 year 3.76% - 292,656,754.34 40.93%
-
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
7. Inventories
(a) Inventories by category are analyzed below:
30 June 2018 31 December 2017
Book value Provision Net book value Book value Provision Net book value Raw materials 1,526,166.46 - 1,526,166.46 1,181,095.08 - 1,181,095.08 Work in progress 1,252,296.05 - 1,252,296.05 129,098.02 - 129,098.02 Finished goods 4,243,417,987.75 6,667,841.42 4,236,750,146.33 3,785,146,957.42 6,840,110.55 3,778,306,846.87 Low cost consumables 5,826,016.38 - 5,826,016.38 2,241,198.15 - 2,241,198.15 4,252,022,466.64 6,667,841.42 4,245,354,625.22 3,788,698,348.67 6,840,110.55 3,781,858,238.12 (b) Provision for declines in value of inventories is analysed below:
Increases Decreases
1 January 2018
Reversal or
30 June 2018 charge Other Other
Written off
Finished goods 6,840,110.55 2,390,647.06 2,562,916.19 - 6,667,841.42 6,840,110.55 2,390,647.06 2,562,916.19 - 6,667,841.42 (c) Provision of inventories is determined according to the gap between the net realizable value and the inventory book value.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
8. Other current assets
30 June 2018 31 December 2017 Input VAT to be credited 91,576,950.50 78,014,460.84 Corporate income tax to be deducted 192,702.06 933,183.78 Others - - 91,769,652.56 78,947,644.62 9. Financial assets available-for-sale
（1） Financial assets available-for-sale
30 June 2018 31 December 2017
Book value Provision Net book value Book value Provision Net book value Available-for-sale
equity instruments 13,685,760.00 - 13,685,760.00 13,865,760.00 180,000.00 13,685,760.00 - Measured at cost - - - 13,865,760.00 180,000.00 13,685,760.00 - Measured at fair
value through other
comprehensive
income 13,685,760.00 - 13,685,760.00 - - - 13,685,760.00 - 13,685,760.00 13,865,760.00 180,000.00 13,685,760.00（2） Financial assets available-for-sale measured at fair value
Equity investments Debt instrument
Classificantion Total
available for sale available for sale
Fair value 13,685,760.00
-
13,685,760.00 Notice:
According to “CSA No.22- Financial Instrument Measurement and Recognition” and “CSA No.37- Financial
Instrument Disclosure”, the boarder regonized the assets as financial assets measured at fair value
through other comprehensive income
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
9. Financial assets available-for-sale
（3） Financial assets available-for-sale measured at cost
Investee
Carrying amount Impairment provision
Shareholding
Opening Increase Decrease Closing Opening Increase Decrease Closing (%) received for the year Sinopharm Health Online
Co., Ltd. 12,000,000.00 - (12,000,000.00) - - - - - 8.06 - Sinopharm Holding Hubei
Guoda Pharmacy Co., Ltd. 1,000,000.00 - (1,000,000.00) - - - - - 10.00 - Hunan Zhongbai
pharmaceutical investment
Co., Ltd. 315,000.00 - (315,000.00) - - - 6.31 31,500.00 Shanghai Guoda Shuguang
Pharmacy Co., Ltd. 270,760.00 - (270,760.00) - - - - - 25.00 - Xinxiang Golden Elephant. 180,000.00 - (180,000.00) - (180,000.00) - 180,000.00 - 18.00 - Shanghai Guoren Pharmacy
Co., Ltd. 100,000.00 - (100,000.00) - - - - - 10.00 - 13,865,760.00 - 13,865,760.00 - (180,000.00) - 180,000.00 - - 31,500.00
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
10. Long-term equity investments
Associates in 2018
Changes in the year
Provision for Investee 1 January 2018 Cash dividend 30 June 2018
Additional Profit of loss under Other changes in impairment declared by Other
Investment equity method equity
investee
Associates
Shenzhen Main Luck Pharmaceutical Inc.
239,046,738.14 - 29,983,887.32 - - - 269,030,625.46 - (“Main Luck Pharmaceutical”).
Zhijun Medicine 291,042,921.20 - 61,373,560.78 - (58,111,254.57) - 294,305,227.41 - Zhijun Trade 7,676,142.69 - 853,674.01 - (664,795.03) - 7,865,021.67 - Zhijun Suzhou 46,199,728.91 - (10,671,086.78) - - - 35,528,642.13 - Pingshan Medicine 68,686,804.33 - 15,453,485.62 - (9,719,480.71) - 74,420,809.24 - Morden Pharma 979,174,050.62 - 65,661,682.41 397,342.21 (8,641,853.20) 193,639.30 1,036,784,861.34 - Shanghai Beiyi Guoda Pharmaceutical Co. Ltd. 9,518,694.65 - 659,783.20 - - - 10,178,477.85 - Shanghai Liyi Pharmacy Co., Ltd. 771,408.05 - - - - - 771,408.05 - Sinopharm Jienuo Medical Treatment Service
8,502,884.50 - (652,715.21) - - - 7,850,169.29 - Guangdong Co., Ltd. (“Guangdong Jie nuo”)
Shanghai Dingqun Management& Consulting
- 20,000,000.00 - - - - 20,000,000.00 - Co. , Ltd
Dongyuan Accord Pharmaceutical Chain Co.,
396,638.32 - - - - - 396,638.32 396,638.32 Ltd.
1,651,016,011.41 20,000,000.00 162,662,271.35 397,342.21 (77,137,383.51) 193,639.30 1,757,131,880.76 396,638.32
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
11. Investment properties
Subsequent measurement under the cost model:
2018 Buildings and
constructions Land use right Total Original cost
Opening balance 245,932,518.64 23,370,084.72 269,302,603.36 Purchase 45,481.13 - 45,481.13 Transfer from fixed assets 4,605,965.69 - 4,605,965.69 Transfer to fixed assets 6,209,855.73 - 6,209,855.73 Transfer to intangible assets 470,783.88 - 470,783.88 Closing balance
243,903,325.85 23,370,084.72 267,273,410.57 Accumulated
depreciation and
amortization
Opening balance 106,139,314.25 8,184,950.00 114,324,264.25 Provision 4,506,346.47 249,314.66 4,755,661.13 Transfer from fixed assets 1,192,262.29 - 1,192,262.29 Transfer to fixed assets 3,420,626.15 - 3,420,626.15 Transfer to intangible assets 287,874.74 - 287,874.74 Closing balance 108,129,422.12 8,434,264.66 116,563,686.78 Provision for
impairment
Opening balance 1,300,000.00 - 1,300,000.00 Closing balance 1,300,000.00 - 1,300,000.00 Carrying amount
At end of year 134,473,903.73 14,935,820.06 149,409,723.79 At beginning of the year 138,493,204.39 15,185,134.72 153,678,339.11（2）The fixed asset failing to accomplish certification of title
Carrying amount Reason for outstanding property right
Items
certificates
Sinopharm Guangxi Logistics leased the property. As at 30 June 2018, the original cost is RMB70,085,820.00 and the Accumulated depreciation and amortization is Reconstruction of old RMB4,756,023.60. The certification of title is in town 65,329,796.40 progress.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
12. Fixed assets
2018
Fixed asset
Buildings Machinery Vehicles Other equipment Total improvements
Original cost
Opening balance 456,161,611.21 183,752,571.14 87,999,790.56 259,281,585.41 30,111,198.47 1,017,306,756.79 Purchase 11,609,004.98 7,511,943.05 2,537,492.46 8,854,897.18 6,106,795.57 36,620,133.24 Transfer from construction in progress - 2,066,324.80 - - - 2,066,324.80 Transfer from Investment properties 6,209,855.73 - - - - 6,209,855.73 Business combination not involving enterprises under
- - - - - - common control
Transfer to Investment properties 4,605,965.69 - - - - 4,605,965.69 Disposal of subsidiaries - - - - - - Disposal or retirement - 1,176,437.95 3,672,293.82 1,263,162.39 1,110,799.64 7,222,693.80 Closing balance 469,374,506.23 192,154,401.04 86,864,989.20 266,873,320.20 35,107,194.40 1,050,374,411.07 Accumulated depreciation
Opening balance 149,119,755.22 73,601,067.33 59,221,772.87 154,689,144.23 28,964,583.12 465,596,322.77 Provision 6,394,173.54 11,961,644.96 3,796,763.45 9,720,011.38 6,493,533.09 38,366,126.42 Transfer from Investment properties 3,420,626.15 - - - - 3,420,626.15 Transfer to Investment properties 1,192,262.29 - - - - 1,192,262.29 Disposal of subsidiaries - - - - - - Disposal or retirement - 1,037,763.79 3,142,894.82 979,173.35 759,134.31 5,918,966.27 Closing balance 157,742,292.62 84,524,948.50 59,875,641.50 163,429,982.26 34,698,981.90 500,271,846.78
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
12. Fixed assets (Continued)
2018(Continued)
Fixed asset
Buildings Machinery Vehicles Other equipment Total improvements
Provision for impairment
Opening balance - - - - - - Disposal of subsidiaries - - - - - - Closing balance - - - - - - Carrying amount
At end of year 311,632,213.61 107,629,452.54 26,989,347.70 103,443,337.94 408,212.50 550,102,564.29 At beginning of the year 307,041,855.99 110,151,503.81 28,778,017.69 104,592,441.18 1,146,615.35 551,710,434.02
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
12. Fixed assets (Continued)
(a) Fixed assets held under finance leases are presented as follows:
2018
Original cost Accumulated depreciation Provision for impairment Carrying amount Machinery 25,065,579.83 8,994,037.20 - 16,071,542.63 (b) Fixed assets without official property right certificates
||||
|-|-|-|
|Items|Carrying amount|Reason for outstanding property right certificates|
|Buildings|27,867,743.48|In the process|

 (c) As at 30 June 2018, there were no fixed assets that were leased under operating leases.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
13. Construction in progress
30 June 2018 31 December 2017
Carrying Provision for Provision for
balance impairment Carrying amount Carrying balance impairment Carrying amount Warehouse improvement project 3,563,091.66 - 3,563,091.66 1,009,314.93 - 1,009,314.93 New office building project 1,056,812.98 - 1,056,812.98 765,882.63 - 765,882.63 Supply chain extension project 8,234,723.40 - 8,234,723.40 8,193,935.70 - 8,193,935.70 Software project 8,038,066.18 - 8,038,066.18 3,926,271.33 - 3,926,271.33 Other projects 9,913,179.89 - 9,913,179.89 9,051,854.40 - 9,051,854.40 30,805,874.11 - 30,805,874.11 22,947,258.99 - 22,947,258.99
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
13. Construction in progress (Continued)
(a) Changes of significant construction in progress
Changes of significant construction in progress in 2018 are presented as follows:
Decrease
Proportion of Project name Budget
At begi tn hn ein yg
e
ao rf
Increase
Transferred to fixed Transferred to
Tra tn es rf mer
p
t ro
e
l po an ig
d
s
D ui bs sp ido is aa rl
i
eo sf
Others
At end of year
Sour fc ue n do sf inv be us dtm gee tn (t% to ) assets intangible assets expense
Warehouse improvement
project 6,808,651.57 1,009,314.93 3,919,831.35 - - - - 1,366,054.62 3,563,091.66 Other 70.65% New office building Project 1,410,920.18 765,882.63 290,930.35 - - - - - 1,056,812.98 Other 86.80% Supply chain extension
project 32,144,615.39 8,193,935.70 2,107,112.50 2,066,324.80 - - - - 8,234,723.40 Other 87.41% Software project 10,880,000.00 3,926,271.33 4,111,794.85 - - - - - 8,038,066.18 Other 30.00% Other construction projects 207,890,962.32 9,051,854.40 1,939,425.82 - - - - 1,078,100.33 9,913,179.89 Other 5.21% 259,135,149.46 22,947,258.99 12,369,094.87 2,066,324.80 - - - 2,444,154.95 30,805,874.11 - -
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
13. Construction in progress (Continued)
(a) Changes of significant construction inprogress（Continued）
Accumulated amount of Incl: interest capitalized Capitalization Project name Budget Progress（%）
interest capitalized in current year rate(%) Warehouse improvement project 6,808,651.57 70.65% - - - New office building project 1,410,920.18 86.80% - - - Supply chain extension project 32,144,615.39 87.41% - - - Software project 10,880,000.00 30.00% - - - Other construction projects 207,890,962.32 5.21% - - - 259,135,149.46 - - - - For the six month ended 30 June 2018, the original cost of construction in progress transferred to fixed assets amounted to RMB2,066,324.80 (For the six month ended 30 June 2017: RMB1,687,272.11), the original cost of construction in progress transferred to long term prepaid expense amounted to RMB2,444,154.95 (For the six month ended 30 June 2017: RMB14,725,268.66) and there is no construction in progress transferred to intangible assets (For the six month ended 30 June 2017: RMB15,395,443.32).
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
14. Intangible assets
2018 Land use right Software Sales network Trademarks Franchise Total
Original cost
Opening balance 60,481,989.28 126,128,809.36 112,117,142.86 159,219,850.00 710,000.00 458,657,791.50
Purchase - 1,925,352.60 - - - 1,925,352.60
Transfer from construction in
progress - - - - - -
Transfer from investment properties 470,783.88 - - - - 470,783.88
Disposal of subsidiaries - - - - - -
Transfer to investment properties - - - - - -
Transfer to long term prepaid expense - - - - - -
Disposal or retirement 1,210,000.00 1,210,000.00
Closing balance
59,742,773.16 128,054,161.96 112,117,142.86 159,219,850.00 710,000.00 459,843,927.98
Accumulated amortization
Opening balance 26,667,841.47 55,408,075.33 35,086,476.18 15,033,967.64 710,000.00 132,906,360.62
Provision 288,177.06 6,268,956.05 2,802,928.57 2,472,852.94 - 11,832,914.62
Transfer from investment properties 287,874.74 - - - - 287,874.74
Disposal of subsidiaries - - - - - -
Transfer to investment properties - - - - - -
Transfer to long term prepaid expense - - - - - -
Disposal or retirement - - - - - -
Closing balance
27,243,893.27 61,677,031.38 37,889,404.75 17,506,820.58 710,000.00 145,027,149.98
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
14. Intangible assets (Continued)
2018 (Continued) Land use right Software Sales network Trademarks Franchise Total
Provision for impairment
Opening balance - - - - - -
Disposal of subsidiaries - - - - - -
Closing balance
- - - - - -
Carrying amount
At end of the year
32,498,879.89 66,377,130.58 74,227,738.11 141,713,029.42 - 314,816,778.00
At beginning of the year
33,814,147.81 70,720,734.03 77,030,666.68 144,185,882.36 - 325,751,430.88
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
14. Intangible assets (Continued)
As at 30 June 2018, there were no intangible assets arising from internal research and
development (30 June 2017: none)
As at30 June 2018, intangible assets without the right certificates as below,
||||
|-|-|-|
|Items|Carrying amount|Reason for outstanding property right certificates|
|Land useright|4,000,000.00|In the process|

CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
15. Goodwill
(1) Goodwill cost
30 June 2018 Opening balance Increase Decrease Closing balance Jiangmen Renren Medical Co., Ltd.
(“Sinopharm Jiangmen”) 27,392,317.73 - - 27,392,317.73 Sinopharm Holding Shenzhen
Yanfeng Co., Ltd. (“Sinopharm
Yanfeng”) 16,868,644.87 - - 16,868,644.87 Sinopharm Holding Zhaoqing Co., Ltd.
(“Sinopharm Zhaoqing”) 2,594,341.53 - - 2,594,341.53 Sinopharm Holding Shaoguan Co.,
Ltd. (“Sinopharm Shaoguan”) 1,686,496.80 - - 1,686,496.80 Sinopharm Holding Meizhou Co., Ltd.
(“Sinopharm Meizhou”) 1,610,819.66 - - 1,610,819.66 Sinopharm Holding Huizhou Co., Ltd.
(“Sinopharm Huizhou”) 923,184.67 - - 923,184.67 Sinopharm Holding Zhanjiang Co.,
Ltd. (“Sinopharm Zhanjiang”) 282,135.55 - - 282,135.55 Sinopharm Holding Dongguan Co.,
Ltd. (“Sinopharm Dongguan”) 1,499.02 - - 1,499.02 South Pharma& Trade 2,755,680.62 - - 2,755,680.62 Foshan Nanhai 88,877,850.51 - - 88,877,850.51 Sinopharm Holding Zhuhai
Co.,Ltd.(Sinopharm Zhuhai) 6,772,561.47 - - 6,772,561.47 Sinopharm Holding Maoming Co., Ltd.
(“Sinopharm Maoming”) 66,417.07 - - 66,417.07 Sinopharm Holding Guoda ForMe
Medicines (Shanghai) Co., Ltd.
( “ForMe Medicines”) 3,033,547.53 - - 3,033,547.53 Sinopharm Holding Guoda ForMe
Pharmacy Chain Store Co., Ltd.
(“ForMe Pharmacy Chain Store”) 19,405,450.23 - - 19,405,450.23 Sinopharm Holding Guoda Shanxi
Yiyuan Pharmacy Chain Store Co.,
Ltd. 9,080,100.00 - - 9,080,100.00 Sinopharm Holding Guoda Yangzhou
Dadesheng Pharmacy Chain Store
Co., Ltd. 7,979,000.00 - - 7,979,000.00 Zhejiang Guoda Pharmacy Co., Ltd. 3,045,183.85 - - 3,045,183.85 Guoda Shenyang Tianyitang
Pharmacy Chain 1,687,942.92 - - 1,687,942.92 Sinopharm Holding Guoda Shenyang
Pharmacy Chain Store Co., Ltd. 39,360,015.16 - - 39,360,015.16 Sinopharm Holding Guoda Nanjing
Pharmacy Chain Store Co., Ltd. 11,598,341.12 - - 11,598,341.12 Sinopharm Holding Guoda Shandong
Pharmacy Chain Store Co., Ltd. 29,110,409.46 - - 29,110,409.46 Quanzhou Guoda Pharmacy Chain
Store Co., Ltd. 41,298,622.59 - - 41,298,622.59 Shanxi Guoda Wanmin Pharmacy
Chain Store Co., Ltd. 65,025,000.00 - - 65,025,000.00 Sinopharm Holding Hunan Guoda
Minshengtang Pharmacy Chain
Co., Ltd. 41,165,574.64 - - 41,165,574.64 Liyang Guoda People Pharmacy
Chain Store Co., Ltd. 107,275,095.74 - - 107,275,095.74
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
15. Goodwill (Continued)
(1)Goodwill cost (Continued)
Increase Decrease
30 June 2018 (Continued) Opening balance Business combination not Closing balance involving enterprises under
common control Disposal
Sinopharm Holding Guoda Henan
Pharmacy Chain Store Co., Ltd. 22,666,179.77 - - 22,666,179.77 Sinopharm Holding Guoda
Neimenggu Pharmacy Chain Store
Co., Ltd. 70,485,777.00 - - 70,485,777.00 Sinopharm Guoda Pharmacy
Jiangmen Chain Co., Ltd. 77,350,000.00 - - 77,350,000.00 Fujian Guoda Pharmacy Chain Store
Co., Ltd. 1,567,250.76 - - 1,567,250.76 Sinopharm Holding Guoda Pharmacy
Chain Store Shanghai Co., Ltd. 5,028,638.00 - - 5,028,638.00 Beijing Golden Elephant Pharmacy
Medicine Chain Company Limited
(“Beijing Golden Elephant”) 63,546,507.81 - - 63,546,507.81 Beijing Yangqiao Rongzhi Golden
Elephant Pharmacy Company
Limited 593,616.55 - - 593,616.55 Xiaoyi Guoda Wanmin Baicaotang
Pharmacy Chain Store Co., Ltd.
(“Xiaoyi Wanmin”) 15,866,680.00 - - 15,866,680.00 Shijiazhuang Lerentang Yikang
Pharmacy Chain Store Co., Ltd.
(“Hebei Yikang”) 29,482,149.57 - - 29,482,149.57 Shenzhen Guanganli Pharmacy Chain
Store Co., Ltd. store acquisition 13,420,000.00 - - 13,420,000.00 Guoda Taishan 26,826,120.55 - - 26,826,120.55 855,729,152.75 - - 855,729,152.75
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
15. Goodwill (Continued)
(2)Provision of impairment loss
Changes in provision for impairment of goodwill are presented as follows:
20 18 Opening balance
Increase Decrease
Closing balance Quanzhou Guoda Pharmacy
Chain Store Co., Ltd.
25,000,000.00 - - 25,000,000.00 The method of goodwill impairment testing process, parameter and recognition of impairment loss: The recoverable amount of asset groups and groups of asset groups is calculated by using the estimated cash flows according to the five-year budget approved by management. Management determines budgeted gross margin based on historical experience and forecast on market
development. The discount rates determined by management are the pre-tax interest rates which reflect the risks specific to the related asset groups and groups of asset groups. The above
assumptions are used to assess the recoverable amount of each asset group and group of asset groups within the corresponding operating segment.
16. Long-term prepaid expenses
2018 Opening balance Additions Amortization Other decrease Closing balance Fixed asset improvement
expenditure 199,209,837.80 47,172,150.82 37,044,188.47 1,059,643.27 208,278,156.88 Acquisition expenditure to
obtain the right to operate 49,013,331.48 4,191,488.00 3,801,140.68 - 49,403,678.80 Others 4,023,881.51 161,478.68 792,968.47 - 3,392,391.72 252,247,050.79 51,525,117.50 41,638,297.62 1,059,643.27 261,074,227.40
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
17. Deferred tax assets/liabilities
(a) Deferred tax assets before offseting
30 June 2018 31 December 2017
Deductible temporary Deductible temporary
differences Deferred tax assets differences Deferred tax assets Provision for
impairment of assets 65,649,831.79 15,142,434.13 66,273,264.14 16,274,860.36 Deductible tax loss 92,143,605.37 22,824,595.10 115,556,647.93 28,705,915.53 Accrued payroll 38,401,349.70 9,046,959.71 60,250,524.89 14,540,506.81 Accrued expenses 83,904,219.01 20,394,682.93 47,994,796.55 11,141,862.66 Deferred revenue 29,041,585.51 7,198,990.94 30,837,426.91 7,540,824.20 Others 6,946,672.66 1,462,475.52 5,424,788.24 1,268,913.50 316,087,264.04 76,070,138.33 326,337,448.66 79,472,883.06 (b) Deferred tax liabilities before offseting
30 June 2018 31 December 2017
Taxable temporary Taxable temporary
differences Deferred tax liabilities differences Deferred tax liabilities Fair value adjustment
for business
combination not
involving enterprises
under common
control 233,836,821.08 58,459,205.27 239,773,296.84 59,943,324.20 Changes in fair value 45,620,230.45 11,405,057.61 53,300,601.31 11,939,928.82 279,457,051.53 69,864,262.88 293,073,898.15 71,883,253.02 Deferred tax assets and liabilities are presented after being offset against each other:
30 June 2018 31 December 2017
Deferred tax Temporary Deferred tax Temporary assets/liabilities - differences assets/liabilities - differences Net after set-off Net after set-off Deferred tax assets
76,070,138.33 79,472,883.06 Deferred tax liabilities
69,864,262.88 71,883,253.02
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
17. Deferred tax assets/liabilities (Continued)
(c) The deductible temporary differences and deductible losses that were not recognized as deferred tax assets are presented as follows:
30 June 2018 31 December 2017 Deductible temporary differences 886,927.95 1,480,000.00 Deductible loss (i) 21,759,547.45 21,759,547.45 22,646,475.40 23,239,547.45 (i) For those loss-making subsidiaries, as it is not considered probable that taxable profit will be available against which the tax losses can be utilized, the Group has not recognized deferred tax assets arising from accumulated losses amounting to RMB21,759,547.45 which are tax deductible under the tax law.
The aforesaid unrecognized deductible losses will due:
30 June 2018 31 December 2017 2018 2,970,715.21 2,970,715.21 2019 3,159,690.78 3,159,690.78 2020 4,835,260.23 4,835,260.23 2021 2,641,220.49 2,641,220.49 2022 8,152,660.74 8,152,660.74 21,759,547.45 21,759,547.45 (note) As some subsidiaries are still making loss, andit’s uncertainty that the loss-making subsidiarie can obtain enough taxable income to offset against the loss in the future. So the group do not
recognised deferred tax assets which came from the deductible loss of RMB 21,759,547.45 .
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
18. Other non-current assets
30 June 2018 31 December 2017 Prepayment for investment (Note 1) 60,000,000.00 60,000,000.00 Physical assets reserve specifically
authorized 43,002,651.70 45,074,249.27 Prepayment for a rental fee (Note 2) 13,728,510.39 17,506,780.28 Prepayment for project and equipment 13,495,723.15 19,441,433.20 130,226,885.24 142,022,462.75 Note 1 On March 2017, the Group subscribed to Sinopharm Zhongjin medical industry fund, as its limited partner. The total investment which amounted to RMB200 million, will be paid within 3 years gradually. The total amount paid unitl now was30% of the total investment which was
RMB60 million. The amount which should be paid in current year have not been settled.
Note 2: The prepayment for a rental fee which is over one year is recognized at other non-
current assets for the Group.
19. Short-term borrowings
30 June 2018 31 December 2017 Credit borrowings 1,841,257,752.04 1,413,638,993.97 Discounted notes 209,881,899.63 147,715,527.67 2,051,139,651.67 1,561,354,521.64 As at 30 June 2018, the annual interest rate for the above borrowings was4.65% (31 December 2017:4.34%).
