China National Accord Medicines Corporation Ltd.
Annual Report 2016
April 2017
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 charge of
accounting works and Wang Ying, person in charge of accounting organ
(accounting principal) hereby confirm that the Financial Report of 2016 Annual
Report is authentic, accurate and complete.
Other directors attending the Meeting for annual report deliberation except for
the followed
Name of director absent Title for absent director Reasons for absent Attorney
Li Zhiming director Official business Ma Wanjun
It is likely to existing risks in aspect of industrial competition, operation&
management, market and national policy, and majority investors are advised to
exercise caution of investment risks.
The profit distribution plan that deliberated and approved by the Board is: based
on total stock issued 428,126,983 shares, distributed 3.30 Yuan (tax included)
bonus in cash for every 10-share hold by all shareholders, 0 shares bonus issued
(tax included) and no capitalizing of common reserves carried out.
Contents
Section I Important Notice, Contents and Paraphrase………………………………………..2
Section II Company Profile and Main Finanical Indexes……………………………………..5
Section III Summary of Company Business………………………………………..…………10
Section IV Discussion and Analysis of Business…………………………………..…………..14
Section V Important Events………………………………………………………....…………41
Section VI Changes in shares and particular about shareholders………………….………..69
Section VII Preferred Stock……………………………………………………………………78
Section VIII Particulars about Directors, Supervisors, Senior Executives and Employees.79
Section IX Corporate Governance…………………………………………………………….91
Section X Corporate Bond……………………………………………………………………..99
Section XI Financial Report……………………………………………………………….…100
Section XII Documents available for reference……………………………………………..325
Paraphrase
Items Refers to Contents
Listed Company, Company, the Company,
Refers to China National Accord Medicines Corporation Ltd.
Sinopharm Accord, the Group
Sinopharm Holding Refers to Sinopharm Group Co., Ltd.; Controlling shareholder of the Company
“Twelfth Five-Year” Refers to Year of 2011 to 2015
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
Direct selling Refers to A sales method of selling drug to the hospital directly
GMP certificate Refers to Good Manufacture Practice of Drugs certificate
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 Refers to China National Pharmaceutical Group Corporation
Sinopharm (CNCM LTD) Refers to China National Medicines Corporation Ltd.
Sinopharm Holding Guangzhou Refers to Sinopharm Holding Guangzhou Co., Ltd.
Guoda Pharmacy Refers to Sinopharm Holding Guoda Pharmacy Co., Ltd.
Sinopharm Holding Guangxi Refers to Sinopharm Holding Guangxi 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 Pharmaceutical Refers to Shenzhen Main Luck Pharmaceuticals Inc.
China National Zhijun (Suzhou) Refers to China National Zhijun (Suzhou) Pharmaceutical Co., Ltd.
Section II Company Profile and Main Finanical Indexes
I. Company information
Short form of the stock Sinopharm Accord ; Accord B Stock code 000028, 200028
Stock exchange for listing Shenzhen Stock Exchange
Name of the Company (in
国药集团一致药业股份有限公司
Chinese)
Short form of the Company
国药一致
(in Chinese)
Foreign name of the Company
China National Accord Medicines Corporation Ltd.
(if applicable)
Short form of foreign name of
Sinopharm Accord
the Company (if applicable)
Legal representative Lin Zhaoxiong
Registrations add. Accord Pharm. Bldg., No. 15, Ba Gua Si Road, Futian District, Shenzhen, Guangdong Province
Code for registrations add 518029
Offices add. Accord Pharm. Bldg., No. 15, Ba Gua Si Road, Futian District, Shenzhen, Guangdong Province
Codes for office add.
Company’s Internet Web Site http://www.szaccord.com.cn
E-mail gyyz0028@sinopharm.com
II. Person/Way to contact
Secretary of the Board Rep. of security affairs
Name Chen Changbing
Accord Pharm. Bldg., No. 15, Ba Gua Si Road, Futian
Contact add.
District, Shenzhen, Guangdong Province
Tel. +(86)755 25875195
Fax. +(86)755 25195435
E-mail gyyzinvestor@sinopharm.com；
III. Information disclosure and preparation place
Newspaper appointed for information disclosure Securities Times; China Securities Journal; Hong Kong Commercial Daily
HTTP://WWW.SZSE.CN;
Website for annual report publish appointed by CSRC
HTTP://WWW.CNINFO.COM.CN
Preparation place for annual report Secretariat of the Board of Directors
IV. Registration changes of the Company
Organization code 19218626-7
Changes of main business since listing (if
No change.
applicable)
Previous changes for controlling
No change.
shareholders (if applicable)
V. Other relevant information
CPA engaged by the Company
Name of CPA Ernst & Young CPA (Special General partnership)
Offices add. for CPA 21/F, China Resources Building, No. 5001, Shennan East Road, Luohu District, Shenzhen
Signing Accountants Li Jianguang, Zhang Yongkun
Sponsor engaged by the Company for performing continuous supervision duties in reporting period
□ Applicable √ Not applicable
Financial consultant engaged by the Company for performing continuous supervision duties in reporting period
√Applicable □Not applicable
Name of the financial Offices add. for the financial
Financial advisor Continuous supervision period
consultant consultant
27/F-28/F, Building 2,
China International Capital International Trade Mansion,
Zhang Lei, Chen Chao 2017-2018
Corporation Limited No.1 Jianguomen Outer Street,
Beijing
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting error
correction or not
□ Yes √ No
2016 2015 Changes over last year 2014
Operating income (RMB) 41,248,429,322.91 37,819,277,959.01 9.07% 33,745,321,295.39
Net profit attributable to
shareholders of the listed company 1,186,601,899.27 927,610,234.41 27.92% 808,392,679.17
(RMB)
Net profit attributable to
shareholders of the listed company
834,359,349.80 709,923,823.36 17.53% 529,096,553.54
after deducting non-recurring gains
and losses (RMB)
Net cash flow arising from
1,472,545,587.85 1,457,416,143.80 1.04% -365,016,206.55
operating activities (RMB)
Basic earnings per share
2.80 2.19 27.85% 2.00
(RMB/Share)
Diluted earnings per share
2.80 2.19 27.85% 2.00
(RMB/Share)
Return on Equity 15.06% 13.43% 1.63% 15.11%
Changes over end of
End of 2016 End of 2015 End of 2014
last year
Total assets (RMB) 21,312,754,511.97 20,313,335,694.54 4.92% 18,231,124,183.27
Net assets attributable to
shareholder of listed company 8,450,150,621.93 7,352,924,544.29 14.92% 6,128,373,728.41
(RMB)
VII. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International
Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS (International Accounting
Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting rules
and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicable
The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign accounting rules or
Chinese GAAP (Generally Accepted Accounting Principles) in the period.
VIII. Quarterly main financial index
In RMB
First quarter Second quarter Third quarter Fourth quarter
Operating income 10,279,365,074.72 10,248,011,483.12 10,544,689,840.15 10,176,362,924.92
Net profit attributable to
246,385,445.06 408,301,295.21 252,031,302.51 279,883,856.49
shareholders of the listed company
Net profit attributable to
187,445,696.09 217,063,712.32 174,075,812.75 255,774,128.64
shareholders of the listed company
after deducting non-recurring gains
and losses
Net cash flow arising from
-119,648,923.44 925,231,893.73 -9,018,970.70 675,981,588.26
operating activities
Whether there are significant differences between the above-mentioned financial index or its total number and the relevant financial
index disclosed in the company’s quarterly report and semi-annual report
√Yes □ No
The financial data for enterprise combined merger under the same control, needs to trace from beginning of the period to the delivery
date, affected by the reorganization. There are differences between first three quarters and the quarterly report & semi-annual report
that have been disclosed.
Note: explain main reasons if the above mentioned financial index and total numbers have major difference with the data disclosed in
quarterly and semi-annual report.
IX. Items and amounts of extraordinary profit (gains)/loss
√Applicable □ Not applicable
In RMB
Item 2016 2015 2014 Note
The revenue received
Gains/losses from the disposal of non- from assets disposal
current asset (including the write-off that 11,931,729.24 5,863,107.27 2,262,989.96 from subsidiary
accrued for impairment of assets) Guoda Pharmacy and
Guangxi Logistic
Governmental subsidy reckoned into current Mainly for receiving
gains/losses (not including the subsidy of all kinds of special
enjoyed in quota or ration according to 34,000,702.25 34,025,749.62 31,534,869.05 subsidies and fiscal
national standards, which are closely interest discount in the
relevant to enterprise’s business) period.
Current net gain/losses
of the subsidiary from
period-begin to
Current net gain/losses of the subsidiary
combination date,
merger under the same control from 260,527,573.39 247,889,700.57 238,044,602.29
which is included by
beginning of the period to combination date
merger under the same
control in major
restructuring
Switch back of provision for depreciation of
account receivable which was singly taken 5,952,565.52 7,421,904.86 3,518,118.71
depreciation test
Earnings obtained
from entrusted loans
Gains and losses on foreign entrusted loans 2,880,583.33
offered Sinopharm
Zhijun (Suzhou)
The managed service
offering to Sinopharm
Holding and China
Consigning fee received for consigned
393,081.77 750,000.00 750,000.00 National
operation
Pharmaceutical
Foreign Trade
Corporation
Other non-operating income and expenditure
6,300,281.94 19,155,803.67 16,116,561.38
except for the aforementioned items
The earrings of the
residual 33%
shareholding re-
Earnings of the residual shareholding re-
35,080,116.91 measured by fair value
measured by fair value after losing control
after disposing 67%
equity of Sinopharm
Zhijun (Suzhou)
Investment earnings
Investment income from disposal of long from disposal of 67%
86,674,065.35
term equity investment equity of Sinopharm
Zhijun (Suzhou)
Less: Impact on income tax 28,392,824.03 11,848,624.93 11,767,755.13
Impact on minority shareholders’
63,105,326.20 85,571,230.01 1,163,260.63
equity (post-tax)
Total 352,242,549.47 217,686,411.05 279,296,125.63 --
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for Companies
Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according to
the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their
Securities to the Public --- Extraordinary Profit/loss, explain reasons
□ Applicable √ Not applicable
In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists of
extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities to the
Public --- Extraordinary Profit/loss
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
No
In the reporting period, the main business of China National Accord Medicines includes pharmaceutical distribution,
pharmaceutical retail and pharmaceutical industry, 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. The Company’s pharmaceutical distribution business is established in Guangdong and Guangxi, the company has
completed the network construction of Guangdong and Guangxi in 2013, and the business has extended to the
county-level regions, and accelerated the integration of three-level companies in 2014, and realized the entire
network operations in 2015. In year of 2016, the network has been further expanded, including: 1660 A-grade
hospitals, 3348 community-oriented primary cares and 1447 retail terminal clients.
2. The Company’s pharmaceutical distribution business has achieved the first scale in Guangdong and Guangxi and
the leading position in market segment of Guangdong and Guangxi, and has obtained the relatively leading position
in vaccine, instrument, and e-commerce industries based on the full integration of resources.
(ii) In the pharmaceutical retail field, Guoda Pharmacy 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. Up to the date of disclosure, the retail chain network of Guoda Pharmacy spreads over 18 provinces,
autonomous regions and municipalities, covers nearly 70 large and medium-sized cities, and manages a total of
more than 3,500 retail drugstores.
1. Abundant commodity category system and nationwide procurement network
In accordance with the number of operating goods, Guoda Pharmacy is one of the nationwide pharmaceutical retail
chain enterprises with the most abundant commodities. By virtue of the strong procurement network and years of
experience in commodity operations, and based on the consumer demands and medication habits, Guoda Pharmacy
has established a set of commodity system with wide coverage, high professionalization, and rich varieties. Guoda
Pharmacy manages nearly 120,000 kinds of commodities, and its abundant and attractive commodity combinations
promote the steady growth of its sales volume.
2. Modern logistics and distribution system
Guoda Pharmacy has a nationwide modern logistics and distribution system, which establishes the logistics and
distribution networks including Shanghai National Logistics Center and 23 provincial and municipal distribution
centers, and covers all the stores throughout the country. Guoda Pharmacy takes use of the national and provincial
and municipal distribution centers to support collective purchasing and regional purchasing model, efficiently
respond to the business needs, and effectively realize the logistics cost minimization.
(iii) In 2016, the company implemented a major asset reorganization, and the pharmaceutical industry enterprises
completed the setting out of controlling interests, the company continued to integrate R & D and marketing, took
technological innovation as the guide, and became the provider providing the medical & healthcare products and
services with quality leadership, core competitive advantages, diversified transverse correlation, complete vertical
industry chain, and brand influence in both domestic and overseas markets.
1. The company passed international certifications in the pharmaceutical industry field, improved the quality system,
integrated the export and product resources, opened up the mainstream markets in Europe and America, and realized
internationalization in technical cooperation, intellectual property protection, talent introduction, and joint venture
and cooperation.
2. The company continued to develop cephalosporin series products and the upgrade products of APIs, gradually
introduced the cardiovascular, digestive system, respiratory system series products, took APIs and chemical
agents as the core business and strategic business, and the traditional Chinese medicine and massive health
as the emerging business.
II. Major changes in main assets
1. Major changes in main assets
Major assets Note of major changes
Increased 1,222,751,500 Yuan over that of period-begin with 642.60% up, mainly due to
Equity assets
the major assets restructuring in the period
Decreased 885.64 million Yuan over that of period-begin with 64.52% down, mainly due
Fixed assets
to the major assets restructuring in the period
Decreased 88.87 million Yuan over that of period-begin with 21.71% down, mainly due
Intangible assets
to the major assets restructuring in the period
Decreased 153,504,900 Yuan over that of period-begin with 76.53% down, mainly due to
Construction in progress
the major assets restructuring in the period.
Increased 11.01 million Yuan over that of period-begin with 411.47% up, mainly because
Financial assets available for sale
Guoda Pharmacy has new investment in the Period.
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
No
(I) Distribution core competitiveness of Sinopharm Accord
1. Perfect distribution network
The Company owns an integrated distribution networks for pharmaceutical in Guangdong and Guangxi province,
and completely covers second grade class-A or above medical institutions and major chain drugstores in the above
two provinces. Furthermore, the Company offering medicine delivery services for the third terminal, represented
by many monomer drugstores, community health service network, clinic and new rural cooperative medical system.
Sinopharm Accord fully explore advantages of distribution network, provides customers with value-added services
and creating client value.
2. Leading edge intelligent supply chain
Distribution of the Company core with an intelligent supply chain, by means of promoting the jointly managed
inventory and intellectualized inventory management in hospital pharmacy, supply chain services extends
effectively with resources sharing and effective coordination in upstream-and-downstream achieved.
3. High-efficiency management & control integration
The Company continues to promoted an integrated operation system in Guangdong and Guangxi province in aspect
of medicine distribution, focus on promoting integration both in procurement and foundation operation in
Guangdong and Guangxi province; accelerate the move towards collaboration in business of apparatus,
consumables, vaccine etc. within Guangdong and Guangxi, realized a synchronous of management in areas of
Guangdong and Guangxi.
4. Rich product resources
In aspect of pharmaceutical distribution, the Company building an extensive cooperation with thousands of venders
and commercial enterprise in China, establishing a stable business relationship with hundreds of importers and joint
venture companies, owns variety resources of products.
5. Unique-influence Sinopharm brand
Brand of the Company and distribution, industry child-brand and controlling shareholder and actual controller’s
brand come down in one continuous line, depending on powerful force of central enterprises, the Company’s
popularity and influence are prominent day by day in the industry.
(II) Core-competitiveness of the Guoda Pharmacy
1. A national wide marketing network leads in scale
Guoda Pharmacy 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. Up to end of December
2016, the retail chain network of Guoda Pharmacy spreads over 18 provinces in total including Shanghai, Jiangsu,
Shandong, Fujian, Zhejiang, Anhui, Shanxi, Beijing, Hebei, Inner Mongolia, Tianjin, Liaoning, Guangdong,
Guangxi, Hunan, Henan, Ningxia and Xinjiang, autonomous regions and municipalities, covers nearly 70 large
&small and medium-sized cities, and manages a total of more than 3,502 retail drugstores.
2. Abundant commodity category system and nationwide procurement network
In accordance with the number of operating goods, Guoda Pharmacy is one of the nationwide pharmaceutical retail
chain enterprises with the most abundant commodities. By virtue of the strong procurement network and years of
experience in commodity operations, and based on the consumer demands and medication habits, Guoda Pharmacy
has established a set of commodity system with wide coverage, high professionalization, and rich varieties. Up to
31st December 2016, Guoda Pharmacy manages nearly 120,000 kinds of commodities, and its abundant and
attractive commodity combinations promote the steady growth of its sales volume.
The abundant commodity system of Guoda Pharmacy comes from the nationwide, stable and reliable procurement
network. Over the years, Guoda Pharmacy continued to strengthen the sales concentration of quality products,
expanded the cooperation scale with key manufacturers, and won trust of the majority partners by the nationwide
headquarters centralized purchasing and regional purchasing network system, and the integrative purchasing
management. Guoda Pharmacy is the preferred long-term strategic partner for the domestic and international well-
known enterprises producing and distributing medical and healthcare products, most suppliers have cooperated with
Guoda Pharmacy for many years, and ensured the competitive advantages of Guoda Pharmacy in the purchasing
price and quality. At the same time, Guoda Pharmacy established a complete set of strict quality assurance system,
implemented a number of quality management measures, strictly followed the national GSP standards for the whole
process of commodity purchasing, logistics and sales, and further ensured the product quality safety.
3. Modern logistics and distribution system
Guoda Pharmacy has a nationwide modern logistics and distribution system, which establishes the logistics and
distribution networks including Shanghai National Logistics Center and 23 provincial and municipal distribution
centers, and covers all the stores throughout the country. Guoda Pharmacy takes use of the national and provincial
and municipal distribution centers to support collective purchasing and regional purchasing model, efficiently
respond to the business needs, and effectively realize the logistics cost minimization.
With the modern logistics and distribution system, Guoda Pharmacy has achieved the delivery within 48 hours for
the stores. In addition, Guoda Pharmacy has greatly enhanced the operational efficiency and delivery accuracy by
using the advanced Manhattan warehouse management system (WMS) which supports a variety of operations and
optimizes each operation.
Section IV Discussion and Analysis of Business
1. Introduction
2016 was the transformation year of enterprise restructuring and reorganization. Over the past year, under the
leadership of the board of directors, Sinopharm Accord adhered to embrace the changes with sunny attitude in the
face of changing external policy environment and industry changes, answered the changes with \"changes\", sought
and seized opportunities in the challenges, continued to consolidate the traditional businesses, strove to open up
innovative businesses, developed businesses in new transboundary fields, achieved progress in \"stability\", and
successfully completed the key work.
I. The whole business in 2016
In 2016, the Company realized operating income of RMB 41.248 billion, representing a year-on-year increase of
9.07%; net profit attributable to shareholders of listed company of RMB 1187 million, representing a year-on-year
increase of 27.92%. The Company has continued to keep growth, including:
As for distribution, operating income was RMB 31.136 billion, representing a year-on-year increase of 9.9%; net
profit of RMB 604 million, representing a year-on-year increase of 10.15%.
As for retail, operating income was RMB 9.109 billion, representing a year-on-year increase of 13.99%; net profit
of RMB 223 million, representing a year-on-year increase of 60.93%.
As for pharmaceutical, operating income was RMB 1.192 billion from January to October 2016; net profit of RMB
217 million.
II Work overview of the board of directors
(i) Optimize the industrial layout, successfully complete the major assets restructuring projects
Actively cooperate and promote the \"platform\" strategy of Sinopharm, solve the horizontal competition, and fulfill
the relevant commitments, Sinopharm Accord Company delisted and launched the major asset restructuring project
on October 21, 2015. This restructuring project included: (1) Sinopharm Accord subscribed the shares newly issued
by Shanghai Shyndec Pharmaceutical with 51% stock rights of Zhijun Pharmaceutical, and 51% stock rights of
Zhijun Pharmacy Trade, and 51% stock rights of Pingshan Pharmaceutical, and all productive assets of Pingshan
base; (2) Sinopharm Accord bought 100% stock rights of Guoda Pharmacy, 100% stock rights of Foshan Nanhai,
100% stock rights of Guangdong Uptodate & Special Medicines from the non-public offering of shares of
Sinopharm Group, and 51% stock rights of Nanfang Pharmaceutical Trade from the non-public offering of shares
of Sinopharm Foreign Trade, and 49% stock rights of Nanfang Pharmaceutical Trade by cash from Fu Yuequn and
other 10 natural minority shareholders; (3) raised supporting funds to pay the equity cash consideration.
This reorganization was a significant action to deepen the reform of state-owned enterprises and optimize the
industrial layout of Sinopharm, Sinopharm Accord has become an independent listing platform for pharmaceutical
retail of Sinopharm through this reorganization, which would enable the pharmaceutical retail business to obtain
high-quality financing platform and gain the specialized development, and lay a solid foundation for the foreign
merger and acquisition and integration of pharmaceutical retail business, construction of retail network, innovation
of business model, and other development strategies; after the completion of reorganization, Sinopharm Accord
would hold 100% stock rights of Foshan Nanhai, Guangdong Uptodate & Special Medicines, and Nanfang
Pharmaceutical Trade, and become the only platform for pharmaceutical distribution in Guangdong and Guangxi
provinces under Sinopharm, at the same time, Sinopharm Accord no longer would hold the controlling stakes of
Zhijun Pharmaceutical, Zhijun Pharmacy Trade, and Pingshan Pharmaceutical, and all productive assets of Pingshan
base, moreover, Sinopharm Accord and its subordinate holding subsidiaries would no longer hold any
pharmaceutical industry businesses, which thoroughly solved the horizontal competition in pharmaceutical
distribution businesses between the listed company and controlling shareholders and between the actual controller
and controlling enterprise and the existing and potential horizontal competition in the pharmaceutical industry field;
the pharmaceutical industry stock rights held by the company would also benefit from the research and development,
marketing resource synergies brought by the unified integration of pharmaceutical platform of Sinopharm, and share
the operating results of professional development of Shanghai Shyndec Pharmaceutical, and help to enhance the
overall profitability of listed companies. The transaction would help to promote the professional development of
listed companies, enhance the business scale and scope of listed companies, improve the market-oriented operational
level and differentiated competitiveness, strengthen the core competitiveness, enhance the profitability of listed
companies, return the minority shareholders of listed companies, and achieve the win-win.
The company's sustained profitability will be enhanced trough this transaction:
2015-12-31/2015
Item Pre-trade (in 10 thousand Post-trade (in 10 Increase (%)
Yuan) thousand Yuan)
Total assets 1,321,834.97 2,142,606.72 62.09%
Net assets 556,647.50 919,053.92 65.11%
Equity attributable to owners of the parent
545,339.37 877,965.83 60.99%
company
Operation income 2,599,313.93 3,656,790.83 40.68%
Operation profit 90,659.32 114,462.14 26.26%
Total profit 96,130.79 119,427.26 24.23%
Net profit 78,734.79 96,673.86 22.78%
Net profit attributable to owners of the parent
76,131.23 88,620.14 16.40%
company
Net profit attributable to owners of the parent
company after deducting non recurring gains 71,521.27 84,633.16 18.33%
and losses
[Note: The data in the table derive from the report about asset sales, stock issuance, asset purchase by cash, raised supporting funds
and related transactions of Sinopharm Accord disclosed on September 28, 2016 (revision)]
The reorganization involved three listed companies listed in Shenzhen, Shanghai, and Hong Kong, faced with
different regulatory requirements, so its complexity was evident. After more than one year of intense and efficient
promotion, the company has completed the initial public offering on January 5, 2017, the major assets restructuring
has been completed successfully.
(ii) Plan and prepare the new journey for strategic transformation
Combining with the objective changes after the reorganization of Sinopharm Accord and deeply analyzing the
macroeconomic situation and industry changes, the company has initially defined to build the nationwide
pharmaceutical retail integration platform subordinated to Sinopharm and position the development strategy of
\"nationwide retail + Guangdong and Guangxi distribution + industrial investment\", boost \"wholesale-retail
integration\", integrate existing resources, create wholesale-retail integration and two-wheel driving development
model, and deeply give play to synergies. Initially boost \"wholesale-retail integration\" strategy and
\"internationalization\" process, aim to become the pharmaceutical & healthcare products and services provide with
international competitiveness, create the leading drug distribution and supply chain service provider in southern
district of China for distribution, follow “adhere to two-wheel driving, build one system, promote three changes” to
conduct a comprehensive layout, speed up the pace of transformation, improve quality and efficiency, build the new
driving forces of development and core competitiveness; create the reliable Chinese pharmaceutical & healthcare
retail brand, give play to the capital advantages, improve the network layout, innovate the service products, explore
the e-commerce model, enhance the business operation capacity, improve the market influence, and ensure the
industry-leading position.
(iii) Actively explore and continue to promote the mixed ownership reforms of state-owned enterprises
As one of the pilot enterprises of Sinopharm, according to the requirements of SASAC, Sinopharm and Sinopharm
Group, Sinopharm Accord has actively promoted the company to develop mixed ownership reforms of state-owned
enterprises. According to the Company Law and the Securities Law and other laws and regulations, the company
has set up leading groups and working groups to actively explore and promote the Company's mixed ownership
reforms plan, pay close attention to the capital market dynamics, and actively communicate with regulatory
authorities so as to comprehensively guarantee the smooth progress of mixed ownership reforms in the light of the
unified arrangements of Sinopharm and Sinopharm Group.
At the beginning of August 2016, the company's controlling shareholder, Sinopharm Group, has formed a restricted
stock incentive plan and disclosed and implemented it in respect of the pilot work of mixed ownership reforms.
(iv) Elaborate norms, maintain a good reputation in the industry
The board of directors of Sinopharm Accord is rigorous and normative in operations, and is professional and
responsible in work. In 2016, the major assets restructuring project of Sinopharm Accord was arduous and complex,
the board of directors of the company, on the one hand, complete the restructuring plan making, and communicate
and discuss, on the other hand, strictly follow the relevant laws and regulations of capital market, fulfill the
information disclosure and investor instructions in accordance with the regulatory requirements of regulatory
authorities. In 2016, Sinopharm Accord totally disclosed 4 periodical reports and 98 temporary announcements in
the capital market supervision level, actively cooperated with the regulation, and effectively protected the interests
of investors, and gained the compliments from supervisor and investors by virtue of rigorous and efficient work
style and pragmatic and progressive professional ethics.
III Work arrangement of the company's board of directors in 2017
In 2017, Sinopharm Accord inside faces the main business adjustment after restructuring, the outside faces the
\"two-vote system\" and sunshine procurement and other more severe and thick market policy changes, establish the
\"innovation\" and \"progress\" as the main work ideas. On the basis of new platform, establish new strategies, build
the nationwide pharmaceutical retail integration platform subordinated to China National Pharmaceutical Group,
position the \"nationwide retail + Guangdong and Guangxi distribution + industrial investment\", integrate the
existing resources, build wholesale-retail integration and two-wheel driving development patterns, and deeply give
play to synergies; march toward the new goal to promote the \"wholesale-retail integration\" strategy and the
\"internationalization\" process, become the pharmaceutical and healthcare products and services providers with
international competitiveness; develop new momentum, adhere to the \"strategy-driven culture-leading\", complete
the management mechanism, accumulate and release new growth momentum; create new models, transform from
doing \"products\" to doing \"services\", and return to the \"user-centered\" nature; achieve the leapfrog development
by \"innovation and transformation\", promote the retail treatment business, improve the network layout, set up retail
distribution, socialize Guoda Pharmacy merger and acquisition, implement Guangdong and Guangxi distribution
network layout, achieve the breakthrough development of internet-based business, and accelerate the international
process to expand international business; achieve steady development by \"intensive cultivation\", strengthen
business units, realize industry-leading, give play to the existing network advantages and core competitiveness,
actively carry out the regional integration by implementing the internal refined and lean management, ensure the
traditional business advantages, increase the profitability, develop new commercial activities and new growth, and
all commercial activities accelerate the new business innovation, bloom the vitality, and make characteristics.
II Main business analysis
1. Overview
In 2016, Sinopharm Accord went through another important journey in its development history. In this year, the
company successfully completed a major asset restructuring, and achieved the main business upgrades. In order to
seize the opportunities to meet the challenges, the company continued to promote the organizational change and
structural adjustment, continuously optimized the format structure and variety structure, and consolidated the
traditional businesses, at the same time, constantly opened up innovative formats, enhanced the company's
development; comprehensively strengthened the compliance management, deepened the operations management,
and constantly improved the fine management level of enterprise. The main work was as follows:
1. Successfully completed the major assets restructuring project
Actively cooperated to promote the \"platform\" strategy of Sinopharm, relied on the capital market, added Guoda
Pharmacy plate, built Guangdong and Guangxi pharmaceutical distribution and the only nationwide retail platform,
and strengthened the strategic objectives of professional development.
2. Reinforced the foundation, and enhanced the control efficiency
Based on the professional, enhanced the control and service capabilities, supported the business development,
strengthened the forward-looking and agility of management background, and completed the risk prevention.
