China National Accord Medicines Corporation Ltd.
Annual Report 2020
April 2021
1
Section I. Important Notice, Contents and Interpretation
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, Gu Guolin, person in charger of
accounting works and Wang Ying, person in charge of accounting organ
(accounting principal) hereby confirm that the Financial Report of 2020 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
Su Weiwei Independent Director Official business Chen Honghui
The profit distribution plan that deliberated and approved by the Board is:
based on total stock issued 428,126,983 shares, distributed 8.00 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.
2
Contents
Section I Important Notice, Contents and Interpretation .............................................................. 2
Section II Company Profile and Main Financial Indexes .............................................................. 5
Section III Summary of Company Business .................................................................................. 11
Section IV Discussion and Analysis of the Operation ................................................................... 15
Section V Important Events ............................................................................................................ 44
Section VI Changes in shares and particular about shareholders ............................................... 79
Section VII Preferred Stock ............................................................................................................ 90
section VIII Convertible Bonds.......................................................................................................91
Section IX Particulars about Directors, Supervisors, Senior Executives and Employees ......... 92
Section X Corporate Governance ................................................................................................. 105
Section XI Corporate bond ........................................................................................................... 114
Section XII Financial Report ........................................................................................................ 115
Section XIII Documents available for reference ......................................................................... 388
3
Interpretation
Items Refers to Contents
Listed Company, Company, the Company,
Refers to China National Accord Medicines Corporation Ltd.
Sinopharm Accord, the Group
“SINOPHARM” or “CNPGC” Refers to China National Pharmaceutical Group Corporation
Sinopharm Group Co., Ltd, Controlling shareholder of the
Sinopharm Holding Refers to
Company
Company Law Refers to Company Law of the People’s Republic of China
Securities Law Refers to Securities Law of the People’s Republic of China
Yuan, 10 thousand Yuan, 100 million Yuan Refers to RMB, RMB 10 thousand, RMB 100 million
Terminology: Refers to
SPD hospital logistics supply chain extension business, IVD
4D business Refers to diagnostic reagent business, CSSD disinfection service, and
MWD equipment life cycle management business
GPO Refers to Group purchasing organizations
Abbreviation: Refers to
Sinopharm Holding Guangzhou Refers to Sinopharm Holding Guangzhou Co., Ltd.
“Guoda Drugstore” or “Guoda Pharmacy” Refers to Sinopharm Holding Guoda Drugstore Co., Ltd.
Sinopharm Holding Guangxi Refers to Sinopharm Holding Guangxi Co., Ltd.
China National Zhijun Refers to China National Zhijun (Shenzhen) Pharmaceutical Co., Ltd.
Zhijun Pharmacy Trade Refers to Shenzhen Zhijun Pharmacy Trade Co., Ltd.
China National Zhijun (Shenzhen) Pingshan Pharmaceutical Co.,
Zhijun Pingshan Refers to
Ltd.
Main Luck Pharmaceuticals Refers to Shenzhen Main Luck Pharmaceuticals Inc.
4
Section II Company Profile and Main Financial Indexes
I. Company profile
Short form of the stock Sinopharm Accord, Accord B Stock code 000028, 200028
Stock exchange for listing Shenzhen Stock Exchange
Name of the Company (in
国药集团一致药业股份有限公司
Chinese)
Short form of the Company
国药一致
(in Chinese)
Foreign name of the Company
China National Accord Medicines Corporation Ltd.
(if applicable)
Short form of foreign name of
Sinopharm Accord
the Company (if applicable)
Legal representative Lin Zhaoxiong
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. 518029
Company’s Internet Web Site http://www.szaccord.com.cn
E-mail gyyz0028@sinopharm.com
II. Person/Way to contact
Secretary of the Board Securities affairs representative
Name Chen Changbing Wang Zhaoyu
Accord Pharm. Bldg., No. 15, Ba Gua Si Accord Pharm. Bldg., No. 15, Ba Gua Si
Contact add. Road, Futian District, Shenzhen, Road, Futian District, Shenzhen,
Guangdong Province Guangdong Province
Tel. +(86)755 25875195 +(86)755 25875222
Fax. +(86)755 25195435 +(86)755 25195435
E-mail gyyzinvestor@sinopharm.com gyyz0028@sinopharm.com
III. Information disclosure and preparation place
Newspaper appointed for information disclosure Securities Times; China Securities Journal; Hong Kong Commercial Daily
5
Website for annual report publish appointed by CSRC http://www.szse.cn ； http://www.cninfo.com.cn
Preparation place for annual report Secretariat of the Board of Directors
IV. Registration changes of the Company
Organization code 91440300192186267U
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 accountant Li Jianguang, Li Yuanfeng
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
VI. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data
√Yes □No
Cause of retroactive adjustment or restatement
Enterprises combined under the same control (Note 1)
Changes
2019 over last 2018
year
2020
After
Before adjustment After adjustment adjustme Before adjustment After adjustment
nt
Operating revenue (RMB) 59,649,455,012.03 52,045,764,143.21 52,786,807,476.28 13.00% 43,122,385,521.23 43,858,500,106.45
Net profit attributable to
shareholders of the listed 1,401,892,593.23 1,271,289,183.01 1,267,931,291.32 10.57% 1,210,742,435.78 1,208,343,941.71
Company (RMB)
6
Net profit attributable to
shareholders of the listed
Company after deducting 1,369,652,035.50 1,226,765,271.97 1,226,765,271.97 11.65% 1,175,971,967.39 1,175,971,967.39
non-recurring gains and losses
(RMB) (Note 2)
Net cash flows from operating
1,502,746,598.47 2,000,352,083.20 2,012,653,189.74 -25.34% 1,322,606,352.27 1,338,639,227.25
activities (RMB)
Basic earnings per share
3.27 2.97 2.96 10.47% 2.83 2.82
(RMB/Share) (Note 2)
Diluted earnings per share
3.27 2.97 2.96 10.47% 2.83 2.82
(RMB/Share)
0.18
percenta
Weighted average ROE
10.49% 10.43% 10.31% ge 11.56% 11.41%
(Note 2)
points
up
Changes
over end
Year-end of 2019 Year-end of 2018
of last
Year-end of 2020 year
After
Before Before
After adjustment adjustme After adjustment
adjustment adjustment
nt
33,520,609, 28,930,300,
Total assets (RMB) 39,594,533,471.65 34,028,843,214.20 16.36% 29,450,897,487.81
123.67 519.97
Net assets attributable to
12,806,410, 11,618,432,
shareholder of listed company 13,948,322,652.33 12,911,140,435.88 8.03% 11,726,520,064.93
865.92 603.28
(RMB)
Note 1: The Group acquired 75.00% equity of Shanghai Pudong New Area Medicine & Medication Co., Ltd. under the same control
in the current year. When preparing the comparative statement of the consolidated statement for year of 2020, it is deemed that the
parties involved in the merger already exist in the current state when the ultimate controlling party begins to exercise control, and
adjust the previous comparative statement.
Note 2: Net profit attributable to shareholders of listed companies increased by 10.57% from the same period of last year, mainly due
to the soaring sales from pharmaceutical retail business, and the impact of mergers and acquisitions on incremental performance,
the basic earnings per share increased by 10.47% correspondingly and weighted average return on equity increased by 0.18
percentage points.
The lower one of net profit before and after deducting the extraordinary gains/losses in the last three fiscal years is negative, and the
audit report of last year shows that the ability to continue operating is uncertain
□Yes √No
The lower one of net profit before and after deducting the extraordinary gains/losses is negative
7
□Yes √No
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 revenue 12,824,196,278.66 14,345,743,909.86 15,710,564,937.11 16,768,949,886.40
Net profit attributable to
248,800,655.88 394,650,924.71 354,134,165.83 404,306,846.81
shareholders of the listed company
Net profit attributable to
shareholders of the listed company
241,724,850.95 385,292,168.50 354,311,453.14 388,323,562.91
after deducting non-recurring gains
and losses
Net cash flows from operating
-688,273,848.63 2,126,477,891.98 545,143,142.89 -480,600,587.77
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
IX. Items and amounts of extraordinary profit (gains)/loss
√Applicable □ Not applicable
In RMB
Item 2020 2019 2018 Note
Gains/losses from the disposal of The gains from fixed
5,969,522.10 2,340,925.97 7,048,337.10
non-current asset (including the write-off assets disposal .
8
that accrued for impairment of assets)
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 65,568,137.35 49,299,242.48 30,098,383.86 subsidies and fiscal
national standards, which are closely interest discount in the
relevant to enterprise’s business) period.
Investment costs while acquiring
subsidiaries, joint ventures and associated Negative goodwill
enterprise, less than fair value of the 70.96 14.65 729.29 from subsidiary
identifiable net assets from invested acquisition.
enterprise which should be enjoined
Current net gain/losses of the subsidiary
merger under the same control from - -4,059,241.89 4,703,735.76
beginning of the period to combination date
Switch back of provision for depreciation of
account receivable and contract assets that 578,362.65 1,310,345.38 5,301,091.66
are individually tested for impairment
Gains and losses from external entrusted
- 3,460,037.16 3,246,925.69
loans
Consigning fee received for consigned
961,488.75 - 516,929.44
operation
The non-operating
expenditure
recognized from the
litigation
Other non-operating income and expenditure compensation in the
-11,819,894.60 17,179,002.78 5,069,438.37
except for the aforementioned items Period, and the
non-operating income
recognized by
non-payment that
verified
Other gains/losses satisfy a definition of
3,835,445.51 508,168.93 1,445,926.01
extraordinary gains/losses
Less: Impact on income tax 16,223,813.42 17,317,723.70 12,137,071.11
Impact on minority shareholders’
16,628,761.57 11,554,752.41 12,922,451.75
equity (post-tax)
Total 32,240,557.73 41,166,019.35 32,371,974.32 --
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
9
□ 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
10
Section III. Summary of Company Business
I. Main businesses of the company in the reporting period
The Company complies with the disclosure requirement of Information Disclosure Guidelines for the Shenzhen Stock Exchange No.
8- Listing Company Engaged in Retailing Industry
In the reporting period, the main business of Sinopharm Accord includes pharmaceutical distribution and
pharmaceutical retail, specifically as follows:
(i) In the pharmaceutical distribution field, the company continues to integrate the distribution and logistics
business, deeply penetrates into the end markets, improves the stepped distribution network, creates intelligent
supply chain, and devotes to become a provider for pharmaceutical and health care 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; in 2014, we accelerating the integration of three-tier companies and the Company achieved
an operation all over the network in 2015. The network further expanded in 2019 and main development direction
is retail terminals. As of 31 December 2020, after optimizing and adjusting the types of customers in 2020, there
are 1,092 second- and third-tier medical institutions, 7,745 primary-level medical customers, and 8,257 retail
terminal customers (chain pharmacies, single stores, and self-paying pharmacies in hospitals).
2. The Company’s pharmaceutical distribution business has achieved the first scale in Guangdong and Guangxi;
The Guangdong and Guangxi regions have subdivided the format markets, pharmaceutical distribution and
apparatus consumables, retail direct sales and retail diagnosis and treatment, medical instrument linkage, retail
development, and the entire industry business maintains a relatively leading position in the industry; innovative
business continues to develop new customer cooperation models and become a medical supply chain management
solution and service providers; improve national logistics planning and construction, provide third-party logistics
professional services, and create leading logistics and supply chain service capabilities.
(ii) In the pharmaceutical retail field, Guoda Drugstore is a leading pharmaceutical retail enterprise in sales scale
throughout the country, and is one of the few enterprises in China with national direct sales drug retail network.
By the end of 2020, Guoda Drugstore has operated 7,660 stores, covering 20 provinces, autonomous regions and
municipalities, entering nearly 142 large and medium sized cities, which has formed a drugstore networks
covering eastern and northern China, southern coastal cities, and gradually expanded into northeast, central plains
and inland cities, the sales scale of which has exceeded 19 billions, ranking the first within industry; Guoda
drugstore, the business of which were mainly relying on modern retail drugstores, has been putting great attention
11
on the development of professional service system with medical resources as core competitiveness, building a
group of stores with professional commercial activities, which are able to provide retails and therapy services that
integrating medical service and health-care products sales and cooperate with hospitals; at the same time, the
Company has been vigorously developing new business, exploring and expanding new sales channels, improving
professional services, being dedicated to transit from a traditional medical retail into an innovative service
enterprise. By means of conventional products retail management, improving major brands and exploring business
cooperation with supplier, accelerating the establishment and improvement of DTP business and continuation of
health care service system, Guoda has built industry-leading professional service ability.
II. Major changes in main assets
1. Major changes in main assets
Major assets Note of major changes
Increased 165.3726 million Yuan over that of period-begin with 7.45% rate of change,
Equity assets
mainly because the investment income from joint ventures increased.
Increased 146.1909 million Yuan over that of period-begin with 20.65% rate of change,
Fixed assets mainly because the new enterprise merged in the Period made an increase in balance of
the period-end.
Increased 359.5564 million Yuan over that of period-begin with 95.94% rate of change,
mainly because the sales network, trademarks and brand rights are resulted for the
Intangible assets acquisition of Shanghai Dingqun Enterprise Management Consulting Co., Ltd and
Chengda Fangyuan Pharmaceutical Group Co., Ltd by subsidiary of the Company -
Guoda Drugstore in the Period.
Increased 15.0486 million Yuan over that of period-begin with 47.65% rate of change,
Construction in progress mainly because more investment for the ERP system construction and supply chain
extension project.
Decreased 2887.525 million Yuan over that of period-begin with -32.50% rate of change,
mainly due to the payment for equity acquisition of Chengda Fangyuan Pharmaceutical
Cash and bank balances
Group Co., Ltd and Shanghai Dingqun Enterprise Management Consulting Co., Ltd,
acquired by the subsidiary of the Company- Guoda Drugstore.
Increased 958.6451 million Yuan over that of period-begin with 214.78% rate of change,
Receivable financing mainly because the settlement with customers has changed and the receivable financing
increased at end of the Period by the newly merged enterprise
Increased 1737.3174 million Yuan over that of period-begin with 172.00% rate of
change, mainly due to the acquisition of Chengda Fangyuan Pharmaceutical Group Co.,
Goodwill
Ltd and Shanghai Dingqun Enterprise Management Consulting Co., Ltd, acquired by the
subsidiary of the Company- Guoda Drugstore.
12
Increased 29.0079 million Yuan over that of period-begin with 45.96% rate of change,
Deferred tax assets mainly because the new enterprise merged in the Period made an increase in balance of
the period-end.
Increased 330.8426 million Yuan over that of period-begin with 427.69% rate of change,
Other non-current assets mainly due to the emergency special reserve materials purchased at the request of the
government for preventing and controlling the COVID-19.
2. Main overseas assets
□ Applicable √ Not applicable
III. Core competitiveness analysis
1. Strong network coverage and layout
Relying on the perfect distribution network and variety resources, Sinopharm Accord has unified the wholesale
and retail resources. The company has a complete drug distribution network in the whole country and Guangdong
and Guangxi regions, sales of all forms have achieved a steady growth.
(1) The 50 subsidiaries in 23 prefecture-level cities in Guangdong and Guangdong fully cover medical institutions
at all levels, small social medical institutions, and retail chain single-store terminals;
(2) In terms of retail diagnosis and treatment, DTP and hospital-side pharmacies (Sinopharm Holding Drugstore)
exceeded 100;
(3) Logistics construction includes 5 large-scale automated logistics centers in Guangzhou, Shenzhen, Foshan,
Nanning and Liuzhou and 15 regional distribution centers, providing efficient logistics services for national
distribution areas, retail direct sales, medical direct sales, and third-party logistics.
Sinopharm Accord has a retail network leading in scale and covering the whole country, Guoda Drugstore has
retail chain network spreading over 20 provinces, municipalities and autonomous regions, covering nearly 142
cities nationwide.
2. Abundant variety resources
After years of hard work, the company’s distribution business has accumulated rich variety resources in
pharmaceuticals, consumables and other fields, and established extensive cooperative relations with thousands of
domestic manufacturers and commercial enterprises, and established stable business relationships with hundreds
of import and joint ventures, the overall operating product regulations exceed 50,000.
Guoda Drugstore operates nearly 120,000 merchandises. With its relatively comprehensive purchasing network and
years of experience in commodity management, Guoda Drug Store has established a merchandise system with wide
coverage, high professionalization, and rich varieties.
13
3. Complete logistics and distribution system
Sinopharm Accord distribution adopts supply chain management and warehouse management solutions system, it
has built large-scale first-grade logistics centers in Guangzhou, Nanning, Shenzhen and other places and
established distribution centers in Guangdong and Guangxi which has formed ladder logistics and distribution
networks, it is the first enterprise in Guangdong and Guangxi that has achieved the third-party logistics
qualification and has the professional pharmaceutical logistics capabilities with the largest scale, the most
extensive network, and the most complete modes in south district of China.
Guoda Drugstore owns a nationwide modern logistics and distribution system, and the logistics warehouses are
located in 20 provinces, has 33 large-and-small logistics warehouses, covering an area of about 160,000 square
meters in total.
4. The advantages of medical insurance resources
Regarding medicine retails, the subsidiaries of Guoda Drugstore have featured generally higher medical insurance
acquiring ability, with higher medical insurance sales ratio and steady operation.
5. The advantages of Compliance
The Company had a big lead under an increasingly stringent regulatory environment for the reason that it has kept
emphasizing legalization and compliance in the process of operation and management.
6. Unique-influence Sinopharm brand
Brand of the Company and distribution, industry child-brand and controlling shareholder and 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.
14
Section IV. Discussion and Analysis of Business
1. Introduction
In 2020, the COVID-19 epidemic swept across the world, plus the impact of policies such as centralized drug
procurement, the growth rate of the industry sharply declined, and the industry structure continued to restructure,
Sinopharm Accord took various measures to ensure growth under the pressure. During the epidemic, Sinopharm
Accord undertook the central, provincial (Guangdong, Guangxi), municipal (Guangzhou, Shenzhen, Nanning, etc.)
special reserves of medical instrument commodities and the allocation and supply of epidemic prevention and
anti-epidemic materials needed throughout the country. Facing the complicated policy and market environment,
under the strategic guidance of SINOPHARM and Sinopharm Holding, Sinopharm Accord coordinated epidemic
prevention and control and business development, improved quality and efficiency and sprinted goals with the
determination of "undiminished tasks and unchanged goals", solidly advanced all the work, excellently completed
the major task of fighting the epidemic and guaranteeing the supply, while effectively responding to the huge
impact of the epidemic, and achieved new highs in operating performance.
In 2020, the Company has accumulated operating income of 59,649 million yuan, a y-o-y growth of 13.00%;
operating profit achieved 2,164 million yuan with 18.21% up on a y-o-y basis; the net profit amounted as 1,721
million yuan, a y-o-y increase of 16.29% and the net profit attributable to shareholders of listed company was
1402 million yuan, an increase of 10.57% from a year earlier.
In 2020, Sinopharm Accord achieved a total operating income of 41070 million yuan in distribution business, a
y-o-y increase of 2.64%. Through overcoming the impact of epidemic on medical institutions, the advantages of
direct-selling business have been consolidated. At the same time, the coverage of primary medical institutions has
been further improved in breadth and depth, and a number of business types have a rapidly growth, of which: the
hospital recovered its direct sales to the original scale with 3% down slightly, direct sales of other medical
institutions increased by 5% on a y-o-y basis, retail direct-sale has 16% up on a y-o-y basis, device consumables
business growth on a y-o-y basis of 42% and 27% increase from retail clinic on a y-o-y basis. Sinopharm Accord
achieved a net profit of 855 million yuan in distribution business in 2020, a y-o-y increase of 1.06%.
In 2020,Guoda Drugstore completed an operating income of 19438 million yuan in total, a y-o-y growth of
44.04%. Various types of business have developed rapidly, including 44% up on a y-o-y basis from dire-sale
routine, 22% growth from DTP, 221% growth from OTO and 18% rate of growth from franchise business. Guoda
Drugstore achieved a net profit of 477 million yuan in 2020 with a growth of 54.81% from a year earlier,the net
profit attributable to parent company amounted as 341 million yuan, a y-o-y increase of 41.82%.
In 2020, the accumulative investment income from associates was 354 million yuan, a y-o-y increase of 7.00%.
15
(I) Working together to fight the epidemic
Sinopharm Accord fulfilled its responsibility for epidemic prevention and supply, and gave full play to its network
advantages and global channel procurement capabilities, companies at all levels have been recognized by all
sectors of society in terms of medical material distribution, material reserves, resumption of production and work,
and organizational effectiveness and anti-epidemic actions have been commended by governments at all levels, 22
subsidiaries have obtained qualifications for emergency medical supplies reserves with 46 qualifications. Guoda
Drugstore won the title of Outstanding Contribution Enterprise in "Fighting COVID-19 Epidemic" of Shanghai;
Sinopharm Holding Guangzhou won the honorary titles of Guangdong Province's Advanced Group in Fighting
COVID-19 Epidemic and Guangdong Province's Advanced Grassroots Party Organization in Fighting COVID-19
Epidemic.
1. Sinopharm Accord’s distribution business segment undertook the medical supplies emergency guarantee supply
and material assistance tasks on a large scale
At the beginning of 2020, the epidemic was raging. Sinopharm Accord’s distribution business segment quickly
established emergency leading groups and supply guarantee groups at all levels, established working mechanisms,
formulated emergency plans, overcame shortages of supply and transportation control and other issues, and
completed the sourcing, procurement, storage, and delivery of emergency supplies in a timely manner, the total
purchasing and storage amounted to more than 1.59 billion yuan; more than 2,000 objects were allocated, more
than 142 large-scale equipment such as breathing machines and ECMO were deployed, more than 1.76 million
sets of protective clothing, isolation clothing were deployed, and more than 8.48 million gloves and more than
96.8 million masks of various types were deployed.
2. Guoda Drugstore assumed full social responsibility and provided epidemic material support services
Guoda Drugstore took advantage of the national centralized procurement, coordinated inventory allocation,
actively sought sources to purchase epidemic prevention materials, and ensured government rationing and market
supply through multi-sectoral coordination. During the epidemic, the company's 24 regional companies and more
than 5,000 directly-operated stores were operating normally, and 21 subsidiaries undertook the government's
fixed-point distribution tasks of epidemic materials; provided anti-epidemic materials, including 320 million
masks, more than 8.76 million bottles of disinfection supplies, and more than 23 million pieces of protective
articles such as protective clothing and gloves.
(II) Sinopharm Accord's distribution business segment: firmly promote the overall deployment of one body with
two wings strategy, improve quality and efficiency, and accelerate the upgrade of the supply chain
1. Continue to increase the market share of traditional businesses: direct sales by hospitals were 29 billion yuan, a
decrease of 3% on a year-on-year basis, and direct sales by other medical institutions were 3.6 billion, an increase
of 5% on a year-on-year basis.
16
Among the 35 cities in Guangdong and Guangxi, the regions with top three market shares increased by 4 on a
year-on-year basis. All subsidiaries in Guangdong and Guangxi have obtained a higher proportion of distribution
rights in the national centralized procurement, and the entrusted delivery rate of various batches of centralized
procurement have been staying ahead of the industry. The company actively grasped the market concentration
opportunities brought by the GPO platform, followed up GPO landing areas in many regions in Guangdong, and
increased the market share of the provincial platform and the Guangzhou platform. At the same time, continued to
carry out the "ice-breaking" operation of the original third-party trustee medical institutions, competed for the
cultivation of new varieties, carried out special management of ice-breaking areas, and expanded advantages.
2. Retail direct sales business: In 2020, retail direct sales (including small-scale social medical services) had a
total sales of 6,877 million, a year-on-year increase of 16%.
Sinopharm Accord's distribution business segment accelerated the network layout of retail terminals, continued to
promote the top 100 national chain projects, promoted the national retail integrated terminal projects, and
developed 4,533 new customers. Developed a network of member stores, and achieved sales of 31.51 million
yuan in member stores, and built a network of hospital-side stores in Guangdong Province, covering a total of 456
stores. Leveraged the advantages of the B2B e-commerce platform, the cumulative customer online rate reached
94%, and the online order rate reached 76%, and sales exceeded 2,200 million. Further improved the platform
functions, realized the upgrade of online payment, membership management and other functions, optimized and
upgraded more than 100 basic functions, and developed a standard assessment system for platform operation and
maintenance. At the same time, science and technology empowered terminal marketing model innovation,
promoted the launch of the official account of Sinopharm Holding Hengxing Member Store and Sinopharm
Daojia WeChat Mall, established Sinopharm Holding Hengxing live broadcast room, and independently launched
an online live broadcast model.
3. Retail diagnosis and treatment: cumulative sales was 1,710 million yuan, a year-on-year increase of 27%
Sinopharm Accord's distribution business segment completed the first phase of the comprehensive network layout
of the Guangdong and Guangxi specialty pharmacies. At the end of the reporting period, the total number of large
pharmacies of Sinopharm Holding reached 100 (75 in Guangdong and 25 in Guangxi), an increase of 17
compared with the beginning of the year, and completed the layout of 4 key hospitals. Actively promoted the
circulation of prescriptions, established cooperative relationships with over 10 platforms, and initiated 31
prescription circulation projects (17 new projects), involving 55,000 prescriptions. Combined and promoted
medical insurance and commercial insurance projects, two subordinate large pharmacies have passed the national
special drug pharmacy certification. At the same time, the large pharmacies in Shenzhen and Maoming have
obtained the overall medical insurance network settlement qualification, and the three large pharmacies in Zhuhai
have access to the country’s first prefecture-level medical insurance prescription circulation platform - "Zhuhai
City Cloud Medical Insurance Prescription Sharing Service Platform", a total of 19 large pharmacies have
17
obtained the first batch of prefecture-level commercial supplementary medical insurance designated pharmacies
qualifications. Explored a multi-level service model, promoted the implementation of a multi-level payment
service model of "Mentor Services + Commercial Supplementary Medical Insurance Services + Rare Disease
Assistance Services + Commercial Health Insurance Services + Charity Assistance", promoted professional
patient services, and established a patient medication follow-up model, a total of more than 8,000 people were
followed up throughout the year; the model of live broadcast of patient education was innovated, with 22 live
broadcast of patient education throughout the year.
4. Accelerate the development of innovative business characteristics and promote the transformation and
upgrading of business models
(1) Promote the rapid expansion of innovative business to subsidiaries: During the reporting period, the
cumulative sales of equipment and consumables were 5,530 million yuan, a year-on-year increase of 42%; the
cumulative service fee income of innovative business increased by 36% on a year-on-year basis.
(2) Promote the differentiated development of 4D business:
1) SPD: Create a model project through standardized process management: The Third People’s Hospital of
Shenzhen project has realized the centralized management of material information through the combination of
SPD+IVD; Dongguan Eighth People's Hospital project is the first professional SPD project outside of Guangzhou
and Shenzhen
2) CSSD: Undertake the Conghua Hospital project-the first regional disinfection business led by the government.
3) Innovative IVD+cold chain combined service model: Undertake the Fengshun People’s Hospital project
4) MED: The Third Affiliated Hospital of Southern Medical University project has obtained the qualification of
the first Philips authorized dealer in Guangdong and Guangxi.
(3) Expand the third-party logistics business of disease control warehousing and distribution
Created a third-party integrated supply chain service system for vaccines, realized the docking with the
immunization planning system of the Guangdong and Guangxi CDC; completed the delivery business of
vaccination points in Guangzhou, Shenzhen, Foshan and other places.
5. Industry and finance dual drive, continue to deepen the distribution network layout
By reorganizing the 70% equity of Yangjiang Hecheng, Sinopharm Holding Guangzhou has filled the gap in the
Yangjiang regional market and increased the company's local market share. At the same time, diversified the
layout around the supply chain, speeded up the target selection and mergers and acquisitions of innovative
projects.
(III) Guoda Drugstore business: Seize the opportunity, make breakthroughs in mergers and acquisitions, and grow
rapidly throughout the year
1. Promote store expansion and strengthen regional advantages
18
As of the end of 2020, the total number of Guoda Drugstore reached 7,660 stores (including 6,212 directly
operated stores, and 1,448 franchised stores), an increase of 2,639 from the beginning of the year. Guoda
Drugstore has covered 20 provinces/municipalities and 88 prefecture-level cities across the country. In 2020, it has
expanded to 25 prefecture-level cities and 59 county-level administrative district cities. At the same time, each
region has seized the opportunity of layout to promote store expansion, expand secondary and tertiary hospital
side stores, strive for medical insurance co-ordination qualifications, and undertake prescription outflows; and it
also has expanded community advantageous areas to provide community consumers with convenient health
services.
2. Focus on the whole nationwide network strategy for retail, comprehensively promote investment and mergers
and acquisitions
Further increase market share and concentration through investment mergers and acquisitions, in 2020, Guoda
Drugstore successfully and merged and acquired Cheng Da Fang Yuan, a leading regional chain, the project
stretched across 5 provinces and 19 cities, adding more than 1,500 stores. This acquisition has consolidated the
company’s position as a leading company in the national sales scale in the pharmaceutical retail sector, and
consolidated the leading position in the advantageous regions, especially the Liaoning region.