As at 30 June 2018, credit borrowings of RMB1,423,611,601.11 were guaranteed by the Company and its subsidiaries (31 December 2017: credit borrowings of RMB1,156,302,581.02 were guaranteed by the Company and its subsidiaries.), guaranteed borrowings of RMB122,986,581.52 (31 December 2017: RMB147,715,527.67) were guaranteed by Sinopharm Group.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
20. Notes payable
30 June 2018 31 December 2017 Commercial acceptance notes 40,893,576.65 60,129,565.95 Bank acceptance notes 2,332,734,564.21 2,672,308,262.47 2,373,628,140.86 2,732,437,828.42 At 30 June2018，balance of notes payable at maturity was RMB0.00. (31 December2017：RMB 19,900.00).
21. Accounts payable
30 June 2018 31 December 2017 Trade payables 7,230,024,480.35 6,144,221,000.10 At 30 June 2018, the total amount of accounts payable aged over one year was RMB391,213,598.73(31 December 2017: RMB269,295,585.18 ), and the payment has not yet been cleared.
22. Advances from customers
30 June 2018 31 December 2017 Sales received in advance 178,425,087.30 216,938,239.32 At 30 June 2018, the total amount of accounts payable aged over one year was RMB3,598,442.48(31 December 2017: RMB16,618,324.72).
23. Employee benefits payable
At beginning of At end of the 2018 the year Increase Decrease year Short-term employee
benefits (a) 209,320,163.70 828,379,586.12 897,398,633.92 140,301,115.90 Post-employment
benefits (defined
contribution plan)(b) 5,596,277.12 83,185,725.88 78,979,669.66 9,802,333.34 Termination benefits (c) 740,085.72 587,663.14 745,755.84 581,993.02 215,656,526.54 912,152,975.14 977,124,059.42 150,685,442.26
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
23. Employee benefits payable (Continued)
(a) Short-term employee benefits
At beginning of
2018 year Increase Decrease At end of year Salaries, bonuses, allowances
and grants 193,078,506.49 721,571,753.11 790,541,221.26 124,109,038.34 Staff welfare 2,602,805.92 21,451,963.99 22,876,399.30 1,178,370.61 Social security contribution 1,363,649.32 41,911,740.91 40,873,381.07 2,402,009.16 Incl: Medical insurance 1,130,984.41 37,059,846.24 36,185,027.55 2,005,803.10 Work injury insurance 10,541.55 1,788,839.75 1,680,745.39 118,635.91 Maternity insurance 222,123.36 3,063,054.92 3,007,608.13 277,570.15 Housing funds 929,089.33 28,300,167.29 28,485,275.01 743,981.61 Labor union funds and
employee education funds 10,178,562.87 14,254,035.42 13,705,147.37 10,727,450.92 Other short-term benefits 1,167,549.77 889,925.40 917,209.91 1,140,265.26 Total
209,320,163.70 828,379,586.12 897,398,633.92 140,301,115.90 (b) Defined contribution plan
At beginning of
2018 year Increase Decrease At end of year Basic pension
insurance 1,739,623.34 79,178,966.66 76,578,569.12 4,340,020.88 Unemployment
insurance 221,831.21 2,274,056.40 2,062,541.82 433,345.79 Contribution to
pension fund 3,634,822.57 1,732,702.82 338,558.72 5,028,966.67 5,596,277.12 83,185,725.88 78,979,669.66 9,802,333.34Note：
For half year of 2018, the Group provided other termination benefits for severing labor relations of
RMB69,075.00 (2017: RMB117,149.03).
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
24. Tax payable
30 June 2018 31 December 2017 Value-added tax 82,014,625.51 85,843,903.33 Corporate Income taxes 100,059,775.47 102,947,883.38 Individual income tax payable 11,467,041.74 3,921,305.41 City maintenance and construction surtax 7,179,360.17 6,691,713.89 Educational surcharge payable 5,219,506.77 4,862,588.43 Water conservancy fund payable 5,216,011.64 5,356,119.89 Stamp duty 3,350,847.10 4,166,596.91 Property tax 811,622.69 971,268.99 Land use tax payable 187,073.98 513,790.48 Others 7,845,865.69 8,477,729.53 223,351,730.76 223,752,900.24 25. Interest payable
30 June 2018 31 December 2017 Interest payable
- interest on long-term borrowings 35,440.24 38,984.28 - interest on short-term borrowings 10,316,727.99 6,968,878.69 Factoring interest paybale
10,856.93 - Interest payable to former shareholder
15,188.75 303,956.68 10,378,213.91 7,311,819.65 26. Dividend payable
30 June 2018 31 December 2017 Shanghai Fosun Pharmaceutical (Group) Co., Ltd. 4,835,511.58 4,835,511.58 Luqi Zhong 1,853,188.06 4,103,188.06 Lunan Zhong 345,928.44 765,928.44 Xiangjun Zhong 271,800.92 601,800.92 Meiluo Pharmaceutical Co., Ltd. 164,170.07 164,170.07 Ganyin Bai 29,204.73 29,204.73 Zhenfang Zhang 1,389,639.31 1,389,639.31 8,889,443.11 11,889,443.11
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
27. Other payables
30 June 2018 31 December 2017 Payables for factoring programs 305,380,394.63 388,729,758.59 Deposit 231,443,810.46 129,662,851.39 Payables arising from acquisition of
subsidiaries 80,432,813.17 109,445,960.00 Payables for construction in progress and
equipment 50,543,206.13 98,293,860.11 Accrued selling and distribution expenses 128,398,461.81 96,065,832.84 Payables to individuals 49,879,370.07 34,316,089.64 Payables for rentals 13,320,632.62 27,766,119.66 Payables for land transfer payments 18,071,000.00 18,071,000.00 Payables to related parties 20,450,723.24 15,817,669.33 Temparary loan 15,800,000.00 15,800,000.00 Collection of others 18,182,500.61 8,430,347.08 Others 92,273,791.37 68,728,908.62 1,024,176,704.11 1,011,128,397.26 At 30 June 2018, other payables due within 1 year amounted to RMB 184,112,776.75(31 December 2017: RMB 136,676,639.91 ). It is mainly consisted of construction cost payable, company borrowings payable, deposits and etc.
28. Non-current liabilities due within 1 year
30 June 2018 31 December 2017 Finance lease payables 5,651,227.56 5,434,770.70 5,651,227.56 5,434,770.70
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
29. Other current liabilities
30 June 2018 31 December 2017 Output VAT to be recognized
114,239.45 112,817.65 30. Long-term borrowings
30 June 2018 31 December 2017 Credit borrowings (a) 31,600,000.00 31,600,000.00 31,600,000.00 31,600,000.00 (a) At 30 June 2018, the entrusted borrowings of RMB31,600,000.00 were provided by Sinopharm Group through Group Financial Co.
At 30 June 2018, the annual interest rate of above-mentioned borrowings was4.04% (31 December 2017:4.40%).
31. Long-term payables
30 June 2018 31 December 2017 Finance lease payables 12,255,803.40 14,767,307.84 Less: due within one year (5,651,227.56) (5,434,770.70) 6,604,575.84 9,332,537.14 32. Long-term employee benefits payable
30 June 2018 31 December 2017 Early retirement benefits payable 1,636,000.00 1,777,000.00 Less: Retirement benefits payable–
- - within 1 year (Note V (24)(c))
1,636,000.00 1,777,000.00 33. Payable for specific projects
2018
At beginning of year Increase Decrease At end of year Special funds granted by
government
800,000.00 - - 800,000.00
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
34. Deferred income
Reasons of derred 2018 Opening balance Increase Decrease Closing balance income Government
Government grants grants 96,725,183.34 - 2,663,153.60 94,062,029.74
Promotion
The fair value of Rewards
promotion rewards Program 28,357,189.19 1,189,038.59 1,612,877.41 27,933,350.37
125,082,372.53 1,189,038.59 4,276,031.01 121,995,380.11
As at 30 June 2018, deferred income from government grants are as follow:
Government grants Opening Addition in Amount included Amount Closing balance Asset related/ program balance the year in non-operating included in income related income in the other income
year in the year
Resettlement
Compensation (i) 78,253,849.73 - 1,349,204.28 - 76,904,645.45 Asset related Guangxi Logistics Project 6,949,832.98 - - 248,203.20 6,701,629.78 Asset related Logistics standardization
project 3,361,259.39 - - 273,123.42 3,088,135.97 Asset related A comprehensive
experimental modern
service industry
subsidies 1,800,000.00 - - 150,000.00 1,650,000.00 Asset related Shared Logistics Center
(completed) 270,858.75 - - 9,400.20 261,458.55 Asset related Other projects 6,089,382.49 - - 633,222.50 5,456,159.99 income related 96,725,183.34 - 1,349,204.28 1,313,949.32 94,062,029.74
Due to the implementation of urban planning for old town reconstruction in Nanning, the operating
center of Guangxi Logistics which was located in Longteng Road District, Nanning City, was to be
reconstructed in another place. According to the agreement signed between Guangxi Logistics and the real estate developer, Guangxi Logistics would obtain a compensation of RMB120,250,000.00,
including cash of RMB50,000,000.00 and property in constructing equaling a value of
RMB70,250,000.00. Cash compensation of RMB 50,000,000.00 was received in May 2012. In year 2015, construction properties with a value of RMB70,250,000.00 were built and delivered, and had been recognized as investment properties (Note V (18)).
The compensation relating the capital expenditure in the reconstruction of the new logistic center in another place, amounting to RMB93.32 million was recognized as deferred revenue, and would be amortized and recognized in the income statement within the expected useful lives using the straight line method (Note V(71)), and the other cash compensation, which amount approximates to RMB26.93 million, was recognized in the income statement in 2012.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
35. Other non-current liabilities
30 June 2018 31 December 2017 Governmental medical reserve
funds
45,427,343.31 45,427,343.31 Certain medical reserves funds were received by the Group from the PRC government and local government for purchasing medical products (including medicines) required to respond to serious disasters, epidemics and other emergencies.
36. Share capital
2018 At beginning of year At end of year Shares
428,126,983.00 428,126,983.00 37. Capital surplus
2018 At beginning of year Increase Decrease At end of year Share premium 2,118,174,787.27 - - 2,118,174,787.27 Significant reorganization 1,173,907,763.19 - - 1,173,907,763.19 Transition reserves from
investments in associates
reclassified from capital surplus to
other comprehensive income 2,020,250.22 - - 2,020,250.22 Transfer of capital surplus
recognized under the previous
accounting system 2,650,322.00 - - 2,650,322.00 Others (115,324,057.69) 397,342.21 - (114,926,715.48) 3,181,429,064.99 397,342.21 - 3,181,826,407.20 Capital surplus-others increased by RMB397,342.21 when other changes in equity of Modern Pharmaceutical resulted in adjustment of long-term equity investment and an increase of capital surplus by RMB397,342.21.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
38. Surplus reserve
At beginning of year Increase Decrease At end of year Surplus reserve 214,063,491.50 - - 214,063,491.50 214,063,491.50 - - 214,063,491.50 39. Retained earnings
30 June 2018 31 December 2017 Retained earnings at the end of the prior year 5,572,952,806.39 4,689,189,642.51 A business combination involving enterprises under
common control - 1,076,241.59 Retained earnings at beginning of year after
retrospective adjustment and restatement 5,572,952,806.39 4,690,265,884.10 Add: Net profit attributable to the parent 641,727,034.93 1,057,791,930.67 Deduct: Withdrew surplus reserve - (32,747,520.00) Ordinary share cash dividends payable (128,438,094.90) (141,281,904.39) Others - (1,075,583.99) Retained earnings at end of year 6,086,241,746.42 5,572,952,806.39 40. Operating revenue and cost
For the six months ended For the six months ended
30 June 2018 30 June 2017
Revenue Cost Revenue Cost main operations 20,606,027,974.57 18,355,002,752.42 20,372,097,755.35 18,352,591,276.82 Other operating 173,138,725.10 12,640,971.42 152,709,914.22 11,443,174.01 20,779,166,699.67 18,367,643,723.84 20,524,807,669.57 18,364,034,450.83
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
41. Tax and surcharges
For the six month ended For the six month ended 30 June 2018 30 June 2017 City maintenance and construction tax 22,352,680.77 24,931,171.70 Educational surcharge 16,112,625.97 18,243,233.02 Property tax 3,075,856.41 3,345,273.43 Land tax 245,070.74 172,937.56 Vehicle and vessel use tax 98,966.20 98,180.93 Stamp duty 14,200,426.96 14,569,034.12 Others 534,900.20 1,825,790.10 56,620,527.25 63,185,620.86 42. Selling expenses
For the six month ended For the six month ended 30 June 30 June 2018 2017 Employees payroll and welfare
benefits 659,176,548.69 582,798,944.53 Rental expenses 322,805,173.33 285,053,247.11 Transportation charges 33,086,676.72 29,416,679.32 Depreciation expenses 26,125,384.59 21,860,957.80 Promotion and marketing expenses 18,454,328.54 16,881,877.36 Office allowances 16,283,197.98 15,153,489.34 Entertainment expenses 11,357,532.12 11,158,406.02 Storage expenses 14,866,861.14 23,155,581.32 Travel allowances 3,415,890.36 3,425,411.69 Market development fees 3,255,084.76 250,938.26 Conference expenses 1,654,991.62 2,800,521.29 Others 163,107,086.22 118,490,884.13 1,273,588,756.07 1,110,446,938.17
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
43. Administrative expenses
For the six month ended For the six month ended 30 June 2018 30 June 2017 Employees payroll and welfare benefits 248,803,724.84 237,320,475.09 Rental expenses 18,347,245.83 17,030,347.32 Depreciation expenses 12,732,380.45 14,130,107.15 Office allowances 11,877,499.56 13,498,455.92 Amortization of intangible assets 8,272,613.85 7,873,617.35 Entertainment expenses 6,428,775.38 5,878,571.05 Amortization of long-term deferred
expenses 4,518,905.10 4,478,646.05 Vehicle management expenses 4,435,451.82 4,100,271.65 Travel allowances 4,323,679.13 3,538,432.83 Utilities 2,713,666.76 3,714,057.62 Taxations 2,241,415.79 4,087,147.80 Conference expenses 2,059,875.35 718,993.59 Repairing fees 1,624,550.73 1,665,071.14 Others 23,440,279.19 22,601,856.55 351,820,063.78 340,636,051.11 44. Finance costs
For the six month ended For the six month ended 30 June 2018 30 June 2017 Interest expenses 83,356,367.18 59,569,071.77 Less: Interest income (23,082,233.56) (17,460,371.42) Cash discount (21,542,580.44) (13,655,314.59) Exchanges loss/(gain) 329,665.40 (283,622.22) Others 18,480,325.74 16,329,015.22 57,541,544.32 44,498,778.76
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
45. Impairment loss
For the six month ended For the six month ended 30 June 2018 30 June 2017 Inventories provision 508,849.26 (836,741.23) Bad debt allowance (1,026,702.24) 933,498.39 Impairment in fixed assets - - Impairment in goodwill - - (517,852.98) 96,757.16 46. Investment income
For the six month ended For the six month ended 30 June 2018 30 June 2017 Investment income from long-term equity investments
162,662,271.35 146,775,417.29 under the equity method
Investment income from disposal of subsidiaries - - Gain from remeasurement of fair value of remaining
equity interest upon loss of control - - Investment income from available-for-sale financial
31,500.00 50,000.00 assets
Remeasurement loss of fair value when achieved
subsidary in stages - (99,377.39) 162,693,771.35 146,726,039.90 47. Gain on disposal of assets
For the six month ended For the six month ended 30 June 2018 30 June 2017 Gain on disposal of fixed assets 389,144.70 554,192.50 Gain on disposal of intangible assets 3,892,019.91 - Gain on disposal of other non-current assets - (69,106.84) 4,281,164.61 485,085.66 48. Other income
For the six month ended For the six month ended 30 June 2018 30 June 2017 Government grants related to
10,589,212.57 7,958,493.67 daily activities
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
49. Non-operating income
For the six month For the six month Amount classified as ended ended non-recurring profit or 30 June 2018 30 June 2017 loss Government grants (Note a) 1,349,204.28 1,349,204.28 1,349,204.28 Gain on disposal of non-current assets 2,303.00 1,363.70 2,303.00 Incl: Gain on disposal of fixed assets - - - Gain from writing off the unnecessary
payment 2,898,512.62 2,249,156.84 2,898,512.62 Gain arising from donation - - - Others 1,248,931.21 2,456,418.01 1,248,931.21 5,498,951.11 6,056,142.83 5,498,951.11 All non-operating income was wholly classified as non-recurring profit or loss for the six month ended Note a:
Government grants which was recorded in profit or loss are asfollow：
For the six month For the six month Related to asset/income ended ended
30 June 2018 30 June 2017
Resettlement Compensation of Guangxi Asset related Logistics 1,349,204.28 1,349,204.28
50. Non-operating expenses
For the six month ended For the six month ended Amount 30 June 2018 30 June 2017 classified as non-recurring profit or loss Donation expenses 60,000.00 59,900.00 60,000.00 Losses on disposal of non-current
assets 28,525.01 284,142.93 28,525.01 Incl: Losses on disposal of fixed
assets 8,300.35 284,142.93 8,300.35 Penalty expenses 1,194,388.28 1,925,449.66 1,194,388.28 Others 514,379.51 1,290,495.50 514,379.51 1,797,292.80 3,559,988.09 1,797,292.80 Non-operating cost was wholly classified as non-recurring profit or loss for the six month ended
30 June 2018.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
51. Income taxes
For the six month ended For the six month ended 30 June 2018 30 June 2017 Current income tax
163,102,979.73 162,853,639.57 Deferred income tax 1,383,754.59 (2,812,531.94) 164,486,734.32 160,041,107.63 The reconciliation from income tax calculated based on applicable tax rates and total profit presented in the consolidated financial statements to the income taxes is listed below:
For the six month ended 30 June 2018 Total profit 853,735,744.23 Income taxes calculated at applicable tax rates 213,433,936.06 Lower tax rates enacted by local authorities (12,404,268.99) Adjustment of income tax expense of previous year (799,186.91) Income not subject to tax (40,673,442.84) Expenses not deductible for tax 4,061,292.94 Utilization of previously unrecognized tax losses 16,701.91 Deductible loss on unconfirmed deferred tax assets at end
of the year 951,711.58 Impact of the temporary discrepancy on unconfirmed
deductible deferred tax assets at end of the year (100,009.43) Income tax 164,486,734.32
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
52. Notes to items in the cash flow statement
(a) Cash receipts related to other operating activities
2018 2017 Government grants except tax return 10,345,223.64 1,349,204.28 Rent income 37,793,728.50 28,140,527.98 Operational restricted bank deposits received 88,156,799.79 4,067,748.35 Interest income 22,642,258.30 17,412,415.01 Others 153,046,777.37 47,052,933.05 311,984,787.60 98,022,828.67 (b) Cash paid relating to other operating activities
2018 2017 Rental expenses 341,152,419.16 302,083,594.43 Entertainment expenses 17,786,307.50 17,036,977.07 Shipping expenses 33,086,676.72 29,416,679.32 Travel expenses 7,739,569.49 6,963,844.52 Storage expenses 14,866,861.14 23,155,581.32 Office expenses 28,160,697.54 28,651,945.26 Advertising expenses 18,454,328.54 16,881,877.36 Others
377,222,116.67 222,065,660.72 838,468,976.76 646,256,160.00 (c) Cash received relating to other investing activities
2018 2017 Received Entrusted loan payments
44,000,000.00 - from Zhijun Suzhou
Received funds of acquiring
4,680,000.00 - Sinopharm Guangzhou Huadu
Received deposits returned by
- 75,259,200.00 Shyndec
Others 86,145.15 11,768,140.19 48,766,145.15 87,027,340.19
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
52. Notes to items in cash flow statement (Continued)
Cash paid relating to other
(d)
investing activities
2018 2017 Entrusted loan payments to Zhijun
43,999,800.00 44,000,000.00 Suzhou
Others - 26,175,078.90 43,999,800.00 70,175,078.90 Cash received relating to other
(e)
financing activities
2018 2017 Received bank factoring money - 59,676,813.84 Received security deposit of pledged
79,825,164.60 31,255,582.91 borrowings
Others 3,920,000.00 - 83,745,164.60 90,932,396.75 Cash payments relating to other
(f)
financing activities
2018 2017 Repayment of bank factoring 64,002,739.23 - Cash paid for acquisition of non-controlling
54,722,980.00 158,996,642.00 interests
Repayment of entrusted borrowings
- 13,415,363.07 provided by Sinopharm Group
Others - 6,579,569.60 118,725,719.23 178,991,574.67
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
53. Supplementary information of cash flow statement
(a) Reconciliation of net profit to cash flows from operating activities
For the six month ended For the six month ended 30 June 2018 30 June 2017 Net profit 689,249,009.91 599,533,739.02 Adjustments: Provision for asset impairment (506,814.18) 422,321.11 Depreciation of fixed assets and investment
38,366,126.42 35,222,304.68 properties
Amortization of intangible assets 11,832,914.62 12,273,709.34 Amortization of long-term prepaid expenses 41,638,297.62 31,374,523.14 Gains on disposal of fixed assets, and other
(4,254,942.60) (202,306.43) non-current assets
Financial expenses 82,449,854.36 28,528,443.16 Investment income (162,693,771.35) (146,726,039.90) Decrease/(increase) of deferred tax assets 3,402,744.73 (1,641,139.11) Decrease of deferred tax liabilities (2,018,990.14) (2,666,680.74) Decrease/(increase) of inventory (463,324,117.97) 113,733,297.36 (Increase)/decrease in operating receivables
(1,298,602,834.11) (1,127,697,064.94) items
Increase/(decrease) in operating payables
1,170,553,090.12 596,195,867.27 items
Others 119,267,141.77 89,986,457.44 Net cash generated from operating activities 225,357,709.20 228,337,431.40
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
53. Supplementary information of cashflow statement (Continued)
(c) Movement of cash
For the six month ended For the six month ended 30 June 2018 30 June 2017 Cash at end of year 3,592,715,787.37 3,024,190,631.97 Less: cash at beginning of year 3,673,498,691.48 3,150,915,425.49 Net increase in cash
(80,782,904.11) (126,724,793.52) (d) Acquisition of subsidiaries and operating units
For the six month ended
30 June 2018
Cash and cash equivalents paid for acquisitions
of subsidiaries and other business units 16,380,000.00
Incl: Sinopharm Zhuhai -
Sinopharm Guangzhou Huadu 16,380,000.00
Maoming Yongsheng Medicines Co., Ltd.
（MaomingYongsheng） -
Less: Cash held by subsidiaries at the acquisition
date 21,146,145.15
Incl: Sinopharm Zhuhai -
Sinopharm Guangzhou Huadu 21,146,145.15 - Maoming Yongsheng -
Net cash outflow on acquisition of the subsidiaries
and business units
(4,766,145.15)
(e) Cash
30 June 2018 31 December 2017 Cash 3,592,715,787.37 3,673,498,691.48 Incl: Cash on hand 3,721,460.75 6,208,674.32 Bank deposits on demand 3,588,994,326.62 3,667,290,017.16 Ending banlance cash and
cash equivalent
3,592,715,787.37 3,673,498,691.48
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
54. Notes to changes inshareholders’ equity
Capital surplus-others increased by RMB397,342.21 when other changes in equity of Modern Pharmaceutical resulted in adjustment of long-term equity investment and an increase of capital surplus by RMB397,342.21.
55. Assets under restricted ownership or right to use
Book value Reasons Deposits of bank acceptance notes, Cash and cash equivalents 350,879,773.21 depostis for letter of credit Notes receivable endorsed but not due, notes receivable discounted but Notes receivables 209,881,899.63 not due. 560,761,672.84
56. Foreign monetary items
30 June 2018
Original currency Exchange rate Equivalent to RMB Short-term borrowings
10,000.00 6.3978 63,978.00 US dollar
10,000.00 6.3978 63,978.00
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VI. Changes in the scope of consolidation
1. Business combination not involving enterprises under common control
(1) Business combination not involving enterprises under common control during the current period
Revenue of the Net income of the Name of Equity Equity Equity Basis for entity acquired from entity acquired from the entity acquisition Equity acquisition acquisition acquisition Date of determining the the acquisition date the acquisition date to acquired date cost ratio method acquisition acquisition date to the end of period the end of period Sinopharm
Holding
Guangzhou Acquisition of
Huadu Co., Apr.26th Apr.30th controlling
Ltd. 2018 16,380,000.00 70.00% Cash 2018 interest 0.00 (415,654.72) Otherinformation：
In April 2018, the Group increased capital in Guangzhou Honoka red Pharmaceutical Co., Ltd. to70% for RMB 16,380,000.00 to constitue a business combination involving enterprises not under common control. After the increase of capital, Guangzhou Honoka red Pharmaceutical Co., Ltd. changedit’s name to Sinopharm Holding Guangzhou Huadu Co., Ltd..The acquisition was completed on April 30th 2018 and included in the consolidation scope of the company. (2) Cost of combination and Goodwill
Sinopharm Holding Cost of combination Guangzhou Huadu Co., Ltd. Cash 16,380,000.00 Total cost of combination 16,380,000.00 Less: Fair value shares of identifiable net assets obtained 16,380,729.29 The amount of Goodwill / Cost of combination less than fair
value shares of identifiable net assets obtained (729.29) Illustration for the method of determining fair value of the cost of combination and for contingent consideration and its variation:
Fair value of the cost of combination is determined by the consideration actually paid.