3. Transformation innovation promoted the business development
Distribution sector: accelerated the service transformation focusing on the consumers and the terminal patients,
optimized and stocked, made bigger increments, and cultivated new formats; the integrated sales scale reached 4.875
billion Yuan, an increase of 14.34% on a year-on-year basis; Guangxi distribution integration operation mechanism
has been improved, and the operation ability has been promoted; combed the foreground-background operation
process, optimized the foreground-background division of labor and collaboration, and improved the operational
efficiency; implemented the logistics action charges, and promoted the supply chain collaborative optimization;
terminal network has been further expanded, including: 1660 hospitals above class A, 3348 primary medical care
customers, and 1447 retail terminal customers; medicine material crude slices business initially established
production, quality, management and marketing system; apparatus business created the provincial integrated
apparatus purchasing platform, and explored and formed hospital supplies management new model; depth
distribution covered more than 1,300 customers across the province; logistics services network construction was
further improved, and totally increased 30,000 square meters warehouse. Innovation business: expanded medical
services, sped up the medical management services, disinfection center businesses, equipment maintenance
businesses, and reagent supplies business innovation and incubation; carried out the network layout for retail
diagnoses and treatment in Guangdong and Guangxi, opened 16 DTP drugstores, and set up 17 drugstores
within/beside the hospital. The retail management system was further improved and completed the unified and
standardized operating guidelines, accelerated the business development, and the profitability of initially showed:
sales volume exceeded 409 million, achieved gross margin of 10.6%, and comprehensively achieved profitability
in Guangdong.
Retail sector: continued to promote the fine management, deepened the potentials, accelerated the layout of retail
diagnoses and treatment business, innovation driven provided new growth points; up to now, there were totally
3502 retail stores, 2503 regular chain stores, and 999 franchised outlets; in 2016, there was an increase of 422 retail
stores on a year-on-year basis, a net increase of 374 regular chain stores, and a net increase of 48 franchised outlets;
5 + X retail diagnoses and treatment stores: an increase of 20 stores; opened 31 new stores around the hospitals, a
total of 138; in 2016, there were 15 suppliers for unified collection, of which the income reached 33.4 million Yuan.
In the innovation business, actively expanded the store multi-channel businesses, achieved the links of multiple
O2O applications, achieved business connection with many operators such as Sinopharm Online, Tmall, Jingdong,
etc., and opened multiple payment channels; promoted the member development work, the total number of members
reached 17.99 million, valid members reached 8.7 million, and gradually enhanced the member quality; actively
carried out the chronic disease management projects, achieved sales volume of 370 million Yuan, and built the
professional competitiveness of Guoda Pharmacy; developed various measures simultaneously, and actively carried
out the regional governance of losses; focused on the operation special projects, established the national inventory
control program, and optimized the inventory: the valid inventory accounted for 0.7%, a decrease of 0.1% on a year-
on-year basis. The inventory of invalid goods has been completely cleared; refined the management, strengthened
the corporate governance and quality management, optimized the logistics and distribution, and improved the
information system; optimized the staff structure and organizational structure, adjusted the organizational structure
of headquarters, and achieved the upper and lower linkage between the headquarters and the regions.
Industry sector: adjusted the organizational structure, promoted the transformation of marketing model and the node
work of research and development, ensured the smooth transition of Shenzhen industry; completed the optimization
to the integration, specialization, and gradient organizational structure of Shenzhen industry; optimized the incentive
program, established the performance view, improved the personnel efficiency and organizational performance;
took fine marketing as the basis, and market policy as the guide, and promoted the transformation of marketing
model; boosted the \"generic drug consistency evaluation\" work to lay a solid foundation for the company's future
development; promoted the internationalization, and signed a strategy Cooperation agreement with German
company, and discussed the three-party strategic cooperation with Indonesia and Hong Kong; the sales volume of
industrial investment subordinate enterprises - Sinopharm Zhijun, Sinopharm Zhijun Pingshan, Zhijun Pharmacy
Trade, Zhijun Suzhou nearly reached 1.2 billion, a total of five varieties over a hundred million; the sales volume
of Main Luck Pharmaceuticals was close to 800 million, a total of three varieties over a hundred million.
4. Cultural upgrading led the strategic transformation
Started from the enterprise's current environment and strategic needs, inherited the culture accumulation, enriched
the open and inclusive cultural connotation, and stimulated the transformation kinetic energy.
5.Organizational change promoted the atmosphere change
Started from the professional point of view, optimized the structure, reconstructed the mechanism, remolded the
concept, and enhanced the organizational atmosphere at headquarters.
6. Personnel training strengthened the team building
Took stock of human resources, built a manpower mechanism to promote strategic transformation, tapped the
potential of human resources, stimulated the talent vitality, and completed the talent echelon building.
7. Strengthened the party building to provide the ideological guarantee for transformation
Strengthened the organization construction, discipline construction and system construction, and gave full play to
the advantages of party building.
2. Revenue and cost
(1) Constitute of operation revenue
In RMB
2016
Increase/decrease y-
Ratio in operation Ratio in operation
Amount Amount o-y
revenue revenue
Total of operation
41,248,429,322.91 100% 37,819,277,959.01 100% 9.07%
revenue
According to industries
Medicine wholesale 30,982,482,620.75 75.11% 28,452,153,683.28 75.22% 8.89%
Medicine retail 8,761,101,587.23 21.24% 7,382,199,442.63 19.52% 18.68%
Pharmaceutical
1,174,241,370.22 2.85% 1,628,474,289.30 4.31% -27.89%
manufacturing
Logistic & storage
20,551,062.91 0.05% 17,678,920.37 0.05% 16.25%
service
Lease and other
310,052,681.80 0.75% 338,771,623.43 0.90% -8.48%
income
According to products
Medicine 40,238,426,935.37 97.55% 37,165,380,598.79 98.27% 8.27%
Apparatus 678,860,843.04 1.65% 538,085,402.20 1.42% 26.16%
Other 331,141,544.50 0.80% 115,811,958.02 0.31% 185.93%
According to region
Domestic revenue 41,194,040,337.33 99.87% 37,743,479,000.46 99.80% 9.14%
Foreign revenue 54,388,985.58 0.13% 75,798,958.55 0.20% -28.25%
(2) About the industries, products, or regions accounting for over 10% of the company’s operating income
or operating profit
√Applicable □ Not applicable
Whether the company needs to comply with the disclosure requirements of the particular industry
No
In RMB
Increase/decrease Increase/decrease Increase/decrease
Operating
Operating cost Gross profit ratio of operating of operating cost of gross profit
revenue
revenue y-o-y y-o-y ratio y-o-y
According to industries
Medicine 30,982,482,620.7
29,319,997,756.0 5.37% 8.89% 8.99% -0.08%
wholesale
Medicine retail 8,761,101,587.23 24.61% 18.68% 19.89% -0.76%
6,605,050,729.00
According to products
40,238,426,935.3 35,971,239,209.4
Medicine 10.60% 8.27% 9.45% -0.97%
7
According to region
41,194,040,337.3 36,605,759,113.4
Domestic revenue 11.14% 9.14% 9.69% -0.44%
3
Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business based on latest
one year’s scope of period-end
□ Applicable √ Not applicable
(3) Income from physical sales larger than income from labors
√Yes □ No
Increase/decrease y-
Industries Item Unit Jan.-Oct. 2016
o-y
10 thousand
Sales volume 32,551 42,914 -24.15%
branches/box
10 thousand
Chemical Output 28,980 44,324 -34.62%
branches/box
10 thousand
Storage 6,575 9,543 -31.10%
branches/box
Chemical API Sales volume KG 0 132,211 -100.00%
(Active KG 0 163,622 -100.00%
Output
Pharmaceutical
Ingredient) Storage KG 0 45,981 -100.00%
10 thousand
Sales volume 917 1,208 -24.09%
branches/box
10 thousand
Chinese patent drug Output 856 1,378 -37.88%
branches/box
10 thousand
Storage 191 318 -39.94%
branches/box
10 thousand
Sales volume 148.53 8.36 1,676.67%
branches/box
10 thousand
Massive health Output 141.15 8.84 1,496.72%
branches/box
10 thousand
Storage 49.95 3.88 1,187.37%
branches/box
10 thousand
Sales volume 2,135 2,207 -3.26%
branches/box
10 thousand
International trade Output 2,093 2,161 -3.15%
branches/box
10 thousand
Storage 187 241 -22.41%
branches/box
Reasons for y-o-y relevant data with over 30% changes
√Applicable □ Not applicable
Chemical output: mainly because (i)Zhijun Suzhou exclude in the consolidation scope in the Period,(ii) and part of
the production line for powder preparation was out of service in 2016 for GMP certification and workshop
reconstruction; furthermore (iii) the period for counting has two months shorter than same period of last year.
Chemical storage: mainly because (i) Zhijun Suzhou exclude in the consolidation scope in the Period, (ii) and
secondary affected by the sharply decline in output (iii) furthermore, the period for counting has two months shorter
than same period of last year.
Chemical API: no chemical API in the Period, mainly because Zhijun Suzhou exclude in the consolidation scope in
the Period.
Chinese patent drug output: mainly because (i) the period for counting has two months shorter than same period of
last year (ii) part of the products needs to preparing due to the Bagualing Plant removal at end of 2015.
Chinese patent drug storage: mainly because (i) the period for counting has two months shorter than same period of
last year (ii) part of the products needs to preparing due to the Bagualing Plant removal at end of 2015.
Massive health sales volume: developed new business in the period, adjusted sales structure and the new product of
National Soap has rapidly growth in sales.
Massive health output: new business module, optimized production structures, new products National Soap has
major output in the Period.
Massive health storage: mainly because new products National Soap has major output in the Period.
(4) Fulfillment of the company’s signed significant sales contracts up to this reporting period
□ Applicable √ Not applicable
(5) Constitute of operation cost
Industry classification
In RMB
2016
Increase/decrease
Industries Item Ratio in operation Ratio in operation
Amount Amount y-o-y
cost cost
Medicine Sales cost 26,901,734,940.5
29,319,997,756.0 80.00% 80.46% 8.99%
wholesale
Medicine retail Sales cost 18.02% 5,509,074,867.30 16.48% 19.89%
6,605,050,729.00
Pharmaceutical
Sales cost 677,553,586.23 1.85% 951,255,881.90 2.85% -28.77%
manufacturing
Logistic & Transportation &
13,271,551.53 0.04% 12,984,126.10 0.04% 2.21%
storage service storage cost
Lease and other
Service cost 32,363,280.78 0.09% 57,798,028.73 0.17% -44.01%
income
Note:
1. Sales cost for pharmaceutical manufacturing takes a declined of 28.77% in operation costs, mainly because affected by reorganization,
the costs of pharmaceutical manufacturing in the above table refers to the data in industrial plate from January to October while the
contrast period is the data from whole year.
2. Costs for lease and other income takes a declined of 44.01% in operation costs, mainly because 67% equity of the subsidiary
Sinopharm Zhijun (Suzhou) was disposed in the Period, other business costs from Zhijun (Suzhou) refers to the data from January to
April while the contrast period is the data from whole year.
(6) Whether the changes in the scope of consolidation in Reporting Period
√Yes □ No
Details of the changes in the scope of consolidation in reporting Period can be seen in Note VI of Audit Report.
(7) Major changes or adjustment in business, product or service of the Company in Reporting Period【net
profit attributable to parent company】
√Applicable □ Not applicable
In RMB
Net profit attributable to
shareholders of the parent
Enterprise placement: Operation income Total profit company
Sinopharm Holding Guoda Pharmacy
Co., Ltd. 9,109,459,900.42 306,427,433.40 165,044,047.22
Foshan Nanhai Pharmaceutical Group
Co., Ltd. 1,854,458,730.12 66,400,682.62 49,450,875.41
Guangdong Dong Fang Uptodate &
Special Medicines Co. Ltd. 981,042,251.37 25,705,701.48 19,232,071.83
Guangdong Nanfang Pharmaceutical
Foreign Trade Co., Ltd. 2,112,809,945.67 54,411,210.13 40,178,338.91
Net profit attributable to
Enterprise replaced: shareholders of the parent
Operation income Total profit company
China National Zhijun (Shenzhen)
Pharmaceutical Co., Ltd. 909,620,950.55 220,547,065.08 189,221,408.06
China National Zhijun (Shenzhen) Pingshan
Pharmaceutical Co., Ltd. 206,174,817.60 47,937,658.52 35,976,818.41
Shenzhen Zhijun Pharmacy Trade Co., Ltd. 63,813,161.13 3,287,738.62 2,801,747.02
Note: During the reporting period, the company implemented a major asset restructuring, before the reorganization, the main business
of Sinopharm Accord included pharmaceutical distribution and pharmaceutical industry. Among them, the operations of
pharmaceutical distribution business mainly concentrated in Guangdong and Guangxi, the market shares of Guangdong and Guangxi
ranked first, and took the lead in the market segment of Guangdong and Guangxi; pharmaceutical industry business mainly produced
and developed cephalosporin series products and the upgrade products of APIs, cardiovascular, digestive system, respiratory system
series products.
After completed the reorganization, the original pharmaceutical industry-related assets of Sinopharm Accord would be taken out of the
listed company, Sinopharm Accord would no longer hold the pharmaceutical industry-related assets, which would help the company
to actively and steadily promote the main business adjustment work, and focus on the pharmaceutical business. At the same time, the
company would inject the national pharmaceutical retail assets and the pharmaceutical distribution assets of Guangdong and Guangxi
so as to realize the connection between the state-owned pharmaceutical retail leading enterprise - Guoda Pharmacy and the capital
market, further consolidate and enhance the competitive advantage of pharmaceutical distribution in Guangdong and Guangxi, greatly
expand the company’s business scale and scope, effectively enhance the company's sustainable development capacity and
comprehensive competitiveness, and enhance the profitability of listed companies.
Up to the date of disclosure, all underlying assets of the company's major assets reorganization had transferred ownership.
In addition, the company completed the transfer of 67% stock rights of Sinopharm Zhijun (Suzhou) Pharmaceutical Co., Ltd. during
the reporting period (See details on the announcement at www.cninfo.co.com on June 2, 2016, Sinopharm Accord: Notice on the
Public Listing of the Transfer of 67% Stock Rights of Sinopharm Zhijun (Suzhou) Pharmaceutical Co., Ltd.).
Up to the date of disclosure, the Company no longer held the above pharmaceutical industry company.
(8) Major sales and main suppliers
Major sales client of the Company
Total top five clients in sales (RMB) 1,970,021,480.66
Proportion in total annual sales volume for top five clients 4.81%
Ratio of related parties in annual total sales among the top
0.00%
five clients
Information of top five clients of the Company
Serial Name Sales (RMB) Proportion in total annual sales
1 First 456,523,283.78 1.11%
2 Second 432,870,347.95 1.06%
3 Third 426,817,994.86 1.04%
4 Fourth 355,523,259.20 0.87%
5 Fifth 298,286,594.87 0.73%
Total -- 1,970,021,480.66 4.81%
Other situation of main clients
□ Applicable √ Not applicable
Main suppliers of the Company
Total purchase amount from top five suppliers (RMB) 4,970,130,155.53
Proportion in total annual purchase amount for top five
10.10%
suppliers
Ratio of related parties in annual total sales among the top
2.42%
five suppliers
Information of top five suppliers of the Company
Serial Name Purchases (RMB) Proportion in total annual purchases
1 First 1,246,866,571.86 2.53%
2 Second 1,192,663,035.08 2.42%
3 Third 992,806,191.25 2.02%
4 Fourth 790,850,691.31 1.61%
5 Fifth 746,943,666.03 1.52%
Total -- 4,970,130,155.53 10.10%
Other notes of main suppliers of the Company
□ Applicable √ Not applicable
3. Expenses
In RMB
Increase/decrease
2016 2015 Note of major changes
y-o-y
Sales expense 2,198,203,437.27 2,039,829,217.72 7.76% No major change.
Management expense 859,720,679.17 880,634,356.47 -2.37% No major change.
Financial expense 101,855,104.66 128,651,208.50 -20.83% No major change.
4. R&D expenses
√Applicable □ Not applicable
In 2016, in accordance with the relevant policy requirements that the state actively promoted the consistency
evaluation of generic drug, Sinopharm Zhijun rapidly responded, quickly carried out the project selection and
evaluation of consistency evaluation, based on the principle of large varieties priority, adopted the phased orderly
promotion way and determined nine varieties, a total of 11 products as the first batch of varieties to develop the
consistency evaluation, concentrated the superior resources, quickly started the project, and actively carried out the
in vitro pharmacy comparative study, in vivo bioequivalence pre-research. Under the premise of ensuring the
progress and quality of the generic drug consistency evaluation project, Sinopharm Zhijun also actively carried out
the research on new products to ensure the sustainable competitiveness of the enterprise. In 2016, the company
launched three new product projects by combing and reevaluating the established new product projects, and would
carry our the research in 2017.
The consistency evaluation of generic drugs is related to the continuity of enterprises in the production of large
varieties, new products affect the future market competitiveness of enterprises, and only actively carrying out the
consistency evaluation of varieties in production and the research of new products can guarantee the sustainable
development of enterprises.
R&D investment of the Company
Jan.- Oct. 2016 2015 Change ratio
Number of R&D (people) 221 240 -7.92%
Ratio of number of R&D 13.90% 15.10% -1.20%
R&D investment (Yuan) 43,731,710.16 73,150,395.26 -40.22%
R&D investment accounted for
0.11% 0.19% -0.08%
R&D income
R&D investment capitalization
0.00 0.00 0.00%
(Yuan)
Capitalization R&D investment
0.00% 0.00% 0.00%
accounted for R&D investment
The reason of great changes in the proportion of total R&D investment accounted for operation income than last year
√Applicable □ Not applicable
Affected by the reform of drug registration policy, the project in research needs evaluation again, R&D investment has slow progress
as a result.
Reason for the great change in R&D investment capitalization rate and rational description
□ Applicable √ Not applicable
5. Cash flow
In RMB
Item 2016 2015 Y-o-y changes
Subtotal of cash in-flow from
45,588,958,626.59 44,773,015,854.73 1.82%
operation activity
Subtotal of cash out-flow from
44,116,413,038.74 43,315,599,710.93 1.85%
operation activity
Net cash flow from operation
1,472,545,587.85 1,457,416,143.80 1.04%
activity
Subtotal of cash in-flow from 1,670,147,707.67 -72.92%
6,168,078,398.09
investment activity
Subtotal of cash out-flow from 1,679,286,473.62 -75.01%
6,720,021,850.83
investment activity
Net cash flow from investment
-9,138,765.95 -551,943,452.74 98.34%
activity
Subtotal of cash in-flow from
1,037,266,668.95 1,459,468,047.42 -28.93%
financing activity
Subtotal of cash out-flow from
1,513,509,387.78 1,478,973,844.93 2.34%
financing activity
Net cash flow from financing
-476,242,718.83 -19,505,797.51 -2,341.54%
activity
Net increased amount of cash
986,601,066.49 885,869,137.50 11.37%
and cash equivalent
Main reasons for y-o-y major changes in aspect of relevant data
√Applicable □ Not applicable
(1) Subtotal of cash in-flow from investment activity: a 72.92% declined from a year earlier, mainly because the subsidiary Guoda
Pharmacy, replaced for reorganization, has a y-o-y decrease of business in cash pooling with its former parent company;
(2) Subtotal of cash out-flow from investment activity: a 75.01% declined from a year earlier, mainly because the subsidiary Guoda
Pharmacy, replaced for reorganization, has a y-o-y decrease of business in cash pooling with its former parent company;
(3) Net cash flow from investment activity: a 98.34% up from a year earlier, mainly because the subsidiary Guoda Pharmacy, replaced
for reorganization, has a y-o-y decrease of business in cash pooling with its former parent company;
(4) Net cash flow from financing activity: a 2,341.54% declined from a year earlier, mainly because the subsidiary Guoda Pharmacy,
replaced for reorganization, received a capital increment from its former parent company with 410 million Yuan in last period, while
no such amount occurred in the period.
Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company
√Applicable □ Not applicable
The Company has 1,472,545,587.85 Yuan achieved in the period for net cash flow from operation activity, net profit amounting to
1,186,601,899.27 Yuan, the main reasons for major difference is that, the fund collection accelerated in the period, than the
operational cash in-flow increased on a y-o-y basis.
III. Analysis of the non-main business
□ Applicable √ Not applicable
IV. Assets and liability
1. Major changes of assets composition
In RMB
End of 2016 End of 2015
Ratio
Ratio in Ratio in total Notes of major changes
Amount Amount changes
total assets assets
Monetary fund 3,519,955,564.98 16.52% 2,654,931,479.88 13.07% 3.45% No major change.
Account
7,654,225,510.89 35.91% 7,827,466,715.32 38.53% -2.62% No major change.
receivable
Inventory 4,049,482,529.71 19.00% 4,165,157,673.06 20.50% -1.50% No major change.
Investment
166,715,848.80 0.78% 162,653,174.74 0.80% -0.02% No major change.
property
Long-term equity Caused by the material asset
1,413,034,165.56 6.63% 190,282,629.14 0.94% 5.69%
investment reorganization in the period
Caused by the material asset
Fix assets 487,009,600.10 2.29% 1,372,649,567.99 6.76% -4.47%
reorganization in the period
Construction in Caused by the material asset
47,063,868.49 0.22% 200,568,804.08 0.99% -0.77%
process reorganization in the period
Short-term loans 1,512,713,629.95 7.10% 1,633,231,960.35 8.04% -0.94% No major change.
Mainly because the Company
return loans in the Period, and
the long-term loans almost to
Long-term loans - - 72,495,172.30 0.36% -0.36%
due was re-classified as non-
current liability due within one
year.
2. Assets and liability measured by fair value
□ Applicable √ Not applicable
3. Assets right restriction till end of reporting period
Nil
V. Investment
1. Overall situation
During the reporting period, the company implemented material asset reorganization: the shares placement and cash
paid for assets amounting to 3504 million Yuan(including 100% equity of Guoda Pharmacy, 100% equity of Foshan
Nanhai, 100% equity of Guangdong Uptodate & Special Medicines and 100% equity of Nanfang Pharmaceutical
Trade). At the same time, the Company acquired 29% equity (9.86 million Yuan) of Sinopharm Steri Guard Medical
Service Guangdong Co., Ltd. and 30% equity (3.5 million Yuan) of Sinopharm Holding Shantou Co., Ltd in the
Period, an increased of 3516 million Yuan from a year earlier.
2. The major equity investment obtained in the reporting period
Relevant material asset reorganization proposals have been deliberated and approved by 13th session of 7th BOD,
16th session of 7th BOD, 17th session of 7th BOD and the third extraordinary shareholders general meeting of 2016,
the Company acquired 100% equity of Guoda Pharmacy, 100% equity of Foshan Nanhai and 100% equity of
Guangdong Uptodate & Special Medicines by privately placement to Sinopharm. Acquired 51% equity of Nanfang
Pharmaceutical Trade with private placement to Sinopharm Foreign Trade and acquired another 49% equity of
Nanfang Pharmaceutical Trade from 11 minority shareholder including Fu Yuqun, with cash. The above mentioned
object equities have concluded in the consolidation statement in October 2016. More are as:
Name of Equity ratio in
invested Main business investee
company enterprise
Investment and management of pharmaceuticals industry; domestic trading (special license
excluded), wholesale of Chinese patent drug, traditional Chinese medicines prepared in ready-
to-use forms, chemical medicine preparation, antibiotic, biochemical drug, biological,
anabolic agents and peptide hormone; sales of chemical products (toxic and dangerous goods
Guoda
prohibit), medical apparatus and instruments (found in license), glassware, general 100%
Pharmacy
merchandise, household appliances and edible agricultural products (pig products excluded);
food distribution (engaged in business before obtained a permit), management consulting;
development and sales of the software and network projects.
[In right of exequatur to run if refers to permission operation ]
Investment and management in respect of medical, armarium, medical apparatus and
instruments, hospital, hygiene material, health foods and cosmetics industry and paid services
(operates pursuit to the laws and regulations, permission required for the projects restricted
Foshan Nanhai by laws and regulations); general cargo warehousing services; own property leasing; sales of 100%
domestic appliances, general merchandise, ironware, construction material, arts and crafts
(gold and silver exclude), disinfection products and health products.
(In right of exequatur to run if refers to permission operation)
Wholesale of the Chinese patent drug, chemical API, chemical medicine preparation,
antibiotic APT, antibiotic preparation, biochemical drugs, biological (vaccines and IVD
reagents included), 2nd species psychotropic drugs (preparation), medicinal toxic drug
Guangdong (western medicine), anabolic agent, peptide hormone and health foods; sales of medical
Uptodate & apparatus and instruments (the above mentioned items operates in line with the valid license),
100%
Special ironware, electric material, chemical products and raw materials (hazardous chemicals
Medicines exclude), general merchandise and antiseptic; import and export of goods (excluded the items
prohibited by laws and regulations; permission required for the projects restricted by laws and
regulations ), information consulting service for the above mentioned items.
(In right of exequatur to run if refers to permission operation)
Import and export of goods, as well as technology(excluded the items prohibited by laws and
regulations; permission required for the projects restricted by laws and regulations ); medical
information consultation and exhibition. wholesale of Chinese patent drug, chemical API,
chemical medicine preparation, antibiotic APT, antibiotic preparation, biochemical drugs,
Southern biological (vaccines excluded), 2nd species psychotropic drugs (preparation), anabolic agents
100%
Medical Trade and peptide hormone; sales of 2nd and 3rd species medical apparatus and instruments;
wholesale and retail of pre-packaged food (including alcoholic beverages), dairy product
(including infant formula milk powder, operates in valid license); sales of cosmetics, general
merchandise, cloths, shoes and hats, storage and logistic services.
(In right of exequatur to run if refers to permission operation)
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
5. Application of raised proceeds
√Applicable □ Not applicable
(1)Overall application of raised proceeds
√Applicable □ Not applicable
In 10 thousand Yuan
Usage of
Cumulativ Ratio of the
Total
e raised cumulative retained
Total Total raised Total Raised
capitals raised raised
Total raised accumulati capital has accumulati capitals
has capitals capitals
Year Way raised capital ve raised purpose of ve raised idle for
purpose of has and what
capitals used capitals uses capitals more than
uses purpose of is expected
in Period used changed in unused two years
changed in uses to invested
Period
total changed with those
capitals
Non-
public Deposit
2016 27,361.49 579.82 579.82 0 0 0.00% 26,781.67
offering of bank
shares
Total -- 27,361.49 579.82 579.82 0 0 0.00% 26,781.67 --
Explanation on General usage of raised capital
More details of the use of raised capitals can be seen in “Special report on the storage and the actual use of raised capitals of
Sinopharm Accord in 2016” disclosed on 19 April 2017.
(2) Situation of committed project of raised proceeds
√Applicable □ Not applicable
In 10 thousand Yuan
Projects Amount of
Project
Committed investment changed Total Total accumulateInvestment
Amount Reach the feasibility
projects and capital or not committed investment d program till Predicted Realized
invested in predicted was
invested in areas with (includin investment after investmentthe period-useable date interests
report interest or changed
fund raising out of the g of raised adjustment till the end of project in Period
period not hugely or
plan changed capitals (1) period-end (3)=(2)/(1)
not
partially) (2)
Committed investment projects
Cash consideration of
49% equity of
Not Not Not
Guangdong Nanfang
No 26,781.67 26,781.67 0 0 0.00% applicabl applicabl applicabl No
Pharmaceutical
e ee
Foreign Trade Co., Ltd.
paid
Not Not Not
Payment of issuance
No 579.82 579.82 579.82 579.82 100.00% applicabl applicabl applicabl No
cost
e ee
Subtotal of committed
-- 27,361.49 27,361.49 579.82 579.82 -- -- -- --
investment projects
Capital invested in areas with fund raising out of the plan
Not applicable
Total -- 27,361.49 27,361.49 579.82 579.82 -- -- 0 -- --
Situation about not
coming up to schemed
progress or expected
Not applicable
revenue and the
reason(In specific
project)
Explanation on major
changes on project Not applicable
feasibility
Not applicable
Amount, usage and
progress of using for
fund raising out of the
plan
Not applicable
Change of
implementation place
of investment project
of raised capitals
Not applicable
Regulation of
implementation ways
of investment project
of raised capitals
Preliminary investment Not applicable
and replacement of
investment project of
raised capitals
Not applicable
Temporarily
supplement for the
current capitals with
idle raised capitals
Not applicable
Amount and reason for
surplus of raised
capitals when
implementing projects
Usage of the retained
raised fund and what is
Not applicable
expected to invested
with those fund
Issues or other
conditions found in use Use of the fund raised are strictly execute in line with the “tri-party supervision agreement for fund raised”,
of fund raised and and no related issues or other conditions been found
disclosure
(3) The changed project of raised proceeds
□ Applicable √ Not applicable
The Company has no project of raised proceeds changed in the Period
VI. Sales of major assets and equity
1. Sales of major assets
On 28 September 2016, the “Notice of assets on sale, shares offering, acquiring assets in cash and raising supporting funds and related
transactions” was released on jucharo website, Sinopharm Accord subscribed the shares newly issued by Shanghai Shyndec
Pharmaceutical with 567,621,500 Yuan, all productive assets of Pingshan base. Till end of the disclosure date, all productive assets of
Pingshan base have transferred to Shyndec Pharmaceutical.