3. Vigorously promote the construction of its own brand
In 2020, its own brand sales increased by 43% on a year-on-year basis, and gross profit increased by 30% on a
year-on-year basis. The company speeded up the development of its own brand varieties, and cooperated with the
global sourcing center of Sinopharm Holding to jointly develop OEM varieties and multi-channel sales, and
cooperated with Sinopharm Medical Device, Shenzhen Zhijun, Sinopharm Aomei, China TCM, Xiamen Xingsha
to complete the planning for nutrient and home protection key points category, and has completed the
development of mid-to-high-end series of nutrient-owned brands. At the same time, established a quality control
system, improved the management of its own brand, formulated a special sales incentive mechanism, and carried
out brand promotion.
4. Enhance professional service capabilities for chronic diseases and continue to build a professional service
system for pharmaceutical affairs
(1) Strengthen professional training and promote personnel training. Guoda Drugstore has 2,149 chronic disease
specialists and diabetes specialists, and 2,117 hypertension specialists. By organizing employees to actively
participate in the examination of licensed pharmacists, and carrying out E-learning pharmacy service training,
epidemic training, manufacturer resource training, etc., and organizing "Master of Glory" training and "Master of
Actual Combat" high hyperlipaemia training to promote the training of professional talents.
(2) Strengthen chronic disease management and improve service quality. The number of effective members of
Guoda Drugstore increased by 52% on a year-on-year basis, and member sales increased by 67% on a
year-on-year basis. Carry out online patient education and complete relevant training on respiratory system,
COPD, bronchial system, etc.; establish a doctor-patient circle in the healthy communities to promote
19
communication among patients, shop assistants, doctors, and manufacturers; carry out hospital-store linkages,
skill competitions, patient education, store free clinics, chronic disease through-train projects and other activities;
carry out monthly store service inspections, evaluate the basic service level of stores, and strengthen store services
through the evaluation mechanism.
5. Focus on the development of internet business, promote the integration of online and offline, innovative
businesses (including B2C, third-party O2O, self-operated O2O, commercial insurance) reached 1,140 million
yuan in tax-included sales, a year-on-year increase of 96%.
(1) Development of self-operated e-commerce platform
The subordinate 22 subsidiaries of Guoda Drugstore have launched self-operated malls with nearly 3.83 million
members; the importance of the platform during the epidemic has become prominent, providing convenience for
consumers to purchase drugs without contact, and gradually cultivating consumers' internet drug purchasing habits;
promoted platform function optimization, including the development of pre-sale, variety library standard products,
brand pavilion and other functions; triggered from Weizi and arabinose varieties, and focused on social marketing.
(2) Third-party O2O platform construction
There are more than 6000 online stores on various third-party platforms, and the third-party O2O business has
increased from 12,000 orders/day at the beginning of the year to 40,000 orders/day, and the market share of core
cities has continued to increase. We cooperated with key suppliers to create traffic landing, and used differentiated
management of core stores to create a win-win situation.
(3) Vigorously develop self-media marketing
Live broadcast marketing was carried out through WeChat video accounts and short video accounts, and 205 live
broadcasts were completed throughout the year, with a total of over 18 million viewers and more than 180,000
fans.
(4) Expand multi-party commercial insurance business
Pay attention to the use of drugs for people with serious illnesses, and achieved sales of 131 million yuan through
cooperation with serious illness commercial insurance. Cooperate with key commercial insurance channels to
increase offline marketing activities and service duration expansion.
(IV) Continue to promote the core strategy of integration of wholesale and retail, and expand the pilot area of
integration of wholesale and retail
Taking into account the regional coverage, sales scale, and distribution of the corresponding regional distribution
companies of the subsidiaries of Guoda Drugstore, 10 regions including Shanxi and Inner Mongolia were selected,
and a total of 15 regions were promoted and implemented in the integrated model of wholesale and retail. For the
10 newly-added pilot regions, we conducted regional meetings to announce the experience summary of wholesale
and retail integration, successful cases and annual plans, and guided the direction of work in the pilot regions.
Among them, in 2020, Guangdong's integrated wholesale and retail sales reached nearly one billion yuan, a
20
year-on-year increase of more than 18%; wholesale and retail integration covered 1,032 member stores in
Guangdong, a net increase of 722 stores from the beginning of the year.
(V) Comprehensively promote digital transformation to help upgrade the supply chain
Sinopharm Accord has established a digital transformation project team, determined the blueprint and path of
digital transformation, and coordinated project implementation; established an information technology center to
simulate "corporate" operations to fully support the digital transformation of the company's business. Taking
digital transformation as an important starting point, we have explored the key points of improvement from all
links of the supply chain, and comprehensively promoted the improvement of supply chain operation efficiency
from the aspects of sales automation, quality management integration, operation digitalization, logistics
digitalization, and financial digitalization.
(VI) Improve quality and efficiency, and promote high-quality development of the company
We combined the improvement of personnel efficiency, the control of the two funds, the governance of
loss-making companies, the management of risk and other quality and efficiency improvement projects, the
company's profitability has been improved from the potential of expenses, business growth, etc., and the
company's overall operating profit rate and profitability have achieved year-on-year growth and promotion. We
also have promoted the optimization of the organizational structure, scientifically designed the department
structure and staffing, promoted the improvement of human efficiency, capacity cultivation, etc., and enhanced the
organization's ability to quickly adapt to the environment; established a dynamic risk management and control
system, promoted the long-term management and control of the two funds pressure control, strictly grasped the
special governance of the enterprise, and improved the quality and efficiency to ensure development.
The Company complies with the disclosure requirement of Information Disclosure Guidelines for the Shenzhen Stock Exchange No.
8- Listing Company Engaged in Retailing Industry
Operation of the retail stores in reporting period:
1. By the end of 2020, Guoda Drugstore has 6,212 direct-sale stores, sales revenue (tax excluded) amounted to
14.136 billion yuan; and has 1,448 franchised stores, the distribution revenue (tax excluded) amounted as 1.329
billion yuan.
Region Direct-sale store Franchised outlet
Sales revenue (in 10 thousand Distribution revenue (in 10
Numbers Numbers
Yuan) thousand Yuan)
North 4,068 832,218.40 544 55,207.08
East China 959 262,019.24 599 61,059.48
21
South China 476 157,197.28 168 10,023.56
Central China 298 61,630.36 137 6,579.59
Northwest 295 81,916.87
Southwest 116 18,663.34
Total 6,212 1,413,645 1,448 132,869.71
Note: North: Liaoning, Shanxi, Inner Mongolia, Beijing, Tianjin, Hebei, Jiling;
East China: Shanghai, Jiangsu, Anhui, Shandong, Fujian, Zhejiang;
South China: Guangdong, Guangxi;
Central China: Henan, Hunan;
Northwest: Ningxia, Xinjiang;
Southwest: Yunnan
(1) There were 759 new stores opened and 240 closed in 2020, a net increase of 519stores.
Region Direct-sale store Franchised outlet
Number of
Number of store Number of store Number of stores shut
Total area (square meters) stores shut
increased increased down
down
North 499 56,442.72 -105 103 -135
East China 105 12,705.46 -77 46 -39
South China 60 6,322.40 -29 62 -17
Central China 34 3,422.86 -21 22 -1
Northwest 41 4,924.31 -6 - -
Southwest 20 2,244.37 -2 - -
Total 759 86,062.12 -240 233 -192
(2) Medical insurance qualification of the stores
As of 31 December 2020, the Company has 6212 chain stores with directly selling, and 5490 pharmacy stores
obtained the qualification of “Designated retail pharmacies of medical insurance”, representing 88% of the total
pharmacies of the Company.
Stores obtained the qualification of
Region Number of stores Ratio in total pharmacies in
“Designated retail pharmacies of medical
22
insurance” regions
North 4068 3738 92%
East China 959 729 76%
South China 476 400 84%
Central China 298 246 83%
Northwest 295 267 91%
Southwest 116 110 95%
Total 6212 5490 88%
2.Change of main selling index
Proportion of medical Proportion of
Per customer Proportion of Proportion of the
Year insurance sales in transaction times of
transaction (RMB) prescription drugs direct member sales
direct-sale stores direct members
2019 86 53% 38% 67% 57%
2020 90 52% 41% 67% 59%
(1) Classify according to region
Amount of sales growth (tax-free, in 10 thousand
Region Gross margin Net profit ratio
yuan)
North 497,037 23% 3%
East China 101,582 22% 2%
South China 16,565 25% 2%
Central China 11,259 26% 2%
Northwest 25,223 24% 3%
Southwest 17,212 42% 10%
(2) Operating efficiency of direct-sale stores in reporting period
23
Daily average efficiency
Operating area of the stores Rental efficiency (tax-included,
Region Number of stores (tax-included, Yuan/Square
(square meters) annual sales volume/rental)
Meters)
North 4068 585,036 67 17
East China 959 120,852 66 16
South China 476 53,073 91 19
Central China 298 35,211 53 15
Northwest 295 35,409 72 26
Southwest 116 14,908 39 20
Note: Daily average efficiency=Average daily operating income/Operating area of the stores;
Average daily operating revenue=Operating revenue (tax-included) of the store in the Year/Operating days of store in the Year.
Rental efficiency=Annual sales volume/Yearly rental
3.Structure of the category at retail terminal
Category 2020 2019
Health care products 5.03% 5.54%
Convenience food 0.84% 0.82%
Rx Drug 52.11% 53.00%
OTC 25.83% 25.97%
Traditional Chinese medicine 1.25% 1.07%
Personal care 0.34% 0.21%
Home convenience 7.33% 4.37%
Household health products 4.29% 4.44%
Proportion of other categories 3.00% 4.59%
4. Purchasing and supplies:
Goods suppliers of Guoda Drugstore are mainly external suppliers and assist affiliated enterprise of
SINOPHARM and private brands. Top five suppliers for year of 2020:
Ranking Purchase amount (tax included) (10 thousand yuan) Procurement ratio
No.1 187,639,598 13%
No.2 108,147,621 7%
24
No.3 90,784,195 6%
No.4 84,464,531 6%
No.5 81,079,083 6%
5. Member management and service business
In 2020, the membership sales accounted for 67% with no change in the shares from 2019. At the same time,
the number of member transactions in 2020 has increased by 12% on a year-on-year basis. The proportion of
member transactions in total transactions increased from 56% in 2018 to 57% in 2019, and then to 59% in 2020.
The number of member transactions has maintained a steady annual growth during the continuous improvement
of sales in the past three years, which played a key supporting role in the steady improvement of the company's
performance.
The company has improved its operating efficiency by optimizing the product structure. In 2020, the unit price of
company members was 112 yuan, which was 1.2 times higher than that of non-member customers of 90 yuan. The
main difference between members and non-members lies in the degree of brand recognition and the differentiation
of the types of goods purchased.
6. Warehousing and logistics during the reporting period
As of 2020, the company has a total of 33 logistics distribution centers across the country, with a total logistics
construction area of over 160,000 square meters, which are used for storage and circulation of normal temperature,
shady and cool, and refrigerated products, ensured the distribution of goods for 6,212 directly-operated chain
stores. On average, there are more than 255,000 lines of operations per day, 53,000 customer boxes, the shipment
amount reaches more than 58 million yuan, the company's overall logistics annual distribution exceeds 8.16
million boxes. All logistics operations are paperless and visualized operations, with mechanization as the main
and auxiliary operation. During the reporting period, in response to the storage and transportation temperature
problems of refrigerated drugs, the Quality Center built a cold chain monitoring platform through its own research
+ supplier cooperation, integrated company business data and equipment temperature record data, and realized
real-time monitoring on PC and mobile terminals, used cold chain data as the main monitoring indicators to
realize multi-dimensional dynamic monitoring of cold chain operation, and at the same time formulated and
improved cold chain operation management documents to realize cold chain operation standardization. It solved
the technical problems of heat preservation, temperature measurement and traceability during the storage and
transportation of refrigerated medicines. In 2020, the logistics center has integrated warehousing resources, aimed
at operation standardization, model diversification, moderation automation, and precise energy saving so as to
improve the distribution capacity and utilization rate.
25
II. Main business analysis
1. Overview
Found more in “I. Introduction” in “Discussion and Analysis of Business”
2. Revenue and cost
(1) Constitute of operation revenue
In RMB
2020 2019
Increase/decrease
Ratio in operation Ratio in operation
Amount Amount y-o-y
revenue revenue
Total of operating
59,649,455,012.03 100% 52,786,807,476.28 100% 13.00%
revenue
According to industries
Pharmaceutical
41,771,721,959.60 70.03% 39,289,565,512.68 74.43% 6.32%
distribution
Retail pharmacy 17,626,007,757.96 29.55% 13,327,372,258.48 25.25% 32.25%
Other 251,725,294.47 0.42% 169,869,705.12 0.32% 48.19%
According to products
Pharmaceuticals 54,004,558,520.07 90.54% 48,911,083,932.45 92.66% 10.41%
Medical devices and
4,010,735,060.66 6.72% 2,756,591,633.83 5.22% 45.50%
disposables
Diagnostic reagents 947,638,322.63 1.59% 692,370,435.53 1.31% 36.87%
Medical equipment 434,797,814.20 0.73% 256,891,769.35 0.49% 69.25%
Other 251,725,294.47 0.42% 169,869,705.12 0.32% 48.19%
According to region
China 59,649,455,012.03 100.00% 52,786,807,476.28 100.00% 13.00%
(2) About the industries, products, or regions accounting for over 10% of the company’s operating income
or operating profit
√Applicable □ Not applicable
In RMB
Increase/decrease Increase/decrease Increase/decrease
Gross profit
Operating revenue Operating cost of operating of operating cost of gross profit
ratio
revenue y-o-y y-o-y ratio y-o-y
26
According to industries
Pharmaceutical
41,771,721,959.60 39,206,149,975.93 6.14% 6.32% 6.48% -0.15%
distribution
Retail pharmacy 17,626,007,757.96 13,265,264,981.82 24.74% 32.25% 32.33% -0.04%
According to products
Pharmaceuticals 54,004,558,520.07 47,415,791,473.79 12.20% 10.41% 9.19% 0.98%
According to region
China 59,649,455,012.03 52,591,767,464.37 11.83% 13.00% 12.16% 0.66%
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
(4) Fulfillment of the company’s signed significant sales contracts up to this reporting period
□Applicable √Not applicable
(5) Constitute of operation cost
In RMB
2020 2019
Increase/decrease
Industries Item Ratio in Ratio in
Amount Amount y-o-y
operation cost operation cost
Pharmaceutical
Sales cost 39,206,149,975.93 74.55% 36,819,319,475.22 78.52% 6.48%
distribution
Retail pharmacy Sales cost 13,265,264,981.82 25.22% 10,024,600,201.08 21.38% 32.33%
Other Other cost 120,352,506.62 0.23% 47,304,628.74 0.10% 154.42%
Note
N/A
(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 Financial Report.
27
(7) Major changes or adjustment in business, product or service of the Company in Reporting Period
□ Applicable √ Not applicable
(8) Major sales and main suppliers
Major sales client of the Company
Total top five clients in sales (RMB) 2,567,346,434.44
Proportion in total annual sales volume for top five clients 4.30%
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 amount (RMB) Proportion in total annual sales
1 No. 1 728,589,391.96 1.22%
2 No. 2 531,588,556.80 0.89%
3 No. 3 465,948,001.18 0.78%
4 No. 4 423,815,969.50 0.71%
5 No. 5 417,404,515.00 0.70%
Total -- 2,567,346,434.44 4.30%
Other situation of main clients
□ Applicable √ Not applicable
Main suppliers of the Company
Total purchase amount from top five suppliers (RMB) 7,418,642,753.58
Proportion in total annual purchase amount for top five
12.26%
suppliers
Ratio of related parties in annual total sales among the top
1.68%
five suppliers
Information of top five suppliers of the Company
Serial Suppliers Purchase amount (RMB) Proportion in total annual purchases
1 No. 1 4,307,618,451.80 7.12%
2 No. 2 1,016,554,697.18 1.68%
3 No. 3 948,648,459.33 1.57%
4 No. 4 593,899,138.58 0.98%
5 No. 5 551,922,006.69 0.91%
Total -- 7,418,642,753.58 12.26%
28
Other notes of main suppliers of the Company
□ Applicable √ Not applicable
3. Expenses
In RMB
Increase/decrease
2020 2019 Note of major changes
y-o-y
Sales expense 3,943,134,095.75 3,168,007,835.69 24.47% No major changes occurred
Management expense 1,008,178,815.78 871,076,467.62 15.74% No major changes occurred
Financial expense 119,855,169.85 126,340,266.54 -5.13% No major changes occurred
4. R&D expenses
□ Applicable √ Not applicable
5. Cash flow
In RMB
Item 2020 2019 Increase/decrease y-o-y
Total cash inflows from operating
63,412,452,004.15 57,406,241,648.15 10.46%
activities
Total cash outflows from operating
61,909,705,405.68 55,393,588,458.41 11.76%
activities
Net cash flows from operating activities 1,502,746,598.47 2,012,653,189.74 -25.34%
Total cash inflows from investing
211,813,981.71 639,931,575.04 -66.90%
activities
Total cash outflows from investing
2,995,043,135.68 861,056,729.45 247.83%
activities
Net cash flows from investing activities -2,783,229,153.97 -221,125,154.41 -1,158.67%
Total cash inflows from financing
1,166,552,513.20 467,185,917.92 149.70%
activities
Total cash outflows from financing
2,906,975,331.01 1,467,403,127.13 98.10%
activities
Net cash flows from financing activities -1,740,422,817.81 -1,000,217,209.21 74.00%
Net decrease/ increase in cash and cash
-3,020,957,912.17 791,135,132.86 -481.85%
equivalent
Main reasons for y-o-y major changes in aspect of relevant data
√Applicable □ Not applicable
29
(1) Total cash inflows from investing activities: has 66.90% down from a year earlier, mainly because in the
period, subsidiary of the Company- Guoda Drugstore merged the Shanghai Pudong New Area Medicine &
Medication Co., Ltd. under the same control; and at same period last year, received the appropriation from the
cash pool of Sinopharm Group, the original parent company of Pudong Medicine in the previous year, and
recovered the funds originally collected to the cash pool in the current year;
(2) Total cash outflows from investing activities: has 247.83% up from a year earlier, mainly due to the payment
for equity acquisition of Chengda Fangyuan Pharmaceutical Group Co., Ltd and Shanghai Dingqun Enterprise
Management Consulting Co., Ltd in the Period by subsidiary of the Company - Guoda Drugstore;
(3) Net cash flows from investing activities: has 1,158.67% down from a year earlier, mainly due to the payment
for equity acquisition of Chengda Fangyuan Pharmaceutical Group Co., Ltd and Shanghai Dingqun Enterprise
Management Consulting Co., Ltd in the Period f by subsidiary of the Company - Guoda Drugstore;
(4) Total cash inflows from financing activities: has 149.70% up from a year earlier, mainly because received a
loans from financial institution in the period, and received the special loans for COVID-19 epidemic prevention
and control;
(5) Total cash outflows from financing activities: has 98.10% up from a year earlier, mainly because repayment of
the borrowings to non-financial institutions and repayment of supply chain financing increased;
(6) Net cash flows from financing activities: has 74.00% up from a year earlier, mainly because repayment of the
borrowings to non-financial institutions and repayment of supply chain financing increased;
(7) Net decrease/ increase in cash and cash equivalent: has 481.85% down from a year earlier, mainly due to the
payment for equity acquisition of Chengda Fangyuan Pharmaceutical Group Co., Ltd and Shanghai Dingqun
Enterprise Management Consulting Co., Ltd in the Period by subsidiary of the Company - Guoda Drugstore
Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company
□Applicable √Not applicable
III. Analysis of the non-main business
□ Applicable √ Not applicable
IV. Analysis of assets and liabilities
1. Major changes of assets composition
The Company initially implemented the new revenue standard or new lease standards since 2020, and relevant items of the financial
statement at year-beginning of the implementation year were adjusted
Not applicable
In RMB
Year-end of 2020 Year-end of 2019 Ratio
Notes of major changes
Amount Ratio in Amount Ratio in changes
30
total assets total assets (+,-)
Mainly due to the payment for
equity acquisition of Chengda
Fangyuan Pharmaceutical Group
Cash and bank Co., Ltd and Shanghai Dingqun
5,998,204,295.87 15.15% 8,885,729,250.47 26.11% -10.96%
balances Enterprise Management
Consulting Co., Ltd in the Period
by subsidiary of the Company -
Guoda Drugstore
Accounts
13,799,971,014.22 34.85% 10,712,983,544.18 31.48% 3.37% No major changes occurred
receivable
Inventories 6,285,010,674.46 15.87% 5,063,274,143.26 14.88% 0.99% No major changes occurred
Investment
properties
127,444,379.94 0.32% 138,900,358.30 0.41% -0.09% No major changes occurred
Long-term equity
2,287,019,627.99 5.78% 2,105,114,410.88 6.19% -0.41% No major changes occurred
investment
Fix assets 854,191,083.27 2.16% 708,000,172.63 2.08% 0.08% No major changes occurred
Construction in
46,631,190.23 0.12% 31,582,575.84 0.09% 0.03% No major changes occurred
progress
Short-term
1,612,187,020.12 4.07% 1,453,018,300.01 4.27% -0.20% No major changes occurred
borrowings
Received the loans from Group
Long-term Finance Company entrusted by
borrowings
31,637,173.89 0.08% - - 0.08%
China National Pharmaceutical
Group Corporation in the Period
2. Assets and liability measured by fair value
√Applicable □ Not applicable
(1) Assets and liabilities at fair value
2020
Input applied in the measurement of fair value
Quoted Significant Significant Total
prices in observable unobservable
active inputs inputs
markets
Level 1 Level 2 Level 3
Continuous measurement of
fair value
Receivables financing - 1,404,987,700.38 - 1,404,987,700.38
Other investment in equity - -
31
instruments 99,488,340.28 99,488,340.28
Other non-current financial
assets - - 120,972,350.24 120,972,350.24
- 1,504,476,040.66 120,972,350.24 1,625,448,390.90
2019
Input applied in the measurement of fair value
Quoted Significant Significant Total
prices in observable unobservable
active inputs inputs
markets
Level 1 Level 2 Level 3
Continuous measurement of
fair value
Receivables financing - 446,342,588.46 - 446,342,588.46
Other investment in equity
instruments - 116,021,000.00 - 116,021,000.00
Other non-current financial
assets - - 140,000,000.00 140,000,000.00
- 562,363,588.46 140,000,000.00 702,363,588.46
(2) Assets and liabilities disclosed at fair value
2020
Input applied in the measurement of fair value
Quoted Significant Significant Total
prices in observable unobservable
active inputs inputs
markets
Level 1 Level 2 Level 3
Long-term borrowings - 31,637,173.89 - 31,637,173.89
Whether the measurement attribute for main assets of the Company have changed significantly in the reporting period
□Yes √No
32
3. Assets right restriction till end of reporting period
2020 2019 Note
Cash and cash equivalents 593,091,037.88 442,672,297.43 (1)
Notes receivable and accounts
receivables financing that were
endorsed 27,939,151.58 - (2)
Notes receivable that were
discounted - 64,038,348.12 (3)
Receivables financing that were
pledged 2,620,000.00 - (4)
623,650,189.46 506,710,645.55
(1) On 31 December 2020, the Group had deposits of bank acceptance bills, deposits for letters of credit,
and fixed deposits for guarantee or notice deposits of RMB593,091,037.88 (31 December 2019:
RMB442,672,297.43) (found more in the Note V-1 carried in Section XII Financial Report).
(2) On 31 December 2020, the Group had accounts receivables financing of RMB23,843,867.66 and
commercial acceptance bills receivable of RMB4,095,283.92, which were endorsed but not have
matured (31 December 2019: nil) (found more in the Note V-2 and Note V-4 carried in Section XII
Financial Report).
(3) On 31 December 2020, the Group had commercial acceptance bills receivable of RMB0.00, which
were discounted but have not matured (31 December 2019: RMB64,038,348.12) (found more in the
Note V-2 carried in Section XII Financial Report).
(4) On 31 December 2020, the Group had pledged financing receivable of RMB2,620,000.00 (31
December 2019: nil) (found more in the Note V-4 carried in Section XII Financial Report).
V. Investment
1. Overall situation
√ Applicable □ Not applicable
(1) During the reporting period, the Company acquired the four enterprises in cash with combined under the
different control, including Chengda Fangyuan Pharmaceutical Group Co., Ltd (100%), Shanghai Dingqun
Enterprise Management Consulting Co., Ltd (100%), Beijing Golden Elephant Guoxing Pharmaceutical Co., Ltd.
(100%) and Sinopharm Accord (Yangjiang) pharmaceutical Co., Ltd.（70%） the Company acquired the Shanghai
Pudong New Area Medicine & Medication Co., Ltd. (75%) in cash for the enterprise merged under the same
control. The company newly established subsidiaries including Guoda Pharmacy (Rizhao) Co., Ltd. (100%),
Liaoning Guoda Health Pharmacy Co., Ltd. (100%), Liaoning Guoda Pharmacy Co., Ltd. (100%), Liaoning
Huludao Guoda Pharmacy Co., Ltd.. (100%), Jinzhong Yuci Guoda Wanmin Clinic Co., Ltd (100%), Sinopharm
Holding Guoda Jianfeng (Jiangmen) Medicine Chain Co., Ltd (100%) and Guoda Wanmin Huimin Kangwei
Pharmacy Lvliang Co., Ltd. (51%).
(2) During the reporting period, the Company completed the capital increase (100%) to Sinopharm Holding
Maoming Co., Ltd, after capital increase, the shareholding ratio remained unchanged.
33
(3) During the reporting period, the Company made an additional investment in Guangdong Jianhui Construction
Investment Management Co., Ltd（10%） after additional investment, the shareholding ratio remained unchanged.
More investment information, found in the Note (V)-9, Note (VI) and Note (VII) carried in the financial report.
2. The major equity investment obtained in the reporting period
□ Applicable √ Not applicable
3. The major non-equity investment doing in the reporting period
□ Applicable √ Not applicable
4. Financial assets investment
(1) Securities investment
□ Applicable √ Not applicable
The company had no securities investment in the reporting period.
(2)Derivative investment
□ Applicable √ Not applicable
The company had no derivative investment in the reporting period.
5. Application of raised proceeds
√ Applicable □ Not applicable
In 10 thousand Yuan
Projects Amount of
The date Project
Committed investment changed Total Total accumulateInvestment
Amount when the Reach the feasibility
projects and capital or not committed investment d program Realized
invested in project predicted was
invested in areas with (includin investment after investment till the interests
report reaches its interest or changed
fund raising out of the g of raised adjustment till the period-end in Period
period intended not hugely or
plan changed capitals (1) period-end (3)=(2)/(1)
availability not
partially) (2)
Committed investment projects
Cash consideration of
49% equity of
Not Not Not
Guangdong Nanfang
N 26,781.67 26,781.67 4,892.15 26,781.67 100.00% applicabl applicabl applicabl N
Pharmaceutical
e ee
Foreign Trade Co., Ltd.
paid
34
Not Not Not
Payment of issuance
N 579.82 579.82 0 579.82 100.00% applicabl applicabl applicabl N
cost
e ee
Not
Subtotal of committed
-- 27,361.49 27,361.49 4,892.15 27,361.49 -- -- applicabl -- --
investment projects
e
Capital invested in areas with fund raising out of the plan
Not applicable
Not
Total -- 27,361.49 27,361.49 4,892.15 27,361.49 -- -- applicabl -- --
e
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
Amount, usage and
progress of using for
Not applicable
fund raising out of the
plan
Change of
implementation place
Not applicable
of investment project
of raised capitals
Regulation of
implementation ways
Not applicable
of investment project
of raised capitals
Preliminary investment
and replacement of
Not applicable
investment project of
raised capitals
Temporarily
supplement for the
Not applicable
current capitals with
idle raised capitals
35
Amount and reason for
surplus of raised
Not applicable
capitals when
implementing projects
Usage of the retained
raised fund and what is
No unspent raised funds
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
□ Applicable √ Not applicable
The Company has no sales of major assets in the Period.