(3) Identifiable assets and liabilities of the acquired entity on the acquisition date
Sinopharm Holding Guangzhou Huadu Co., Ltd. Fair value Carrying amount Cash and bank balances 16,466,145.15 16,466,145.15 Accounts receivable 8,111,461.42 8,111,461.42 Advances to suppliers 2,140,000.00 2,140,000.00 Other receivables 1,751,932.93 1,751,932.93 Accounts payable 244,940.00 244,940.00 Tax payables 1,341,300.52 1,341,300.52 Other payables 24,587,265.45 24,587,265.45 Net assets 2,296,033.53 2,296,033.53 Method of determining fair value of the identifiable assets and liabilities:
Determined by valuation price.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VI. Changes in scope of consolidation (Continued)
2. Changes in scope of consolidation for other reasons
Establishment of subsidiaries:
30 June 2018 30 June 2018
Net assets Net profits Remarks Sinopharm Holding Guoda Haohai New Pharmacy Co., Ltd. (a) - - establishment Sinopharm Holding Foshan Medical New Consumables Supply Chain Co., Ltd. (b) 7,994,832.20 (5,167.80) establishment Sinopharm Holding Medical Supply Chain New Services (Guangxi) Co., Ltd. (c) 19,583,025.78 (416,974.22) establishment Sinopharm Holding Baiyi Pharmacy New Guangxi Co., Ltd. (d) 1,938,956.56 (61,043.44) establishment a. On 18 January 2018, the Group and Shanghai Linhong Medical Equipment Co., Ltd. set up Sinopharm Holding Guoda Haohai Pharmacy Co., Ltd. registered capital subscribed RMB
408,000.00 and RMB 392,000.00 respctively. As of 30 June 2018, funding has not yet been completed.
b. On 30 January 2018, the Group and Shenzhen Qingniu Medical Investment Co., Ltd. set
upSinopharm Holding Foshan Medical Consumables Supply Chain Co., Ltd., subscription of registered capital of RMB 8,000,000.00 for which the Group has indirect holding of70%.
c. On 4 January 2018, the Group, Guorun Medical Supply Chain Service (Shanghai) Co., Ltd. and Guangxi Deyiyuan Medical Investment Center (Limited Partnership) set upSinopharm Holding Medical Supply Chain Services (Guangxi) Co., Ltd., registered capital subscribed
RMB6,120,000.00, RMB5,880,000.00 and RMB8,000,000.00 respectively. As of 30 June 2018, fundings of RMB3,060,000.00, RMB2,940,000.00 and RMB4,000,000.00 has been completed respectively.
d. On 24 April 2018, the Group and BaiseJian’an Medical Chain Co., Ltd. set upSinopharm
Holding Baiyi Pharmacy Guangxi Co., Ltd., registered capital subscribed RMB1,020,000.00 and RMB980,000.00 respectively. As of 30 June 2018, funding has not yet been completed.
3. Cancellation of subsidiary
Subsidiaries
Principal place Place of
caR pie tag li s (t Re Mre Bd
Nature of
Shareholding
Reason for no longer of business incorporation
0.000)
business
Direct Indirect
being a subsidiary Tangshan Wholesale
Lerentang and sales of
Pharmacy medicines
Chain Store and health
Co., Ltd.e Tangshan Tangshan 300 products - 100% Absorption merger e. In March 2018, Tangshan Lerentang Pharmacy Chain Store Co., Ltd. completed industrial and commercial cancellation procedures, and cancelled corporate body.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VII Interests in other entities
1． Interests in subsidiaries
(1) The composition of the Group:
Subsidiaries
Principal place of Place of Nature of
Shareholding
Ways of acquisition business incorporation business
Direct Indirect
Sinopharm Guilin Guilin Guilin Commercial - 100.00% Establishment Sinopharm Baise Baise Baise Commercial - 100.00% Establishment Sinopharm Holding
Zhongshan Co., Ltd.
(“Sinopharm
Zhongshan") Zhongshan Zhongshan Commercial 100.00% - Establishment Sinopharm Guigang Guigang Guigang Commercial - 100.00% Establishment Sinopharm Beihai Beihai Beihai Commercial - 100.00% Establishment Guangzhou Medical
Treatment Guangzhou Guangzhou Commercial - 51.00% Establishment Business Shenzhen Jianmin combinations Pharmaceutical Co., involving entities Ltd. (“Sinopharm under common Jianmin") Shenzhen Shenzhen Commercial 100.00% - control Sinopharm Holding
Shenzhen Traditional& Business Herbal Medicine Co., combinations Ltd. (“Sinopharm involving entities Traditional& Herbal under common Medicine") Shenzhen Shenzhen Commercial 100.00% - control Business Sinopharm Holding combinations Shenzhen Logistics involving entities Co., Ltd. (“Shenzhen under common Logistics") Shenzhen Shenzhen Services 100.00% - control Business Sinopharm Holding combinations Guangzhou Co., Ltd. involving entities (“Sinopharm under common Guangzhou") Guangzhou Guangzhou Commercial 100.00% - control Business Sinopharm Holding combinations Guangdong Hengxing involving entities Co., Ltd. (“Sinopharm under common Hengxing") Guangzhou Guangzhou Commercial 100.00% - control Business combinations involving entities under common Sinopharm Yulin Yulin Yulin Commercial - 100.00% control
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VII Interests in other entities (Continued)
1. Interests in subsidiaries (Continued)
(1) The composition of the Group (Continued):
Subsidiaries
Prin oc fi p ba ul
s
p inla ec se
s
incorP pola race
ti
oo nf
Nature of business
DS irh ea ctr eholding
Indirect
Ways of acquisition Business combinations involving entities under Sinopharm Liuzhou Liuzhou Liuzhou Commercial 51.00% - common control Business combinations Guangdong Huixin Investment Co., involving entities under Ltd. (“Huixin Investment”) Guangzhou Guangzhou Service 100.00% - common control Business combinations Sinopharm Holding Foshan Co., involving entities under Ltd. (“Sinopharm Foshan") Foshan Foshan Commercial 100.00% - common control Sinopharm Holding Guangdong Business combinations Yuexing Co., Ltd. (“Sinopharm involving entities under Yuexing”) Guangzhou Guangzhou Commercial 100.00% - common control Sinopharm Holding Guangdong Business combinations Logistics Co., Ltd. involving entities under (“Guangdong Logistic”) Guangzhou Guangzhou Service 100.00% - common control Business combinations involving entities under Sinopharm Guangxi Nanning Nanning Commercial 100.00% - common control Business combinations involving entities under Guangxi Logistic Nanning Nanning Service - 100.00% common control Business combinations involving entities under Sinopharm Wuzhou Wuzhou Wuzhou Commercial - 99.90% common control Business combinations Sinopharm Holding Dongguan Co., involving entities not under Ltd. (“Sinopharm Dongguan") Dongguan Dongguan Commercial 100.00% - common control Business combinations Sinopharm Holding Zhanjiang Co., involving entities not under Ltd. (“Sinopharm Zhanjiang") Zhanjiang Zhanjiang Commercial 100.00% - common control Business combinations Sinopharm Holding Yanfeng Co., involving entities not under Ltd. (“Sinopharm Yanfeng ") Shenzhen Shenzhen Commercial 51.00% - common control Business combinations Sinopharm Holding Meizhou Co., involving entities not under Ltd. (“Sinopharm Meizhou") Meizhou Meizhou Commercial 100.00% - common control
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VII Interests in other entities (Continued)
1． Interests in subsidiaries (Continued)
(1) The composition of the Group (Continued):
Subsidiaries
Principal place of Place of Nature of
Shareholding
Ways of acquisition business incorporation business
Direct Indirect
Business combinations Sinopharm Holding Huizhou Co., involving entities not under Ltd.("Sinopharm Huizhou") Huizhou Huizhou Commercial 100.00% - common control Business combinations Sinopharm Holding Zhaoqing Co., involving entities not under Ltd.("Sinopharm Zhaoqing") Zhaoqing Zhaoqing Commercial 100.00% - common control Sinopharm Holding Jiangmeng Business combinations Renren Medical Co., involving entities not under Ltd.(“Sinopharm Jiangmen”) Jiangmen Jiangmen Commercial 100.00% - common control Business combinations Sinopharm Holding Shaoguan Co., involving entities not under Ltd.("Sinopharm Shaoguan") Shaoguan Shaoguan Commercial 70.00% - common control Business combinations involving entities not under Sinopharm Shantou Shantou Shantou Commercial 100.00% - common control Business combinations involving entities under Foshan Nanhai Medicine Co., Ltd. Foshan Foshan Commercial 100.00% - common control Business combinations Foshan Nanhai Uptodate& Special involving entities under Medicines Co., Ltd. Foshan Foshan Commercial - 100.00% common control Business combinations involving entities under Foshan Nanhai Medicine Co., Ltd. Foshan Foshan Commercial - 100.00% common control Business combinations Guangdong Uptodate& Special involving entities under Medicines Guangzhou Guangzhou Commercial 100.00% - common control Business combinations Guangdong South Pharmaceutical involving entities under Foreign Trade Co., Ltd. Guangzhou Guangzhou Commercial 100.00% - common control Business combination not involving enterprises under Sinopharm Zhuhai Zhuhai Zhuahai Commercial 100.00% - common control Business combination not involving enterprises under Sinopharm Maoming Maoming Maoming Commercial 100.00% - common control Sinopharm Holding Guangzhou
Medical T reatment Technology
Co., Ltd. Guangzhou Guangzhou Commercial - 51.00% Establishment Sinopharm Holding Guangzhou
Medical Supply Chain Co., Ltd. Guangzhou Guangzhou Commercial - 51.00% Establishment Business combination not involving enterprises under Sinopharm Heyuan Heyuan Heyuan Commercial - 70.00% common control Sinopharm Holding Foshan Medical
Consumables Supply Chain
Co., Ltd. Foshan Foshan Commercial - 70.00% Establishment Sinopharm Holding Medical Supply
Chain Services (Guangxi) Co.,
Ltd. Nanning Nanning Commercial - 30.60% Establishment Sinopharm Holding Guoda Haohai
Pharmacy Co., Ltd. Shanghai Shanghai Commercial - 51.00% Establishment Business combination not Sinopharm Holding Guangzhou involving enterprises under Huadu Co., Ltd. Guangzhou Guangzhou Commercial - 70.00% common control Sinopharm Holding Baiyi Pharmacy
Guangxi Co., Ltd. Nanning Nanning Commercial - 51.00% Establishment Business combinations Sinopharm Holding Guoda involving entities under Pharmacy Co., Ltd. Shanghai Shanghai Commercial - 100.00% common control Sinopharm Holding Guoda Business combinations Pharmacy Chain Store involving entities under Shanghai Co., Ltd. Shanghai Shanghai Commercial - 100.00% common control
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VII. Interests in other entities (Continued)
1． Interests in subsidiaries (Continued)
(1) The composition of the Group (Continued)
Subsidiaries Principal place Place of Nature of business Shareholding Ways of acquisition of business incorporation
Direct Indirect
Beijing Guoda Pharmacy Business combinations involving Chain Store Co., Ltd. Beijing Beijing Commercial - 100.00% entities under common control Tianjin Guoda Pharmacy Business combinations involving Chain Store Co., Ltd. Tianjin Tianjin Commercial - 80.00% entities under common control Guangxi Guoda Pharmacy
Consulting Chain Store Business combinations involving Co., Ltd. Nanning Nanning Commercial - 100.00% entities under common control Sinopharm Holding Guoda
Pharmacy Guangdong Business combinations involving Co., Ltd. Shenzhen Shenzhen Commercial - 100.00% entities under common control Sinopharm Guoda
Pharmacy Guangxi Business combinations involving Chain Co., Ltd. Liuzhou Liuzhou Commercial - 100.00% entities under common control Zhejiang Guoda Pharmacy Business combinations involving Co., Ltd. Hangzhou Hangzhou Commercial - 100.00% entities under common control Sinopharm Holding Guoda
Yangzhou Dadesheng
Pharmacy Chain Store Business combinations involving Co., Ltd. Yangzhou Yangzhou Commercial - 93.68% entities under common control Ningxia Guoda Pharmacy Business combinations involving Chain Store Co., Ltd. Yinchuan Yinchuan Commercial - 70.00% entities under common control Sinopharm Holding Guoda
Nanjing Pharmacy Chain Business combinations involving Store Co., Ltd. Nanjing Nanjing Commercial - 60.00% entities under common control Sinopharm Holding Guoda
Shandong Pharmacy Business combinations involving Chain Store Co., Ltd. Linyi Linyi Commercial - 55.00% entities under common control Sinopharm Holding Guoda
Shenyang Pharmacy Business combinations involving Chain Store Co., Ltd. Shenyang Shenyang Commercial - 51.00% entities under common control Fujian Guoda Pharmacy Business combinations involving Chain Store Co., Ltd. Xiamen Xiamen Commercial - 100.00% entities under common control
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VII. Interests in other entities (Continued)
1． Interests in subsidiaries (Continued)
(1) The composition of the Group (Continued)
Subsidiaries Principal place Place of Nature of Shareholding Ways of acquisition of business incorporation business
Direct Indirect
Business combinations Anhui Guoda Pharmacy Chain involving entities under Store Co., Ltd. Hefei Hefei Commercial - 60.00% common control Business combinations Quanzhou Guoda Pharmacy involving entities under Chain Store Co., Ltd. Quanzhou Quanzhou Commercial - 51.00% common control Business combinations Shanxi Guoda Wanmin Pharmacy involving entities under Chain Store Co., Ltd. Taiyuan Taiyuan Commercial - 85.00% common control Sinopharm Holding Hunan Guoda Business combinations Minshengtang Pharmacy involving entities under Chain Co., Ltd. Hengyang Hengyang Commercial - 51.00% common control Business combinations Liyang Guoda People Pharmacy involving entities under Chain Store Co., Ltd. Liyang Liyang Commercial - 80.00% common control Sinopharm Holding Guoda Henan Business combinations Pharmacy Chain Store Co., involving entities under Ltd. Pingdingshan Pingdingshan Commercial - 60.00% common control Sinopharm Holding Guoda Business combinations Neimenggu Pharmacy Chain involving entities under Store Co., Ltd. Hohhot Hohhot Commercial - 96.70% common control Sinopharm Hebei Lerentang Business combinations Pharmacy Chain Store Co., involving entities under Ltd. Shijiazhuang Shijiazhuang Commercial - 60.00% common control Business combinations Sinopharm Guoda Pharmacy involving entities under Jiangmen Chain Co., Ltd. Jiangmen Jiangmen Commercial - 65.00% common control Sinopharm Holding Guoda Shanxi Business combinations Yiyuan Pharmacy Chain Store involving entities under Co., Ltd. Taiyuan Taiyuan Commercial - 80.00% common control Sinopharm Holding Xinjiang New Business combinations& Special Medicines Chain involving entities under Store Co., Ltd. Urumqi Urumqi Commercial - 51.00% common control Sinopharm Holding Guoda ForMe Business combinations Medicines (Shanghai) Co., involving entities under Ltd. Shanghai Shanghai Commercial - 97.00% common control Sinopharm Holding Guoda ForMe
Pharmacy Chain Store Co.,
Ltd. (Formerly “Shanghai Business combinations ForMe YiXing Pharmacy involving entities under Chain Store Co., Ltd.”) Shanghai Shanghai Commercial - 99.76% common control
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VII. Interests in other entities (Continued)
1． Interests in subsidiaries (Continued)
(1) The composition of the Group (Continued)
Subsidiaries Principal place Place of Nature of Shareholding Ways of acquisition of business incorporation business
Direct Indirect
Beijing Golden Elephant Business combinations Pharmacy Medicine Chain involving entities under Company Limited Beijing Beijing Commercial - 53.13% common control Business combinations Shanxi Tongfeng Pharmacy involving entities under Logistics Co., Ltd. Taiyuan Taiyuan Commercial - 100.00% common control Datong Guoda Wanmin Business combinations Pharmacy Chain Store involving entities under Co., Ltd. Datong Datong Commercial - 100.00% common control Changzhi Guoda Wanmin Business combinations Pharmacy Chain Store involving entities under Co., Ltd. Changzhi Changzhi Commercial - 51.00% common control Shanxi Guoda Wanmin Clinic Business combinations Management Chain Co., involving entities under Ltd. Taiyuan Taiyuan Medical services - 100.00% common control Business combinations Shanghai Guoda Shanghong involving entities under Qibao Pharmacy Co., Ltd. Shanghai Shanghai Commercial - 51.00% common control Zhejiang Intlmedicine Business combinations Pharmacy Dongshan Co., involving entities under Ltd. Hangzhou Hangzhou Commercial - 51.00% common control Business combinations Shanghai Guoda Dongsheng involving entities under Pharmacy Co., Ltd. Shanghai Shanghai Commercial - 100.00% common control Sinopharm Guoda Drug Store Business combinations (Shenzhen) Chain Co., involving entities under Ltd. Shenzhen Shenzhen Commercial - 100.00% common control Sinopharm Holding Guoda Business combinations Pharmacy Guangzhou involving entities under Chain Co., Ltd. Guangzhou Guangzhou Commercial - 100.00% common control Business combinations Shanghai Guoda Changxin involving entities under Pharmacy Co., Ltd. Shanghai Shanghai Commercial - 100.00% common control Shanghai Guodong Chinese Business combinations Traditional Medicine Clinic involving entities under Co., Ltd. Shanghai Shanghai Medical clinic - 100.00% common control Shanghai Guoda Dongxin Business combinations Pharmacy Chain Store involving entities under Co., Ltd. Shanghai Shanghai Commercial - 100.00% common control
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VII. Interests in other entities (Continued)
1． Interests in subsidiaries (Continued)
(1) The composition of the Group (Continued)
Subsidiaries Principal place of Place of Nature of business Shareholding Ways of acquisition business incorporation
Direct Indirect
Shanghai Yutaitang Chinese Business combinations Traditional Medicine involving entities under Clinic Co., Ltd. Shanghai Shanghai Commercial - 100.00% common control Beijing Yangqiao Rongzhi
Golden Elephant Business combinations Pharmacy Company involving entities under Limited Beijing Beijing Commercial - 50.79% common control Sanhe Liyang Golden Business combinations Elephant Pharmacy Co., involving entities under Ltd. Langfang Langfang Commercial - 100.00% common control Xiaoyi Guoda Wanmin Business combinations Baicaotang Pharmacy involving entities under Chain Store Co., Ltd. Xiaoyi Xiaoyi Commercial - 70.00% common control Sinopharm Holding Guoda Business combinations Pharmacy Hulun Buir involving entities under Co., Ltd. Hulun Buir Hulun Buir Commercial - 51.00% common control Shijiazhuang Lerentang Business combinations Yikang Pharmacy Chain involving entities under Store Co., Ltd. Shijiazhuang Shijiazhuang Commercial - 100.00% common control Business combinations Shanghai ForMe Pharmacy involving entities under Co., Ltd. Shanghai Shanghai Commercial - 100.00% common control Sinopharm Holding Ulanqab
Co., Ltd. Ulanqab Ulanqab Commercial - 60.00% Establishment Sinopharm Guoda Business combinations Pharmacy Qinhuangdao involving entities under Chain Co., Ltd. Qinhuangdao Qinhuangdao Commercial - 51.00% common control Taishan Sinopharm Holding
Guoda Qunkang Business combinations Pharmacy Chain Store involving entities under Co., Ltd. Taishan Taishan Commercial - 70.00% common control Beijing Golden Elephant Business combinations Fuxing Technology Co., involving entities under Ltd. Beijing Beijing Commercial - 80.00% common control mbinations involving entities under common Sinopharm Lerentang Shijiazhuang Shijiazhuang Commercia - 100% control GuoDa Drugstore Manzhouli
Co., Ltd Manzhouli Manzhouli Commercial - 51.00% Establishment Sinopharm Guoda
Pharmacy Maanshan
Chain Store Co., Ltd. Anshan Anshan Commercial - 51.00% Establishment Sinopharm Guoda
Pharmacy Yongsheng
(Shanghai) Co., Ltd. Shanghai Shanghai Commercial - 55.00% Establishment Sanhe Lixin Golden
Elephant Pharmacy Co.,
Ltd. Langfang Langfang Commercial - 100.00% Establishment
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VII. Interests in other entities (Continued)
2. Interests in associates
Principal place Place of Nature of
Shareholding(%)
of business incorporation business Accounting Direct Indirect
Associates
Shenzhen Main Luck
Pharmaceutical Co., Ltd.
("Main Luck
Pharmaceutical ") Shenzhen Shenzhen Manufacturing 35.19% - Equity Sinopharm Group
Zhijun(Suzhou)
Pharmaceutical Co., Ltd. Suzhou Suzhou Manufacturing 33.00% - Equity Sinopharm Group
Zhijun(Shenzhen)
Pharmaceutical Co., Ltd. Shenzhen Shenzhen Manufacturing 49.00% - Equity Shenzhen Zhijun
Pharmaceutical Trade Co.,
Ltd. Shenzhen Shenzhen Commercial 49.00% - Equity Sinopharm Group
Zhijun(Shenzhen) Pingshan
Pharmaceutical Co., Ltd. Shenzhen Shenzhen Manufacturing 49.00% - Equity Shanghai Shyndec
Pharmaceutical Co., Ltd.
(“Shyndec
Pharmaceutical”) Shanghai Shanghai Manufacturing 16.00% - Equity上海鼎群企业管理咨询有限公
Shanghai Shanghai 2.53% Equity司 商务服务业
Shanghai Beiyi Guoda
pharmaceutical Co. Ltd. Shanghai Shanghai Commercial - 26.00% Equity Shanghai Liyi Pharmacy
Co., Ltd Shanghai Shanghai Commercial - 35.00% Equity Sinopharm Jienuo Medical
Treatment Service
Guangdong Co., Ltd. Guangzhou Guangzhou Commercial - 29.00% Equity Dongyuan accord
pharmaceutical chain
Co., Ltd. Heyuan Heyuan Commercial - 45.00% Equity Accoding to the Articles of Association and investment aggrement, the board of directors of Shanghai Dingqun Enterprise Management Consulting consisted of three directors, in which one were appointed by the Group, accounting for33.33% of voting rights.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VII. Interests in other entities (Continued)
3. Summarised financial information of significant associate
30 June 2018 30 June 2017 Shanghai Shyndec Shanghai Shyndec Pharmaceutical Co., Ltd. Pharmaceutical Co., Ltd. Current assets 8,210,661,752.98 6,919,923,607.58 Non-current assets 8,136,876,492.43 8,250,667,440.18 Total assets 16,347,538,245.41 15,170,591,047.76 Current liabilities 6,124,167,753.55 5,390,426,266.96 Non-current liabilities 2,190,226,473.72 2,132,391,027.26 Total liabilities 8,314,394,227.27 7,522,817,294.22 Non-controlling interests 1,502,385,107.44 1,474,395,375.11Shareholders’ equity attributable
to shareholders of the parent 6,530,758,910.70 6,173,378,378.43 Portion of net assets calculated
by shareholding ratio 1,036,784,861.34 979,174,050.63 Carrying value of equity
investment in joint ventures 1,036,784,861.34 979,174,050.63 Operating revenue 5,853,255,169.05 4,579,660,856.59 Net profit 575,258,204.58 524,753,028.55 Total comprehensive income 575,258,204.58 524,753,028.55 Dividends received from joint
ventures this year 8,641,853.20 22,468,818.32 VIIl. Risks related to financial instruments
1. Classification of financial instruments
The fair values of each category of financial instruments that reasonably approximate to their carrying amounts at the end of the reporting period are as follows:
30 June 2018
Borrowings and Available-for-sale Total Financial assets receivables financial assets
Cash and bank balances 3,943,595,560.58 -
3,943,595,560.58 Notes receivable 1,021,697,370.21 -
1,021,697,370.21 Accounts receivable 9,441,542,367.19 -
9,441,542,367.19 Interest receivable 47,507.80 -
47,507.80 Other receivables 698,672,023.18 -
698,672,023.18 Available-for-sale financial 13,685,760.00 assets - 13,685,760.00
15,105,554,828.96 13,685,760.00
15,119,240,588.96
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VIIl. Risks related to financial instruments (Continued)
1. Classification of financial instruments (Continued)
31 December 2017
Borrowings and Available-for-sale Total Financial assets receivables financial assets
Cash and bank balances 4,191,655,438.51 -
4,191,655,438.51 Notes receivable 1,504,194,764.08 -
1,504,194,764.08 Accounts receivable 7,589,412,679.88 -
7,589,412,679.88 Interest receivable 61,441.11 -
61,441.11 Other receivables 657,871,058.54 -
657,871,058.54 Available-for-sale financial 13,685,760.00 assets - 13,685,760.00
13,943,195,382.12 13,685,760.00
13,956,881,142.12 Financial liabilities 30 June 2018 31 December 2017 Short-term borrowings 2,051,139,651.67 1,561,354,521.64 Notes payable 2,373,628,140.86 2,732,437,828.42 Accounts payable 7,230,024,480.35 6,144,221,000.10 Dividends payable 8,889,443.11 11,889,443.11 Other payables 1,024,176,704.11 1,011,128,397.26 Non-current liabilities due within one year 5,651,227.56 5,434,770.70 Interest payable 10,378,213.91 7,311,819.65 Long-term borrowings 31,600,000.00 31,600,000.00 Long-term payables 6,604,575.84 9,332,537.14 12,742,092,437.41 11,514,710,318.02 2. Transfer of financial assets
Transferred financial assets that are not derecognized in their entirety
As at 30 June 2018, the Group had endorsed commercial bills receivable (the "Endorsed Bills") to certain of its suppliers in order to settle accounts payable due to such suppliers of RMB0 (31 December 2017: RMB0 ). During the year, the Group operated a number of discounting business through several banks in China. At 30 June 2018, the carrying value thereof was RMB209,881,899.63 (31 December 2017: RMB147,715,527.67). In the opinion of the directors, the Group has retained the substantial risks and rewards, which include default risks relating to such Endorsed Bills, and accordingly, it continued to recognize the full carrying amounts of the Endorsed Bills and the associated accounts payable settled. Subsequent to the Endorsement, the Group did not retain any rights on the use of the Endorsed Bills, including the sales, transfer or pledge of the Endorsed Bills to any other third parties. As at 30 June 2018, the carrying value of accounts payable settled by the Group totalled RMB209,881,899.63 (31 December 2017: RMB147,715,527.67).