2. Sales of major equity
√Applicable □ Not applicable
The net
profits
contribu The
ted to proporti Whether
the on of the equity
listed the net The sales on
compan profits ownersh plan or
Transact y by the that the Related The ip of not,
ion equity Impact equity transacti associati equity explain Date
Pricing
Counter Assets The date price (in from the on the for sale on on with that the of
principl Index of disclosure
party for sale of sale 10 beginni Compan contribu confirm the involve reasons disclo
e
thousan ng of y ted to ed counter d has and sure
d Yuan) current the (Y/N) party transferr counterme
period listed ed asure
to the compan totally taken by
date of y in the
sale(in total Company
10 profits
thousan
d Yuan)
“Notice of assets on
Shangha Based sale, shares offering,
51% Impact
i on the acquiring assets in
equity 0Yuan The
Shyndec results cash and raising
of 2016- 154,327 18,922. on same 2016-
Pharma 0.00% of the Yes Yes Yes supporting funds and
Zhijun 10-31 .18 14 current controll 05-31
ceutical evaluati related transactions”
Pharma net er
Co., on on Juchao website
ceutical profit
Ltd. report dated 28 September
Shangha 51% 2016- Impact Based The 2016- “Notice of assets on
812.53 280.17 0.00% Yes Yes Yes
i equity 10-31 0Yuan on the same 05-31 sale, shares offering,
Shyndec of on results controll acquiring assets in
Pharma Zhijun current of the er cash and raising
ceutical Pharma net evaluati supporting funds and
Co., ceutical profit on related transactions”
Ltd. report on Juchao website
dated 28 September
“Notice of assets on
Shangha 51% Based sale, shares offering,
Impact
i equity on the acquiring assets in
0Yuan The
Shyndec of results cash and raising
2016- 39,230. 3,597.6 on same 2016-
Pharma Pingsha 0.00% of the Yes Yes Yes supporting funds and
10-31 39 8 current controll 05-31
ceutical n evaluati related transactions”
net er
Co., Pharma on on Juchao website
profit
Ltd. ceutical report dated 28 September
Xinyu
Boda
Hengka
ng 67% Impact Based ”Resolution Notice
Investm equity 121,754 on the of the 12th session of
ent of ,200 results 7th BOD” (Notice
2016- - Unrelate 2016-
Manage Sinopha 15,780 Yuan on 9.50% of the No Yes Yes No. 2015-56)
04-26 1,116.99 d party 06-02
ment rm current evaluati released on jucharo
Center Zhijun net on website dated 31
(Limite Suzhou profit report December 2015
d
Partners
hip)
VII. Analysis of main holding company and stock-jointly companies
√Applicable □ Not applicable
Particular about main subsidiaries and stock-jointly companies net profit over 10%
In RMB
Company Register Operating Operating
Type Main business Total assets Net Assets Net profit
name capital revenue profit
Chinese traditional
Sinopharm
patent medicine,
Holding Subsidi 1,000,000,0 6,201,439,75 1,269,663,03 15,715,341,5 215,474,944. 159,964,487.
chemical preparations,
Guangzhou ary 00.00 5.87 9.25 54.78 65
antibiotics, bio-
Co., Ltd.
chemical medicine,
biological medicine,
diagnosis medicine,
biological medicine
with features of
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
Sales of drugs,
medical apparatus and
instruments,
freightage, storage,
loading and
unloading, glass
wares, cosmetics and
Sinopharm
daily merchandise;
Holding Subsidi 500,000,00 1,855,599,51 675,838,320. 3,813,794,63 125,365,234. 110,569,992.
other business
Guangxi Co., ary 0.00 0.84 67 9.30 54
services, other
Ltd.
professional
consultation, various
goods agency and for
self-operation, import
& export of
technology, houses
leasing
Retail and distribution
in respect of
Sinopharm
pharmaceutical
Holding
Subsidi products and medical 1,010,000,0 4,941,581,20 1,733,724,84 9,109,459,90 290,299,955. 223,107,979.
Guoda
ary apparatus and 00.00 4.36 9.58 0.42 53
Pharmacy
instruments,
Co., Ltd.
wholesale and retails
of health products
Particular about subsidiaries obtained or disposed in report period
√Applicable □ Not applicable
The method of obtaining and handling The influence to the whole production and
Company Name
subsidiaries during the report period performance
The company will achieve the connection
between the state-owned pharmaceutical
retail leading enterprise - Guoda Pharmacy
and the capital market through the injection
of national pharmaceutical retail assets,
Sinopharm Holding Guoda Pharmacy Co.,
Acquisition substantially expand the company's
Ltd.
business scale and scope, effectively
enhance the company's sustainable
development capacity and comprehensive
competitiveness, and promote the
profitability of listed company.
Further to consolidate the pharmaceutical
Foshan Nanhai Pharmaceutical Group Co.,
Acquisition distribution business in Guangxi &
Ltd.
Guangdong
Further to consolidate the pharmaceutical
Guangdong Dong Fang Uptodate &
Acquisition distribution business in Guangxi &
Special Medicines Co. Ltd.
Guangdong
Further to consolidate the pharmaceutical
Guangdong Nanfang Pharmaceutical
Acquisition distribution business in Guangxi &
Foreign Trade Co., Ltd.
Guangdong
Transformation focus on pharmaceutical
business and retail business, not
Sinopharm Holding Suzhou Co., Ltd. Transfer
controlling relevant asses of health care
industry any more
Transformation focus on pharmaceutical
China National Zhijun (Shenzhen) business and retail business, not
Transfer
Pharmaceutical Co., Ltd. controlling relevant asses of health care
industry any more
Transformation focus on pharmaceutical
business and retail business, not
Shenzhen Zhijun Pharmacy Trade Co., Ltd. Transfer
controlling relevant asses of health care
industry any more
Transformation focus on pharmaceutical
China National Zhijun (Shenzhen) business and retail business, not
Transfer
Pingshan Pharmaceutical Co., Ltd. controlling relevant asses of health care
industry any more
VIII. Structured vehicle controlled by the Company
□ Applicable √ Not applicable
IX. Future Development Prospects
(i) Industry environment analysis
1. Recent policy analysis
With the continuous promotion of a new round of medical reform thinking, i.e. “hospital, medical insurance, and
medical reform linkage, reducing drug prices, and vacating cage to change bird”, the concentration ratio of
pharmaceutical business and pharmaceutical industry continues to increase, the outflow of hospital prescriptions
intensifies, and the corresponding increase in the retail market accelerates; drive the circulation enterprises to
transform to intelligent pharmaceutical service provider, and become a large-scale drug circulation enterprise with
annual sales exceeding 500 billion in 2020.
The country supports to separate the clinic and pharmacy once again, and will carry out the \"two-vote system\"
across the country in 2018, the policy trends of production and circulation push the exit of backward enterprises,
large-scale enterprises increase scale and promote the scale, standardization and intensive development of drug
circulation enterprises, and encourage the strong social logistics enterprises with modern logistics base to enter the
pharmaceutical logistics field.
2. Pharmaceutical market analysis
China’s pharmaceutical market development trends: growth, optimization, integration, and supervision. In 2016,
China’s pharmaceutical market was adjusted in the policies, in 2017, the pharmaceutical industry will complete
more qualified growth. The sales terminal transfers to grassroots markets, with the deepening of medical reform,
the first terminal pharmaceutical market share will be squeezed. The drugstore market will achieve rapid growth by
service extension and system management. The broad market based on grass-roots medical will usher in faster
growth in the future.
3. Changes in the pharmaceutical market pattern
Motivating factors: the masses have more requirements in health (from treatment to prevention), rigid demands
increase (urbanization, aging, etc.), payment ability improves (health insurance coverage reaches 95%, the masses
raise health awareness).
Risk factors: intense competition in the subdivision field (logistics, pharmacies, services, etc.); industry standards
and regulatory become strict, product costs increase; pharmaceutical procurement and drug price management
mechanism put pressure on the market.
Drug sales growth will further slow down to innovate and develop, impacted by the price limit of tendering, the
cancellation of drug price addition in public hospitals, and the strict control to medicine fee growth, the drug terminal
sales growth will slow down year by year. In the uncertain environment, it’s required to tap the internal potential,
positively innovate and develop, and constantly make up their deficiencies mutually based on the international
vision.
4. Competitive dynamics
The strong pharmaceutical enterprises continue to innovate and lay out in the industrial chain integration, service
and cooperation extension and other aspects. In 2016, drug retail springs up everywhere, influenced by the concern
of capital, the promotion of policy trends, and the industrial structure of current industry, the merger and acquisition
will continue. With the changes in industry policy, the business model will also have huge changes, create the
wholesale- retail integrated control and operating model, fully integrate the distribution and retail resources to build
new core competitiveness.
(ii) The company's development strategy
1. Focus on the wholesale- retail integration strategy, reconstruct the organizational structure, and enhance the
foreground-background synergies
Achieve the dual headquarters control of strategic investment headquarters and business operations headquarters in
the future, of which:
(1) Strategic investment headquarters: strengthen the strategic control, resource allocation, investment, and risk
controls, etc.; build mechanism, allocate resources, promote the business layout by strategy; possess the customer
orientation, professional degree and forward looking.
(2) Business operations headquarters: undertake the strategy implementation; focus on operation control,
quality management, and efficiency improvement, etc.; build the profit model of all business units; sensitive and
fast market response, strong execution; strengthen the business background construction and resource integration
capabilities.
Face to the market, create a strong management service background, reconstruct the core competitiveness such as
the operations decision-making, strategy promotion and new business promotion, etc., and support the business
development.
2. Strengthen the headquarters building, enhance the business unit services and resource allocation capabilities
Establish the wholesale-retail integrated management system with special competitiveness: establish the integrated
procurement management system for integrated distribution and retail procurement resources; establish the financial
management system suitable for wholesale-retail integrated development, resources and platform sharing; establish
the human resources management system dynamically and rapidly matches with the business diversification
development.
3. Distribute the two-wheel drive, refine and vitalize, bloom together, and take the lead in various commercial
activities
Focus on building the intelligent supply chain, deepen the integration operations.
(1) Refine and vitalize the traditional businesses
1. Improve quality and efficiency
Promote the network layout in Guangdong and Guangxi and the terminal network construction of subsidiaries;
refactor the business network: from the \"big business\" to \"small business\", clinics, single store, complete the risk
control and information exchange; consolidate the basic management, accomplish the management improvement;
find benefits from the management; purchase and sale linkage, enhance the integrated operation capabilities.
2. Dig the potential and new advantages
Chinese medicine pieces and equipment require new breakthroughs, create new profit growth points for distribution;
Logistics: focus on the intelligent supply chain construction, and establish the distribution system for service
terminal consumers.
(2) Innovative businesses bloom together
Adept in integrating resources and highlighting the profession, and build the multilayer, differentiated service
product system.
(3) Vigorously expand the retail and clinics
Integrate the distribution and procurement resources, integrate the retail procurement resources, give full play to the
wholesale-retail integrated benefits; orderly promote the network layout to open drugstores in Guangdong and
Guangxi; establish the business model of distribution opening retail .
4. Guoda Pharmacy intensively cultivates, optimizes and innovates, and the terminal generates power to achieve
new breakthroughs
1. Focus on the \"wholesale-retail integration\", and establish an integrated business operating system
Strengthen the control functions of the headquarters; establish the provincial platform; create the strong background
and sensitive foreground.
2. Improve quality and efficiency, and strengthen the stock business
Focus on promoting mergers and acquisitions and network layout; classify commercial activities management and
store-type management for retail to
improve quality and efficiency; eliminate the enterprises running a deficit, reduce the stores having losses; further
rationalize the ownership structure of subsidiaries.
3. Integrate resources, and innovate the business model
Retail should be based on building and implementing the professional service system; integrate the distribution and
retail procurement resources; innovate the business model.
X. Reception of research, communication and interview
1. In the report period, reception of research, communication and interview
√Applicable □ Not applicable
Time Way Type Basic situation index of investigation
Found more in “record chart of investor
relations activities dated 13 January
2016-01-13 Field research Institute
2016 ” uploaded to interactive easy of
Shenzhen Stock Exchange
2016-04-22 Field research Institute Resolution Notice of AGM of 2015
Resolution Notice of Third Extraordinary
2016-06-16 Field research Institute
Shareholders General Meeting of 2016
Reception (times)
Number of hospitality
Number of individual reception
Number of other reception
Disclosed, released or let out major undisclosed No disclosed, released or let out major undisclosed information
information
Section V Iimportant Events
I. Profit distribution plan of common stock and capitalizing of common reserves plan
Formulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend policy during the
Reporting Period
√Applicable □ Not applicable
On 22 April 2016, the profit distribution plan for year of 2015 was deliberated and approved by annual general
meeting of 2014, that is taking total 362,631,943 shares as the radix, distributed RMB 3.00 (tax included) for each
10 shares in cash. The announcement of 2015 interest distribution implementation was released on 24 May 2016 by
the Board (published in Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao
Website http://www.cninfo.com.cn), the profit distribution plan for year of 2015 was completed, and dividend for
public shares was distributed to the account of shareholders dated 30 May 2016 (A-share) and 1 June 2016 (B-share)
respectively.
Special explanation on cash dividend policy
Satisfy regulations of General Meeting or requirement of Article
Y
of Association (Y/N):
Well-defined and clearly dividend standards and proportion
Y
(Y/N):
Completed relevant decision-making process and mechanism
Y
(Y/N):
Independent directors perform duties completely and play a
Y
proper role (Y/N):
Minority shareholders have opportunity to express opinions and
Y
demands totally and their legal rights are fully protected (Y/N):
Condition and procedures are compliance and transparent while
Not applicable
the cash bonus policy adjusted or changed (Y/N):
Profit distribution plan (pre-plan) of common stock and capitalizing of common reserves plan (pre-plan) in latest three years (including
the reporting period)
(1) Profit distribution plan for year of 2014
Taking the total 362,631,943 shares as of 31 December 2014 as the radix, cash bonus of RMB 2.00 (before tax)
each 10 shares will be distributed to the whole shareholders. This profit distribution did not convert capital reserve
into share capital.
(2) Profit distribution plan for year of 2015
Taking the total 362,631,943 shares as of 31 December 2015 as the radix, cash bonus of RMB 3.00 (before tax)
each 10 shares will be distributed to the whole shareholders. This profit distribution did not convert capital reserve
into share capital.
(3) Profit distribution plan for year of 2016
Taking the total 428,126,983 shares as the radix, cash bonus of RMB 3.30 (before tax) each 10 shares will be
distributed to the whole shareholders. This profit distribution did not convert capital reserve into share capital.
Cash dividend of common stock in latest three years (including the reporting period)
In RMB
Net profit Ratio in net profit
attributable to attributable to
common stock common stock
Year for bonus Amount for cash shareholders of shareholders of Amount for cash Proportion for cash
shares bonus (tax included) listed company in listed company bonus by other ways bonus by other ways
consolidation contained in
statement for bonus consolidation
year statement
2016 141,281,904.39 1,186,601,899.27 11.91% 0.00 0.00%
2015 108,789,582.90 761,312,261.06 14.29% 0.00 0.00%
2014 72,526,388.60 652,497,176.03 11.12% 0.00 0.00%
The Company gains profits in reporting period and the retained profit of common stock shareholders provided by parent company is
positive but no plan of cash dividend proposed of common stock
□ Applicable √ Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
√Applicable □ Not applicable
Bonus shares for every 10-share (Share)
Dividends for every 10-share (RMB) (Tax
3.30
included)
Equity base of distribution plan (Share) 428,126,983
Total cash dividend(RMB) (Tax included) 141,281,904.39
Distributable profits (RMB) 2,829,823,727.08
Ratio of cash dividend in total profit distribution 100.00%
Cash dividend policy:
If the company’s development is at the growth stage with significant capital expenditures, the minimum proportion of cash
dividend in the profit distribution should reach 40%.
Detail explanation on profit distribution or capitalization from capital public reserve
III. Implementation of commitment
1. Commitments completed in Period and those without completed till end of the Period from actual
controller, shareholders, related parties, purchaser and companies
√Applicable □ Not applicable
Type
Comm Commit
Commitmen of Implementat
Promise Content of commitments itment ment
ts commi ion
date term
tments
Commitmen
ts for
share merger
reform
As a large pharmaceutical commercial enterprise whose business involves
pharmaceutical wholesale and retail, Sinopharm Holding may overlap with
the Company in geographical segmentation during its future business
development. To avoid the potential peer competition brought by such
geographical overlap, Sinopharm Holding undertakes that, upon the transfer
Commitmen
Comm of shares of Sinopharm Holding Guangzhou it held to Accord Pharma, “1. it
ts in report Normally
itment will not newly-establish or broaden within Guangdong any business Long-
of Sinopharm 2005- implementin
of operation that actually compete with that of Accord Pharma, or set up any term
acquisition Holding 06-21 g
shareh new subsidiaries or subordinate enterprises who engage in such business. 2. effective
or equity
olders It will enter into business delineation with Accord Pharma and Sinopharm
change
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 Holding and Sinopharm Foreign Trade made commitments in
Sinopharm
the Report about China National Accord Medicines Corporation Ltd.
Group
Purchasing Assets and Raising Supporting Funds and Related Transactions
Co., Ltd.;
Comm by Asset Sale, Stock Issuance and Cash Payment that the non-public offering
China
Commitmen itment of shares of Sinopharm Accord obtained from this transaction shall not be
National Normally
ts in assets on transferred within 36 months since the finish date of issuance and shall be 2016- 36
Pharmace implementin
reorganizati restrict unlocked after 36 months since the date of listing. Within 6 months after the 05-31 months
utical g
on ed completion of this transaction, if the closing price of the stock of Sinopharm
Foreign
shares Accord is less than the issue price in continuous 20 trading days, or the
Trade
closing price at the end of 6 months after the completion of this transaction
Corporatio
is less than the issue price, the lockup period of the stock of Sinopharm
n
Group 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 this transaction should also abide by the
above stock restricted arrangements.”
\"China Ping An Asset Management Co., Ltd. made commitments in the
Report about China National Accord Medicines Corporation Ltd.
Comm Purchasing Assets and Raising Supporting Funds and Related Transactions
Ping’an
itment by Asset Sale, Stock Issuance and Cash Payment that the non-public
Assets Normally
on offering of shares of Sinopharm Accord obtained from this transaction shall 2016- 36
Managem implementin
restrict not be transferred within 36 months since the finish date of issuance and 05-31 months
ent Co., g
ed shall be unlocked after 36 months since the date of listing. After placement
Ltd.
shares 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 profits of Foshan Nanhai,
Perfor
Guangdong Uptodate & Special Medicines and Guoda Pharmacy should
mance
respectively be no less than RMB 47,385,600.00, RMB 19,167,000.00, and
commi
RMB 98,466,100.00, while the 2017 annual net profits should respectively
tment
Sinopharm be no less than RMB 49,394,500.00, RMB 20,209,700.00, and RMB Normally
and 2016- 2018-
Group 110,998,90.00, and the 2018 annual net profits should respectively be no less implementin
compe 05-31 12-31
Co., Ltd. than RMB 51,148,200.00, RMB 21,330,100.00, and RMB 131,275,500.00. g
nsatio
Net profit refers to the lower one between the after-tax net profit attributable
n
to the owners of parent company planning to invest in the target company
arrang
and the net profit attributable to the owners of parent company after
ement
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
Perfor National Accord Medicines Corporation Ltd. Purchasing Assets and Raising
China mance Supporting Funds and Related Transactions by Asset Sale, Stock Issuance
National commi and Cash Payment that the 2016 annual net profits of Southern Medical
Pharmace tment Trade should be no less than RMB 39880700, while the 2017 annual net
Normally
utical and profits should be no less than RMB 47323200, and should not less than RMB 2016- 2018-
implementin
Foreign compe 55364600 in 2018. Net profit refers to the lower one between the after-tax 05-31 12-31
g
Trade nsatio net profit attributable to the owners of parent company planning to invest in
Corporatio n the target company and the net profit attributable to the owners of parent
n arrang company after deducting the non-recurring gains and losses. If the actual net
ement profit of the Southern Medical 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
Jiancheng;
Fu Yuequn
“Fu Yueling and other 10 natural person made commitments in the Report
Gu
about China National Accord Medicines Corporation Ltd. Purchasing Assets
Chaoqun;
Perfor and Raising Supporting Funds and Related Transactions by Asset Sale, Stock
Guo
mance Issuance and Cash Payment that the 2016 annual net profits of Southern
Shu’er;
commi Medical Trade should be no less than RMB 39,880,700, while the 2017
Huang
tment annual net profits should be no less than RMB 47,323,200, and should not
Qiufang; Normally
and less than RMB 55,364,600 in 2018. Net profit refers to the lower one 2016- 2018-
Li implementin
compe between the after-tax net profit attributable to the owners of parent company 05-31 12-31
Hongbing; g
nsatio planning to invest in the target company and the net profit attributable to the
Liao Zhi;
n owners of parent company after deducting the non-recurring gains and
Lin
arrang losses. If the actual net profit of the Southern Medical Trade doesn’t reach
Wanqun;
ement the committed net profit, Fu Yuequn and other 10 natural person will need to
SunWei;
compensate according to the stipulations of the \"Profit Forecast
Zhang
Compensation Agreement for the Stock Issuance and Assets Purchase.”
Zhaohua;
Zhang
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
Perfor than RMB 222,671,700.00, RMB 232,561,600.00, and RMB
mance 241,878,700.00; the net profits attributable to the owners of parent company
China commi after deducting the non-recurring gains and losses committed by Zhijun
National tment Pharmacy Trade in 2016, 2017 and 2018 should be respectively no less than
Normally
Accord and RMB 2,379,600.00, RMB 2,335,100.00, and RMB 2,345,600.00; the net 2016- 2018-
implementin
Medicines compe profits attributable to the owners of parent company after deducting the non- 05-31 12-31
g
Corporatio nsatio recurring gains and losses committed by Pingshan Pharmaceutical in 2016,
n Ltd. n 2017 and 2018 should be respectively no less than RMB 39,716,300.00,
arrang RMB 43,033,500.00, and RMB 50,325,500.00. If the actual net profits
ement 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
National
Accord
Medicines
“The listed company, controlling shareholders, the actual controllers made
Corporatio
commitments in the Report about China National Accord Medicines
n Ltd.;
Corporation Ltd. Purchasing Assets and Raising Supporting Funds and
Sinopharm
Other Related Transactions by Asset Sale, Stock Issuance and Cash Payment that Long- Normally
Group 2016-
commi the Company shall not violate the relevant regulations of Article 16 in term implementin
Co., 05-31
tments Securities Issuance and Underwriting Management Approach, and directly effective g
Ltd.;China
or indirectly providing financial assistance or compensation for the
National
subscription objects and its shareholders / partners / clients (if any) of this
Pharmace
non-public offering does not exist and will not occur in the future.”
utical
Group
Corporatio
n
“Ping An Asset Management Co., Ltd. Promises 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, the relevant
Assets Other capital sources are legitimate, there is no hierarchical income and other Long- Normally
2016-
Managem commi structured arrangements, and there is no use of leveraged funds. The unit term implementin
03-24
ent Co., tments does not receive financial assistance or compensation from Sinopharm effective g
Ltd. Accord and its controlling shareholders, or the actual controllers. The
investors’ structure of above - mentioned products do 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
China
Increa trading day of the 30 trading days after the listing of newly increased shares
National
se in this transaction is less than the issue price of newly increased shares in this
Pharmace Normally
holdin transaction, Sinopharm will accumulatively invest no more than RMB 150 2017- 2017-
utical implementin
g million in these 30 trading days to increase the holding by the stock trading 01-06 02-24
Group g
commi system of the Shenzhen Stock Exchange (this increase of holding) until the
Corporatio
tment earlier one of below two situations occurs: (1) the above-mentioned funds
n
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 completion of this major assets reorganization (hereinafter referred to as
“this reorganization”), Sinopharm Accord shall no longer hold shares or
operate relevant businesses of pharmaceutical industry, the main business
will become the national pharmaceutical retail and pharmaceutical
distribution business in Guangdong and Guangxi. In order to support the
business development of Sinopharm Accord and avoid horizontal
competition with Sinopharm Accord and its controlling enterprises, the
Company made following irrevocable commitments and promises:1, after
the completion of this reorganization, as for the social retail drugstore assets
Comm
except for Sinopharm Group Guoda Pharmacy Co., Ltd. and its subsidiaries
itment
and branches owned or controlled by the Company, the Company promised
s on
to take appropriate measures to solve the horizontal competition problem in
horizo
the pharmaceutical retail business between the Company and Sinopharm
ntal
Accord within 5 years since the completion date of this reorganization. 2.
compe
The Company's way of resolving horizontal competition problems includes
Sinopharm tition, Long- Normally
and is not limited to purchasing the social retail drugstore assets subordinated 2016-
Group relatio term implementin
to the Company by Sinopharm Accord, taking the entrusted operation, 12-28
Co., Ltd. n effective g
leasing or contracting operation by Sinopharm Accord and its controlling
transac
enterprises in accordance with the methods permitted to national laws to hold
tion
or control the social retail drugstore assets, or transferring the controlling
and
stake of the social retail drugstore assets by the Company. 3. If the
capital
shareholders of the social retail drugstore assets (hereinafter referred to as
occupa
\"the third party\") of the Company or the enterprises controlled by the
tion
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) up to the issue date of this commitment letter, after the completion
of this major assets reorganization (hereinafter referred to as “this
reorganization”), Sinopharm Accord shall no longer hold shares or operate
Comm
relevant businesses of pharmaceutical industry, the main business will
itment
become the national pharmaceutical retail and pharmaceutical distribution
s on
business in Guangdong and Guangxi. In order to support the business
horizo
development of Sinopharm Accord and avoid horizontal competition with
China ntal
Sinopharm Accord and its controlling enterprises, the Company made
National compe
following irrevocable commitments and promises:1, after the completion of
Pharmace tition, Long- Normally
this reorganization, as for the social retail drugstore assets except for 2016-
utical relatio term implementin
Sinopharm Group Guoda Pharmacy Co., Ltd. and its subsidiaries and 12-28
Group n effective g
branches owned or controlled by the Company, the Company promised to
Corporatio transac
take appropriate measures to solve the horizontal competition problem in the
n tion
pharmaceutical retail business between the Company and Sinopharm Accord
and
within 5 years since the completion date of this reorganization. 2. The
capital
Company's way of resolving horizontal competition problems includes and
occupa
is not limited to purchasing the social retail drugstore assets subordinated to
tion
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 Letter About
Sinopharm Group Co., Ltd. to Avoid Horizontal Competition: “First, the
Company and the Company’s wholly-owned, controlling or other enterprises Controlling
with actual control (in addition to Sinopharm Accord and its controlling shareholder
enterprises, hereinafter the same) don’t have businesses and operations is implement
constituting the substantial horizontal competition to Sinopharm Accord and in real
its controlling enterprises. Second, the Company and the Company’s wholly- earnest,
owned, controlling or other enterprises with actual control shall not engage, Sinopharm
Commitmen Comm
participate in or do businesses and activities in Guangdong and Guangxi Accord will
ts make in itment Long-
Sinopharm which constitute substantial competition to Sinopharm Accord and 2013- actively
initial public of term
Holding pharmaceutical business services. Third, the Company and the Company’s 09-05 urged the
offering or shareh effective
wholly-owned, controlling or other enterprises with actual control shall not controlling
re-financing olders
engage, participate in or do businesses and activities which constitute shareholder
substantial competition to Sinopharm Accord and pharmaceutical industry and actual
businesses. Fourth, the Company shall not take advantage of the control to controller to
Sinopharm Accord to damage the legitimate rights and interests of fulfill
Sinopharm Accord and other shareholders (especially medium and small commitment
shareholders). This commitment letter takes effect from the issue date, and s
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 can not 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 the related transactions according to relevant laws, regulations,
Controlling
rules, other normative documents and the constitutions of Sinopharm
shareholder
Accord. Third, for the related transactions that can not be avoided or have
is implement
reasonable reasons to occur, the Company and related party shall abide by
in real
the open, fair and just market principles and confirm the price of related
earnest,
transactions in accordance with the price that the independent third party
Sinopharm
Comm without association sets for the same and similar transactions, and ensure the
Accord will
itment fairness of the price of the related transactions. Fourth, when the board of Long-
Sinopharm 2013- actively
of directors and the general meeting of stockholders of Sinopharm Accord vote term
Holding 09-05 urged the
shareh on the related transactions involving the Company and other enterprises effective
controlling
olders controlled by the Company, the Company shall fulfill the necessary
shareholder
obligations that the associated directors and associated shareholders abstain
and actual
from voting in accordance with the relevant provisions, and abide by the
controller to
legal procedures for approving related transactions and the information
fulfill
disclosure obligations. Fifth, the Company guarantees to participate in the
commitment
shareholders' general meeting, equally exercise the corresponding rights and
s
take the corresponding obligations 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.”