2. Sales of major equity
□ Applicable √ Not applicable
VII. Analysis of main holding company and stock-jointly companies
√ Applicable □ Not applicable
Subsidiary and joint-stock enterprise with an impact of more than 10% on the Company’s net profit
In RMB
Company Register Operating Operating
Type Main business Total assets Net assets Net profit
name capital revenue profit
Sales of drugs,
Sinopharm medical apparatus
Holding and instruments, 3,553,249,39 16,020,031,3 4,653,577,09 30,583,358,1 774,030,623. 579,817,808.7
Subsidiary
Guangzho freight 3.17 32.98 5.40 96.47 98 5
u Co., Ltd. transportation,
storage, loading and
36
unloading, glass
wares, cosmetics and
daily merchandise;
other business
services, other
professional
consultation, various
goods agency and
for self-operation,
import & export of
technology, houses
leasing
Chinese traditional
patent medicine,
chemical
preparations,
antibiotics,
bio-chemical
medicine, biological
medicine, diagnosis
Sinopharm medicine, biological
Holding medicine with
1,683,333,33 15,456,873,7 5,539,462,64 19,437,660,1 655,446,001. 476,588,088.9
Guoda Subsidiary features of treatment
3.00 21.83 4.54 00.65 06 5
Drugstore and diagnosis,
Co., Ltd. shaped packing food,
chemical products,
and various
commodity and
technique hold by
self-support and
agency as well as
import & export of
technology
Retail and
distribution in
respect of
Sinopharm
pharmaceutical
Holding 521,407,965. 4,357,209,98 1,161,715,39 6,142,028,88 204,722,034. 179,046,206.0
Subsidiary products and
Guangxi 79 3.64 7.13 7.43 77 4
medical apparatus
Co., Ltd.
and instruments,
wholesale and retails
of health products
Particular about subsidiaries obtained or disposed in report period
37
√ Applicable □ Not applicable
The method of obtaining and handling The influence to the whole production and
Company name
subsidiaries during the report period performance
Expand the business layout of wholesale
Shanghai Dingqun Enterprise Management
Acquisition and retail integration, and without major
Consulting Co., Ltd
influence on performance of the Company
Expand the business layout of medicine
Beijing Golden Elephant Guoxing
Acquisition retail in local area, and without major
Pharmaceutical Co., Ltd.
influence on performance of the Company
Expand the business layout of wholesale
Shanghai Pudong New Area Medicine &
Acquisition and retail integration, and without major
Medication Co., Ltd.
influence on performance of the Company
Expand the business layout of medicine
Guoda Pharmacy (Rizhao) Co., Ltd. Establishment retail in local area, and without major
influence on performance of the Company
Expand the business layout of medicine
Liaoning Guoda Health Pharmacy Co.,
Establishment retail in local area, and without major
Ltd.
influence on performance of the Company
Expand the business layout of medicine
Sinopharm Accord (Yangjiang) Medicine distribution in local area, and without
Acquisition
Co., Ltd. major influence on performance of the
Company
Expand the business layout of medicine
Liaoning Guoda Pharmacy Co., Ltd. Establishment retail in local area, and without major
influence on performance of the Company
Expand the business layout of medicine
Liaoning Huludao Guoda Pharmacy Co.,
Establishment retail in local area, and without major
Ltd.
influence on performance of the Company
Expand the business layout of medicine
Jinzhong Yuci Guoda Wanmin Clinic Co.,
Establishment retail in local area, and without major
Ltd
influence on performance of the Company
Expand the business layout of medicine
Guoda Jianfeng (Jiangmen)
Establishment retail in local area, and without major
Pharmaceutical Chain Co., Ltd.
influence on performance of the Company
Expand the business layout of medicine
Guoda Wanmin Huimin Kangwei
Establishment retail in local area, and without major
Pharmacy Lvliang Co., Ltd.
influence on performance of the Company
Expand the business layout of wholesale
Chengda Fangyuan Pharmaceutical Group
Acquisition and retail integration, and without major
Co., Ltd
influence on performance of the Company
38
Explanation on main holding and stock-jointly enterprise
VIII. Structured vehicle controlled by the Company
□ Applicable √ Not applicable
IX. Future Development Prospects
(i) Industry environment and its impact on the company
2021 is the first year of the "14th Five-Year Plan" of Sinopharm Accord, the environmental changes of the new
normal bring a series of opportunities and challenges. In the context of international trade frictions and the new
normal of China's economy, China's internal industrial structure upgrade pressure continues to increase, and
state-owned enterprises need to accelerate the pace of corporate reform and transformation to shift to high-quality
development. National competition has increasingly evolved into competition between urban agglomerations, how
to position state-owned enterprises to conform to national strategies, to be open and coordinated, and to develop
together with the region and form a joint force has become the key. Continuous breakthroughs in science and
technology will subvert the development model in various fields, and at the same time, it will also be a strong
support for China to improve its international competitiveness, we should actively explore the field of science and
innovation, seize opportunities for transformation, and build core competitiveness. The new medical reform
centered on the "three medical" linkages has promoted the redistribution of the interests of different participants in
the entire industry chain of the medical industry. The entire industry is in a period of structural adjustment and
model reshaping. The redistribution of the interests of the participants in the industry chain will generate new
businesses demand, bring new and diversified profit growth points.
(ii) Company business plan
In the new year, the company will focus on the strategy of “technology empowerment, service upgrade,
integration of wholesale and retail, and industry-finance dual drive”, and will continue to develop with high
quality. Strengthen traditional business on the one hand, further stimulate the vitality of traditional businesses,
become stronger and bigger, and consolidate the leading position in the industry; on the other hand, expand new
business, seize the window period, accelerate the development of new business scale and highlight the benefits.
1. Scientifically study and judge policies and situations, grasp market changes, and build a new development
pattern
Maintain sensitivity to policies and the environment, and respond quickly. Continue to seize the opportunity to
increase industry concentration and expand market share. Continue to research new business models, innovate and
empower, and improve profitability. Normalize the epidemic prevention of the COVID-19 epidemic, consolidate
the responsibilities of epidemic prevention, complete the emergency security, and provide the government with a
full network and a full range of medical supplies and emergency protection solutions. Pay attention to policy
dividends, under the new development pattern of "domestic big cycle, domestic and international double cycle",
continue to follow up and make full use of local government subsidy policies, and strive for more financing
39
support and corporate dividends brought by various preferential policies to reduce business costs and improve
efficiency.
2. Continue organizational transformation and build integrated service and management capabilities
Focus on the goals and tasks of the "14th Five-Year" strategic plan, strengthen publicity and implementation,
supervise implementation, and enhance the strategic management and control capabilities, the integrated
management and control capabilities, the personalized resource allocation capabilities, the innovative and
developmental operation management systems, and the cultural characteristics led by party building. Continue to
implement the annual human efficiency management and control requirements, and explore the development of
management, talents, and organizations based on future scale changes. Continue to improve the systematic,
professional and standardized financial management and control system. Keep an eye on changes in the industry,
and strive to promote the incubation of innovative capabilities and projects such as new businesses, new models,
and digital transformation.
3. Fully focus on technological empowerment, drive innovative services and supply chain upgrades with
digitalization, and create future-oriented core competitiveness
From the two levels of supply chain operation and management, with the goal of improving quality and efficiency,
and taking the new business model as the direction to promote digital transformation. The "professional +
regional" dual-combined management approach optimizes the organizational structure of the information
technology center, continues corporate operation, lays a solid foundation for digital transformation, and efficiently
promotes informatization projects.
4. Fully plan and integrate national logistics network resources, improve efficiency, optimize models, and
establish strategic advantages
Guided by business development needs, actively realize the transformation of logistics marketization, and build a
leading pharmaceutical supply chain enterprise in terms of logistics cost, logistics efficiency, network coverage,
and customer service experience.
5. Focus on customer value orientation, coordinate resources and networks, and focus on service upgrades and
model innovation
The distribution business segment promotes the strategic deployment and resources allocation of one body and
two wings, and continues to promote the company's high-quality development around "digital transformation,
integrated operation, supply chain upgrade, and business innovation". Focus on policy and market changes,
structural optimization and model upgrades, cultivate new growth points, and form new growth drivers. Create a
characteristic retail service system, promote model innovation under the integration of retail networks, and build
the core competitiveness of professional services. Rapidly cultivate innovative businesses, improve the
informatization and standardized service capabilities of medicines and consumables, and provide overall solutions
and integrated service capabilities.
In the retail business segment, we will seize the new pharmaceutical retail opportunities and promote the
integration of online and offline businesses. Promote the optimization of "product + service" professional
capabilities and create a closed loop of "medical + pharmaceutical" services. Continue to improve the integrated
management and control capabilities of the headquarters, and seek benefits from management.
40
6. Deeply explore the connotation and value of "integration of wholesale and retail", and promote the extension of
resources to the upstream and downstream of the industrial chain
Thoroughly implement the wholesale and retail integrated development strategy, on the basis of network linkage,
promote the effective allocation and circulation of resources in various formats and regions, enhance the synergy
and complementarity between distribution and retail, and create synergy. The wholesale and retail coordination is
implemented nationwide, and the integration of wholesale and retail in Guangdong and Guangxi continues to
deepen, with the help of the manufacturer resource platform of Sinopharm Holding and Sinopharm Accord, we
will jointly develop our own brands and cover the integrated network of wholesale and retail.
7. Realize simultaneous growth of "connotation + extension"
Through "improvement of quality and efficiency" and continuous lean management, we can achieve connotative
growth; through the focus strategy, we will promote investment and mergers and acquisitions to start a new
situation and achieve extensional growth.
(iii) Possible risks
1.Risks of changes in industry policy
With the continuous deepening of new medical reform, the pharmaceutical industry frequently releases policies,
and the operating environment of the industry has major changes, affected by the “4 + 7” centralized procurement
linkage and expansion, the GPO in Guangdong and Guangxi provinces, and the continuous expansion of the
national talks, and other policies, the drug price has continued to drop sharply, and the company’s profit margin is
facing the risk of further compression. The supervision has been continuously upgraded, the introduction of the
new Drug Administration Law and the implementation of the “four strictest” put forward higher requirements for
the compliance operation of pharmaceutical enterprises, the pharmaceutical circulation industry faces increased
risks of uncertain compliance. The company will respond to the impacts of industry policies by transforming and
upgrading its business structure, exploring new profit models, and improving its risk management and control
capabilities.
2. Management risks of the continuous expansion of marketing network of Guoda Drugstore
Through the continuous opening of new stores and extended M & A, the marketing network of Guoda Drugstore
has maintained a steady growth trend in recent years. The expansions of the sales areas and the increase in the
number of stores have put pressure on the store location, distribution, cash management, marketing and human
resource management of Guoda Drugstore. The company will strengthen management and construction in the
commodity procurement, logistics and delivery, sales and other links, and formulate corresponding management
measures in each link to ensure unified standards and management quality for store expansion, and at the same
time strengthen integration and control of new merged stores.
3. Risks of intensifying market competition
As the country continues to introduce corresponding policies to encourage the integration of pharmaceutical retail
industry, the major pharmaceutical retail enterprises in the industry have accelerated the pace of mergers and
acquisitions, and continued to expand the marketing networks, improve the logistics center constructions, and
41
innovate the business and profit models so that the sales scale and comprehensive strength continuously strengthen.
At the same time, with the upgrading of consumption and the gradual opening of market, the foreign pharmaceutical
distribution enterprises with powerful strength are entering the domestic pharmaceutical distribution markets
through a variety of ways, so the industry competition is further intensifying. In addition, the cross-border
competitors with internet genes have quickly penetrated into the company’s traditional business fields, which
brought certain challenges to the company’s business model.
The company will continue to integrate existing resources, deepen the strategic development initiatives with
wholesale-retail integration as the core, and deeply give play to the synergies, directly face the terminal patients
and consumers through complementary varieties, capital collaboration, supply chain collaboration, and
international promotion, at the same time, it will realize brand globalization by capital operation, and continuously
increase investment in scientific and technological innovation, and actively respond to cross-border competition.
4. Risks of facing the horizontal competition
In the pharmaceutical retail field, Sinopharm Holding’s affiliated distribution subsidiaries have also opened some
social retail pharmacies, which constitute a certain degree of horizontal competition with the subordinate Guoda
Drugstore. Sinopharm Holding and SINOPHARM have pledged to take effective measures to resolve the possible
horizontal competition.
5. The risk of goodwill impairments
On 31 December 2020, the book value of goodwill in consolidate financial statement listed as 2,747 million Yuan,
and distributed to the assets group of distribution business and retail business. In accordance with the Accounting
Standards for Business Enterprises, the Company carried out annual impairment test for the goodwill.
Impairment of goodwill will released on the Note V.-18 and Note III-17 & 33 listed under the Section XII.
Financial Report
X. Reception of research, communication and interview
1. In the report period, reception of research, communication and interview
√Applicable □ Not applicable
Main contents of
the discussion
Basic situation index of
Time Location Way Reception object Type and the
investigation
information
provided
Performance and Record of the investor
Accord
2020-04-22 Telephoning Institute Institute operation of the relations activities
Pharmacy Bldg.
Company (No.:2020-1)
42
Basic operating Resolution of the
Accord Institute, situation of the Annual General
2020-05-15 Field research Institute
Pharmacy Bldg. individual Company and Meeting 2019 (Notice
future outlook No.:2020-17)
Resolution of the First
Basic operating Extraordinary
Accord Institute,
2020-11-13 Field research Institute situation of the Shareholders’ General
Pharmacy Bldg. individual
Company Meeting of 2020
(Notice No.:2020-38)
Basic operating
Guoda Drugstore Jian
Accord situation of the
2020-12-22 Field research Other Time Finance Zhi Wan Jia Store of
Pharmacy Bldg. Company and
2021
future outlook
Reception (times) 4
Number of reception institutions 118
Number of individual reception 5
Number of other reception 1
Disclosed, released or let out major undisclosed
No disclosed, released or let out major undisclosed information
information
43
Section V. Important 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 15 May 2020, the profit distribution plan for year of 2019 was deliberated and approved by annual general
meeting of 2019, that is taking total 428,126,983 shares as base, distributed 6.00 yuan (tax included) for each 10
shares in cash. The announcement of 2019 interest distribution implementation was released on 10 June 2020 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 2019 was completed, and dividend for public
shares was distributed to the account of shareholders dated 18 June 2020 (A-share) and 22 June 2020 (B-share)
respectively.
Special explanation on cash dividend policy
Satisfy regulations of General Meeting or requirement of Article of Association (Y/N): Y
Well-defined and clearly dividend standards and proportion (Y/N): Y
Completed relevant decision-making process and mechanism (Y/N): Y
Independent directors perform duties completely and play a proper role (Y/N): Y
Minority shareholders have opportunity to express opinions and demands totally and
Y
their legal rights are fully protected (Y/N):
Condition and procedures are compliance and transparent while the cash bonus policy
Not applicable
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 2018
Taking the total 428,126,983 shares as base, cash bonus of 4.00 yuan (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 2019
Taking the total 428,126,983 shares as base, cash bonus of 6.00 yuan (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 2020
Taking the total 428,126,983 shares as base, cash bonus of 8.00 yuan (before tax) each 10 shares will be distributed
to the whole shareholders. This profit distribution did not convert capital reserve into share capital.
44
Cash dividend of common stock in latest three years (including the reporting period)
In RMB
Ratio of the
Ratio of the
Ratio of the total cash
cash bonus by
Net profit cash bonus in bonus (other
other ways in
attributable to net profit ways included)
Proportion for net profit
common stock attributable to Total cash in net profit
Year for Amount for cash cash bonus by attributable to
shareholders of common stock bonus attributable to
bonus bonus (tax other ways(i.e. common stock
listed company in shareholders of (including common stock
shares included) share shareholders of
consolidation listed company other ways) shareholders of
buy-backs) listed company
statement for contained in listed company
contained in
bonus year consolidation contained in
consolidation
statement consolidation
statement
statement
2020 342,501,586.40 1,401,892,593.23 24.43% 0.00 0.00% 342,501,586.40 24.43%
2019 256,876,189.80 1,271,289,183.01 20.21% 0.00 0.00% 256,876,189.80 20.21%
2018 171,250,793.20 1,210,742,435.78 14.14% 0.00 0.00% 171,250,793.20 14.14%
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) 0.00
Dividends for every 10-share (RMB) (Tax included) 8.00
Increments per 10 shares (Share) 0.00
Equity base of the distribution plan (Share) 428,126,983
Amount of cash dividend(RMB) (Tax included) 342,501,586.40
Amount of cash dividend in other ways(i.e. share
0.00
repurchase)(RMB)
Total cash dividend (including other way) (RMB) 342,501,586.40
Profit available for distribution (RMB) 5,788,050,243.66
Proportion of total cash dividend (including other ways) to
100%
total profit distribution
Cash dividend situation
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 of the profit distribution plan or plan for capitalizing from public reserves
45
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 of Comm
Commitme Promise Commitme Impleme
commitm Content of commitments itment
nt reason by nt term ntation
ents date
"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
Commitme
of shares of Sinopharm Holding Guangzhou it held to Sinopharm Accord, “1.
nts in report Commit
Sinophar it will not newly-establish or broaden within Guangdong any business 21 Normally
of ment of Long-term
m operation that actually compete with that of Sinopharm Accord, or set up any June impleme
acquisition sharehold effective
Holding new subsidiaries or subordinate enterprises who engage in such business. 2. It 2005 nting
or equity ers
will enter into business delineation with Sinopharm Accord 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 Sinopharm
Accord in the production and R&D of pharmaceutical products.”
"Sinopharm Group and Sinopharm Foreign Trade made commitments in the
Report about China National Accord Medicines Corporation Ltd. Purchasing
Assets and Raising Supporting Funds and Related Transactions by Asset Sale,
Sinophar
Stock Issuance and Cash Payment that the non-public offering of shares of
m Group
Sinopharm Accord obtained from this transaction shall not be transferred
Co.,
within 36 months since the finish date of issuance and shall be unlocked after
Ltd;Chin
36 months since the date of listing. Within 6 months after the completion of
Commitme a Commit
this transaction, if the closing price of the stock of Sinopharm Accord is less 31
nts in assets National ment on 36 Complet
than the issue price in continuous 20 trading days, or the closing price at the May
reorganizati Pharmace restricted months ed
end of 6 months after the completion of this transaction is less than the issue 2016
on utical shares
price, the lockup period of the stock of Sinopharm Group and Sinopharm
Foreign
Foreign Trade obtained from Sinopharm Accord by this transaction will
Trade
automatically prolong at least 6 months. The shares derived from stock
Corporati
dividends allocation and capital reserve increase transferring of Sinopharm
on
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."
46
"Ping An Asset Management Co., Ltd. made commitments in the Report
about China National Accord Medicines Corporation Ltd. Purchasing Assets
Ping’an and Raising Supporting Funds and Related Transactions by Asset Sale, Stock
Commit
Assets Issuance and Cash Payment that the non-public offering of shares of 31
ment on Complet
Manage Sinopharm Accord obtained from this transaction shall not be transferred May 36 months
restricted ed
ment Co., within 36 months since the finish date of issuance and shall be unlocked after 2016
shares
Ltd 36 months since the date of listing. After placement completed, the shares of
the listed Company increased due to bonus shares and turning to increase
capital should pursuit to the restriction arrangement the above mentioned.
47
“Sinopharm Holding 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 except for
Sinopharm Holding Guoda Drugstore Co., Ltd. and its subsidiaries and
branches owned or controlled by the Company, the Company promised to
take appropriate measures to solve the horizontal competition problem in the
pharmaceutical retail business between the Company and Sinopharm Accord
within 5 years since the completion date of this reorganization. 2. The
Company's way of resolving horizontal competition problems includes and is
not limited to purchasing the social retail drugstore assets subordinated to the
Commit Company by Sinopharm Accord, taking the entrusted operation, leasing or
ments on contracting operation by Sinopharm Accord and its controlling enterprises in
horizonta accordance with the methods permitted to national laws to hold or control the
l social retail drugstore assets, or transferring the controlling stake of the social
competiti retail drugstore assets by the Company. 3. If the shareholders of the social 28
Sinophar Normally
on, retail drugstore assets (hereinafter referred to as "the third party") of the Decem Long-term
m Group impleme
relation Company or the enterprises controlled by the Company have or are going to ber effective
Co., Ltd nting
transactio perform the preemptive rights under the same conditions in accordance with 2016
n and relevant laws and corresponding Articles of Association, then the above
capital commitment will not be applicable, but in this case, the Company should try
occupatio its utmost to urge the third party to waive its preemptive rights. If the
n 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
48
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
“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
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 except for
Sinopharm Group Guoda Drugstore Co., Ltd. and its subsidiaries and
branches owned or controlled by the Company, the Company promised to
take appropriate measures to solve the horizontal competition problem in the
pharmaceutical retail business between the Company and Sinopharm Accord
within 5 years since the completion date of this reorganization. 2. The
Company's way of resolving horizontal competition problems includes and is
Commit
not limited to purchasing the social retail drugstore assets subordinated to the
ments on
Company by Sinopharm Accord, taking the entrusted operation, leasing or
horizonta
contracting operation by Sinopharm Accord and its controlling enterprises in
l
accordance with the methods permitted to national laws to hold or control the
competiti 28
social retail drugstore assets, or transferring the controlling stake of the social Normally
SINOPH on, Decem Long-term
retail drugstore assets by the Company. 3. If the shareholders of the social impleme
ARM relation ber effective
retail drugstore assets (hereinafter referred to as "the third party") of the nting
transactio 2016
Company or the enterprises controlled by the Company have or are going to
n and
perform the preemptive rights under the same conditions in accordance with
capital
relevant laws and corresponding Articles of Association, then the above
occupatio
commitment will not be applicable, but in this case, the Company should try
n
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
49
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
Sinopharm Holding made commitments in the Commitment Letter About Controlli
Sinopharm Group Co., Ltd. to Avoid Horizontal Competition: “First, the ng
Company and the Company’s wholly-owned, controlling or other enterprises sharehol
with actual control (in addition to Sinopharm Accord and its controlling der is
enterprises, hereinafter the same) don’t have businesses and operations impleme
constituting the substantial horizontal competition to Sinopharm Accord and nt in real
its controlling enterprises. Second, the Company and the Company’s earnest,
wholly-owned, controlling or other enterprises with actual control shall not Sinophar
Commitme engage, participate in or do businesses and activities in Guangdong and m
nts make in Guangxi which constitute substantial competition to Sinopharm Accord and Accord
Commit 5
initial Sinophar pharmaceutical business services. Third, the Company and the Company’s will
ment of Septe Long-term
public m wholly-owned, controlling or other enterprises with actual control shall not actively
sharehold mber effective
offering or Holding engage, participate in or do businesses and activities which constitute urged the
ers 2013
re-financin substantial competition to Sinopharm Accord and pharmaceutical industry controlli
g businesses. Fourth, the Company shall not take advantage of the control to ng
Sinopharm Accord to damage the legitimate rights and interests of Sinopharm sharehol
Accord and other shareholders (especially medium and small shareholders). der and
This commitment letter takes effect from the issue date, and remains in effect actual
for the entire period when the Company acts as the controlling shareholder or controlle
its related party of Sinopharm Accord. Within the effective period of the r to
commitment, if the Company violates this commitment and causes a loss to fulfill
Sinopharm Accord, the Company will timely make full compensation for commitm
Sinopharm Accord.” ents
50
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 nor have reasonable reasons to occur, the Company
Controlli
and related party shall sign normative related transaction agreement in
ng
accordance with relevant laws with Sinopharm Accord. Sinopharm Accord
sharehol
implements the approval procedures and fulfills the information disclosure
der is
obligations of the related transactions according to relevant laws, regulations,
impleme
rules, other normative documents and the constitutions of Sinopharm Accord.
nt in real
Third, for the related transactions that can not be avoided or have reasonable
earnest,
reasons to occur, the Company and related party shall abide by the open, fair
Sinophar
and just market principles and confirm the price of related transactions in
m
accordance with the price that the independent third party without association
Accord
Commit sets for the same and similar transactions, and ensure the fairness of the price 5
Sinophar will
ment of of the related transactions. Fourth, when the board of directors and the Septe Long-term
m actively
sharehold general meeting of stockholders of Sinopharm Accord vote on the related mber effective
Holding urged the
ers transactions involving the Company and other enterprises controlled by the 2013
controlli
Company, the Company shall fulfill the necessary obligations that the
ng
associated directors and associated shareholders abstain from voting in
sharehol
accordance with the relevant provisions, and abide by the legal procedures for
der and
approving related transactions and the information disclosure obligations.
actual
Fifth, the Company guarantees to participate in the shareholders' general
controlle
meeting, equally exercise the corresponding rights and take the corresponding
r to
obligations in accordance with the constitutions of Sinopharm Accord, not to
fulfill
take advantage of controlling shareholder status to seek improper benefits or
commitm
utilize related transactions to illegally transfer the funds and profits of
ents
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.”
51
Actual
"SINOPHARM made commitments in the Commitment Letter About China Controlle
National Pharmaceutical Group Corporation to Avoid Horizontal Competition r is
with China National Accord Medicines Corporation Ltd.: “First, in the next impleme
five years, Sinopharm plans to take appropriate measures (including assets nt in real
replacement or acquisition, equity reorganization, etc.) to resolve the earnest,
horizontal competition between Sinopharm Weiqida and Sinopharm Accord. Sinophar
Second, in addition to the past matters and matters disclosed in this m
commitment letter, the Company and the Company’s wholly-owned, Accord
Commit controlling or other enterprises with actual control rights (except for will
16
SINOPH ment of Sinopharm Accord and its controlling enterprises, the same as below) shall Long-term actively
Octobe
ARM actual not directly engaged in, participate in or do the businesses an activities effective urged the
r 2013
controller constituting actual competition to the production and operation of Sinopharm controlli
Accord in China. The relevant commitments about avoiding horizontal ng
competition that the Company made in the past still remain in effect. Third, sharehol
the Company shall not take advantage of the control relationship to der and
Sinopharm Accord to damage the legitimate rights and interests of Sinopharm actual
Accord and its shareholders (especially the medium and small shareholders). controlle
Fourth, this commitment letter comes into force from the issue date and r to
remains in effect for the entire period when the Company acts as the fulfill
controlling shareholder or its related party of Sinopharm Accord.” commitm
ents
52
"SINOPHARM made commitments in the Commitment Letter About
Sinopharm Group Co., Ltd. to Regulate the Related Transactions with China
National Accord Medicines Corporation Ltd.: “First, when the Company is
controlling Sinopharm Accord, the Company and the companies and
enterprises directly and indirectly controlled by the Company (“related party”
for short) will strictly regulate the related transactions with Sinopharm
Actual
Accord and its controlling enterprises. Second, for the related transactions
Controlle
that can not be avoided or have reasonable reasons to occur, the Company
r is
and related party shall sign normative related transaction agreement in
impleme
accordance with relevant laws with Sinopharm Accord. Sinopharm Accord
nt in real
implements the approval procedures and fulfills the information disclosure
earnest,
obligations of the related transactions according to relevant laws, regulations,
Sinophar
rules, other normative documents and the constitutions of Sinopharm Accord.
m
Third, for the related transactions that can not be avoided or have reasonable
Accord
reasons to occur, the Company and related party shall abide by the open, fair
Commit 22 will
and just market principles and confirm the price of related transactions in
SINOPH ment of Septe Long-term actively
accordance with the price that the independent third party without association
ARM actual mber effective urged the
sets for the same and similar transactions, and ensure the fairness of the price
controller 2013 controlli
of the related transactions. Fourth, when the board of directors and the
ng
general meeting of stockholders of Sinopharm Accord vote on the related
sharehol
transactions involving the Company and other enterprises controlled by the
der and
Company, the Company shall fulfill the necessary obligations that the
actual
associated directors and associated shareholders abstain from voting in
controlle
accordance with the relevant provisions, and abide by the legal procedures for
r to
approving related transactions and the information disclosure obligations.
fulfill
Fifth, the Company guarantees not to take advantage of actual controller
commitm
status to seek improper benefits or utilize related transactions to illegally
ents
transfer the funds and profits of Sinopharm Accord, and not to damage the
legitimate rights and interests of other shareholders (especially the medium
and small shareholders) of Sinopharm Accord. Sixth, this commitment letter
comes into force from the issue date and remains in effect for the entire
period when the Company acts as the actual controller or its related party of
Sinopharm Accord.
Completed
on time Y
(Y/N)
2. Concerning assets 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
53
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
Accounting treatment of rent concessions related to the COVID-19 epidemic
According to the "Regulations on Accounting Treatment of Rental Concessions Related to the COVID-19
Epidemic", simplified methods can be selected for rent concessions related to the COVID-19 epidemic according
to the accounting treatment regulations. As the lessee, the Group adopted the simplified method in the accounting
treatment regulations for the relevant rent concessions for leases that occurred from January 1, 2020 (please refer
to the Financial Report, Section XII, Note iii, 29), and the amount of the relevant rent concessions included in
the profit for the year was 10,686,956.74 yuan.
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 Section XII. Financial 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 thousand
594.57
Yuan)
Continuous life of auditing service for domestic accounting firm 5
54
Name of domestic CPA Li Jianguang, Li Yuanfen
Continuous life of CPA from the domestic accounting firm for
5
auditing service
Name of foreign accounting firm (if applicable) N/A
Re-appointed accounting firms in this period
□ Yes √ No
Appointment of internal control auditing accounting firm, financial consultant or sponsor
√Applicable □ Not applicable
In the Period, the Company engaged Ernst & Young CPA (Special General partnership) as the audit body for internal control, and
auditing charge for internal control amounting as 893,410yuan.
X. Particular about 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 litigations and arbitration of the Company
□ Applicable √ Not applicable
No significant litigations and arbitration occurred in the reporting period.
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 reporting period, controlling shareholder and actual controller of the Company has a sound integrity , and there are no cases of
failure to implement the effective judgement of the court and the large amount of debt due and unliquidated
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
55
that have not been implemented.
XVI. Major related transaction
1. Related transaction with routine operation concerned
√ Applicable □ Not applicable
(1) Related transaction with routine operation concerned can be found in “X. Related party and related transaction”
carried in Section XII. Financial Report;
(2) The related transactions are settled in cash and by notes, according to the Proposal of Expected Routine
Related Transactions with Subordinate Enterprise for Year of 2020 deliberated and approved by 15th session of 8th
BOD held on 20 April 2020 and the Notice on Expected Routine Related Transaction for Year of 2020 (Notice No.:
2020-10) released on 22 April 2020, the related sales takes 75.82% in total expected amount for the whole year,
and related procurement takes 89.47% in total expected amount for the whole year.
2. Related transactions by assets acquisition and sold
□ Applicable √ Not applicable
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
No contact of related credit and debt occurred in the reporting period
5. Other major related transactions
√ Applicable □ Not applicable
The Proposal on 100% Equity of Shanghai Dingqun Enterprise Management Consulting Co., Ltd. Acquisition by
Sinopharm Holding Guoda Drugstore Co., Ltd and Proposal on 75% Equity of Shanghai Pudong New Area
Medicine & Medication Co., Ltd. Acquisition by Sinopharm Holding Guoda Drugstore Co., Ltd were deliberated
and approved by 13th session of 8th BOD and Third Extraordinary Shareholders’ General Meeting of 2019. The
above mentioned target enterprises completed the equity delivery and registration change for industrial &
commerce in January 2020.