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VIIl. Risks related to financial instruments (Continued)
2. Transfer of financial assets (Continued)
Transferred financial assets that are derecognized in their entirety in which continuing involvement exists
As at 30 June 2018, the Group had endorsed commercial bills receivable (the "Endorsed Bills") to certain of its suppliers in order to settle accounts payable due to such suppliers of RMB706,198,208.44(31 December 2017: RMB667,900,939.97). During the year, the Group operated a number of discounting business through several banks in China. At 30 June 2018, the carrying value thereof was RMB361,130,021.33 (31 December 2016: RMB367,011,030.59). The Derecognized Bills had a maturity of 1 to 12 months at the end of the reporting period. In accordance with the Law of Negotiable Instruments, the holders of the Derecognized Bills have a right of recourse against the Group if the accepting banks default (the “Continuing Involvement”). In the opinion of the directors, the Group has transferred substantially all risks and rewards relating to the Derecognized Bills. Accordingly, it has derecognized the full carrying amounts of the Derecognized Bills and the associated accounts payable. The maximum exposure to loss from the Group's Continuing Involvement in the Derecognized Bills and the undiscounted cash flows to repurchase these Derecognized Bills is equal to their carrying amounts. In the opinion of the directors, the fair values of theGroup’s Continuing Involvement in the Derecognized Bills are not significant.
As part of its normal business, the Group entered into an accounts receivable factoring arrangement (the “Arrangement”) without recourse and transferred certain accounts receivable to a bank. In the opinion of the directors, the Group has transferred substantially all risks and rewards under the arrangement. Accordingly, it has derecognized the full carrying amounts of the associated accounts receivable. The original carrying value of the derecognized accounts receivable transferred under the Arrangement that have not been settled as at 30 June 2018 amounted to RMB761,574,518.74 (31 December 2017: RMB525,614,331.67).
As of 30 June 2018, the Group has not recognized any gain or loss on the date of transfer. No gain or loss were recognized from derecognized financial assets in which Continuing Involvement exists, both during the year or cumulatively.
As of 30 June 2018, the Group has not recognized any gain or loss on the date of transfer of the Derecognized Bills. No gains or losses were recognized from the Continuing Involvement, both during the year or cumulatively.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VIIl. Risks related to financial instruments (Continued)
3. Risks of financial instruments
The main purpose and policies of financial risk management
The Group's principal financial instruments comprise bank borrowings and cash and short term deposits. The main purpose of these financial instruments is to raise finance for the Group's operations. The Group has various other financial assets and liabilities such as accounts receivable and accounts payable, which arise directly from its operations.
The main risks arising from the Group's financial instruments are interest rate risk, liquidity risk, foreign currency risk and credit risk.
Credit risk
Credit risk is managed on the basis of the Group. Credit risk mainly arises from cash at banks and on hand, accounts receivable, other receivables and notes receivable, etc.
The Group expects that there is no significant credit risk associated with cash at banks since it is deposited with state-owned banks and other medium or large sized 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 guarantees from third parties, their credit history and other factors such as current market conditions. The Group will confirm the balances with its clients regarding the accounts receivable semi-annually, and assess the recoverability of each account receivable, by using individual evaluation and similar credit risk group methods. 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.
Liquidity risk
Cash flow forecasting is performed by each subsidiary of the Group and aggregated by theGroup’s finance department in its headquarter. TheGroup’s finance department at its headquarter 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. In the meanwhile, the Group continually monitors the terms of the debt covenants in the loan agreements, ensuring that sufficient unutilized commitments from major financial institutions, in order to meet the short-term and long-term liquidity requirements.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VIII Risks related to financial instruments (Continued)
3. Risks of financial instruments (Continued)
Liquidity risk (Continued)
The maturity analysis of the Group's financial liabilities as at the end of the reporting period, based on the contractual undiscounted cash flows, is as follows: 30 June 2018
Within 1 year 1 to 2 years 2 to 5 years Above 5 years Total Short-term borrowings 2,070,582,956.14 - - - 2,070,582,956.14 Notes payable 2,373,628,140.86 - - - 2,373,628,140.86 Accounts payable 7,230,024,480.35 - - - 7,230,024,480.35 Interest payables 10,378,213.91 - - - 10,378,213.91 Dividend payables 8,889,443.11 - - - 8,889,443.11 Other payables 1,024,176,704.11 - - - 1,024,176,704.11 Current portion of non-current 5 ,651,227.56 - - - 5,651,227.56 Long-term payables - 3,716,803.49 2,887,772.35 - 6,604,575.84 liabilities
Long-term borrowings 1,293,570.14 32,695,104.58 33,988,674.72 12,724,624,736.18 36,411,908.07 2,887,772.35 12,763,924,416.60
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VIII Risks related to financial instruments (Continued)
3. Risks of financial instruments (Continued)
Liquidity risk (Continued)
31 December 2017
Within 1 year 1 to 2 years 2 to 5 years Above 5 years Total Short-term borrowings 1,574,233,015.06 - - - 1,574,233,015.06 Notes payable 2,732,437,828.42 - - - 2,732,437,828.42 Accounts payable 6,144,221,000.10 - - - 6,144,221,000.10 Interest payables 7,311,819.65 - - - 7,311,819.65 Dividend payables 11,889,443.11 - - - 11,889,443.11 Other payables 1,011,128,397.26 - - - 1,011,128,397.26 Current portion of non-current 7 , 3 04,197.88 - - - 7,304,197.88 lLiaobniglit-iteesrm payables - 7,304,197.88 4,987,438.87 - 12,291,636.75 Long-term borrowings 1,293,570.14 1,293,570.14 32,043,003.47 - 34,630,143.75 11,489,819,271.62 8,597,768.02 37,030,442.34 - 11,535,447,481.98
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VIII Risks related to financial instruments (Continued)
4. Market risk
Interest rate risk
The Group's interest rate risk arises from long-term borrowings from banks. Financial liabilities issued at floating rates expose the Group to cash flow interest rate risk. Financial liabilities issued at fixed rates expose the Group to fair value interest rate risk. The Group determines the relative proportions of its fixed rate and floating rate contracts depending on the prevailing market conditions. As at 30 June 2018, if the floating interest rates of the long-term interest-bearing borrowings increases or decreases by 50 base points, while other factors does not change, theGroup’s net income will decrease or increase by RMB118,500 (31 December 2017: RMB118,500). Increases in interest rates will increase the cost of new borrowings 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 headquarter 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 first half of 2018 and 2017, the Group did not enter into any interest rate swap agreements.
For the year ended 30 June 2018, the Group has long-term interest-bearing borrowings with floating interest rates amounted to RMB31,600,000.00 (31 December 2017: RMB31,600,000.00). Currency 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 recognized assets and liabilities, and future transactions denominated in foreign currencies, primarily with respect to United States dollars and Hong Kong dollars. TheGroup’s finance department at its headquarter is responsible for monitoring the amounts 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.
As at 30 June 2018, if the currency had weakened/strengthened by5% against the United States dollar while all other variables had been held constant, theGroup’s net profit for the year would increase/decrease by RMB0 (2017: RMB0).
As at 30 June 2018, if the currency had weakened/strengthened by5% against the Hong Kong Dollar while all other variables had been held constant, theGroup’s net profit for the year would increase/decrease by RMB0 (2017: RMB0 ).
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VIII Risks related to financial instruments (Continued)
5. Capital management
TheCompany’s primary objective for 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 the lowest cost of capital available to the entity.
Management adjusts the capital structure through adjusting dividend payments to shareholders, returning capital to shareholders, issuing new shares or selling assets to reduce debts.
TheGroup’s total capital is the totalshareholders’ equity in the balance sheet. The Group does not adopt an asset ratio as a compulsory factor to govern capital investment.
The gearing ratios of the Group as at the end of the reporting periods were as follows:
30 June 2018 31 December 2017 Gearing ratio
56.36% 55.57%
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
IX Disclosure of fair value
1. The fair value of financial assets and liabilities recorded in fair value
||||||
|-|-|-|-|-|
||Fair value at period end||||
||Level 1|Level 2|Level 3|Total|
|Financial assetsavailable-for-sale|-|-|13,685,760.00|13,685,760.00|
|（1）Debt investment|-|-|-|-|
|（2）Equity investment|-|-|13,685,760.00|13,685,760.00|
|（3）Others|-|-|-|-|

 The results of fair value measurement are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly; and
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
(1) Assets that are measured at fair value on a recurring basis
The Group has no assets that are measured at fair value on a recurring basis.
(2) Assets that are measured at fair value on a non-recurring basis
The Group has no assets that are measured at fair value on a non-recurring basis.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
1. Parent
Proportion of Proportion of Share ownership voting power Registered capital interest in the in the address Nature of business(RMB’0,000) Company Company Industrial investment holding, trustee of a
pharmaceutical enterprise, assets
Sinopharm reorganization, distribution and retail of
Group Shanghai medicines and pharmaceutical products, etc. 276,709.51 56.06% 56.06% The ultimate controlling party of the Company is CNPGC.
2. Subsidiaries
Refer to Note VII (1) for details of subsidiaries.
3. Associates
Refer to Note VII (2) for details of associates.
Company name Related party relationships Shenzhen Main Luck Pharmaceutical Co., Ltd. Associate Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd. Associate Shenzhen Zhijun Pharmaceutical Trade Co., Ltd. Associate Sinopharm Group Zhijun(Shenzhen) Pingshan Pharmaceutical Co., Ltd. Associate Shanghai Modern Pharmaceutical Co., Ltd. (Modern Pharmaceutical) Associate Sinopharm Group Zhijun(Suzhou) Pharmaceutical Co., Ltd. Associate Shanghai Dingqun Enterprise Management Consulting Co., Ltd. Associate Sinopharm Jienuo Medical Treatment Sevice Guangdong Co., Ltd. Associate Shanghai Beiyi Guoda pharmaceutical Co. Ltd. Associate Shanghai Liyi Drug Store Co.,Ltd Associate Dongyuan accord pharmaceutical chain Co., Ltd. Associate 4. Other related parties
Company name Related party relationships China Otsuka Pharmaceutical Co., Ltd. Associate of CNPGC Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. Associate of CNPGC Changchun Changsheng Gene Pharmaceutical Co., Ltd. Associate of CNPGC Subsidiary of Main Luck Shenzhen Wanwei Medicine trading Co., Ltd. Pharmaceutical Sinopharm Holding Financing Lease Co., Ltd. Associate of Sinopharm Group
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Company name Related party relationships China Otsuka Pharmaceutical Co., Ltd. Associate of CNPGC Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. Associate of CNPGC Changchun Changsheng Gene Pharmaceutical Co., Ltd. Associate of CNPGC Subsidiary of Main Luck Shenzhen Wanwei Medicine trading Co., Ltd. Pharmaceutical Yichang Humanwell Pharmaceutical Co., Ltd. Associate of Sinopharm Group Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Co., Ltd. Associate of Sinopharm Group Sinopharm Health Online Co., Ltd.. Associate of Sinopharm Group Shanghai Guoda Lingyun Pharmacy Co., Ltd. Associate of Sinopharm Group Sichuan Kang Daxin Pharmaceutical Co., Ltd Associate of Sinopharm Group Hubei Medical Group Co., Ltd. Associate of Sinopharm Group Shareholder who has significant Shanghai Fosun Pharmaceutical (Group) Co., Ltd.("Fosun Pharm") influence over Sinopharm Group Chongqing Yaoyou Pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm Sichuan Hexin Pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm Shanghai Chaohui Pharmecurical Co., Ltd. Subsidiary of Fosun Pharm Tibet Yaopharma Co., Ltd. Subsidiary of Fosun Pharm Shenyang Hongqi Pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm Jiangsu Wanbang Pharmacy Marketing Co., Ltd. Subsidiary of Fosun Pharm Chongqing Haisiman Pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm Jinzhou AoHong Pharmaceuticals Co., Ltd. Subsidiary of Fosun Pharm Hunan Dongting Pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm Suzhou Erye Pharmaceutical Limited Company Subsidiary of Fosun Pharm Foshan Chancheng District Central Hospital Subsidiary of Fosun Pharm Foshan Chanyixing Medicine Development Co Ltd. Subsidiary of Fosun Pharm Foshan Chancheng Pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm Shenzhen Hengsheng Hospital Subsidiary of Fosun Pharm Guilin South pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm Shanghai Transfusion Technology Co., Ltd. Subsidiary of Fosun Pharm Jiangsu Huanghe Pharmaceutical Co., Ltd. Subsidiary of Fosun Pharm Jiangsu Fuxing Pharmaceutical Trading Co., Ltd. Subsidiary of Fosun Pharm Group Financial Co.Group Financial Co. Controlled by CNPGC Sinopharm Group Guangdong Medicine Device Co., Ltd. Controlled by CNPGC Huayi Pharmaceutical Co., Ltd. Controlled by CNPGC Sichuan Jiangyouzhongbafuzi Technology Development Co., Ltd. Controlled by CNPGC Guizhou Tongjitang Pharmaceutical Co., Ltd. Controlled by CNPGC Anhui Jingfang Pharmaceutical Co., Ltd. Controlled by CNPGC Guangdong Medi-World Pharmaceutical Co., Ltd. Controlled by CNPGC Shandong Lu Ya Pharmaceutical Co., Ltd. Controlled by CNPGC Foshan Fengliaoxing Pharmaceutical Co., Ltd. Controlled by CNPGC
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Company name Related party relationships China Otsuka Pharmaceutical Co., Ltd. Associate of CNPGC Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. Associate of CNPGC Changchun Changsheng Gene Pharmaceutical Co., Ltd. Associate of CNPGC Subsidiary of Main Luck Shenzhen Wanwei Medicine trading Co., Ltd. Pharmaceutical Winteam Pharmaceutical Group Ltd. Controlled by CNPGC Chengdu Rongsheng Pharmacy Co., Ltd. Controlled by CNPGC Lanzhou Institute of Biological Products Co., Ltd. Controlled by CNPGC Shantou Jinshi Powder Injection Co., Ltd. Controlled by CNPGC China National Pharmaceutical Industry Co., Ltd. Controlled by CNPGC Sinopharm Group Weiqida Medicine Co., Ltd. Controlled by CNPGC Shanghai Modern Hasen (Shangqiu) Pharmaceutical Co., Ltd. Controlled by CNPGC Shanghai Shyndec Pharmaceutical Marketing Co., Ltd. Controlled by CNPGC Sinopharm Group Rongsheng Pharmaceutical Co., Ltd. Controlled by CNPGC Wuhan Zhonglian Pharmaceutical Group Co., Ltd. Controlled by CNPGC The Fourth Pharmaceutical Co., Ltd. of Zhonglian Group Controlled by CNPGC Sinopharm Chuan Kang Pharmaceutical Co., Ltd. Controlled by CNPGC China National Pharmaceutical Foreign Trade Corporation Controlled by CNPGC Sinopharm Group Yibin Pharmaceuticals Co., Ltd. Controlled by CNPGC Sinopharm Zhuhai Medical Instrument Co., Ltd. Controlled by CNPGC Sinopharm Fujian Medical Examination Co., Ltd. Controlled by CNPGC Beijing Huasheng Pharmaceutical Biotechnology Development Co., Ltd. Controlled by CNPGC Beijing Huamiao Pharmaceutical Co., Ltd. Controlled by CNPGC Sinopharm Xinjiang Pharmaceutical Co., Ltd. Controlled by CNPGC Sinopharm Holding Sanyi Medicine (Wuhu) Co., Ltd. Controlled by CNPGC Sinopharm Shantou Jinshi Pharmaceutical Co., Ltd. Controlled by CNPGC Sinopharm Hebei Medical Instrument Co., Ltd. Controlled by CNPGC Sinopharm Fengliaoxing (Foshan) Medicines Co., Ltd. Controlled by CNPGC China National Scientific Instruments& Materials Imp/Exp Shenzhen Co., Ltd. Controlled by CNPGC CMDC Guizhou Qiannan Co., Ltd. Controlled by CNPGC Fujian CMDC Co., Ltd. Controlled by CNPGC Sinopharm Fengliaoxing Medical Hospital Co., Ltd. Controlled by CNPGC Beijing Tiantan Biological Products Co., Ltd. Controlled by CNPGC Sinopharm Guangdong Medical Examination Co., Ltd. Controlled by CNPGC Sinopharm Group Shanghai Medicine Device Co., Ltd. Controlled by CNPGC Foshan Dezhong Pharmaceutical Co., Ltd. Controlled by CNPGC Chengdu Institute of Biological Products Co., Ltd. Controlled by CNPGC China National ofTraditional&Herbal Medicine Co., Ltd. Controlled by CNPGC Sinopharm Chongqing Pharmaceutical and Medical Industry Design Institute Controlled by CNPGC
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Company name Related party relationships China Otsuka Pharmaceutical Co., Ltd. Associate of CNPGC Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. Associate of CNPGC Changchun Changsheng Gene Pharmaceutical Co., Ltd. Associate of CNPGC Subsidiary of Main Luck Shenzhen Wanwei Medicine trading Co., Ltd. Pharmaceutical Sinopharm (Guangzhou) Medical Equipment Co., Ltd. Controlled by CNPGC China Sinopharm International Corporation Controlled by CNPGC Shanghai Shangsheng Biological Products Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Tianjin Binhai Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Shanghai Tongyu Information Technology Co., Ltd. Controlled by Sinopharm Group Guorun Medical Supply Chain Services (Shanghai) Co., Ltd. Controlled by Sinopharm Group Sinopharm Group Southwest Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Tianjin Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Hunan Co., Ltd. Controlled by Sinopharm Group China National Medicines Co., Ltd. Controlled by Sinopharm Group Sinopharm Group Guorui Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Beijing Huahong Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Sub Marketing Center Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Henan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Fuzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Shandong Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Dezhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Hainan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Fujian Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Guizhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Lianyungang Co., Ltd. Controlled by Sinopharm Group Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Lerentang Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Lerentang Shijiazhuang Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Shanxi Co., Ltd. Controlled by Sinopharm Group Sinopharm Le-Ren-Tang Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Shanxi Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Shenyang Co., Ltd. Controlled by Sinopharm Group Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Yangzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Lunan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Beijing Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Hulun Buir Co., Ltd. Controlled by Sinopharm Group
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Company name Related party relationships China Otsuka Pharmaceutical Co., Ltd. Associate of CNPGC Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. Associate of CNPGC Changchun Changsheng Gene Pharmaceutical Co., Ltd. Associate of CNPGC Subsidiary of Main Luck Shenzhen Wanwei Medicine trading Co., Ltd. Pharmaceutical Sinopharm Holding Inner Mongolia Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Pingdingshan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jiangsu Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Xiamen Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Suzhou Co., Ltd. Controlled by Sinopharm Group Shanghai Merro Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Changzhou Medical Logistics Center Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Changzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Ningxia Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Shanxi Instrument Branch Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Beijing Kangchen Bio-Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Wuxi Co., Ltd. Controlled by Sinopharm Group Sinopharm Lerentang Hebei Medical Instrument Trade Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Dalian Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jinan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Tianjin Distribution Center Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Donghong Medical (Shanghai) Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Yancheng Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jinzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Rizhao Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Putian Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Group Shanxi Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Chengdu Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Quanzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Kashi New& Special Drugs Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Anhui Co., Ltd. Controlled by Sinopharm Group Beijing Tongyu Information Technology Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Ulanqab Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Hubei Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Zhihui Minsheng (Tianjin) Medicine Co., Ltd. Controlled by Sinopharm Group
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Company name Related party relationships China Otsuka Pharmaceutical Co., Ltd. Associate of CNPGC Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. Associate of CNPGC Changchun Changsheng Gene Pharmaceutical Co., Ltd. Associate of CNPGC Subsidiary of Main Luck Shenzhen Wanwei Medicine trading Co., Ltd. Pharmaceutical Sinopharm Holding Shanxi Jincheng Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Zhejiang Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Changsha Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Nanping Newforce Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Yangzhou Biological Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Taizhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Wende Medicine Nanjing Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Dalian Hecheng Co., Ltd. Controlled by Sinopharm Group Sinopharm Lerentang Qinhuangdao Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Tongliao Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jiangxi Co., Ltd. Controlled by Sinopharm Group Sinopharm Group Chemical Reagent Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Ordos Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Tianjin North Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Yongzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jinhua Co., Ltd. Controlled by Sinopharm Group Sinopharm Lerentang Tangshan Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Chongqing Co., Ltd. Controlled by Sinopharm Group Sinopharm Prospect Dentech (Beijing) Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Biopharmaceutical (Tianjin) Co., Ltd. Controlled by Sinopharm Group Sinopharm Group Medicine Logistic Co., Ltd. Controlled by Sinopharm Group China National Pharmaceutical Logistics Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Hubei Hongyuan Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Wuhu Co., Ltd.. Controlled by Sinopharm Group Sinopharm Holding Lu'an Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Suzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jiling Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Liaocheng Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Yunnan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Honghe Co., Ltd. Controlled by Sinopharm Group Yuxi Sinopharm Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Hainan Hongyi Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Gansu Co., Ltd. Controlled by Sinopharm Group
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Company name Related party relationships China Otsuka Pharmaceutical Co., Ltd. Associate of CNPGC Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. Associate of CNPGC Changchun Changsheng Gene Pharmaceutical Co., Ltd. Associate of CNPGC Subsidiary of Main Luck Shenzhen Wanwei Medicine trading Co., Ltd. Pharmaceutical Sinopharm Holding Longyan Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Ningde Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Nanchang Pharmacy Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Tongren Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Zunyi Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Guizhou Medical Equiment Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jilin Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Jilin Pharmacy Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Siping Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Wenzhou Co., Ltd Controlled by Sinopharm Group Sinopharm Holding Nantong Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Heilongjiang Co., Ltd. Controlled by Sinopharm Group Sinopharm Lerentang Hengshui Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Lerentang Baoding Medicine Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Qinghai Co., Ltd. Controlled by Sinopharm Group Sinopharm Sichuan Pharmaceutical Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Zhangzhou Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Huaian Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Xiangyang Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Xinxiang Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Hongrun Medical Business Service (Shanghai) Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Huangshi Co., Ltd. Controlled by Sinopharm Group Sinopharm Xinxiang Chain Store Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Qianxinan Co., Ltd. Controlled by Sinopharm Group Sinopharm Group Shanghai Co., Ltd. Controlled by Sinopharm Group Beijing Sinopharm Tianyuan Real Estate& Property Management Co., Ltd. Controlled by Sinopharm Group Xinjiang Baitong Property Service Co., Ltd. Controlled by Sinopharm Group Sinopharm Group Shanghai Management Consulting Branch Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Huaideju Pharmaceutical (Xiamen) Co., Ltd. Controlled by Sinopharm Group Pudong New Area of Shanghai Pharmaceutical Medicine Ltd. Controlled by Sinopharm Group Sinopharm Holding Xinyu Co., Ltd. Controlled by Sinopharm Group Sinopharm Holding Hunan Weian Pharmacy Medicine Chain Company
Ltimited. Controlled by Sinopharm Group Sinopharm Holding Jiaozuo Co., Ltd. Controlled by Sinopharm Group Sinopharm Xinjiang Korla Pharmaceutical Co., Ltd. Sinopharm Xinjiang Korla Controlled by Sinopharm Group
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Company name Related party relationships China Otsuka Pharmaceutical Co., Ltd. Associate of CNPGC Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. Associate of CNPGC Changchun Changsheng Gene Pharmaceutical Co., Ltd. Associate of CNPGC Subsidiary of Main Luck Shenzhen Wanwei Medicine trading Co., Ltd. Pharmaceutical Pharmaceutical Co., Ltd.
Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd Non-controlling interest of a subsidiary Hunan Minshengtang Investment Co., Ltd. Non-controlling interest of a subsidiary Shenyang Pharmaceutical Co., Ltd Non-controlling interest of a subsidiary Lerentang Investment Group Co., Ltd. Non-controlling interest of a subsidiary Pingdingshan Pusheng Pharmaceutical Co., Ltd. Non-controlling interest of a subsidiary Linyi Medical Group Co., Ltd. Non-controlling interest of a subsidiary Huang Lijin Huang Lijin Non-controlling interest of a subsidiary Guangdong Jiyuantang Development Co., Ltd. Non-controlling interest of a subsidiary Shenzhen Jiufeng Investment Co., Ltd. Non-controlling interest of a subsidiary Taishan Qunkang Pharmacy Co., Ltd. Non-controlling interest of a subsidiary Zhang Zhenfang Zhang Zhenfang Non-controlling interest of a subsidiary Hangzhou Xihu Business Group Corporation Non-controlling interest of a subsidiary Guangxi Deyiyuan Medical Investment Center (Limited Partnership) Non-controlling interest of a subsidiary Baise Jianan Medicine Chain Co., Ltd. Non-controlling interest of a subsidiary Heyuan Mairui Trading Co., Ltd. Non-controlling interest of a subsidiary Family member of the non-controlling Wang Yang Wang Yang shareholder of a subsidiary Controller of non-controlling interest of Gu Jinfang Gu Jinfang a subsidiary Controlled by non-controlling interest Nanjing Yuanguang Trading Co., Ltd. of a subsidiary Controlled by non-controlling interest Taishan Xiangranhui Trade Co., Ltd of a subsidiary Controlled by non-controlling interest Shaoguan Wujiang District Muyang Medicine Information Consultant Co., Ltd. of a subsidiary
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties
(1) Related party transactions–goods and services
Purchase of goods and receiving of services from related parties
Related party Type of transaction 2018 2017 Sinopharm Holding Sub Marketing Center Co.,
Ltd. Purchase of goods 515,167,083.81 503,647,182.73 China National Medicines Co., Ltd. Purchase of goods 237,636,101.58 192,328,445.40 Sinopharm Holding Shanxi Co., Ltd.