Sinopharm made commitments in the Commitment Letter About China
National Pharmaceutical Group Corporation to Avoid Horizontal
Competition with China National Accord Medicines Corporation Ltd.:
“First, in the next five years, Sinopharm plans to take appropriate measures Controlling
(including assets replacement or acquisition, equity reorganization, etc.) to shareholder
resolve the horizontal competition between Sinopharm Weiqida and is implement
Sinopharm Accord. Second, in addition to the past matters and matters in real
disclosed in this commitment letter, the Company and the Company’s earnest,
Comm wholly-owned, controlling or other enterprises with actual control rights Sinopharm
itment (except for Sinopharm Accord and its controlling enterprises, the same as Accord will
Long-
Sinopharm of below) shall not directly engaged in, participate in or do the businesses an 2013- actively
term
Group actual activities constituting actual competition to the production and operation of 10-16 urged the
effective
control Sinopharm Accord in China. The relevant commitments about avoiding controlling
ler horizontal competition that the Company made in the past still remain in shareholder
effect. Third, the Company shall not take advantage of the control and actual
relationship to Sinopharm Accord to damage the legitimate rights and controller to
interests of Sinopharm Accord and its shareholders (especially the medium fulfill
and small shareholders). Fourth, this commitment letter comes into force commitment
from the issue date and remains in effect for the entire period when the s
Company acts as the controlling shareholder or its related party of Sinopharm
Accord.”
Sinopharm Group 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 Controlling
companies and enterprises directly and indirectly controlled by the shareholder
Company (“related party” for short) will strictly regulate the related is implement
transactions with Sinopharm Accord and its controlling enterprises. Second, in real
for the related transactions that can not be avoided or have reasonable earnest,
Comm reasons to occur, the Company and related party shall sign normative Sinopharm
itment related transaction agreement in accordance with relevant laws with Accord will
Long-
Sinopharm of Sinopharm Accord. Sinopharm Accord implements the approval procedures 2013- actively
term
Group actual and fulfills the information disclosure obligations of the related transactions 09-22 urged the
effective
control according to relevant laws, regulations, rules, other normative documents controlling
ler and the constitutions of Sinopharm Accord. Third, for the related shareholder
transactions that can not be avoided or have reasonable reasons to occur, and actual
the Company and related party shall abide by the open, fair and just market controller to
principles and confirm the price of related transactions in accordance with fulfill
the price that the independent third party without association sets for the commitment
same and similar transactions, and ensure the fairness of the price of the s
related transactions. Fourth, when the board of directors and the general
meeting of stockholders of Sinopharm Accord vote on the related
transactions involving the Company and other enterprises controlled by the
Company, the Company shall fulfill the necessary obligations that the
associated 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.
Equity
incentive
commitment
Other
commitment
s for
medium and
small
shareholders
Completed
on time Yes
(Y/N)
2. Concerning assts or project of the Company, which has profit forecast, and reporting period still in
forecasting period, explain reasons of reaching the original profit forecast
√Applicable □ Not applicable
Reasons of
Current Current
fails to
Assets or project forecast actually Disclosure date
achieved the
with profit Starting time Terminal time performance performance for former Index
forecast
forecasted (in 10 thousand (in 10 thousand prediction
number (if
Yuan) Yuan)
applicable)
”Sinopharm Accord:
Acquiring Assets by
Offering Shares and Profit
Foshan Nanhai 2016-01-01 2018-12-31 4,738.56 4,930.7 Not applicable 2016-05-31
Forecast Compensation
Agreement” on Juchao
website
Guangdong “Sinopharm Accord:
2016-01-01 2018-12-31 1,916.7 1,923.21 Not applicable 2016-05-31
Uptodate & Acquiring Assets by
Special Offering Shares and Profit
Medicines Forecast Compensation
Agreement” on Juchao
website
“Sinopharm Accord:
Acquiring Assets by
Offering Shares and Profit
Guoda Pharmacy 2016-01-01 2018-12-31 9,846.61 15,278.82 Not applicable 2016-05-31
Forecast Compensation
Agreement” on Juchao
website
“Sinopharm Accord:
Acquiring Assets by
Southern Offering Shares and Profit
2016-01-01 2018-12-31 3,988.07 3,993.33 Not applicable 2016-05-31
Medical Trade Forecast Compensation
Agreement” on Juchao
website
”Sinopharm Accord:
Shanghai Shyndec
Pharmaceutical Co., Ltd.
and the Company of
Zhijun
2016-01-01 2018-12-31 22,267.17 22,408.57 Not applicable 2016-05-31 Acquiring Assets by
Pharmaceutical
Offering Shares and Profit
Forecast Compensation
Agreement” on Juchao
website
”Sinopharm Accord:
Shanghai Shyndec
Pharmaceutical Co.,
Ltd.and the Company of
Zhijun Pharmacy
2016-01-01 2018-12-31 237.96 260.44 Not applicable 2016-05-31 Acquiring Assets by
Trade
Offering Shares and Profit
Forecast Compensation
Agreement” on Juchao
website
”Sinopharm Accord:
Shanghai Shyndec
Pharmaceutical Co.,
Ltd..and the Company of
Pingshan
2016-01-01 2018-12-31 3,971.63 4,157.16 Not applicable 2016-05-31 Acquiring Assets by
Pharmaceutical
Offering Shares and Profit
Forecast Compensation
Agreement” on Juchao
website
Commitment made by shareholders of the Company and counterparty in annual operation performance
□ Applicable √ Not applicable
IV. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicable
No non-operational fund occupation from controlling shareholders and its related party in period.
V. Explanation from Board of Directors, Supervisory Committee and Independent Directors
(if applicable) for “Qualified Opinion” that issued by CPA
□ Applicable √ Not applicable
VI. Particulars about the changes in aspect of accounting policy, estimates and calculation
method compared with the financial report of last year
□ Applicable √ Not applicable
No particulars about the changes in aspect of accounting policy, estimates or calculation method in Period.
√Applicable □Not applicable
According to the requriement of Regulation of the Accounting Treatmetns on Value-Added Tax (Cai Kuai [2016] No.22), in year of
2016, the item of “Business tax and surcharge” listed in profit statement is adjust to item of “Taxes and surcharge”; as for the relevant
taxes occurring since 1 May 2016 from operation activities, such as house duty, land holding tax, vehicle and vessel usage tax as well
as stamp tax are listed under the item of “Taxes and surcharge” instead of “Administration expenses”; while the taxes (except the house
duty and land holding tax with investment property concerned reckoned in “Business tax and surcharge”) occurred before 1 May 2016
still in item of “Administration expenses”. The debited balance of sub-item as “Payable VAT”, “Unpaid VAT”, “Pending deduct VAT
on purchase”, “Certified purchase duty” and “VAT retained”under “Taxes payable”, are re-classified to “other current assets” and
“other non-current assets” instead of the “payable taxes” in balance sheet at end of 2016; while the above mentioned items are listed
in original item at end of 2015. The credit balance of sub-itm as “substituted money on VAT” under “Taxes payable” are re-classifed
to “Other current liability” and “Other non-current liability” instead of the “payable taxes” in balance sheet at end of 2016 while the
above mentioned items are listed in original item at end of 2015. Due to the above requriements, the follow items are have difference
among “taxes and surcharge” and “administration expenses” for year of 2016 and year of 2015, the items of “taxes payable”, “other
current assets”, “other receivable”, “other non-current assets”, “other current liability” and “other non-current liability” for year ended
as 2016 and ended as 2015. however, the consolidate net profit and net profit of the Company as well as the shareholders’ euqity of the
Company and consolidate shareholers’ euqity for year of 2016 and 2015 have no influences. Due to the influence，the taxes and
surcharges increased RMB28,560,596.90, administrative expenses decreased RMB28,560,596.90; the current liability increased
RMB123,294.77, taxes payable decreased RMB123,294.77.
VII. Major accounting errors within reporting period that needs retrospective restatement
□ Applicable √ Not applicable
No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.
VIII. Compare with last year’s financial report; explain changes in consolidation statement’s
scope
√Applicable □ Not applicable
Details of changes in consolidation statement’s scope can be seen in Note VI of Audit Report.
IX. Appointment and non-reappointment (dismissal) of CPA
Accounting firm appointed
Name of domestic accounting firm Ernst & Young CPA (Special General partnership)
Remuneration for domestic accounting firm (in 10
292 (excluding the auditing charge for internal control)
thousand Yuan)
Continuous life of auditing service for domestic
One year
accounting firm
Name of domestic CPA Li Jianguang, Zhang Yongkun
Name of foreign accounting firm (if applicable) N/A
Remuneration for foreign accounting firm (10
thousand Yuan) (if applicable)
Continuous life of auditing service for foreign
accounting firm (if applicable)
Name of foreign CPA (if applicable) N/A
Re-appointed accounting firms in this period
√Yes □ No
Whether change the CPA in auditing period or not
□Yes √ No
Performing approval procedures while change the CPA
√Yes □ No
Explanation on re-engagement and changes of the CPA
The company’s controlling shareholder, Sinopharm Group, proceeded with the bidding work of accounting firms
for 2016 annual financial final account audit in accordance with the relevant provisions of SASAC to audit
intermediary organizational management, Sinopharm Group engaged Ernst & Young as the audit institution for the
company’s financial final account audit. In order to engage the same audit institution as the controlling shareholder
Sinopharm Group for the company’s financial final account audit to improve the efficiency of the company’s
financial work and audit work, and avoid the repeated audit, and the audit team of the company’s original audit
institution, Price Waterhouse Coopers, has been providing the audit services for more than 5 years, the risk internal
control and audit committee company’s board of directors, the 18th meeting of the company’s 7th board of directors
and 12th session of the company’s 7th board of supervisors, and the company’s 4th extraordinary general meeting in
2016 deliberated and agreed to engage Ernst & Young to provide the audit services for 2016 annual audit and
internal controls of financial reports. The independent directors made agreed independent opinions on this matter.
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√Applicable □ Not applicable
The Company engaged Ernst & Young CPA (Special General partnership) as the audit body for internal control, and auditing charge
for internal control amounting as RMB 0.247 million.
The Company engaged China International Capital Corporation Limited as the finance consultant for material asset reorganization
and privately placement. The finance consultation charge was 16,536,000 Yuan (tax included) and consignment inward costs
5,798,200 Yuan (tax included).
X. Particular about suspended and delisting after annual report disclosed
□ Applicable √ Not applicable
XI. Bankruptcy reorganization
□ Applicable √ Not applicable
No bankruptcy reorganization for the Company in reporting period
XII. Significant lawsuits and arbitrations of the Company
□ Applicable √ Not applicable
No significant lawsuits and arbitrations occurred in the reporting period
Other lawsuits
Till end of the disclosure date, the Company has 20 contract disputes in routine operations, 37,104,428 Yuan involved in total; one
infringement dispute with 2,518,408 Yuan concerned; one labor dispute with 1,044,000 Yuan involved and four equity transfer
disputes with 2,507,300 Yuan involved.
Totally 26 disputes in the above mentioned with 43,173,822 Yuan involved. There are no accrual liability resulted, and has no impact
on normal operation management of the Company.
XIII. Penalty and rectification
□ Applicable √ Not applicable
No penalty and rectification for the Company in reporting period.
XIV. Integrity of the company and its controlling shareholders and actual controllers
√Applicable □ Not applicable
In 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.
XV. Implementation of the company’s stock incentive plan, employee stock ownership plan or
other employee incentives
□ Applicable √ Not applicable
During the reporting period, the company has no stock incentive plan, employee stock ownership plan or other employee incentives
that have not been implemented.
XVI. Major related transaction
1. Related transaction with routine operation concerned
(1) The related transaction with routine operations concerned found more in the “X. Related parties and related transaction” in “Section
XI. Financial Report”;
(2) The related transactions are settled by cash and notes, disclosed on 27 March 2016, and disclosure on Juchao Website with Notice
No.: 2016-032;
(3) In accordance with the “Forecast for Routine Related Transactions for year of 2016” approved by 14th session of 7th BOD on 26
March 2016 and the AGM of 2015 held on 22 April 2016, during the reporting period, the sales from related parties takes 77.91% in
total amount predicted while purchasing with related parties takes 146.36% (actual amount occurred from related parties including the
amount in all year place-in the Company from merger under the same control, for material asset reorganization in the period. After
deducted the data of the enterprise place-in from period-begin to delivery date of reorganization, purchasing with related parties takes
93.86% without aboving the quota ); the loan principal & interest from related parties takes 16.96% in total amount predicted for whole
year; note buyer discount interest from related parties takes 103.04% in total amount predicted for whole year(has 36500 Yuan over
the quota and did not qualify the disclosure standards); finance lease interest from related parties takes 29.16% in total amount predicted
for whole year; purchasing fixed assets and long-term assets from related parties takes 5.47% in total amount predicted for whole year;
leasing revenue from related parties takes 9.96% in total amount predicted for whole year and house and equipment leasing costs from
related parties takes 471.52% in total amount predicted for whole year(actual amount occurred from related parties including the
amount in all year place-in the Company from mergering under the same control, for material asset reorganization in the period. After
deducted the data of the enterprise place-in from period-begin to delivery date of reorganization, house and equipment leasing costs
from related parties amounted as 26,870,700 Yuan, a 157.14% in total amount predicted for whole year with 9,770,700 Yuan over the
quota, a 0.18% in the audited net assets from latest period without qualify the disclosure standards. Mainly because the Guoda
Pharmacy-place in from reorganization, has more business from house leasing); revenue from providing service from related parties
takes 46.89% in total amount predicted for whole year while received services from related parties takes 59.45% in total amount
predicted for 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. Main related transactions of mutual investment outside
□ Applicable √ Not applicable
No main related transactions of mutual investment outside for the Company in reporting period
4. Contact of related credit and debt
√Applicable □ Not applicable
Whether the Company had non-operating contact of related credit and debt
□Yes √ No
The Company had no non-operating contact of related credit and debt in the reporting period.
5. Other related transactions
√Applicable □ Not applicable
During the reporting period, the company implemented major asset reorganization:
Sinopharm Accord subscribed the shares newly issued by Shanghai Shyndec Pharmaceutical with 51% stock rights
of Zhijun Pharmaceutical, and 51% stock rights of Zhijun Pharmacy Trade, and 51% stock rights of Pingshan
Pharmaceutical, and all productive assets of Pingshan base; at the same time, Sinopharm Accord bought 100% stock
rights of Guoda Drugstore, 100% stock rights of Foshan Nanhai, 100% stock rights of Guangdong Uptodate &
Special Medicines from the non-public offering of shares of Sinopharm Holding, and bought 51% stock rights of
Nanfang Pharmaceutical Trade from the non-public offering of shares of Sinopharm Foreign Trade, and bought 49%
stock rights of Nanfang Pharmaceutical Trade by cash from Fu Yuequn and other 10 natural minority shareholders.
Except for buying 49% stock rights of Nanfang Pharmaceutical Trade by cash from Fu Yuequn and other 10 natural
minority shareholders, this assets sale and share issuance and asset purchase all involved the transactions between
the company and controlling shareholders or other enterprises controlled by actual controllers, therefore, the above
transactions constituted related transactions.
Up to the date of disclosure, all subjects of this major assets reorganization have completed the transfer.
Disclosure information for major related transaction temporary disclosed
Temporary notice Dated disclosed Website for disclosure
Sinopharm Accord: Notice of Purchasing Assets and Raising
Supporting Funds and Related Transactions by Asset Sale, 2016-03-10 Juchao Website: http://www.cninfo.com.cn
Stock Issuance and Cash Payment
Sinopharm Accord: Notice of Plans of Purchasing Assets and
Raising Supporting Funds and Related Transactions by Asset 2016-03-25 Juchao Website: http://www.cninfo.com.cn
Sale, Stock Issuance and Cash Payment
Sinopharm Accord: Supplement Notice of Purchasing Assets
and Raising Supporting Funds and Related Transactions by 2016-05-31 Juchao Website: http://www.cninfo.com.cn
Asset Sale, Stock Issuance and Cash Payment
Sinopharm Accord: Report of Purchasing Assets and Raising
Supporting Funds and Related Transactions by Asset Sale, 2016-06-14 Juchao Website: http://www.cninfo.com.cn
Stock Issuance and Cash Payment (draft) (Revised)
Sinopharm Accord: Report of Purchasing Assets and Raising
Supporting Funds and Related Transactions by Asset Sale, 2016-08-18 Juchao Website: http://www.cninfo.com.cn
Stock Issuance and Cash Payment (draft) (3rd Revised)
Sinopharm Accord: Report of Purchasing Assets and Raising
Supporting Funds and Related Transactions by Asset Sale, 2016-09-28 Juchao Website: http://www.cninfo.com.cn
Stock Issuance and Cash Payment (Revised)
Sinopharm Accord: Notice of the Target Assets’ Ownership
Transfer for Purchasing Assets and Raising Supporting
2016-12-13 Juchao Website: http://www.cninfo.com.cn
Funds and Related Transactions by Asset Sale, Stock
Issuance and Cash Payment
XVII. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
√Applicable □ Not applicable
Explanation on trust
1. Foshan Nanhai Pharmaceutical Co., Ltd. and Guangdong Dong Fang Uptodate & Special Medicines Co., Ltd.
were subordinate enterprises of major shareholders, their operation businesses were pharmaceutical distribution,
and business scope was in Guangdong region, and there were some overlaps with the Company's pharmaceutical
distribution businesses and regions, which constituted the horizontal competition, in July 2013, in order to
effectively solve the horizontal competition, the major shareholders handed over these two companies to Sinopharm
Accord for trusteeship, and Sinopharm Accord also agreed to accept the entrust and manage the subject companies.
Up to July 2016, trusteeship has ended.
2. Guangdong Nanfang Pharmaceutical Foreign Trade Co., Ltd. was the subordinate enterprise of actual
controllers, its operation business was pharmaceutical distribution, and business scope was in
Guangdong region, and there were some overlaps with the Company's pharmaceutical distribution
businesses and regions, which constituted the horizontal competition, in September 2013, in order to
effectively solve the horizontal competition, the actual controllers of Sinopharm handed it over to
Sinopharm Accord for trusteeship, and Sinopharm Accord also agreed to accept the entrust and manage
the subject company. Up to June 2016, trusteeship has ended.
The above three companies have become the Company’s wholly owned subsidiaries by the company's major asset
reorganization and acquisition of assets.
Items generated over 10% gains/losses in total profit in reporting period for the Company
□ Applicable √ Not applicable
The Company had no trust items generated over 10% gains/losses in total profit 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 and the subsidiaries (Barring the guarantee for subsidiaries)
Related Guarante
Actual date of
Announce Actual e for
Name of the Company Guarantee happening (Date Guarantee Guarantee Implemen
ment guarantee related
guaranteed limit of signing type term ted (Y/N)
disclosure limit party
agreement)
date (Y/N)
Total actual occurred
Total approving external guarantee
- external guarantee in report -
in report period (A1)
period (A2)
Total actual balance of
Total approved external guarantee
- external guarantee at the -
at the end of report period (A3)
end of report period (A4)
Guarantee between the Company and the subsidiaries
Related Guarante
Actual date of
Announce Actual e for
Name of the Company Guarantee happening (Date Guarantee Guarantee Implemen
ment guarantee related
guaranteed limit of signing type term ted (Y/N)
disclosure limit party
agreement)
date (Y/N)
China National
General 2016.5.25-
Accord Medicines 2016-03-26 25,000 2016-05-25 10,708.05 No Yes
assurance 2017.5.25
Corporation Ltd.
China National
General 2016.11.23-
Accord Medicines 2016-03-26 20,000 2016-11-23 12,018.46 No Yes
assurance 2017.11.22
Corporation Ltd.
Sinopharm Holding General 2016.5.20-
2016-03-26 35,000 2016-05-18 19,005.33 No Yes
Guangzhou Co., Ltd. assurance 2017.5.20
Sinopharm Holding General 2016.10.19-
2016-03-26 10,000 2016-10-19 9,606.54 No Yes
Guangzhou Co., Ltd. assurance 2017.10.18
Sinopharm Holding General 2016.9.22-
2016-03-26 21,000 2016-09-22 10,483.85 No Yes
Guangzhou Co., Ltd. assurance 2017.9.21
Sinopharm Holding General 2015.12.21-
2015-08-20 20,000 2015-12-21 10,963.07 No Yes
Guangzhou Co., Ltd. assurance 2016.12.20
Sinopharm Holding General 2016.6.29-
2016-03-26 40,000 2016-06-29 36,212.26 No Yes
Guangzhou Co., Ltd. assurance 2017.6.28
Sinopharm Holding General 2016.9.20-
2016-03-26 40,000 2016-09-20 7,664.25 No Yes
Guangzhou Co., Ltd. assurance 2017.9.19
Sinopharm Holding General 2016.9.26-
2016-03-26 35,000 2016-09-26 1,501.54 No Yes
Guangzhou Co., Ltd. assurance 2017.9.25
Sinopharm Holding General 2016.7.6-
2016-03-26 30,000 2016-07-06 21,155.83 No Yes
Guangzhou Co., Ltd. assurance 2017.4.30
Sinopharm Holding 2016-03-26 35,000 2016-05-09 17,968.82 General 2016.5.9- No Yes
Guangzhou Co., Ltd. assurance 2017.4.28
Sinopharm Holding General 2015.10.23-
2015-03-21 10,000 2015-10-23 6,656.75 No Yes
Guangzhou Co., Ltd. assurance 2016.10.31
Sinopharm Holding General 2016.6.30-
2016-03-26 50,000 2016-06-30 35,615.73 No Yes
Guangzhou Co., Ltd. assurance 2017.6.30
Sinopharm Holding General 2016.5.10-
2016-03-26 20,000 2016-05-10 5,767.02 No Yes
Guangzhou Co., Ltd. assurance 2017.5.9
Sinopharm Holding General 2016.6.28-
2016-03-26 30,000 2016-06-28 1,149.16 No Yes
Guangzhou Co., Ltd. assurance 2017.4.28
Sinopharm Holding General 2016.4.1-
2016-03-26 126,000 2016-04-01 35,247.99 No Yes
Guangzhou Co., Ltd. assurance 2017.3.31
Sinopharm Holding
General 2016.5.20-
Guangdong Yuexing 2016-03-26 3,500 2016-05-20 No Yes
assurance 2017.5.20
Co., Ltd.
Sinopharm Holding
General 2016.9.26-
Guangdong Yuexing 2016-03-26 5,000 2016-09-26 4,422.88 No Yes
assurance 2017.9.25
Co., Ltd.
Sinopharm Holding
General 2016.9.18-
Guangdong Yuexing 2016-03-26 3,000 2016-09-18 1,737.31 No Yes
assurance 2017.9.17
Co., Ltd.
Sinopharm Holding General 2016.9.14-
2016-03-26 5,000 2016-09-14 60.39 No Yes
Guangxi Co., Ltd. assurance 2016.9.13
Sinopharm Holding General 2016.11.2-
2016-03-26 20,000 2016-11-02 7,404.01 No Yes
Guangxi Co., Ltd. assurance 2017.11.2
Sinopharm Holding General 2016.9.26-
2016-03-26 25,000 2016-09-26 11,669.04 No Yes
Guangxi Co., Ltd. assurance 2017.9.25
Sinopharm Holding General 2016.9.24-
2016-03-26 20,000 2016-09-24 No Yes
Guangxi Co., Ltd. assurance 2017.9.24
Sinopharm Holding General 2016.9.30-
2016-03-26 20,000 2016-09-30 13,832.28 No Yes
Guangxi Co., Ltd. assurance 2017.9.30
Sinopharm Holding
General 2016.12.23-
Jiangmen Renren Co., 2016-03-26 2,000 2016-12-23 1,999.6 No Yes
assurance 2017.9.25
Ltd.
Sinopharm Holding General 2016.9.26-
2016-03-26 9,000 2016-09-26 4,919.55 No Yes
Liuzhou Co., Ltd. assurance 2017.9.25
Sinopharm Holding General 2016.6.20-
2016-03-26 5,000 2016-06-20 3,096.98 No Yes
Liuzhou Co., Ltd. assurance 2017.6.19
Sinopharm Holding General 2015.11.24-
2015-08-20 6,000 2015-11-24 1,143.18 No Yes
Liuzhou Co., Ltd. assurance 2016.11.23
Sinopharm Holding
General 2016.07.04-
Shenzhen Yanfeng 2016-03-26 2,000 2016-07-04 No Yes
assurance 2017.07.04
Co., Ltd.
Sinopharm Holding
General 2016.09.26-
Shenzhen Yanfeng 2016-03-26 7,000 2016-09-26 4,598.92 No Yes
assurance 2017.09.25
Co., Ltd.
Sinopharm Holding
General 2016.11.23-
Shenzhen Yanfeng 2016-03-26 2,000 2016-11-23 2,000 No Yes
assurance 2017.11.22
Co., Ltd.
Sinopharm Holding
General 2016.6.28-
Shenzhen Yanfeng 2016-03-26 3,000 2016-04-29 1,800 No Yes
assurance 2017.04.28
Co., Ltd.
Sinopharm Holding General 2015.9.26-
2016-03-26 1,500 2016-09-26 No Yes
Zhanjiang Co., Ltd. assurance 2016.9.25
Sinopharm Holding General 2016.12.20-
2016-03-26 2,000 2016-09-26 2,000 No Yes
Zhaoqing Co., Ltd. assurance 2017.9.25
Sinopharm Holding General 2016.9.26-
2016-03-26 1,000 2016-09-26 877.41 No Yes
Foshan Co., Ltd. assurance 2017.9.25
Sinopharm Holding
General 2016.9.26-
Shenzhen Medicine 2016-03-26 1,000 2016-09-26 908.5 No Yes
assurance 2017.9.25
Co., Ltd.
Total amount of actual
Total amount of approving
occurred guarantee for
guarantee for subsidiaries in report 654,000 1,087,619.35
subsidiaries in report period
period (B1)
(B2)
Total balance of actual
Total amount of approved
guarantee for subsidiaries at
guarantee for subsidiaries at the 690,000 304,194.7
the end of reporting period
end of reporting period (B3)
(B4)
Guarantee between the subsidiaries and the subsidiaries
Related Guarante
Actual date of
Announce Actual e for
Name of the Company Guarantee happening (Date Guarantee Guarantee Implemen
ment guarantee related
guaranteed limit of signing type term ted (Y/N)
disclosure limit party
agreement)
date (Y/N)
Sinopharm Holding
Guoda Pharmacy General 2016.3.1-
2016-12-30 5,600 2016-03-01 4,072 No Yes
Shenyang Chain assurance 2017.3.1
Co.,Ltd
Sinopharm Holding General 2016.3.1-
2016-12-30 4,500 2016-03-01 4,255 No Yes
Guoda Pharmacy assurance 2017.3.1
Shenyang Chain
Co.,Ltd
Sinopharm Holding
Guoda Pharmacy General 2016.6.1-
2016-12-30 5,000 2016-06-01 4,963 No Yes
Shenyang Chain assurance 2017.6.1
Co.,Ltd
Sinopharm Holding
Guoda Pharmacy General 2016.2.1-
2016-12-30 6,000 2016-02-01 1,411 No Yes
Shenyang Chain assurance 2017.2.1
Co.,Ltd
Sinopharm Holding
Guoda Pharmacy General 2016.11.1-
2016-12-30 6,000 2016-11-01 2,452 No Yes
Shenyang Chain assurance 2017.11.1
Co.,Ltd
Fujian Guoda
General 2016.3.1-
Pharmacy Chain 2016-12-30 2,000 2016-03-01 No Yes
assurance 2017.3.1
Co.,Ltd
Fujian Guoda
General 2016.5.1-
Pharmacy Chain 2016-12-30 3,000 2016-05-01 1,560 No Yes
assurance 2017.5.1
Co.,Ltd
Sinopharm Holding
Guoda Pharmacy General 2016.2.1-
2016-12-30 4,000 2016-02-01 4,000 No Yes
Shanxi Yiyuan Chain assurance 2017.1.1
Co.,Ltd
Sinopharm Holding
Guoda Pharmacy General 2016.2.1-
2016-12-30 3,000 2016-02-01 2,037 No Yes
Shanxi Yiyuan Chain assurance 2017.1.1
Co.,Ltd
Sinopharm Holding
Guoda Pharmacy General 2016.7.1-
2016-12-30 4,000 2016-07-01 3,132 No Yes
Shanxi Yiyuan Chain assurance 2017.7.1
Co.,Ltd
Sinopharm Holding
Guoda Pharmacy General 2016.10.1-
2016-12-30 2,800 2016-10-01 550 No Yes
Shanxi Yiyuan Chain assurance 2017.10.1
Co.,Ltd
Sinopharm Holding
Guoda Pharmacy General 2016.9.1-
2016-12-30 1,500 2016-09-01 1,385 No Yes
Shanxi Yiyuan Chain assurance 2017.12.1
Co.,Ltd
Sinopharm Holding 2016-12-30 1,960 2016-10-01 1,960 General 2016.10.1- No Yes
Guoda Pharmacy assurance 2017.10.1
Shanxi Yiyuan Chain
Co.,Ltd
Sinopharm Holding
Guoda Pharmacy General 2016.4.1-
2016-12-30 3,000 2016-04-01 2,143 No Yes
Inner Mongolia assurance 2017.4.1
Co.,Ltd
Sinopharm Holding
Guoda Pharmacy General 2016.4.1-
2016-12-30 5,000 2016-04-01 1,635 No Yes
Inner Mongolia assurance 2017.4.1
Co.,Ltd
Sinopharm Holding
Guoda Fumei General 2015.12.1-
2016-12-30 6,000 2015-12-01 2,772 No Yes
Pharmaceutical assurance 2016.12.1
(Shanghai) Co., Ltd.