Relevant queries on the website of interim notices of major related party transaction disclosed
56
Interim Notice Date for disclosed Website for notice released
Sinopharm Accord: 75% Equity of Shanghai
Pudong New Area Medicine & Medication
Co., Ltd. Acquisition by Sinopharm Holding
2019-10-29 Juchao Website http://www.cninfo.com.cn
Guoda Drugstore Co., Ltd-controlling
subsidiary of the Company and Related Party
Transaction
Sinopharm Accord: 100% Equity of Shanghai
Dingqun Enterprise Management Consulting
Co., Ltd. Acquisition by Sinopharm Holding
Guoda Drugstore Co., Ltd-controlling
2019-10-29 Juchao Website http://www.cninfo.com.cn
subsidiary of the Company and Related Party
Transaction of the 85% Equity Acquisition of
Sinopharm Holding Tianhe Jiling Medical Co.,
Ltd.
XVII. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable √ Not applicable
The Company had no trusteeship in the 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)
57
Related Guarante
Announce Actual e for
Name of the Company Guarantee Actual date of Guarantee Guarantee Implemen
ment guarantee related
guaranteed limit happening type term ted (Y/N)
disclosure limit party
date (Y/N)
Guarantee between the Company and the subsidiaries
Related Guarante
Announce Actual e for
Name of the Company Guarantee Actual date of Guarantee Guarantee Implemen
ment guarantee related
guaranteed limit happening type term ted (Y/N)
disclosure limit party
date (Y/N)
Sinopharm Holding Joint liability 2020.5.20-20
2020-04-22 33,000 2020-05-20 26,912.64 N Y
Guangzhou Co., Ltd. assurance 21.5.20
Sinopharm Holding Joint liability 2020.5.20-20
2020-04-22 60,000 2020-05-20 60,000 N Y
Guangzhou Co., Ltd. assurance 21.5.19
Sinopharm Holding Joint liability 2020.12.8-20
2020-04-22 60,000 2020-12-08 5,584.3 N Y
Guangzhou Co., Ltd. assurance 21.12.3
Sinopharm Holding Joint liability 2020.3.31-20
2019-08-24 25,000 2020-03-31 5,903.18 N Y
Guangzhou Co., Ltd. assurance 21.3.30
Sinopharm Holding Joint liability 2020.5.20-20
2020-04-22 80,000 2020-05-20 58,822.52 N Y
Guangzhou Co., Ltd. assurance 21.5.19
Sinopharm Holding Joint liability 2020.1.15-20
2019-08-24 15,000 2020-01-15 10,536.4 N Y
Guangzhou Co., Ltd. assurance 21.1.14
Sinopharm Holding Joint liability 2020.10.20-2
2020-04-22 20,000 2020-10-20 10,987.3 N Y
Guangzhou Co., Ltd. assurance 021.10.19
Sinopharm Holding Joint liability 2020.8.31-20
2020-04-22 47,000 2020-08-31 N Y
Guangzhou Co., Ltd. assurance 21.8.31
Sinopharm Holding Joint liability 2020.8.6-202
2020-04-22 5,000 2020-08-06 4,350.04 N Y
Guangzhou Co., Ltd. assurance 1.8.5
Sinopharm Holding Joint liability 2020.6.11-20
2020-04-22 5,000 2020-06-11 4,221.84 N Y
Guangzhou Co., Ltd. assurance 21.5.18
Sinopharm Holding
Joint liability 2020.5.20-20
Guangdong Yuexing 2020-04-22 5,000 2020-05-20 3,681 N Y
assurance 21.5.20
Co., Ltd.
Sinopharm Holding
Joint liability 2020.10.20-2
Guangdong Yuexing 2020-04-22 12,000 2020-10-20 5,927.63 N Y
assurance 021.10.19
Co., Ltd.
Sinopharm Holding
Joint liability 2020.9.10-20
Guangdong Yuexing 2020-04-22 15,000 2020-09-10 4,741.6 N Y
assurance 21.9.10
Co., Ltd.
58
Sinopharm Holding
Joint liability 2020.11.20-2
Guangdong Yuexing 2020-04-22 5,000 2020-11-20 N Y
assurance 021.11.19
Co., Ltd.
Sinopharm Holding
Joint liability 2020.9.27-20
Guangdong Hengxing 2020-04-22 15,000 2020-09-27 6,752.7 N Y
assurance 21.9.27
Co., Ltd.
Sinopharm Holding
Joint liability 2019.11.26-2
Guangdong Hengxing 2019-08-24 3,000 2019-11-26 471.07 N Y
assurance 020.11.25
Co., Ltd.
Sinopharm Holding Joint liability 2020.10.20-2
2020-04-22 500 2020-10-20 28.1 N Y
Foshan Co., Ltd. assurance 021.10.19
Sinopharm Holding Joint liability 2020.5.27-20
2020-04-22 3,000 2020-05-27 113.07 N Y
Foshan Co., Ltd. assurance 21.3.21
Sinopharm Holding Joint liability 2020.10.20-2
2020-04-22 2,500 2020-10-20 1,743.72 N Y
Zhaoqing Co., Ltd. assurance 021.10.19
Sinopharm Holding Joint liability 2020.6.5-202
2020-04-22 2,000 2020-06-05 809.89 N Y
Zhaoqing Co., Ltd. assurance 1.5.18
Sinopharm Holding Joint liability 2020.12.21-2
2020-04-22 3,000 2020-12-21 500.48 N Y
Zhaoqing Co., Ltd. assurance 021.3.11
Guangdong Nanfang
Pharmaceutical Joint liability 2020.7.1-202
2020-04-22 19,500 2020-07-01 12,501.91 N Y
Foreign Trade Co., assurance 1.6.30
Ltd.
Guangdong Nanfang
Pharmaceutical Joint liability 2020.10.16-2
2020-04-22 15,000 2020-10-16 4,957.04 N Y
Foreign Trade Co., assurance 021.10.15
Ltd.
Guangdong Nanfang
Pharmaceutical Joint liability 2020.9.27-20
2020-04-22 20,000 2020-09-27 20,000 N Y
Foreign Trade Co., assurance 21.9.27
Ltd.
Guangdong Nanfang
Pharmaceutical Joint liability 2020.10.20-2
2020-04-22 3,000 2020-10-20 N Y
Foreign Trade Co., assurance 021.10.19
Ltd.
Guangdong Nanfang
Pharmaceutical Joint liability 2020.11.12-2
2020-04-22 10,000 2020-11-12 973.82 N Y
Foreign Trade Co., assurance 021.11.3
Ltd.
Guangdong Nanfang 2020-04-22 10,000 2020-06-03 Joint liability 2020.6.3-202 N Y
59
Pharmaceutical assurance 1.5.18
Foreign Trade Co.,
Ltd.
Guangdong Nanfang
Pharmaceutical Joint liability 2020.9.25-20
2020-04-22 5,000 2020-09-25 N Y
Foreign Trade Co., assurance 21.9.24
Ltd.
Foshan Nanhai Joint liability 2020.10.20-2
2020-04-22 1,500 2020-10-20 404.48 N Y
Medicine Co., Ltd. assurance 021.10.19
Foshan Nanhai Joint liability 2020.5.27-20
2020-04-22 10,000 2020-05-27 3,151.99 N Y
Medicine Co., Ltd. assurance 21.3.21
Foshan Nanhai Joint liability 2019.11.7-20
2019-08-24 7,000 2019-11-07 32.04 N Y
Medicine Co., Ltd. assurance 20.11.6
Foshan Nanhai
Joint liability 2020.10.20-2
Uptodate & Special 2020-04-22 2,000 2020-10-20 N Y
assurance 021.10.19
Medicines Co. Ltd.
Foshan Nanhai
Joint liability 2020.5.27-20
Uptodate & Special 2020-04-22 10,000 2020-05-27 8,086.96 N Y
assurance 21.3.21
Medicines Co. Ltd.
Foshan Nanhai
Joint liability 2020.4.16-20
Uptodate & Special 2019-08-24 2,500 2020-04-16 97.9 N Y
assurance 20.12.23
Medicines Co. Ltd.
Sinopharm Holding Joint liability 2020.10.20-2
2020-04-22 1,500 2020-10-20 501.44 N Y
(Jiangmen) Co., Ltd. assurance 021.10.19
Sinopharm Holding Joint liability 2020.5.26-20
2020-04-22 3,000 2020-05-26 1,934.8 N Y
(Jiangmen) Co., Ltd. assurance 21.5.18
Sinopharm Holding Joint liability 2020.9.21-20
2020-04-22 3,000 2020-09-21 2,497 N Y
(Jiangmen) Co., Ltd. assurance 21.9.20
Sinopharm Holding Joint liability 2020.7.13-20
2020-04-22 3,000 2020-07-13 2,890.32 N Y
(Jiangmen) Co., Ltd. assurance 21.7.13
Sinopharm Holding Joint liability 2020.10.20-2
2020-04-22 1,000 2020-10-20 N Y
Meizhou Co., Ltd. assurance 021.10.19
Sinopharm Holding Joint liability 2020.6.29-20
2020-04-22 4,000 2020-06-29 1,900 N Y
Meizhou Co., Ltd. assurance 21.6.28
Sinopharm Holding Joint liability 2020.5.22-20
2020-04-22 5,000 2020-05-22 4,000 N Y
Meizhou Co., Ltd. assurance 21.5.18
Sinopharm Holding Joint liability 2020.6.10-20
2020-04-22 3,000 2020-06-10 2,100 N Y
Meizhou Co., Ltd. assurance 21.5.31
Sinopharm Holding 2020-04-22 1,000 2020-10-20 850 Joint liability 2020.10.20-2 N Y
60
Zhongshan Co., Ltd. assurance 021.10.19
Sinopharm Holding Joint liability 2020.11.18-2
2020-04-22 2,000 2020-11-18 714 N Y
Zhongshan Co., Ltd. assurance 021.11.17
Sinopharm Holding Joint liability 2020.9.7-202
2020-04-22 1,000 2020-09-07 725.58 N Y
Zhongshan Co., Ltd. assurance 1.5.18
Sinopharm Holding Joint liability 2020.8.17-20
2020-04-22 1,000 2020-08-17 406.94 N Y
Zhongshan Co., Ltd. assurance 21.8.14
Sinopharm Holding Joint liability 2020.10.20-2
2020-04-22 500 2020-10-20 500 N Y
Shantou Co., Ltd. assurance 021.10.19
Sinopharm Holding Joint liability 2020.8.31-20
2020-04-22 3,000 2020-08-31 1,000 N Y
Shantou Co., Ltd. assurance 21.8.30
Sinopharm Holding Joint liability 2020.8.31-20
2020-04-22 2,000 2020-08-31 1,000 N Y
Shantou Co., Ltd. assurance 21.5.18
Sinopharm Holding Joint liability 2020.6.1-202
2020-04-22 2,000 2020-06-01 1,000 N Y
Shantou Co., Ltd. assurance 1.5.31
Sinopharm Holding Joint liability 2020.10.20-2
2020-04-22 1,000 2020-10-20 957.74 N Y
Huizhou Co., Ltd. assurance 021.10.19
Sinopharm Holding Joint liability 2020.10.20-2
2020-04-22 3,000 2020-10-20 1,325.32 N Y
Huizhou Co., Ltd. assurance 021.10.19
Sinopharm Holding Joint liability 2020.9.7-202
2020-04-22 2,000 2020-09-07 1,797.07 N Y
Huizhou Co., Ltd. assurance 1.5.18
Sinopharm Holding Joint liability 2020.9.3-202
2020-04-22 1,000 2020-09-03 888.16 N Y
Huizhou Co., Ltd. assurance 1.9.2
Sinopharm Holding Joint liability 2020.10.20-2
2020-04-22 2,000 2020-10-20 1,700 N Y
Zhanjiang Co., Ltd. assurance 021.10.19
Sinopharm Holding Joint liability 2020.8.10-20
2020-04-22 5,000 2020-08-10 1,495 N Y
Zhanjiang Co., Ltd. assurance 21.8.9
Sinopharm Holding Joint liability 2020.6.3-202
2020-04-22 3,000 2020-06-03 1,420.24 N Y
Zhanjiang Co., Ltd. assurance 1.5.20
Sinopharm Holding Joint liability 2020.9.18-20
2020-04-22 3,000 2020-09-18 2,200 N Y
Zhanjiang Co., Ltd. assurance 21.9.17
Sinopharm Holding Joint liability 2020.10.20-2
2020-04-22 1,000 2020-10-20 990.26 N Y
Zhuhai Co., Ltd. assurance 021.10.19
Sinopharm Holding Joint liability 2020.8.5-202
2020-04-22 3,000 2020-08-05 2,929.1 N Y
Zhuhai Co., Ltd. assurance 1.8.4
Sinopharm Holding Joint liability 2020.7.3-202
2020-04-22 1,000 2020-07-03 899.4 N Y
Zhuhai Co., Ltd. assurance 1.5.18
Sinopharm Holding Joint liability 2020.5.15-20
2020-04-22 2,000 2020-05-15 2,000 N Y
Zhuhai Co., Ltd. assurance 21.5.15
61
Sinopharm Holding Joint liability 2020.5.29-20
2020-04-22 5,000 2020-05-29 2,000 N Y
Dongguan Co., Ltd. assurance 21.5.18
Sinopharm Holding Joint liability 2020.10.20-2
2020-04-22 2,000 2020-10-20 1,500 N Y
Dongguan Co., Ltd. assurance 021.10.19
Sinopharm Holding Joint liability 2020.5.6-202
2020-04-22 3,000 2020-05-06 N Y
Dongguan Co., Ltd. assurance 1.2.27
Sinopharm Holding Joint liability 2020.6.24-20
2020-04-22 3,000 2020-06-24 N Y
Dongguan Co., Ltd. assurance 21.6.23
Guangdong Dongfang
Joint liability 2020.5.11-20
New Special Medicine 2020-04-22 10,000 2020-05-11 9,822.06 N Y
assurance 21.5.10
Co., Ltd
Guangdong Dongfang
Joint liability 2020.5.20-20
New Special Medicine 2020-04-22 5,000 2020-05-20 3,973.49 N Y
assurance 21.4.10
Co., Ltd
Guangdong Dongfang
Joint liability 2020.4.9-202
New Special Medicine 2019-08-24 3,000 2020-04-09 2,982.62 N Y
assurance 1.3.16
Co., Ltd
Guangdong Dongfang
Joint liability 2020.10.19-2
New Special Medicine 2020-04-22 9,000 2020-10-19 4,672.46 N Y
assurance 021.10.18
Co., Ltd
Guangdong Dongfang
Joint liability 2020.10.20-2
New Special Medicine 2020-04-22 4,000 2020-10-20 3,572.57 N Y
assurance 021.10.19
Co., Ltd
Guangdong Dongfang
Joint liability 2020.4.16-20
New Special Medicine 2019-08-24 2,500 2020-04-16 2,483.1 N Y
assurance 20.12.23
Co., Ltd
Sinopharm Holding Joint liability 2020.5.29-20
2020-04-22 3,000 2020-05-29 1,348.06 N Y
Shaoguan Co., Ltd. assurance 21.5.18
Sinopharm Holding Joint liability 2020.6.10-20
2020-04-22 2,000 2020-06-10 1,900 N Y
Shaoguan Co., Ltd. assurance 21.5.31
Sinopharm Holding Joint liability 2020.10.20-2
2020-04-22 1,000 2020-10-20 N Y
Shaoguan Co., Ltd. assurance 021.10.19
Sinopharm Holding Joint liability 2020.5.26-20
2020-04-22 5,000 2020-05-26 N Y
Maoming Co., Ltd. assurance 21.5.18
Sinopharm Holding Joint liability 2020.7.28-20
2020-04-22 3,000 2020-07-28 537.72 N Y
Maoming Co., Ltd. assurance 21.7.27
Sinopharm Holding
Joint liability 2020.6.8-202
Guangzhou Huadu 2020-04-22 2,000 2020-06-08 599.42 N Y
assurance 1.6.7
Co., Ltd.
62
Sinopharm Holding
Joint liability 2020.9.27-20
Guangzhou Huadu 2020-04-22 3,000 2020-09-27 2,647.74 N Y
assurance 21.9.27
Co., Ltd.
Sinopharm Holding
Joint liability 2020.9.1-202
Guangzhou Huadu 2020-04-22 2,000 2020-09-01 N Y
assurance 1.5.24
Co., Ltd.
Sinopharm Holding Joint liability 2020.5.21-20
2020-04-22 5,000 2020-05-21 4,480 N Y
Heyuan Co., Ltd. assurance 21.5.18
Sinopharm Holding Joint liability 2020.8.3-202
2020-04-22 3,000 2020-08-03 N Y
Heyuan Co., Ltd. assurance 1.5.31
Sinopharm Holding
Foshan Medical Joint liability 2019.11.7-20
2019-08-24 1,000 2019-11-07 3.59 N Y
Supplies Supply Chain assurance 20.11.6
Co., Ltd.
Sinopharm Accord
Joint liability 2020.6.17-20
(Guangzhou) 2020-04-22 1,000 2020-06-17 N Y
assurance 21.5.18
Medicine Co., Ltd.
Sinopharm Accord
Joint liability 2020.8.17-20
(Guangzhou) 2020-04-22 1,000 2020-08-17 N Y
assurance 21.8.16
Medicine Co., Ltd.
Sinopharm Holding Joint liability 2020.6.28-20
2020-04-22 30,000 2020-06-28 6,796.17 N Y
Guangxi Co., Ltd. assurance 21.4.20
Sinopharm Holding Joint liability 2020.10.20-2
2020-04-22 16,000 2020-10-20 9,316.12 N Y
Guangxi Co., Ltd. assurance 021.10.19
Sinopharm Holding Joint liability 2020.2.17-20
2019-08-24 15,000 2020-02-17 14,172.04 N Y
Guangxi Co., Ltd. assurance 21.2.21
Sinopharm Holding Joint liability 2020.6.16-20
2020-04-22 20,000 2020-06-16 N Y
Guangxi Co., Ltd. assurance 21.6.15
Sinopharm Holding Joint liability 2020.5.28-20
2020-04-22 10,000 2020-05-28 N Y
Guangxi Co., Ltd. assurance 21.5.28
Sinopharm Holding Joint liability 2019.12.25-2
2019-08-24 25,000 2019-12-25 5,117.31 N Y
Guangxi Co., Ltd. assurance 020.12.25
Sinopharm Holding Joint liability 2020.9.1-202
2020-04-22 10,000 2020-09-01 N Y
Guangxi Co., Ltd. assurance 1.8.31
Sinopharm Holding Joint liability 2020.5.20-20
2020-04-22 20,000 2020-05-20 15,544.96 N Y
Guangxi Co., Ltd. assurance 21.5.19
Sinopharm Holding Joint liability 2020.9.11-20
2020-04-22 15,000 2020-09-11 670 N Y
Guangxi Co., Ltd. assurance 21.9.10
Sinopharm Holding 2020-04-22 12,000 2020-05-29 11,088.12 Joint liability 2020.5.29-20 N Y
63
Guangxi Co., Ltd. assurance 21.5.18
Sinopharm Holding Joint liability 2020.10.20-2
2020-04-22 5,000 2020-10-20 2,463.87 N Y
Liuzhou Co., Ltd. assurance 021.10.19
Sinopharm Holding Joint liability 2020.6.21-20
2020-04-22 10,000 2020-06-21 3,217.92 N Y
Liuzhou Co., Ltd. assurance 21.6.20
Sinopharm Holding Joint liability 2020.2.21-20
2019-08-24 10,000 2020-02-21 2,399.87 N Y
Liuzhou Co., Ltd. assurance 21.2.20
Sinopharm Holding Joint liability 2020.7.25-20
2020-04-22 5,000 2020-07-25 N Y
Liuzhou Co., Ltd. assurance 21.7.24
Sinopharm Holding Joint liability 2020.12.20-2
2020-04-22 10,000 2020-12-20 7,548.81 N Y
Liuzhou Co., Ltd. assurance 021.12.19
Sinopharm Holding
Medicine Supply Joint liability 2019.10.8-20
2019-08-24 1,000 2019-10-08 792 N Y
Chain Service assurance 20.10.7
(Guangxi) Co., Ltd.
Sinopharm Holding
Medicine Supply Joint liability 2020.7.1-202
2020-04-22 1,000 2020-07-01 N Y
Chain Service assurance 1.5.18
(Guangxi) Co., Ltd.
Sinopharm Holding Joint liability 2020.10.20-2
2020-04-22 300 2020-10-20 99.11 N Y
Wuzhou Co., Ltd. assurance 021.10.19
Sinopharm Holding Joint liability 2020.8.7-202
2020-04-22 2,000 2020-08-07 N Y
Wuzhou Co., Ltd. assurance 1.8.7
Sinopharm Holding Joint liability 2020.10.20-2
2020-04-22 200 2020-10-20 N Y
Guilin Co., Ltd. assurance 021.10.19
Sinopharm Holding Joint liability 2020.10.20-2
2020-04-22 500 2020-10-20 N Y
Beihai Co., Ltd. assurance 021.10.19
Sinopharm Holding Joint liability 2020.10.20-2
2020-04-22 500 2020-10-20 291.76 N Y
Baise Co., Ltd. assurance 021.10.19
Sinopharm Holding Joint liability 2020.10.20-2
2020-04-22 1,000 2020-10-20 N Y
Yulin Co., ltd. assurance 021.10.19
Sinopharm Holding
Joint liability 2020.2.17-20
Shenzhen Jianmin 2019-08-24 2,000 2020-02-17 900 N Y
assurance 21.2.17
Co., ltd.
Sinopharm Holding
Joint liability 2020.10.20-2
Shenzhen Jianmin 2020-04-22 3,000 2020-10-20 2,020.64 N Y
assurance 021.10.19
Co., ltd.
Sinopharm Holding Joint liability 2020.10.20-2
2020-04-22 500 2020-10-20 291.44 N Y
Shenzhen Medicinal assurance 021.10.19
64
Materials Co., Ltd.
Sinopharm Holding
Joint liability 2020.7.1-202
Shenzhen Medicinal 2020-04-22 1,000 2020-07-01 275.56 N Y
assurance 1.5.18
Materials Co., Ltd.
Sinopharm Holding
Joint liability 2020.10.20-2
Shenzhen Yanfeng 2020-04-22 4,000 2020-10-20 544.83 N Y
assurance 021.10.19
Co., Ltd.
Sinopharm Holding
Joint liability 2020.5.28-20
Shenzhen Yanfeng 2020-04-22 8,000 2020-05-28 4,523.99 N Y
assurance 21.5.28
Co., Ltd.
Sinopharm Holding
Joint liability 2020.5.25-20
Shenzhen Yanfeng 2020-04-22 10,000 2020-05-25 931.01 N Y
assurance 21.5.18
Co., Ltd.
Sinopharm Holding
Joint liability 2020.11.2-20
Shenzhen Yanfeng 2020-04-22 5,000 2020-11-02 5,000 N Y
assurance 21.7.13
Co., Ltd.
Sinopharm Accord
Medicines Supply Joint liability 2020.6.18-20
2020-04-22 5,000 2020-06-18 639.4 N Y
Chain (Shenzhen) Co., assurance 21.5.18
Ltd.
Sinopharm Accord
Medicines Supply Joint liability 2020.11.10-2
2020-04-22 3,000 2020-11-10 446.99 N Y
Chain (Shenzhen) Co., assurance 021.11.9
Ltd.
Total amount of actual
Total amount of approving
occurred guarantee for
guarantee for subsidiaries in report 897,000 1,378,272.95
subsidiaries in report period
period (B1)
(B2)
Total balance of actual
Total amount of approved
guarantee for subsidiaries at
guarantee for subsidiaries at the 934,000 440,530.74
the end of reporting period
end of reporting period (B3)
(B4)
Guarantees of subsidiaries to subsidiaries
Guarante
Related
e for
Announce Actual Implemen
Name of the Company Guarantee Actual date of Guarantee Guarantee
ment guarantee related
guaranteed limit happening type term ted (Y/N)
disclosure limit
party
date
(Y/N)
Sinopharm Holding
Joint liability 2020.10.21-2
Guoda Drugstore 2020-04-22 1,200 2020-10-21 888.72 N Y
assurance 021.10.20
Yangzhou Dadesheng
65
Chain Co., Ltd.
Sinopharm Holding
Guoda Drugstore Joint liability 2020.12.21-2
2020-04-22 1,200 2020-12-21 969.91 N Y
Yangzhou Dadesheng assurance 021.12.20
Chain Co., Ltd.
Fujian Guoda
Joint liability 2020.05.17-2
Drugstore Chain Co., 2020-04-22 1,800 2020-05-17 0 N Y
assurance 021.05.17
Ltd.
Fujian Guoda
Joint liability 2020.07.29-2
Drugstore Chain Co., 2020-04-22 1,200 2020-07-29 834.4 N Y
assurance 021.07.30
Ltd.
Fujian Guoda
Joint liability 2020.10.21-2
Drugstore Chain Co., 2020-04-22 1,800 2020-10-21 408.67 N Y
assurance 021.10.20
Ltd.
Sinopharm Holding
Guoda Fumei Joint liability 2020.06.29-2
2020-04-22 1,800 2020-06-29 280.84 N Y
Drugstore Shanghai assurance 021.06.28
Chain Co., Ltd.
Sinopharm Holding
Joint liability 2020.10.21-2
Guoda Drugstore 2020-04-22 6,000 2020-10-21 3,078.09 N Y
assurance 021.10.20
Guangdong Co., Ltd.
Sinopharm Holding
Joint liability 2020.12.21-2
Guoda Drugstore 2020-04-22 1,800 2020-12-21 736.9 N Y
assurance 021.12.20
Guangdong Co., Ltd.
Sinopharm Holding
Joint liability 2020.07.31-2
Guoda Drugstore 2020-04-22 6,000 2020-7-31 2,467.39 N Y
assurance 021.05.14
Guangdong Co., Ltd.
Taishan Sinopharm
Holding Guoda Joint liability 2020.10.21-2
2020-04-22 600 2020-10-21 9.16 N Y
Qunkang Drugstore assurance 021.10.20
Chain Co., Ltd.
Taishan Sinopharm
Holding Guoda Joint liability 2020.06.16-2
2020-04-22 600 2020-06-16 132.68 N Y
Qunkang Drugstore assurance 021.05.14
Chain Co., Ltd.
Sinopharm Holding
Guoda Drugstore Joint liability 2020.10.21-2
2020-04-22 1,800 2020-10-21 559.62 N Y
Guangxi Chain Co., assurance 021.10.20
Ltd.
Sinopharm Holding Joint liability 2020.12.21-2
2020-04-22 600 2020-12-21 371.92 N Y
Guoda Drugstore assurance 021.12.20
66
Guangxi Chain Co.,
Ltd.
China National Hebei
Joint liability 2020.10.21-2
Lerentang Medicine 2020-04-22 1,800 2020-10-21 843.16 N Y
assurance 021.10.20
Chain Co., Ltd.
China National Hebei
Joint liability 2020.06.03-2
Lerentang Medicine 2020-04-22 9,000 2020-06-03 7,117.41 N Y
assurance 021.05.14
Chain Co., Ltd.
Hunan Guoda
Minshentang Joint liability 2020.10.21-2
2020-04-22 1,800 2020-10-21 742.41 N Y
Drugstore Chain Co., assurance 021.10.20
Ltd.
Hunan Guoda
Minshentang Joint liability 2020.12.21-2
2020-04-22 1,200 2020-12-21 1,030.55 N Y
Drugstore Chain Co., assurance 021.12.20
Ltd.
Sinopharm Holding
Guoda Drugstore Joint liability 2020.10.21-2
2020-04-22 1,800 2020-10-21 475.65 N Y
Jiangmen Chain Co., assurance 021.10.20
Ltd.
Sinopharm Holding
Guoda Drugstore Joint liability 2020.04.01-2
2019-08-24 1,200 2020-04-01 963.51 N Y
Jiangmen Chain Co., assurance 021.04.01
Ltd.
Sinopharm Holding
Guoda Drugstore Joint liability 2020.12.21-2
2020-04-22 1,800 2020-12-21 991.67 N Y
Jiangmen Chain Co., assurance 021.12.20
Ltd.
Sinopharm Holding
Guoda Drugstore Joint liability 2020.12.28-2
2020-04-22 3,000 2020-12-28 877.75 N Y
Jiangmen Chain Co., assurance 021.12.27
Ltd.
Beijing Golden
Elephant Pharmacy Joint liability 2020.12.21-2
2020-04-22 4,200 2020-12-21 1,908.89 N Y
Medicine Chain assurance 021.12.20
Company Limited
Sinopharm Holding
Guoda Drugstore Joint liability 2020.12.21-2
2020-04-22 600 2020-12-21 545.14 N Y
Nanjing Chain Co., assurance 021.12.20
Ltd.
