China National Accord Medicines Corporation Ltd.
Semi-Annual Report 2018
August 2018
Section I. Important Notice, Contents and Paraphrase
Board of Directors, Supervisory Committee, all directors, supervisors and seniorexecutives of China National Accord Medicines Corporation Ltd. (hereinafterreferred to as the Company) hereby confirm that there are no any fictitiousstatements, misleading statements, or important omissions carried in this report,and shall take all responsibilities, individual and/or joint, for the reality,accuracy and completion of the whole contents.Lin Zhaoxiong, Principal of the Company, Wei Pingxiao, person in charger ofaccounting works and Wang Ying, person in charge of accounting organ(accounting principal) hereby confirm that the Financial Report of Semi -Annual Report 2018 is authentic, accurate and complete.All directors are attended the Board Meeting for report deliberation.The Company plans not to pay cash dividends, bonus and carry out capitalizingof common reserves.
Contents
Section I Important Notice and Paraphrase ...... 1
Section II Company Profile and Main Financial Indexes ...... 5
Section III Summary of Company Business ...... 8
Section IV Discussion and Analysis of Business ...... 12
Section V Important Events ...... 28
Section VI Changes in Shares and Shareholders ...... 49
Section VII Preferred Stock ...... 55
Section VIII Particulars about Directors, Supervisors and Senior Executives ...... 55
Section IX Corporate Bonds ...... 56
Section X Financial Report ...... 57
Section XI Documents Available for Reference ...... 223
Paraphrase
| Items | Refers to | Contents |
| Listed Company, Company, the Company, Sinopharm Accord, the Group | Refers to | China National Accord Medicines Corporation Ltd. |
| Sinopharm | Refers to | China National Pharmaceutical Group Corporation |
| Sinopharm Holding | Refers to | Sinopharm Group Co., Ltd; Controlling shareholder of the Company |
| Company Law | Refers to | Company Law of the People’s Republic of China |
| Securities Law | Refers to | Securities Law of the People’s Republic of China |
| Yuan, 10 thousand Yuan, 100 million Yuan | Refers to | RMB, RMB 10 thousand, RMB 100 million |
| Terminology: | Refers to | |
| Two Invoices System | Refers to | The first invoice refers to the invoice from the manufacturer to the distributor, and the second invoice refers to the invoice from the distributor to the medical service provider. By this way, circulation links have been greatly reduced and the number of distributors for each medicine category shall not exceed two. |
| Pharmacy Trust | Refers to | It is a kind of operation activity that the medical organization has medicine enterprise with strong management ability and larger risk appetites to operate and manage their drugstores in the form of contracts with payment, which has clearly stated the relationship of right and duty between hospitals and pharmacy owners and operators, ensuring preservation and appreciation of hospital and pharmacy property and creating a kind of management activity with considerable social benefit and economic benefit, under the condition that there is no change in the ownership of drugstores |
| GPO | Refers to | Group purchasing organizations |
| Direct selling | Refers to | A sales method of selling drug to the hospital directly |
| GSP certificate | Refers to | Good Supply Practice certificate |
| Supply Chain Management | Refers to | That is CMS, and information system processing workflow & procurement, inventory & sales documents |
| Abbreviation: | Refers to | |
| Sinopharm Holding Guangzhou | Refers to | Sinopharm Holding Guangzhou Co., Ltd. |
| Guoda Drugstore | Refers to | Sinopharm Holding Guoda Drugstore Co., Ltd. |
| Sinopharm Holding Guangxi | Refers to | Sinopharm Holding Guangxi Co., Ltd. |
| Foshan Nanhai | Refers to | Foshan Nanhai Pharmaceutical Group Co., Ltd. |
| Southern Pharmaceutical Foreign Trade | Refers to | Guangdong Southern Pharmaceutical Foreign Trade Co., Ltd. |
| Zhijun Pharmaceutical | Refers to | China National Zhijun (Shenzhen) Pharmaceutical Co., Ltd. |
| Zhijun Pharmacy Trade | Refers to | Shenzhen Zhijun Pharmacy Trade Co., Ltd. |
| Pingshan Pharmaceutical | Refers to | China National Zhijun (Shenzhen) Pingshan Pharmaceutical Co., Ltd. |
| Main Luck Pharmaceuticals | Refers to | Shenzhen Main Luck Pharmaceuticals Inc. |
Section II Company Profile and Main Finnaical Indexes
I. Company profile
| Short form of the stock | Sinopharm Accord ; Accord B | Stock code | 000028, 200028 |
| Stock exchange for listing | Shenzhen Stock Exchange | ||
| Name of the Company (in Chinese) | 国药集团一致药业股份有限公司 | ||
| Short form of the Company (in Chinese) | 国药一致 | ||
| Foreign name of the Company (if applicable) | China National Accord Medicines Corporation Ltd. | ||
| Short form of foreign name of the Company (if applicable) | Sinopharm Accord | ||
| Legal representative | Lin Zhaoxiong | ||
II. Person/Way to contact
| Secretary of the Board | Representative of security affairs | |
| Name | Chen Changbing | Wang Zhaoyu |
| Contact add. | Accord Pharm. Bldg., No. 15, Ba Gua Si Road, Futian District, Shenzhen, Guangdong Province | Accord Pharm. Bldg., No. 15, Ba Gua Si Road, Futian District, Shenzhen, Guangdong Province |
| Tel. | +(86)755 25875195 | +(86)755 25875222 |
| Fax. | +(86)755 25195435 | +(86)755 25195435 |
| gyyzinvestor@sinopharm.com | gyyz0028@sinopharm.com |
III. Others
1. Way of contact
Whether registrations address, offices address and codes as well as website and email of the Company changed in reporting period ornot
□ Applicable √ Not applicableRegistrations address, offices address and codes as well as website and email of the Company has no change in reporting period,found more details in Annual Report 2017
2. Information disclosure and preparation place
Whether information disclosure and preparation place changed in reporting period or not□ Applicable √ Not applicableThe newspaper appointed for information disclosure, website for semi-annual report publish appointed by CSRC and preparation
place for semi-annual report have no change in reporting period, found more details in Annual Report 2017
IV. Main accounting data and financial indexes
Whether it has retroactive adjustment or re-statement on previous accounting data□Yes √ No
| Current period | Same period of last year | Increase/decrease in this report y-o-y | |
| Operating revenue (RMB) | 20,779,166,699.67 | 20,524,807,669.57 | 1.24% |
| Net profit attributable to shareholders of the listed Company(RMB) | 641,727,034.93 | 556,125,318.19 | 15.39% |
| Net profit attributable to shareholders of the listed Company after deducting non-recurring gains and losses(RMB) | 623,296,339.34 | 546,253,390.00 | 14.10% |
| Net cash flow arising from operating activities(RMB) | 225,357,709.20 | 228,337,431.40 | -1.30% |
| Basic earnings per share (RMB/Share) | 1.50 | 1.30 | 15.38% |
| Diluted earnings per share (RMB/Share) | 1.50 | 1.30 | 15.38% |
| Weighted average ROE | 6.62% | 6.41% | 0.21% |
| End of current period | End of last period | Increase/decrease in this report-end over that of last period-end | |
| Total assets (RMB) | 24,013,015,677.32 | 22,343,643,527.77 | 7.47% |
| Net assets attributable to shareholder of listed Company(RMB) | 9,910,258,628.12 | 9,396,572,345.88 | 5.47% |
V. Difference of the accounting data under accounting rules in and out of China
1. Difference of the net profit and net assets disclosed in financial report, under both IAS (InternationalAccounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicableThe Company had no difference of the net profit or net assets disclosed in financial report, under both IAS (International AccountingStandards) and Chinese GAAP (Generally Accepted Accounting Principles)
2. Difference of the net profit and net assets disclosed in financial report, under both foreign accountingrules and Chinese GAAP (Generally Accepted Accounting Principles)
□ Applicable √ Not applicableThe Company had no difference of the net profit or net assets disclosed in financial report, under both foreign accounting rules andChinese GAAP (Generally Accepted Accounting Principles)
VI. Items and amounts of extraordinary profit (gains)/loss
√ Applicable □ Not applicable
In RMB
| Item | Amount | Note |
| Gains/losses from the disposal of non-current asset (including the write-off that accrued for impairment of assets) | 4,254,942.60 | The income from disposal of intangible assets by subsidiary Sinopharm Holding Guangxi |
| Logistic Co., Ltd. | ||
| Governmental subsidy calculated into current gains and losses(while closely related with the normal business of the Company, excluding the fixed-amount or fixed-proportion governmental subsidy according to the unified national standard) | 11,938,416.85 | The vary taxation subsidiary and financial incentive received in the period |
| Investment costs while acquiring subsidiaries, joint ventures and associated enterprise, less than fair value of the identifiable net assets from invested enterprise which should be enjoined | 729.29 | Income from acquisition of subsidiary Sinopharm Holding Guangzhou Huadu Co., Ltd. in the period |
| Reversal of impairment reserve for account receivable with separate impairment testing | 4,203,173.20 | The bad debt provision of receivables which has accrual independently of a prior year was collected in the period |
| Gains/losses on entrusted loans | 1,549,650.99 | |
| Other non-operating income and expenditure except for the aforementioned items | 2,377,946.75 | |
| Less: impact on income tax | 5,505,057.19 | |
| Influenced amount of minority shareholders’ equity (after tax) | 389,106.90 | |
| Total | 18,430,695.59 | -- |
Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for CompaniesOffering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring profit (gain)/loss according tothe lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering TheirSecurities to the Public --- Extraordinary Profit/loss, explain reasons□ Applicable √ Not applicableIn reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the lists ofextraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering Their Securities tothe Public --- Extraordinary Profit/loss.