Shanxi Guoda
General 2015.12.1-
Wanmin Drugstore 2016-12-30 980 2015-12-01 938 No Yes
assurance 2016.12.1
Chain Co.,Ltd
Shanxi Guoda
General 2016.3.1-
Wanmin Drugstore 2016-12-30 5,000 2016-03-01 3,143 No Yes
assurance 2017.2.1
Chain Co.,Ltd
Sinopharm Holding
Guoda Pharmacy General 2015.5.1-
2016-12-30 1,500 2015-05-01 1,299 No Yes
Guangxi Chain assurance 2016.12.1
Co.,Ltd
Sinopharm Holding
General 2016.3.1-
Guoda Pharmacy 2016-12-30 2,000 2016-03-01 1,996 No Yes
assurance 2017.2.1
Guangdong Co.,Ltd
Tianjin Guoda
General 2016.4.1-
Pharmacy Chain 2016-12-30 1,000 2016-04-01 555 No Yes
assurance 2017.3.1
Co.,Ltd
Sinopharm Holding
Guoda Pharmacy General 2016.9.1-
2016-12-30 1,000 2016-09-01 512 No Yes
Yangzhou Dadesheng assurance 2017.9.1
Chain Co.,Ltd
Shanxi Tongfeng General 2016.11.1-
2016-12-30 2,100 2016-11-01 1,800 No Yes
Logistics Co., Ltd. assurance 2017.11.1
Total amount of actual
Total amount of approving
occurred guarantee for
guarantee for subsidiaries in report 76,940 50,682
subsidiaries in report period
period (C1)
(C2)
Total balance of actual
Total amount of approved
guarantee for subsidiaries at
guarantee for subsidiaries at the 76,940 48,570
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 730,940 occurred guarantee in report 1,138,301.35
(A1+B1+C1) period (A2+B2+C2)
Total amount of approved Total balance of actual
guarantee at the end of report 766,940 guarantee at the end of 352,764.7
period (A3+B3+C3) report period (A4+B4+C4)
The proportion of the total amount of actually guarantee in the net
41.75%
assets of the Company (that is A4+ B4+C4)
Including:
Note:
Before deliverydate of the material asset reorganization, Guoda Pharmacy and its subordinate subsidiary entered into relevant guarantee
agreement (Sinopharm Holding provide a guaranty) before the reorganizataion. After delivery date, as the “Adjustment on General
Credit Limit Application to the Bank for year of 2016 and Guarantee Arrangement” was deliberated and approved by the 20th session
of 7th BOD of Sinopharm Accord held on 29 December 2016 and First Extraordinary Shareholders General Meeting of Sinopharm
Accord for year of 2017 dated 18 January 2017, Sinopharm Accord act as the guarantor for Guoda Pharmacy and its subsidiary to re-
signing relevant guarantee agreement. Found more in the “Sinopharm Accord: Notice of Adjustment on General Credit Limit
Application to the Bank for year of 2016 and Guarantee Arrangement” (Notice No.:2016-96) released on 30 December 2016 and
“Sinopharm Accord: Resolution Notice of First Extraordinary Shareholders General Meeting for year of 2017” (Notice No.:2017-05)
dated 18 January 2017 published on Juchao website
(2)Guarantee outside against the regulation
□ Applicable √ Not applicable
No guarantee outside against the regulation in Period.
3. Entrust others to cash asset management
(1) Trust financing
□ Applicable √ Not applicable
The Company had no trust financing in the reporting period.
(2) Entrusted loans
□ Applicable √ Not applicable
The company had no entrusted loans in the reporting period.
4. Other material contracts
□ Applicable √ Not applicable
No other material contracts for the Company in reporting period
XVIII. Social responsibility
1. Execution of social responsibility of targeted poverty alleviation
□ Applicable √ Not applicable
2. Execution of other social responsibility
“Social Responsibility Report of Sinopharm Accord in 2016” can be seen in Juchao website dated 19 April 2017
(HTTP://WWW.CNINFO.COM.CN)
Listed company and its subsidiary belongs to the key pollution enterprise listed by Department of Environmental Protection
No
Whether the social responsibility report released
√Yes □ No
CSR report
Whether contained Disclosure standards
Whether contained Whether contained
Nature of the the corporate
the environment the social
corporate governance Domestic standards Foreign standards
information information
information
State-owned
Yes Yes Yes Yes
enterprise
Note
1. Whether the company has the Environment
Yes
Management System Certification (ISO14001)
2. Amount the company annually invested and paid for
328.98
environmental protection (Yuan)
According to the group's energy-saving and environmental protection
3. The company’s emission reduction performance of
objectives and requirements, establish the industry environmental
waste gas, waste water, and waste residue
protection and energy saving working group, supervise and urge
enterprises to implement the policies and guidelines, laws and regulations
relevant to environmental protection and energy saving issued by the state
and superior companies; at the same time, actively implement the
technology improvement for environmental protection and energy saving,
continue to upgrade and optimize the sewage treatment system according
to the changes in production capacity, and hand over to the professional
environmental protection company for operation and maintenance, the
daily operation process is normal, no operational accident occurs. In
addition, strictly classify, unify to collect and hand over the wastes
generated in the production process to the qualified professional
companies for treatment as required. Through the above series of
measures, ensure that the waste disposal of enterprises’ three wastes is
legal and environmentally friendly, and obtain the government's approval
and recognition. Among which, Zhijun Guanlan sewage treatment
upgrade and renovation project declares the cyclic economy, and energy-
saving and emission reduction special funds of Shenzhen City, and gains
subsidy of 1.22 million Yuan, and has passed the energy management
system certification in 2016.
4. Investment the company made for enhancing the
employees’ individual knowledge and skills so as to
improve employees’ career development ability (Yuan)
5. Amount of the company’s social charitable donations
(funds, goods and materials, free professional services)
(Yuan)
XIX. Explanation on other significant events
√Applicable □ Not applicable
During the Period, relevant progress with material asset reorganization concerned has promoted in a steady way:
the “Plan of Sinopharm Accord Purchasing Assets and Raising Supporting Funds and Related Transactions by Asset
Sale, Stock Issuance and Cash Payment” was published respectively on 10 March 2016 and 25 March, and
respectively released the “Report of Purchasing Assets and Raising Supporting Funds and Related Transactions by
Asset Sale, Stock Issuance and Cash Payment (draft)” on 31 May 2016 and on 14 June; on 28 September 2016, we
released the “Official Reply on Sinopharm Accord Purchasing Assets and Raising Supporting Funds and Related
Transactions by Asset Sale, Stock Issuance and Cash Payment from CSRC” and “Report of Purchasing Assets and
Raising Supporting Funds and Related Transactions by Asset Sale, Stock Issuance and Cash Payment (Revised)”;
and released the “Sinopharm Accord: Notice of the Target Assets’ Ownership Transfer for Purchasing Assets and
Raising Supporting Funds and Related Transactions by Asset Sale, Stock Issuance and Cash Payment” on 13
December 2016. Till end of the Report released, target assets in the material asset reorganization have completed
transfer of ownership.
XX. Significant event of subsidiary of the Company
□ Applicable √ Not applicable
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
Capitaliza
New
Proporti Bonus tion of Subtota Proportio
Amount shares Others Amount
on shares public l n
issued
reserve
I. Restricted shares 74,484,531 20.54% 74,484,531 20.54%
2. State-owned legal person’s
74,482,543 20.54% 74,482,543 20.54%
shares
3. Other domestic
1,988 0.00% 1,988 0.00%
shareholding
Including: Domestic nature
1,988 0.00% 1,988 0.00%
person shares
II. Unrestricted shares 288,147,412 79.46% 288,147,412 79.46%
1. RMB Ordinary shares 233,261,812 64.32% 233,261,812 64.32%
2. Domestically listed foreign
54,885,600 15.14% 54,885,600 15.14%
shares
III. Total shares 362,631,943 100.00% 362,631,943 100.00%
Reasons for share changed
□ Applicable √ Not applicable
Approval of share changed
□ Applicable √ Not applicable
Ownership transfer of share changes
□ 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 or need to disclosed under requirement from security regulators
√Applicable □ Not applicable
Numbers of private placement for purchasing assets with shares issue in material asset reorganization amounting to
65,495,040 shares (circulated shares with restriction condition), the stocks have listed on 5 January 2017. after
shares increased for listing, total shares of the Company comes to 428,126,983 shares.
2. Changes of restricted shares
□ Applicable √ Not applicable
II. Securities issuance and listing
1. Security offering (without preferred stock) in Reporting Period
□ Applicable √ Not applicable
2. Changes of total shares and shareholders structure as well as explanation on changes of assets and liability
structure
□ Applicable √ Not applicable
3. Existing internal staff shares
□ Applicable √ Not applicable
III. Particulars about shareholder and actual controller of the Company
1. Amount of shareholders of the Company and particulars about shares holding
In Share
Total common Total preference Total preference
Total common
stock shareholders with shareholders
stock 13,506 11,789 0
shareholders at voting rights with voting
shareholders in
end of last month recovered at end of rights recovered
reporting before annual reporting period (if at end of last
period-end report disclosed applicable) (found month before
in note8) annual report
disclosed (if
applicable)
(found in note8)
Particulars about shares held above 5% by shareholders or top ten shareholders
Total Number of share pledged/frozen
Amount Amount
Proportio sharehold
Changes of of un-
Full name of Nature of n of ers at the
in report restricted restricted
Shareholders shareholder shares end of State of share Amount
period shares shares
held report
held held
period
Sinopharm State-owned 184,942,2 74,482,54 110,459,7
51.00%
Holding Co., Ltd. Corporation 91 3
HTHK/CMG
FSGUFP-CMG
Foreign
FIRST STATE 2.28% 8,255,056
Corporation
CHINA GROWTH
FD
TARGET VALUE Foreign
1.32% 4,791,914
FUND Corporation
GUOTAI JUNAN
SECURITIES(HO Foreign
1.25% 4,526,392
NGKONG) Corporation
LIMITED
China Securities State-owned
1.24% 4,495,815
Finance Co., Ltd. Corporation
China Life
Insurance Co., Ltd. Domestic non
– tradition –general state-owned 1.16% 4,216,998
insurance products Corporation
-005L-CT001 Shen
Domestic non
CITIC Securities
state-owned 1.16% 4,212,630
Co., Ltd.
Corporation
New China Life
Insurance Co., Ltd.
Domestic non
– Bonus –
state-owned 1.16% 4,199,772
Individual bonuses
Corporation
- -018L-FH002
Shen
VALUE
Foreign
PARTNERS 1.05% 3,808,966
Corporation
CLASSIC FUND
Central Huijin State-owned
1.05% 3,804,400
Investment Ltd. Corporation
It is unknown that there exists no associated relationship or belongs to the consistent
Explanation on associated relationship
actionist among the other tradable shareholders regulated by the Management Measure of
among the aforesaid shareholders
Information Disclosure on Change of Shareholding for Listed Companies.
Particular about top ten shareholders with un-restrict shares held
Type of shares
Shareholders’ name Amount of un-restrict shares held at Period-end
Type Amount
RMB ordinary
Sinopharm Holding Co., Ltd. 110,459,748 110,459,748
shares
HTHK/CMG FSGUFP-CMG FIRST Domestic listed
8,255,056 8,255,056
STATE CHINA GROWTH FD foreign shares
Domestic listed
TARGET VALUE FUND 4,791,914 4,791,914
foreign shares
GUOTAI JUNAN
Domestic listed
SECURITIES(HONGKONG) 4,526,392 4,526,392
foreign shares
LIMITED
RMB ordinary
China Securities Finance Co., Ltd. 4,495,815 4,495,815
shares
China Life Insurance Co., Ltd. –
RMB ordinary
tradition –general insurance products - 4,216,998 4,216,998
shares
005L-CT001 Shen
RMB ordinary
CITIC Securities Co., Ltd. 4,212,630 4,212,630
shares
New China Life Insurance Co., Ltd. –
RMB ordinary
Bonus – Individual bonuses - -018L- 4,199,772 4,199,772
shares
FH002 Shen
VALUE PARTNERS CLASSIC Domestic listed
3,808,966 3,808,966
FUND foreign shares
RMB ordinary
Central Huijin Investment Ltd. 3,804,400
shares
Expiation on associated relationship or
consistent actors within the top 10 un- It is unknown that there exists no associated relationship or belongs to the consistent
restrict shareholders and between top actionist among the other tradable shareholders regulated by the Management Measure of
10 un-restrict shareholders and top 10 Information Disclosure on Change of Shareholding for Listed Companies.
shareholders
Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a buy-back
agreement dealing in reporting period
□Yes √ No
The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have no
buy-back agreement dealing in reporting period.
2. Controlling shareholder of the Company
Nature of controlling shareholders: central state-owned holding
Type of controlling shareholders: legal person
Legal
Controlling person/person Organization
Date of foundation Main operation business
shareholders in charge of code
the unit
Industrial investment holding; management and assets
reorganization entrusted by pharmaceutical enterprise;
Chinese medicine, Chinese medicine tablets, chemical
medicine preparations, chemical raw materials,
antibiotics, biochemical drugs, biological products,
narcotic drugs, psychotropic substances, toxic drugs for
medical use (compatible with the business scope),
medicine IVD Reagents, vaccine, anabolic agents,
Peptide hormone and medical equipment. III: injection
puncture instruments, hygienic materials & dressings,
Sinopharm Holding
Li Zhiming 2003-01-08 74618434-4 medical polymer materials and products, categories II:
Co., Ltd.
medical X-ray ancillary equipment and components; food
marketing management (non-physical way), and domestic
trade (other than special licensing), logistics and other
consulting services, cosmetics, stationeries and related
consulting services, operating various types of goods and
import and export of technology (not attached directory
of import and export commodities), but excluded the
import and export of goods and technology the State
limits or prohibit the company. [In right of exequatur to
run if refers to permission operation].
Equity of other
domestic/oversea
listed company
control by Sinopharm Group Co., Ltd. hold 44.01 percent equity of China National Medicines Corporation Ltd (Stock
controlling code: 600511) up to the end of Period.
shareholder as well
as stock-joint in
report period
Changes of controlling shareholders in reporting period
□ Applicable √ Not applicable
The Company had no changes of controlling shareholders in reporting period
3. Actual controller of the Company
Nature of actual controller: central state-owned assets management
Type of actual controller: legal person
Legal
Actual controlling person/person in Date of Organizatio
Main operation business
shareholders charge of the foundation n code
unit
Chinese patent drug, traditional Chinese medicines
prepared in ready-to-use forms, traditional Chinese
medicinal materials, chemical API, chemical medicine
preparation, antibiotics, biochemical drug and biologic
pharmacy (License for pharmaceutical trading runs until 12
China National May 2020); mandatory for pharmaceutical enterprise, asset
Pharmaceutical Group She Lulin 198-03-26 10000588-8 reorganization; consulting service of medicine industrial
Corporation investment; exhibition of medical devices; consulting
services with main business concerned. (the enterprise has
independent choices on operation items for business; in
right of exequatur to run if refers to permission operation ;
operation activity that prohibited or restricted by the City
Government are not allowed)
Name of listed Total shareholders
Name company with (10 thousand Proportion of shares held
shares held shares)
Sinopharm Group Jianmin Group 132.35 0.86%
Sinopharm
Sinopharm Group 272.84 0.10%
Equity of Holding
domestic/oversea listed Sinopharm Holding
Sinopharm
company control by Industrial Investment 157,155.60 56.79%
Holding
actual controller in Co., Ltd.
report period Sinopharm Holding Sinopharm 21,070.15 44.01%
Sinopharm
Sinopharm Holding 18,494.23 51%
Accord
Sinopharm JLPC 321.93 2.12%
Shanghai Institute of Modern
11,975.63 41.62%
Pharmaceutical Industry Pharmaceutical
Chinese Medicine Hengrui
10,621.86 4.52%
Industry Co., Ltd. Medicine
Tiantan
Biosino 27,472.50 53.30%
Biological
Sinopharm Group H.K.
China TCM 161,431.36 36.43%
Co., Ltd.
Changes of actual controller in reporting period
□ Applicable √ Not applicable
No changes of actual controllers for the Company in reporting period.
Property right and controlling relationship between the actual controller and the Company is as follow:
The State-owned Assets Supervision & Administration Commission of the State Council
100%
National Council for Social
China National Pharmaceutical
Shanghai Fosun Pharmaceutical Security Fund &public
Group Corporation
(Group) Co., Ltd. shareholder
49% 51% 43.11%
Sinopharm Industry
Investment Co., Ltd.
0.10%
56.79%
Sinopharm Holding Co., Ltd.
51%
China National Accord Medicines Corporation Ltd.
Actual controller controlling the Company by entrust or other assets management
□ Applicable √ Not applicable
4. Particulars about other legal person shareholders with over 10% shares held
□ Applicable √ Not applicable
5. Limitation and reducing the holdings of shares of controlling shareholders, actual controllers,
restructuring side and other commitment subjects
□ Applicable √ Not applicable
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the Period.
Section VIII. Particulars about Directors, Supervisors, Senior
Executives and Employees
I. Changes of shares held by directors, supervisors and senior executives
Amount Amount
Shares Shares
of shares of shares
End date held at Other held at
Working Start dated of office increased decreased
Title Sex Age of office period- changes period-
Name status term in this in this
term begin (share) end
period period
(Share) (Share)
(Share) (Share)
Chen
Secretary of Currently
Changbi M 48 2015-01-13 2,651 0 0 2,651
the Board in office
ng
Total -- -- -- -- -- -- 2,651 0 0 2,651
II. Changes of directors, supervisors and senior executives
Name Title Type Date Reasons
Appoint Mr. Yan Zhigang resign from director and specialized committee of
Yan ment the Company and step down from GM of the Company; BOD
Deputy GM 2016-03-09
Zhigang and agreed to appointed Mr. Yan Zhigang as deputy GM of the
removal Company.
Appoint According to work arrangement, BOD appointed Mr. Lin Zhaoxiong
Lin
ment as the GM (legal representative)of the Company; and nominated as
Zhaoxio GM 2016-03-09
and additional director candidate by the recommendation from
ng
removal Sinopharm Holding-controlling shareholders of the Company
Appoint
Lin
ment Mr. Lin ZhaoXiong elected as director of the 7th BOD of the
Zhaoxio Director 2016-04-06
and Company in 2nd extraordinary shareholders general meeting of 2016
ng
removal
Yan Dismiss
N/A 2016-05-23 Resign from deputy GM due to individual reasons.
Zhigang al
Li Office Li Zhiming step down from the chairman of 7 th BOD of Sinopharm
Director 2016-08-16
Zhiming leaving Accord by the recommendation from controlling shareholder
Appoint
Ma ment Ma Wanjun serves as Chairman of 7th BOD of the Sinopharm
Chairman 2016-08-16
Wanjun and Accord by the recommendation from controlling shareholder
removal
Feng N/A Office 2016-08-12 Feng Yifeng request to resign from chairman of supervisory
Yifeng leaving committee of 7th supervisor committee of the Company due to
individual reasons
Guang Office Guang Xiaohui request to resign from supervisor of the 7th
N/A 2016-08-16
Xiaohui leaving supervisory committee of the Company due to career moves
Appoint
Wu Yijian elected as Supervisor of the 7th Supervisor Committee of
Wu ment
Supervisor 2016-09-02 the Company in 4th extraordinary shareholders general meeting of
Yijian and
removal
Appoint
Liu Jingyun elected as Supervisor of the 7th Supervisor Committee
Liu ment
Supervisor 2016-09-02 of the Company in 4th extraordinary shareholders general meeting of
Jingyun and
removal
Appoint
Chairman of Mr. Wu Yijian elected as Chairman of 7th supervisory committee of
Wu ment
supervisory 2016-09-27 the Company in 2nd extraordinary meeting of 7th supervisory
Yijian and
committee committee
removal
Deng Baojun resign from former deputy GM of the Company due to
Deng Dismiss
N/A 2016-11-17 the work adjustment after integration of China National
Baojun al
Pharmaceutical Industry Corporation Ltd.
Cui Dieling resign from former director, deputy chairman and
specialized committee due to the work adjustment after integration
Cui Office of China National Pharmaceutical Industry Corporation Ltd;
N/A 2016-12-29
Dieling leaving nominated Mr. Liu Yong as additional director candidate by
recommendation from Sinopharm Holding-controlling shareholder
of the Company
Appoint
Liu ment Liu Yong elected as director of 7th BOD of the Company in 1st
Director 2017-01-18
Yong and extraordinary shareholders general meeting of 2017
removal
Office
leaving
Resign from Independent Director of the Company due to term of
He Zhiyi N/A while 2017-02-14
office has run out
term is
due
Appoint
Chen Independent ment Elected as Independent Director of 7th BOD of the Company in 2nd
2017-03-14
Honghui Director and extraordinary shareholders general meeting of 2017
removal
Pan Dismiss
N/A 2017-02-22 Resign from Deputy GM of the Company due to individual reasons
Rangren al
Wei Director Office 2017-03-25 Not in post of director of the Company for statutory retirement age
Yulin leaving come
III. Post-holding
Professional background, major working experience and present main responsibilities in Company of directors,
supervisors and senior executive at the present in latest five years
1. Members of the Board
Chairman-- Mr. Ma Wanjun, EMBA. He served as the follow post in latest 5 years: deputy GM of Operation Center
of Sinopharm Group Co., Ltd. from December 2009 to September 2010; Director of Sinopharm Holding Shenyang
Co., Ltd from January 2010 to November 2011; he serves as Chairman of Guangdong Dong Fang Uptodate &
Special Medicines Co., Ltd. since March 2010; Director of Sinopharm Holding Suzhou Co., Ltd from May 2010 to
November 2011; Chairman of Sinopharm Holding Jiangsu Co., Ltd from May 2010 to November 2011; Director of
Wenzhou Biomedicine-Appliances Supplies Co., Ltd. from July 2010 to November 2011; deputy President of
Sinopharm Group Co., Ltd. since September 2010; Chairman of Sinopharm Holding Henan Co., Ltd from October
2010 to January 2013; Director of Sinopharm Holding Changzhou Co., Ltd from December 2010 to November
2011; Director of Shanghai Bionuo Enterprise Management Co., Ltd. from December 2010 to November 2011;
general counsel of Sinopharm Group Co., Ltd. from May 2011 to October 2012; he serves as Director of Sinopharm
Le-Ren-Tang Medicine Co., Ltd. since April 2011; Director of Sinopharm Group Shaanxi Co., Ltd. from April 2011
to September 2011; Director of China National Medicines Corporation Ltd since October 2011; Director of Yujia
Medicine Service Co., Ltd. since November 2011; Chairman of Sinopharm Health Industry (Shanghai) Co., Ltd.
since November 2011; Director of 6th and 7th Session of the Board for the Company since March 2011; Chairman
of Sinopharm Holding Health Development (Shanghai ) Co., ltd since May 2012; Chairman of Sinopharm Holding
Fujian Co., Ltd and Sinopharm Holding Fuzhou Co., Ltd since August 2012; he serves as executive Director of
Sinopharm Holding Henan Co., Ltd. since January 2013 and executive Director of Shanghai Tongyu Information
Technology Co., Ltd. since April 2013 and serves as chairman of the Company since August 2016.
Director -- Mr. Li Zhiming, college graduation, a senior economist, and he served as the follow post in latest 5 years:
chairman, GM and party secretary of Sinopharm Group Xinjiang Pharmaceutical Co., Ltd. from February 2009 to
May 2013; deputy president of Sinopharm Group Co., Ltd. from May 2020 to November 2013; he hold a concurrent
post of General Counsel of Sinopharm Group Co., Ltd. from October 2012 to January 2014; a deputy party secretary,
discipline inspection commission secretary and labor union chairman of Sinopharm Group Co., Ltd. from November
2012 to November 2013; president of Sinopharm Group Co., Ltd. since November 2013; meanwhile, served as
Chairman of China National Medicines Corporation Ltd from August 2010 to October 2011; chairman of
Sinopharm Holding Tianjin Co., Ltd. from August 2010 to December 2013; chairman of Sinopharm Holding
Heilongjiang Co., Ltd. from November 2010 to April 2013; chairman of Sinopharm Holding Shenyang Co., Ltd.
from October 2011 to April 2013; chairman of Sinopharm Holding Jilin Co., Ltd. from October 2011 to April 2013;
chairman of Sinopharm Holding Inner Mongolia Co., Ltd. from March 2011 to December 2013; serves as chairman
of Sinopharm Holding Ningxia Co., Ltd. since June 2011; chairman of Sinopharm Holding Shaanxi Co., Ltd. since
October 2011; chairman of Sinopharm Holding Gansu Co., Ltd. since October 2011; he had a concurrent post of
chairman of Sinopharm Holding Shanxi Co., Ltd. from October 2011 to December 2013; serves as chairman of
Sinopharm Holding Qinghai Co., Ltd. since October 2011; he took post of chairman of Sinopharm Holding Mudan
River Co., Ltd. from October 2011 to April 2013; serves as chairman of Sinopharm Group Shanxi Co., Ltd. since
March 2012; chairman and party secretary of Sinopharm Group Xinjiang Pharmaceutical Co., Ltd. since May 2013;
president of Sinopharm Group Co., Ltd. since November 2013; Director of Sinopharm Group Hong Kong Co., Ltd.
since January 2014 and chairman of China National Medicines Corporation Ltd since February 2014; he serves as
executive director of Sinopharm Holding Sub Marketing Center Co., Ltd. since January 2014 and serves as chairman
of 6th and 7th session of the Board for the Company since February 2014 and serves as director of the Company
since August 2016.
Director -- Mr. Jiang Xiuchang, a university background, senior economists and senior accountant. He served as the
follow post in latest 5 years: CFO of Sinopharm Group Co., Ltd. since May 2010; he acts as deputy President of
Sinopharm Group Co., Ltd. since July 2013 and hold concurrent post of Supervisor of Sinopharm Holding Guoda
Pharmacy Co., Ltd since June 2010; Supervisor of Yujia Medicine Co., Ltd. since September 2010; Director of
China National Medicines Corporation Ltd since February 2011; Director of Sinopharm Le-Ren-Tang Medicine
Co., Ltd since April 2011; Director of Sinopharm Holding H.K. Co., Ltd since November 2011; Director of
Sinopharm Group Financial Co., Ltd since November 2011; Director of Sinopharm Group Shaanxi Co., Ltd. from
April 2011 to September 2011; Supervisor of Sinopharm Sub Marketing Center Co., Ltd. since April 2011;
Supervisor of Sinopharm Holding Beijing Co., Ltd. and Director of Sinopharm Group Financial Co., Ltd since
November 2011; he serves as Director of 6th and 7th session of the Board for the Company since March 2011,
Chairman of Sinopharm Holding Jiangxi Co., Ltd. since June 2013; Chairman of Sinopharm Holding Shanxi Co.,
Ltd., deputy Chairman of Sinopharm Group Shanxi Co., Ltd., Chairman of Sinopharm Holding Tianjin Co., Ltd.
and Chairman of Sinopharm Holding Inner Mongolia Co., Ltd. since December 2013.
Director -- Mr. Liu Yong, a doctor degree, pharmacist-in-charge and licensed pharmacist. He successively acting
as deputy GM of marketing department in China National Pharmaceutical Group Corporation since July 1999,
deputy GM of Shanghai Guoda Drugstore Chain Co., Ltd., the GM and secretary of the party committee and
chairman in Sinopharm Holding Shengyang Co., Ltd., chairman of Sinopharm Holding Shandong Co., Ltd.;
Chairman of Sinopharm Holding Henan Co., Ltd., executive director of Shanghai Huyong Medicine Co., Ltd.,
executive director of Sinopharm Group Medicine Logistic Co., Ltd., the chairman of Sinopharm Group Chemical
Reagent Co., Ltd. and Sinopharm Group Shanghai Likang Pharmaceutical Co., Ltd.; Chairman of Sinopharm
Holding Anhui Co., Ltd., GM, secretary of the party committee and Chairman of Sinopharm Holding Beijing
Co.,Ltd, Chairman of Sinopharm Holding Jiling Co., Ltd., Chairman of Sinopharm Holding Beijing Kangchen Bio-
Pharmaceutical Co., Ltd., Director of Sinopharm Group Shanxi Co., Ltd., Director and Chairman of the China
National Medicines Corporation Ltd., Chairman of Sinopharm Holding Chongqing Co., Ltd., Chairman of
Sinopharm Holding Hunan Co., Ltd., Chairman of Sinopharm Holding Chongqing Taimin Pharmaceutical Co., Ltd.,
Chairman of Sinopharm Holding Xinan Co., Ltd., GM of Beijing Sinopharm Tianyuan Property Management Co.,
Ltd. and Director of Sichuan Medicine Co., Ltd.; now he acting as Director of China National Medicines
Corporation Ltd., Chairman of Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co.,Ltd, Chairman
of Sinopharm Holding Guoda Drugstore Co., Ltd., Chairman of Sinopharm Holding Beijing Huahong Biological
Medicine Co.Ltd and Sinopharm Holding Guizhou Co., Ltd., Chairman of Sinopharm Holding Yunnan Co., Ltd.,
Director of Sinopharm Guohua Network Technology Co., Ltd. and Chairman of Sinopharm Health On-line Co.,
Ltd.; he serves as Deputy president of Sinopharm Group Co., Ltd. since January 2009; General counsel of
Sinopharm Group Co., Ltd. since January 2014, the Secretary of the Board of Sinopharm Group Co., Ltd.since
October 2016 and acting as director of the 7th BOD of the Company since January 2017.