Sinopharm Holding 2020-04-22 3,000 2020-09-23 1,794.05 Joint liability 2020.09.23-2 N Y
67
Guoda Drugstore assurance 021.08.19
Inner Mongolia Co.,
Ltd
Sinopharm Holding
Guoda Drugstore Joint liability 2020.07.21-2
2020-04-22 1,800 2020-07-21 458.74 N Y
Inner Mongolia Co., assurance 021.07.21
Ltd
Sinopharm Holding
Guoda Drugstore Joint liability 2020.10.21-2
2020-04-22 6,000 2020-10-21 4,439.56 N Y
Inner Mongolia Co., assurance 021.10.20
Ltd
Sinopharm Holding
Guoda Drugstore Joint liability 2020.12.21-2
2020-04-22 4,800 2020-12-21 3,488.69 N Y
Inner Mongolia Co., assurance 021.12.20
Ltd
Sinopharm Holding
Guoda Drugstore Joint liability 2020.06.05-2
2020-04-22 1,800 2020-06-05 844.82 N Y
Inner Mongolia Co., assurance 021.05.14
Ltd
Sinopharm Holding
Joint liability 2020.05.19-2
Guoda Drugstore 2020-04-22 600 2020-05-19 520.52 N Y
assurance 021.05.14
Bayan Nur Co., Ltd.
Sinopharm Holding
Joint liability 2020.05.18-2
Guoda Drugstore 2020-04-22 600 2020-05-18 484.57 N Y
assurance 021.05.14
Hulun Buir Co., Ltd.
Sinopharm Holding
Joint liability 2020.10.21-2
Guoda Drugstore 2020-04-22 300 2020-10-21 275.14 N Y
assurance 021.10.20
Hulun Buir Co., Ltd.
Sinopharm Holding
Joint liability 2020.06.15-2
Guoda Drugstore 2020-04-22 600 2020-06-15 109.81 N Y
assurance 021.05.14
Ulanqab Co., Ltd.
Ningxia Guoda
Joint liability 2020.08.29-2
Drugstore Chain Co., 2020-04-22 2,400 2020-08-29 2,209.8 N Y
assurance 021.08.28
Ltd.
Sinopharm Holding
Joint liability 2019.10.14-2
Guoda Drugstore 2019-08-24 2,400 2019-10-14 641.2 N Y
assurance 020.10.13
Shandong Co., Ltd
Sinopharm Holding
Joint liability 2020.01.17-2
Guoda Drugstore 2019-08-24 1,200 2020-01-17 593.54 N Y
assurance 020.11.26
Shandong Co., Ltd
Shanxi Guoda 2020-04-22 3,600 2020-11-08 3,600 Joint liability 2020.11.08-2 N Y
68
Wanmin Drugstore assurance 021.11.07
Chain Co., Ltd.
Shanxi Guoda
Joint liability 2020.06.13-2
Wanmin Drugstore 2020-04-22 3,600 2020-06-13 2,160 N Y
assurance 021.06.12
Chain Co., Ltd.
Shanxi Guoda
Joint liability 2020.05.22-2
Wanmin Drugstore 2020-04-22 15,000 2020-05-22 11,100 N Y
assurance 021.05.14
Chain Co., Ltd.
Shanxi Guoda
Joint liability 2020.10.21-2
Wanmin Drugstore 2020-04-22 5,400 2020-10-21 4,698 N Y
assurance 021.10.20
Chain Co., Ltd.
Sinopharm Holding
Joint liability 2020.05.21-2
Guoda Shanxi 2020-04-22 15,000 2020-05-21 14,965.9 N Y
assurance 021.05.14
Medicines Co., Ltd.
Sinopharm Holding
Joint liability 2020.10.21-2
Guoda Shanxi 2020-04-22 1,200 2020-10-21 1,200 N Y
assurance 021.10.20
Medicines Co., Ltd.
Sinopharm Holding
Guoda Drugstore Joint liability 2020.11.27-2
2020-04-22 1,800 2020-11-27 1,571.53 N Y
Shanghai Chain Co., assurance 021.11.27
Ltd.
Sinopharm Holding
Guoda Drugstore Joint liability 2020.10.25-2
2020-04-22 2,400 2020-10-25 2,290.06 N Y
Shanghai Chain Co., assurance 021.10.24
Ltd.
Sinopharm Holding
Guoda Drugstore Joint liability 2020.10.10-2
2020-04-22 2,400 2020-10-10 46.81 N Y
Shanghai Chain Co., assurance 021.10.09
Ltd.
Sinopharm Holding
Guoda Drugstore Joint liability 2020.06.29-2
2020-04-22 3,000 2020-06-29 1,204.88 N Y
Shanghai Chain Co., assurance 021.06.28
Ltd.
Sinopharm Holding
Guoda Drugstore Joint liability 2020.09.11-2
2020-04-22 6,000 2020-09-11 5,897.87 N Y
Shenyang Chain Co., assurance 021.09.10
Ltd.
Sinopharm Holding
Guoda Drugstore Joint liability 2020.10.21-2
2020-04-22 12,000 2020-10-21 9,381.13 N Y
Shenyang Chain Co., assurance 021.10.20
Ltd.
69
Sinopharm Holding
Guoda Drugstore Joint liability 2020.05.19-2
2020-04-22 13,800 2020-5-19 9,796.09 N Y
Shenyang Chain Co., assurance 021.05.14
Ltd.
Sinopharm Holding
Guoda Drugstore
Joint liability 2020.11.18-2
Xinjiang New Special 2020-04-22 3,000 2020-11-18 1,599.3 N Y
assurance 021.11.18
Medicine Chain Co.,
Ltd
Sinopharm Holding
Guoda Drugstore
Joint liability 2020.06.29-2
Xinjiang New Special 2020-04-22 1,800 2020-06-29 1,797.01 N Y
assurance 021.05.14
Medicine Chain Co.,
Ltd
Sinopharm Holding
Guoda Drugstore Joint liability 2020.12.29-2
2020-04-22 3,600 2020-12-29 350.67 N Y
Shanxi Yiyuan Chain assurance 020.12.28
Co., Ltd.
Sinopharm Holding
Guoda Drugstore Joint liability 2020.05.02-2
2020-04-22 5,400 2020-05-02 4,060.04 N Y
Shanxi Yiyuan Chain assurance 021.05.01
Co., Ltd.
Sinopharm Holding
Guoda Drugstore Joint liability 2020.08.20-2
2020-04-22 3,360 2020-8-20 2,503.28 N Y
Shanxi Yiyuan Chain assurance 020.11.16
Co., Ltd.
Sinopharm Holding
Guoda Drugstore Joint liability 2020.11.28-2
2020-04-22 3,600 2020-11-28 3,599.82 N Y
Shanxi Yiyuan Chain assurance 021.11.27
Co., Ltd.
Sinopharm Holding
Guoda Drugstore Joint liability 2020.10.21-2
2020-04-22 9,000 2020-10-21 4,514.35 N Y
Shanxi Yiyuan Chain assurance 021.10.20
Co., Ltd.
Sinopharm Holding
Guoda Drugstore Joint liability 2020.04.10-2
2019-08-24 3,000 2020-04-10 0 N Y
Shanxi Yiyuan Chain assurance 021.04.09
Co., Ltd.
Sinopharm Holding
Joint liability 2020.05.26-2
Guoda Drugstore 2020-04-22 3,000 2020-05-26 504 N Y
assurance 021.05.25
Shanxi Yiyuan Chain
70
Co., Ltd.
Sinopharm Holding
Guoda Drugstore Joint liability 2020.05.21-2
2020-04-22 4,200 2020-5-21 3,540.28 N Y
Shanxi Yiyuan Chain assurance 021.05.14
Co., Ltd.
Sinopharm Holding
Guoda Drugstore Joint liability 2020.12.21-2
2020-04-22 300 2020-12-21 121.78 N Y
Zhengzhou Chain Co., assurance 021.12.20
Ltd.
Inner Mongolia Guoda Joint liability 2020.06.03-2
2020-04-22 2,400 2020-06-03 2,313.55 N Y
Medicine Co., Ltd. assurance 021.05.14
Sinopharm Holding
Joint liability 2020.11.24-2
Tianhe Jilin Medicines 2020-04-22 6,000 2020-11-24 4,928.94 N Y
assurance 021.11.23
Co., Ltd.
Sinopharm Holding
Joint liability 2020.10.21-2
Tianhe Jilin Medicines 2020-04-22 3,000 2020-10-21 2,099.29 N Y
assurance 021.10.20
Co., Ltd.
Yushu Dinghe
Joint liability 2020.08.20-2
Medicine Technology 2020-04-22 1,800 2020-8-20 1,747.91 N Y
assurance 021.05.14
Co., Ltd.
Guoda Yihe Drugstore Joint liability 2020.09.23-2
2020-04-22 4,080 2020-09-23 3,692.49 N Y
Jilin Co., Ltd. assurance 021.09.22
Guoda Yihe Drugstore Joint liability 2020.07.15-2
2020-04-22 3,000 2020-07-15 171.95 N Y
Jilin Co., Ltd. assurance 021.07.15
Tianjin Guoda
Joint liability 2019.12.26-2
Drugstore Chain Co., 2019-08-24 300 2019-12-26 195.71 N Y
assurance 020.12.25
Ltd.
Sinopharm Holding
Joint liability 2020.12.21-2
Guoda Drugstore 2020-04-22 1,200 2020-12-21 746.8 N Y
assurance 021.12.20
Henan Chain Co., Ltd.
Sinopharm Holding
Joint liability 2020.06.11-2
Guoda Drugstore 2020-04-22 1,800 2020-06-11 398.86 N Y
assurance 021.05.14
Henan Chain Co., Ltd.
Sinopharm Holding
Guoda Drugstore Joint liability 2020.12.21-2
2020-04-22 1,800 2020-12-21 618.8 N Y
(Shenzhen) Chain Co., assurance 021.12.20
Ltd.
Liaoning Chengda
Joint liability 2020.11.15-2
Fangyuan Medicine 2020-10-22 13,200 2020-11-15 9,543.94 N Y
assurance 021.11.15
Chain Co., Ltd.
71
Liaoning Chengda
Joint liability 2020.11.17-2
Fangyuan Medicine 2020-10-22 4,800 2020-11-17 4,148.27 N Y
assurance 021.05.14
Chain Co., Ltd.
Liaoning Chengda
Joint liability 2020.10.22-2
Fangyuan Medicine 2020-10-22 6,000 2020-10-22 2,997.94 N Y
assurance 021.10.20
Chain Co., Ltd.
Liaoning Chengda 2020.12.21
Joint liability
Fangyuan Medicine 2020-10-22 6,000 2020-12-21 0 —2021.12.2 N Y
assurance
Chain Co., Ltd. 0
Shanghai Pudong New
Joint liability 2020.07.24-2
Area Medicine & 2020-04-22 3,000 2020-07-24 711.48 N Y
assurance 021.07.23
Medication Co., Ltd.
Guoda Drugstore
Joint liability 2020.06.15-2
(Pu'er) Songmao Co., 2020-04-22 1,200 2020-06-15 847.86 N Y
assurance 021.05.14
Ltd.
Guoda Drugstore
Joint liability 2020.09.01-2
(Pu'er) Songmao Co., 2020-04-22 1,200 2020-09-01 20 N Y
assurance 021.08.31
Ltd.
Yanji Xianghe Joint liability 2020.06.17-2
2020-04-22 1,800 2020-06-17 40.63 N Y
Medicines Co., Ltd. assurance 021.05.14
Liaoning Guoda Joint liability 2020.10.21-2
2020-04-22 600 2020-10-21 599.97 N Y
Medicines Co., Ltd. assurance 021.10.20
Liaoning Guoda Joint liability 2020.06.29-2
2020-04-22 3,000 2020-6-29 2,968.09 N Y
Medicines Co., Ltd. assurance 021.05.14
Fujian Guoda Joint liability 2020.07.29-2
2020-04-22 600 2020-07-29 443.8 N Y
Medicines Co., Ltd. assurance 021.07.30
Total amount of actual
Total amount of approving guarantee occurred guarantee for
267,840 599,503.63
for subsidiaries in report period (C1) subsidiaries in report period
(C2)
Total balance of actual
Total amount of approved
guarantee for subsidiaries at
guarantee for subsidiaries at the 270,540 171,833.96
the end of reporting period
end of reporting period (C3)
(C4)
Total amount of guarantee of the Company ( total of three above mentioned guarantee)
Total amount of approving Total amount of actual
guarantee in report period 1,164,840 occurred guarantee in report 1,977,776.58
(A1+B1+C1) period (A2+B2+C2)
Total amount of approved Total balance of actual
1,204,540 612,364.7
guarantee at the end of report guarantee at the end of
72
period (A3+B3+C3) report period (A4+B4+C4)
The proportion of the total amount of actually guarantee in the net
43.90%
assets of the Company (that is A4+ B4+C4)
Including:
Explanation on guarantee using the composite way
(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.Material contract with routine operation concerned
□ Applicable √ Not applicable
5. Other material contracts
□ Applicable √ Not applicable
No other material contracts for the Company in reporting period.
XVIII. Social responsibility
1. Execution of social responsibility
“Social Responsibility Report of Sinopharm Accord in 2020” can be seen in Juchao website released on the same date
(http://www.cninfo.com.cn)
2. Execution of social responsibility of targeted poverty alleviation
The Company has not carried out targeted poverty alleviation in the reporting period and has no follow-up plan of targeted poverty
alleviation
73
3. Environment protection
The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection department
□Yes √No
Voluntary disclosure
Name of
Major Distribution Executed
Quantity of Emission Approved
Company Pollutants Emission of Pollutant Total Excessive
Discharge Concentrati Total
/subsidiary and Method Discharge Discharge Emissions Discharge
Outlet on Emissions
Particular Outlet Standards
Pollutants
Discharge
Standards
of Water
Pollutants
for
Discharge Pharmaceuti
Main Luck
Nanotubes Outlet of cal industry 0.020 0.078
Pharmaceuti COD 1 15mg/L N/A
emissions Waste Mixing/Co ton/year ton/year
cals
Water mpounding
and
Formulation
Category
-GB21908-
2008
Discharge
Standards
of Water
Pollutants
for
Discharge Pharmaceuti
Main Luck
Ammonia Nanotubes Outlet of cal industry 0.0007 0.012
Pharmaceuti 1 0．5mg/L N/A
Nitrogen emissions Waste Mixing/Co ton/year ton/year
cals
Water mpounding
and
Formulation
Category
-GB21908-
2008
Discharge Discharge
Main Luck
Nanotubes Outlet of Standards 0.00007 0.0006
Pharmaceuti Phosphate 1 0.05mg/l N/A
emissions Waste of Water ton/year ton/year
cals
Water Pollutants
74
for
Pharmaceuti
cal industry
Mixing/Co
mpounding
and
Formulation
Category
-GB21908-
2008
Discharge
Standards
of Water
Pollutants
for
Discharge Pharmaceuti
Main Luck
Nanotubes Outlet of cal industry 0.004 0.020
Pharmaceuti BOD 1 5mg/L N/A
emissions Waste Mixing/Co ton/year ton/year
cals
Water mpounding
and
Formulation
Category
-GB21908-
2008
Discharge
Standards
of Water
Pollutants
for
Discharge Pharmaceuti
Main Luck
Nanotubes Outlet of cal industry 0.0026 0.036
Pharmaceuti SS 1 2mg/L N/A
emissions Waste Mixing/Co ton/year ton/year
cals
Water mpounding
and
Formulation
Category
-GB21908-
2008
Located in a
China
Nanotubes sewage 1.5008 7.306
National COD 1 23.10mg/L 60mg/L N/A
emissions treatment ton/year ton/year
Zhijun
station
China Ammonia Nanotubes 1 Located in a 0.73mg/L 10mg/L 0.0477 0.812 N/A
75
National Nitrogen emissions sewage ton/year ton/year
Zhijun treatment
station
Located in a
China Total
Nanotubes sewage 0.0017 0.041
National phosphor 1 0.027mg/L 0.5mg/L N/A
emissions treatment ton/year ton/year
Zhijun us
station
Located in a
China
Total Nanotubes sewage 0.4470 4.104
National 1 6.88mg/L 20mg/L N/A
nitrogen emissions treatment ton/year ton/year
Zhijun
station
Located in a
China Discharge
sewage 100mg/Nm
National VOCs after 5 2.30mg/m 0 0 N/A
treatment 3
Zhijun treatment
station
Class-IV
Discharge
water
Zhijun Nanotubes Outlet of 0.9244 2.16
COD 1 12.00mg/L standard in N/A
Pingshan emissions Waste ton/year ton/year
GB21908-2
Water
008
Class-IV
Sewage water
Zhijun Ammonia Nanotubes 0.0204 0.144
1 treatment 0.128mg/L standard in N/A
Pingshan Nitrogen emissions ton/year ton/year
station GB21908-2
008
Class-IV
Sewage water
Zhijun Total Nanotubes 0.0127 0.0216
1 treatment 0.039mg/L standard in N/A
Pingshan phosphorus emissions ton/year ton/year
station GB21908-2
008
Class-IV
Sewage water
Zhijun Total Nanotubes 0.0507 0.108
1 treatment 0.75mg/L standard in N/A
Pingshan nitrogen emissions ton/year ton/year
station GB21908-2
008
Emission
Located on standards of
Discharge
Zhijun the roof of the table 3 0.1208 5.90
SO2 after 1 1.02mg/m3 N/A
Pingshan the boiler in ton/year ton/year
treatment
room GB13271-2
014
76
Emission
Located on standards of
Discharge
Zhijun Nitrogen the roof of 24.00mg/m the table 3 2.8318 17.70
after 1 N/A
Pingshan oxides the boiler 3 in ton/year ton/year
treatment
room GB13271-2
014
Construction and operation of pollution prevention and control facilities
At present, the above-mentioned environmental pollution key monitoring units in which the Company has a shareholding have
established pollution prevention and control facilities for waste water. In the daily management process, enterprises establish
management procedures and operating instructions for environmental protection facilities, and ensure the normal and compliant
operation of anti-pollution facilities through system implementation and responsibility implementation. All enterprises are
continuously investing funds and stepping up the transformation and improvement of pollution prevention and control facilities to
ensure the stable operation of pollution prevention facilities and improve the disposal capacity of environmental protection facilities.
Environmental impact assessment of construction projects and other environmental protection administrative licenses
At present, the projects of all key monitoring units have carried out environmental impact assessments and obtained approvals. The
projects to be built also carry out the relevant administrative review procedures according to the “three simultaneous” requirements of
the environmental protection facilities of the construction project.
Emergency plan for environmental emergencies
At present, the above-mentioned environmental pollution key monitoring units in which the Company has a shareholding have
formulated the Emergency Plan for Environmental Emergencies and reported them according to the regulatory requirements of the
local regulatory authorities. According to the management requirements of the emergency plan, the key units regularly carry out
emergency plan drills to further provide the enterprises’ emergency response capability.
Environmental self-monitoring scheme
At present, the above-mentioned environmental pollution key monitoring units in which the Company has a shareholding have
established environmental self-detection scheme and plan, and implemented self-inspection, third-party detection and other monitoring
methods according to the government requirements. Relevant monitoring data and reports have been archived and saved.
Other environmental information that should be disclosed
The above two companies are joint stock companies of the Company. The Company and its holding subsidiaries are not listed as key
pollutant discharge units announced by the environmental protection department.
Relevant information on environment protection
Nil
XIX. Explanation on other significant events
□ Applicable √ Not applicable
77
No other significant events need to explain in the reporting period.
XX. Significant event of subsidiary of the Company
□ Applicable √ Not applicable
78
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
Proportio Bonus tion of Proportio
Amount shares Others Subtotal Amount
n shares public n
issued
reserve
65,498,15 -59,989,2 -59,989,2
I. Restricted shares 15.30% 5,508,883 1.29%
3 70 70
1.Shares hold by the state
2. State-owned legal 60,380,74 -54,874,9 -54,874,9
14.10% 5,505,770 1.29%
person’s shares 3 73 73
3. Other domestic -5,114,29 -5,114,29
5,117,410 1.20% 3,113 0.00%
shareholding 7 7
Including: Domestic -5,114,29 -5,114,29
5,114,297 1.19% 0 0.00%
legal person’s shares 7 7
Domestic nature
3,113 0.00% 3,113 0.00%
person shares
4.Foreign shareholding
Including: shares hold
by overseas legal person
Share hold by
overseas natural person
362,628,8 59,989,27 59,989,27 422,618,1
II. Unrestricted shares 84.70% 98.71%
30 0 0 00
307,744,3 59,989,27 59,989,27 367,733,6
1. RMB Ordinary shares 71.88% 85.89%
55 0 0 25
2. Domestically listed 54,884,47 54,884,47
12.82% 12.82%
foreign shares 5 5
3. Foreign shares listed
abroad
4. Other
79
428,126,9 428,126,9
III. Total shares 100.00% 100.00%
83 83
Reasons for share changed
√Applicable □Not applicable
When the company issued shares to purchase assets and raised matching funds in 2016, the non-publicly issued
shares with restrictions on sales were lifted from sales restrictions on January 6, 2020, and the number of shares
released from sales restrictions was 59,989,270 shares.
Approval of share changed
□Applicable √Not applicable
Ownership transfer of share changed
□ Applicable √ Not applicable
Progress of shares buy-back
□Applicable √Not applicable
Implementation progress of the reduction of repurchases shares by centralized bidding
□Applicable √Not applicable
Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to common
shareholders of Company in latest year and period
□ Applicable √ Not applicable
Other information necessary to disclose for the Company or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
2. Changes of restricted shares
√ Applicable □ Not applicable
In Share
Restricted
shares
Opening shares increased Shares released Ending shares Restricted
Shareholders Date for released
restricted in in Period restricted reasons
the
Period
Sinopharm Group 55,057,700 49,551,930 5,505,770 Non-public 6 Jan. 2020
80
Co., Ltd offering share
China National
Pharmaceutical Non-public
5,323,043 5,323,043 0 6 Jan. 2020
Foreign Trade offering share
Corp.
Ping An
Asset-ICBM -Ping
An Asset Xinxiang Non-public
2,557,148 2,557,148 0 6 Jan. 2020
No. 7 Insurance offering share
Asset Management
Product
Ping An
Asset-ICBM -
Non-public
Xinxiang No. 3 2,557,149 2,557,149 0 6 Jan. 2020
offering share
Asset Management
Product
Total 65,495,040 59,989,270 5,505,770 -- --
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. Current 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 common Total preference Total preference
stock 42,036 stock 45,466 shareholders with 0 shareholders 0
shareholders in shareholders at voting rights with voting
81
reporting end of last month recovered at end of rights recovered
period-end before annual reporting period (if at end of last
report disclosed applicable) (found month before
in note 8) annual report
disclosed (if
applicable)
(found in note 8)
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
Full name of Nature of n of ers at the
in report lock-up un-restrict
Shareholders shareholder shares end of State of share Amount
period shares ed shares
held report
held held
period
Sinopharm Group State-owned 239,999,9 234,494,2
56.06% 5,505,770
Co., Ltd Corporation 91 21
Hong Kong
Foreign 12,580,66 12,580,66
Securities Clearing 2.94%
Corporation 5 5
Company Ltd
FIRST SENTIER
INVESTORS
GLOBAL
Foreign 11,469,64 11,469,64
UMBRELLA 2.68%
Corporation 4 4
FUND PLC -
FSSA CHINA
GROWTH FUND
National Social Domestic non
Security Fund 118 state-owned 1.59% 6,791,699 6,791,699
Portfolio Corporation
China National
Pharmaceutical State-owned
1.24% 5,323,043 5,323,043
Foreign Trade corporate
Corp.
Central Huijin State-owned
0.89% 3,804,400 3,804,400
Investment Ltd. corporate
National Social Domestic non
Security Fund 413 state-owned 0.86% 3,675,031 3,675,031
Portfolio Corporation
National Social Domestic non
Security Fund 115 state-owned 0.82% 3,500,000 3,500,000
Portfolio Corporation
82
BBH BOS S/A
FIDELITY FD - Foreign
0.78% 3,358,761 3,358,761
CHINA FOCUS Corporation
FD
Fidelity Investment
Management
Foreign
(Hong Kong) 0.54% 2,308,237 2,308,237
Corporation
Limited - Client’s
fund
Sinopharm Group Co., Ltd. and China National Pharmaceutical Foreign Trade Corporation
have the same actual controller, which is China National Pharmaceutical Group
Explanation on associated relationship
Corporation. It is unknown that there exists no associated relationship or belongs to the
among the aforesaid shareholders
consistent actionist among the other tradable shareholders regulated by the Management
Measure of Information Disclosure on Change of Shareholding for Listed Companies.
Particular about top ten common shareholders with un-restrict shares held
Amount of un-restrict common shares held at Type of shares
Shareholders
period-end Type Amount
RMB ordinary
Sinopharm Group Co., Ltd 234,494,221 234,494,221
shares
Hong Kong Securities Clearing RMB ordinary
12,580,665 12,580,665
Company Ltd shares
FIRST SENTIER INVESTORS Domestically
GLOBAL UMBRELLA FUND PLC - 11,469,644 listed foreign 11,469,644
FSSA CHINA GROWTH FUND shares
National Social Security Fund 118 RMB ordinary
6,791,699 6,791,699
Portfolio shares
China National Pharmaceutical RMB ordinary
5,323,043 5,323,043
Foreign Trade Corp. shares
RMB ordinary
Central Huijin Investment Ltd. 3,804,400 3,804,400
shares
National Social Security Fund 413 RMB ordinary
3,675,031 3,675,031
Portfolio shares
National Social Security Fund 115 RMB ordinary
3,500,000 3,500,000
Portfolio shares
Domestically
BBH BOS S/A FIDELITY FD -
3,358,761 listed foreign 3,358,761
CHINA FOCUS FD
shares
Fidelity Investment Management RMB ordinary
2,308,237 2,308,237
(Hong Kong) Limited - Client’s fund shares
83
Expiation on associated relationship or Sinopharm Group Co., Ltd. and China National Pharmaceutical Foreign Trade Corporation
consistent actors within the top 10 have the same actual controller, which is China National Pharmaceutical Group
un-restrict shareholders and between Corporation. It is unknown that there exists no associated relationship or belongs to the
top 10 un-restrict shareholders and top consistent actionist among the other tradable shareholders regulated by the Management
10 shareholders Measure of Information Disclosure on Change of Shareholding for Listed Companies.
Whether top ten common 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 person/person
Controlling shareholders Date of foundation Organization code Main operation business
in charge of the unit
Industrial investment
holding; management and
assets reorganization
entrusted by pharmaceutical
enterprise; Chinese
medicine, Chinese
medicine tablets, chemical
medicine preparations,
chemical raw materials,
antibiotics, biochemical
drugs, biological products,
narcotic drugs,
Sinopharm Group Co., Ltd Yu Qingming 8 January 2003 74618434-4
psychotropic substances,
toxic drugs for medical use
(compatible with the
business scope), medicine
IVD Reagents, vaccine,
Anabolic agents, wholesale
of peptide hormones,
medical device operation,
food sales management
(non-physical method),
technology development,
technology transfer,
84
technical consultation,
technical service in the field
of medical technology,
chemical raw materials and
products (except hazardous
chemicals, monitoring
chemicals, fireworks and
firecrackers, flammables
and explosives, explosives
for civilian use), business
management consulting,
business consulting, market
information consulting and
investigation (no social
surveys, social
investigation, opinion
surveys, or opinion polls),
data processing services,
e-commerce (no
value-added
telecommunications
financial services), sales,
design, production agency,
publishing various domestic
and foreign advertisements
of disinfection products,
daily necessities, textiles
and knitwear, wholesale of
protective equipment for
medical staff, sales of labor
protection supplies, daily
mask (non-medical) sales,
sporting goods, household
appliances, electronic
products, furniture, toys,
edible agricultural products,
cosmetics, and cultural and
sports goods, domestic
trade (except special
license), logistics and
related consulting services,
operating various types of
goods and import and
export of technology (not
85
attached directory of import
and export commodities),
but excluded the import and
export of goods and
technology the State limits
or prohibit the company.
(with the exception of
projects subject to approval
according to the law, carry
out business activities
independently according to
the business license)
Equity of other
domestic/oversea listed
company control by Sinopharm Group Co., Ltd. hold 54.72 percent equity of China National Medicines Corporation Ltd
controlling shareholder as (Stock code: 600511) up to the end of Period.
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 and persons acting in concert
Nature of actual controller: central state-owned assets management
Type of actual controller: legal person
Legal
Organization
Actual controlling shareholders person/person in Date of foundation Main operation business
code
charge of the unit
86
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 May
2020); mandatory for pharmaceutical
China National Pharmaceutical enterprise, asset reorganization; consulting
Liu Jingzhen 26 March 1987 10000588-8
Group Corporation service of medicine industrial 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)
87
Name of listed Total shareholders
Proportion of
Name company with held (10 thousand
shares held
shares held shares)
SINOPHARM Jianmin Group 132.35 0.86%
Sinopharm
SINOPHARM 20,728.95 6.64%
Holding
Sinopharm
Holding
Sinopharm
Industrial 157,155.60 50.36%
Holding
Investment
Co., Ltd.
Sinopharm Sinopharm
41,284.17 54.72%
Equity of domestic/oversea Holding Holding
listed company control by Sinopharm Sinopharm
actual controller in report period 24,000.00 56.06%
Holding Accord
Sinopharm Lianhuan
375.21 1.30%
Group Pharmaceutical
Shyndec
SIPS 23,951.26 23.32%
Pharmaceutical
China National
Pharmaceutical Hengrui
21,862.02 4.10%
Investment Medicine
Co., Ltd.
China National
Biotec Group BTBP 62,673.65 49.96%
Co., Ltd.