Section III Summary of Company Business
I. Main businesses of the Company in the reporting period
Whether the Company needs to comply with the disclosure requirements of the particular industryReference disclosureRetailing industryThe Company complies with the disclosure requirement of “Information Disclosure Guidelines for the Shenzhen Stock ExchangeNo. 8- Listing Company Engaged in Retailing Industry”
In the reporting period, the main business of Sinopharm Accord includes pharmaceutical distribution andpharmaceutical retail, specifically as follows:
(i) In the pharmaceutical distribution field, the Company continues to integrate the distribution and logisticsbusiness, deeply penetrates into the end markets, improves the multistep distribution network, creates intelligentsupply chain, and devotes to become a provider for pharmaceutical and healthcare products and services with thestrongest influence, the highest share, the most complete variety, the best service, and the fastest delivery in southdistrict of China.1. The Company’s pharmaceutical distribution business is established in Guangdong and Guangxi, the networkconstruction of Guangdong and Guangxi has completed in 2013 with business extended to the county-levelregions, furthermore, we speed up integration of the three tier companies in 2014. In year of 2015, the Companyachieved an operation all over the network, the network has further expansion in first half of 2018, including 1785A-grade hospitals, 3433 community-oriented primary cares and 1538 retail terminal clients.2. Pharmaceutical distribution business has achieved the first scale in Guangdong and Guangxi and the leadingposition in market segment of Guangdong and Guangxi. In terms of traditional business, relying on the network
layout of distribution, accelerated the optimization of terminal network construction, and ranked top 3 in themarket competition of hospital direct marketing in 31 prefecture-level cities; in terms of logistics networkconstruction, transformed from the traditional commercial trade services to the professional supply chain services,established the first third-party logistics in Guangdong and Guangxi.3. While steadily developing the traditional business, the Company actively carried out innovative business:
comprehensively carried out instrument business, adopted advanced supply chain management methods andmodern technology, possessed professional medical supply chain companies, expanded 4D business, and createdSPD core competitiveness; developed retail diagnosis and treatment business, complied with the general trend ofseparating pharmacies from medical institutions, integrated national retail resources, developed a variety of retailpharmacy models, and provided patients with professional, high-quality, convenient and affordable medicine,pharmacy and distribution services. By the first half of 2018, the Company has 51 types of pharmacies in socialpharmacies, dispensaries at the grassroots level, pharmacies for chronic disease management, and drug stores.
(ii) In the pharmaceutical retail field, Guoda Drugstore is a pharmaceutical retail enterprise that ranks the first in
the sales volume throughout the country, and is one of the few enterprises in China with national direct sales drugretail network. The retail chain network of Guoda Drugstore spreads over 19 provinces, autonomous regions andmunicipalities, covers nearly 70 large and medium-sized cities,.By the end of first half of 2018, Guoda Drugstore has operated 4004 stores, covering 19 provinces, autonomousregions and municipalities, entering nearly 70 large and medium sized cities, which has formed a drugstorenetworks covering eastern and northern China, southern coastal cities, and gradually expanded into northeast,central plains and inland cities, the sales scale of which has exceeded 10 billions, ranking the first within industry.Guoda , the business of which were mainly relying on modern retail drugstores, has been putting great attentionon the development of professional service system with medical resources as core competitiveness, building agroup of stores with professional commercial activities, which are able to provide retails and therapy services thatintegrating medical service and health-care products sales and cooperate with hospitals; at the same time, theCompany has been vigorously developing new business, exploring and expanding new sales channels, improvingprofessional services, being dedicated to transit from a traditional medical retail into an innovative serviceenterprise. By means of conventional products retail management, improving major brands and exploring businesscooperation with supplier, accelerating the establishment of DTP business and continuous health care servicesystem, Guoda has built industry-leading professional service ability. Besides, the leading scale of Guoda isregarded as one of the core competitiveness, for the reason that the advantage in scale has reduced its procurementcost and enhanced its negotiation advantages.
II. Major changes in main assets
1. Major changes in main assets
| Major assets | Note of major changes |
| Equity assets | Increased 106.1159 million Yuan over that of period-begin with 6.38% up, mainly because the investment income from joint ventures increased |
| Fixed assets | Decreased 1.6079 million Yuan over that of period-begin with 0.29% down, mainly due to the depreciation of fixed assets |
| Intangible assets | Decreased 10.9347 million Yuan over that of period-begin with 3.36% down, mainly due to the amortization of intangible assets |
| Construction in progress | Increased 7.8586 million Yuan over that of period-begin with 34.25% up, mainly due to the ERP system update from headquarter of Guoda Drugstore |
2. Main overseas assets
□ Applicable √ Not applicable
III. Core competitiveness analysis
Whether the Company needs to comply with the disclosure requirements of the particular industry
Reference disclosureRetailing industry
As an enterprise with both wholesale and retail business, Sinopharm Accord has the following competitiveadvantages:
1. Strong network coverage and layout
Take the lead in scale and cover the countrywide retail network: Guoda Drugstore is a pharmaceutical retailenterprise with sales volume ranking first for five consecutive years throughout the country, established 28regional chain enterprises, with retail network spreading over 19 provinces and municipalities and autonomousregions and covering nearly 70 cities.
Leading layout and complete distribution network in Guangdong and Guangxi: the Company has completepharmaceutical distribution networks in Guangdong and Guangxi, which comprehensively cover the medicalinstitutions above second grade and the large-scale chain drugstores in Guangdong and Guangxi, and provide drugdistribution services for numerous drugstores, community health care service networks, clinics and the thirdterminals represented by new rural cooperative medical system. The Company is a leading provider of drugdistribution and supply chain services in Southern China.
2. Abundant variety resources
Guoda Drugstore operates nearly 120,000 merchandises. With its relatively comprehensive purchasing networkand years of experience in commodity management, Guoda Drugstore has established a merchandise system withwide coverage, high professionalization, and rich varieties.In the pharmaceutical distribution, the Company has established extensive cooperative relations with thousands ofdomestic manufacturers and commercial enterprises and established stable business relationships with hundreds ofimport and joint venture manufacturers, and has rich variety resources.
3. Complete logistics and distribution systemGuoda Drugstore has a nationwide modern logistics and distribution system, and has established the logistics anddistribution network covering all the stores throughout the country, including Shanghai National Logistics Centerand 23 provincial and municipal distribution centers.Accord distribution adopts supply chain management and warehouse management solutions system, it has builtlarge-scale first-grade logistics centers in Guangzhou, Nanning, Shenzhen and other places and establisheddistribution centers in Guangdong and Guangxi which has formed ladder logistics and distribution networks, it isthe first enterprise in Guangdong and Guangxi that has achieved the third-party logistics qualification and has theprofessional pharmaceutical logistics capabilities with the largest scale, the most extensive network, and the mostcomplete modes in southern China.
4. The advantages of medical insurance resources
Regarding medicine retails, the subsidiaries of Guoda Drugstore have featured generally higher medical insuranceacquiring 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 regulatoryenvironment for the reason that it has kept emphasizing legalization and compliance in the process of operationand management.
6. Unique-influence Sinopharm brand
Brand of the Company and distribution, industry child-brand and controlling shareholder and actual controller’sbrand come down in one continuous line, depending on powerful force of central enterprises, the Company’spopularity and influence are prominent day by day in the industry.
Section IV. Discussion and Analysis of Business
1. Introduction
In the first half of 2018, Sinopharm Accord focused on a clear development strategy and clear goals, transformedboth foreground and background, innovated together, and took serious measures to business landing, and madesteady growth in business performance, and showed potential in business models.
(i) Performance completion in first half of 2018Sinopharm Accord achieved a revenue from operation amounted as 20.779 billion Yuan with a y-o-y growth1.24%; the net profit attributable to parent Company comes to 642 million Yuan with 15.39% up on a y-o-y basis.The pharmaceutical distribution has operation revenue of 15.879 billion Yuan with y-o-y growth of 0.79%; netprofit attributable to parent Company has 333 million Yuan with y-o-y growth of 8.93%. As for thepharmaceutical retail, the Company gains 5.144 billion Yuan in operation revenue, a y-o-y growth of 5.23% andthe net profit attributable to parent Company amounted as 139 million Yuan, a 40.66% up on a y-o-y basis.(ii) Analysis of policy environment2018 is a year of domestic adjustment and increasing international pressure. On the one hand, the domesticeconomy has significant resilience characteristics; on the other hand, the advance of the US interest rate hike cyclehas led to a tendency of shock upstream of global capital costs. The evolution of trade friction is accompanied byunexpected changes in the external environment, and financial deleverage and other complex externalenvironment have brought more pressure in business operation.1. Industry growth rate continued to slow down, and the trend of leading concentration ratio remained unchangedIn the first quarter of 2018, the growth of drug distribution and sales increased by 7.9%, a decline of 0.5% on ayear-on-year basis; the growth of drug retail and sales increased by 9.1%, and an increase of 0.1% on a year-on-year basis. The growth rate of large pharmaceutical wholesale enterprises slowed down noticeably, the mainbusiness income of top 100 wholesale enterprises increased by 8.4% in 2017, a decline of 5.6% on a year-on-yearbasis; the top 100 market share was 70.7%, a decline of 0.2% on a year-on-year basis; the market share of 4leading enterprises was 37.6%, a rise of 0.2 % on a year-on-year basis.