Director -- Mr. Lin Zhaoxiong, executive MBA and pharmacist in-charge. He worked in China Medicine (Group)
Guangzhou Company from January 1999 to December 2003, and successively served as deputy manager and
manager of the pharmaceutical department, manager in pharmaceutical company and chief in operation management
department; served as Deputy GM of Sinopharm Holding Guangzhou Co., Ltd. from January 2004 to December
2006; serves as GM of Sinopharm Holding Guangzhou Co., Ltd. since December 2006 and deputy GM of the
Company from December 2008 to 9 March 2016; he serves as GM of the Company since 9 March 2016 and director
of 7th BOD of the Company since April 2016.
Independent Director -- Mr.Xiong Chuxiong, a doctor degree, professor and a CPA. He graduated from Accounting
Dept. of Southwestern University of Finance & Economics and Accounting Dept. of Xiamen University
successively. After obtained the PhD. Economics in Xiamen University in 1992, he was assigned to teach in
accounting majors of Shenzhen University. He used to be a visiting scholar in University of Manchester, U.K.
currently; he works as professor in Shenzhen University. He serves as Independent Director of the 6th and 7th Session
of the Board for the Company since April 2011.
Independent Director -- Mr. Xiao Shengfang, civil and commercial law graduate in Renmin University of China,
MBA of Jinan University, and lawyer. He acts as director of Sino-Win Law Firm, whose social functions include
vice director of Labor and Social Security Law Committee of All China Lawyers Association, president of
Guangdong Lawyers Association, legal adviser of Guangzhou Municpal People’s Government, counselor of
CPPCC Guangzhou Committee, legal consultant of the People’s Government of Guangzhou Baiyun District,
adjunct professor at Lawyer College of Renmin University of China, adjunct professor at School of Law of South
China Normal University, executive vice president of MBA sodality in Ji'nan University, arbitrator at South China
International Economic and Trade Arbitration Commission, arbitrator at Guangzhou Arbitration Commission, and
mediation expert at South China International Economic and Trade Arbitration Commission. He has acted as the
independent director for the Company’s sixth and seventh board of director since April 2011.
Independent Director -- Mr. Chen Honghui, professor of Lingnan (University) College of Sun Yat-Sen University,
a doctoral supervisor of management. He worked in school of management, Wuhan University of Science &
Technology from July 1993 to June 2003 and successively acted as a tutor and instructor; he works in Lingnan
(University) College of Sun Yat-Sen University since July 2003 and also served as deputy professor and professor;
vice president of the Lingnan (University) College of Sun Yat-Sen University from 2007 to 2012; the director of
department of business administration in Lingnan College since 2008 and deputy chairman of the GDISR. he serves
as independent director of Cabbeen Fashion Co., Ltd. since October 2013 and Guangzhou Grandbuy Co., Ltd. since
September 2016. Serves as independent director of 7th BOD of the Company since March 2017.
2. Members of supervisors:
Chairman of supervisory committee-- Mr. Wu Yijian, a postgraduate background. He currently serves as the
assistant president of Shanghai Fosun Pharmaceutical Group Co., Ltd. and director of pharmaceutical business
management committee. He worked in Sanjiu Enterprise Group since July 1993, and successively served as the
sales director of Sanjiu Medical Trading Co., Ltd., COO of Sanjiu Medical Chain Co., Ltd. and deputy GM of
Shanghai Sanjiu Technology Development Co., Ltd. He also works in Fosun Pharma Group since June 2004 and
successively took post of Gm of the Shanghai Fosun Pharmaceutical Investment Co., Ltd., GM of Shanghai Fosun
Pharmaceutical Co., Ltd. and GM of Shanghai Fumei Drugstore Co., Ltd. Mr. Wu served as deputy president of the
Shanghai Yuyuan Tourist Mart Co., Ltd. from 2014 to 2015. now he serves as the chairman of supervisory
committee of the Company since September 2016.
Supervisor -- Ms. Liu Jingyun, postgraduate background. Currently she serves as the director of financial and asset
management in Sinopharm Group Co., Ltd. and he successively hold a teaching post in Nanjing Radio and
Television University, works in Sinopharm Group Co., Ltd. since November 2003 and serves as deputy director of
assets management department and Director of ministry of finance and credit management. She serves as supervisor
of the 7th supervisory committee of the Company since September 2016.
Staff Supervisor -- Mr. Wang Huaiqin, junior college background, a polical engineer and assistant accountant. He
served as first union chairman from September 2005 to March 2009; and serves as member of the party committee,
deputy secretary and union chairman of the Company since September 2008; and serves as the staff supervisor of
5th, 6th and 7th supervisory of the Company since September 2007.
3. Senior executive
Deputy GM-- Mr. Lin Zhaoxiong, found in aforesaid previous work experience
Deputy GM-- Mr. Lin Min, senior MBA, Pharmaceutical Engineer, Licensed Pharmacist, worked in China
National Pharmaceutical Group Guangzhou Corporation with successively taking the posts of assistant to manager,
deputy general manger of Pharmacy Department and deputy general manger of purchasing in Pharmaceutical
Company from Jan. 2001 to Nov. 2003; supervisor of Guangzhou pharmacy sales of Sinopharm Holding Guangzhou
Co., Ltd from Nov. 2003 to Jan. 2005; general manager of Sinopharm Holding Liuzhou Co., Ltd from March 2006
to Nov. 2007; took deputy general manager of Sinopharm Holding Guangzhou Co., Ltd from Jan. 2005 to Dec.
2008; serves as deputy GM of the Company since December 2008.
Deputy GM-- Mr. Lin Xinyang, MBA, Licensed Pharmacist, he took the turns of deputy GM of Nanfang Pharm.
Co., deputy GM of China Medicine Group (Guangzhou) Company Yuexing Company, general supervisor of PD of
Sinopharm Holding Guangzhou Company successively since January 1996; took the post of deputy GM of
Sinopharm Holding Guangzhou Company from Jan. to Dec. 2004; serves as deputy GM of the Company since
January 2005.
CFO-- Mr. Wei Pingxiao, MBA, an accountant, took the turns of Financial department of State-owned Beijing
Electronic Tube Plant, Modern Electronic Shenzhen Industrial Company, China Electronic Industrial Headquarter
since August 1985; and took the turns of deputy section chief of financial department of China Electronic
Information Industry Group, financial director of AMOI, section chief of planning financial department of China
Electronic Finance Leasing Company, Deputy GM of AMOI Beijing branch, financial charger of AMOI and
director of its subsidiary since April 1993; and he hold the post of CFO of the Company since December 2004.
Secretary of the Board-- Mr. Chen Changbing, Master Degree. He serves as secretary of the Board since December
2000; and serves as assistant GM and Chief of planning investment management department since November 2015
Post-holding in shareholder’s unit
√ Applicable □ Not applicable
Received
End remunerati
Start dated of office date of on from
Name Name of shareholder’s unit Position in shareholder’s unit n
term office shareholde
term r’s unit
(Y/N)
Ma Deputy president, General counsel
Sinopharm Group Co., Ltd. 2011-05-01 Y
Wanjun Secretary of the Board
Chairman, Executive Director,
Wei Yulin Sinopharm Group Co., Ltd. 2013-11-01 Y
secretary of the party committee
Li
Sinopharm Group Co., Ltd. President 2013-11-01 Y
Zhiming
Jiang
Sinopharm Group Co., Ltd. CFO 2010-06-01 Y
Xiuchang
Deputy president, Secretary of the
Liu Yong Sinopharm Group Co., Ltd. 2009-01-01 Y
Board, General counsel
Liu Director of ministry of finance and
Sinopharm Group Co., Ltd. 2003-11-1 Y
Jingyun credit management
Post-holding in other unit
√ Applicable □ Not applicable
Received
Position in Start dated of office End date of remuneration
Name Name of other units
other unit n term office term from other unit
(Y/N)
Guangdong Dong Fang Uptodate & Special
Ma Wanjun Chairman 2010-03-01 N
Medicines Co. Ltd.
Ma Wanjun Sinopharm Holding Henan Co., Ltd. Chairman 2010-10-01 N
Executive
Ma Wanjun Sinopharm Holding Henan Co., Ltd. 2013-01-01 N
Director
Ma Wanjun Sinopharm Holding Changzhou Co., Ltd. Director 2010-12-01 N
Ma Wanjun Shanghai Bionuo Industrial Co., Ltd. Director 2010-12-01 N
Sinopharm Le -Ren-Tang Medicine Co.,
Ma Wanjun Director 2011-04-01 N
Ltd.
Ma Wanjun Sinopharm Group Shanxi Co., Ltd. Director 2011-04-01 N
Ma Wanjun China National Medicines Corporation Ltd. Director 2011-10-01 N
Ma Wanjun Yujia Medical Service Co., Ltd. Director 2011-11-01 N
Sinopharm Health Industry (Shanghai) Co.,
Ma Wanjun Chairman 2011-11-01 N
Ltd.
Sinopharm Holding Health Development
Ma Wanjun Chairman 2012-05-01 N
(Shanghai) Co., Ltd.
Ma Wanjun Sinopharm Holding Fujian Co., Ltd. Chairman 2012-08-01 N
Ma Wanjun Sinopharm Holding Fuzhou Co., Ltd. Chairman 2012-08-01 N
Wei Yulin Sinopharm Holding Hong Kong Co.,Ltd Chairman 2011-01-01 N
Sinopharm Group Chemical Reagent
Wei Yulin Chairman 2011-12-01 N
Co.,Ltd
Sinopharm Le -Ren-Tang Medicine Co.,
Wei Yulin Chairman 2011-04-01 N
Ltd.
Sinopharm Holding Guoda Drugstore Co.,
Wei Yulin Director 2012-08-01 N
Ltd.
Sinopharm Xinjiang Pharmaceutical Co.,
Li Zhiming Chairman 2013-05-01 N
Ltd.
Li Zhiming Sinopharm Holding Ningxia Co., Ltd Chairman 2011-06-01 N
Li Zhiming Sinopharm Holding Shaanxi Co., Ltd Chairman 2011-10-01 N
Li Zhiming Sinopharm Holding Gangsu Co., Ltd Chairman 2011-10-01 N
Li Zhiming Sinopharm Holding Qinghai Co., Ltd Chairman 2011-10-01 N
Li Zhiming China National Medicines Corporation Ltd. Chairman 2011-10-01 N
Li Zhiming Sinopharm Holding Hong Kong Co.,Ltd Director 2014-01-01 N
Sinopharm Holding Sub Marketing Center Executive
Li Zhiming 2014-01-01 N
Co., Ltd. Director
Sinopharm Holding Guoda Drugstore Co.,
Jiang Xiuchang Supervisor 2010-06-01 N
Ltd.
Jiang Xiuchang Yujia Medical Co., Ltd. Supervisor 2010-09-01 N
Jiang Xiuchang China National Medicines Corporation Ltd. Director 2011-02-01 N
Sinopharm Le -Ren-Tang Medicine Co.,
Jiang Xiuchang Director 2011-04-01 N
Ltd.
Jiang Xiuchang Sinopharm Holding Hong Kong Co.,Ltd Director 2011-11-01 N
Jiang Xiuchang Sinopharm Group Financial Co.,Ltd Director 2011-11-01 N
Jiang Xiuchang Sinopharm Group Shanxi Co., Ltd. Director 2011-04-01 N
Sinopharm Holding Sub Marketing Center
Jiang Xiuchang Supervisor 2011-04-01 N
Co., Ltd.
Jiang Xiuchang Sinopharm Holding Beijing Co.,Ltd Supervisor 2011-11-01 N
Liu Yong Sinopharm Holding Beijing Co.,Ltd Chairman 2010-08-02 N
Sinopharm Holding Beijing Kangchen Bio-
Liu Yong Chairman 2010-07-01 N
Pharmaceutical Co., Ltd.
Liu Yong China National Medicines Corporation Ltd. Director 2014-01-01 N
Sinopharm Holding Beijing Tianxing Puxin
Liu Yong Chairman 2011-10-10 N
Biological Medical Co.,Ltd
Sinopharm Holding Guoda Drugstore Co.,
Liu Yong Chairman 2011-11-01 N
Ltd.
Sinopharm Holding Beijing Huahong
Liu Yong Chairman 2013-09-02 N
Biological Medicine Co.Ltd
Liu Yong Sinopharm Holding Guizhou Co., Ltd. Chairman 2014-01-06 N
Liu Yong Sinopharm Holding Yunnan Co., Ltd. Chairman 2014-01-06 N
Sinopharm Guohua Network Technology
Liu Yong Director 2015-04-01 N
Co., Ltd.
Liu Yong Sinopharm Health On-line Co., Ltd. Chairman 2015-07-02 N
Punishment of securities regulatory authority in recent three years to the company’s current and outgoing directors, supervisors and
senior management during the reporting period
□ Applicable √ Not applicable
IV. Remuneration for directors, supervisors and senior executives
Decision-making procedures, recognition basis and payment for directors, supervisors and senior executives
(i) Remuneration decision procedure of directors, supervisors, senior management:
The Company implemented the annual salary system for senior executives based on the 2016 annual performance
appraisal (scheme) on management staff, paid annual salary remuneration according to the appraisal results.
Remuneration and appraisal committee of the company's board of directors is responsible for the formulation and
examination of salary plan and program as well as formulation and examination of salary plan and assessment
standards of directors (not including the independent directors), supervisors and senior executives. They also
evaluate the performance assessment of directors, supervisors and senior officers in accordance with the assessment
criteria, compensation scheme.
(ii) Remuneration determining basis
The main principles of making standard of compensation are: (1) the company's overall business and the profit level;
(2) the overall salary level and dynamic index over past years; (3) difference in position and duty; (4) relative
importance and risks of position; (5) related post salary level in the same industry; (6) individual professional ability.
(iii) Actual payment
Executives get monthly basic salary and annual salary after the issuance of annual examination.
Remuneration for directors, supervisors and senior executives in reporting period
In 10 thousand Yuan
Total Received
remuneration remuneration
Post-holding
Name Title Sex Age before tax from related party
status
obtained from the of the
Company Company(Y/N)
Currently in
Ma Wanjun Chairman M 47 0 Y
office
Currently in
Wei Yulin Director M 59 0 Y
office
Currently in
Li Zhiming Director M 53 0 Y
office
Currently in
Jiang Xiuchang Director M 53 0 Y
office
Currently in
Liu Yong Director M 47 0 Y
office
Cui Dieling Deputy Chairman F 51 Office leaving 0 Y
Currently in
Lin Zhaoxiong Director, GM M 49 184 N
office
Yan Zhigang Director, GM M 57 Office leaving 65 N
Independent
He Zhiyi M 61 Office leaving 8 N
Director
Independent Currently in
Xiong Chuxiong M 61 8 N
Director office
Independent Currently in
Xiao Shengfang M 47 8 N
Director office
Independent Currently in
Chen Honghui M 45 0 N
Director office
Chairman of Currently in
Wu Yijian M 46 0 Y
supervisory office
committee
Currently in
Liu Jingyun Supervisor F 40 0 Y
office
Currently in
Wang Huaiqin Supervisor M 59 63 N
office
Currently in
Lin Min Deputy GM M 52 162 N
office
Currently in
Lin Xinyang Deputy GM M 52 133 N
office
Deng Baojun Deputy GM M 55 Office leaving 134 N
Pan Rangren Deputy GM M 52 Office leaving 133 N
Currently in
Wei Pingxiao CFO M 53 133 N
office
Secretary of the Currently in
Chen Changbing M 49 95 N
Board office
Total -- -- -- -- 1,126 --
Delegated equity incentive for directors and senior executives in reporting period
□ Applicable √ Not applicable
V. Particulars of workforce
1. Number of staff, professional composition and education background
The number of current employees of parent company (people)
The number of current employees of main subsidiaries (people) 21,097
Total number of current employees (people) 21,192
The total number of employees in payroll (people) 21,192
The total number of retired staff and workers that the parent company
1,836
and main subsidiaries need to bear the costs (people)
Professional composition
Category of professional composition Number of professional composition (people)
Production staff
Salesman 16,534
Technical staff
Financial staff
Administrative staff 2,339
Logistics Staff 1,779
Total 21,192
Education background
Category of education Number (people)
Post-graduate qualification and above
Undergraduate 2,721
Junior college 7,377
Secondary technical school and below 10,969
Total 21,192
2. Remuneration policy
Sinopharm Accord and the subordinate enterprises provide perfect compensation and benefits for the staff, the
compensation level is closely combined with organization (total amount of labor, compensation strategy, job value),
staff (capacity development, performance results), and market (market level, talent competition). The company
adjusts the remuneration for staff having abilities and contributions every year by the responsibility sorting, position
evaluation, target remuneration range positioning, and the staff annual work performance and ability assessment; at
the same time, performance bonuses and performance closely link together, and realize win-win of the interests of
company and the interests of employees. Pay attention to the income growth requirements of low-income groups,
develop annual wage growth program, and implement after the deliberation and approval of the workers' congress.
3. Training programs
Based on the company's strategic direction and combined with the training needs, the human resources department
develops annual training plan and monthly implements in accordance with established plans. Develop the induction
training to new employees, carry out the targeted job skills training to on-the-job staff, implement the leadership
promotion projects to middle & senior management, establish the talent team adapting to the enterprises’ production
and management development, and ensure the healthy and sustainable development of enterprises.
4. Labor outsourcing
√ Applicable □ Not applicable
Total number of working hours of labor outsourcing (Hour) 448,920
Total remuneration paid of labor outsourcing (RMB) 22,424,512.06
Section IX. Corporate Governance
I. Corporate governance of the Company
Articles of Association are formulated at governance level. In compliance with requirements of Articles, rules of
procedures for shareholders’ meeting, board and board of supervisors, working system of strategy committee,
nomination committee, internal risk control and audit committee, remuneration and evaluation committee, general
manager and secretary to board, corporate governance system regarding information disclosure, connected
transactions, fund raising, performance of social responsibilities, inside information and informant management,
investor relation management, engagement of accounting firm and prevention of occupation by major shareholders
and connected parties of capital of listing companies are also established.
During the Reporting Period, the Article of Association has been revised according to regulatory requirements and
governance needs. The effective implementation of corporate governance system ensures the effective performance
of duties and responsibilities of respective committees, thereby facilitating the board of supervisors to play a
supervisory role and offering help for the board to make scientific decisions.
Is there any difference between the actual condition of corporate governance and relevant regulations about corporate governance for
listed company from CSRC?
□Yes √ No
There are no differences between the actual condition of corporate governance and relevant regulations about corporate governance
for listed company from CSRC.
II. Independency of the Company relative to controlling shareholders’ in aspect of businesses,
personnel, assets, organization and finance
The Company totally separates from the controlling shareholders in business, personnel, assets, institutions,
financial and other aspects, with independent and complete self-management ability.
1. The business: the Company was independent from controlling shareholders, having a complete business system
and self-managing ability; the company has independent procurement and sales system thus all procurement and
sales of drugs and raw materials is in charge of the purchasing department and subordinate subsidiary, branch and
production enterprises; production, supply, marketing and R & D separate from each other; the Company is a legal
market person with independent operation.
2. Personnel: procedures of the controlling shareholder nominating directors and general and deputy general
manager are legal; no intervene on the appointment and removal of personnel made by the board of directors and
shareholders’ meeting happened; the Company set up independent human resource department, responsible for
assessment, training and salary review on staff, making rules and regulations and handbook the employees should
abide by. Labor, personnel, wages and pension, medical insurance and other insurance are independently managed.
3. Institution: production and operation mechanism and administrative management is completely independent from
the controlling shareholder or actual controller; offices and sites of business operation separate from the controlling
shareholder; the Company established corporate governance structure where the board of directors, board of
supervisors and managers carry out their duties and exercise their respective duties in accordance with relevant
provisions of the articles of association.
4. Asset: property and rights relationship between the Company and the controlling shareholder is clear, with
independent operations; the company has independent production system, auxiliary production system and
supporting system; industrial property rights, trademarks, non-patented technology and other intangible assets
owned by the Company and its subsidiary.
5. Financial aspects: the Company established independent financial departments and independent financial
accounting system; the Company opened a bank account independently; the financial staff is independent without
taking part-time and receiving remuneration in the controlling shareholder; the Company pays tax independently.
III. Horizontal competition
√ Applicable □ Not applicable
Nature of Work schedule
Name of controlling
Type controlling Reason Solution measure and follow-up
shareholder
shareholder plan
Distribution
subsidiary of In March 2016, Sinopharm
Sinopharm Holding Holding issued a commitment
established some letter of avoiding horizontal
social retail competition with Sinopharm
pharmacy, which Accord, and promise to solve
Horizontal Normally
Sinopharm Holding SASAC might has horizontal the horizontal competition in
competition performing
competition with the respect of pharmaceutical
Guoda Drugstore, retail business in an
the subordinate appropriate way within five
enterprise of the years since the date when
listed company after reorganization completed
restructuring
Distribution
subsidiary of In March 2016, Sinopharm
Sinopharm Holding Holding issued a commitment
established some letter of avoiding horizontal
social retail competition with Sinopharm
pharmacy, which Accord, and promise to solve
Horizontal Normally
Sinopharm Group SASAC might has horizontal the horizontal competition in
competition performing
competition with the respect of pharmaceutical
Guoda Drugstore, retail business in an
the subordinate appropriate way within five
enterprise of the years since the date when
listed company after reorganization completed
restructuring
IV. AGM (Annual General Meeting) and extraordinary shareholders’ general meeting held in the
Period
1. AGM
Ratio of investor
Session of meeting Type Date Date of disclosure Index of disclosure
participation
Juchao Website—
(http://www.cninfo.com.c
First extraordinary
Extraordinary n) “Resolution Notice of
general meeting of 68.61% 2016-01-19 2016-01-20
general meeting First extraordinary
2016
general meeting of 2016”
No.: 2016-10
Juchao Website—
Second (http://www.cninfo.com.c
extraordinary Extraordinary n) “Resolution Notice of
58.89% 2016-04-06 2016-04-07
general meeting of general meeting Second extraordinary
2016 general meeting of 2016”
No.: 2016-39
Juchao Website—
(http://www.cninfo.com.c
Annual general
AGM 61.78% 2016-04-22 2016-04-23 n) “Resolution Notice of
meeting 2015
AGM of 2015” No.:
2016-45
Juchao Website—
(http://www.cninfo.com.c
Third extraordinary
Extraordinary n) “Resolution Notice of
general meeting of 69.77% 2016-06-16 2016-06-17
general meeting Third extraordinary
2016
general meeting of 2016”
No.: 2016-62
Juchao Website—
(http://www.cninfo.com.c
Fourth extraordinary
n) “Resolution Notice of
general meeting of AGM 55.22% 2016-09-02 2016-09-03
Fourth extraordinary
2016
general meeting of 2016”
No.: 2016-81
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
V. Responsibility performance of independent directors
1. The attending of independent directors to Board meetings and general meeting
The attending of independent directors to Board Meeting
Times of Board
Absent the
meeting Times of Times of
Name of independent Times of Times of Meeting for the
supposed to attending by entrusted
director Presence Absence second time in a
attend in the communication presence
row (Y/N)
report period
He Zhiyi 10 1 9 0 0 N
Xiong Chuxiong 10 4 6 0 0 N
Xiao Shengfang 10 2 8 0 0 N
Times for attending general meeting
from independent directors
Explanation of absent the Board Meeting for the second time in a row
2. Objection for relevant events from independent directors
Independent directors come up with objection about Company’s relevant matters
□Yes √No
Independent directors has no objections for relevant events in reporting period
3. Other explanation about responsibility performance of independent directors
The opinions from independent directors have been adopted
√ Yes □ No
Explanation on advice that accepted/not accepted from independent directors
During the reporting period, the independent directors performed their duties in a careful, diligent, dedicated attitude
in accordance with requirements of the \"Working System of Independent Director\", offered some useful suggestions
and opinions on business decision-making, legal affairs, financial management and other aspects; carefully
examined important matters those needed opinions of independent directors, made independent judgments and
issued a written independent opinion on major related transactions, daily related transactions, accountancy hiring
and other matters, playing a positive role in safeguarding the legitimate rights and interests of small shareholders.
Besides, independent directors played an important role in operation of special committee. At the same time, the
Company can guarantee independent directors and other directors of the same right to know. During the reporting
period, the independent directors have no objection on the related issues of the Company.
VI. Duty performance of the special committees under the board during the reporting period
(i) Duties fulfillment of the board of directors and audit committee on internal control over risk
Internal control on risk and Audit Committee of the board of directors of the company comprises 3 independent
non-executive directors and three directors, including the convener (professional accountant) is an independent
director. In accordance with relevant provisions of China Securities Regulatory Commission and Shenzhen Stock
Exchange and working system, Internal control on risk and Audit Committee of the board of directors seriously
performed duties in a dedicated attitude. In the annual financial report audit, they acted as supervisors, maintained
individuality of audit and issued a series of notices such as the Written Opinion on Financial Accounting Statements
Issued by the Company before CPA of Annual Examination Entered, the Written Opinion on Financial Accounting
Statements after Preliminary Audit Issued by CPA of Annual Examination, the Summary Report of Internal Risk
Control and Audit Committee on the Annual Audit Work of CPA as well as the Resolution on Rehire the Audit
Institution. Its main duties comprise the following:
1. Risk internal control and audit committee is responsible for determining the audit work schedule, negotiating
with CPA who engages in audit;
2. Before CPA enters, audit committee should review the financial statements prepared by the Company and issue
written opinions;
3. Strengthen communication with the CPA, and urge them to submit audit report within stipulated time with
urgency letter;
4. Review again the financial statements after the CPA issues preliminary opinion, and issue written opinions;
5. The Committee held annual work conference 2016, approved proposal of financial accounting report, summary
report of annual audit work of CPA and rehiring Ernst & Young CPA (Special General Partnership) as the audit
institution, and then formed a resolution to submit to board of directors for approval.
(ii) Duties fulfillment of Remuneration and Appraisal Committee
As special working mechanism of the board of directors, the remuneration and appraisal committee is responsible
for approving the assessment standard of directors and senior executives, formulating and reviewing compensation
policies and programs of directors and executive. And they take charge in examining according to the standard and
policies. The remuneration and appraisal committee is composed of three directors, including two independent
directors; convener is He Zhiyi, an independent director.
During the reporting period, remuneration and assessment committee actively performed duty; clearly defined their
responsibilities; did serious research and appraisal on the remuneration and appraisal system, especially salary,
assessment system and program over directors, supervisors and senior executive. According to working rules of the
remuneration and appraisal committee, they have rights to check regular reports, meetings records, business
planning and other materials by telephone, interviews and other methods to learn the performance of directors,
executives. And they’re required to submit problems existing in implementation of system to the Board of Directors
and raise up suggestion on them. Their contents are as follows:
1. In 2016, the remuneration and appraisal committee carried out the performance evaluation of executives
according to the 2015 Annual operation standard and performance.
2. It proposed the \"2017 Evaluation Scheme of Operating Performance\", and submitted it to the board of directors
for approval.
3. The remuneration and appraisal committee approved salary of directors, supervisors and senior executives
disclosed in 2016 annual report. And it issued the following opinions:
Compensation decision procedures of directors, supervisors and senior management personnel was in accordance
with the provisions; the standard was in accordance with the remuneration system; the disclosure of 2016 annual
report about personnel salary of the directors, supervisors and senior management is real and accurate.
VII. Works from Supervisory Committee
The Company has risks in reporting period that found in supervisory activity from supervisory committee
□ Yes √ No
Supervisory committee has no objection about supervision events in reporting period
VIII. Examination and incentives of senior management
Senior executives of the Company took responsibility for the board of directors, in the reporting period, the board
of directors implemented the performance checking mechanism that the remuneration of senior executives related
with their performance checking, with achievement as direction, and made relevant reward and punishment
according to target completion. The Company’s relevant incentive and restriction mechanism gradually in order to
further exert the enthusiasm and creativity of senior executives, urge the senior executives to perform the obligations
of being honest and diligent. The Company had no incentive mechanism for senior executives such as stock option,
purchase of management team and equity held by owner.