Purchase of goods 156,466,334.83 105,080,688.10 Sinopharm Lingyun Biopharmaceutical
(Shanghai) Co., Ltd. Purchase of goods 127,271,627.94 100,523,284.41 Sinopharm Group Co., Ltd. Purchase of goods 95,150,353.69 246,228,882.09 Fresenius Kabi Huarui Pharmaceuticals Co., Ltd.
Purchase of goods 90,145,795.30 86,204,005.23 Sinopharm Holding Shanxi Co., Ltd.
Purchase of goods 83,517,976.15 75,921,179.25 Sinopharm Le-Ren-Tang Medicine Co., Ltd.
Purchase of goods 79,259,083.01 79,720,630.75 Sinopharm Holding Shenyang Co., Ltd.
Purchase of goods 63,689,297.73 48,659,442.34 Lanzhou Institute of Biological Products Co., Ltd.
Purchase of goods 52,860,000.00 30,600,000.00 Sinopharm Group Xinjiang Special Drugs
National Pharmaceutical Co., Ltd. Purchase of goods 39,872,567.55 31,547,957.86 Sinopharm Holding Lunan Co., Ltd.
Purchase of goods 39,298,409.81 22,663,023.60 Jiangsu Wanbang Pharmacy Marketing Co., Ltd.
Purchase of goods 33,623,739.18 34,629,877.72 Sinopharm Holding Beijing Co., Ltd.
Purchase of goods 23,822,442.41 21,094,588.81 Jinzhou AoHong Pharmaceuticals Co., Ltd.
Purchase of goods 23,749,213.17 - Sinopharm Holding Yangzhou Co., Ltd.
Purchase of goods 23,005,232.97 25,252,127.28 Sinopharm Holding Hunan Co., Ltd.
Purchase of goods 22,435,971.65 9,503,424.67 Chongqing Yaoyou Pharmaceutical Co., Ltd.
Purchase of goods 21,508,305.23 16,356,695.13 Sinopharm Holding Inner Mongolia Co., Ltd.
Purchase of goods 18,984,953.29 17,911,878.26 Sinopharm Holding Lerentang Pharmaceutical
Co., Ltd. Purchase of goods 16,967,826.05 14,552,984.64 Winteam Pharmaceutical Group Ltd.
Purchase of goods 15,331,219.12 4,095,720.68 Sinopharm Holding Pingdingshan Co., Ltd.
Purchase of goods 14,446,097.55 17,629,734.37 Shenzhen Main Luck Pharmaceutical Co., Ltd.
Purchase of goods 14,173,934.35 18,163,682.64 China National Pharmaceutical Foreign Trade
Corporation Purchase of goods 13,645,110.09 2,074,302.37 Sinopharm Holding Jiangsu Co., Ltd.
Purchase of goods 12,276,533.11 13,721,003.83
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions–goods and services (Continued)
Purchase of goods and receiving of services from related parties (Continued)
Related party Type of transaction 2018 2017 Sinopharm Lerentang Shijiazhuang Medicine Co.,
Ltd. Purchase of goods 10,465,965.70 14,140,996.60 Shenzhen Wanwei Medicine Trading Co., Ltd. Purchase of goods 10,428,796.93 12,411,303.09 Suzhou Erye Pharmaceutical Limited Company
Purchase of goods 9,554,764.03 - Sinopharm Holding Xiamen Co., Ltd.
Purchase of goods 9,246,131.91 9,257,962.72 Sinopharm Holding Fujian Co., Ltd. Purchase of goods 9,171,420.33 11,822,333.08 Chengdu Rongsheng Pharmacy Co., Ltd.
Purchase of goods 8,958,139.00 10,163,100.00 Sinopharm Holding Shanxi Instrument Branch
Co., Ltd. Purchase of goods 7,410,730.23 3,895,843.72 Sinopharm Holding Henan Co., Ltd.
Purchase of goods 6,575,293.46 2,394,853.44 Sinopharm Holding Suzhou Co., Ltd.
Purchase of goods 6,247,553.79 8,828,494.63 Sinopharm Holding Ningxia Co., Ltd.
Purchase of goods 6,113,483.50 5,691,842.49 Sinopharm Chuan Kang Pharmaceutical Co., Ltd.
Purchase of goods 5,794,907.91 - Sinopharm Group Zhijun (Shenzhen) PingShan
Pharmaceutical Co., Ltd. Purchase of goods 5,519,530.03 4,251,111.59 Sinopharm Holding Fuzhou Co., Ltd.
Purchase of goods 4,703,935.11 3,003,163.81 Sinopharm Group Zhijun(Shenzhen)
Pharmaceutical Co., Ltd. Purchase of goods 4,670,243.13 2,222,406.63 Sinopharm Holding Changzhou Medical Logistics
Center Co., Ltd. Purchase of goods 4,530,675.45 7,317,867.44 Yichang Humanwell Pharmaceutical Co., Ltd.
Purchase of goods 4,513,583.78 4,109,780.72 Sinopharm Xingsha Pharmaceuticals (Xiamen)
Co., Ltd. Purchase of goods 3,676,515.83 933,727.04 Sinopharm Holding Jinan Co., Ltd.
Purchase of goods 3,621,583.69 1,832,235.96 Sinopharm Holding Xinjiang Special Drugs
Western Pharmaceutical Co., Ltd. Purchase of goods 3,614,733.64 4,544,410.21 Sinopharm Holding Beijing Huahong Co., Ltd.
Purchase of goods 3,550,261.18 3,843,243.29 Sinopharm Group Guorui Medicine Co., Ltd.
Purchase of goods 3,735,052.72 65,812.60 Shandong Lu Ya Pharmaceutical Co., Ltd.
Purchase of goods 2,909,280.05 - Sinopharm Holding Changzhou Co., Ltd.
Purchase of goods 2,900,395.11 7,051,762.45 Tibet Yaopharma Co., Ltd. Purchase of goods 2,761,512.07 - Sinopharm Holding Wuxi Co., Ltd.
Purchase of goods 2,453,393.36 2,736,138.04 Pudong New Area of Shanghai Pharmaceutical
Medicine Ltd. Purchase of goods 2,298,554.23 - Sinopharm Holding Jinzhou Co., Ltd.
Purchase of goods 2,249,516.98 1,199,028.41 Sinopharm Holding Beijing Kangchen Bio-
Pharmaceutical Co., Ltd. Purchase of goods 2,240,460.54 3,179,370.11
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions–goods and services (Continued)
Purchase of goods and receiving of services from related parties (Continued)
Related party Type of transaction 2018 2017 Shanghai Merro Pharmaceutical Co., Ltd. Purchase of goods 2,016,321.47 8,681,736.93 Foshan Fengliaoxing Pharmaceutical Co., Ltd. Purchase of goods 2,015,702.90 320,789.59 Sinopharm Holding Shanghai Likang
Pharmaceutical Co., Ltd. Purchase of goods 2,003,690.59 1,111,214.17 Sinopharm Lerentang Hebei Medical Instrument
Trade Co., Ltd.
Purchase of goods 1,889,376.44 2,446,393.63 Beijing Golden Elephant Fosun Pharmaceutical
Co., Ltd. Purchase of goods 1,799,439.15 2,203,729.99 Sinopharm Holding Tianjin Co., Ltd.
Purchase of goods 1,598,345.37 1,531,041.56 Sinopharm Group Rongsheng Pharmaceutical
Co., Ltd.
Purchase of goods 1,574,958.10 367,123.16 Guizhou Tongjitang Pharmaceutical Co., Ltd.
Purchase of goods 1,536,282.82 783,375.17 Sinopharm Holding Xinjiang Xinte Karamay
Pharmaceutical Co., Ltd. Purchase of goods 1,451,522.48 866,286.88 Sinopharm Holding Yancheng Co., Ltd.
Purchase of goods 1,402,672.48 1,321,450.59 Sichuan Hexin Pharmaceutical Co., Ltd.
Purchase of goods 1,094,458.11 (288.55) Shenyang Hongqi Pharmaceutical Co., Ltd.
Purchase of goods 1,058,670.33 509,884.44 Shanghai Shyndec Pharmaceutical Marketing
Co., Ltd. Purchase of goods 995,510.64 1,019,792.18 Sinopharm Group (Tianjin) Eastern Bokang
Pharmaceutical Co., Ltd.
Purchase of goods 921,863.31 1,117,427.20 Sinopharm Holding Putian Co., Ltd.
Purchase of goods 895,532.89 1,060,202.09 Sinopharm Holding Dalian Co., Ltd.
Purchase of goods 769,041.46 1,933,096.74 Hutchison Whampoa Sinopharm Pharmaceuticals
(Shanghai) Co., Ltd. Purchase of goods 763,625.20 321,124.91 Sinopharm Holding Shandong Co., Ltd.
Purchase of goods 718,163.95 - Sinopharm Holding Hulun Buir Co., Ltd.
Purchase of goods 713,341.49 18,397,145.25 Huayi Pharmaceutical Co., Ltd.
Purchase of goods 695,732.52 - Sinopharm Holding Donghong Medical
(Shanghai) Co., Ltd.
Purchase of goods 615,989.84 1,398,400.16 Sinopharm Holding Rizhao Co., Ltd.
Purchase of goods 586,905.03 1,070,541.55 Sinopharm Holding Tongliao Co., Ltd.
Purchase of goods 584,726.70 74,569.23 Guangdong Medi-World Pharmaceutical Co., Ltd.
Purchase of goods 584,223.16 - Sinopharm Holding Anhui Co., Ltd.
Purchase of goods 539,726.50 251,374.86 Sinopharm Holding Quanzhou Co., Ltd.
Purchase of goods 509,662.25 693,843.09 Sinopharm Holding Yangzhou Biological Medicine
Co., Ltd. Purchase of goods 444,000.00 - Wuhan Zhonglian Pharmaceutical Group Co., Ltd.
Purchase of goods 435,887.39 583,749.71
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions–goods and services (Continued)
Purchase of goods and receiving of services from related parties (Continued)
Related party Type of transaction 2018 2017 Sinopharm Holding Changsha Co., Ltd. Purchase of goods 414,897.11 - Sinopharm Holding Kashi New& Special Drugs
Co., Ltd. Purchase of goods 400,421.76 488,097.76 Hunan Dongting Pharmaceutical Co., Ltd.
Purchase of goods 340,441.92 135,686.75 Sinopharm Holding Beijing Tianxing Puxin
Biological Medical Co., Ltd. Purchase of goods 335,484.62 72,490.93 Shanghai Chaohui Pharmaceutical Co., Ltd. Purchase of goods 330,363.62 - Shantou Jinshi Powder Injection Co., Ltd.
Purchase of goods 330,119.93 - Sinopharm Holding Ulanqab Co., Ltd.
Purchase of goods 308,191.79 142,060.09 Sinopharm Holding Zhejiang Co., Ltd.
Purchase of goods 289,516.54 - Sinopharm Holding Dalian Hecheng Co., Ltd.
Purchase of goods 262,027.99 - China Otsuka Pharmaceutical Co., Ltd.
Purchase of goods 241,236.29 2,811,496.30 Sinopharm Holding Dezhou Co., Ltd.
Purchase of goods 228,731.52 228,117.43 Shanghai Modern Hasen (Shangqiu)
Pharmaceutical Co., Ltd. Purchase of goods 200,544.82 - Sinopharm Lerentang Qinhuangdao Medicine
Co., Ltd. Purchase of goods 193,277.45 116,087.32 China National Pharmaceutical Industry Co., Ltd.
Purchase of goods 188,275.39 80,821.92 Sinopharm Group Zhijun(Shenzhen)
Pharmaceutical Co., Ltd. Purchase of goods 173,484.94 923.08 Sinopharm Group Southwest Medicine Co., Ltd.
Purchase of goods 153,389.66 - Sinopharm Holding Lianyungang Co., Ltd.
Purchase of goods 153,111.27 - Shanghai Modern Pharmaceutical Co., Ltd.
(Modern Pharmaceutical) Purchase of goods 142,521.39 - Sinopharm Group Yibin Pharmaceuticals Co., Ltd.
Purchase of goods 121,618.26 4,666.51 Sinopharm Shantou Jinshi Pharmaceutical Co.,
Ltd. Purchase of goods 109,039.96 55,299.53 Sinopharm Holding Hainan Co., Ltd.
Purchase of goods 97,450.60 - Sinopharm Group Shanxi Co., Ltd.
Purchase of goods 87,596.90 862,803.50 Sinopharm Holding Zhihui Minsheng (Tianjin)
Purchase of goods 80,410.58 - Medicine Co., Ltd.
Sinopharm Holding Guizhou Co., Ltd.
Purchase of goods 73,729.75 - Sinopharm Holding Taizhou Co., Ltd.
Purchase of goods 73,304.23 - Sinopharm Holding Biopharmaceutical (Tianjin)
Co., Ltd. Purchase of goods 63,648.72 (1,108.71) Sinopharm Holding Sanyi Medicine (Wuhu) Co.,
Purchase of goods 58,952.78 102,930.09 Ltd.
Sichuan Jiangyouzhongbafuzi Technology
Development Co., Ltd. Purchase of goods 49,297.30 22,300.88
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions–goods and services (Continued)
Purchase of goods and receiving of services from related parties (Continued)
Related party Type of transaction 2018 2017 Sinopharm Holding Yongzhou Co., Ltd. Purchase of goods 38,141.67 22,688.00 Chongqing Haisiman Pharmaceutical Co., Ltd. Purchase of goods 33,895.38 22,055,921.01 Sinopharm Group Weiqida Medicine Co., Ltd.
Purchase of goods 31,965.52 - Sinopharm Holding Wende Medicine Nanjing
Co., Ltd. Purchase of goods 27,310.34 - The Fourth Pharmaceutical Co., Ltd. of
Zhonglian Group
Purchase of goods 24,295.86 112,080.00 Sinopharm Lerentang Tangshan Medicine Co.,
Ltd. Purchase of goods 20,598.94 14,862.40 Sinopharm Holding Nanping Newforce Co., Ltd.
Purchase of goods 15,315.32 - Sinopharm Holding Shanxi Jincheng Co., Ltd.
Purchase of goods 11,481.46 - Sinopharm Zhuhai Medical Instrument Co., Ltd.
Purchase of goods 9,564.95 - Sinopharm Hebei Medical Instrument Co., Ltd.
Purchase of goods 6,533.84 29,467.36 Sinopharm Prospect Dentech (Beijing) Co., Ltd.
Purchase of goods 4,073.48 2,101.14 Beijing Huamiao Pharmaceutical Co., Ltd.
Purchase of goods 2,649.79 - Sinopharm Group Guangdong Medicine Device
Co., Ltd. Purchase of goods 1,770.86 - Sinopharm Holding Jinhua Co., Ltd.
Purchase of goods 38.80 15,569.23 Sinopharm Xinjiang Pharmaceutical Co., Ltd.
Purchase of goods 12.82 - Sinopharm Holding Tianjin Distribution Center
Co., Ltd. Purchase of goods - 1,452,364.83 Sinopharm Holding Chengdu Co., Ltd.
Purchase of goods - 809,743.62 Sinopharm Fujian Medical Examination Co.,
Ltd. Purchase of goods - 680,423.93 Beijing Huasheng Pharmaceutical
Biotechnology Development Co., Ltd. Purchase of goods - 219,374.28 Guizhou Longlife Pharmacertical Co., Ltd.
Purchase of goods - 188,738.84 Beijing Tongyu Information Technology Co.,
Ltd. Purchase of goods - 175,351.00 Sinopharm Holding Hubei Co., Ltd.
Purchase of goods - 137,617.16 Sinopharm Holding Jiangxi Co., Ltd.
Purchase of goods - 69,941.45 Sinopharm Group Chemical Reagent Co., Ltd.
Purchase of goods - 46,153.84 Sinopharm Holding Tianjin North Medicine Co.,
Ltd. Purchase of goods - 23,066.70 Sinopharm Holding Chongqing Co., Ltd.
Purchase of goods - 9,230.76 Sinopharm Fengliaoxing (Foshan) Medicines
Co., Ltd. Purchase of goods - 2,332.96
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions–goods and services (Continued)
Purchase of goods and receiving of services from related parties (Continued)
Related party Type of transaction 2018 2017 China National Scientific Instruments&
Materials Imp/Exp Shenzhen Co., Ltd. Purchase of goods - (1,598,611.60) Sinopharm Holding Ordos Co., Ltd. Purchase of goods (10,667.01) 35,826.67 Anhui Jingfang Pharmaceutical Co., Ltd.
Purchase of goods (13,269.30) 460,506.20 Sinopharm Group Medicine Logistic Co., Ltd.
Storage and transport cost 6,666,668.71 7,395,406.16 Sinopharm Health Online Co., Ltd.
Consulting service fee 6,085,895.22 3,071,581.63 Shanghai Beiyi Guoda pharmaceutical Co.
Ltd.
Consulting service fee 1,263,962.22 589,442.86 Shanghai Tongyu Information Technology Co.,
Information system access
Ltd.
fee 98,113.21 98,113.21 China National Pharmaceutical Logistics Co.,
Ltd.
Storage and transport cost 44,030.65 28,856.97 Sinopharm Holding Tianjin Binhai
Information system access
Pharmaceutical Co., Ltd.
fee 7,075.47 - Sinopharm Group Co., Ltd.