2. The total number of medical institutions was expanding, and the process of rational allocation of medicalresources was acceleratingUnder the policy promoting, more than 19,000 new-level medical and health institutions have been added, and thegrowth rate of the number of medical treatments and inpatient number has far exceeded that of class hospitals, andthe medical resources are constantly leaning toward the basic level.(iii) The main work completed by the Company in the first half of 20181. Built new dynamic organizational capability and consolidated the foundation of transformationIn the first half of the year, the Company introduced the third-party organizations, initiated the research work atheadquarters, distribution, and Guoda, and provided research basis for organizational optimization throughresearch and analysis. Among them, distribution implemented the integration of departments and regions atdifferent levels through organizational structure optimization and re-design, region penetrated deeply, andplatform concentrated on profession; retail promoted the organizational structure design of Guoda so as to matchwith the business internationalization.2. Integrated wholesale and retail, and dug deep into resource advantagesDuring the reporting period, the Company’s catalogue management of wholesale and retail integration varietyincreased from 33 brands to 77 brands, and the number of articles increased from 255 to 430. Through theplanning for wholesale and retail integration suppliers, seven suppliers were promoted to boost the wholesale andretail integration project, at the same time, further promoted the wholesale and retail cooperation project of GuodaDrugstore.3. Implemented information technology projects, and strengthened new competence of technologyThe Company attached great importance to the construction of IT talent team, increased recruitment efforts,comprehensively strengthened the “informatization” orientation, and established a matching performanceincentive mechanism. During the reporting period, the Company optimized the basic management by informationtechnology, created a dual information platform of “Hospital Supply Chain Management” and “Retail ProfessionalSupply Chain Management”, and promoted the new business model through the integration of technology:
(1) In terms of business flow, the retail direct sales mobile order APP popped up online; the self-owned pharmacyonline prescription APP ensured the prescription to be undertaken; the settlement management completed thethird-party payment platform and the medical insurance settlement docking of five regions; the first-level
inventory management of instrument consumables popped up online.(2) In terms of logistics, the APP of Android version was developed, and the non-pharmaceutical system onlineimplementing of six warehouses in Guangzhou, Foshan and Zhuhai were completed; the third-party logisticsconstruction added six third-party cargo owners.(3) In terms of the initial introduction of AI intelligence, the AGV machine site investigation has been completed,and the system flow and docking plan have been initially confirmed; the vending machine has been put into use insome areas and would be distributed in other parts of the country in succession; the unmanned pharmacy hascompleted the prototype test and would be put into operation as soon as possible.4. Organized the full docking with Walgreens Boots Alliance, and the projects were implemented smoothlyAfter many times of communication and combining the research on the market, the new term of board of directorsof the joint-ventured Guoda Drugstore reached a consensus on the strategic planning for the next 3-5 years andformed specific strategic measures.5. Distribution focused on four major directions, transformation and innovation for development(1) Primary care:
The Company actively responded to the “two-vote system”, made overall plans, made variety planning, resourcedocking and channel merging; improved the supply chain efficiency by building invoice management system,procurement tax refund process optimization, multi-warehouse operation inventory management, etc.; in order tomeet the business needs, the Company established standardized prepayment and cash deposit operationprocedures to effectively control payment risks.In response to the “GPO”, various regions and multiple channels actively proposed suggestions for the GPOprogram, and signed strategic cooperation framework agreements with Taishan, HeYuan, Maoming and otherplaces; actively affected the variety catalogue of Foshan implementation plans, and strived to supplement the keyvarieties, improved the maximum match between the varieties and the implementation catalog; the GPOs inShenzhen and Dongguan entered the implementation stage, and the Company maintained active communicationand responded well.The Company directly faced the pharmacy custody at various regions, actively participated in the bidding ofvarious custody projects, strengthened the front-end business management, actively interpreted and responded tothe bidding work, formulated the bidding tools, and formed the standardization process of the universal template +customized solution; and insisted on the individualized response in the hospitals in trust, integrated the varietiesand business resources, adjusted the cooperation models, and maintained the share and improved the gross profit.(2) Retail diagnosis and treatment:
During the reporting period, there were 51 retail clinics, including 10 ones newly established in Guangdong andtwo ones newly established in Guangxi in the first half of the year. Foshan Pharmacy and Foyi Pharmacy becamethe specific pharmacies in Foshan City. Shenzhen Pharmacy and Zhaoqing Pharmacy won the first batch of“Guangdong Provincial Demonstration Pharmacies”.1) Integrated management synergy, and improved profitabilityThe Company continued to improve the pharmacy system process and standard operation, carried through the
foreground-background integrated management in the operation, procurement, information, quality management,logistics, and brand; refined and strengthened the daily operation management, carried out more than 60 audits inthe first half of the year; the Company enriched the retail categories through commodity negotiations, reasonablyplanned the varieties on the basis of hospital nature and local disease spectrum, and created superior prescriptioncategories.2) All regions exerted their strength and innovated the cooperation methodsWith the help of the “Internet + Medical” project, the Company joined hands with Tencent and has signed the“Internet + Smart Hospital” framework agreement with the three-level hospitals in Nanning, Baise and Guilin;Sinopharm Group Guangxi and Guangxi Fudi Finance Investment Group signed the “Healthy Baise” ProjectCooperation Agreement, and opened a hospital pharmacy.(3) Retail direct sales:
The B2B platform completed the background upgrade, and the online marketing terminal customers reached 789;docked to Guoda platform, integrated the marketing resources of Guoda, exported the standardized services, andcarried out deep distribution projects to achieve full coverage of network sales.(4) Instrument consumables:
All regions promoted in an all-round way, won the bidding of 10 medical projects, newly increased 4 SPDprojects, and promoted the project landing of 3 hospitals in the province; promoted the deployment of 4Dservices, established the top three hospitals in the reagent business; and established a medical joint venture modelfor instrument maintenance service in Haizhu District; the disinfection supply business actively carried outbusiness promotion and gradually put into supply.6. Guoda Drugstore ensured stock and made increment, and elaborately operated new features(1) Accelerated the distribution speed according to strategic deploymentAs of the end of the reporting period, the total number of Guoda Drugstore reached 4,004, and accumulatively hada net increase of 169 stores in the first half of the year, including 163 direct-sale stores. The distribution points ofadvantageous areas were scattered, strengthened the regional management, formulated the implementation plan ofthe store transfer shop model, carried out help guidance on the spot, and grasped the local policies throughanalysis and continued to follow up. Guoda Drugstore pre-judged the policy changes and market trends, andincreased the expansion speed of stores around hospitals. In the first half of the year, 29 new stores aroundhospitals were added, and there were totally 332 stores around hospitals as of the end of the reporting period.(2) Dug the potential benefits of stock stores and created specialized pharmacies with chronic diseases as the core1) Optimized store management and managed the loss-making storesGuoda Drugstore concerned and helped regional companies to improve their marketing capabilities, formulatedassessment plans and budgets, gradually increased the proportion of high-margin sales, took measures to controlretail prices, monitored the rationality of price adjustments and pricing and corrected errors, and carried out dailymonitoring and maintenance to the prices of centralized purchasing varieties throughout the country.2) Established records and set up warehouses, implemented chronic disease services and membershipmanagement
Guoda Drugstore focused on promoting chronic disease work in various regions, organized the preparation ofpharmaceutical service manuals, and tried out the chronic disease learning cases at online platforms within 17companies across the country, meanwhile, the DTP pharmacies upgraded the service models which is centering onpatients.(3) Implemented the integration strategy of wholesale and retail, and strengthened the fine management ofmerchandize purchaseImplemented the provincial-level platform construction of Guoda Drugstore step by step, docked the project ofwholesale and retail integration, implemented the strategic requirements, completed the docking withmanufacturers, and sought a new cooperation mode; carried through the fine management to merchandizepurchase and sales, promoted the application planning guidebook and tapped the potential in inter-regionalbenchmarking; focused on the category inside, used the benchmarking method of same type of commodity to findthe superior goods, and increased the sales quota of superior goods.(4) Accelerate the exploration of e-commerce business new modelGuoda Drugstore has negotiated cooperation with a number of internet hospitals and reached a nationwidecooperation agreement with Yaofangyun. At present, the cooperation in Ningxia and Xiamen has already beenimplemented.The Company is required to comply with the disclosure requirements of the Industry Information DisclosureGuide of the Shenzhen Stock Exchange No. 8 - Listed Companies Engaged in Retail-Related Businesses.
1. The entity business operations and the business condition of the stores during the reporting period:
As of the end of June 2018, Guoda had 2,965 direct-operated stores, with sales revenue of 4.04 billion Yuan, ayear-on-year growth of 10.6%, and the same stores had an increase of 5.0% on a year-on-year basis, 1,039franchise stores with distribution revenue of 580 million Yuan, an increase of 9.7% on a year-on-year basis.
| Region | Direct-sale store | Franchised outlet | ||||
| Numbers of the store | Sales income (in 10 thousand Yuan) | y-o-y | Numbersof the store | Dispatching income (10 thousand Yuan) | y-o-y | |
| North | 1,369 | 209,772.98 | 13.52% | 305 | 23,545.05 | 21.97% |
| East China | 759 | 95,094.95 | 6.06% | 580 | 27,203.89 | 0.48% |
| South China | 387 | 57,263.51 | 7.14% | 60 | 4,264.78 | 8.86% |
| Central China | 241 | 21,621.69 | 13.28% | 94 | 2,736.92 | 17.43% |
| Northwest | 209 | 21,043.89 | 10.18% | - | - | 0.00% |
| Total | 2,965 | 404,797.02 | 10.57% | 1,039 | 57,750.64 | 9.73% |
Note:
North: Liaoning, Shanxi, Inner Mongolia, Beijing, Tianjin, Hebei;East China: Shanghai, Jiangsu, Anhui, Shandong, Fujian, Zhejiang;
South China: Guangdong, Guangxi;Central China: Henan, Hunan;Northwest: Ningxia, Xinjiang.