IX. Internal Control
1. Details of major defects in IC appraisal report that found in reporting period
□Yes √ No
2. Appraisal Report of Internal Control
Disclosure date of full internal control
2017-03-23
evaluation report
Disclosure index of full internal control ”Self-evaluation report of internal control for 2016” in Juchao website
evaluation report (www.cninfo.com.cn) appointed by Shenzhen Stock Exchange
The ratio of the total assets of units
included in the scope of evaluation
accounting for the total assets on the 66.53%
company's consolidated financial
statements
The ratio of the operating income of units
included in the scope of evaluation
accounting for the operating income on the 65.92%
company's consolidated financial
statements
Defects Evaluation Standards
Category Financial Reports Non-financial Reports
Financial report defects are mainly judged Non-financial report defects are mainly
and decided by the degree of influence and judged and decided by the degree of
the likelihood of occurrence to the influence and the likelihood of occurrence
misstatements of financial reports caused by of defects to the validity of business
defects. (1) Significant defects: a combination process. (1) Significant defects: a
of one or multiple internal control defects that combination of one or multiple internal
exists in internal control and may cause the control defects that may cause the
material misstatements in financial enterprise’s serious deviation to internal
Qualitative criteria statements cannot be prevented, found or control objectives; (2) Major defects: a
corrected in time; (2) Major defects: a combination of one or multiple internal
combination of one or multiple internal control defects whose severity level and
control defects that exists in internal control economic consequences are lower than
and has lower severity level than significant significant defects but still may cause the
defects but still should be concerned by the enterprise’s deviation to internal control
superintendents of enterprise financial objectives; (3) Common defects: other
reports; (3) Common defects: other defects defects except for significant and major
except for significant and major defects. defects.
Quantitative criteria: a quantitative
criterion determines the degree of
importance of the company’s defects
based on the amount of direct loss and the
degree of significant influence to the
company. (1) Significant defects: the
amount of direct property loss is or more
than 10 million Yuan, or has been
Quantitative criteria: a quantitative criterion
officially disclosed and caused negative
determines the degree of importance of
effects to periodic report disclosure of the
misstatements (including missing reports) in
joint-stock companies; (2) Major defects:
the consolidated statements of listed
the amount of direct property loss is
companies based on the consolidated
Quantitative standard between 5 million and 10 million Yuan,
statement data. (1) Significant defects: equal
or has been punished by the national
to or greater than 5% of profit before tax (2)
government departments but has not
Major defects: between 1% and 5% of profit
caused negative effects to periodic report
before tax; (3) Common defects: less than or
disclosure of the joint-stock
equal to 1% of profit before tax.
companies;(3) Common defects: the
amount of direct property loss is between
0.1 million and 5 million Yuan, or has
been punished by the provincial or sub-
provincial government departments but
has not caused negative effects to periodic
report disclosure of the joint-stock
companies.
Amount of significant defects in financial
reports
Amount of significant defects in non-
financial reports
Amount of important defects in financial
reports
Amount of important defects in non-
financial reports
X. Auditing report of internal control
√ Applicable □ Not applicable
Deliberations in Internal Control Audit Report
According to relevant regulations and “Basic Rules of Internal Control for Enterprises”, China National Accord Medicines
Corporation Ltd. in all major aspects, keeps an efficiency of internal control of financial report dated 31 December 2016.
Disclosure details of audit report of
Disclosed
internal control
Disclosure date of audit report of
2017-04-19
internal control (full-text)
Index of audit report of internal Audit Report of Internal Control under the name of China National Accord Medicines
control (full-text) Corporation Ltd. released on Juchao Website (http://www.cninfo.com.cn)
Opinion type of auditing report of
Standard unqualified
IC
Whether the non-financial report
No
had major defects
Carried out modified opinion for internal control audit report from CPA
□Yes √ No
The internal control audit report, issued by CPA, has concerted opinion with self-evaluation report, issued from the Board
√ Yes □ No
Section X. Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the date when
annual report approved for released or fail to cash in full on due
No
Section XI. Financial Report
Auditor’s report
Ernst & Young Hua Ming (2017) Shen Zi No. 61295118_H01
To the Shareholders of China National Accord Medicines Corporation Ltd.
We have audited the accompanying financial statements of China National Accord Medicines Corporation Ltd.
(hereinafter the “Company”) and its subsidiaries (“the Group”), which comprise the consolidated and company
balance sheets as at 31 December 2016, the consolidated and company income statements, the consolidated and
company statements of changes in shareholders’ equity and the consolidated and company cash flow statements for
the year then ended, and the notes to the financial statements.
Management’s Responsibility for the Financial Statements
Management of China National Accord Medicines Corporation Ltd. is responsible for the preparation and fair
presentation of these financial statements. This responsibility includes: (1) preparing and fairly presenting the
financial statements in accordance with Accounting Standards for Business Enterprises; (2) designing, implementing
and maintaining internal control as management determines is necessary to enable the preparation of the financial
statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit
in accordance with China Standards on Auditing. Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial
statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal control relevant to the entity’s preparation and fair presentation of the financial
statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made
by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinion.
- 101 -
Auditor’s report (Continued)
Ernst & Young Hua Ming (2017) Shen Zi No. 61295118_H01
Opinion
In our opinion, the accompanying financial statements present fairly, in all material respects, the financial position of
the Company and the Group as at 31 December 2016, and their financial performance and cash flows of the
Company and the Group for the year then ended in accordance with the requirements of Accounting Standards for
Business Enterprises.
Ernst & Young Hua Ming LLP Chinese Certified Public Accountant: Li Jian Guang
Beijing, the People’s Republic of China Chinese Certified Public Accountant: Zhang Yong Kun
17 April 2017
- 102 -
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED BALANCE SHEET
As at 31 December 2016
(Expressed in Renminbi Yuan)
ASSETS Note V 31 December 2016 31 December 2015
Current assets
Cash and bank balances 1 3,519,955,564.98 2,654,931,479.88
Notes receivable 2 1,504,000,909.21 912,341,423.78
Accounts receivable 3 7,654,225,510.89 7,827,466,715.32
Advances to suppliers 4 424,867,581.80 635,602,648.17
Interest receivable 5 450,722.67 197,875.00
Dividends receivable 6 - 964,600.00
Other receivables 7 474,787,643.28 498,631,612.04
Inventories 8 4,049,482,529.71 4,165,157,673.06
Assets classified as held-for-sale - 2,456,876.83
Other current assets 9 57,207,307.35 53,955,160.61
Total current assets 17,684,977,769.89 16,751,706,064.69
Non-current assets
Financial assets available-for-sale 10 13,685,760.00 2,675,760.00
Long-term equity investments 11 1,413,034,165.56 190,282,629.14
Investment properties 12 166,715,848.80 162,653,174.74
Fixed assets 13 487,009,600.10 1,372,649,567.99
Construction in progress 14 47,063,868.49 200,568,804.08
Intangible assets 15 320,435,400.89 409,306,586.01
Development costs 16 - 5,619,315.47
Goodwill 17 823,890,174.21 825,083,446.98
Long-term prepaid expenses 18 188,377,725.64 141,662,520.11
Deferred tax assets 19 72,914,722.30 134,785,070.05
Other non-current assets 20 94,649,476.09 116,342,755.28
Total non-current assets 3,627,776,742.08 3,561,629,629.85
Total assets 21,312,754,511.97 20,313,335,694.54
The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED BALANCE SHEET (Continued)
For the Year ended 31 December 2016
(Expressed in Renminbi Yuan)
LIABILITIES Note V 31 December 2016 31 December 2015
Current liabilities
Short-term borrowings 22 1,512,713,629.95 1,633,231,960.35
Notes payable 23 2,406,642,582.86 2,528,499,859.34
Accounts payable 24 6,701,558,514.10 6,011,673,284.50
Advances from customers 25 163,450,365.92 247,426,363.39
Employee benefits payable 26 195,138,079.85 249,760,884.00
Tax payable 27 187,043,717.52 144,411,878.93
Interest payable 28 6,956,463.02 7,297,682.23
Dividends payable 29 8,483,370.21 36,517,259.20
Other payables 30 917,193,911.34 1,155,395,354.95
Non-current liabilities due within one year 31 36,411,339.96 7,754,878.16
Other current liabilities 32 123,294.77 -
Total current liabilities 12,135,715,269.50 12,021,969,405.05
Non-current liabilities
Long-term borrowings 33 - 72,495,172.30
Long-term payables 34 14,616,598.34 13,785,657.94
Payable for specific projects 35 800,000.00 1,287,000.00
Provision 36 - 3,936,157.67
Deferred income 37 123,953,462.81 195,505,543.33
Long-term employee benefits payable 38 1,722,599.89 3,523,100.00
Deferred tax liabilities 19 76,535,704.01 83,695,072.39
Other non-current liabilities 39 45,427,343.31 45,427,343.31
Total non-current liabilities 263,055,708.36 419,655,046.94
Total liabilities 12,398,770,977.86 12,441,624,451.99
The accompanying notes form an integral part of these financial statements
SHAREHOLDERS’ EQUITY Note V 31 December 2016 31 December 2015
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED BALANCE SHEET (Continued)
For the Year ended 31 December 2016
(Expressed in Renminbi Yuan)
Shareholders’ equity
Share capital 40 362,631,943.00 362,631,943.00
Capital surplus 41 3,151,518,024.92 3,197,599,303.65
Other equity instruments 42 65,495,040.00 -
Surplus reserve 43 181,315,971.50 181,315,971.50
Retained earnings 44 4,689,189,642.51 3,611,377,326.14
Shareholders’ equity attributable
to shareholders of the parent 8,450,150,621.93 7,352,924,544.29
Non-controlling interests 45 463,832,912.18 518,786,698.26
Total shareholders’ equity 8,913,983,534.11 7,871,711,242.55
Total liabilities and shareholders’
equity 21,312,754,511.97 20,313,335,694.54
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 Year ended 31 December 2016
(Expressed in Renminbi Yuan)
Note V 2016
Operating revenue 46 41,248,429,322.91 37,819,277,959.01
Less: Operating costs 46 36,648,236,903.56 33,432,847,844.59
Tax and surcharge 47 124,271,433.05 99,159,941.59
Selling expenses 48 2,198,203,437.27 2,039,829,217.72
Administrative expenses 49 859,720,679.17 880,634,356.47
Finance costs 50 101,855,104.66 128,651,208.50
Impairment loss 51 (8,548,825.97) 59,537,034.70
Add: Investment income 52 223,467,928.58 56,212,724.93
Incl: Investment income from 97,075,494.40 58,544,653.18
associates
Operating profits 1,548,158,519.75 1,234,831,080.37
Add: Non-operating income 53 58,941,395.37 68,076,926.28
Incl: Gain from disposal of non-current
10,501,930.08 2,518,092.37
assets
Less: Non-operating expenses 54 6,842,790.86 5,402,071.03
Incl: Loss from disposal of non-current 1,326,826.43 1,162,517.88
assets
Total profit 1,600,257,124.26 1,297,505,935.62
Less: Income taxes 56 318,376,817.78 267,557,184.01
Net profit 1,281,880,306.48 1,029,948,751.61
Incl: Net profit of acquiree before business
combinations involving enterprises under
common control 260,527,573.39 247,889,700.57
Net profit attributable to shareholders of the parent 1,186,601,899.27 927,610,234.41
Profit or loss of non-controlling interests 95,278,407.21 102,338,517.20
Total comprehensive income 1,281,880,306.48 1,029,948,751.61
Incl: Total comprehensive income for the year 1,186,601,899.27 927,610,234.41
attributable to owners of the parent
Total comprehensive income for the year 95,278,407.21 102,338,517.20
attributable to non-controlling interests
Earnings per share
Basic earnings per share 2.80 2.19
Diluted earnings per share 2.80 2.19
The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For the Year ended 31 December 2016
(Expressed in Renminbi Yuan)
Shareholders’ equity attributable to shareholders of the parent Non-controlling
2016 Other equity Total equity
interests
Share capital instrument Capital surplus Surplus reserve Retained earnings Subtotal
Closing balance of the preceding year 362,631,943.00 - 1,863,894,533.34 181,315,971.50 3,045,551,246.71 5,453,393,694.55 113,081,262.72 5,566,474,957.27
Business combination involving
enterprises under common control - - 1,333,704,770.31 - 565,826,079.43 1,899,530,849.74 405,705,435.54 2,305,236,285.28
Opening balance of the current year 362,631,943.00 - 3,197,599,303.65 181,315,971.50 3,611,377,326.14 7,352,924,544.29 518,786,698.26 7,871,711,242.55
Movements in the current year - 65,495,040.00 (46,081,278.73) - 1,077,812,316.37 1,097,226,077.64 (54,953,786.08) 1,042,272,291.56
(1) Total comprehensive income - - - - 1,186,601,899.27 1,186,601,899.27 95,278,407.21 1,281,880,306.48
(2) Capital paid and reduced by
owners - 65,495,040.00 (46,081,278.73) - - 19,413,761.27 (117,965,822.18) (98,552,060.91)
1.Capital injection by owners - 5,114,297.00 263,030,592.50 - - 268,144,889.50 - 268,144,889.50
2.Significant reorganization - 60,380,743.00 (156,366,978.12) - - (95,986,235.12) - (95,986,235.12)
3. Acquisition of non-controlling
interests - - (152,385,126.76) - - (152,385,126.76) (124,729,773.24) (277,114,900.00 )
4.Others - - (359,766.35) - - (359,766.35) 6,763,951.06 6,404,184.71
(3) Profit distribution - - - - (108,789,582.90) (108,789,582.90) (32,266,371.11) (141,055,954.01)
1.Distribution to equity owners - - - - (108,789,582.90) (108,789,582.90) (32,266,371.11) (141,055,954.01)
Closing balance of the current 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
The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For the Year ended 31 December 2015
(Expressed in Renminbi Yuan)
Shareholders’ equity attributable to shareholders of the parent Non-controlling
2015 Total equity
Share capital Capital surplus Surplus reserve Retained earnings Subtotal interests
Closing balance of the preceding year 362,631,943.00 1,863,894,533.34 181,315,971.50 2,356,765,374.25 4,764,607,822.09 86,607,614.56 4,851,215,436.65
Business combination involving enterprises under
common control - 923,704,770.31 - 440,061,136.01 1,363,765,906.32 316,556,724.02 1,680,322,630.34
Opening balance of the current year 362,631,943.00 2,787,599,303.65 181,315,971.50 2,796,826,510.26 6,128,373,728.41 403,164,338.58 6,531,538,066.99
Movements in the current year - 410,000,000.00 - 814,550,815.88 1,224,550,815.88 115,622,359.68 1,340,173,175.56
(1) Total comprehensive income - - - 927,610,234.41 927,610,234.41 102,338,517.20 1,029,948,751.61
(2) Capital paid and reduced by owners - 410,000,000.00 - (25,233,029.93) 384,766,970.07 79,912,773.09 464,679,743.16
1.Capital injection by owners - - - - - 1,470,000.00 1,470,000.00
2.Capital contribution by non-controlling
shareholders of subsidiaries - 410,000,000.00 - - 410,000,000.00 2,470,000.00 412,470,000.00
3.Acquisition of non-controlling interests - from
business combination involving enterprises
under common control - - - (25,233,029.93) (25,233,029.93) (20,065,970.07) (45,299,000.00)
4.Acquisition of subsidiaries - from business
combination involving enterprises under
common control - - - - - 96,038,743.16 96,038,743.16
(3) Profit distribution - - - (87,826,388.60) (87,826,388.60) (66,628,930.61) (154,455,319.21)
1.Distribution to owners - - - (72,526,388.60) (72,526,388.60) (1,032,000.00) (73,558,388.60)
2.Distribution to Guoda Pharmacy - business
combination involving enterprises under
common control - - - - - (50,896,930.61) (50,896,930.61)
3.Distribution to South Pharma & Trade -
business combination involving enterprises
under common control - - - (15,300,000.00) (15,300,000.00) (14,700,000.00) (30,000,000.00)
Closing balance of the current year 362,631,943.00 3,197,599,303.65 181,315,971.50 3,611,377,326.14 7,352,924,544.29 518,786,698.26 7,871,711,242.55
The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED CASH FLOW STATEMENT
For the Year ended 31 December 2016
(Expressed in Renminbi Yuan)
Note V 31 December 2016 31 December 2015
1.CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from sales of good or rendering of
services 45,257,448,760.86 44,506,946,623.95
Tax refunds 16,985,904.86 10,573,860.85
Cash receipts related to other operating activities 58 314,523,960.87 255,495,369.93
Sub-total of cash inflows from operating activities 45,588,958,626.59 44,773,015,854.73
Cash paid for goods and services 39,904,501,683.58 39,360,953,053.57
Cash paid to and on behalf of employees 1,794,695,502.08 1,636,966,579.52
Cash paid for all types of taxes 1,124,648,508.06 1,093,677,245.33
Cash payments related to other operating
activities 58 1,292,567,345.02 1,224,002,832.51
Sub-total of cash outflows from operating
activities 44,116,413,038.74 43,315,599,710.93
Net cash flows from operating activities 59 1,472,545,587.85 1,457,416,143.80
2.CASH FLOWS FROM INVESTING ACTIVITIES
Cash received from recovery of investments 226,000.00 2,385,000.00
Cash received from returns on investments 41,420,278.36 41,849,691.77
Net cash received from disposal of fixed assets,
intangible assets and other long-term assets 23,568,618.35 11,550,816.84
Cash receipts related to other investing activities 1,604,932,810.96 6,112,292,889.48
Sub-total of cash inflows from investing activities 1,670,147,707.67 6,168,078,398.09
The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED CASH FLOW STATEMENT (Continued)
For the Year ended 31 December 2016
(Expressed in Renminbi Yuan)
Note V 2016
2.CASH FLOWS FROM INVESTING ACTIVITIES(Continued)
Cash paid for acquisition of fixed assets,
265,885,799.28 300,373,202.53
intangible assets and other long-term assets
Cash paid for acquisition of investments 21,860,000.00 7,870,000.00
Net cash paid for acquisition of subsidiaries and
59 11,639,196.11 95,524,807.48
other business units
Net cash paid from disposal of subsidiaries and other
59 105,527,131.30 -
business units
Cash payments related to other investing activities 58 1,274,374,346.93 6,316,253,840.82
Sub-total of cash outflows from investing activities 1,679,286,473.62 6,720,021,850.83
Net cash flows from investing activities (9,138,765.95) (551,943,452.74)
3.CASH FLOWS FROM FINANCING ACTIVITIES
Cash proceeds from investments by others 271,286,689.50 413,940,000.00
Incl: Cash received from capital contributions from
3,470,000.00 2,470,000.00
non-controlling shareholders of subsidiaries
Cash received from borrowings 467,980,655.24 754,980,434.42
Cash receipts related to other financing activities 58 297,999,324.21 290,547,613.00
Sub-total of cash inflows from financing activities 1,037,266,668.95 1,459,468,047.42
Cash repayments for debts 787,922,055.10 870,239,116.16
Cash payments for distribution of dividends or profit and
254,987,476.35 259,255,184.14
interest expenses
Incl: Profit and dividends paid to non-controlling
8,287,977.64 37,722,183.44
shareholders of subsidiaries
Cash payments related to other financing activities 58 470,599,856.33 349,479,544.63
Sub-total of cash outflows from financing activities 1,513,509,387.78 1,478,973,844.93
Net cash flows from financing activities (476,242,718.83) (19,505,797.51)
The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED CASH FLOW STATEMENT (Continued)
For the Year ended 31 December 2016
(Expressed in Renminbi Yuan)
Note V 2016
4.EFFECT OF FOREIGN EXCHANGE RATE CHANGES (563,036.58) (97,756.05)
ON CASH AND CASH EQUIVALENTS
5.NET INCREASE IN CASH AND CASH EQUIVALENTS 59 986,601,066.49 885,869,137.50
Add: Cash and cash equivalents at beginning of the year 2,164,308,359.05 1,278,439,221.55
6.CASH AND CASH EQUIVALENTS AT END OF YEAR 59 3,150,909,425.54 2,164,308,359.05
The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY BALANCE SHEET
For the Year ended 31 December 2016
(Expressed in Renminbi Yuan)
ASSETS Note XIV 31 December 2016 31 December 2015
Current assets
Cash and bank balances 1,342,041,409.86 429,437,078.35
Notes receivable 79,868,867.49 43,896,287.87
Accounts receivable 1 397,351,577.24 381,093,808.53
Advances to suppliers 2,135,439.82 5,452,046.55
Interest receivable 2,029,125.06 2,053,659.27
Other receivables 2 1,801,567,851.50 1,613,862,656.17
Inventories 184,708,273.76 182,659,794.51
Other current assets 6,937,946.90 39,482.38
Total current assets 3,816,640,491.63 2,658,494,813.63
Non-current assets
Long-term equity investments 3 5,914,542,602.10 2,795,231,208.93
Investment properties 3,571,809.38 4,379,786.84
Fixed assets 16,555,996.92 391,937,393.50
Construction in progress - 129,851,067.29
Intangible assets 1,534,730.15 35,678,610.77
Long-term deferred expenses 6,645,211.13 7,417,691.74
Deferred tax assets 2,869,931.88 2,906,189.80
Other non-current assets 9,859,840.00 34,856,698.50
Total non-current assets 5,955,580,121.56 3,402,258,647.37
Total assets 9,772,220,613.19 6,060,753,461.00
The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY BALANCE SHEET (Continued)
For the Year ended 31 December 2016
(Expressed in Renminbi Yuan)
LIABILITIES 31 December 2016 31 December 2015
Current liabilities
Short-term borrowings 50,000,000.00 106,000,000.00
Notes payable 334,383,191.54 285,394,838.22
Accounts payable 391,726,381.93 292,794,309.39
Advances from customers 2,997,964.16 5,841,769.74
Employee benefits payable 30,618,183.84 22,441,125.24
Tax payables 3,308,582.29 10,770,924.28
Interest payable 37,801.50 354,492.17
Other payables 1,100,143,593.55 680,741,770.79
Non-current liabilities due within one
31,600,000.00 -
year
Other current liabilities 123,294.77 -
Total current liabilities 1,944,938,993.58 1,404,339,229.83
Non-current liabilities
Long-term borrowings - 72,495,172.30
Payables for specific projects 800,000.00 800,000.00
Deferred income 1,570,000.00 5,074,999.99
Long-term employee benefits payable 26,000.00 72,000.00
Deferred tax liabilities 3,773,319.00 3,773,319.00
Total non-current liabilities 6,169,319.00 82,215,491.29
Total liabilities 1,951,108,312.58 1,486,554,721.12
The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY BALANCE SHEET (Continued)
For the Year ended 31 December 2016
(Expressed in Renminbi Yuan)
SHAREHOLDERS’ EQUITY 31 December 2016 31 December 2015
Shareholders’ equity
Share capital 362,631,943.00 362,631,943.00
Capital surplus 4,381,845,619.03 1,869,692,921.70
Surplus reserves 181,315,971.50 181,315,971.50
Other equity instruments 65,495,040.00 -
Retained earnings 2,829,823,727.08 2,160,557,903.68
Total shareholders’ equity 7,821,112,300.61 4,574,198,739.88
Total liabilities and shareholders’ equity 9,772,220,613.19 6,060,753,461.00
The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY INCOME STATEMENT
For the Year ended 31 December 2016
(Expressed in Renminbi Yuan)
Note XIV 2016
Operating revenue 4 3,138,854,618.97 2,863,660,401.47
Less: Operating costs 4 3,004,349,631.69 2,737,910,097.84
Tax and surcharge 7,524,958.43 6,075,183.19
Selling expenses 50,852,431.61 46,270,636.71
Administrative expenses 86,328,173.16 55,216,452.28
Finance costs (60,205,031.57) (66,168,235.86)
Impairment loss 337,659.11 487,293.37
Add: Investment income 5 588,945,025.76 571,927,007.23
Incl: Investment income from associates 209,757,868.18 57,413,887.70
Operating profits 638,611,822.30 655,795,981.17
Add: Non-operating income 13,669,692.02 6,114,684.26
Incl: Gain from disposal of
non-current assets 49,837.86
Less: Non-operating expenses 698,639.61 -
Incl: Loss from disposal of
non-current assets 324,736.85 -
Total profit 651,582,874.71 661,910,665.43
Less: Income taxes 12,348,207.78 23,664,542.54
Net profit 639,234,666.93 638,246,122.89
Total comprehensive income 639,234,666.93 638,246,122.89
The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For the Year ended 31 December 2016
(Expressed in Renminbi Yuan)
Other equity
2016 Share capital Capital surplus Surplus reserve Retained earnings Total equity
instruments
Closing balance of the preceding year 362,631,943.00 - 1,869,692,921.70 181,315,971.50 2,160,557,903.68 4,574,198,739.88
Others - - - - 138,820,739.37 138,820,739.37
Opening balance of the current year 362,631,943.00 - 1,869,692,921.70 181,315,971.50 2,299,378,643.05 4,713,019,479.25
Movements in the current year - 65,495,040.00 2,512,152,697.33 - 530,445,084.03 3,108,092,821.36
(1) Total comprehensive income - - - - 639,234,666.93 639,234,666.93
(2) Capital paid and reduced by
- 65,495,040.00 2,512,152,697.33 - - 2,577,647,737.33
owners
1. Capital injection by owners - 5,114,297.00 263,030,592.50 - - 268,144,889.50
2. Significant reorganization - 60,380,743.00 2,249,481,871.18 - - 2,309,862,614.18
3. Others - - (359,766.35) - - (359,766.35)
(3) Profit distribution - - - - (108,789,582.90) (108,789,582.90)
1. Distribution to owners - - - - (108,789,582.90) (108,789,582.90)
Closing 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
The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Continued)
For the Year ended 31 December 2015
(Expressed in Renminbi Yuan)
2015 Share capital Capital surplus Surplus reserve Retained earnings Total equity
Closing balance of the preceding year and 362,631,943.00 1,869,692,921.70 181,315,971.50 1,594,838,169.39 4,008,479,005.59
opening balance of the current year
Movements in the current year - - - 565,719,734.29 565,719,734.29
(1) Total comprehensive income - - - 638,246,122.89 638,246,122.89
(2) Profit distribution - - - (72,526,388.60) (72,526,388.60)
1. Distribution to owners - - - (72,526,388.60) (72,526,388.60)
Closing balance of the current year 362,631,943.00 1,869,692,921.70 181,315,971.50 2,160,557,903.68 4,574,198,739.88
The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY CASH FLOW STATEMENT
For the Year ended 31 December 2016
(Expressed in Renminbi Yuan)
2016
1.CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from sales of good or rendering of
services 3,401,302,572.88 3,285,822,755.42
Cash receipts related to other operating activities 51,854,505.86 22,129,617.81
Sub-total of cash inflows from operating activities 3,453,157,078.74 3,307,952,373.23
Cash paid for goods and services 3,186,087,599.05 3,192,267,206.67
Cash paid to and on behalf of employees 64,460,810.25 54,576,026.24
Cash paid for all types of taxes 41,496,603.39 47,163,193.25
Cash payments related to other operating
activities 24,972,169.45 26,759,541.81
Sub-total of cash outflows from operating
activities 3,317,017,182.14 3,320,765,967.97
Net cash flows from operating activities 136,139,896.60 (12,813,594.74)
2. CASH FLOWS FROM INVESTING ACTIVITIES
Cash received from returns of investments 418,909,426.90 616,517,083.38
Net cash received from disposal of fixed assets,
intangible assets and other long-term assets 5,580.00 -
Net cash paid from disposal of subsidiaries and
other business 156,111,000.00 -
Cash receipts related to other investing activities 1,857,919,415.00 2,604,319,315.47
Sub-total of cash inflows from investing activities 2,432,945,421.90 3,220,836,398.85
Cash paid for acquisition of fixed assets,
intangible assets and other long-term assets 46,855,153.72 145,095,042.98
Net cash paid for purchasing subsidiaries and
other business - 9,452,000.00
Cash payments related to other investing
activities 2,005,548,023.10 3,081,753,248.70
Sub-total of cash outflows from investing
activities 2,052,403,176.82 3,236,300,291.68
Net cash flows from investing activities 380,542,245.08 (15,463,892.83)
The accompanying notes form an integral part of these financial statements
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY CASH FLOW STATEMENT (Continued)
For the Year ended 31 December 2016
(Expressed in Renminbi Yuan)
2016
3. CASH FLOWS FROM FINANCING ACTIVITIES
Cash proceeds from investments by others 267,816,689.50 -
Cash received from borrowings 80,100,000.00 112,799,724.30
Cash receipts related to other financing activities 9,255,846,037.96 220,661,123.28
Sub-total of cash inflows from financing activities 9,603,762,727.46 333,460,847.58
Cash repayments for debts 189,800,218.30 10,000,000.00
Cash payments for distribution of dividends or
116,941,247.37 85,759,595.29
profit and interest expenses
Cash payments related to other financing
8,901,099,071.96 37,160,001.18
activities
Sub-total cash outflows from financing activities 9,207,840,537.63 132,919,596.47
Net cash flows from financing activities 395,922,189.83 200,541,251.11
4. NET INCREASE IN CASH AND CASH
912,604,331.51 172,263,763.54
EQUIVALENTS
Add: Cash and cash equivalents at beginning of the 429,437,078.35 257,173,314.81
year
5. CASH AND CASH EQUIVALENTS 1,342,041,409.86 429,437,078.35
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 31 December 2016
(All amounts in Renminbi “RMB” unless otherwise stated)
I Profile of the Company
(1) Historical development and basic information
As approved by the People’s Government of Shenzhen (SFBF (1993) No.356), China National Accord
Medicines Corporation Ltd. (hereinafter referred to as the “the Company”), formerly known as Shenzhen
Health Mineral Water Corp., Ltd., was registered as a joint stock liability limited company on 1 February
1993 through stock transformation. In March 1993, with the approval from the Shenzhen Branch of the
People’s Bank of China, the Company issued 30 million A shares (including 16.5 million public shares, 3.5
million employee shares and 10 million corporation shares) and 20 million B shares. After this issuance,
the Company’s share capital was RMB105 million. Through convert capital surplus into share capital,
bonus issues and issuance of shares for years, the share capital of the Company increased to
RMB362,631,943 as at 31 December 2016.