Consulting service fee - 5,982.51
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions–goods and services (Continued)
Sale of goods and rendering of services
Type of
Related party transaction 2018 2017 Sinopharm Group Co., Ltd. Sale of goods 54,514,170.65 5,593,686.39 Shanghai Beiyi Guoda pharmaceutical Co. Ltd. Sale of goods 49,727,338.63 51,483,490.91 Foshan Chancheng Pharmaceutical Co., Ltd. Sale of goods 42,375,781.14 33,011,056.01 Sinopharm Holding Hainan Co., Ltd. Sale of goods 29,338,160.25 36,385,390.99 Sinopharm Holding Hainan Hongyi Co., Ltd. Sale of goods 24,127,524.50 25,628,473.91 Sinopharm Group Xinjiang Special Drugs
National Pharmaceutical Co., Ltd. Sale of goods 17,376,808.71 13,060,212.97 Sinopharm Holding Wenzhou Co., Ltd. Sale of goods 10,830,194.79 16,144,827.68 Pudong New Area of Shanghai Pharmaceutical
Medicine Ltd. Sale of goods 10,524,551.98
Beijing Golden Elephant Fosun
9,566,003.52 Pharmaceutical Co., Ltd. Sale of goods 9,738,902.57
37,145,400.72 Sinopharm Sichuan Pharmaceutical Co., Ltd. Sale of goods 9,061,104.38
Sinopharm Holding Sub Marketing Center Co.,
12,124,282.34 Ltd. Sale of goods 8,970,804.72
Sinopharm Holding Henan Co., Ltd. Sale of goods 8,736,054.45
15,920,365.63 Sinopharm Holding Nantong Co., Ltd. Sale of goods 8,717,338.95
10,668,342.56 Shenzhen Hengsheng Hospital Sale of goods 8,215,885.93
Sinopharm Le-Ren-Tang Medicine Co., Ltd. Sale of goods 7,728,482.84
29,700,260.69 Sinopharm Lingyun Biopharmaceutical
137,615.38 (Shanghai) Co., Ltd. Sale of goods 7,489,471.75
Sinopharm Group (Tianjin) Eastern Bokang
28,222,286.50 Pharmaceutical Co., Ltd. Sale of goods 6,837,559.00
Sinopharm Holding Beijing Co., Ltd. Sale of goods 5,770,691.44
46,330,723.11 Sinopharm Holding Yunnan Co., Ltd. Sale of goods 5,713,012.18 13,882,513.85 Sinopharm Holding Yangzhou Co., Ltd. Sale of goods 5,144,530.81 4,983,173.28 Sinopharm Holding Beijing Huahong Co., Ltd. Sale of goods 4,816,641.92 18,809,022.65 Sinopharm Holding Shandong Co., Ltd. Sale of goods 4,577,546.05 54,609,405.93 Foshan Chancheng District Central Hospital Sale of goods 4,504,644.96 4,152,584.46 Sinopharm Holding Xinjiang Special Drugs
Western Pharmaceutical Co., Ltd. Sale of goods 4,409,528.78 2,315,354.12 Sinopharm Holding Hubei Co., Ltd. Sale of goods 3,772,162.27 36,728,642.88 Sinopharm Holding Shanxi Co., Ltd. Sale of goods 2,577,305.96 1,347,127.61
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions–goods and services (Continued)
Sale of goods and rendering of services
Type of
Related party transaction 2018 2017 China National Medicines Co., Ltd. Sale of goods 1,740,716.75 2,063,573.21 Foshan Chanyixing Medicine Development Co
Ltd. Sale of goods 1,450,198.02 1,405,871.30 Sinopharm Holding Gansu Co., Ltd. Sale of goods 1,353,030.00 2,884,856.13 Sinopharm Holding Hunan Co., Ltd. Sale of goods 1,308,950.82 5,020,059.72 Sinopharm Holding Dalian Co., Ltd. Sale of goods 1,263,047.36 486,071.84 Shanghai Merro Pharmaceutical Co., Ltd. Sale of goods 1,223,626.19 3,234,923.55 Sinopharm Holding Jilin Co., Ltd. Sale of goods 1,172,196.27 3,009,786.08 Sinopharm Holding Anhui Co., Ltd. Sale of goods 1,168,187.29 366,059.49 Sinopharm Holding Guizhou Co., Ltd. Sale of goods 1,042,466.52 5,972,815.92 Sinopharm Holding Tianjin Co., Ltd. Sale of goods 1,029,758.40 8,825,649.05 Sinopharm Group Southwest Medicine Co.,
Ltd. Sale of goods 1,006,172.43 15,591,867.75 Sinopharm Holding Fujian Co., Ltd. Sale of goods 979,220.98 6,048,503.32 Sinopharm Holding Zhejiang Co., Ltd. Sale of goods 921,282.05 6,829,401.70 Sinopharm Holding Shanxi Co., Ltd. Sale of goods 917,123.69 6,299,521.58 Hubei Medical Group Co., Ltd. Sale of goods 853,130.68 - Sinopharm Holding Shanghai Likang
Pharmaceutical Co., Ltd. Sale of goods 673,847.93 4,235.90 Yuxi Sinopharm Medicine Co., Ltd. Sale of goods 625,927.21 - Shanghai Guoda Lingyun Pharmacy Co., Ltd. Sale of goods 540,476.78 713,931.05 Sinopharm Group Shanxi Co., Ltd. Sale of goods 486,510.78 844,560.30 Sinopharm Holding Donghong Medical
(Shanghai) Co., Ltd. Sale of goods 448,887.64 201,902.45 Sinopharm Holding Changzhou Co., Ltd. Sale of goods 435,840.01 - Sinopharm Holding Jiangxi Co., Ltd. Sale of goods 371,671.87 647,485.30 Sinopharm Holding Wuxi Co., Ltd. Sale of goods 349,203.27 215,010.22 Sinopharm Holding Heilongjiang Co., Ltd. Sale of goods 324,789.98 2,720,546.27 Sinopharm Holding Dalian Hecheng Co., Ltd. Sale of goods 301,982.46 366,975.51 Sinopharm Holding Ningxia Co., Ltd. Sale of goods 240,539.93 6,303,526.27 Sinopharm Holding Inner Mongolia Co., Ltd. Sale of goods 239,130.68 366,510.94 Sinopharm Holding Chengdu Co., Ltd. Sale of goods 215,685.18 1,227,783.73 Sinopharm Holding Yongzhou Co., Ltd. Sale of goods 203,544.77 -
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions–goods and services (Continued)
Sale of goods and rendering of services
Type of
Related party transaction 2018 2017 Sinopharm Holding Ulanqab Co., Ltd. Sale of goods 175,775.17 92,908.28 Sinopharm Holding Changzhou Medical
Logistics Center Co., Ltd. Sale of goods 175,352.41 291,901.64 Sinopharm Holding Qinghai Co., Ltd. Sale of goods 168,653.68 1,759,644.99 Sinopharm Holding Chongqing Co., Ltd. Sale of goods 145,147.69 125,938.47 Sinopharm Holding Guizhou Medical Equiment
Co., Ltd. Sale of goods 133,404.19 - Sinopharm Holding Huaian Co., Ltd. Sale of goods 128,653.00 440,133.12 Sinopharm Holding Wuhu Co., Ltd. Sale of goods 127,195.59 - Sinopharm Holding Shenyang Co., Ltd. Sale of goods 103,846.57 3,907,366.12 Sinopharm Holding Suzhou Co., Ltd. Sale of goods 103,840.63 - Sinopharm Holding Hubei Hongyuan Co., Ltd. Sale of goods 97,162.40 - Sinopharm Holding Jilin Pharmacy Co., Ltd. Sale of goods 91,435.98 - Sinopharm Group Zhijun (Shenzhen)
PingShan Pharmaceutical Co., Ltd. Sale of goods 79,279.28 - Sinopharm Holding Lu'an Co., Ltd. Sale of goods 66,987.18 - Sinopharm Holding Putian Co., Ltd. Sale of goods 64,610.68 637,366.11 Sinopharm Holding Tianjin North Medicine Co.,
Ltd. Sale of goods 58,775.86 - Sinopharm Holding Longyan Co., Ltd. Sale of goods 58,172.99 114,780.52 Sinopharm Holding Nanchang Pharmacy Co.,
Ltd. Sale of goods 54,017.59 - Dongyuan accord pharmaceutical chain
Co., Ltd. Sale of goods 39,393.65 - Sinopharm Holding Zunyi Co., Ltd. Sale of goods 35,054.94 - Sinopharm Holding Xinxiang Co., Ltd. Sale of goods 34,164.62 - Sinopharm Holding Huangshi Co., Ltd. Sale of goods 34,025.78 87,938.08 Sinopharm Holding Siping Co., Ltd. Sale of goods 26,548.13 - Sinopharm Holding Ningde Co., Ltd. Sale of goods 23,864.90 603,115.39 Sinopharm Holding Tongren Co., Ltd. Sale of goods 21,011.20 - Sinopharm Holding Hongrun Medical Business
Service (Shanghai) Co., Ltd. Sale of goods 19,240.32 - Sinopharm Holding Jiling Co., Ltd. Sale of goods 19,035.54 - Sinopharm Fengliaoxing Medical Hospital Co.,
Ltd. Sale of goods 16,804.60 2,175.11 Sinopharm Holding Liaocheng Co., Ltd. Sale of goods 15,596.82 - Fujian CMDC Co., Ltd. Sale of goods 13,988.00 -
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions–goods and services (Continued)
Sale of goods and rendering of services
Type of
Related party transaction 2018 2017 Sinopharm Lerentang Baoding Medicine Co.,
Ltd. Sale of goods 12,991.45 - CMDC Guizhou Qiannan Co., Ltd. Sale of goods 12,712.58 - Sinopharm Lerentang Hengshui Medicine Co.,
Ltd. Sale of goods 12,108.38 - Sinopharm Holding Honghe Co., Ltd. Sale of goods 9,595.25 - Sinopharm Zhuhai Medical Instrument Co.,
Ltd. Sale of goods 9,119.70 - Sinopharm Group Zhijun(Shenzhen)
Pharmaceutical Co., Ltd. Sale of goods 7,617.49 - Sinopharm Holding Fuzhou Co., Ltd. Sale of goods 6,927.14 6,073,301.78 Sinopharm Holding Hulun Buir Co., Ltd. Sale of goods 4,570.00 5,955,618.61 Hunan Minshengtang Investment Co., Ltd. Sale of goods - 4,378,542.02 Sinopharm Holding Quanzhou Co., Ltd. Sale of goods - 2,300,292.62 Sinopharm Holding Lunan Co., Ltd. Sale of goods - 1,004,572.65 Sinopharm Holding Zhangzhou Co., Ltd. Sale of goods - 750,514.60 Sinopharm Holding Beijing Tianxing Puxin
Biological Medical Co., Ltd. Sale of goods - 598,153.85 Sinopharm Group Guangdong Medicine
Device Co., Ltd. Sale of goods - 557,307.70 Hutchison Whampoa Sinopharm
Pharmaceuticals (Shanghai) Co., Ltd. Sale of goods - 409,246.96 China Otsuka Pharmaceutical Co., Ltd. Sale of goods - 153,846.15 China National Scientific Instruments&
Materials Imp/Exp Shenzhen Co., Ltd. Sale of goods - 121,846.14 Sinopharm Holding Xiangyang Co., Ltd. Sale of goods - 109,542.99 Sinopharm Xinxiang Chain Store Co., Ltd. Sale of goods - 66,445.13 Sichuan Kang Daxin Pharmaceutical Co., Ltd. Sale of goods - 33,230.76 Beijing Tiantan Biological Products Co., Ltd. Sale of goods - 7,692.31 Sinopharm Holding Qianxinan Co., Ltd. Sale of goods - 7,478.63 Sinopharm Guangdong Medical Examination
Co., Ltd. Sale of goods - 802.05 Transport and
storage
China National Medicines Co., Ltd. income 3,580,698.30 3,785,126.52 Transport and
storage
Sinopharm Group Medicine Logistic Co., Ltd. income 294,804.62 1,133,089.80 Sinopharm Group Zhijun(Shenzhen)
Pharmaceutical Co., Ltd. Meal fee 294,180.00 266,360.00 Transport and
Sinopharm Group Zhijun (Shenzhen) storage
PingShan Pharmaceutical Co., Ltd. income 122,242.00 110,434.27
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions–goods and services (Continued)
Sale of goods and rendering of services
Related party Type of transaction 2018 2017 Consulting service
Sinopharm Holding Shanxi Co., Ltd. income 9,433.96 28,301.88 Consulting service
Guizhou Tongjitang Pharmaceutical Co., Ltd. income 8,285.71 - Consulting service
Winteam Pharmaceutical Group Ltd. income 2,023.58 6,580.11 Sinopharm Holding Shanxi Instrument Branch
Co., Ltd. Other income 1,132.08 22,830.19 Sinopharm Holding Sub Marketing Center Co., Consulting service
Ltd. income - 51,379.25 Transport and
Shenzhen Wanwei Medicine Trading Co., Ltd. storage income - 38,808.71 Sinopharm Holding Shanxi Co., Ltd. Other income - 19,433.96 Transport and
Shenzhen Main Luck Pharmaceutical Co., Ltd. storage income - 18,277.71 Shenzhen Zhijun Pharmaceutical Trade Co.,
Ltd. Meal fee - 17,461.63 Sinopharm Group (Tianjin) Eastern Bokang
Pharmaceutical Co., Ltd. Other income - 13,650.94 Consulting service
Sinopharm Health Online Co., Ltd. income - 10,697.08
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(2) Related party transactions - leases
(a) As the lessor
Type of assets under Income from Income from leases in leases leases in 2018 2017 Sinopharm Group Zhijun (Shenzhen) Building
Pharmaceutical Co., Ltd. 351,428.58 637,142.88 Shenzhen Zhijun Pharmaceutical Trade Co., Building
Ltd. 285,714.30 - Building
China National Medicines Co., Ltd. 45,714.29 45,714.29 Sinopharm Holding Sub Marketing Center Co., Building
Ltd. - 22,857.14 (b) As the lessee
Type of assets under Expenses from Expenses from leases leases leases in 2018 in 2017 Beijing Golden Elephant Fosun Pharmaceutical
Co., Ltd. Building 5,461,904.76 4,780,000.00 Sinopharm Group Xinjiang Special Drugs
National Pharmaceutical Co., Ltd. Building 3,914,124.76 4,239,560.37 Sinopharm Group Shanghai Co., Ltd. Building 3,790,426.48 3,574,131.14 Beijing Sinopharm Tianyuan Real Estate&
Property Management Co., Ltd. Equipment 3,750,000.00 3,750,000.00 Shenyang Pharmaceutical Co., Ltd. Building 3,548,219.75 3,263,809.62 Sinopharm Group Medicine Logistic Co., Ltd. Building 3,539,999.98 3,539,999.98 Lerentang Investment Group Co., Ltd. Building 2,277,892.99 2,700,000.00 Hunan Minshengtang Investment Co., Ltd. Building 2,027,673.99 1,548,351.84 Sinopharm Holding Yangzhou Co., Ltd. Building 1,862,857.14 1,862,857.14 Linyi Medical Group Co., Ltd. Building (Store) 1,329,859.65 - Pingdingshan Pusheng Pharmaceutical Co., Ltd. Building 1,277,732.57 2,402,965.82 Guangdong Jiyuantang Development Co., Ltd. Building 1,192,864.11 611,398.72 Nanjing Yuanguang Trading Co., Ltd. Building 866,794.89 - Building (Warehouse,
Linyi Medical Group Co., Ltd. Office) 706,516.80 - Shaoguan Wujiang District Muyang Medicine
Information Consultant Co., Ltd. Building 470,161.86 470,161.86 Taishan Xiangranhui Trade Co., Ltd Building 451,963.88 - Zhang Zhenfang Building 402,499.98 402,499.98 Wang Yang Building 262,857.12 262,857.12 Sinopharm Group Co., Ltd. Building 259,915.02 259,915.04 Sinopharm Holding Kashi New& Special Drugs
Co., Ltd. Building 236,051.50 212,179.81
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(2) Related party transactions– leases (Continued)
(b) As the lessee (continued)
Type of assets Expenses from Expenses from under leases leases in 2018 leases in 2017 Sinopharm Holding Beijing Co., Ltd. Building 235,714.29 221,944.46 Sinopharm Holding Shanxi Co., Ltd. Building 234,017.16 297,653.30 Sinopharm Holding Xinjiang Xinte Karamay
Pharmaceutical Co., Ltd. Building 184,253.18 184,253.33 Gu Jinhua Building 178,800.00 596,654.10 Beijing Sinopharm Tianyuan Real Estate&
Property Management Co., Ltd. Building 173,523.81 254,544.44 China National Medicines Co., Ltd. Building 153,750.00 199,563.50 Hangzhou Xihu Business Group Corporation Building 132,823.81 126,500.00 Sinopharm Xinjiang Pharmaceutical Co.,
Ltd. Building 130,208.30 125,000.04 Shenzhen Jiufeng Investment Co., Ltd. Building 89,260.15 - Taishan Qunkang Pharmacy Co., Ltd. Building 74,170.32 - Xinjiang Baitong Property Service Co., Ltd. Building 44,581.16 34,551.74 Sinopharm Group Zhijun (Shenzhen)
PingShan Pharmaceutical Co., Ltd. Park 35,428.57 - Sinopharm Holding Fujian Co., Ltd. Building 6,571.38 1,999.98 Huang Lijin Building - 819,144.15 Taishan Qunkang Pharmacy Co., Ltd. Building - 81,271.80 Linyi Medical Group Co., Ltd. Building - 2,010,483.23 Sinopharm Group Xinjiang Pharmaceutical
Co., Ltd. Building - 27,000.00
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(3) Related party transactions– Financing
Related party Amount Inception Maturity Note Borrowed from
Group Financial Co. Discount on commercial 28,864,324.33 6.February.2018 31.March.2018 acceptance notes Group Financial Co. Discount on commercial 17,745,523.36 8.June.2018 31.July.2018 acceptance notes Group Financial Co. Discount on commercial 16,989,310.72 8.June.2018 2.July.2018 acceptance notes Group Financial Co. Discount on commercial 15,000,000.00 6.February.2018 9.May.2018 acceptance notes Group Financial Co. Discount on commercial 15,000,000.00 8.June.2018 9.July.2018 acceptance notes Group Financial Co. Discount on commercial 14,421,033.37 8.June.2018 31.July.2018 acceptance notes Group Financial Co. Discount on commercial 13,299,616.90 6.February.2018 9.June.2018 acceptance notes Group Financial Co. Discount on commercial 10,427,104.57 8.June.2018 9.August.2018 acceptance notes Group Financial Co. Discount on commercial 10,000,000.00 8.June.2018 25.July.2018 acceptance notes Group Financial Co. Discount on commercial 10,000,000.00 8.June.2018 25.August.2018 acceptance notes Group Financial Co. Discount on commercial 9,154,974.69 6.February.2018 31.March.2018 acceptance notes Group Financial Co. Discount on commercial 8,492,564.70 6.February.2018 31.March.2018 acceptance notes Group Financial Co. Discount on commercial 6,533,003.82 23.May.2018 27.June.2018 acceptance notes Group Financial Co. Discount on commercial 5,824,599.68 8.June.2018 31.July.2018 acceptance notes Group Financial Co. Discount on bank 5,494,215.57 29.January.2018 25.July.2018 acceptance notes Group Financial Co. Discount on commercial 5,397,269.57 8.June.2018 25.August.2018 acceptance notes Group Financial Co. Discount on commercial 4,829,908.00 6.February.2018 25.April.2018 acceptance notes Group Financial Co. Discount on bank 3,500,231.10 23.May.2018 28.September.2018 acceptance notes Group Financial Co. Discount on commercial 3,203,901.98 8.June.2018 25.July.2018 acceptance notes Guorun Medical Supply
Chain Services
(Shanghai) Co., Ltd. 3,200,000.00 27.June.2018 26.June.2018 Short-term borrowings Group Financial Co. Discount on commercial 2,985,850.00 8.June.2018 25.July.2018 acceptance notes Group Financial Co. Discount on commercial 2,586,003.25 6.February.2018 9.April.2018 acceptance notes Group Financial Co. Discount on commercial 2,500,661.99 8.June.2018 9.July.2018 acceptance notes Group Financial Co. Discount on bank 2,000,000.00 23.May.2018 28.June.2018 acceptance notes Group Financial Co. Discount on bank 2,000,000.00 23.May.2018 19.October.2018 acceptance notes
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Related party Amount Inception Maturity Note Borrowed from
Group Financial Co. Discount on bank 1,819,472.43 29.January.2018 25.July.2018 acceptance notes Group Financial Co. Discount on commercial 1,782,632.39 6.February.2018 31.May.2018 acceptance notes Group Financial Co. Discount on commercial 1,727,218.03 8.June.2018 31.August.2018 acceptance notes Group Financial Co. Discount on bank 1,721,826.42 29.January.2018 26. August.2018 acceptance notes Group Financial Co. Discount on bank 1,614,923.40 29.January.2018 25.June.2018 acceptance notes Group Financial Co. Discount on commercial 1,567,611.66 8.June.2018 31.July.2018 acceptance notes Group Financial Co. Discount on commercial 1,424,501.98 8.June.2018 3.November.2018 acceptance notes Discount on bank Group Financial Co. 1,350,000.00 29.January.2018 27.June.2018 acceptance notes Discount on commercial Group Financial Co. 1,020,299.50 6.February.2018 26.April.2018 acceptance notes Discount on commercial Group Financial Co. 1,009,120.49 8.June.2018 30.September.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 23.May.2018 30.July.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 23.May.2018 17.October.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 25.July.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 25.July.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 25.July.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 25.July.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 25.July.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 25.July.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 26.August.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 26.August.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 26.August.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 26.August.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 26.August.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 26.August.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 28.June.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 28.June.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 28.June.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 28.June.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 28.June.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 28.June.2018 acceptance notes
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Related party Amount Inception Maturity Note Borrowed from
Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 28.June.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 28.June.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 27.March.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 27.March.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 27.March.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 27.March.2018 acceptance notes Discount on bank Group Financial Co. 1,000,000.00 29.January.2018 27.March.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 30.March.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 30.March.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 27.April.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 27.April.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 27.April.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 31.May.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 31.May.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Related party Amount Inception Maturity Note Borrowed from
Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.March.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes Discount on commercial Group Financial Co. 999,000.00 11.February.2018 25.April.2018 acceptance notes Discount on bank Group Financial Co. 965,711.76 29.January.2018 27.March.2018 acceptance notes Discount on bank Group Financial Co. 960,382.84 23.May.2018 30.June.2018 acceptance notes Discount on bank Group Financial Co. 881,196.30 23.May.2018 13.July.2018 acceptance notes Discount on commercial Group Financial Co. 866,989.11 11.February.2018 25.March.2018 acceptance notes Discount on bank Group Financial Co. 832,908.92 23.May.2018 20.October.2018 acceptance notes Discount on commercial Group Financial Co. 773,422.00 8.June.2018 26.July.2018 acceptance notes Discount on commercial Group Financial Co. 762,190.80 6.February.2018 26.May.2018 acceptance notes Discount on bank Group Financial Co. 726,717.56 23.May.2018 26.July.2018 acceptance notes Discount on bank Group Financial Co. 725,482.85 23.May.2018 8.September.2018 acceptance notes Discount on commercial Group Financial Co. 705,466.20 6.February.2018 30.June.2018 acceptance notes Discount on bank Group Financial Co. 700,894.97 23.May.2018 7.September.2018 acceptance notes Discount on bank Group Financial Co. 700,000.00 23.May.2018 26.September.2018 acceptance notes Discount on bank Group Financial Co. 682,963.15 29.January.2018 28.June.2018 acceptance notes Discount on commercial Group Financial Co. 663,946.00 8.June.2018 26.August.2018 acceptance notes
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Related party Amount Inception Maturity Note Borrowed from
Discount on bank Group Financial Co. 662,209.60 23.May.2018 26.July.2018 acceptance notes Discount on commercial Group Financial Co. 644,139.50 11.February.2018 25.March.2018 acceptance notes Discount on commercial Group Financial Co. 637,825.05 11.February.2018 25.April.2018 acceptance notes Discount on bank Group Financial Co. 630,654.72 23.May.2018 12.June.2018 acceptance notes Discount on bank Group Financial Co. 626,307.92 23.May.2018 27.July.2018 acceptance notes Discount on commercial Group Financial Co. 605,037.40 8.June.2018 26.September.2018 acceptance notes Discount on commercial Group Financial Co. 603,985.26 11.February.2018 30.March.2018 acceptance notes Discount on bank Group Financial Co. 579,670.29 23.May.2018 23.July.2018 acceptance notes Discount on commercial Group Financial Co. 572,565.64 8.June.2018 31.October.2018 acceptance notes Discount on bank Group Financial Co. 509,183.55 23.May.2018 23.August.2018 acceptance notes Discount on commercial Group Financial Co. 483,944.32 6.February.2018 25.March.2018 acceptance notes Discount on commercial Group Financial Co. 448,347.26 11.February.2018 27.April.2018 acceptance notes Discount on bank Group Financial Co. 234,565.32 23.May.2018 28.July.2018 acceptance notes Discount on commercial Group Financial Co. 217,124.56 11.February.2018 31.May.2018 acceptance notes Discount on commercial Group Financial Co. 147,903.08 8.June.2018 25.July.2018 acceptance notes Lend to
Sinopharm Group
Zhijun(Suzhou)
Pharmaceutical Co., Ltd. 44,000,000.00 26.January.2018 25. January.2019 Entrusted loan (4) Related party asset transfer
Type of transaction 2018 2017 Sinopharm Holding Tianjin Binhai Pharmaceutical Co., Purchase of construction
Ltd. in progress 21,794.87
Purchase of intangible
Shanghai Tongyu Information Technology Co., Ltd. asset 46,153.85
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(5) Other related party transactions
2018 2017 (a) Remuneration for key management personnel 2 , 9 8 1 , 2 5 0 . 0 0 2,507,458.00 (b) Interest expense
Related party Category 2018 2017 Payment of notes
Group Financial Co. discount interest 3,411,652.84 3,150,834.52 China National Pharmaceutical Group Payment of entrusted loan
Corporation interest 641,469.02 134,673.05 Sinopharm Holding Financing Lease Payment of financing
Co., Ltd. lease interest 623,402.17 837,111.29 Guorun Medical Supply Chain Payment of related parties
Services (Shanghai) Co., Ltd. loan interest 1,778.67 - Group Financial Co.. Payment of loan interest - 688,598.96 4,678,302.70 4,811,217.82 (c) Interest income
Related party Category 2018 2017 Sinopharm Group Zhijun (Suzhou)
Pharmaceutical Co., Ltd. Entrusted loan interest 1,549,650.99 937,951.77 Group Financial Co. Deposit interest 387,479.46 129,656.35 Shanghai Shyndec Pharmaceutical
Co., Ltd. Other interest - 47,628.66 1,937,130.45 1,115,236.78
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
6. Commitments between the Group and related parties
2018 2017
RMB‘0,000 RMB‘0,000
Leases
Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd. 3,439.50 2,580.00
Shenyang Pharmaceutical Co., Ltd. 3,000.00 700.00
Sinopharm Holding Yangzhou Co., Ltd. 978.00 1,173.60
Linyi Medical Group Co., Ltd. 959.42 429.97
Sinopharm Group Medicine Logistic Co., Ltd. 806.70 -
Guangdong Jiyuantang Development Co., Ltd. 685.50 -
Nanjing Yuanguang Trading Co., Ltd. 672.00 463.09
Taishan Xiangranhui Trade Co., Ltd 551.18 527.54
Pingdingshan Pusheng Pharmaceutical Co., Ltd. 512.85 162.11
Sinopharm Group Shanghai Co., Ltd. 488.79 4,032.80
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd. 352.45 877.80
Lerentang Investment Group Co., Ltd. 263.50 527.00
Shaoguan Wujiang District Muyang Medicine Information Consultant Co., Ltd. 216.08 263.09
Gu Jinhua 213.96 289.06
Sinopharm Group Co., Ltd. 147.29 173.28
Sinopharm Holding Beijing Co., Ltd. 146.00 166.42
Taishan Qunkang Pharmacy Co., Ltd. 93.01 53.36
Beijing Sinopharm Tianyuan Real Estate& Property Management Co., Ltd. 86.90 -
Wang Yang 82.80 110.40
China National Medicines Co., Ltd. 75.00 94.50
Hangzhou Xihu Business Group Corporation 73.99 87.93
Shenzhen Jiufeng Investment Co., Ltd. 58.00 -
Sinopharm Holding Kashi New& Special Drugs Co., Ltd. 48.54 52.89
Sinopharm Xinjiang Pharmaceutical Co., Ltd. 27.56 40.69
Sinopharm Holding Fujian Co., Ltd. 1.96 2.65
Hunan Minshengtang Investment Co., Ltd. - 841.86
Sinopharm Group Zhijun (Shenzhen) PingShan Pharmaceutical Co., Ltd. - -
Xinjiang Baitong Property Service Co., Ltd. - -
Zhang Zhenfang - 80.50
Shenzhen Jiufeng Investment Co., Ltd. - 78.00
Sinopharm Holding Shanxi Co., Ltd. - 49.14
Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd.
- 45.31
13,980.97 13,902.99
Lease out
Sinopharm Group Zhijun (Shenzhen) Pharmaceutical Co., Ltd. - 35.14
Shenzhen Zhijun Pharmaceutical Trade Co., Ltd. - 28.57
Sinopharm Group Medicine Logistic Co., Ltd. - 16.94
- 80.65
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
7. Amounts due from related parties
Accounts receivable 2018 2017
Gross carrying Provision for Gross carrying Provision for Related party amount bad debt amount bad debt Foshan Chancheng Pharmaceutical Co.,
Ltd. 36,703,959.69 207,364.54 21,934,107.53 175,357.55 Sinopharm Group Co., Ltd. 30,140,408.15 - 15,369,464.29 - Shanghai Beiyi Guoda pharmaceutical Co.