(1) Top 10 stores in sales
| Serial | Region | Name | Year for starting business | Operating mode | Business activity | Actual operating area (in M2) | Property belonging |
| 1 | TaiYuan Shanxi Province | Zhongli Branch | 2002 | Direct-sale | 5+X | 820.00 | Rental |
| 2 | Hohhot Inner Mongolia | Hohhot HQ | 2003 | Direct-sale | 5+X | 1,689.26 | Rental |
| 3 | TaiYuan Shanxi Province | Er Yuan Branch | 2011 | Direct-sale | 5+X | 600.00 | Rental |
| 4 | Shenzhen Guangdong Province | Shenzhen Exhibition Hall | 2006 | Direct-sale | Modern pharmacy | 260.00 | Rental |
| 5 | Shijiazhuang Hebei Province | Le Ren Tang HQ | 2010 | Direct-sale | TCM diagnosis shops | 1,206.00 | Rental |
| 6 | Beijing | Jinxiang Store, Xidang | 1997 | Direct-sale | Modern pharmacy | 773.16 | Rental |
| 7 | Shijiazhuang Hebei Province | Kangning Store, Lerentang | 2000 | Direct-sale | TCM diagnosis shops | 280.00 | Rental |
| 8 | Yangzhou Jiangsu Province | Baiyulan Store, Jiangsu | 1991 | Direct-sale | Modern pharmacy | 620.00 | Rental |
| 9 | Shenzhen Guangdong Province | Zhenxing Store | 2002 | Direct-sale | Modern pharmacy | 200.00 | Rental |
| 10 | Shenyang Liaoning Province | Zhongjie Store | 2002 | Direct-sale | TCM diagnosis shops | 1,300.00 | Rental |
(2) In first half of 2018, new 207 direct-sale shops are operates, and 44 shops closed with 163 shops net increased,the operating area has 27462 M
icnreased, and has net increase of almost 200 million Yuan in sales
In M
| Region | Direct-sale store | Franchised outlet | |||
| Number of store increased | Total area | Number of stores shut down | Number of store increased | Number of stores shut down | |
| North | 108 | 15,206.60 | -17 | 21 | -2 |
| East China | 36 | 4,522.25 | -13 | 6 | -21 |
| South China | 26 | 3,014.70 | -5 | 7 | -5 |
| Central China | 16 | 1,964.31 | -5 | 13 | -13 |
| Northwest | 21 | 2,754.46 | -4 | - | - |
| Total | 207 | 27,462.32 | -44 | 47 | -41 |
2. In first half of 2018, online sales growth in a steady pace; totally 13 third party platform online one afteranother so far. Details are:
In 10 thousand Yuan
| Cooperation platform | Trading Volume | Business revenue |
| T-Mall (Sinopharm On-line) | 10,357.06 | 10,357.06 |
| Yaofangwang (www.yaofangwang.com) | 810.02 | 810.02 |
| Yiyaowang (www.111.com.cn) | 131.13 | 131.13 |
| JD daojia (http://daojia.jd.com) | 222.34 | 222.34 |
| 800FANG.CN (www.800pharm.com) | 142.21 | 142.21 |
| Meituan Waimai (waimai.meituan.com) | 36.70 | 36.70 |
| Yaopin Daojia | 0.88 | 0.88 |
| ele.me (www.ele.me/home) | 67.90 | 67.90 |
| Wanda E-business | 1.80 | 1.80 |
| Baidu takeout | 13.53 | 13.53 |
| BAHEAL Pharmaceutical Easy Referral | 25.42 | 25.42 |
| Other B2B E-business | 648.03 | 648.03 |
| We Chat Mall | 89.52 | 89.52 |
| Total | 12,546.53 | 12,546.53 |
3. procurement, inventory and supplier from the headquarter: headquarter of the Company has total amount of4.894 billion Yuan (tax included) for procurement for the first half of 2018, and inventory costs amounted as 960million Yuan, details are:
In 10 thousand Yuan
| Category | Purchasing Amount (tax included) | Inventory cost |
| Health-care food | 20,691 | 4,690 |
| Convenience food | 4,774 | 763 |
| Kids | 11,275 | 2,214 |
| Gynecology | 14,201 | 2,206 |
| Liver and gall | 7,869 | 1,439 |
| Cold | 10,031 | 2,324 |
| Personal care | 4,977 | 1,265 |
| Orthopedics | 16,893 | 4,895 |
| Respiratory | 16,942 | 3,398 |
| Household conveniences | 1,393 | 329 |
| Family health products | 17,834 | 4,633 |
| Antipyretic analgesicss | 4,106 | 695 |
| Anti-infection | 12,321 | 2,283 |
| Anti-allergic | 4,013 | 779 |
| Temporary coding | 818 | 212 |
| Urination | 10,221 | 2,248 |
| Endocrine | 16,970 | 3,092 |
| Other | 117,208 | 8,970 |
| Clearing heat and detoxitating | 16,043 | 3,357 |
| Neurology | 17,822 | 3,151 |
| Drugs for external use | 23,450 | 7,163 |
| Vitamin-mineral | 10,500 | 1,966 |
| Five sense organs | 15,252 | 3,383 |
| Digestion | 20,473 | 4,867 |
| Heart brain | 49,824 | 9,368 |
| Chinese herbal pieces | 20,283 | 4,837 |
| Nourishing food | 23,258 | 11,458 |
| Total | 489,441.54 | 95,981.09 |
Top 5 suppliers:
In 10 thousand Yuan
| Ranks | Supplier | Procurement amount (tax included) | Purchase ratio |
| 1 | No. 1 | 8,577 | 12% |
| 2 | No. 2 | 6,727 | 9% |
| 3 | No. 3 | 5,808 | 8% |
| 4 | No. 4 | 5,134 | 7% |
| 5 | No. 5 | 4,672 | 6% |
4. Warehousing and logistics:
In the first half of 2018, logistics warehouses of Guoda Drugstore spread over 17 provinces, there were 27 largeand small logistics warehouses and the total warehouse area was over 110,000 square meters. For the inventorymanagement of Guoda Drugstore, the commodity department is responsible for monitoring the inventorydynamics of the headquarters and subsidiaries, and managing inventory on a monthly basis, providing inventoryanalysis and management reports, and giving suggestions on the optimization of inventory structure, while theoperation department is responsible for the inventory turnover index of the monthly tracking business andproviding business inventory assessment data, and the purchasing department is responsible for rationalreplenishment, ensuring smooth and stable supply channels, and effectively controlling the inventory turnover ofcommodity while ensuring the satisfaction rate of goods, and handling and resolving the dead stock andcommodity with expiry date every month. .