SINOPHARM
China TCM 163,470.56 32.46%
H.K. 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:
88
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
89
Section VII. Preferred Stock
□ Applicable √ Not applicable
The Company had no preferred stock in the Period.
90
Section VIII. Convertible Bonds
□ Applicable √ Not applicable
The Company had no convertible bonds in the Period
91
Section IX. Particulars about Directors, Supervisors, Senior
Executives and Employees
I. Changes of shares held by directors, supervisors and senior executives
Amount Amount
Shares
Start of shares of shares Shares
End date held at Other
held at
Working dated of increased decreased
Title Sex Age of office period-be changes period-en
Name status office in this in this d
term gin (share)
term period period (Share)
(Share)
(Share) (Share)
Independ
Chen Currently 2018-04-
ent M 58 1,500 0 0 0 1,500
Shengqun in office 17
director
Deputy
GM,
Chen Currently 2015-01-
Secretary M 53 2,651 0 0 0 2,651
Changbin in office 13
of the
Board
Total -- -- -- -- -- -- 4,151 0 0 0 4,151
II. Changes of directors, supervisors and senior executives
√Applicable □ Not applicable
Name Title Type Date Reasons
Wei Pingxiao CFO Dismissal 2020-05-28 Job change, and no longer serves as the CFO
Gu Guolin CFO Appointment 2020-05-28 Appointed as CFO by the 8th BOD
Deputy
Ma Zhanjun Chairman, Office leaving 2020-07-31 Resigned due to the mandatory retirement age
Director
Job change, and o longer serves as Director and other
Li Zhiming Director Office leaving 2020-10-21
position of the Company
Wu Yijian Director Be elected 2020-11-13 New Director of 8th BOD
Lin Min Director Be elected 2020-11-13 New Director of 8th BOD
No longer serves as Director and other position of the
Li Dongjiu Director Office leaving 2021-03-02
Company for adjustment of work arrangement
92
III. Post-holding
Professional background, major working experience and present main responsibilities in Company of directors, supervisors and
senior executive at the present
1. Members of BOD
Mr. Liu Yong, joined Sinopharm Group Co., Ltd in January 2003 and serves as executive director and president
of Sinopharm Holding since November 2017 and acts as deputy party secretary of Sinopharm Holding since
January 2018; Mr. Liu own over 26 years of working experience, among which, over 23 years are related to
management experience in medicine and health care products industry. He is a pharmacist-in-charge and licensed
pharmacist. During the period from July 1992 to July 1999, Mr. Liu worked in the Shanghai Pharma, and
successively served as deputy general manager of the marketing department of Shanghai Branch of China
National Pharmaceutical Group Corporation and Shanghai Guoda Drugstore Chain Company Limited from July
1999 to April 2003. Mr. Liu served as GM and party secretary of the Sinopharm Holding Shenyang Co., Ltd from
April 2003 to November 2009; a deputy president of Sinopharm Holding from January 2009 to November 2017;
the Secretary of the Board of Sinopharm Holding from October 2016 to November 2017 and General Counsel of
Sinopharm Holding from January 2014 to December 2017. Currently, he also acts as the Director of
SINOPHARM, Sinopharm Holding Guoda Drugstore Co., Ltd., China National Scientific Instruments &
Materials Co., Ltd and China National Medical Equipment Co., Ltd.; and executive Director of Sinopharm
Holding Distribution Center Co., Ltd. Mr. Liu serves as Director of the 7th BOD of the Company since January
2017 and Chairman of the 7th and 8th BOD of the Company since October 2017.
Mr. Jiang Xiuchang, he has acted as vice president of Sinopharm Holding since July 2013. Mr. Jiang owns over 31
years of working experiences, among which, 20 years of management experiences are related to medicine and
health-care industries. He is a senior economist and senior accountant. Mr. Jiang has worked as deputy director of
information department, deputy director of restructuring office, deputy director of financial department as well as
deputy director of pharmaceutical department in China National Pharmaceutical Group Corporation from July
1986 to March 2002; he has also served as deputy director, director of financial department and chief financial
officer of China National Medicines Corporation Ltd. in succession from March 2002 to May 2010. Currently, Mr.
Jiang serves as Chairman of Sinopharm Holding Jiangxi Co., Ltd, Sinopharm Holding Tianjin Co., ltd. and
China National Medicines Corporation Ltd; Director of Sinopharm Holding H.K. Co., ltd and China National
Finance Corporation Ltd; and executive Director of Beijing Sinopharm Taiyuan Property Management Co., Ltd
and SINOPHARM Shanghai Co., Ltd; served as CFO of Sinopharm Holding from May 2010 to March 2021; he
serves as Director of the 6th ,7th and 8th BOD of the Company since March 2011.
Mr. Lian Wanyong is vice president of Sinopharm Group Co., Ltd. He joined China National Pharmaceutical
(Group) Corporation Guangzhou Company in 1996 and successively served as product director of Yuexing
Pharmaceutical Co., Ltd. and senior product manager of Hong Kong Tianjian International Co., Ltd. From August
93
2002 to January 2004, he served as deputy manager of the financial department of Barr laboratories, Inc., USA.
From January 2004 to June 2005, he was appointed as manager of operational audit department of China
Medicinal Materials Group Company. From July 2005 to January 2008, he was appointed as deputy director of
financial asset management department and director of investment management department of China National
Pharmaceutical (Group) Corporation. From December 2010 to February 2014, he served as deputy general
manager of Beijing Sinopharm Asset Management Center, from April 2014 to January 2018, he served as deputy
director of the Policy Research Office of China National Pharmaceutical Group Corporation. Since January 2018,
he has been serving as vice president of Sinopharm Group Co., Ltd., and Mr. Lian is concurrently serving as
chairman of Sinopharm Holding Anhui Co., Ltd., Sinopharm Holding Hubei Co., Ltd., and Sinopharm Holding
Changsha Co., Ltd., and director of China National Medicines Corporation Ltd., director of China National
Zhongjin (Shanghai) Medical Health Investment Management Co., Ltd, director of West China Dental Co., Ltd
and Director of Sinopharm Holding Hunan Co., Ltd. He serves as Director of 8th BOD of the Company since April
2018.
Mr. Wu Yijian, secretary of the board of Sinopharm Group Company Limited, and concurrently serves as the
president of many subsidiaries such as Sinopharm Group Shanxi and Sinopharm Inner Mongolia. Since July 1993,
he served in Sanjiu Enterprise Group and successively served as the sales director of Sanjiu Medical &
Pharmaceutical Trading Co., Ltd., the chief operating officer of Sanjiu Medical & Pharmaceutical Chain Co., Ltd.,
and the deputy general manager of Shanghai Sanjiu Technology Development Co., Ltd. Since June 2004, he
served in Fosun Pharmaceutical Group, and successively served as general manager of Shanghai Fosun
Pharmaceutical Investment Co., Ltd., general manager of Shanghai Fosun Pharmaceutical Co., Ltd., and general
manager of Shanghai Fumei Pharmacy Co., Ltd. From 2014 to the end of 2015, he served as the vice president of
Shanghai Yuyuan Tourist Mart Co., Ltd. Mr. Wu is currently serving as the president of China National Shanxi
Co., Ltd, Sinopharm Holding Shanxi Co., ltd, Sinopharm Holding Inner Mongolia Co., Ltd., China National
Health Online Co., Ltd, and a director of China National Zhongjin (Shanghai) Medical Health Investment
Management Co., Ltd, and director and general manager of Sinopharm Holding Group H.K. Co., Ltd. From
September 2016 to May 2019, he concurrently served as the chairman of the board of supervisors of Sinopharm
Accord. From November 2020, he serves as a director of the eighth board of directors of the Company.
Mr. Lin Zhaoxiong: Director and GM of Sinopharm Accord. Has served as deputy manager and manager of
pharmaceutical department, manager of Pharmaceutical corporations and director of operation and management
department during his work in China Pharmaceutical (Group) Guangzhou Co.,Ltd from January 1999 to
December 2003 in succession; He has acted as the deputy general manager of Sinopharm Holding Guangzhou
Co.,Ltd; the general manager of Sinopharm Holding Guangzhou Co.,Ltd from December 2006 to December
2008; He has served as the deputy general manager of the Company from December 2008 to March 2016; Mr
Lin serves as the chairman of Sinopharm Holding Guoda Drugstore Co.,Ltd since October 2017; and GM of the
Company since March 2016, Director of the 7th and 8th BOD of the Company since April 2016.
Mr. Lin Min is the deputy general manager of the Company. He worked in China National Pharmaceutical (Group)
94
Guangzhou Company from January 2001 to November 2003, successively served as assistant manager and deputy
manager of Pharmaceutical Department, deputy purchasing manager of Pharmaceutical Company, and served as
city pharmaceutical sales director of Sinopharm Guangzhou Co., Ltd. from November 2003 to January 2005, from
January 2005 to December 2008, he served as deputy general manager of Sinopharm Holding Guangzhou Co.,
Ltd., and concurrently served as general manager of Sinopharm Holding Guangzhou Co., Ltd. since March 2016.
He served as deputy general manager of the Company since December 2008, from November 2020, he has been
serving as a director of the seventh and eighth board of directors of the Company.
Mr. Chen Honghui, Professor and doctoral supervisor in Management of Lingnan (University) College. From July
1993 to June 2003, he worked in the School of Management of Wuhan University of Science and Technology as a
teaching assistant and lecturer. From July 2003 until now, he has been working in Lingnan (University) College as
an associate professor and professor. From 2007 to 2012, he served as the deputy dean of Lingnan (University)
College; from 2008 to 2019, he served as the director of the Business Management Department of Lingnan
(University) College. Since 2008, he has served as the director of the Research Center for Corporate Social
Responsibility of Lingnan (University) College. Mr. Chen is concurrently serving as the vice chairman of
Guangdong International Social Responsibility, independent director of Cabbeen Fashion Limited, and
independent director of Guangzhou Grandbuy Co., Ltd. Since March 2017, he has been serving as an independent
director of the seventh and eighth board of directors of the Company.
Mr. Ou Yongliang, Practicing Lawyer of China, Vice President of All China Lawyers Association, Vice President
of Guangdong Province Law Society, President of the 9th and 10th Guangdong Lawyers Association, director of
Guangdong Hopesun Law Firm, member of the 12th Guangdong Provincial Committee of CPPCC, expert
consultant of the 11th Party Congress of the Guangdong Provincial Committee of the Communist Party of China,
legislative consultant of the 12th Standing Committee of Guangdong Provincial People's Congress, specially
invited member of the 11th Guangdong Provincial Committee of the CPPCC, member of Judges and Procurators
Selection Committee of Guangdong Province, representative of the Ninth Congress of the Guangzhou
Municipality of the Communist Party of China, an arbitrator of the China International Economic and Trade
Arbitration Commission, an arbitrator of the Shenzhen Court of International Arbitration, an arbitrator of the
Shanghai Arbitration Commission, an arbitrator of the Guangzhou Arbitration Commission. Since April 2018, he
has been serving as an independent director of the eighth board of directors of the Company.
Mr. Chen Shengqun is an associate researcher and senior accountant, he has been teaching at the Shanghai
National Accounting Institute since 2013. Mr. Chen came out of the postdoctoral research station of Shanghai
University of Finance and Economics in 1998 as the first postdoctoral fellow in management accounting. He was
employed as a senior researcher at the CAFR Center of the Hong Kong Polytechnic University and is currently a
visiting professor of EDP curriculum at the Xiamen University. Since 1998, Mr. Chen has served as director of the
finance division of China Pacific Insurance Co., Ltd., in 2002, he was transferred to serve as deputy general
manager of the financing plan department of China Pacific Insurance Co., Ltd. (presiding work), at the end of
95
2003, he joined China Reinsurance Group and successively served as general manager of the fund application
department of China Continent Insurance (concurrently general manager of the strategic development department,
and general manager assistant of China Re Asset Management Company. He serves as independent director of the
8th BOD of the Company since April 2018.
Ms. Su Weiwei: Doctor of pharmacy, professor of School of Life Sciences of Sun Yat-Sen University and a doctoral
supervisor. She worked in Guangdong pharmaceutical University from July 1987 to April 2000, and successively
served as a teaching assistant, lecturers, associate professor and professor, she serves as a professor in Sun Yat-Sen
University since May 2000. Ms. Su Weiwei have devoted herself to the research and development of innovative
drugs for many years, and achieved two chemical clinical permission for first-type new drugs and one clinical
permission for the fifth-type new drugs of TCM (traditional Chinese medicine) which have independent
intellectual property rights.
2. Members of BOS:
Mr. Wen Deyong, joined Sinopharm Group Co., Ltd. in September 2017, and has been serving as a non-executive
director of Sinopharm Group Co., Ltd. to this day. From September 1995 to May 2016, Mr. Wen served as a
technician in the hydro-acupuncture workshop of Chongqing No. 6 Pharmaceutical Factory, field salesman of
sales department of Chongqing YaoPharma, sales director of Chongqing YaoPharma Co., Ltd., general manager of
sales department 2 of Chongqing YaoPharma Co., Ltd., general manager of Northern Company of Chongqing
Haisiman Pharmaceutical Co., Ltd., vice president of Chongqing YaoPharma, president of Chongqing YaoPharma,
currently serves as vice president of Shanghai Fosun Pharmaceutical (Group) Co., Ltd., director of pharmaceutical
business management committee, general manager of centralized procurement and procurement management
department, and executive vice president of Shanghai Fosun Pharmaceutical Industry Development Co., Ltd. He
has been the chairman of the board of supervisors of the eighth board of supervisors of the Company since July
2019.
Ms. Liu Jingyun, Director of the capital department of 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, director of the financial & assets
management dept. and Director of ministry of finance and credit management. She serves as supervisor of the 7th
and 8th supervisory committee of the Company since September 2016.
Ms. Chen Guojing: she worked in Shenzhen Accord Medicinal Materials Company in December 1999, now she
serves as the office director and director of security department in the Company. Ms. Chen served as the financial
manager and deputy chief of Finance and Funds Department of the Company from June 2005 to December 2013,
she is the member of trade union federations of the Company and chairman of the first trade union since March
2009; she served as chief (part-time) of the auditing department of the Company from January 2013 to August
96
2017, and chief (part-time) of the risk and operation management of the Company from January 2014 to May
2016. She serves as staff supervisor of the 8th supervisory committee of the Company since August 2018
3. Senior executive:
Mr. Lin Zhaoxiong, found in aforesaid previous work experience
Mr. Lin Min, found in aforesaid previous work experience
Mr. Zhao Xiaochuan: Deputy GM of the Company. He has served as the general manager of Liaoning Accord
Chain Co., Ltd from December 2001 to April 2008; served as the general manager of Sinopharm Holding Guoda
Tian Yi Tang Drugstore Chain (Shenyang) Co., Ltd and Sinopharm Holding Guoda Shenyang Chain Co., Ltd from
May 2008 to June 2015; he has acted as general manager of Sinopharm Holding Guoda Drugstore Co., Ltd since
June 2015; serves as President of Sinopharm Holding Guoda Drugstore Co., Ltd. Since January 2021 and he has
worked as the deputy general mange of the Company since July 2017.
Mr. Liu Tianyao is deputy general manager of the Company. From August 2002 to April 2009, he served as senior
director of human resources department of China National Pharmaceutical Group Corporation. From April 2009
to May 2017, he successively served as deputy director of human resources department, director of talent
development department, director of human resources department, and director of retail medical business
development department of Sinopharm Group Co., Ltd., from December 2013 to July 2016, he concurrently
served as general manager of Shanghai Management Consulting Branch, from July 2016 to May 2017, he
concurrently served as general manager of Sinopharm Holding Medical Management (Shanghai) Co., Ltd., from
May 2017 to January 2019, he has been serving as director of human resources and director of human resources
department of Sinopharm Group Co., Ltd and he serves as Deputy GM of the Company since January 2019.
Mr. Lin Xinyang: Deputy GM of the Company.He took the turns of deputy GM of Nanfang Pharm. Co., deputy
GM of China Pharmaceutical (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.
Mr. Lang Baochun is deputy secretary of the party committee, secretary of the disciplinary committee, chairman
of the labor union and general counsel of the Company. From September 2007 to March 2008, he served as
deputy director of general office of Sinopharm Group Co., Ltd., from March 2008 to December 2009, he served as
general manager of Shanghai Chuanghui Investment Co., Ltd., from January 2010 to May 2010, he served as
director of the research office of Shanghai Shibei Hi-Tech (Group) Co., Ltd., from June 2010 to September 2011,
he served as deputy director of the president’s office of Sinopharm Group Co., Ltd., from October 2011 to
December 2015, he served as director of the strategic planning department of Sinopharm Group Co., Ltd., from
97
January 2016 to June 2017, he served as secretary of the party committee of Sinopharm Guoda Drugstore Co.,
Ltd., from March 2016 to February 2018, he served as deputy secretary of the party committee and secretary of
the disciplinary committee of the Company. Since March 2018, he has been serving as deputy secretary of the
party committee, secretary of the disciplinary committee, and chairman of the labor union of the Company. He
serves as General Counsel of the Company since August 2018
Mr. Gu Guolin is the chief financial officer of the Company. He joined Sinopharm Group Co., Ltd. in May 2011,
and served as the senior manager of the financial management department of Sinopharm Group Co., Ltd. from
May to July 2011; from July 2011 to May 2014, he served as the chief financial officer of Sinopharm Holding
Ningxia Co., Ltd. Since May 2014, he has served as the chief financial officer of Sinopharm Sichuan
Pharmaceutical Group Co., Ltd. and concurrently as the chief financial officer of Sinopharm Holding Sichuan
Pharmaceutical Co., Ltd. Since May 2020, he has been serving as the chief financial officer of the Company.
Mr. Chen Changbin: Deputy GM of the Company, and Secretary of the Board. He has served as secretary of board
of directors of the Company since December 2000; he has also worked as the director of planning investment
management department of the Company as well as assistant general manager, in charge of strategic planning,
investment and mergers and acquisitions, capital operation, affairs related to three major meetings and
international co-operation. He has acted as the deputy general manager of the Company since April 2017.
Post-holding in shareholder’s unit
√ Applicable □ Not applicable
Whether to receive
Position in compensation and
Commencemen
Name Name of shareholder’s unit shareholder’s Termination date allowances in the
t date of tenure
unit shareholders’ unit
(Y/N)
Executive
Liu Yong Sinopharm Group Co., Ltd Director, 2017-11-01 Y
President
Deputy party
Liu Yong Sinopharm Group Co., Ltd 2018-01-01 Y
secretary
Deputy
Jiang Xiuchang Sinopharm Group Co., Ltd 2013-07-01 Y
President
Deputy
Lian Wanyong Sinopharm Group Co., Ltd 2018-01-01 Y
President
Secretary of
Wu Yijian Sinopharm Group Co., Ltd 2019-01-01 Y
the Board
Director of
Liu Jingyun Sinopharm Group Co., Ltd 2016-07-01 Y
Capital
98
department
Post-holding in other unit
√ Applicable □ Not applicable
Whether to
receive
Position in Commencemen
Name Name of other units Termination date compensation and
other unit t date of tenure
allowances in
other unit (Y/N)
Liu Yong China National Medicines Corporation Ltd Director 2017-11-01
Sinopharm Holding Guoda Drugstore Co.,
Liu Yong Director 2017-10-01
Ltd.
China National Scientific Instruments &
Liu Yong Director 2018-12-01
Materials Co., Ltd
China National Medical Equipment Co.,
Liu Yong Director 2018-12-01
Ltd.
Sinopharm Holding Distribution Center Co., Executive
Liu Yong 2020-08-01
Ltd Director
Jiang Xiuchang Sinopharm Holding Jiangxi Co., Ltd. President 2013-06-01
Executive
Jiang Xiuchang SINOPHARM Shanghai Co., Ltd 2017-11-01
Director
Jiang Xiuchang Sinopharm Holding Tianjin Co., Ltd. President 2013-12-01
Jiang Xiuchang China National Medicines Corporation Ltd President 2017-11-01
Jiang Xiuchang Sinopharm Holding H.K. Co., ltd Director 2011-11-01
Jiang Xiuchang China National Finance Corporation Ltd Director 2011-11-01
Beijing Sinopharm Taiyuan Property Executive
Jiang Xiuchang 2017-12-01
Management Co., Ltd Director
Lian Wanyong China National Medicines Corporation Ltd Director 2017-12-01
China National Zhongjin (Shanghai)
Lian Wanyong Medical Health Investment Management Director 2018-07-01
Co., Ltd
Lian Wanyong West China Dental Co., Ltd Director 2019-01-01
Lian Wanyong Sinopharm Holding Anhui Co., Ltd. President 2019-01-01
Lian Wanyong Sinopharm Holding Changsha Co., Ltd. President 2019-06-01
Lian Wanyong Sinopharm Holding Hubei Co., Ltd. President 2020-01-01
Lian Wanyong Sinopharm Holding Hunan Co., Ltd. Director 2020-03-01
Wu Yijian China National Shanxi Co., Ltd President 2019-03-01
99
Wu Yijian Sinopharm Holding Shanxi Co., ltd President 2019-03-01
Sinopharm Holding Inner Mongolia Co.,
Wu Yijian President 2019-03-01
Ltd.
China National Zhongjin (Shanghai)
Wu Yijian Medical Health Investment Management Director 2019-03-01
Co., Ltd
Wu Yijian China National Health Online Co., Ltd. President 2020-05-01
Wu Yijian Sinopharm Holding Group H.K. Co., Ltd. Director, GM 2020-10-01
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 2020 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
Post-holding
Name Title Sex (F/M) Age remuneration remuneration
status
before tax from related party
100
obtained from the of the Company
Company (Y/N)
Currently in
Liu Yong President M 51 0Y
office
Ma Zhanjun Deputy Chairman M 60 Office leaving 145.83 Y
Li Zhiming Director M 57 Office leaving 0Y
Currently in
Jiang Xiuchang Director M 56 0Y
office
Currently in
Lian Wanyong Director M 50 0Y
office
Li Dongjiu Director M 55 Office leaving 0Y
Currently in
Wu Yijian Director M 50 0Y
office
Currently in
Lin Zhaoxiong Director, GM M 53 250 N
office
Director, Party
Currently in
Lin Min Secretary, Deputy M 56 225 N
office
GM
Independent Currently in
Chen Honghui M 49 12 N
director office
Independent Currently in
Ou Yongliang M 51 12 N
director office
Independent Currently in
Chen Shengqun M 58 12 N
director office
Independent Currently in
Su Weiwei F 61 12 N
director office
Chairman of
Currently in
Wen Deyong supervisory M 49 0Y
office
committee
Currently in
Liu Jingyun Supervisor F 44 0Y
office
Currently in
Chen Guojing Staff supervisor F 50 78.65 N
office
Currently in
Zhao Xiaochuan Deputy GM M 57 200 N
office
Currently in
Liu Tianrao Deputy GM M 41 175 N
office
Currently in
Lin Xinyang Deputy GM M 56 175 N
office
101
Deputy party
secretary,
Secretary of
Currently in
Lang Baochun committee for M 57 175 N
office
discipline
inspection,
General counsel
Currently in
Gu Guolin CFO M 45 87.5 N
office
Wei PingXiao CFO M 57 Office leaving 72.92 N
Deputy GM,
Currently in
Chen Changbin Secretary of the M 53 150 N
office
Board
Total -- -- -- -- 1,782.90 --
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) 119
The number of current employees of main subsidiaries (people) 38,170
Total number of current employees (people) 38,289
The total number of employees in payroll (people) 38,289
The total number of retired staff and workers that the parent
1,694
company and main subsidiaries need to bear the costs (people)
Professional composition
Category of professional composition Number of professional composition (people)
Production staff 28
Salesman 28,684
Technical staff 248
Financial staff 736
Administrative staff 170
Other 8,423
Total 38,289
Education background
Category of education Number (people)
102
Post-graduate qualification and above 163
Undergraduate 4,789
Junior college 12,757
College degree 20,580
Total 38,289
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
Sinopharm Accord and its subordinate companies attach great importance to building learning organizations,
invest training resources every year to train and develop employees at all levels. In 2020, talent development and
training work are based on the main line of empowering operations, strengthening the function of tow depths
(going deep into the front line and going deep into the scene), and constantly improve the company’s training and
cultivating system.
1. Optimize the training management system, revise the training system management system, the employee
training management system, the internal trainer management system, the employee continuing education
management system, the intern management system, the internal lecturer management system, optimize internal
trainers management process, annual training needs and plan management process, and training implementation
process.
2. The headquarters, operation headquarters, and key subsidiaries all set up full-time training posts to assist
managers at all levels to carry out employee training. The company has promoted a three-level training model
throughout the company, and conducted outstanding learning organizations, learning projects, excellent internal
trainers, and excellent training managers on Teachers’ Day.
3. Vigorously promote online training, more than 4,000 accounts have been opened on the "Sinopharm
103
University" platform, covering various subsidiaries across the country, the average online learning hours for all
employees have exceed 30 hours. Among them, live broadcast training methods were vigorously promoted in
2020, and 33,000+ person-times have been organized to take part in live broadcast training, which increased the
influence and coverage of training.
4. The types of training include training for new recruits, vocational training for employees, leadership training for
managers, and internal trainer training. Courses include management courses, general quality courses, and
vocational skills classes.
5. As of the end of 2020, the training expenses of the headquarters and distribution operation headquarters of
Sinopharm Accord and the headquarters of Guoda Drugstore were about 2 million yuan, and the per capital period
reached more than 50 hours.
4. Labor outsourcing
√ Applicable □ Not applicable
Total number of working hours of labor outsourcing (Hour) 1,787,328
Total remuneration paid of labor outsourcing (RMB) 55,870,488.31
104
Section X. Corporate Governance
I. Corporate governance of the Company
During the reporting period, the company strictly followed the requirements of the Company Law, Securities Law,
Government Guidelines for Listed Companies and the relevant laws and regulations of the China Securities
Regulatory Commission and Shenzhen Stock Exchange, continuously improved the company’s corporate
governance structure, and established and improved the company’s internal control. The general meeting of
shareholders, the board of directors and the board of supervisors have standardized operations, independent
directors and special committees of the board of directors have performed their respective duties, continuously
strengthened company management, controlled and prevented risks, standardized company operations, and
improved operational efficiency. The company gradually formed a governance mechanism with clear powers and
responsibilities, standardized operations, mutual coordination, and mutual checks and balances among power
institutions, decision-making institutions, supervisory institutions, and managers.
During the reporting period, the company strengthened internal coordination and communication, revised and
improved internal control related systems, and sorted out various work processes, and further improved the
company’s management quality and operational efficiency. At the same time, it continuously strengthened the
management of inside information, further improved the process systems of inside information management,
strengthened the disclosure of information, improved the management of investor relations, strengthened and
improved the management of affiliated companies, so that the company’s standard operation level has been further
improved. In the future, the company will continue to strictly implement the specific requirements of the
regulatory agencies, strengthen the implementation, improve the evaluation mechanism, and improve the
corporate governance structure, at the same time, strengthen supervision, and strive to promote governance to a
higher level.
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. Independence 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.
105
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
Name of controlling Nature of controlling Work schedule and
Type Reason Solution measure
shareholder shareholder follow-up plan
Distribution In December 2016, Normally
subsidiary of Sinopharm Holding implementing,
Horizontal
Sinopharm Holding SASAC Sinopharm Holding issued a commitment Sinopharm Accord
competition
established some letter of avoiding will also actively
social retail horizontal urge the controlling
106
pharmacy, which competition with shareholder to fulfill
might have Sinopharm Accord, their commitments
horizontal and promise to solve
competition with the the horizontal
Guoda Drugstore, competition in
the subordinate respect of
enterprise of the pharmaceutical retail
listed company after business in an
restructuring appropriate way
within five years
since the date when
reorganization
completed
In December 2016,
SINOPHARM
Distribution issued a commitment
subsidiary of letter of avoiding
SINOPHARM horizontal
established some competition with
Normally
social retail Sinopharm Accord,
implementing,
pharmacy, which and promise to solve
Sinopharm Accord
Horizontal might have the horizontal
SINOPHARM SASAC will also actively
competition horizontal competition in
urge the controlling
competition with the respect of
shareholder to fulfill
Guoda Drugstore, pharmaceutical retail
their commitments
the subordinate business in an
enterprise of the appropriate way
listed company after within five years
restructuring since the date when
reorganization
completed
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://ww
Annual General
AGM 66.62% 2020-05-15 2020-05-16 w.cninfo.com.cn)
Meeting of 2019
“Notice of
Resolution of AGM
107
of 2019” No.:
2020-17
Juchao
Website—(http://ww
w.cninfo.com.cn)
First extraordinary
Extraordinary “Notice of
general meeting of 63.17% 2020-11-13 2020-11-14
general meeting Resolution of First
2020
extraordinary
general meeting of
2020” No.: 2020-38
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 shareholders general meeting
The attending of independent directors to Board Meeting & shareholders general meeting
Times of Absent the Times
Times of
Board meeting Times of Meeting for attending the
Times of attending by Times of
Independent
supposed to entrusted the second shareholders
director Presence communicatio Absence
attend in the presence time in a row general
n
report period (Y/N) meeting
Chen Honghui 8 3 5 0 0 N 1
Ou Yongliang 8 3 5 0 0 N 1
Su Weiwei 8 3 5 0 0 N 1
Chen Shengqun 8 3 5 0 0 N 1
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 have no objections for relevant events in reporting period
108
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 4 independent
directors and 4 directors, including the convener Chen Shengqun - an independent director(professional
accountant). 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 2020, 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
109
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 are
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 4 independent directors and
3 directors; convener is Chen Honghui, 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 2020, the remuneration and appraisal committee carried out the performance evaluation of executives
according to the 2019 Annual operation standard and performance.