Ltd. 18,617,164.50 - 17,897,203.42 - Sinopharm Holding Hainan Co., Ltd. 10,514,385.94 - 14,215,247.85 - Sinopharm Holding Hainan Hongyi Co., Ltd. 8,529,182.80 - 8,091,971.32 - Sinopharm Lingyun Biopharmaceutical
(Shanghai) Co., Ltd. 4,589,946.00 - 2,157,970.20 - Sinopharm Health Online Co., Ltd. 4,525,649.68 - 9,422,294.03 - Sinopharm Holding Sub Marketing Center
Co., Ltd. 4,190,027.84 - 2,804,530.25 - Beijing Golden Elephant Fosun
Pharmaceutical Co., Ltd. 4,124,312.92 - 8,809,915.50 - Sinopharm Sichuan Pharmaceutical Co.,
Ltd. 3,976,185.33 - 662,971.38 - Foshan Chancheng District Central Hospital 3,576,265.62 20,670.88 2,529,205.51 12,659.85 China National Medicines Co., Ltd. 3,501,874.71 - 2,676,276.13 - Shenzhen Hengsheng Hospital 3,490,867.82 - - - Sinopharm Le-Ren-Tang Medicine Co., Ltd. 3,339,262.36 - 3,637,345.22 - Pudong New Area of Shanghai
Pharmaceutical Medicine Ltd. 2,854,404.51 - 7,370,859.93 - Sinopharm Holding Nantong Co., Ltd. 2,722,425.92 - 1,704,073.87 - Sinopharm Group (Tianjin) Eastern Bokang
Pharmaceutical Co., Ltd. 2,635,080.55 - 1,005,726.44 - Sinopharm Holding Yunnan Co., Ltd. 2,532,060.95 - 1,035,424.32 - Sinopharm Holding Henan Co., Ltd. 1,557,141.42 - 1,154,757.68 - Sinopharm Holding Beijing Huahong Co.,
Ltd. 1,375,881.06 - 506,804.30 - Sinopharm Holding Hubei Co., Ltd. 1,339,756.44 - 2,748,951.80 - Sinopharm Holding Beijing Co., Ltd. 1,296,500.16 - 90,046.08 - Sinopharm Holding Shanxi Co., Ltd. 1,265,918.60 - 1,200,884.28 - Sinopharm Holding Wenzhou Co., Ltd. 1,230,357.78 - 1,158,304.46 - Sinopharm Holding Shandong Co., Ltd. 1,225,393.60 - 588,056.32 - Sinopharm Group Xinjiang Special Drugs
National Pharmaceutical Co., Ltd. 1,148,175.69 - 4,323,084.16 - Foshan Chanyixing Medicine Development
Co Ltd. 987,490.80 3,943.78 673,746.17 2,421.30 Sinopharm Holding Yangzhou Co., Ltd. 935,414.27 - 1,296,112.24 - Sinopharm Holding Shanghai Likang
Pharmaceutical Co., Ltd. 675,756.00 - 130,704.00 - X. Related party relationships and transactions (Continued)
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
7. Amounts due from related parties (Continued)
Accounts receivable(continued) 2018 2017
Gross carrying Provision for Gross carrying Provision for Related party amount bad debt amount bad debt Sinopharm Holding Guizhou Co., Ltd. 639,918.78 - 170,986.79 - Sinopharm Holding Hunan Co., Ltd. 595,452.08 - 43,981.92 - Sinopharm Holding Jilin Co., Ltd. 492,849.62 - 565,721.74 - Sinopharm Holding Tianjin Co., Ltd. 416,379.20 - 135,626.56 - Sinopharm Holding Anhui Co., Ltd. 391,641.84 - 33,633.20 - Sinopharm Holding Xinjiang Special Drugs
Western Pharmaceutical Co., Ltd. 329,296.00 - 380,649.04 - Shanghai Merro Pharmaceutical Co., Ltd. 249,999.26 - 612,664.66 - Sinopharm Holding Fujian Co., Ltd. 235,092.24 - 180,055.08 - Sinopharm Holding Shanxi Co., Ltd. 229,324.80 - 36,481.28 - Sinopharm Holding Ningxia Co., Ltd. 227,560.68 - 1,104,953.59 - Sinopharm Group Southwest Medicine
Co., Ltd. 224,193.04 - 16,558.20 - Sinopharm Holding Dalian Co., Ltd. 214,854.56 - 541,531.52 - Shanghai Guoda Lingyun Pharmacy Co.,
Ltd. 209,212.66 - 270,164.54 - Sinopharm Holding Donghong Medical
(Shanghai) Co., Ltd. 179,629.32 - 124,991.20 - Sinopharm Group Medicine Logistic Co.,
Ltd. 155,588.33 - 189,151.95 - Yuxi Sinopharm Medicine Co., Ltd. 146,026.37 - 146,026.37 - Sinopharm Holding Qinghai Co., Ltd. 108,180.98 - 27,315.00 - Sinopharm Holding Gansu Co., Ltd. 98,794.08 - - - Sinopharm Holding Ulanqab Co., Ltd. 97,118.11 - - - Hubei Medical Group Co., Ltd. 85,653.12 - 113,688.23 - Sinopharm Holding Heilongjiang Co., Ltd. 76,328.00 - 50,000.00 - Sinopharm Holding Tianjin North Medicine
Co., Ltd. 68,180.00 - - - Sinopharm Holding Nanchang Pharmacy
Co., Ltd. 62,660.40 - - - Sinopharm Holding Dalian Hecheng Co.,
Ltd. 62,495.50 - 168,912.00 - Sinopharm Group Shanxi Co., Ltd. 52,792.80 - 127,541.80 - Sinopharm Holding Changzhou Medical
Logistics Center Co., Ltd. 44,066.56 - 67,701.92 - Sinopharm Holding Huangshi Co., Ltd. 39,317.00 - - - Sinopharm Group Zhijun (Shenzhen)
PingShan Pharmaceutical Co., Ltd. 39,204.00 - 19,980.00 - Sinopharm Holding Chengdu Co., Ltd. 35,908.41 - 144,788.41 - X. Related party relationships and transactions (Continued)
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
7. Amounts due from related parties (Continued)
Accounts receivable(continued) 2018 2017
Gross carrying Provision for Gross carrying Provision for bad Related party amount bad debt amount debt Sinopharm Holding Wuxi Co., Ltd. 30,260.00 - 61,247.00 - Sinopharm Holding Fuzhou Co., Ltd. 15,192.00 - - - Sinopharm Holding Putian Co., Ltd. 15,192.00 - - - Sinopharm Holding Longyan Co., Ltd. 15,192.00 - - - Sinopharm Holding Zunyi Co., Ltd. 12,238.80 - - - Sinopharm Holding Jiangxi Co., Ltd. 11,188.52 - 129,605.63 - Sinopharm Holding Honghe Co., Ltd. 11,130.50 - - - Sinopharm Holding Xinxiang Co., Ltd. 9,789.00 - - - Sinopharm Holding Ningde Co., Ltd. 7,596.00 - - - Sinopharm Group Zhijun(Shenzhen)
Pharmaceutical Co., Ltd. 3,534.90 - 6,780.30 - Sinopharm Holding Hongrun Medical
Business Service (Shanghai) Co., Ltd. 2,316.62 - - - Sinopharm Fengliaoxing Medical Hospital
Co., Ltd. 2,278.20 - 4,611.25 14.56 Sinopharm Holding Beijing Tianxing Puxin
Biological Medical Co., Ltd. - - 155,520.00 - Sinopharm Holding Zhejiang Co., Ltd. - - 716,400.00 - Sinopharm Xinxiang Chain Store Co., Ltd. - - 20,066.29 - Sinopharm Holding Changzhou Co., Ltd. - - 483,328.40 - China National Pharmaceutical Foreign
Trade Corporation - - 1,327.42 - Hutchison Whampoa Sinopharm
Pharmaceuticals (Shanghai) Co., Ltd. - - 72,992.40 - Shanghai Liyi Drug Store Co.,Ltd - - 35,579.55 - Linyi Medical Group Co., Ltd. - - 2,538.80 - Sinopharm Holding Huaian Co., Ltd. (19.40) - - - Sinopharm Holding Hulun Buir Co., Ltd. (33,295.45) - 982,776.96 -
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
7. Amounts due from related parties (Continued)
Notes receivable 2018 2017
Gross carrying Provision for Gross carrying Provision for Related party amount bad debt amount bad debt Sinopharm (Guangzhou) Medical
Equipment Co., Ltd. 20,000,000.00 - - - Sinopharm Holding Hainan Co., Ltd. 6,160,961.40 - 3,650,933.87 - Sinopharm Le-Ren-Tang Medicine Co.,
Ltd. 900,000.00 - - - Sinopharm Holding Hubei Co., Ltd. 243,000.00 - - - Sinopharm Group Zhijun (Shenzhen)
PingShan Pharmaceutical Co., Ltd. 80,000.00 - - - Sinopharm Group (Tianjin) Eastern
Bokang Pharmaceutical Co., Ltd. - - 161,555.40 - Sinopharm Holding Shanxi Co., Ltd. - - 500,000.00 - Sinopharm Holding Henan Co., Ltd. - - 1,500,000.00 - Sinopharm Holding Inner Mongolia Co.,
Ltd. - - 136,172.00 - Sinopharm Holding Nantong Co., Ltd. - - 2,240,000.00 - Sinopharm Holding Dalian Hecheng Co.,
Ltd. - - 116,885.00 - Foshan Chancheng Pharmaceutical Co.,
Ltd. - - 8,149,623.63 -
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
7. Amounts due from related parties (Continued)
Other receivables 2018 2017
Gross carrying Provision for Gross carrying Provision for bad Related party amount bad debt amount debt Sinopharm Group Medicine Logistic Co.,
Ltd. 5,001,939.98 - 1,398,849.53 - Sinopharm Group Zhijun(Suzhou)
Pharmaceutical Co., Ltd. 44,000,000.00 - 44,000,000.00 - Guorun Medical Supply Chain Services
(Shanghai) Co., Ltd. 2,940,000.00 - - - Sinopharm Holding Sub Marketing Center
Co., Ltd. 8,120.00 - - - Sinopharm Holding Henan Co., Ltd. 67,526.20 - - - Sinopharm Holding Jiaozuo Co., Ltd. 21,476.00 - - - Sinopharm Holding Fujian Co., Ltd. 5,476.29 - - - Shanghai Modern Pharmaceutical Co., Ltd.
(Modern Pharmaceutical) 101,166,758.92 - 125,181,658.92 - Wuhan Zhonglian Pharmaceutical Group
Co., Ltd. 5,000.00 500.00 5,000.00 500.00 Sinopharm Group Zhijun(Shenzhen)
Pharmaceutical Co., Ltd. 79,791.10 600.00 17,060.30 300.00 Guangxi Deyiyuan Medical Investment
Center (Limited Partnership) 4,000,000.00 - - - China National Medicines Co., Ltd. 115,340.85 - - - Sinopharm Holding Shanxi Co., Ltd. - - 100,000.00
Baise Jianan Medicine Chain Co., Ltd. 980,000.00 - - - Sinopharm Group Xinjiang Special Drugs
National Pharmaceutical Co., Ltd. 100,000.00 - 100,000.00 - Sinopharm Lerentang Hebei Medical
Instrument Trade Co., Ltd. 48,493.16 - 48,493.16 - Sinopharm Health Online Co., Ltd. - - 1,071,427.97 - Advances to suppliers 2018 2017
Gross carrying Provision for Gross carrying Provision for bad Related party amount bad debt amount debt Hunan Minshengtang Investment Co., Ltd. 4,466,242.71 - 2,670,438.92 - Sinopharm Holding Shanxi Co., Ltd. 3,119,762.79 - 287,996.37 - Sinopharm Group Xinjiang Special Drugs
National Pharmaceutical Co., Ltd. 1,532,954.29 - 2,025,021.70 - Sinopharm Group Co., Ltd. 1,327,141.31 - 1,963,516.79 - Sinopharm Chuan Kang Pharmaceutical
Co., Ltd. 717,145.38 - - Linyi Medical Group Co., Ltd. 596,733.21 - - Nanjing Yuanguang Trading Co., Ltd. 395,816.01 - 168,168.19 - Sinopharm Xinjiang Korla Pharmaceutical
Co., Ltd. 264,360.50 - 264,360.50 - Sinopharm Holding Kashi New& Special
Drugs Co., Ltd. 241,371.50 - 25,200.00 - Sinopharm Holding Shanxi Co., Ltd. 234,017.13 - 5,502,363.26 -
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
7. Amounts due from related parties (Continued)
Advances to suppliers (continued) 2018 2017
Gross carrying Provision for Gross carrying Provision for bad Related party amount bad debt amount debt Sinopharm Holding Xinjiang Xinte Karamay
Pharmaceutical Co., Ltd. 213,574.68 - - - Chongqing Yaoyou Pharmaceutical Co.,
Ltd. 211,092.00 - - - Guizhou Tongjitang Pharmaceutical Co.,
Ltd. 154,778.29 - - - Anhui Jingfang Pharmaceutical Co., Ltd. 150,708.40 - - - Chengdu Rongsheng Pharmacy Co., Ltd. 143,348.00 - 633.13 - Sinopharm Holding Beijing Co., Ltd. 130,000.00 - 117,500.00 - Sinopharm Group Yibin Pharmaceuticals
Co., Ltd. 112,426.00 - - - Shanghai Modern Hasen (Shangqiu)
Pharmaceutical Co., Ltd. 88,685.38 - - - China National Medicines Co., Ltd. 78,750.00 - 183,033.71 - Beijing Sinopharm Tianyuan Real Estate&
Property Management Co., Ltd. 72,000.00 - - - Xinjiang Baitong Property Service Co., Ltd. 67,427.65 - 10,867.40 - Suzhou Erye Pharmaceutical Limited
Company 50,220.00 - - - Sinopharm Holding Sub Marketing Center
Co., Ltd. 35,181.20 - 1,025.86 - Taishan Qunkang Pharmacy Co., Ltd. 26,140.03 - - - Sinopharm Holding Lerentang
Pharmaceutical Co., Ltd. 7,960.00 - - - Sinopharm Holding Tianjin Co., Ltd. 7,705.88 - - - China Sinopharm International Corporation 7,314.00 - - - Winteam Pharmaceutical Group Ltd. 1,927.17 - 19,160.00 - Sinopharm Holding Hunan Co., Ltd. - - 3,136.32 - Sinopharm Group Guorui Medicine Co.,
Ltd. - - 279,120.00 - Sinopharm Holding Fujian Co., Ltd. - - 5,476.24 - Sinopharm Holding Yangzhou Co., Ltd. - - 4,127.79 - Sinopharm Holding Suzhou Co., Ltd. - - 7,676.52 - Guilin South pharmaceutical Co., Ltd. - - 20,000.00 - Jinzhou AoHong Pharmaceuticals Co., Ltd. - - 20,136,997.60 - Shanghai Shangsheng Biological Products
Co., Ltd. - - 1,271,300.00 - Sinopharm Xinjiang Pharmaceutical Co.,
Ltd. - - 42,708.30 - Sinopharm Group Zhijun (Shenzhen)
PingShan Pharmaceutical Co., Ltd. - - 158.49 - Gu Jihua - - 78,420.01 - Sinopharm Holding Jinhua Co., Ltd. - - 38.80 - Sinopharm Holding Tianjin Distribution
Center Co., Ltd. - - 1,735.14 - Sinopharm Holding Shenyang Co., Ltd. - - 1,334,883.98 -
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties
Related party 2018 2017 Accounts payable
Sinopharm Holding Sub Marketing Center Co., Ltd. 185,434,546.68 143,908,467.08 China National Medicines Co., Ltd. 50,999,852.95 28,362,452.88 Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd. 38,736,408.80 37,504,845.76 Sinopharm Holding Shanxi Co., Ltd. 37,706,274.33 244,476.98 Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. 35,753,944.33 16,003,934.07 Sinopharm Le-Ren-Tang Medicine Co., Ltd. 28,095,649.43 - Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co.,
Ltd. 19,956,249.97 19,742,833.00 Sinopharm Group Co., Ltd. 19,380,143.87 45,203,988.04 Lanzhou Institute of Biological Products Co., Ltd. 18,300,000.00 - Jiangsu Wanbang Pharmacy Marketing Co., Ltd. 18,191,902.38 10,003,320.16 Sinopharm Holding Shenyang Co., Ltd. 11,775,646.40 - Sinopharm Holding Lerentang Pharmaceutical Co., Ltd. 11,678,984.58 7,796,905.93 Sinopharm Holding Lunan Co., Ltd. 11,599,866.46 152,924.30 Sinopharm Holding Beijing Co., Ltd. 10,395,045.63 1,148,947.27 Sinopharm Holding Inner Mongolia Co., Ltd. 10,291,898.39 2,664,468.46 Chongqing Yaoyou Pharmaceutical Co., Ltd. 10,162,662.09 5,449,975.66 Winteam Pharmaceutical Group Ltd. 8,836,641.73 1,291,002.80 Sinopharm Holding Fujian Co., Ltd. 8,523,446.87 3,717,579.24 Sinopharm Holding Jiangsu Co., Ltd. 6,712,929.75 7,730,787.92 Sinopharm Holding Shanxi Instrument Branch Co., Ltd. 6,108,785.26 4,089,563.14 Suzhou Erye Pharmaceutical Limited Company 6,043,499.78 - Shenzhen Wanwei Medicine Trading Co., Ltd. 4,844,806.71 4,240,123.65 Shenzhen Main Luck Pharmaceutical Co., Ltd. 4,827,911.78 6,520,471.48 Sinopharm Holding Yangzhou Co., Ltd. 4,754,359.23 5,987,057.82 Jinzhou AoHong Pharmaceuticals Co., Ltd. 4,663,433.10 - Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd. 4,540,260.42 1,141,702.25 Sinopharm Lerentang Shijiazhuang Medicine Co., Ltd. 4,086,875.36 2,106,607.37 Sinopharm Holding Pingdingshan Co., Ltd. 3,648,364.61 8,178,253.43 Tibet Yaopharma Co., Ltd. 3,148,580.21 - Sinopharm Holding Ningxia Co., Ltd. 2,799,537.02 2,809,371.28 Sinopharm Group Zhijun (Shenzhen) PingShan Pharmaceutical Co.,
Ltd. 2,714,815.09 1,350,614.09
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Related party 2018 2017 Accounts payable (Continued)
Sinopharm Holding Shanxi Co., Ltd. 2,652,903.44 - Sinopharm Holding Xiamen Co., Ltd. 2,630,865.97 4,006,491.37 Sinopharm Holding Changzhou Medical Logistics Center Co., Ltd. 2,131,769.27 2,792,663.08 Yichang Humanwell Pharmaceutical Co., Ltd. 2,073,807.37 2,620,139.37 Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd. 2,057,833.38 803,559.06 Sinopharm Holding Beijing Huahong Co., Ltd. 1,874,216.57 1,277,513.68 Sinopharm Holding Fuzhou Co., Ltd. 1,616,691.28 996,015.17 Sinopharm Holding Hulun Buir Co., Ltd. 1,600,453.94 2,902,181.03 Sinopharm Lerentang Hebei Medical Instrument Trade Co., Ltd. 1,582,888.55 1,708,132.21 Sinopharm Holding Jinan Co., Ltd. 1,374,865.44 71,695.99 Sinopharm Holding Hunan Co., Ltd. 1,364,062.66 148,565.65 Foshan Fengliaoxing Pharmaceutical Co., Ltd. 1,358,827.63 1,380,114.57 China Otsuka Pharmaceutical Co., Ltd. 1,352,547.35 1,073,847.85 Sinopharm Holding Beijing Kangchen Bio-Pharmaceutical Co., Ltd. 1,297,375.21 1,095,793.12 Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical Co.,
Ltd. 1,074,129.27 321,836.11 Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd. 935,712.46 482,357.79 Sinopharm Holding Henan Co., Ltd. 875,000.19 1,526,472.33 Shanghai Transfusion Technology Co., Ltd. 779,650.00 251,500.00 Sinopharm Group Rongsheng Pharmaceutical Co., Ltd. 773,028.14 197,304.23 Sinopharm Holding Changzhou Co., Ltd. 762,677.30 156,301.06 Sinopharm Holding Wuxi Co., Ltd. 744,575.65 234,944.25 Sinopharm Holding Shandong Co., Ltd. 718,163.95 - Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd. 713,718.67 495,022.50 Sinopharm Holding Suzhou Co., Ltd. 710,094.01 656,992.49 Shenyang Hongqi Pharmaceutical Co., Ltd. 588,503.90 394,762.85 Huayi Pharmaceutical Co., Ltd. 532,096.11 - Pudong New Area of Shanghai Pharmaceutical Medicine Ltd. 521,871.90 798,390.65 Wuhan Zhonglian Pharmaceutical Group Co., Ltd. 503,372.84 526,750.40 Hunan Dongting Pharmaceutical Co., Ltd. 488,665.79 110,111.27 Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Co., Ltd. 456,155.01 363,937.65 Sinopharm Holding Yangzhou Biological Medicine Co., Ltd. 444,000.00 24,852.45 Sinopharm Holding Dalian Co., Ltd. 437,980.07 80,166.00 Sinopharm Group Guorui Medicine Co., Ltd. 366,991.38 34,649.98 X. Related party relationships and transactions (Continued)
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
8. Amounts due to related parties (Continued)
Related party 2018 2017 Accounts payable (Continued)
Sinopharm Holding Donghong Medical (Shanghai) Co., Ltd. 363,060.90 46,098.20 Sichuan Hexin Pharmaceutical Co., Ltd. 350,457.93 - China National Pharmaceutical Foreign Trade Corporation 341,551.34 2,035,108.96 Shantou Jinshi Powder Injection Co., Ltd. 319,759.20 - Sinopharm Holding Jinzhou Co., Ltd. 306,370.88 520,194.75 Chongqing Haisiman Pharmaceutical Co., Ltd. 275,753.91 438,368.99 Guizhou Tongjitang Pharmaceutical Co., Ltd. 240,306.88 557,491.17 Chengdu Rongsheng Pharmacy Co., Ltd. 235,668.87 - Shanghai Merro Pharmaceutical Co., Ltd. 232,663.76 311,639.09 Anhui Jingfang Pharmaceutical Co., Ltd. 226,349.94 275,317.28 Sinopharm Holding Dezhou Co., Ltd. 209,815.57 239,430.02 Sinopharm Group Shanxi Co., Ltd. 206,588.00 - Chengdu Institute of Biological Products Co., Ltd. 183,600.00 - Sinopharm Group Southwest Medicine Co., Ltd. 177,932.00 - Sinopharm Holding Anhui Co., Ltd. 171,254.00 - Sinopharm Holding Tongliao Co., Ltd. 165,592.89 440,884.70 Shanghai Modern Pharmaceutical Co., Ltd. (Modern Pharmaceutical) 163,448.94 12,807.61 Sinopharm Holding Putian Co., Ltd. 161,557.66 149,819.81 Sinopharm Holding Lianyungang Co., Ltd. 155,264.40 - Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co., Ltd. 155,194.84 42,425.80 Shanghai Chaohui Pharmaceutical Co., Ltd. 152,724.16 8,938.82 Jiangsu Fuxing Pharmaceutical Trading Co., Ltd 139,480.00 183,799.20 Sinopharm Holding Yancheng Co., Ltd. 122,112.27 960.10 Sinopharm Holding Kashi New& Special Drugs Co., Ltd. 105,211.32 155,512.79 Sinopharm Shantou Jinshi Pharmaceutical Co., Ltd. 96,434.97 55,307.67 Sinopharm Holding Changsha Co., Ltd. 92,749.70 - Guangdong Medi-World Pharmaceutical Co., Ltd. 87,519.32 248,787.32 Sinopharm Holding Taizhou Co., Ltd. 86,054.00 94,976.03 Sinopharm Holding Dalian Hecheng Co., Ltd. 84,645.00 - The Fourth Pharmaceutical Co., Ltd. of Zhonglian Group 82,099.79 77,147.00 Sinopharm Holding Ulanqab Co., Ltd. 80,963.40 133,641.00 Sinopharm Holding Zhihui Minsheng (Tianjin) Medicine Co., Ltd. 80,410.58 - Sinopharm Holding Quanzhou Co., Ltd. 77,881.33 106,979.43 Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd. 75,814.60 150,269.45
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Related party 2018 2017 Accounts payable (Continued)
Foshan Dezhong Pharmaceutical Co., Ltd. 58,320.10 98,779.60 Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd. 55,598.69 - China National Pharmaceutical Industry Co., Ltd. 54,841.86 52,320.00 Sinopharm Holding Tianjin Co., Ltd. 52,844.12 88,599.65 Shandong Lu Ya Pharmaceutical Co., Ltd. 52,819.07 1,507,459.07 Sinopharm Holding Zhejiang Co., Ltd. 46,789.67 55,459.28 Sinopharm Holding Sanyi Medicine (Wuhu) Co., Ltd. 45,404.17 74,439.47 Sinopharm Holding Wende Medicine Nanjing Co., Ltd. 42,760.80 - Jiangsu Huanghe Pharmaceutical Co., Ltd. 35,363.79 53,331.64 Sichuan Jiangyouzhongbafuzi Technology Development Co., Ltd. 33,454.55 8,648.65 Sinopharm Holding Ordos Co., Ltd. 33,195.00 55,635.00 Sinopharm Holding Yongzhou Co., Ltd. 30,907.44 30,163.49 Sinopharm Holding Biopharmaceutical (Tianjin) Co., Ltd. 30,235.86 20,509.50 Shanghai Modern Hasen (Shangqiu) Pharmaceutical Co., Ltd. 29,921.40 30,918.42 Sinopharm Group Yibin Pharmaceuticals Co., Ltd. 29,603.90 23,030.00 Sinopharm Group Shanghai Medicine Device Co., Ltd. 16,603.02 16,603.02 Sinopharm Holding Liaocheng Co., Ltd. 16,197.93 16,197.93 Sinopharm Holding Shanxi Jincheng Co., Ltd 13,110.09 - Sinopharm Lerentang Qinhuangdao Medicine Co., Ltd. 11,086.50 - Sinopharm Hebei Medical Instrument Co., Ltd. 7,644.60 3,564.00 Sinopharm Group Zhijun(Suzhou) Pharmaceutical Co., Ltd. 6,408.00 - Sinopharm Holding Rizhao Co., Ltd. 5,292.81 - Sinopharm Prospect Dentech (Beijing) Co., Ltd. 2,548.01 1,206.00 Changchun Changsheng Gene Pharmaceutical Co., Ltd. 1,492.91 14,232.00 Guilin South pharmaceutical Co., Ltd. 1,211.92 1,201.12 Sinopharm Holding Huaideju Pharmaceutical (Xiamen) Co., Ltd. 1,113.85 1,113.85 Sinopharm Fengliaoxing (Foshan) Medicines Co., Ltd. 767.28 149.02 Beijing Huasheng Pharmaceutical Biotechnology Development Co., Ltd. 637.01 637.01 Shenzhen Zhijun Pharmaceutical Trade Co., Ltd. 534.20 534.20 Sinopharm Holding Chongqing Co., Ltd. 117.64 117.64 Sinopharm Zhuhai Medical Instrument Co., Ltd. 104.31 - Shanghai Shyndec Pharmaceutical Marketing Co., Ltd. 77.76 566,354.26 Sinopharm Holding Tianjin Distribution Center Co., Ltd. 35.32 - Sinopharm Group Weiqida Medicine Co., Ltd. 28.93 28.93
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Related party 2018 2017 Accounts payable (Continued)
Linyi Medical Group Co., Ltd. 10.47 10.47 Sinopharm Holding Xinyu Co., Ltd. 0.01 0.01 Sinopharm Group Shanghai Management Consulting Branch Co., Ltd. - - Beijing Huamiao Pharmaceutical Co., Ltd. - 339,889.47 Sinopharm Holding Chengdu Co., Ltd. - 104,102.57 Guizhou Longlife Pharmacertical Co., Ltd. - 103,560.00 Sinopharm ShanXi Ruifulai Pharmaceutical Co., Ltd. - 63,081.60 Sinopharm Holding Jiangxi Co., Ltd. - 30,372.00 Sinopharm Xinjiang Pharmaceutical Co., Ltd. - 27,692.31 Sinopharm Holding Tianjin North Medicine Co., Ltd. - 19,275.46 Related party 2018 2017 Notes payable
Sinopharm Holding Shanxi Co., Ltd. 96,633,609.80 96,829,230.00 Sinopharm Holding Shenyang Co., Ltd. 77,441,965.84 40,215,446.25 Sinopharm Holding Sub Marketing Center Co., Ltd. 74,535,975.61 91,320,346.11 Sinopharm Holding Shanxi Co., Ltd. 43,255,070.00 29,931,650.00 Sinopharm Holding Inner Mongolia Co., Ltd. 8,725,011.77 - Sinopharm Lerentang Shijiazhuang Medicine Co., Ltd. 6,146,830.73 4,180,000.97 Lanzhou Institute of Biological Products Co., Ltd. 3,760,000.00 21,600,000.00 Sinopharm Holding Lerentang Pharmaceutical Co., Ltd. 3,646,912.36 2,669,407.85 Sinopharm Holding Xiamen Co., Ltd. 3,589,479.22 8,573,712.86 Sinopharm Holding Fujian Co., Ltd. 3,582,375.49 6,294,466.11 Sinopharm Holding Hunan Co., Ltd. 3,525,946.06 - Sinopharm Holding Jinzhou Co., Ltd. 2,823,753.72 647,386.99 Sinopharm Holding Shanxi Instrument Branch Co., Ltd. 2,508,000.00 2,051,364.70 China National Medicines Co., Ltd. 1,776,402.01 8,223,431.95 Shenzhen Main Luck Pharmaceutical Co., Ltd. 1,052,377.40 - Shenzhen Wanwei Medicine Trading Co., Ltd. 995,346.00 1,495,728.00 Chengdu Rongsheng Pharmacy Co., Ltd. 953,756.00 1,760,000.00 Sinopharm Holding Dalian Co., Ltd. 645,404.90 295,145.94 Sinopharm Holding Ningxia Co., Ltd. 500,000.00 1,700,000.00 Shanghai Shyndec Pharmaceutical Marketing Co., Ltd. 369,006.80 - Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd. 341,833.60 123,292.80