In M
(Square Metters)
| Province | Reginal enterpreise | Warehouse area |
| Liaoning | Shenyang | 14,200 |
| Guangdong | Guangzhou | 5,300 |
| Shanzhen | ||
| Jiangmen | 5,432 | |
| Shanxi | Shanxi Wanmin | 5,214 |
| Shanxi YiYuan | 4,350 | |
| Jiangsu | Dadesheng | 4,840 |
| Nanjing | 1,800 |
| Liyang | 3,840 | |
| Fujian | Fujian | 2,395 |
| Quanzhou | 1,100 | |
| Hebei | Hebei | 3,772 |
| Shandong | Shandong | 5,800 |
| Ningxia | Ningxia | 3,330 |
| Hunan | Hunan | 3,353 |
| Henan | Henan | 3,500 |
| Inner Mongolia | Inner Mongolia | 1,870 |
| Guangxi | Guangxi | 1,950 |
| Beijing | Beijing Guoda | 4,943 |
| Beijing Jinxiang | ||
| Tianjin | Tianjin | 1,700 |
| Anhui | Anhui | 1,000 |
| Xinjiang | Xinjiang | 3,842 |
| Shanghai | Shanghai Fumei | 20,000 |
| Shanghai Guoda | ||
| Hangzhou | 1,000 | |
| Guoda HQ | HQ | 8,000 |
| Total | 112,531 | |
5. The commodity suppliers of Guoda Drugstore are mainly external suppliers, and also assisted by someSinopharm affiliated enterprises and private brands. The sale for the first half of 2018 was as follows:
In 10 thousand Yuan
| Private brand | Property | Category | Turnover (tax included) | Ratio |
| 1 | Group-buying OEM | Health-care food | 1,773 | 0.31% |
| 2 | Group-buying OEM | Kids | 25 | 0.00% |
| 3 | Group-buying OEM | Gynecology | 19 | 0.00% |
| 4 | Group-buying OEM | Cold | 27 | 0.00% |
| 5 | Group-buying OEM | Personal care | 23 | 0.00% |
| 6 | Group-buying OEM | Family health | 1,754 | 0.30% |
| 7 | Group-buying OEM | Anti-infection | 117 | 0.02% |
| 8 | Group-buying OEM | Anti-allergic&antidinic | 35 | 0.01% |
| 9 | Group-buying OEM | Clearing heat and detoxitating | 160 | 0.03% |
| 10 | Group-buying OEM | External use drugs | 137 | 0.02% |
| 11 | Group-buying OEM | Five sense organs drugs | 162 | 0.03% |
| 12 | Group-buying OEM | Chinese herbal pieces | 1,515 | 0.26% |
| Total | 5,745.35 | 0.99% | ||
II. Main business analysis
Found more in I. Introduction in Discussion and Analysis of BusinessY-o-y changes of main financial data
In RMB
| Current period | Same period of last year | Y-o-y increase/decrease | Reasons for changes | |
| Operating revenue | 20,779,166,699.67 | 20,524,807,669.57 | 1.24% | No major changes |
| Operating costs | 18,367,643,723.84 | 18,364,034,450.83 | 0.02% | No major changes |
| Sales expenses | 1,273,588,756.07 | 1,110,446,938.17 | 14.69% | No major changes |
| Administration expenses | 351,820,063.78 | 340,636,051.11 | 3.28% | No major changes |
| Finance expenses | 57,541,544.32 | 44,498,778.76 | 29.31% | No major changes |
| Income tax expenses | 164,486,734.32 | 160,041,107.63 | 2.78% | No major changes |
| R&D input | 0.00 | 0.00 | 0.00% | No major changes |
| Net cash flow arising from operating activities | 225,357,709.20 | 228,337,431.40 | -1.30% | No major changes |
| Net cash flow arising from investment activities | -18,211,602.74 | -92,279,892.06 | 80.26% | Increased 80.26% on a y-o-y basis, mainly because medical industry fund subscription at same period of last year while no such amount occurred in the period |
| Net cash flow arising from financing activities | -288,243,874.04 | -262,782,332.86 | -9.69% | No major changes |
| Net increase of cash and cash equivalent | -80,782,904.11 | -126,724,793.52 | 36.25% | Increased 36.25% on a y-o-y basis, mainly because the net cash flow arising from investment activities increased from a year earlier |
Major changes on profit composition or profit resources in reporting period□ Applicable √ Not applicableNo major changes on profit composition or profit resources occurred in reporting period.Constitution of main business
In RMB
| Operating revenue | Operating cost | Gross profit ratio | Increase or decrease of operating revenue over same period of last year | Increase or decrease of operating cost over same period of last year | Increase or decrease of gross profit ratio over same period of last year | |
| According to industries | ||||||
| Pharmaceutical wholesale | 15,430,407,519.05 | 14,487,704,805.41 | 6.11% | -0.69% | -1.53% | 0.81% |
| Pharmaceutical retail | 5,153,485,000.11 | 3,856,696,974.63 | 25.16% | 6.99% | 6.25% | 0.52% |
| Logistics and warehousing services | 15,527,964.86 | 9,313,229.39 | 40.02% | 14.36% | 21.97% | -3.75% |
| Leasing and other | 179,746,215.65 | 13,928,714.41 | 92.25% | 14.36% | 3.54% | 0.81% |
| According to products | ||||||
| Drugs | 19,730,368,030.42 | 17,408,684,324.88 | 11.77% | 0.61% | -1.34% | 1.75% |
| Apparatus | 922,013,116.87 | 864,692,352.96 | 6.22% | 68.50% | 70.15% | -0.91% |
| Other | 126,785,552.38 | 94,267,046.00 | 25.65% | -65.39% | -55.16% | -16.97% |
| According to region | ||||||
| Internal revenue | 20,779,166,699.6 | 18,367,643,723.8 | 11.61% | 1.24% | 0.02% | 1.08% |
| 7 | 4 |
III. Analysis of non-main business
□ Applicable √ Not applicable
IV. Assets and liability
1. Major changes of assets composition
In RMB
| End of current period | End of last period | Ratio changes | Notes of major changes | |||
| Amount | Ratio in total assets | Amount | Ratio in total assets | |||
| Monetary fund | 3,943,595,560.58 | 16.42% | 4,191,655,438.51 | 18.76% | -2.34% | No major changes |
| Account receivable | 9,441,542,367.19 | 39.32% | 7,589,412,679.88 | 33.97% | 5.35% | No major changes |
| Inventory | 4,245,354,625.22 | 17.68% | 3,781,858,238.12 | 16.93% | 0.75% | No major changes |
| Investment property | 149,409,723.79 | 0.62% | 153,678,339.11 | 0.69% | -0.07% | No major changes |
| Long-term equity investment | 1,756,735,242.44 | 7.32% | 1,650,619,373.09 | 7.39% | -0.07% | No major changes |
| Fix assets | 550,102,564.29 | 2.29% | 551,710,434.02 | 2.47% | -0.18% | No major changes |
| Construction in process | 30,805,874.11 | 0.13% | 22,947,258.99 | 0.10% | 0.03% | Mainly due to the ERP system update from Guoda Drugstore |
| Short-term loans | 2,051,139,651.67 | 8.54% | 1,561,354,521.64 | 6.99% | 1.55% | Mainly by increase of short-term loans of Holding Guangzhou |
| Long-term loans | 31,600,000.00 | 0.13% | 31,600,000.00 | 0.14% | -0.01% | No major changes |
2. Assets and liability measured by fair value
√Applicable □Not applicable
In RMB
| Item | Opening amount | Gain/loss of changes in fair value in the period | Cumulative fair value changes reckoned into equity | Impairment accrual in the period | Amount purchased in the period | Amount for sold in the period | Ending amount |
| Financial assets | |||||||
| 3. Financial assets available for sale | 13,685,760.00 | 13,685,760.00 | |||||
| Total | 13,685,760.00 | 13,685,760.00 | |||||
| Financial liability | 0.00 | 0.00 | |||||
Whether the main asset measurement attributes has major changes in the period√Yes □No
Reasons for major changes in the measurement attributes of the Company’s prime assets during the reporting
period and the impact on its operating results and financial statusAccording to the Accounting Standards for Business Enterprises No. 22 - Recognition and Measurement ofFinancial Instruments and the Accounting Standards for Business Enterprises No. 37 - Presentation of Financial
Instruments, the board of directors of the Company decided to adopt the “financial assets measured at fair valuethrough other comprehensive income ” to confirm this part of the assets.This change had no impact on the Company’s operating results and financial status.
3. Assets right restriction till end of reporting period
Nil
V. Investment
1. Overall situation
During the reporting period, the Company paid cash to acquire Sinopharm Holding Guangzhou Huadu Co., Ltd.
(70% shareholding) to achieve the business mergers under non-identical control. The Company has newlyestablished three-level subsidiaries, including Sinopharm Holding Foshan Supply Chain of Medical ConsumablesCo., Ltd. (70% shareholding), Sinopharm Holding Supplier Chain Service (Guangxi) Co., Ltd. (30.6%shareholding) and Sinopharm Holding Baiyi Drugstore Guangxi Co., Ltd. (51% shareholding), the Company alsohas newly established four-level subsidiary Shanghai Guoda Pharmacy Co., Ltd. (51% shareholding). For specificinvestment, please refer to Notes (VIII) of the financial report.
2. The major equity investment obtained in the reporting period
□ Applicable √ Not applicable
3. The major non-equity investment doing in the reporting period
□ Applicable √ Not applicable
4. Financial assets investment
(1) Securities investment
□ Applicable √ Not applicableThe Company had no securities investment in the reporting period.
(2) Derivative investment
□ Applicable √ Not applicable
The Company has no derivatives investment in the Period
VI. Sales of major assets and equity
1. Sales of major assets
□ Applicable √ Not applicableThere are no major assets sell in the period
2. Sales of major equity
□ Applicable √ Not applicable
VII. Analysis of main holding Company and stock-jointly companies
√Applicable □ Not applicableParticular about main subsidiaries and stock-jointly companies net profit over 10%
In RMB
| Company name | Type | Main business | Register capital | Total assets | Net Assets | Operating revenue | Operating profit | Net profit |
| Sinopharm Holding Guoda Drugstore Co., Ltd. | Subsidiary | Retail and distribution in respect of pharmaceutical products and medical apparatus and instruments, wholesale and retails of health products | 1,010,000,000.00 | 5,605,478,618.09 | 2,098,354,006.83 | 5,143,601,636.87 | 230,393,417.53 | 172,985,004.03 |
| Sinopharm Holding Guangzhou Co., Ltd. | Subsidiary | Chinese traditional patent medicine, chemical preparations, antibiotics, bio-chemical medicine, biological medicine, diagnosis medicine, biological medicine with features of treatment and diagnosis, shaped packing food, chemical products, and various commodity and technique hold by self-support and agency as well as import & export of technology | 1,530,000,000.00 | 6,339,988,123.82 | 1,787,383,309.36 | 7,314,439,697.76 | 98,350,491.87 | 72,732,408.60 |
| Sinopharm | Subsidiar | Sales of drugs, | 500,000,000. | 2,504,188,78 | 727,501,084. | 2,076,759,81 | 76,022,896 | 65,903,710.92 |
| Holding Guangxi Co., Ltd. | y | medical apparatus and instruments, freightage, storage, loading and 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 | 00 | 6.77 | 72 | 4.93 | .58 |
Particular about subsidiaries obtained or disposed in report period√Applicable □ Not applicable
| Company | The method of obtaining and handling subsidiaries during the report period | The influence to the whole production and performance |
| Shanghai Guoda Pharmacy Co., Ltd. | Establishment | Expand local medicine retail business layout, and without major influence on performance of the Company |
| Sinopharm Holding Foshan Supply Chain of Medical Consumables Co., Ltd. | Establishment | Further expand the distribution business for equipment consumables, and without major influence on performance of the Company |
| Sinopharm Holding Guangzhou Huadu Co., Ltd. | Acquisition | Further consolidated the pharmaceutical distribution business in Guangxi & Guangdong and without major influence on performance of the Company |
| Sinopharm Holding Supplier Chain Sercice (Guangxi) Co., Ltd. | Establishment | Further expand distribution business and without major influence on performance of the Company |
| Sinopharm Holding Baiyi Drugstore Guangxi Co., Ltd. | Establishment | Expand local medicine retail business layout, and without major influence on performance of the Company |
| Tangshan Le Ren Tang Drugstore Chain Co., Ltd. | De-registration | Compressed the management hierarchy and without major influence on performance of the Company |
Notes of main holding Company and stock-jointly companies
VIII. Structured vehicle controlled by the Company
□ Applicable √ Not applicable
IX. Prediction of business performance from January – September 2018
Estimation on accumulative net profit from the beginning of the year to the end of next report period to be loss probably or thewarning of its material change compared with the corresponding period of the last year and explanation on reason□ Applicable √ Not applicable
X. Risks and countermeasures
1. The management risks in sustainable expansion of marketing network of Guoda DrugstoreThe marketing network of Guoda Drugstore has maintained stable growth trend in recent years through newlyopened stores and extended mergers. The expansion of sales area and increase of stores have brought pressure onthe site selection, distribution, cash management, marketing and human resource management of the stores ofGuoda Drugstore. The Company will strengthen the management and construction in merchandise procurement,logistics and distribution, marketing and other links and establish corresponding management methods for eachlink so as to ensure the unified standards and management quality for store expansion.