2. It proposed the "2021 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 2020 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 2020 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
110
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
2 April 2021
evaluation report
Disclosure index of full internal control “Self-evaluation report of internal control for 2020” 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 100.00%
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 100.00%
the 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
and decided by the degree of influence and mainly judged and decided by the
the likelihood of occurrence to the degree of influence and the likelihood
misstatements of financial reports caused of occurrence of defects to the validity
by defects. of business process.
(1) Significant defects: a combination of (1) Significant defects: a combination
one or multiple internal control defects of one or multiple internal control
Qualitative criteria
that exists in internal control and may defects that may cause the enterprise’s
cause the material misstatements in serious deviation to internal control
financial statements cannot be prevented, objectives;
found or corrected in time; (2) Major defects: a combination of
(2) Major defects: a combination of one or one or multiple internal control defects
multiple internal control defects that exists whose severity level and economic
in internal control and has lower severity consequences are lower than
111
level than significant defects but still significant defects but still may cause
should be concerned by the the enterprise’s deviation to internal
superintendents of enterprise financial control objectives;
reports; (3) Common defects: other defects
(3) Common defects: other defects except except for significant and major
for significant and major defects. defects.
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 officially
A quantitative criterion determines the disclosed and caused negative effects
degree of importance of misstatements to periodic report disclosure of the
(including missing reports) in the joint-stock companies;
consolidated statements of listed (2) Major defects: the amount of direct
companies based on the consolidated property loss is between 5 million and
statement data. 10 million Yuan, or has been punished
Quantitative standard
(1) Significant defects: equal to or greater by the national government
than 5% of profit before tax; departments but has not caused
(2) Major defects: Between 1% and 5% of negative effects to periodic report
profit before tax; disclosure of the joint-stock
(3) Common defects: Less than or equal to companies;
1% of profit before tax (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
0
financial reports
Amount of significant defects in
0
non-financial reports
Amount of important defects in financial
0
reports
Amount of important defects in
0
non-financial reports
112
X. Auditing report of internal control
√ Applicable □ Not applicable
Deliberations in Audit Report of Internal Control
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 2020
Disclosure details of audit report of
Disclosed
internal control
Disclosure date of audit report of
2 April 2021
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
113
Section XI. 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
114
Section XII. Financial Report
115
AUDITOR’S REPORT
Ernst & Young Hua Ming (2021) Shen Zi No. 61295118_H01
China National Accord Medicines Corporation Ltd.
To the shareholders of China National Accord Medicines Corporation Ltd.
(I) Opinion
We have audited the financial statements of China National Accord Medicines Corporation Ltd. (the
“Company”), which comprise the consolidated and the Company’s balance sheets as at 31 December 2020,
and the consolidated and the Company’s income statements, the consolidated and the Company’s statements
of changes in equity and the consolidated and the Company’s statements of cash flows for the year then ended,
and notes to the financial statements.
In our opinion, the accompanying financial statements present fairly, in all material respects, the consolidated
and the Company’s financial position as at 31 December 2020, and the consolidated and the Company’s
financial performance and cash flows for the year then ended in accordance with Accounting Standards for
Business Enterprises (“ASBEs”).
(II) Basis for opinion
We conducted our audit in accordance with China Standards on Auditing (“CSAs”). Our responsibilities under
those standards are further described in the Auditor’s responsibilities for the audit of the financial statements
section of our report. We are independent of the Company in accordance with China Code of Ethics for
Certified Public Accountants (the “Code”), and we have fulfilled our other ethical responsibilities in accordance
with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
(III) Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit
of the financial statements of the current period. These matters were addressed in the context of our audit of
the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate
opinion on these matters. For each matter below, our description of how our audit addressed the matter is
provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial
statements section of our report, including in relation to these matters. Accordingly, our audit included the
performance of procedures designed to respond to our assessment of the risks of material misstatement of the
financial statements. The results of our audit procedures, including the procedures performed to address the
matters below, provide the basis for our audit opinion on the accompanying financial statements.
116
AUDITOR’S REPORT (Continued)
Ernst & Young Hua Ming (2021) Shen Zi No. 61295118_H01
China National Accord Medicines Corporation Ltd.
(III) Key audit matters (continued)
Key audit matter How our audit addressed the key audit
matter
Impairment of goodwill
The carrying value of goodwill amounted to The procedures performed to address this matter are
RMB2.747 billion as at 31 December 2020 and was as follows:
allocated to the Company’s asset groups of
pharmaceutical distribution and pharmaceutical 1) Performing walk-through testing in the process
retail. related to goodwill and control testing on identified
key control points;
Under ASBEs, the management of the Company is
required to perform the impairment test for goodwill 2) Inviting internal evaluation experts to assist in
annually. The impairment test is based on the evaluating the goodwill impairment method and
recoverable amount of the respective asset groups to forecasted key parameters adopted by
which the goodwill is allocated. The recoverable management used in the impairment test,
amount of the asset groups is determined according especially the discount rate and perpetual growth
to the present value of the asset groups' expected rate;
future cash flows. As the impairment test process of
goodwill involves significant judgment of the 3) Re-examining the sales revenue and operating
management, the test results highly depend on the results of the future years adopted in the cash flow
management's estimates and assumptions, such as forecast, comparing with the historical operating
the estimation of the forecasted future cash flows results of the related asset groups, especially the
and the discount rate of the asset groups. These future sales growth rate, expected gross profit
estimates are affected by the management's margin, related expenses, etc., and evaluating the
judgment on the future market and economic analyses made by the management on the impact
environment. Using different estimates and of the COVID-19 epidemic;
assumptions will significantly impact the recoverable
value of the asset groups in which the goodwill is 4) Performing sensitivity testing and analysing on key
located. Therefore, this matter was important to our assumptions used in impairment testing; and
audit, and we determined it as a key audit matter.
5) Re-examining the sufficiency of management's
The Company’s disclosures about impairment of disclosure regarding goodwill.
goodwill are included in Note III (17. Impairment of
assets, 33. Significant accounting judgements and
estimates) and Note V (18. Goodwill) to the
consolidated financial statements.
117
AUDITOR’S REPORT (Continued)
Ernst & Young Hua Ming (2021) Shen Zi No. 61295118_H01
China National Accord Medicines Corporation Ltd.
(III) Key audit matters (continued)
Key audit matter How our audit addressed the key audit
matter
Impairment of accounts receivable
Major clients of the Company are medical The procedures performed to address this matter are
establishments, pharmacy chain stores, monomer as follows:
drugstores, community medical service centres,
downstream distribution companies, etc. As at 31 1) Realising and testing management’s internal
December 2020, the book balance of accounts control that relates to the impairment of accounts
receivable in the consolidated financial statements of receivable;
the Company was RMB13.892 billion, and the
impairment of accounts receivable was RMB93 2) Re-examining and evaluating the "Expected Credit
million. Loss Model" used by the management to estimate
bad debts of accounts receivable, including the
The management classifies the accounts receivable management's division of different combinations of
into different combinations of credit risk credit risk characteristics of accounts receivable,
characteristics while considering the factors such as the estimation of the expected credit loss on
the customer type, credit period and collection accounts receivable for combinations of credit risk
history. For each category of combinations of credit characteristics, and historical as well as other
risk characteristics, the management adopts the forward-looking information used in the estimation.
expected credit loss model to estimate and make Re-examined the management's assessment of
provision for bad debts. Management's estimation of the impact of COVID-19 epidemic on the credit risk
the expected credit loss takes into account all of customers;
reasonable and evidence-based information,
including the customer's historical default rate and 3) Discussing with the management regarding the
other specific factors (such as the customer type, recoverability of individually significant accounts
collection history and bad debt write-offs, etc.), as receivable or long-aged accounts receivable and
well as forward-looking information in combination evaluating the adequacy of provision for bad debts;
with factors such as the expected macroeconomic and
environment, etc. In the meantime, the management
pays attention to the collection of accounts 4) Re-examining the sufficiency of the management’s
receivable, especially individually significant disclosure related to accounts receivable.
accounts receivable or long-aged accounts
receivable to identify additional signs of default or
impairment and determine whether additional bad
debt provision is required.
118
AUDITOR’S REPORT (Continued)
Ernst & Young Hua Ming (2021) Shen Zi No. 61295118_H01
China National Accord Medicines Corporation Ltd.
(III) Key audit matters (continued)
Key audit matter How our audit addressed the key audit
matter
Impairment of accounts receivable (Continued)
The classification of different categories of
combinations of credit risk characteristics and the
estimation of the expected credit loss rate of
accounts receivable, etc., involve significant
management’s judgment and estimation, with great
estimation uncertainty, and the setting of various
parameters needs to be based on the statistics and
analysis of the relatively complex historical data.
Therefore, this matter was important to our audit, and
we determined it as a key audit matter.
The Company’s disclosures about impairment of
accounts receivable are included in Note III (8.
Financial instruments, 33. Significant accounting
judgements and estimates) and Note V (3. Accounts
receivable) to the consolidated financial statements.
119
AUDITOR’S REPORT (Continued)
Ernst & Young Hua Ming (2021) Shen Zi No. 61295118_H01
China National Accord Medicines Corporation Ltd.
(IV) Other information
The management of the Company is responsible for the other information. The other information comprises the
information included in the annual report, other than the financial statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. We have nothing to report in this regard.
(V) Responsibilities of the management and those charged with governance for the financial
statements
The management of the Company is responsible for the preparation and fair presentation of the financial
statements in accordance with ASBEs, and for designing, implementing and maintaining such internal control
as the management determines is necessary to enable the preparation of financial statements to be free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s ability to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting, unless management either intends to liquidate the Company or to cease
operations or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Company’s financial reporting process.
120
AUDITOR’S REPORT (Continued)
Ernst & Young Hua Ming (2021) Shen Zi No. 61295118_H01
China National Accord Medicines Corporation Ltd.
(VI) Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our
opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with CSAs will always detect a material misstatement when it exists. Misstatements can arise from
fraud or error and are generally considered material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with CSAs, we exercise professional judgement and maintain professional
scepticism throughout the audit. We also:
(1) Identify and assess the risks of material misstatement of the financial statements, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
(2) Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances.
(3) Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the management.
(4) Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the
related disclosures in the financial statements or, if such disclosures are inadequate, to modify our
opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company to cease to continue as a going concern.
(5) Evaluate the overall presentation, structure and content of the financial statements, including the
disclosures, and whether the financial statements represent the underlying transactions and events in a
manner that achieves fair presentation.
(6) Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Company to express an opinion on the financial statements. We are responsible for
the direction, supervision and performance of the group audit. We remain solely responsible for our audit
opinion.
121
AUDITOR’S REPORT (Continued)
Ernst & Young Hua Ming (2021) Shen Zi No. 61295118_H01
China National Accord Medicines Corporation Ltd.
(VI) Auditor’s responsibilities for the audit of the financial statements (continued)
We communicate with those charged with governance regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical
requirements regarding independence and to communicate with them all relationships and other matters that
may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure
about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected to
outweigh the public interest benefits of such communication.
Ernst & Young Hua Ming LLP Chinese Certified Public Accountant: Li Jian Guang
(Engagement partner)
Chinese Certified Public Accountant: Li Yuan Fen
Beijing, the People’s Republic of China 31 March 2021
Important Notice
This auditor’s report is an English translation of the auditor’s report for the audit engagements which adopt CSAs. In
case the English version does not conform to the Chinese version, the Chinese version prevails.
122
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED BALANCE SHEET
31 December 2020 Expressed in Renminbi Yuan
ASSETS Note V 31 December 2020 31 December 2019
Current assets
Cash and bank balances 1 5,998,204,295.87 8,885,729,250.47
Notes receivable 2 622,115,477.04 793,301,688.64
Accounts receivable 3 13,799,971,014.22 10,712,983,544.18
Receivables financing 4 1,404,987,700.38 446,342,588.46
Advances to suppliers 5 480,313,574.71 389,828,785.54
Other receivables 6 535,228,747.69 501,958,841.43
Inventories 7 6,285,010,674.46 5,063,274,143.26
Contract assets 8 15,177,731.64 -
Other current assets 9 121,082,863.45 102,207,498.20
Total current assets 29,262,092,079.46 26,895,626,340.18
Non-current assets
Long-term equity investments 10 2,287,019,627.99 2,105,114,410.88
Other equity instrument investment 11 99,488,340.28 116,021,000.00
Other non-current financial assets 12 120,972,350.24 140,000,000.00
Investment properties 13 127,444,379.94 138,900,358.30
Fixed assets 14 854,191,083.27 708,000,172.63
Construction in progress 15 46,631,190.23 31,582,575.84
Right-of-use assets 16 2,356,952,392.99 1,994,757,862.07
Intangible assets 17 734,345,179.40 374,788,799.48
Goodwill 18 2,747,375,281.11 1,010,057,927.17
Long-term prepaid expenses 19 457,705,276.09 373,527,968.14
Deferred tax assets 20 92,118,767.81 63,110,829.12
Other non-current assets 21 408,197,522.84 77,354,970.39
Total non-current assets 10,332,441,392.19 7,133,216,874.02
Total assets 39,594,533,471.65 34,028,843,214.20
The accompanying notes form an integral part of these financial statements.
123
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED BALANCE SHEET (CONTINUED)
31 December 2020 Expressed in Renminbi Yuan
LIABILITIES AND EQUITY Note V 31 December 2020 31 December 2019
Current liabilities
Short-term borrowings 22 1,612,187,020.12 1,453,018,300.01
Notes payable 23 7,520,165,274.69 5,555,697,557.53
Accounts payable 24 7,697,451,142.50 6,703,967,826.54
Receipts in advance 25 12,352,466.64 544,372.73
Contract liabilities 26 368,600,357.14 302,650,567.97
Employee benefits payable 27 357,212,047.10 259,640,813.10
Tax payable 28 316,867,149.16 253,379,524.34
Other payables 29 1,599,166,881.14 1,822,364,637.62
Non-current liabilities due within one year 30 748,732,059.89 611,917,847.37
Other current liabilities 31 24,787,078.55 749,710.19
Total current liabilities 20,257,521,476.93 16,963,931,157.40
Non-current liabilities
Long-term borrowings 32 31,637,173.89 -
Lease liabilities 33 1,303,054,163.90 1,208,453,029.51
Long-term payables 34 6,938,189.00 800,000.00
Long-term employee benefits payable 35 1,319,000.00 1,433,000.00
Provisions 36 68,808,166.79 -
Deferred income 37 89,843,583.37 88,704,272.88
Deferred tax liabilities 20 205,921,408.66 118,284,962.77
Other non-current liabilities 38 740,862,989.59 73,256,514.93
Total non-current liabilities 2,448,384,675.20 1,490,931,780.09
Total liabilities 22,705,906,152.13 18,454,862,937.49
The accompanying notes form an integral part of these financial statements.
124
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED BALANCE SHEET (CONTINUED)
31 December 2020 Expressed in Renminbi Yuan
LIABILITIES AND EQUITY Note V 31 December 2020 31 December 2019
Equity
Share capital 39 428,126,983.00 428,126,983.00
Capital surplus 40 4,372,504,053.72 4,470,766,959.44
Other comprehensive income 41 38,483,017.72 45,917,342.77
Surplus reserves 42 214,063,491.50 214,063,491.50
Retained earnings 43 8,895,145,106.39 7,752,265,659.17
Total equity attributable to owners of
the parent 13,948,322,652.33 12,911,140,435.88
Non-controlling interests 2,940,304,667.19 2,662,839,840.83
Total equity 16,888,627,319.52 15,573,980,276.71
Total liabilities and equity 39,594,533,471.65 34,028,843,214.20
The financial statements have been signed by:
Legal representative: Financial controller: Head of Accounting Department:
The accompanying notes form an integral part of these financial statements.
125
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED INCOME STATEMENT
Year ended 31 December 2020 Expressed in Renminbi Yuan
Note V 2020 2019
Operating revenue 44 59,649,455,012.03 52,786,807,476.28
Less: Operating costs 44 52,591,767,464.37 46,891,224,305.04
Taxes and surcharges 45 154,631,447.20 137,600,136.96
Selling expenses 46 3,943,134,095.75 3,168,007,835.69
Administrative expenses 47 1,008,178,815.78 871,076,467.62
Finance costs 48 119,855,169.85 126,340,266.54
Including: Interest expense 258,189,163.79 276,490,046.68
Interest income 136,455,990.10 139,860,973.14
Add: Other income 49 72,363,808.19 45,229,118.70
Investment income 50 283,951,956.10 246,185,242.97
Including: Investment income from associates 354,345,705.65 331,171,902.87
Income from the derecognition of financial
assets measured at amortised cost (76,142,835.36) (86,377,492.55)
Credit impairment losses 51 (25,975,320.08) (53,056,200.12)
Impairment losses 52 (5,179,285.75) (3,038,177.68)
Gain on disposal of assets 53 6,791,962.50 2,551,175.02
Operating profits 2,163,841,140.04 1,830,429,623.32
Add: Non-operating income 54 17,660,920.58 25,602,351.62
Less: Non-operating expenses 55 24,265,611.84 4,575,796.92
Total profit 2,157,236,448.78 1,851,456,178.02
Less: Income tax expenses 56 435,940,050.06 371,296,724.78
Net profit 1,721,296,398.72 1,480,159,453.24
Including: Net profit before business combination of the acquiree
under common control - -
Net profit classified by continuing operations
Profit or loss from continuing operations 1,721,296,398.72 1,480,159,453.24
Net profit classified by attribution of ownership
Net profit attributable to owners of the parent 1,401,892,593.23 1,267,931,291.32
Non-controlling interests 319,403,805.49 212,228,161.92
Other comprehensive income, net of tax (12,394,161.92) 76,618,063.81
Other comprehensive income, net of tax, attributable to owners of the
parent, 41 (7,434,325.05) 45,917,342.77
Other comprehensive income that will not be reclassified to profit or
loss
Change in the fair value of other equity investments (7,439,657.92) 46,050,708.96
Other comprehensive income that may be reclassified to profit or loss
Other comprehensive income using the equity method that may
be reclassified to profit or loss 5,332.87 (133,366.19)
Other comprehensive income, net of tax, attributable to non-controlling
interests 41 (4,959,836.87) 30,700,721.04
The accompanying notes form an integral part of these financial statements.
126
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED INCOME STATEMENT (CONTINUED)
Year ended 31 December 2020 Expressed in Renminbi Yuan
Note V 2020 2019
Total comprehensive income 1,708,902,236.80 1,556,777,517.05
Including:
Total comprehensive income attributable to owners of the 1,394,458,268.18 1,313,848,634.09
parent
Total comprehensive income attributable to non-controlling
314,443,968.62 242,928,882.96
interests
Earnings per share 59
Basic earnings per share 3.27 2.96
Diluted earnings per share 3.27 2.96
The accompanying notes form an integral part of these financial statements.
127
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
Year ended 31 December 2020 Expressed in Renminbi Yuan
Attributable to owners of the parent
2020 Other
comprehensive Non-controlling
Share capital Capital surplus income Surplus reserves Retained earnings Subtotal interests Total equity
I. Balance at end of prior year 428,126,983.00 4,363,007,511.57 45,917,342.77 214,063,491.50 7,755,295,537.08 12,806,410,865.92 2,553,426,974.31 15,359,837,840.23
Add: Business combination involving
entities under common control - 107,759,447.87 - - (3,029,877.91) 104,729,569.96 109,412,866.52 214,142,436.48
II. Balance at beginning of year 428,126,983.00 4,470,766,959.44 45,917,342.77 214,063,491.50 7,752,265,659.17 12,911,140,435.88 2,662,839,840.83 15,573,980,276.71
III. Changes for the year - (98,262,905.72) (7,434,325.05) - 1,142,879,447.22 1,037,182,216.45 277,464,826.36 1,314,647,042.81
(1) Total comprehensive income - - (7,434,325.05) - 1,401,892,593.23 1,394,458,268.18 314,443,968.62 1,708,902,236.80
(2) Owners’ contributions and
reduction in capital - (98,262,905.72) - - (2,136,956.21) (100,399,861.93) 28,361,747.23 (72,038,114.70)
1. Capital contributions by owners - - - - - - 5,700,000.00 5,700,000.00
2. Business combination involving
entities under common control - (97,869,029.99) - - - (97,869,029.99) (65,246,019.99) (163,115,049.98)
3. Business combination involving
entities not under common control - - - - - - 87,907,767.22 87,907,767.22
4. Others - (393,875.73) - - (2,136,956.21) (2,530,831.94) - (2,530,831.94)
(3) Profit distribution - - - - (256,876,189.80) (256,876,189.80) (65,340,889.49) (322,217,079.29)
1.Distribution to equity owners - - - - (256,876,189.80) (256,876,189.80) (65,340,889.49) (322,217,079.29)
IV. Balance at end of year 428,126,983.00 4,372,504,053.72 38,483,017.72 214,063,491.50 8,895,145,106.39 13,948,322,652.33 2,940,304,667.19 16,888,627,319.52
The accompanying notes form an integral part of these financial statements.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (CONTINUED)
Year ended 31 December 2020 Expressed in Renminbi Yuan
Attributable to owners of the parent
2019 Other
comprehensive Non-controlling
Share capital Capital surplus income Surplus reserves Retained earnings Subtotal interests Total equity
I. Balance at end of prior year 428,126,983.00 4,320,984,981.51 - 214,063,491.50 6,655,257,147.27 11,618,432,603.28 2,287,343,889.77 13,905,776,493.05
Add: Business combination involving
entities under common control - 107,759,447.87 - - 328,013.78 108,087,461.65 110,114,216.72 218,201,678.37
II. Balance at beginning of year 428,126,983.00 4,428,744,429.38 - 214,063,491.50 6,655,585,161.05 11,726,520,064.93 2,397,458,106.49 14,123,978,171.42
III. Changes for the year - 42,022,530.06 45,917,342.77 - 1,096,680,498.12 1,184,620,370.95 265,381,734.34 1,450,002,105.29
(1) Total comprehensive income - - 45,917,342.77 - 1,267,931,291.32 1,313,848,634.09 242,928,882.96 1,556,777,517.05
(2) Owners’ contributions and
reduction in capital
- 42,022,530.06 - - - 42,022,530.06 62,799,658.33 104,822,188.39
1. Capital contributions by owners - - - - - - 48,136,000.00 48,136,000.00
2. Others - 42,022,530.06 - - - 42,022,530.06 14,663,658.33 56,686,188.39
(3) Profit distribution
- - - - (171,250,793.20) (171,250,793.20) (40,346,806.95) (211,597,600.15)
1.Distribution to equity owners - - - - (171,250,793.20) (171,250,793.20) (40,346,806.95) (211,597,600.15)
IV. Balance at end of year 428,126,983.00 4,470,766,959.44 45,917,342.77 214,063,491.50 7,752,265,659.17 12,911,140,435.88 2,662,839,840.83 15,573,980,276.71
The accompanying notes form an integral part of these financial statements.
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS
Year ended 31 December 2020 Expressed in Renminbi Yuan
Note V 2020 2019
1. CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from the sale of goods and the
rendering of services 61,701,348,065.17 56,622,085,083.65
Receipts of taxes and surcharges refunds 13,720,143.80 14,595,925.20
Other cash receipts relating to operating activities 60 1,697,383,795.18 769,560,639.30
Total cash inflows from operating activities 63,412,452,004.15 57,406,241,648.15
Cash payments for goods and services 56,018,201,099.73 50,596,329,425.99
Cash payments to and on behalf of employees 2,708,413,782.73 2,282,454,444.09
Payments of all types of taxes and surcharges 1,512,079,139.15 1,292,447,071.15
Other cash payments relating to operating
activities 60 1,671,011,384.07 1,222,357,517.18
Total cash outflows from operating activities 61,909,705,405.68 55,393,588,458.41
Net cash flows from operating activities 61 1,502,746,598.47 2,012,653,189.74
2. CASH FLOWS FROM INVESTING ACTIVITIES
Cash receipts from returns of investments 19,027,649.76 -
Cash receipts from returns on investments 160,164,584.49 151,841,842.08
Net cash receipts from disposal of fixed assets,
intangible assets and other long-term assets 8,570,072.79 5,309,788.13
Net cash receipts from disposal of subsidiaries
and other business units 61 - 791,464.76
Other cash receipts relating to investing activities 60 24,051,674.67 481,988,480.07
Total cash inflows from investing activities 211,813,981.71 639,931,575.04
The accompanying notes form an integral part of these financial statements.
130
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
CONSOLIDATED STATEMENT OF CASH FLOWS (CONTINUED)
Year ended 31 December 2020 Expressed in Renminbi Yuan
Note V 2020 2019
2. CASH FLOWS FROM INVESTING ACTIVITIES (Continued)
Cash payments to acquire fixed assets, intangible assets
and other long-term assets 293,826,061.63 251,856,027.38
Cash payments for investments 50,117,666.41 56,001,023.17
Net cash payments for acquisition of subsidiaries and other
business units 61 2,646,097,210.38 97,801,928.16
Other cash payments relating to investing activities 60 5,002,197.26 455,397,750.74
Total cash outflows from investing activities 2,995,043,135.68 861,056,729.45
Net cash flows from investing activities (2,783,229,153.97) (221,125,154.41)
3. CASH FLOWS FROM FINANCING ACTIVITIES
Cash proceeds from investments by others 5,700,000.00 46,093,966.84
Including: Cash receipts from capital contributions from
non-controlling interests of subsidiaries 5,700,000.00 46,093,966.84
Cash receipts from borrowings 801,520,037.57 171,786,182.96
Other cash receipts relating to financing activities 60 359,332,475.63 249,305,768.12
Total cash inflows from financing activities 1,166,552,513.20 467,185,917.92
Cash repayments for debts 427,347,200.00 215,846,808.49
Cash payments for distribution of dividends or profit and
interest expenses 613,704,450.41 532,883,488.76
Including: Dividends or profit paid to non-controlling
shareholders of subsidiaries 63,799,218.94 39,827,223.10
Other cash payments relating to financing activities 60 1,865,923,680.60 718,672,829.88
Total cash outflows from financing activities 2,906,975,331.01 1,467,403,127.13
Net cash flows from financing activities (1,740,422,817.81) (1,000,217,209.21)
4. EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS (52,538.86) (175,693.26)
5. NET DECREASE / INCREASE IN CASH AND CASH
EQUIVALENTS (3,020,957,912.17) 791,135,132.86
Add: Cash and cash equivalents at beginning of the year 8,426,071,170.16 7,634,936,037.30
6. CASH AND CASH EQUIVALENTS AT END OF YEAR 61 5,405,113,257.99 8,426,071,170.16
The accompanying notes form an integral part of these financial statements.
131
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY BALANCE SHEET
31 December 2020 Expressed in Renminbi Yuan
ASSETS Note XIV 31 December 2020 31 December 2019
Current assets
Cash and bank balances 3,020,909,473.71 2,909,417,289.71
Notes receivable 1 30,984,449.44 14,900,068.42
Accounts receivable 2 609,575,301.13 571,544,784.65
Receivables financing 3 30,248,631.32 30,194,682.11
Advances to suppliers 6,722,204.59 7,996,243.28
Other receivables 4 3,562,309,346.07 1,928,941,595.38
Inventories 172,275,777.63 169,422,075.78
Contract assets 139,154.54 -
Other current assets 39,482.38 39,482.38
Total current assets 7,433,203,820.81 5,632,456,221.71
Non-current assets
Long-term equity investments 5 7,873,668,245.16 7,698,756,525.83
Other non-current financial assets 120,972,350.24 140,000,000.00
Investment properties 1,452,132.04 1,484,198.56
Fixed assets 13,279,902.76 14,763,656.62
Right-of-use assets 5,142,755.88 6,217,504.50
Intangible assets 4,622,268.00 5,838,737.17
Long-term prepaid expenses 4,335,802.92 6,130,534.55
Deferred tax assets 9,025,057.52 9,327,850.53
Other non-current assets 12,967,715.50 9,000,000.00
Total non-current assets 8,045,466,230.02 7,891,519,007.76
Total assets 15,478,670,050.83 13,523,975,229.47
The accompanying notes form an integral part of these financial statements.
132
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY BALANCE SHEET (CONTINUED)
31 December 2020 Expressed in Renminbi Yuan
LIABILITIES AND SHAREHOLDERS’ EQUITY Note XIV 31 December 2020 31 December 2019
Current liabilities
Short-term borrowings 157,892,942.24 121,350,644.36
Notes payable 756,364,719.49 751,577,900.22
Accounts payable 407,275,713.49 322,436,681.01
Contract liabilities 1,807,562.61 7,293,184.46
Employee benefits payable 36,672,344.48 30,469,777.88
Tax payables 13,975,905.04 22,909,124.90
Other payables 3,167,152,583.28 2,120,794,765.05
Non-current liabilities due within one year 1,056,120.58 32,640,325.77
Other current liabilities 636,200.63 338,196.81
Total current liabilities 4,542,834,091.84 3,409,810,600.46
Non-current liabilities
Long-term borrowings 31,637,173.89 -
Lease liabilities 4,455,967.97 5,461,257.38
Long-term payables 800,000.00 800,000.00
Deferred income 827,658.18 1,276,698.66
Other non-current liabilities 11,042.52 -
Total non-current liabilities 37,731,842.56 7,537,956.04
Total liabilities 4,580,565,934.40 3,417,348,556.50
The accompanying notes form an integral part of these financial statements.