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Related party 2018 2017 Notes payable (Continued)
Sinopharm Holding Putian Co., Ltd. 327,255.56 594,085.45 Sinopharm Group Zhijun (Shenzhen) PingShan Pharmaceutical Co.,
Ltd. 318,324.00 157,760.00 Sinopharm Holding Quanzhou Co., Ltd. 290,051.32 457,039.40 Foshan Fengliaoxing Pharmaceutical Co., Ltd. 201,891.16 - Sinopharm Holding Changsha Co., Ltd. 110,056.00 - Sinopharm Group Rongsheng Pharmaceutical Co., Ltd. 104,417.00 170,130.00 Sinopharm Group Co., Ltd. - 60,681,897.22 Chongqing Haisiman Pharmaceutical Co., Ltd. - 3,556,905.12 Chongqing Yaoyou Pharmaceutical Co., Ltd. - 6,722,293.66 Winteam Pharmaceutical Group Ltd. - 68,542.00 Shenyang Hongqi Pharmaceutical Co., Ltd. - 780,010.90 Sinopharm Holding Jinan Co., Ltd. - 240,000.00 Sinopharm Le-Ren-Tang Medicine Co., Ltd. - 20,376,118.04 Jiangsu Wanbang Pharmacy Marketing Co., Ltd. - 2,207,677.30 Anhui Jingfang Pharmaceutical Co., Ltd. - 348,304.76 Guizhou Tongjitang Pharmaceutical Co., Ltd. - 980,303.96
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Related party 2018 2017 Other payables
Sinopharm Group Co., Ltd. 3,414,612.73 584,000.84 Sinopharm Group Shanghai Co., Ltd. 1,660,431.38 - Sinopharm Group Chemical Reagent Co., Ltd. 175,700.00 - Sinopharm Holding Tianjin Binhai Pharmaceutical Co., Ltd. 1,162,820.00 1,137,319.99 Sinopharm Group Medicine Logistic Co., Ltd. 9,106,938.25 4,128,793.99 Guorun Medical Supply Chain Services (Shanghai) Co., Ltd. 3,200,000.00 - China National Scientific Instruments& Materials Imp/Exp
Shenzhen Co., Ltd. 37,450.00 37,450.00 China National ofTraditional&Herbal Medicine Co., Ltd. 1,300,000.00 1,300,000.00 Sinopharm Chongqing Pharmaceutical and Medical Industry
Design Institute 6,712,832.46 - Shanghai Modern Pharmaceutical Co., Ltd. (Modern
Pharmaceutical) 503,462.18 503,462.18 China National Pharmaceutical Foreign Trade Corporation 6,437,142.44 - Shenzhen Wanwei Medicine Trading Co., Ltd. 103,269.08 - Shenyang Pharmaceutical Co., Ltd. 842,544.29 6,092,544.00 Zhang Zhenfang 1,907,499.98 1,505,000.00 Pingdingshan Pusheng Pharmaceutical Co., Ltd. 1,277,732.57 1,235,779.46 Lerentang Investment Group Co., Ltd. - 3,027,759.85 Shanghai Beiyi Guoda pharmaceutical Co. Ltd. 855,341.63 496,651.75 Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd. - 200,000.00 Sinopharm Holding Sub Marketing Center Co., Ltd. 37,782.33 37,782.33 Sinopharm Group Xinjiang Special Drugs National
Pharmaceutical Co., Ltd. 546,753.39 466,443.39 China National Pharmaceutical Logistics Co., Ltd. 8,445.56 7,424.97 Sinopharm Health Online Co., Ltd. 50,005.79 - Heyuan Mairui Trading Co., Ltd. 672,396.36 - Sinopharm Holding Hunan Weian Pharmacy Medicine Chain
Company Limited 95,100.00 6,900.00 Shenzhen Jiufeng Investment Co., Ltd. - 180,000.00 Linyi Medical Group Co., Ltd. - 862,063.20
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Related party 2018 2017 Advances from customers
Sinopharm Holding Beijing Huahong Co., Ltd. 976,210.65 - Sinopharm Holding Guizhou Medical Equiment Co., Ltd. 275,090.49 - Sinopharm Holding Shenyang Co., Ltd. 60,059.47 10,114.48 Sinopharm Holding Wuhu Co., Ltd. 45,576.00 - China National Pharmaceutical Foreign Trade
Corporation 24,941.19 12,505,381.84 Sinopharm Holding Suzhou Co., Ltd. 13,800.00 - Sinopharm Holding Lu'an Co., Ltd. 4,750.00 - Sinopharm Zhuhai Medical Instrument Co., Ltd. 4,074.00 11,512.00 Fujian CMDC Co., Ltd. 1,510.32 - Sinopharm Holding Chongqing Co., Ltd. 755.62 755.62 Dongyuan accord pharmaceutical chain Co., Ltd. 62.00 - Sinopharm Holding Inner Mongolia Co., Ltd. 41.80 - Sinopharm Xinxiang Chain Store Co., Ltd. 0.01 - Sinopharm Holding Gansu Co., Ltd. - 28,914.27 Sinopharm Holding Chengdu Co., Ltd. - 1,270.20 Sinopharm Sichuan Pharmaceutical Co., Ltd. - 739,603.08 Sinopharm Group Southwest Medicine Co., Ltd. - 676,734.09 Sinopharm Group Co., Ltd. - 21,346.83 Sinopharm Holding Hunan Co., Ltd. - 77,403.51 Sinopharm Holding Beijing Co., Ltd. - 2,349,113.58 Sinopharm Holding Shandong Co., Ltd. - 2,515,702.87 Sinopharm Holding Lunan Co., Ltd. - 62,787.26 Sinopharm Holding Nanping Newforce Co., Ltd. - 295,818.24 Sinopharm Holding Suzhou Co., Ltd. - 7,676.52 Sinopharm Holding Qinghai Co., Ltd. - 3,545.67
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
Related party 30 June 2018 31December 2017 Interest payable
35,440.24 38,984.38 China National Pharmaceutical Group Corporation
1,778.67 - Guorun Medical Supply Chain Services (Shanghai) Co., Ltd.
Entrusted borrowings
31,600,000.00 31,600,000.00 China National Pharmaceutical Group Corporation
Other non-current liabilities
35,061,743.31 35,061,743.31 Sinopharm Group Co., Ltd.
Short-term borrowings
122,986,581.52 147,715,527.67 Group Financial Co.
Long-term payables
7,557,432.82 9,332,537.14 Sinopharm Holding Financing Lease Co., Ltd.
Non-current liabilities due within one year
5,651,227.56 5,434,770.70 Sinopharm Holding Financing Lease Co., Ltd.
Cash deposite with a related party
29,919,274.53 156,740,929.50 Group Financial Co.
Amounts due to related parties were interest-free and unsecured, with no fixed terms of repayment.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XI Commitments and contingencies
1. Commitments
(1) Capital commitments
Capital expenditures contracted for at the balance sheet date but not recognized in balance sheet are analyzed as follows:
30 June 2018 31December 2017RMB‘0,000 RMB‘0,000 Buildings, machinery and equipment 223.92 600.45 Investment commitments (Note) 14,000.00 14,000.00 Note: The Group subscribed to Sinopharm Zhongjin medical industry fund as its limited partner,and the total investment amounted to RMB200 million. The investors contribute year by year in batch. The fund manager will send out payment notification to investors according to the actual progress of the project and the investors will commit to complete the payment in 3 year. The investors have paid30% of the amount of contribution during 2017, namely RMB 60 million, and the rest is RMB 140 million.
(2) Operating lease commitments
The future minimum lease payments due under the signed irrevocable operating leases contracts are summarized as follows:
30 June 2018 31 December 2017RMB‘0,000 RMB‘0,000 Within one year 51,747.87 49,860.66 Between 1 and 2 years 41,329.26 39,575.48 Between 2 and 3 years 30,422.97 29,537.37 Over 3 years 43,819.79 51,138.78 167,319.89 170,112.29 2. Contingencies
As of the balance sheet date, there were no contingencies that the Group was required to disclose.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XII Events after the balance sheet date
Guoda Pharmacy, a subsidiary of the Group, acquired a strategic investor which named Walgreens Boots Alliance (Hong Kong) Investments Limited (“WBA”) through capital increase amounting to RMB2.77 billion. Guoda Pharmacy became a sino-foreign joint enterprise since business registration finished in June 28, 2018. The registered capital is RMB1.68 billion, including RMB1.01 billion from the Group(60% of all shares) and RMB0.67 billion from WBA(40% of all shares). In July 4 2018, all related procedures have been finished.
XIII Other significant events
1. Segment reporting
Operating segments
For management purpose, the Group is organized into business units based on its product and service and has four reportable operating segments as follows:
a) The Head Office, which is mainly engaged in investing and managing business;
b) Pharmaceutical distribution segment, which is mainly engaged in the distribution of medicine and pharmaceutical products to customers;
c) Retail pharmacy segment, which is the managing the operation of Guoda Pharmacy; Management monitors the results of theGroup’s operating segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on reportable segment profit, which is a measure of adjusted profit before tax. The adjusted profit before tax is measured consistently with theGroup’s profit before tax except that finance costs, dividend income, non-operating income, non-operating expense, investment income, as well as head office and corporate expenses are excluded from such measurement.
Inter-segment sales and transfers are transacted with reference to the selling prices used in the transactions carried out with third parties at the then prevailing market prices.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XIII Other significant events (Continued)
3. Segment reporting (Continued)
Operating segments (Continued)
Operating segment information as at and for the semi year ended
Elimination between
Head Office Pharmaceutical distribution Retail Total
segments
Revenue of main operations
- 15,858,317,084.75 4,993,130,188.24 (245,419,298.42) 20,606,027,974.57
Cost of main operations - (14,879,713,386.35) (3,721,948,448.31) 246,659,082.25 (18,355,002,752.42)
Investment income 162,655,203.36 (652,715.21) 659,783.20 - 162,662,271.35
Net profit 529,974,276.77 347,154,169.85 172,985,004.03 (360,864,440.74) 689,249,009.91
Total assets
10,680,924,970.49 16,539,616,967.79 5,605,478,618.09 (8,813,004,879.05) 24,013,015,677.32
Total liabilities (1,891,354,344.87) (11,593,180,303.89) (3,507,124,611.26) 3,457,267,336.54 (13,534,391,923.48)
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XIV Notes to key items of the company financial statements
1. Accounts receivable
(a) The aging of accounts receivable and the related provision for bad debts is analyzed below:
30 June 2018
Amount Provision for bad debts Within 1 year 553,496,096.71 - 1 to 2 years - - 2 to 3 years - - 553,496,096.71 - (b) There were no increase, no reversal and no write-off of provision for bad for the six month ended
30 June 2018.
(c) The accounts receivable and related provision for bad debts by category are analyzed below:
30 June 2018 31 December 2017
Amount Provision for bad debts Amount Provision for bad debts% of total % of total
amount rate amount rate amount balance balance amount Accounts
receivable
with similar
credit risk 553,496,096.7199.98% - - 480,467,760.9299.98% - - individually not
significant but
individually
evaluated for
impairment 116,855.40 0.02% 116,855.40 100.00% 117,320.70 0.02% 117,320.70100.00% 553,612,952.11 - 116,855.40 - 480,585,081.62 - 117,320.70 - As at 30 June2018，there were no accounts receivable which were individually significant and for which the provision for bad debt was separately recognized.
As at 30 June 2018, accounts receivable which is actually written off:
Amount Shenzhen Centennial Clinic
465.30
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XIV Notes to key items of the company financial statements (Continued)
1. Accounts receivable (Continued)
(d) the accumulated top five Accounts receivables by customer are analysed below:
% of the total
Amount other receivable Bad debt provision Shenzhen Hospital of Southern Medical
University 55,567,087.27 3.41% - Shenzhen People's Hospital 34,490,479.76 2.12% - Peking University Shenzhen Hospital 29,293,468.53 1.80% - The university of Hong Kong– Shenzhen
hospital 21,317,591.27 1.31% - The Second People's Hospital of Shenzhen 19,580,436.19 1.20% -9.84% - 2. Other receivables
(a) Other receivables and related provision for bad debts by category are analyzed below:
30 June 2018 31 December 2017
Carrying amount Bad debt provision Carrying amount Bad debt provision% of % of
total total
amount amount amount rate amount amount amount rate Individually
significant and
subject to
separate
impairment
assessment 110,146,758.926.72% 8,980,000.008.15% 134,161,658.928.79% 8,980,000.006.69% Receivable
accounts with
similar credit
risk 1,528,788,306.6993.22% 16,955.33 - 1,390,860,253.1491.14% 20,286.35 - Individually not
significant but
individually
evaluated for
impairment 989,623.950.06% 989,623.95100.00% 1,010,023.950.07% 993,703.9598.38% 1,639,924,689.56100.00% 9,986,579.280.61% 1,526,031,936.01100.00% 9,993,990.300.65%
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XIV Notes to key items of the company financial statements (Continued)
2. Other receivables (Continued)
(b) As at 30 June 2018, impairment provision for other receivables individually significant is analyzed as follows:
Assessment for Amount Bad debt provision Rate impairment Other receivable from related party, no uncertainty in Modern Pharmaceutical 101,166,758.92 - - recoverability Shenzhen Yinghai Technology Uncertainty in Investment Co., Ltd.
8,980,000.00 8,980,000.00 100.00%
recoverability 110,146,758.92 8,980,000.00 -
(c) Provisions for impairment of the receivables which have similar credit risk are analyzed below:
30 June 2018
Carrying amount Bad debt provision
Amount Amount Rate Within 1 year 1,528,612,874.88 - - 1 to 2 years 53,815.00 2,690.75 5.00% 2 to 3 years 100,587.85 10,058.79 10.00% Over 3 years 21,028.96 4,205.79 20.00% 1,528,788,306.69 16,955.33 - (d) The other receivables by category are listed below:
30 June 2018 31 December 2017 Amounts due from subsidiaries and
related party 1,459,816,430.56 1,324,203,206.47 Receivable from equity transaction 8,980,000.00 8,980,000.00 Deposit 1,840,914.63 1,864,394.68 Others 169,287,344.37 190,984,334.86 1,639,924,689.56 1,526,031,936.01
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XIV Notes to key items of the company financial statements (Continued)
2. Other receivables (Continued)
(e) As at 30 June 2018, the accumulated top five other receivables by customer are analysed below:
% of the total Bad debt Nature Amount Aging other receivable provision Entrusted
Sinopharm Guangxi borrowings 252,900,000.00 Within 1 year 15.42% - Entrusted
Sinopharm Yuexing borrowings 162,700,000.00 Within 1 year 9.92% - Entrusted
Sinopharm Zhanjiang borrowings 145,000,000.00 Within 1 year 8.84% - Entrusted
Sinopharm Dongguan borrowings 121,000,000.00 Within 1 year 7.38% - Restructuring
consideration
Modern Pharmaceutical receivable 101,166,758.92 Within 2 year 6.17% - 782,766,758.92
47.73% - 3. Long-term equity investments
30 June 2018 31 December 2017
Bad debt Bad debt
Original value provision Carrying amount Original value provision Carrying amount Investments in
subsidiaries 5,594,679,427.58 - 5,594,679,427.58 5,594,679,427.58 - 5,594,679,427.58 Investments in
associates 1,742,336,545.12 39,930,000.00 1,702,406,545.12 1,625,556,656.98 39,930,000.00 1,585,626,656.98 7,337,015,972.70 39,930,000.00 7,297,085,972.70 7,220,236,084.56 39,930,000.00 7,180,306,084.56 The long-term equity investments of the Company are not subject to restriction on conversion into cash.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XIV Notes to key items of the company financial statements (Continued)
3. Long-term equity investments (Continued)
(a) Subsidiaries
Provision for Ending value of impairment in the impairment 31 December 2017 Increases decrease 30 June 2018 current period provision Sinopharm Jianming
60,054,911.04 - - 60,054,911.04 - - Sinopharm Shenzhen
15,450,875.93 - - 15,450,875.93 - - Material
Shenzhen Logistics
5,019,062.68 - - 5,019,062.68 - - Sinopharm Guangzhou
1,565,440,323.63 - - 1,565,440,323.63 - - Sinopharm Hengxing
91,763,288.00 - - 91,763,288.00 - - Sinopharm Liuzhou
21,407,965.79 - - 21,407,965.79 - - Sinopharm Dongguan
72,942,000.00 - - 72,942,000.00 - - Huixin Investment
64,416,937.72 - - 64,416,937.72 - - Guangdong Logistics
13,596,006.21 - - 13,596,006.21 - - Sinopharm Yuexing
243,459,326.27 - - 243,459,326.27 - - Sinopharm Foshan 45,995,065.51 - - 45,995,065.51 - - Sinopharm Guangxi 504,048,985.28 - - 504,048,985.28 - - Sinopharm Zhanjiang 131,769,864.65 - - 131,769,864.65 - - Sinopharm Yanfeng 38,207,800.00 - - 38,207,800.00 - - Sinopharm Meizhou 51,281,900.00 - - 51,281,900.00 - - Sinopharm Huizhou 36,644,200.00 - - 36,644,200.00 - - Sinopharm Zhaoqing 43,060,000.00 - - 43,060,000.00 - - Sinopharm Jiangmen 106,000,000.00 - - 106,000,000.00 - - Sinopharm Zhongshan 30,000,000.00 - - 30,000,000.00 - - Sinopharm Shaoguan 13,580,000.00 - - 13,580,000.00 - - Sinopharm Shantou 23,990,000.00 - - 23,990,000.00 - - Guangdong South
Pharmaceutical Foreign
Trade Co., Ltd. 401,922,987.18 - - 401,922,987.18 - - Guangdong Uptodate&
Special Medicines 144,682,822.34 - - 144,682,822.34 - - Guoda Pharmacy 1,361,800,110.06 - - 1,361,800,110.06 - - Foshan Nanhai Medicine
Co., Ltd. 462,682,298.01 - - 462,682,298.01 - - Maoming Yogshen
8,300,000.00 - - 8,300,000.00 - - Sinopharm Zhuhai
37,162,697.28 - - 37,162,697.28 - - 5,594,679,427.58 - - 5,594,679,427.58 - -
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XIV Notes to key items of the company financial statements (Continued)
3. Long-term equity investments (Continued)
(b)
Movement
31 December Profit or loss under Other changes in Dividend Provision of
2017 Investment the equity method equity declared Other 30 June 2018 impairment
Main Luck
Pharmaceutical 239, 046,738.14 - 29,983,887.32 - - - 269,030,625.46 -
Zhijun Suzhou 39, 930,000.00 - - - - - 39,930,000.00 39,930,000.00
Zhijun Medicine 291, 042,921.20 - 61,373,560.78 - (58,111,254.57) - 294,305,227.41 -
Zhijun Trade 7, 676,142.69 - 853,674.01 - (664,795.03) - 7,865,021.67 -
Pingshan Medicine 68, 686,804.33 - 15,453,485.62 - (9,719,480.71) - 74,420,809.24 -
Shanghai Shyndec
Pharmaceutical
Co., Ltd. 979, 174,050.62 - 65,661,682.41 397,342.21 (8,641,853.20) 193,639.30 1,036,784,861.34 -
Shanghai Dingqun
Enterprise
Management
Consulting Co.,
Ltd. - 20,000,000.00 - - - - 20,000,000.00 -
1,625, 556,656.98 20,000,000.00 173,326,290.14 397,342.21 (77,137,383.51) 193,639.30 1,742,336,545.12 39,930,000.00
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Notes to financial statements (Continued)
For the Year ended 31 December 2016
(All amounts in Renminbi “RMB” unless otherwise stated)
XIV Notes to key items of the company financial statements (Continued)
4. Sales and cost of sales
For the six months ended For the six months ended
30 June 2018 30 June 2017
Revenue Cost Revenue Cost main 1,652,563,177.90 1,597,779,406.09 operations 1,681,220,169.43 1,612,710,688.13
Other 6,037,641.06 2,868,183.37 operating 6,401,186.40 2,006,785.78
1,687,621,355.83 1,614,717,473.91 1,658,600,818.96 1,600,647,589.46 5. Investment income
For the six month ended For the six month ended 30 June 2018 30 June 2017 Gain on long-term equity investment
under cost method 361,514,454.32 352,522,001.40 Gain on long-term equity investment
under equity method (Note
XIV(3)(b)) 173,326,290.14 155,838,740.45 Investment income from disposal of
other long-term equity investments - - 534,840,744.46 508,360,741.85 There is no major restriction on the collection of the gains on investments.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Appendix(Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Supplementary information to financial statements
1. Schedule of non-recurring profit or loss
Amount for 30 June 2018 Illustration Mainly contains income from disposal of intangible Gains and losses from disposal of non-current assets, assets of Sinopharm including write off of accrued asset impairment 4,254,942.60 Guangxi Logistics. Government grants recognized in income statement for the
current year, except for those closely related to the ordinary Mainly contains tax operation of the Company which the Group enjoyed constantly subsidies and financial according to the allotment standards or quantitative criteria of incentives received during the country 11,938,416.85 current period Mainly contains income Net profit and loss arising from the subsidiaries acquired in the arising from the acquisition business combinations involving enterprises under common of Sinopharm Holding control for the period from the beginning of the reporting period Guangzhou Huadu Co., to the combination date 729.29 Ltd. Mainly contains the recovery of impairment provision for receivables Reversal of bad debt provision for accounts receivable that were
individually significat during the tested for impairment individually 4,203,173.20 current period Profit or loss from outward entrusted borrowings 1,549,650.99
Income from entrusted management services 2,377,946.75
Less:Impact on income tax 5,505,057.19
Impact on non-controlling interests after tax 389,106.90
18,430,695.59
Basis for preparation of detailed list of non-recurring profit or loss items:
Under the requirements in Explanatory announcement No. 1 on information disclosure by companies offering securities to the public– non-recurring profit or loss (2008) (“Explanatory announcement No.1”) from CSRC, nonrecurring profit or loss refer to those arising from transactions and events that are not directly relevant to ordinary business, or that are relevant to ordinary business, but are so extraordinary that would have an influence on users of financial statements making proper judgments on the performance and profitability of an enterprise.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
Appendix(Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Supplementary information to financial statements (Continued)
2. Return on equity (“ROE”) and earnings per share (“EPS”)
Basic EPS (RMB/Share)
Weighted
average
ROE(%)
Basic Diluted EPS(RMB/Share) EPS(RMB/Share) Net profit attributable to ordinary
6.64% 1.50 1.50 shareholders of the parent
Net profit after deducting non-recurring
profit or loss attributable to the
6.45% 1.46 1.46Company’s ordinary shareholders of the
parent
The above-mentioned return on net assets and earnings per share were calculated according to the Information Disclosure and Presentation Rules for Companies Making Public Offering of Securities No.9– Calculation and Disclosure of Return on Net Assets and Earnings Per Share (revision 2010) issued by the CSRC.
Note 1: There were no potential dilutive ordinary shares for the six months ended 30 June 2018 hence no presentation of diluted EPS were provided.
Section XI. Documents Available for Reference
1. Accounting Statements carried with the signature and seals of legal representative, chief financial officer and person in charge of accounting;
2. Original text of all documents of the Company as well as manuscript of the announcement disclosed in reporting period on Securities Times, China Securities Journal and Hong Kong Commercial Daily appointed by the CSRC;
3. 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