2. Risks of intensifying market competitionAt present, the market concentration ratio of domestic pharmaceutical retail market industry is relatively low, andthe national and regional pharmaceutical retail enterprises have fierce market competition. As the countrycontinues to introduce corresponding policies to encourage the integration of pharmaceutical retail industry, themajor pharmaceutical retail enterprises in the industry have accelerated the pace of mergers and acquisitions, andcontinued to expand the marketing networks, improve the logistics center constructions, and innovate the businessand 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 distributionenterprises with powerful strength are entering the domestic pharmaceutical distribution markets through a varietyof ways, so the industry competition is further intensifying. Sinopharm Accord will integrate the existingresources, create a two-wheel drive development model with integration of both wholesale and retail, deeply give
full play to synergistic effect, directly face the end patients and consumers by varieties complementation, capital
cooperation, supply chain collaboration, internationalization promotion and other measures, and achieve brandglobalization through capital operation.
3. Risks of changes in industry policyThe development of pharmaceutical retail industry is regulated and influenced by the relevant national policies.The state has promulgated a series of documents such as Good Supply Practice and Control System forPrescription Drug and Over-The-Counter Drug (Pilot), which put forward specific requirements to the industryoperation. Along with the gradual increase of management standards for management standard, the regulations areconstantly being revised and improved and put forward higher requirements to the business operations. In addition,since the promotion and implementation of the new medical reform in 2009, the state has implemented theessential medicine system, public hospital reform, and drug centralized procurement bidding system throughout
the country, and repeatedly introduced policies to reduce the drug retail price ceiling in order to reduce the burden
of drug use. If the policies introduced in the process of implementing new medical reform impose restrictions onthe industrial development and the product price of retail drug stores, the operation and profitability of GuodaDrugstore may have to face some challenges.
4. Risks of facing the horizontal competition
In the pharmaceutical retail field, Sinopharm Group’s affiliated distribution subsidiaries have also opened some
social retail pharmacies, which constitute a certain degree of horizontal competition with the subordinate GuodaDrugstore. Sinopharm Group and Sinopharm have pledged to take effective measures to resolve the possiblehorizontal competition.5. Risk of goodwill impairments
On June 30, 2018, the book value of goodwill in the Group’s consolidated financial statements was RMB
830,729,152.75 and was allocated to the asset groups of distribution branches and retail branches. The Groupconducts impairment test on goodwill annually in accordance with the provisions of the Accounting Standards forBusiness Enterprises. Disclosures relating to the impairments of goodwill are set out in Notes V. 22 and 32 andNotes VII. 27 of the financial statements
Section V. Important Events
I. In the report period, the Company held annual shareholders’ general meeting andextraordinary shareholders’ general meeting
1. Shareholders’ General Meeting in the report period
| Session of meeting | Type | Ratio of investor participation | Date | Date of disclosure | Index of disclosure |
| Annual General Meeting of 2017 | AGM | 63.00% | 2018-04-17 | 2018-04-18 | Juchao Website—(http://www.cninfo.com.cn) “Resolution Notice of AGM of 2017 No.: 2018-32 |
| First extraordinary general meeting of 2018 | Extraordinary general meeting | 62.98% | 2018-06-15 | 2018-06-16 | Juchao Website—(http://www.cninfo.com.cn) “Resolution Notice of First extraordinary general meeting of 2018 No.: 2018-29 |
2. Request for extraordinary general meeting by preferred stockholders whose voting rights restore
□ Applicable √ Not applicable
II. Profit distribution plan and capitalizing of common reserves plan for the Period
□ Applicable √ Not applicableThe Company has no plans of cash dividend distributed, no bonus shares and has no share converted from capital reserve either forthe semi-annual year.
III. Commitments completed in Period and those without completed till end of the Period from actualcontroller, shareholders, related parties, purchaser and companies
√Applicable □ Not applicable
| Commitments | Promise | Type of commitments | Content of commitments | Commitment date | Commitment term | Implementation |
| Commitments in report of acquisition or equity change | Sinopharm Group Co., Ltd | Commitment of shareholders | As a large pharmaceutical commercial enterprise whose business involves pharmaceutical wholesale and retail, Sinopharm Holding may overlap with the Company in geographical segmentation during its future business development. To avoid the potential peer competition brought by such geographical overlap, Sinopharm Holding undertakes that, upon the transfer of shares of Sinopharm Holding Guangzhou it held to Accord Pharma, “1. it will not newly-establish or broaden within Guangdong any business operation that actually compete with that of Accord | 2005-06-21 | Long-term effective | Normally implementing |
| Pharma, or set up any new subsidiaries or subordinate enterprises who engage in such business. 2. It will enter into business delineation with Accord Pharma and Sinopharm Holding Guangzhou, thereby giving the three parties clear geographical areas to carry out pharmaceutical wholesale and retail businesses, so as to avoid potential peer competition. Apart from above, Sinopharm Holding will no longer newly-establish any enterprise that may compete with Accord Pharma in the production and R&D of pharmaceutical products.”" | ||||||
| Commitments in assets reorganization | Sinopharm Group Co., Ltd;China National Pharmaceutical Foreign Trade Corporation | Commitment on restricted shares | “Sinopharm Group and Sinopharm Foreign Trade made commitments in the Report about China National Accord Medicines Corporation Ltd. Purchasing Assets and Raising Supporting Funds and Related Transactions by Asset Sale, Stock Issuance and Cash Payment that the non-public offering of shares of Sinopharm Accord obtained from this transaction shall not be transferred within 36 months since the finish date of issuance and shall be unlocked after 36 months since the date of listing. Within 6 months after the completion of this transaction, if the closing price of the stock of Sinopharm Accord is less than the issue price in continuous 20 trading days, or the closing price at the end of 6 months after the completion of this transaction is less than the issue price, the lockup period of the stock of Sinopharm Group and Sinopharm Foreign Trade obtained from Sinopharm Accord by this transaction will automatically prolong at least 6 months. The shares derived from stock dividends allocation and capital reserve increase transferring of Sinopharm Accord based on the non-public offering of shares of Sinopharm Accord obtained by this transaction should also abide by the above stock restricted arrangements.” | 2016-05-31 | 36 months | Normally implementing |
| Ping’an Assets Management Co., Ltd | Commitment on restricted shares | "Ping An Asset Management Co., Ltd. made commitments in the Report about China National Accord Medicines Corporation Ltd. Purchasing Assets and Raising Supporting Funds and Related Transactions by Asset Sale, Stock Issuance and Cash Payment that the non-public offering of shares of Sinopharm Accord obtained from this transaction shall not be transferred within 36 months since the finish date of issuance and shall be unlocked after 36 months since the date of listing. After placement completed, the shares of the listed Company increased due to bonus shares and turning to increase capital should pursuit to the restriction arrangement the above mentioned. | 2016-05-31 | 36 months | Normally implementing | |
| Sinopharm Group Co., Ltd | Performance commitment and compensation arrangement | “Sinopharm Group made commitments in the Report about China National Accord Medicines Corporation Ltd. Purchasing Assets and Raising Supporting Funds and Related Transactions by Asset Sale, Stock Issuance and Cash Payment that the 2016 annual net profits of Foshan Nanhai, Guangdong Uptodate & Special Medicines and Guoda Drug Store should respectively be no less than RMB 47,385,600.00, RMB 19,167,000.00, and RMB 98,466,100.00, while the 2017 annual net profits should respectively be no less than RMB 49,394,500.00, RMB 20,209,700.00, and RMB 110,998,90.00, and the 2018 annual net profits should respectively be no less than RMB 51,148,200.00, RMB 21,330,100.00, and RMB 131,275,500.00. Net profit refers to the lower one between the after-tax net profit attributable to the owners of parent Company planning to invest in the target Company and the net profit attributable to the owners of parent Company after deducting the non-recurring gains and losses. If | 2016-05-31 | 2018-12-31 | Normally implementing |
| the actual net profit of the target Company doesn’t reach the committed net profit, Sinopharm Group will need to compensate according to the stipulations of the "Profit Forecast Compensation Agreement for the Stock Issuance and Assets Purchase.” | |||||
| China National Pharmaceutical Foreign Trade Corporation | Performance commitment and compensation arrangement | Sinopharm Foreign Trade made commitments in the Report about China National Accord Medicines Corporation Ltd. Purchasing Assets and Raising Supporting Funds and Related Transactions by Asset Sale, Stock Issuance and Cash Payment that the 2016 annual net profits of Southern Pharmaceutical Foreign Trade should be no less than RMB 39,880,700, while the 2017 annual net profits should be no less than RMB 47,323,200, and should not less than RMB 55,364,600 in 2018. Net profit refers to the lower one between the after-tax net profit attributable to the owners of parent Company planning to invest in the target Company and the net profit attributable to the owners of parent Company after deducting the non-recurring gains and losses. If the actual net profit of the Southern Pharmaceutical Foreign Trade doesn’t reach the committed net profit, Sinopharm Foreign Trade will need to compensate according to the stipulations of the "Profit Forecast Compensation Agreement for the Stock Issuance and Assets Purchase.” | 2016-05-31 | 2018-12-31 | Normally implementing |