133
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY BALANCE SHEET (CONTINUED)
31 December 2020 Expressed in Renminbi Yuan
LIABILITIES AND SHAREHOLDERS’ EQUITY Note XIV 31 December 2020 31 December 2019
Shareholders’ equity
Share capital 428,126,983.00 428,126,983.00
Capital surplus 4,467,991,431.59 4,468,385,307.32
Other comprehensive income (128,033.32) (133,366.19)
Surplus reserves 214,063,491.50 214,063,491.50
Retained earnings 5,788,050,243.66 4,996,184,257.34
Total shareholders’ equity 10,898,104,116.43 10,106,626,672.97
Total liabilities and shareholders’ equity 15,478,670,050.83 13,523,975,229.47
The accompanying notes form an integral part of these financial statements.
134
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY INCOME STATEMENT
Year ended 31 December 2020 Expressed in Renminbi Yuan
Note XIV 2020 2019
Operating revenue 6 3,853,659,001.12 4,108,399,019.34
Less: Operating costs 6 3,674,872,961.34 3,916,035,572.52
Taxes and surcharges 6,565,048.14 6,459,864.79
Selling expenses 67,202,266.56 69,400,890.32
Administrative expenses 90,803,215.82 73,489,681.09
Finance costs (89,275,535.72) (64,025,013.54)
Including: Interest expense 45,645,501.85 46,025,863.16
Including: Interest income 137,302,390.98 111,805,557.75
Add: Other income 4,977,883.40 4,810,134.29
Investment income 7 969,166,523.86 1,158,737,566.83
Including: Investment income from
associates 353,352,207.87 353,856,432.16
Income from the
derecognition of
financial assets
measured at amortised
cost (1,796,917.66) (4,379,465.57)
Credit impairment losses (965,769.74) (45,728,840.12)
Impairment losses (500,485.27) (371,833.95)
Gain on disposal of assets (165.97) 155,014.05
Operating profits 1,076,169,031.26 1,224,640,065.26
Add: Non-operating income 1,925.53 741,954.13
Less: Non-operating expenses 388,863.31 280.00
Total profit 1,075,782,093.48 1,225,381,739.39
Less: Income tax expenses 27,039,917.36 14,503,442.87
Net profit 1,048,742,176.12 1,210,878,296.52
Including: Profit or loss from continuing operations 1,048,742,176.12 1,210,878,296.52
Other comprehensive income, net of tax 5,332.87 (133,366.19)
Other comprehensive income that may be
reclassified to profit or loss
Other comprehensive income using the equity
method that may be reclassified to profit or loss 5,332.87 (133,366.19)
Total comprehensive income 1,048,747,508.99 1,210,744,930.33
The accompanying notes form an integral part of these financial statements.
135
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY STATEMENT OF CHANGES IN EQUITY
Year ended 31 December 2020 Expressed in Renminbi Yuan
Other comprehensive
2020 Share capital Capital surplus Surplus reserves Retained earnings Total equity
income
I. Balance at end of prior year 428,126,983.00 4,468,385,307.32 (133,366.19) 214,063,491.50 4,996,184,257.34 10,106,626,672.97
II. Changes for the year - (393,875.73) 5,332.87 - 791,865,986.32 791,477,443.46
(1) Total comprehensive income - - 5,332.87 - 1,048,742,176.12 1,048,747,508.99
(2) Owners’ contributions and reduction in capital - (393,875.73) - - - (393,875.73)
1. Others - (393,875.73) - - - (393,875.73)
(3) Profit distribution - - - - (256,876,189.80) (256,876,189.80)
1. Distribution to owners - - - - (256,876,189.80) (256,876,189.80)
III. Balance at end of year 428,126,983.00 4,467,991,431.59 (128,033.32) 214,063,491.50 5,788,050,243.66 10,898,104,116.43
The accompanying notes form an integral part of these financial statements.
136
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY STATEMENT OF CHANGES IN EQUITY (CONTINUED)
Year ended 31 December 2020 Expressed in Renminbi Yuan
Other comprehensive
2019 Share capital Capital surplus Surplus reserves Retained earnings Total equity
income
I. Balance at end of prior year 428,126,983.00 4,426,362,777.26 - 214,063,491.50 3,956,556,754.02 9,025,110,005.78
II. Changes for the year - 42,022,530.06 (133,366.19) - 1,039,627,503.32 1,081,516,667.19
(1) Total comprehensive income - - (133,366.19) - 1,210,878,296.52 1,210,744,930.33
(2) Owners’ contributions and reduction in capital - 42,022,530.06 - - - 42,022,530.06
1. Others - 42,022,530.06 - - - 42,022,530.06
(3) Profit distribution - - - - (171,250,793.20) (171,250,793.20)
1. Distribution to owners - - - - (171,250,793.20) (171,250,793.20)
III. Balance at end of year 428,126,983.00 4,468,385,307.32 (133,366.19) 214,063,491.50 4,996,184,257.34 10,106,626,672.97
The accompanying notes form an integral part of these financial statements.
137
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY STATEMENT OF CASH FLOWS
Year ended 31 December 2020 Expressed in Renminbi Yuan
Note XIV 2020 2019
1. CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from the sale of goods and the
rendering of services 4,009,125,652.17 4,484,950,773.68
Other cash receipts relating to operating activities 152,617,741.86 55,105,150.55
Total cash inflows from operating activities 4,161,743,394.03 4,540,055,924.23
Cash payments for goods and services 3,813,436,197.34 4,272,419,447.94
Cash payments to and on behalf of employees 94,005,053.76 90,592,261.08
Payments of all types of taxes and surcharges 87,642,227.22 56,746,556.88
Other cash payments relating to operating
activities 69,706,005.74 36,680,891.34
Total cash outflows from operating activities 4,064,789,484.06 4,456,439,157.24
Net cash flows from operating activities 96,953,909.97 83,616,766.99
2. CASH FLOWS FROM INVESTING ACTIVITIES
Cash receipts from returns of investments 32,664,096.76 -
Cash receipts from returns on investments 753,109,725.64 958,057,018.50
Net cash receipts from disposal of fixed assets,
intangible assets and other long-term assets 20,210.00 3,961,383.00
Other cash receipts relating to investing activities 2,774,679,815.57 2,293,944,952.05
Total cash inflows from investing activities 3,560,473,847.97 3,255,963,353.55
Cash paid for acquisition of fixed assets,
intangible assets and other long-term
assets 13,691,557.76 11,264,989.90
Cash payments for investments - 19,998,000.00
Other cash payments relating to investing
activities 4,372,908,047.02 2,669,650,683.28
Total cash outflows from investing activities 4,386,599,604.78 2,700,913,673.18
Net cash flows from investing activities (826,125,756.81) 555,049,680.37
The accompanying notes form an integral part of these financial statements.
138
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
COMPANY STATEMENT OF CASH FLOWS (CONTINUED)
Year ended 31 December 2020 Expressed in Renminbi Yuan
Note XIV 2020 2019
3. CASH FLOWS FROM FINANCING ACTIVITIES
Cash receipts from borrowings 63,864,821.52 10,000,000.00
Other cash receipts relating to financing activities 35,223,164,337.16 26,701,067,083.61
Total cash inflows from financing activities 35,287,029,158.68 26,711,067,083.61
Cash repayments for debts 43,700,000.00 10,000,000.00
Cash payments for distribution of dividends, profit
308,496,896.99 210,404,986.68
or interest expenses
Other cash payments relating to financing 34,079,032,358.66 26,052,473,492.66
activities
Total cash outflows from financing activities 34,431,229,255.65 26,272,878,479.34
Net cash flows from financing activities 855,799,903.03 438,188,604.27
4. EFFECT OF FOREIGN EXCHANGE RATE
CHANGES ON CASH AND CASH (52,538.86) (175,693.26)
EQUIVALENTS
5. NET INCREASE IN CASH AND CASH
126,575,517.33 1,076,679,358.37
EQUIVALENTS
Add: Cash and cash equivalents at beginning of the 2,894,333,956.38 1,817,654,598.01
year
6. CASH AND CASH EQUIVALENTS AT END OF 3,020,909,473.71 2,894,333,956.38
YEAR
The accompanying notes form an integral part of these financial statements.
139
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS
Year ended 31 December 2020 Expressed in Renminbi Yuan
I Profile of the Company
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 RMB105.00 million. Through converting capital surplus into share capital, bonus issues and
issuance of shares for years, the share capital of the Company increased to 428.13 million as at
31 December 2020.
In November 2000, the Company entered into an Asset 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 asset exchange proposal was approved by shareholders in the Second Extraordinary
General Meeting on 29 December 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 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 14 March 2014, the Company issued 74,482,543 ordinary shares (A shares) through the
non-public offering. The par value per share is RMB1.00 yuan. The shares shall not be
transferred within 36 months since the issue date. The total number of shares of the Company
was 362,631,943 since the date of issue.
The Company acquired the companies under common control, including Sinopharm Holding
Guoda Drugstore Co., Ltd. (“Guoda Drugstore”), Foshan Nanhai Medicine Group Co., Ltd.
(“Foshan Nanhai”), Guangdong South Pharmaceutical Foreign Trade Co., Ltd. (“South Pharma &
Trade”) and 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. to acquire the non-controlling interest of South Pharma &
Trade. The above transactions were completed on 31 December 2016, and the relevant shares
were successfully issued and listed on 5 January 2017. Afterwards, the total number of shares of
the Company increased to 428,126,983.
140
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2020 Expressed in Renminbi Yuan
I Profile of the Company (Continued)
As of 31 December 2020, the total share capital was 428,126,983.
The Company is registered with Shenzhen Administration for Industry & Commerce. Its Uniform
Social Credit Code is 91440300192186267U. The operation period of the Company is from 2
August 1986 to the long term. The registered capital of the Company is RMB428.13 million. 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 Chinese herbal slices, 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; the trading of dietary supplements; industrial
investment holding; domestic trade; material supply and the marketing industry (other than
special licensing); the sale of ambulances; the trading of second-class and third-class medical
equipment; project investment; property management and the leasing of self-owned properties;
pharmacovigilance and medical information consulting; parking operation; logistics and related
services; the package agency business; logistic design; import and export services (excluding
projects that are prohibited by the country; and restrictive projects have to be approved before
operating).
Subsidiaries consolidated in the financial statements for the current year and change in the
consolidation scope are shown in Note VI.
The Group’s parent and ultimate parent companies are Sinopharm Group and China National
Pharmaceutical Group Corporation (“CNPGC”), respectively.
These financial statements were authorised for issue by the board of directors of the Company on
31 March 2021.
II Basis of preparation
The financial statements were prepared in accordance with the Basic Standard and specific
standards of Accounting Standards for Business Enterprises issued by the Ministry of Finance
and the specific accounting standards, application guidance, interpretation and other relevant
regulations issued or amended thereafter (hereafter collectively referred to as “Accounting
Standards for Business Enterprises” or “CAS”).
These financial statements are prepared on a going concern basis.
Except for certain financial instruments, the financial statements have been prepared using the
historical cost as the principle of measurement. Where assets are impaired, provisions for asset
impairment are made in accordance with the relevant requirements.
141
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2020 Expressed in Renminbi Yuan
III Summary of significant accounting policies and accounting estimates
The Group determines the specific accounting policies and estimates based on its features of
production and operation, primarily comprising the methods of provision for expected credit losses
on receivables, valuation of inventories, depreciation of fixed assets and amortisation of intangible
assets, the measurement model of investment properties, recognition and measurement of
revenue, etc.
1. Statement of compliance with Accounting Standards for Business Enterprises
The financial statements present truly and completely the financial positions of the Group and the
Company as at 31 December 2020, and the financial performance and the cash flows for the year
then ended in accordance with Accounting Standards for Business Enterprises.
2. Accounting year
The Group’s accounting year begins on 1 January and ends on 31 December.
3. Functional currency
The functional currency is Renminbi. The Company’s functional and presentation currency is
Renminbi (RMB). The currency unit is RMB Yuan unless otherwise stated.
4. Business combinations
Business combinations are classified into business combinations involving entities under common
control and business combinations not involving entities under common control.
(a) Business combinations involving entities under common control
A business combination involving entities under common control is a business combination in
which all of the combining entities are ultimately controlled by the same party or parties both
before and after the combination, and that control is not transitory. In a business combination
involving entities under common control, the entity that, at the combination date, obtains control of
another combining entity is the absorbing entity, while that other combining entity is the entity
being absorbed. The combination date is the date on which the absorbing entity effectively
obtains control on the entity being absorbed.
Assets and liabilities (including goodwill arising from the 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.
142
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2020 Expressed in Renminbi Yuan
III Summary of significant accounting policies and accounting estimates (Continued)
4. Business combinations (Continued)
(b) Business combinations involving enterprises not under common control
A business combination not involving entities under common control is a business combination in
which all of the combining entities are not ultimately controlled by the same party or parties both
before and after the combination. In a business combination not involving entities under common
control, the entity that, on the acquisition date, obtains control of another combining entity is the
acquirer, while that other combining entity is the acquiree. The acquisition date is the date on
which the acquirer effectively obtains control of the acquiree.
The acquirer shall measure the acquiree’s identifiable assets, liabilities and contingent liabilities
acquired in the business combination at their fair values on the acquisition date.
Goodwill is initially recognised and measured at cost, being the excess of the aggregate of the fair
value of the consideration transferred (or the fair value of the equity securities issued) and any fair
value of the Group’s previously held equity interest in the acquiree over the Group’s interest in the
fair value of the acquiree’s net identifiable assets. After initial recognition, goodwill is measured at
cost less any accumulated impairment losses. Where the aggregate of the fair value of the
consideration transferred (or the fair value of the equity securities issued) and any fair value of the
Group’s previously held equity interest in the acquiree is lower than the Group’s interest in the fair
value of the acquiree’s net identifiable assets, the Group reassesses the measurement of the fair
value of the acquiree’s identifiable assets, liabilities and contingent liabilities and the fair value of
the consideration transferred (or the fair value of the equity securities issued), together with the fair
value of the Group’s previously held equity interest in the acquiree. If after that reassessment, the
aggregate of the fair value of the consideration transferred (or the fair value of the equity securities
issued) and the Group’s previously held equity interest in the acquiree is still lower than the
Group’s interest in the fair value of the acquiree’s net identifiable assets, the Group recognises the
remaining difference in profit or loss.
Where the business combination not involving enterprises under common control 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 the fair value and carrying amount
recognised 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. For financial assets at fair value through OCI held before the
acquisition date, changes in fair value that were accumulated through OCI will transfer to retained
earnings.
5. Consolidated financial statements
The scope of the consolidated financial statements, which include the financial statements of the
Company and all of its subsidiaries, is determined on the basis of control. A subsidiary is an
entity that is controlled by the Company (such as an enterprise, a deemed separate entity, or a
structured entity controlled by the Company).
143
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2020 Expressed in Renminbi Yuan
III Summary of significant accounting policies and accounting estimates (Continued)
5. Consolidated financial statements (Continued)
In the preparation of the consolidated financial statements, the financial statements of subsidiaries
are prepared for the same accounting year as the Company, using consistent accounting policies.
All intra-group assets and liabilities, equity, income, expenses and cash flows relating to
transactions between members of the Group are eliminated in full on consolidation.
Where the loss for the current period attributable to non-controlling interests of a subsidiary
exceeds the non-controlling interests of the opening balance of equity of the subsidiary, the excess
shall still be allocated against the non-controlling interests.
For subsidiaries acquired through business combinations not involving entities under common
control, the financial performance and cash flows of the acquiree shall be consolidated from the
date on which the Group obtains control, and continue to be consolidated until the date such
control ceases. While preparing the consolidated financial statements, the Group shall adjust the
subsidiary’s financial statements, on the basis of the fair values of the identifiable assets, liabilities
and contingent liabilities recognised on the acquisition date.
For subsidiaries acquired through business combinations involving entities under common control,
the financial performance and cash flows of the entity being absorbed shall be consolidated from
the beginning of the period in which the combination occurs. While preparing the comparative
financial statements, adjustments are made to related items in the financial statements for the prior
period as if the reporting entity after the combination has been in existence since the date the
ultimate controlling party first obtained the control.
The Group reassesses whether or not it controls an investee if any change in facts and
circumstances indicates that there are changes to one or more of the three elements of control.
When the Group loses control of a subsidiary in multiple transactions in which it disposes of its
long-term equity investment in the subsidiary in stages, if each of the multiple transactions does
not form part of a bundled transaction, the transactions conducted before the loss of control of the
subsidiary are accounted for in accordance with the accounting policy for partial disposal of the
equity investment in subsidiaries where control is retained. If each of the multiple transactions
forms part of a bundled transaction which eventually results in the loss of control in the subsidiary,
these multiple transactions are accounted for as a single transaction. In the consolidated financial
statements, the difference between the consideration received and the corresponding proportion
of the subsidiary’s net assets (calculated continuously from the acquisition date) in each
transaction prior to the loss of control shall be recognised in other comprehensive income and
transferred to profit or loss when the parent eventually loses control of the subsidiary.
6. Cash and cash equivalents
Cash comprises the Group’s cash on hand and bank deposits that can be readily withdrawn on
demand. Cash equivalents are short-term, highly liquid investments that are readily convertible
into known amounts of cash, and are subject to an insignificant risk of changes in value.
144
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2020 Expressed in Renminbi Yuan
III Summary of significant accounting policies and accounting estimates (Continued)
7. Foreign currency translation
Foreign currency transactions are translated into RMB using the exchange rates prevailing at the
dates of the transactions.
At the balance sheet date, monetary items denominated in foreign currencies are translated into
RMB using the spot exchange rates on the balance sheet date. Exchange differences arising from
these translations are recognised in profit or loss for the current period, except for those
attributable to foreign currency borrowings that have been taken out specifically for the acquisition
or construction of qualifying assets, which are capitalised as part of the cost of those assets.
Non-monetary items denominated in foreign currencies that are measured at historical cost are
translated at the balance sheet date using the spot exchange rates at the dates of the
transactions.
Foreign currency cash flows are translated using the spot exchange rates prevailing on the dates
of cash flows. The effect of exchange rate changes on cash is presented separately in the cash
flow statement.
8. Financial instruments
Financial instruments are the contracts that formed the financial assets of one entity, and at the
same time formed the financial liabilities or equity instruments of other entities.
Recognition and derecognition of financial instruments
Financial assets and financial liabilities are recognised when the Group becomes a party to the
contractual provisions of the instrument.
The Group derecognises a financial asset, part of a financial asset or group of financial assets, i.e.,
offset from the accounts and statement of financial position, if either of the following conditions is
satisfied:
(1) The contractual rights to the cash flows from the financial asset expire; or
(2) The contractual rights to the cash flows from the financial asset are transferred out, or
obligated to transfer out all generated cash flows on receipt; and (a) substantially all the
risks and rewards of ownership of the financial asset are transferred to the transferee; or (b)
the Group neither transfers nor retains substantially all the risks and rewards of ownership
of the financial asset, but has not retained control of the financial asset.
A financial liability is derecognised when the obligation under the liability is discharged or
cancelled, or expires. When an existing financial liability is replaced by another from the same
lender on substantially different terms, or the terms of an existing liability are substantially modified,
such an exchange or modification is treated as a derecognition of the original liability and a
recognition of a new liability, and the difference between the respective carrying amounts is
recognised in profit or loss.
Regular way purchases and sales of financial assets are recognised and derecognised using trade
date accounting. Regular way purchases or sales are purchases or sales of financial assets that
require delivery within the period generally established by regulation or convention in the
marketplace. The trade date is the date that the Group committed to purchase or sell a financial
asset.
145
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2020 Expressed in Renminbi Yuan
III Summary of significant accounting policies and accounting estimates (Continued)
8. Financial instruments (Continued)
Classification and measurement of financial assets
The classification of financial assets at initial recognition depends on the financial asset’s
contractual cash flow characteristics and the Group’s business model for managing them: financial
assets at fair value through profit or loss, financial assets at amortised cost, or financial assets at
fair value through other comprehensive income, according to the Group’s business model for
managing financial assets and the contract cash flow characteristics of the financial assets.
Financial assets are measured at fair value at initial recognition, provided that accounts receivable
or bills receivable not containing significant financing components or for which financing
components of not more than 1 year are not taken into consideration shall be measured at their
transaction prices at initial recognition.
For financial assets at fair value through profit or loss, the relevant transaction costs are directly
recognised in profit or loss; while for other financial assets, the relevant transaction costs are
recognised in their initial recognition amount.
The subsequent measurement of financial assets depends on their classification as follows:
Debt investments measured at amortised cost
The Group measures financial assets at amortised cost if both of the following conditions are met:
The financial asset is held within a business model with the objective to hold financial assets in
order to collect contractual cash flows; The contractual terms of the financial asset give rise on
specified dates to cash flows that are solely payments of principal and interest on the principal
amount outstanding. Interest income of this kind of financial assets is recognised using the
effective interest method. Gains and losses are recognised in the income statement when the
asset is derecognised, modified or impaired.
Debt investments at fair value through other comprehensive income
The Group measures debt investments at fair value through other comprehensive income if both of
the following conditions are met: the financial asset is held within a business model with the
objective of both holding to collect contractual cash flows and selling; the contractual terms of the
financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding. Changes in fair values are recognised in other
comprehensive income except that interest income, impairment losses and exchange differences
are recognised in current profit or loss. Upon derecognition, the cumulative fair value change
recognised in other comprehensive income is transferred to profit or loss.
146
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2020 Expressed in Renminbi Yuan
III Summary of significant accounting policies and accounting estimates (Continued)
8. Financial instruments (Continued)
Classification and measurement of financial assets (Continued)
Equity investments at fair value through other comprehensive income
The Group irrevocably chooses to designate some non-tradable equity instrument investments as
financial assets at fair value through other comprehensive income. Only the relevant dividend
income (excluding dividend income explicitly recovered as part of investment cost) is recognised in
profit or loss, and subsequent changes in fair value are included in other comprehensive income
without provision for impairment. When financial assets are derecognised, the accumulated gains
or losses previously recognised in other comprehensive gains are transferred from other
comprehensive income and recognised in retained earnings.
Financial assets at fair value through profit or loss
The financial assets other than the above financial assets measured at amortised cost and
financial assets at fair value through other comprehensive income are classified as financial
assets at fair value through profit or loss. Such financial assets are subsequently measured at
fair value with net changes in fair value recognised in profit or loss except for the derivatives
designated as hedging instruments in an effective hedge.
Only when an accounting mismatch is eliminated or significantly decreased, financial assets are
designated as financial assets at fair value through profit or loss at initial recognition.
When an enterprise initially designates a financial asset as a financial asset at fair value through
profit or loss, it cannot be reclassified to other financial assets; and other financial assets cannot
be re-designated after initial recognition as financial assets measured at fair value through profit or
loss.
Classification and measurement of financial liabilities
The Group’s financial liabilities are, on initial recognition, classified into financial liabilities at fair
value through profit or loss, other financial liabilities. For financial liabilities at fair value through
profit or loss, the relevant transaction costs are directly recognised in profit or loss, and the related
transaction costs of other financial liabilities are recognised in their initial amount.
147
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2020 Expressed in Renminbi Yuan
III Summary of significant accounting policies and accounting estimates (Continued)
8. Financial instruments (Continued)
Classification and measurement of financial liabilities (Continued)
Subsequent measurement of financial liabilities is determined by its classification:
Financial liabilities at fair value through profit or loss
Financial liabilities at fair value through profit or loss include financial liabilities held for trading
(including derivative instruments attributable to financial liabilities) and financial liabilities
designated upon initial recognition as at fair value through profit or loss. Financial liabilities held
for trading (including derivative instruments attributable to financial liabilities) are subsequently
measured at fair value. All changes in fair value of such financial liabilities are recognised in
profit or loss. Financial liabilities designated at fair value through profit or loss are subsequently
measured at fair value and gains or losses are recognised in profit or loss, except for the gains or
losses arising from the Group’s own credit risk which are presented in other comprehensive
income. If gains or losses arising from the Group’s own credit risk which are presented in other
comprehensive income will lead to or expand accounting mismatch in profit or loss, the Group will
include all the changes in fair value (including the amount affected by changes in the Group’s own
credit risk) of such financial liabilities in profit or loss.
Only if one of the following conditions is met can financial liabilities be designated as financial
liabilities at fair value through profit or loss on initial recognition:
(1) It can eliminate or significantly reduce the accounting mismatch.
(2) The formal written document of the risk management or investment strategy has stated that the
portfolio of financial instruments is managed, evaluated and reported to key managers on the
basis of fair value.
(3) The financial liability is a hybrid instrument that contains one or more embedded derivatives,
unless the embedded derivatives have no significant change in the cash flows of the hybrid
instrument, or the embedded derivatives should obviously not be separated from the related
hybrid instruments.
(4) Mixed instruments contain embedded derivatives that need to be split but cannot be measured
separately at the time of acquisition or on subsequent balance sheet days.
When an enterprise designates a financial liability as a financial liability at fair value through profit
or loss, it cannot be reclassified as other financial liabilities; nor can other financial liabilities be
re-designated as financial liabilities at fair value through profit or loss after initial recognition.
Other financial liabilities
For such financial liabilities, subsequent measurement is made at amortised cost using the
effective interest rate method.
148
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2020 Expressed in Renminbi Yuan
III Summary of significant accounting policies and accounting estimates (Continued)
8. Financial instruments (Continued)
Impairment of financial assets
Based on the expected credit losses (“ECLs”), the Group recognises an allowance for ECLs for the
financial assets measured at amortised cost, debt investments at fair value through other
comprehensive income and contract assets.
For accounts receivable and contract assets that do not contain significant financing components,
the Group uses a simplified measurement method to measure loss provisions in accordance with
the amount of expected credit losses equivalent to the entire life cycle.
For accounts receivable and contract assets with significant financing components, the Group
uses a simplified measurement method to measure loss provisions in accordance with the amount
of the expected credit loss equivalent to the entire lifetime.
For financial assets other than those measured with simplified valuation methods, the Group
evaluates at each balance sheet date whether its credit risk has significantly increased since initial
recognition. The period during which credit risk has not significantly increased since initial
recognition is considered the first stage, at which the Group shall measure the loss provision
based on the amount of the expected credit loss for the next 12 months and shall compute interest
income according to the book balance and effective interest rate; the period during which credit
risk has significantly increased since initial recognition although no credit impairment has occurred
is considered the second stage, at which the Group shall measure the loss provision based on the
amount of the expected credit loss for the entire valid period and shall compute interest income
according to the book balance and effective interest rate; and the period during which credit
impairment has occurred after initial recognition is considered the third stage, at which the Group
shall measure the loss provision based on the amount of the expected credit loss for the entire
period and shall compute interest income according to the amortised cost and effective interest
rate. For financial instruments with relatively low credit risk at the balance sheet date, the Group
assumes that its credit risk has not significantly increases since initial recognition.
The Group evaluates the expected credit losses on financial instruments on a single and combined
basis. Taking into account the credit risk characteristics of different customers, the Group
evaluates the expected credit losses on accounts receivable based on the aging portfolio.
Refer to Note VIII (3) for the disclosure of the Group's criteria for judging the significant increase in
credit risk, the definition of assets with impaired credit losses, and the assumption of measuring
expected credit losses.
When the Group no longer reasonably expects to be able to recover all or part of the contract cash
flows of the financial assets, the Group directly writes down the carrying amount of the financial
asset.
149
CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
Year ended 31 December 2020 Expressed in Renminbi Yuan
III Summary of significant accounting policies and accounting estimates (Continued)
8. Financial instruments (Continued)
Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the balance
sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an
intention to settle on a net basis, or to realise the financial assets and settle the financial liabilities
simultaneously.
Transfer of financial assets
A financial asset is derecognised when the Group has transferred substantially all the risks and
rewards of the asset to the transferee. A financial asset is not derecognised when the Group
retains substantially all the risks and rewards of the financial asset.
If the Group neither transfers nor retains substantially all the risks and rewards of ownership of
financial assets, the related accounting treatments of such financial assets are as follows: the
Group derecognises financial assets when it retains no control on them, and associated assets
and liabilities are recognised at the same time. If the Group retains control of the financial asset, it
recognises the financial asset to the extent of its continuing involvement in the transferred financial
asset and recognises an associated liability.
Continuing involvement that takes the form of a financial guarantee over the transferred asset is
measured at the lower of the original carrying amount of the asset and the financial guarantee. The
amount of the financial guarantee is the maximum amount of consideration that the Group could
be required to repay.
9. Inventories
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.
Inventories are initially carried at cost. Cost of inventories comprises all costs of purchase, costs of
conversion and other costs. Cost is determined on the weighted average basis. Turnover materials
include low-value consumables and packing materials, which are on the immediate write-off basis.
The Group adopts the perpetual inventory system.
At the balance sheet date, inventories are stated at the lower of cost and net realisable value.
The inventories are written down below cost to net realisable value and the write-down is
recognised in profit or loss if the cost is higher than the net realisable value. When the
circumstances that previously caused the inventories to be written down below cost no longer exist,
in which case the net realisable value of inventories becomes higher than the carrying amount, the
amount of the write-down is reversed. The reversal is limited to the amount of the original
write-down, and is recognised in profit or loss.
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 sal