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 Management Company’s 100%
equity interests in 11 pharmaceutical companies and certain properties as well as 51% equity interests in
Shenzhen Tefa Modern Computer Co., Ltd. The above 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, the Company’s original major shareholder, Shenzhen Investment Management
Company, entered into a Stock Transfer Agreement with Sinopharm Group Co., Ltd. (hereinafter referred
to as “Sinopharm Group”) to transfer its 43.33% shares in the Company to Sinopharm Group. The legal
procedures of the above equity transfer were completed on 9 December 2004. At the same time, as
approved by the State-owned Assets Supervision and Administration Commission of the State Council
(GZCQ (2004) No.525) and the China Securities Regulatory Commission (ZJGSZ (2004) No.94), the
nature of these shares 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, the Company’s proposal on reformation of segregated stocks was approved. To gain
liquidity for the restricted stocks of the Company, the holders of the restricted stocks of the Company
agreed to pay the following consideration: based on the stock registration as of 27 April 2006, the
Company issued bonus shares on 28 April 2006 at the ratio of 3 shares to every 10 A shares to liquidated
A-shareholders which went public on the same day. After this bonus issue, the total number of shares of
the Company remained unchanged with corresponding changes in the composition of shareholdings.
On 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.
As of 31 December 2016, the total share capital was RMB362,631,943.
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)
I Profile of the Company (Continued)
(1) Historical development and basic information (Continued)
As of 31 December 2016, the total other equity instruments amounted to RMB65,495,040.00. 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.
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 RMB362,631,943. 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).
(2) Change in the consolidation scope and the significant reorganization in the current year
Subsidiaries consolidated in the financial statements for the current year and change in the consolidation
scope are shown in Note VI.
On 9 March 2016, the Board of the Company approved the reorganization plan regarding the commercial
and manufacturing business with related parties as follows:
1) The Company purchases 100% of the equity of Guoda Pharmacy, Foshan Nanhai, Guangdong
Uptodate & Special Medicines and 51% of the equity of South Pharma & Trade from the parent
company, Sinopharm Holding, and the related party, China National Pharmaceutical Foreign
Trade Co., Ltd.(“China Pharma & Trade”), respectively, with consideration of non-public issuance
of A share. Meanwhile, the Company purchased 49% of the equity in South Pharm & Trade from
its non-controlling shareholders, eleven natural persons with cash.
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)
I Profile of the Company (Continued)
(2) Change in the consolidation scope and the significant reorganization in the current year
(Continued)
2) The Company sold Pingshan pharmaceutical research & development manufacturing base
(“Pingshan base”) and 51% of the equity in 3 subsidiaries, including Sinopharm Group Zhijun
(Shenzhen) Pharmaceutical Co., Ltd. (“Zhijun Medicine”), Zhijun Pharmaceutical Trade Co., Ltd.
(“Zhijun Trade”), and Sinopharm Group Zhijun (Shenzhen) Pingshan Pharmaceutical Co., Ltd.
(“Pingshan Medicine”) and subscribe the new shares of Shanghai Shyndec Pharmaceutical Co.,
Ltd (“Shyndec Pharmaceutical”).
3) The Group’s parent and ultimate parent company is Sinopharm Group and China National
Pharmaceutical Group Corporation respectively.
4) These financial statements were authorized for issue by the board of directors of the Company on
17 April 2017.
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
(Note Ⅲ (10)), inventory costing methods (Note Ⅲ (11)), depreciation methods for fixed assets and
amortization method for intangible assets (NoteⅢ(15),Note III(18)), judgement basis for capitalization of
development costs (NoteⅢ(18)) , impairment of long-term assets (NoteⅢ(21)), revenue recognition (Note
Ⅲ(25)).
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)
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 year ended 31 December 2016 are in compliance with
the Accounting Standards for Business Enterprises, and truly and completely present the financial position
of the Group and the Company as of 31 December 2016 and the operating results, cash flows and other
information of the Group and the Company for the year then ended.
(2) Accounting year
The Company’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 controlling shareholder’s acquisition of the
party being absorbed) that are obtained by the absorbing party in a business combination shall be
measured at their carrying amounts at the combination date as recorded by the party being absorbed. The
difference between the carrying amount of the net assets obtained and the carrying amount of the
consideration paid for the combination (or the aggregate face value of shares issued as consideration)
shall be adjusted to share premium under capital surplus. If the capital surplus is not sufficient to absorb
the difference, any excess shall be adjusted against retained earnings. 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 the
acquirer’s interest in the fair value of the acquirer’s identifiable net assets, the difference is recognized as
goodwill; where the cost of combination is lower than the acquirer’s interest in the fair value of the
acquirer’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 31 December 2016
(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, the acquirer’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 the acquirer’s previously held equity interests of the acquiree involve other
comprehensive income (“OCI”) under the equity method, the accounting treatment is conducted on the
same basis as would have been required if the investee had directly disposed of the related assets or
liabilities, and the changes in shareholders’ equity other than net profit or loss, OCI and profit distributions
are charged to profit or loss for the current period on the acquisition date.
(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 a subsidiary’s equity and the portion of a subsidiary’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 the Group’s perspective.
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)
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, the subsidiary’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: financial assets at fair
value through profit or loss, receivables, available-for-sale financial assets and held-to-maturity
investments. The classification of financial assets depends on the Group’s intention and ability to hold the
financial assets. The Group currently holds the financial assets including receivables and available-for-
sale financial assets. Receivables, including notes receivables, accounts receivable and other receivables,
are non-derivative financial assets with fixed or determinable payments that are not quoted in an active
market. Available-for-sale financial assets are those non-derivative financial assets that are designated as
available for sale at initial recognition or are not classified as financial assets at fair value through profit or
loss, held-to-maturity investments or borrowings and receivables.
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)
III Summary of significant accounting policies and accounting estimates (Continued)
(9) Financial instruments (Continued)
(a) Financial assets (Continued)
(ii) Recognition and measurement
Financial assets are recognized at fair value on the balance sheet when the Group becomes a party to the
contractual provisions of the financial instrument. The transaction expenses are included in receivables’
original book value, which is measured at amortized cost using the effective interest method. After initial
recognition, financial assets available-for-sale are measured at fair value.
The premium/discount is amortized using the effective interest method and recognized as interest income
or expense. A gain or loss arising from a change in the fair value of an available-for-sale financial asset is
recognized as other comprehensive income, except for impairment losses and foreign exchange gains
and losses resulted from monetary financial assets which are recognized in profit or loss, until the financial
asset is derecognized or determined to be impaired, at which time the accumulated gain or loss previously
recognized is transferred to profit or loss of the current period. Interests and dividends relating to an
available-for-sale financial asset are recognized in profit or loss of the current period. Investments in equity
instruments, which do not have quoted prices in an active market and whose fair values cannot be reliably
measured, are measured at cost.
(iii) Impairment of financial assets
The Group assesses the carrying amounts of receivables other than those at fair value through profit or
loss at each balance sheet date. If there is objective evidence that a financial asset is impaired, an
impairment loss is provided for.
Objective evidence refers to matters that occur after the financial assets have been recognized, affect the
estimated future cash flow and could be measured accurately by the Group.
When an impairment loss on a financial asset carried at amortized cost has occurred, the amount of loss
is provided for at the difference between the asset’s carrying amount and the present value of its estimated
future cash flows (excluding future credit losses that have not been incurred). If there is objective evidence
that the value of the financial asset recovered and the recovery is related objectively to an event occurring
after the impairment was recognized, the previously recognized impairment loss is reversed and the
amount of reversal is recognized in profit or loss.
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)
III Summary of significant accounting policies and accounting estimates (Continued)
(9) Financial instruments (Continued)
(a) Financial assets (Continued)
(iii) Impairment of financial assets (Continued)
Where there is objective evidence of impairment of available for sale financial assets, the cumulative loss
which results from a decline in fair value and is previously recognized in other comprehensive income is
removed from other comprehensive income and recognized in profit or loss. The cumulative loss removed
is measured as the difference between the acquisition cost and the current fair value, less any retrieved
costs, amortization and impairment loss previously recognized in profit or loss. In the case of equity
investments classified as available for sale, objective evidence of impairment would include a significant
or prolonged decline in the fair value of an investment below its cost. “Significant” is evaluated against the
original cost of the investment and “prolonged” against the period in which the fair value has been below
its original cost. Where there is evidence of impairment, the cumulative loss removed is measured as the
difference between the acquisition cost and the current fair value, less any impairment loss on that
investment previously recognized in profit or loss. Impairment losses on equity instruments classified as
available for sale are not reversed through profit or loss. Increases in their fair value after impairment are
recognized directly in other comprehensive income.
The determination of what is “significant” or “prolonged” requires judgement. In making this judgement,
the Group evaluates, among other factors, the duration or extent to which the fair value of an investment
is less than its cost.
(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.
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.
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)
III Summary of significant accounting policies and accounting estimates (Continued)
(9) Financial instruments (Continued)
(b) Financial liabilities
Financial liabilities are classified into the following categories at initial recognition: financial liabilities at fair
value through profit or loss and other financial liabilities. The financial liabilities of the Group mainly
comprise other financial liabilities, including payables and borrowings
Payables, including notes payable, accounts payable and other payables, are recognized initially at fair
value and subsequently measured at amortized cost using the effective interest method.
Borrowings are recognized initially at fair value, net of transaction costs incurred, and subsequently carried
at amortized costs using the effective interest method.
Other financial liabilities with maturities no more than one year are classified as current liabilities. Other
financial liabilities with maturities over one year but are due within one year at the balance sheet date are
classified as the current portion of non-current liabilities. Others are classified as non-current liabilities.
A financial liability is derecognized or partly derecognized when the current obligation is discharged or
partly discharged. The difference between the carrying amount of the financial liability or the derecognized
part of the financial liability and the consideration paid is recognized in profit or loss.
(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.
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)
III Summary of significant accounting policies and accounting estimates (Continued)
(10) Receivables
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 31 December 2016
(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.
(12) Assets classified as held for sale
Non-current assets or disposal group satisfying the following conditions will be classified as assets held
for sale: (i) the non-current assets or disposal group are instantly ready for sale under the custom terms;
(ii)the resolution regarding the disposal of the non-current assets or disposal group has been appropriately
approved. (iii)Company has signed an irrevocable agreement. (iv)The disposal will be accomplished within
1 year.
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)
III Summary of significant accounting policies and accounting estimates (Continued)
(12) Assets classified as held for sale (Continued)
Non-current assets which meet the conditions of assets classified as held for sale, excluding financial
assets, investment properties measured by the fair value method, and deferred income tax assets could
be appraised as the lower number of the book value and fair value minus disposal cost. The difference
between the fair value minus disposal cost and the book value should be recognized as an Impairment
loss.
Assets and liabilities among the non-current assets or disposal group that are classified as assets
classified as held for sale should be classified as current assets and current liabilities respectively, and
should be individually presented on the balance sheet.
(13) Long-term equity investments
Long-term equity investments comprise the Company’s long-term equity investments in its subsidiaries
and the Group’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 the Company’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 absorbing party’s share of the carrying amount of shareholders’ 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 the Group’s share of the fair value of the investee’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 the Group’s share of the fair value of the investee’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 31 December 2016
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(13) 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 the investor’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 in
shareholders’ 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 the Group’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 the Group’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)).
(14) Investment properties
Investment properties, including land use rights that have already been leased out, buildings that are held
for the purpose of leasing, and buildings that are being constructed or developed for the purpose of leasing
in future, are measured initially at cost. Subsequent expenditures incurred in relation to an Investment
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 31 December 2016
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(14) 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 Investment properties’ 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 (21)).
(15) 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 31 December 2016
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(15) 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 (21)).
(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 (28) (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 31 December 2016
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(16) Construction in progress
Construction in progress is measured at actual cost. Actual cost comprises construction costs, installation
costs, borrowing costs that are eligible for 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 (21)).
(17) Borrowing costs
The borrowing costs that are directly attributable to the acquisition and construction of a fixed asset that
needs a substantially long period of time for its intended use commence to be 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.
(18) 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 31 December 2016
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(18) Intangible assets (Continued)
Categories Useful lives
Land use rights Between the approved useful period and the Company’s
operating period
Software 3-5 years
Trademarks 5-10 years
Technology patents 5 years
Distribution network 20 years
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 31 December 2016
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(18) 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 (21)).
(19) Long-term prepaid expenses
Long-term prepaid expenses include the expenditure for improvements to fixed assets under operating
leases, and other expenditures that have been made but should be 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.
(20) 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.
(21) Impairment of long-term assets
Fixed assets, construction in progress, intangible assets with finite useful lives, long-term prepaid
expenses and investment properties measured using the cost model and long-term equity investments in
subsidiaries 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 the asset’s carrying amount exceeds its recoverable amount. The
recoverable amount is the higher of an asset’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.
III Summary of significant accounting policies and accounting estimates (Continued)
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)
(21) Impairment of long-term assets (Continued)
Goodwill that is separately presented in the financial statements，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.
(22) Employee benefits
Employee benefits mainly include short-term employee benefits, post-employment benefits, termination
benefits and other long-term employee benefits incurred in exchange for service rendered by employees
or various forms of rewards or compensation due to severance of 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
The Company’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 31 December 2016
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(22) 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.
(23) 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 31 December 2016
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(24) Dividend distribution
Cash dividend distribution is recognized as a liability in the period in which it is approved by shareholder
at the annual shareholders’ meeting.
(25) Revenue recognition
The amount of revenue is determined in accordance with the fair value of the consideration received or
receivable for the sale of goods and services in the ordinary course of the Group’s activities. Revenue is
shown net of discounts and returns.
Revenue can be recognized on condition that the transaction-related economic interest is expected to be
satisfied, the amount is able to reliably measured, and the following recognition conditions are met:
(a) Sale of goods
Revenue from the sale of goods is recognized when significant risks and rewards of ownership of the
goods are transferred to the buyer, the Company retains neither continuing managerial involvement to the
degree usually associated with ownership nor effective control over the goods sold, and it is probable that
the economic benefit associated with the transaction will flow to the Company and the relevant revenue
and costs can be measured reliably.
(b) Rendering of services
The Group provides freight, storage and other services to external parties. The freights are recognized as
revenue right after the goods are transported to the place of delivery according to contracts or agreements,
received and confirmed by the purchasers. Other revenue is determined in accordance with the amount
provided in the service period stipulated in the contract.
(c) Customer loyalty programme
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.
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)
III Summary of significant accounting policies and accounting estimates (Continued)
(26) Government grants
Government grants are transfers of monetary or non-monetary assets from the government to the Group
at nil consideration, including refund of taxes and financial subsidies, etc.
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.
(27) 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 in shareholders’ equity if it arises from a business
combination or relates to a transaction or event which is recognized directly in shareholders’ 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.
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)
III Summary of significant accounting policies and accounting estimates (Continued)
(27) Income tax（Continued）
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.
(28) 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.
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)
III Summary of significant accounting policies and accounting estimates (Continued)
(29) 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.
(30) 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 the Group’s management to make decisions about resources to be
allocated to the segment and to assess its performance, and (3) for which the information on financial
position, operating results and cash flows is available to the Group. If two or more operating segments
have similar economic characteristics and satisfy certain conditions, they are aggregated into one single
operating segment.
(31) Critical accounting estimates
The Group continually evaluates the critical accounting estimates and key judgments applied based on
historical experience and other factors, including expectations of future events that are believed to be
reasonable.
(a) Critical accounting estimates and key assumptions
The critical accounting estimates and key assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of assets and liabilities within the next accounting year are outlined
below:
(i) Accounting estimates on impairment of goodwill
The Group tests annually whether goodwill has suffered any impairment. The recoverable amount of asset
groups and groups of asset groups is the present value of the future cash flows expected to be derived
from them. These calculations require the use of estimates (Note V (17)).
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.
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)
III Summary of significant accounting policies and accounting estimates (Continued)
(a) Critical accounting estimates and key assumptions (Continued)
(i) Accounting estimates on impairment of goodwill (Continued)
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 than management’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 the Group’s accounting policy (Note III (10)), the Group’s management tests annually
whether receivables have suffered any impairment. Impairment of receivables has been assessed by
taking into account the customers’ credit history and financial position together with the current market
conditions. Even if the Group’s management has made bad debt provision for the expected loss at its best
estimate, there is a possibility that changes in customers’ financial position or market conditions will alter
the result.
(iii) Accounting estimates on impairment of inventories
In accordance with the Group’s accounting policy (Note III (11) (c)), the Group’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 the Group’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 31 December 2016
(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% or 25%
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%,6%,11%,13% or 17%
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 and business tax paid 5% or 7%
Educational surcharge Amount of VAT and business tax paid 3%
Local educational surcharge Amount of VAT and business tax paid 2%
2. Tax preferences
(a) In 2014, Zhijun Medicine obtained the Certificate of High-Tech Corporation issued by the Shenzhen
Bureau of Technology & Information, Bureau of Finance, National Tax Bureau and Local Tax Bureau.
The Certificate is valid from 2014 to 2016.
According to the 28th rule of the Corporation Income Tax Law of People’s Republic of China,
corporations which obtained the Certificate of High-Tech Corporation can obtained a tax deduction
and pay tax at a tax rate of 15%. The tax rate that is applicable to Zhijun Medicine is 15% (2015:
15%).
(b) In 2014, the Group’s subsidiary Sinopharm Holding Guangxi Logistics Co., Ltd. (“Sinopharm Guangxi
Logistics”) was approved by the Guangxi Local Tax Bureau to enjoy a tax discount applicable to
corporations in the region of Western Development to pay income tax at a tax rate of 15%. Due to
the real estate relocation income, the operating revenue’s proportion is below 70%, which does not
meet the requirements of the preferential tax rate, so Sinopharm Guangxi Logistics was subject to a
corporate income tax rate of 25% during the year. (2015: 15%).
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 of 15%. 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 31 December 2016
(All amounts in Renminbi “RMB” unless otherwise stated)
IV Taxation (Continued)
2. Tax preferences (Continued)
(c) 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 of 15% 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 of
15% 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 2015 and 2016,
the Urumqi Head Office, Changji Branch and Karamay Branch of Xinjiang New & Special Medicines
were subject to a reduced CIT rate of 15%.
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 2015 and 2016, the company was exempt from the local retained portion
of the corporate income tax (40%), and therefore subject to a CIT rate of 15%.
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 of 15%.
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 of 15% in 2015 and 2016.
(d) 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 of 20%. 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 of 50% of the income and pays income
tax at a rate of 20%. That is, the applicable corporate income tax rate is 10%.
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)
IV Taxation (Continued)
2. Tax preferences (Continued)
In 2016, the Group’s subsidiary Zhejiang Intlmedicine Pharmacy Dongshan Co., Ltd., Xinjiang New
& Special Medicines , Sinopharm Holding Guoda Pharmacy Hulun Buir Co., Ltd., the Shule Branch
and Kashgar Branch of Sinopharm Holding Xinjiang New & Special Medicines Chain Store Co., Ltd.
were qualified for the definition of small low-profit enterprise and the requirements under Cai shui
[2014] No. 34. Therefore, these companies enjoyed tax reduction of 50% of the income and paid
income tax at a rate of 20%. That is, the applicable corporate income tax rate was 10%. In 2015,
Sinopharm Holding Guangzhou Medical Treatment Management Co., Ltd, a subsidiary of the Group,
was qualified for small low-profit enterprise. Therefore, the company enjoyed tax reduction of 50% of
the income and paid income tax at a rate of 20%. However, in 2016, the company was not entitled to
the preferential tax rate for small small-profit enterprises.
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)
V Notes to the consolidated financial statements
1. Cash and bank balances
31 December 2016 31 December 2015
Cash on hand 6,164,382.85 2,846,748.55
Cash at banks 3,144,745,042.69 2,161,461,610.50
Other cash balances 369,046,139.44 490,623,120.83
- deposits for letters of credit 58,800.00 2,523,516.15
- deposits for bank acceptance
notes 333,961,620.45 360,316,626.32
-Cash deposit for pledged loan 31,255,582.91 127,782,978.36
-Term deposits longer than 3
3,770,136.08 -
months
3,519,955,564.98 2,654,931,479.88
Current deposits earn interest at the rate based on current deposit interest rates. Maturities of short-
term time deposits range from 1 month to 6 months depending on the fund arrangements of the Group,
and earn interest at the respective deposit rates. The maturities of bank notice deposits are 7 days
depending on the fund arrangement of the Group, and earn interest at respective deposit rates.
2. Notes receivable
31 December 2016 31 December 2015
Trade acceptance notes 594,546,810.36 383,605,635.52
Bank acceptance notes 909,454,098.85 528,735,788.26
1,504,000,909.21 912,341,423.78
At 31 December 2016, there were no notes receivable that were pledged (At 31 December 2015:
notes receivables that were pledged were RMB20,490,279.00). The notes receivable that were
pledged were guaranteed for bank acceptance notes.
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)
V Notes to the consolidated financial statements (Continued)
2. Notes receivable (Continued)
Notes receivable endorsed or discounted by the Group to other parties which were not yet due at 31
December 2016 and 31 December 2015 are as follows:
31 December 2016 31 December 2015
Derecognized Not derecognized Derecognized Not derecognized
Trade acceptance
notes - 159,504,195.71 - 88,924,715.00
Bank acceptance
notes 844,012,721.90 - 993,628,187.92 -
844,012,721.90 159,504,195.71 993,628,187.92 88,924,715.00
As at 31 December 2016 and 31 December 2015, notes that were converted into accounts
receivable due to the drawer’s inability to settle the note on maturity date are as follows:
31 December 2016 31 December 2015
Trade acceptance notes 148,322.25 -
3. Accounts receivable
31 December 2016 31 December 2015
Accounts receivable 7,703,120,162.25 7,901,159,744.78
Less: provision for bad debt (48,894,651.36) (73,693,029.46)
7,654,225,510.89 7,827,466,715.32
An aging analysis of accounts receivable is presented as follows:
31 December 2016 31 December 2015
Provision for bad Provision for bad
Carrying amount debts Carrying amount debts
Within 1 year 7,665,576,478.81 (26,371,938.74) 7,840,443,420.41 (33,586,945.38)
1 to 2 years 12,790,380.58 (1,297,920.86) 38,363,854.47 (20,435,791.30)
2 to 3 years 21,704,712.84 (19,101,203.39) 3,123,715.69 (2,089,361.64)
Over 3 years 3,048,590.02 (2,123,588.37) 19,228,754.21 (17,580,931.14)
7,703,120,162.25 (48,894,651.36) 7,901,159,744.78 (73,693,029.46)
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)
V Notes to the consolidated financial statements (Continued)
3. Accounts receivable (Continued)
Changes in provision for bad debts are presented as follows:
Reversal of
Increases
Opening Reversal in Written off in written off Decreased in Increased in Closing
in the
balance the year the year in previous reorganization merge balance
year
year
2016 73,693,029.46 1,786,013.00 (12,022,290.90) (14,517,375.00) 23,638.80 (68,364.00) - 48,894,651.36
2015 57,865,871.25 22,783,276.61 (10,395,957.75) (37,181.36) 28,377.60 - 3,448,643.11 73,693,029.46
The accounts receivable by category are analyzed below:
31 December 2016 31 December 2015
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 445,672,816.82 5.79% (11,559,178.29) 2.59% 343,642,906.84 4.35% (27,604,373.29) 8.03%
Items for
which
provision for
bad debt is
recognized
by group 7,236,776,975.66 93.95% (27,546,435.58) 0.38% 7,499,917,577.09 94.92% (31,445,629.72) 0.42%
Not
individually
significant
Items for
which
provision for
bad debt is
recognized
separately 20,670,369.77 0.26% (9,789,037.49) 47.36% 57,599,260.85 0.73% (14,643,026.45) 25.42%
7,703,120,162.25 100.00% (48,894,651.36) 0.63% 7,901,159,744.78 100.00% (73,693,029.46) 0.93%
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)
V Notes to the consolidated financial statements (Continued)
3. Accounts receivable (Continued)
At 31 December 2016, accounts receivable that are individually significant and individually assessed for
provisions are as follows:
Bad debt Assessment for
Carrying amount provision Age Rate impairment
Receivable of Receivable of medical
medical Within 1 insurance with no risk of
insurance 335,724,923.69 - year - recoverability
Receivable of franchises
Receivable of Within 1 within 1 year with no risk
franchises 23,722,754.02 - year - of recoverability
Sinopharm
Holding Receivable due from a
Heilongjiang Within 1 related party with no risk
Co., Ltd. 22,466,769.60 - year - of recoverability
Sinopharm Receivable due from a
Health Online Within 1 related party with no risk
Co., Ltd. 15,534,183.30 - year - of recoverability
Receivable of Credit
Receivable of Within 1 cards with no risk of
credit card 14,046,943.02 - year - recoverability
Disputed receivable with
Hubei Xianning higher risk of
Pharmaceutic 2 to 3 recoverability which is
al Co., Ltd. 11,559,178.29 (11,559,178.29) years 100.00% related to a lawsuit
Sinopharm
Holding Receivable due from a
Hulunbuir Co., Within 1 related party with no risk
Ltd. 6,373,883.21 - year - of recoverability
Receivable of E-
Receivable of E- Within 1 Business with no risk of
Business 5,624,876.37 - year - recoverability
Sinopharm Receivable due from a
Group Co., Within 1 related party with no risk
Ltd. 5,478,768.04 - year - of recoverability
Receivable of shopping
Receivable of Within 1 cards with no risk of
shopping card 5,140,537.28 - year - recoverability
Total 445,672,816.82 (11,559,178.29)
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)
V Notes to the consolidated financial statements (Continued)
3. Accounts receivable (Continued)
At 31 December 2015, accounts receivable that are individually significant and individually assessed
for provisions are as follows:
Carrying amount Bad debt provision Age Rate Assessment for impairment
Receivable of Within 1 Receivable of Medical Insurance with no
medical insurance 271,724,677.19 - year - risk of recoverability
Guangdong
Liyuan
Pharmaceutical Over 5 Disputed receivable with higher risk of
Co., Ltd. 14,517,375.00 (14,517,375.00) years 100% recoverability which has filed a lawsuit
Receivables of
Within 1 Receivable of retail stores with no risk of
retail stores
12,269,113.38 - year - recoverability
Receivables of
Within 1 Receivables of credit card with no risk of
credit cards
12,156,111.47 - year - recoverability
Hubei Xianning
Pharmaceutical 1 to 2 years Disputed receivable with higher risk of
Co., Ltd. 11,563,498.29 (11,563,498.29) 100% recoverability which has filed a lawsuit
The First Affiliated
Hospital of Sun Within 1
Yat-sen year
University 8,835,000.00 (883,500.00) 10% The probability of recovery is 90%.
Nanning Second
People’s Within 1
Hospital 6,400,000.00 (640,000.00) year 10% The probability of recovery is 90%.
Receivable of
Within 1 Receivable of Shopping Card with no
shopping card 6,177,131.51 - year - risk of recoverability
Total 343,642,906.84 (27,604,373.29)
The accounts receivable for which the Group recognized provision for bad debt using the aging
analysis method are presented as follows
31 December 2016 31 December 2015
Carrying amount Bad debt provision Carrying amount Bad debt provision
Amount Amount Proportion Amount Amount Proportion
Within 1 year 7,221,261,344.66 (25,898,202.34) 0.36% 7,479,036,688.79 (29,381,260.34) 0.39%
1 to 2 years 12,391,828.46 (954,110.33) 7.70% 18,640,056.59 (1,230,628.11) 6.60%
2 to 3 years 2,483,834.48 (374,438.91) 15.08% 1,426,049.71 (426,350.27) 29.90%
Over 3 years 639,968.06 (319,684.00) 49.95% 814,782.00 (407,391.00) 50.00%
7,236,776,975.66 (27,546,435.58) 0.38% 7,499,917,577.09 (31,445,629.72) 0.42%
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)
V Notes to the consolidated financial statements (Continued)
3. Accounts receivable (Continued)
The provision for bad debt was RMB1,786,013.00 in 2016, including RMB12,022,290.90
recovered or reversed. Important recovered or reversed bad debt items are listed below:
Reason for
recoverability or Original assessment for Recovered or Way of
reversal providing impairment reversed amount recovery
The First Affiliated Hospital of Sun Yat-sen Amount
University Amount received Uncertainty in recovery 883,500.00 received
Amount
Hainan Xinshitong Pharmaceutical Co., Ltd. Amount received Uncertainty in recovery 700,440.00 received
Amount
Nanning Second People’s Hospital Amount received Uncertainty in recovery 640,000.00 received
Amount
Qinzhou Secondary People’s Hospital Amount received Uncertainty in recovery 567,015.38 received
Amount
People’s Hospital of Qinzhou City Qinbei District Amount received Uncertainty in recovery 388,203.85 received
Amount
Chaozhou Central Hospital Amount received Uncertainty in recovery 384,690.40 received
Amount
Health Centre of Zengcheng City Shitan Town Amount received Uncertainty in recovery