| Fu Jiancheng; Fu Yuequn Gu Chaoqun; Guo Shu’er; Huang Qiufang; Li Hongbing; Liao Zhi; Lin Wanqun; SunWei; Zhang Zhaohua; Zhang Zhaotang | Performance commitment and compensation arrangement | “Fu Yuequn and other 10 natural person made commitments in the Report about China National Accord Medicines Corporation Ltd. Purchasing Assets and Raising Supporting Funds and Related Transactions by Asset Sale, Stock Issuance and Cash Payment that the 2016 annual net profits of Southern Pharmaceutical Foreign Trade should be no less than RMB 39,880,700, while the 2017 annual net profits should be no less than RMB 47,323,200, and should not less than RMB 55,364,600 in 2018. Net profit refers to the lower one between the after-tax net profit attributable to the owners of parent Company planning to invest in the target Company and the net profit attributable to the owners of parent Company after deducting the non-recurring gains and losses. If the actual net profit of the Southern Pharmaceutical Foreign Trade doesn’t reach the committed net profit, Fu Yuequn and other 10 natural person will need to compensate according to the stipulations of the "Profit Forecast Compensation Agreement for the Stock Issuance and Assets Purchase.” | 2016-05-31 | 2018-12-31 | Normally implementing |
| China National Accord Medicines Corporation Ltd. | Performance commitment and compensation arrangement | “Sinopharm Accord made commitments in the Report about China National Accord Medicines Corporation Ltd. Purchasing Assets and Raising Supporting Funds and Related Transactions by Asset Sale, Stock Issuance and Cash Payment that the net profits attributable to the owners of parent Company after deducting the non-recurring gains and losses committed by Zhijun Pharmaceutical in 2016, 2017 and 2018 should be respectively no less than RMB 222,671,700.00, RMB 232,561,600.00, and RMB 241,878,700.00; the net profits attributable to the owners of parent Company after deducting the non-recurring gains and losses committed by Zhijun Pharmacy Trade in 2016, 2017 and 2018 should be respectively no less than RMB 2,379,600.00, RMB 2,335,100.00, and RMB 2,345,600.00; the net profits attributable to the owners of parent Company after deducting the non-recurring gains and losses committed by Pingshan Pharmaceutical in 2016, 2017 and 2018 should be respectively no less than RMB 39,716,300.00, RMB 43,033,500.00, and RMB 50,325,500.00. If the actual net profits attributable to the owners of parent Company after deducting the non-recurring gains and losses of Zhijun Pharmaceutical / Zhijun Pharmacy Trade / Pingshan Pharmaceutical don’t reach the committed net profits attributable to the owners of parent Company after deducting the non-recurring gains and losses, Sinopharm Accord should compensate in accordance with the stipulations of the Profit Forecast Compensation Agreement for | 2016-05-31 | 2018-12-31 | Normally implementing |
| the Stock Issuance and Assets Purchase.” | |||||
| China National Accord Medicines Corporation Ltd.; Sinopharm Group Co., Ltd;Sinopharm | Other commitments | “The listed Company, controlling shareholders, the actual controllers 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 not violate the relevant regulations of Article 16 in Securities Issuance and Underwriting Management Approach, and directly or indirectly providing financial assistance or compensation for the subscription objects and its shareholders / partners / clients (if any) of this non-public offering does not exist and will not occur in the future.” | 2016-05-31 | Long-term effective | Normally implementing |
| Ping’an Assets Management Co., Ltd | Other commitments | “Ping An Asset Management Co., Ltd. has made commitments that the unit intends to utilize Ping An Asset Xinxiang No.3 asset management product and Ping An Asset Xinxiang No.7 asset management product to fund and subscribe some non-public offering of shares of Sinopharm Accord in this major asset restructuring process, and has the ability to subscribe the shares, the relevant capital sources are legitimate, there is no hierarchical income and other structured arrangements, and there is no use of leveraged funds. The unit does not receive financial assistance or compensation from Sinopharm Accord and its controlling shareholders, or the actual controllers. The investors’ structure of above-mentioned products does not change from the issue date of the commitment letter to the end date of the lockup period of the stock that the unit subscribes from Sinopharm Accord.” | 2016-03-24 | Long-term effective | Normally implementing |
| China National Pharmaceutical Group Corporation | Increase holding commitment | “Sinopharm made commitments in the Report about China National Accord Medicines Corporation Ltd. Purchasing Assets and Raising Supporting Funds and Related Transactions by Asset Sale, Stock Issuance and Cash Payment that 1. if the stock intraday price of Sinopharm Accord on any trading day of the 30 trading days after the listing of newly increased shares in this transaction is less than the issue price of newly increased shares in this transaction, Sinopharm will accumulatively invest no more than RMB 150 million in these 30 trading days to increase the holding by the stock trading system of the Shenzhen Stock Exchange (this increase of holding) until the earlier one of below two situations occurs: (1) the above-mentioned funds are use up; (2) the intraday price of Sinopharm Accord is no less than the issue price of newly increased shares in this transaction. 2. Sinopharm shall not sell the shares obtained from this increase of holding within 3 years after the end of this increase of holding.” | 2017-01-06 | Three years from the end of increase holding (if applicable) | There is no need for actual controllers to increase holdings |
| Sinopharm Group Co., Ltd | Commitments on horizontal competition, relation transaction and capital occupation | “Sinopharm Group made commitments in the Report about China National Accord Medicines Corporation Ltd. Purchasing Assets and Raising Supporting Funds and Related Transactions by Asset Sale, Stock Issuance and Cash Payment that the Company shall be the controlling shareholder of China National Accord Medicines Corporation Ltd. (hereinafter referred to as Sinopharm Accord) up to the issue date of this commitment letter, after the completion of this major assets reorganization (hereinafter referred to as “this reorganization”), Sinopharm Accord shall no longer hold shares or operate relevant businesses of pharmaceutical industry, the main business will become the national pharmaceutical retail and pharmaceutical distribution business in Guangdong and Guangxi. In order to support the business development of Sinopharm Accord and avoid horizontal competition with Sinopharm Accord and its controlling enterprises, the Company made following irrevocable commitments and promises:1, after the completion of this reorganization, as for the social retail drugstore assets 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 | 2016-12-28 | Long-term effective | Normally implementing |
| years since the completion date of this reorganization. 2. The Company's way of resolving horizontal competition problems includes and is not limited to purchasing the social retail drugstore assets subordinated to the Company by Sinopharm Accord, taking the entrusted operation, leasing or contracting operation by Sinopharm Accord and its controlling enterprises in accordance with the methods permitted bu national laws to hold or control the social retail drugstore assets, or transferring the controlling stake of the social retail drugstore assets by the Company. 3. If the shareholders of the social retail drugstore assets (hereinafter referred to as "the third party") of the Company or the enterprises controlled by the Company have or are going to perform the preemptive rights under the same conditions in accordance with relevant laws and corresponding Articles of Association, then the above commitment will not be applicable, but in this case, the Company should try its utmost to urge the third party to waive its preemptive rights. If the Company is unable to urge the third party to give up the preemptive rights, the Company will urge the enterprises controlled by the Company to transfer the social retail drugstore assets to the third party to solve the horizontal competition problem. 4. The pharmaceutical distribution assets currently owned or controlled by the Company are distributed outside Guangdong and Guangxi regions, there is no horizontal competition with Sinopharm Accord, the Company will not engage in the same or similar operation businesses to Sinopharm Accord in Guangdong and Guangxi in the future, if the Company and its holding enterprises obtain the new business opportunities constituting substantial horizontal competition (hereinafter referred to as competitive new business) within the pharmaceutical distribution business scope of Sinopharm Accord in Guangdong and Guangxi, the Company will send written notice to Sinopharm Accord and try its utmost to firstly provide the new business opportunities to Sinopharm Accord or its holding enterprises according to the reasonable and fair terms and conditions so as to avoid the horizontal competition with Sinopharm Accord and its holding enterprises. 5. Since the issue date of this commitment letter, the Company promises to indemnify Sinopharm Accord for all actual losses, damages and expenses caused by the Company in violation of any commitments under this commitment letter. 6. This commitment letter terminates when following circumstances occur (subject to the earlier one): (1) the Company is no longer the controlling shareholder of Sinopharm Accord; or (2) the shares of Sinopharm Accord terminate the listing at the stock exchange.” | |||||
| China National Pharmaceutical Group Corporation | Commitments on horizontal competition, relation transaction and capital occupation | “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 Pharmacy Co., Ltd. and its subsidiaries and branches owned or controlled by the Company, the Company promised to take appropriate measures to solve the horizontal | 2016-12-28 | Long-term effective | Normally implementing |
| competition problem in the pharmaceutical retail business between the Company and Sinopharm Accord within 5 years since the completion date of this reorganization. 2. The Company's way of resolving horizontal competition problems includes and is not limited to purchasing the social retail drugstore assets subordinated to the Company by Sinopharm Accord, taking the entrusted operation, leasing or contracting operation by Sinopharm Accord and its controlling enterprises in accordance with the methods permitted bu national laws to hold or control the social retail drugstore assets, or transferring the controlling stake of the social retail drugstore assets by the Company. 3. If the shareholders of the social retail drugstore assets (hereinafter referred to as "the third party") of the Company or the enterprises controlled by the Company have or are going to perform the preemptive rights under the same conditions in accordance with relevant laws and corresponding Articles of Association, then the above commitment will not be applicable, but in this case, the Company should try its utmost to urge the third party to waive its preemptive rights. If the Company is unable to urge the third party to give up the preemptive rights, the Company will urge the enterprises controlled by the Company to transfer the social retail drugstore assets to the third party to solve the horizontal competition problem. 4. The pharmaceutical distribution assets currently owned or controlled by the Company are distributed outside Guangdong and Guangxi regions, there is no horizontal competition with Sinopharm Accord, the Company will not engage in the same or similar operation businesses to Sinopharm Accord in Guangdong and Guangxi in the future, if the Company and its holding enterprises obtain the new business opportunities constituting substantial horizontal competition (hereinafter referred to as competitive new business) within the pharmaceutical distribution business scope of Sinopharm Accord in Guangdong and Guangxi, the Company will send written notice to Sinopharm Accord and try its utmost to firstly provide the new business opportunities to Sinopharm Accord or its holding enterprises according to the reasonable and fair terms and conditions so as to avoid the horizontal competition with Sinopharm Accord and its holding enterprises. 5. This commitment letter terminates when following circumstances occur (subject to the earlier one): (1) the Company is no longer the actual controller of Sinopharm Accord; or (2) the shares of Sinopharm Accord terminate the listing at the stock exchange.” | ||||||
| Commitments make in initial public offering or re-financing | Sinopharm Holding | Commitment of shareholders | Sinopharm Holding made commitments in the Commitment Letter About Sinopharm Group Co., Ltd. to Avoid Horizontal Competition: “First, the Company and the Company’s wholly-owned, controlling or other enterprises with actual control (in addition to Sinopharm Accord and its controlling enterprises, hereinafter the same) don’t have businesses and operations constituting the substantial horizontal competition to Sinopharm Accord and its controlling enterprises. Second, the Company and the Company’s wholly-owned, controlling or other enterprises with actual control shall not engage, participate in or do businesses and activities in Guangdong and Guangxi which constitute substantial competition to Sinopharm Accord and pharmaceutical business services. Third, the Company and the Company’s wholly-owned, controlling or other enterprises with actual control shall not engage, participate in or do businesses | 2013-09-05 | Long-term effective | Controlling shareholder is implement in real earnest, Sinopharm Accord will actively urged the controlling shareholder and actual controller to fulfill commitments |
| and activities which constitute substantial competition to Sinopharm Accord and pharmaceutical industry businesses. Fourth, the Company shall not take advantage of the control to Sinopharm Accord to damage the legitimate rights and interests of Sinopharm Accord and other shareholders (especially medium and small shareholders). This commitment letter takes effect from the issue date, and remains in effect for the entire period when the Company acts as the controlling shareholder or its related party of Sinopharm Accord. Within the effective period of the commitment, if the Company violates this commitment and causes a loss to Sinopharm Accord, the Company will timely make full compensation for Sinopharm Accord.” | |||||
| Sinopharm Holding | Commitment of shareholders | Sinopharm Holding made commitments in the Commitment Letter About Sinopharm Group Co., Ltd. to Regulate the Related Transactions with China National Accord Medicines Corporation Ltd.: “First, when the Company is controlling Sinopharm Accord, the Company and the companies and enterprises directly and indirectly controlled by the Company (“related party” for short) will strictly regulate the related transactions with Sinopharm Accord and its controlling enterprises. Second, for the related transactions that cannot be avoided or have reasonable reasons to occur, the Company and related party shall sign normative related transaction agreement in accordance with relevant laws with Sinopharm Accord. Sinopharm Accord implements the approval procedures and fulfills the information disclosure obligations of the related transactions according to relevant laws, regulations, rules, other normative documents and the constitutions of Sinopharm Accord. Third, for the related transactions that cannot be avoided or have reasonable reasons to occur, the Company and related party shall abide by the open, fair and just market principles and confirm the price of related transactions in accordance with the price that the independent third party without association sets for the same and similar transactions, and ensure the fairness of the price of the related transactions. Fourth, when the board of directors and the general meeting of stockholders of Sinopharm Accord vote on the related transactions involving the Company and other enterprises controlled by the Company, the Company shall fulfill the necessary obligations that the associated directors and associated shareholders abstain from voting in accordance with the relevant provisions, and abide by the legal procedures for approving related transactions and the information disclosure obligations. Fifth, the Company guarantees to participate in the shareholders' general meeting, equally exercise the corresponding rights and take the corresponding obligations in accordance with the constitutions of Sinopharm Accord, not to take advantage of controlling shareholder status to seek improper benefits or utilize related transactions to illegally transfer the funds and profits of Sinopharm Accord, and not to damage the legitimate rights and interests of other shareholders (especially the medium and small shareholders) of Sinopharm Accord. Sixth, this commitment letter comes into force from the issue date and remains in effect for the entire period when the Company acts as the controlling shareholder or its related party of Sinopharm Accord. Within the effective period of the commitment, if the Company violates this commitment and causes a loss to Sinopharm Accord, the Company will timely make full compensation for Sinopharm Accord.” | 2013-09-05 | Long-term effective | Controlling shareholder is implement in real earnest, Sinopharm Accord will actively urged the controlling shareholder and actual controller to fulfill commitments |
| China National | Commitment of | Sinopharm made commitments in the Commitment Letter About | 2013-10-16 | Long-term effective | Controlling |
| Pharmaceutical Group Corporation | actual controller | China National Pharmaceutical Group Corporation to Avoid Horizontal Competition with China National Accord Medicines Corporation Ltd.: “First, in the next five years, Sinopharm plans to take appropriate measures (including assets replacement or acquisition, equity reorganization, etc.) to resolve the horizontal competition between Sinopharm Weiqida and Sinopharm Accord. Second, in addition to the past matters and matters disclosed in this commitment letter, the Company and the Company’s wholly-owned, controlling or other enterprises with actual control rights (except for Sinopharm Accord and its controlling enterprises, the same as below) shall not directly engaged in, participate in or do the businesses an activities constituting actual competition to the production and operation of Sinopharm Accord in China. The relevant commitments about avoiding horizontal competition that the Company made in the past still remain in effect. Third, the Company shall not take advantage of the control relationship to Sinopharm Accord to damage the legitimate rights and interests of Sinopharm Accord and its shareholders (especially the medium and small shareholders). Fourth, this commitment letter comes into force from the issue date and remains in effect for the entire period when the Company acts as the controlling shareholder or its related party of Sinopharm Accord." | shareholder is implement in real earnest, Sinopharm Accord will actively urged the controlling shareholder and actual controller to fulfill commitments | ||
| China National Pharmaceutical Group Corporation | Commitment of actual controller | 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 Accord and its controlling enterprises. Second, for the related transactions that can not be avoided or have reasonable reasons to occur, the Company and related party shall sign normative related transaction agreement in accordance with relevant laws with Sinopharm Accord. Sinopharm Accord implements the approval procedures and fulfills the information disclosure obligations of the related transactions according to relevant laws, regulations, rules, other normative documents and the constitutions of Sinopharm Accord. Third, for the related transactions that cannot be avoided or have reasonable reasons to occur, the Company and related party shall abide by the open, fair and just market principles and confirm the price of related transactions in accordance with the price that the independent third party without association sets for the same and similar transactions, and ensure the fairness of the price of the related transactions. Fourth, when the board of directors and the general meeting of stockholders of Sinopharm Accord vote on the related transactions involving the Company and other enterprises controlled by the Company, the Company shall fulfill the necessary obligations that the associated directors and associated shareholders abstain from voting in accordance with the relevant provisions, and abide by the legal procedures for approving related transactions and the information disclosure obligations. Fifth, the Company guarantees not to take advantage of actual controller status to seek improper benefits or utilize related transactions to illegally transfer the funds and profits of Sinopharm Accord, and not to damage the legitimate | 2013-09-22 | Long-term effective | Controlling shareholder is implement in real earnest, Sinopharm Accord will actively urged the controlling shareholder and actual controller to fulfill commitments |
| 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/N) | Y | ||
IV. Appointment and non-reappointment (dismissal) of CPA
Financial report has been audit or not□ Yes √ NoNot been audited.
V. Explanation from Board of Directors, Supervisory Committee for “Qualified Opinion”
that issued by CPA
□ Applicable √ Not applicable
VI. Explanation from the Board for “Qualified Opinion” of last year’s
□ Applicable √ Not applicable
VII. Bankruptcy reorganization
□ Applicable √ Not applicableNo bankruptcy reorganization for the Company in Period.
VIII. Lawsuits
Material lawsuits and arbitration□ Applicable √ Not applicableNo significant lawsuits and arbitrations occurred in the reporting period.Other lawsuitsAs of the date of disclosing this report, the Company has 23 cases of contract disputes in the daily operation, with total amount ofRMB 16,408,700 involved; one labor dispute, involving a total amount of RMB 322,000; and 4 cases of equity transfer dispute,involving a total amount of RMB 64,329,000. The total amount involved in the above 28 cases was RMB 81,059,800, which neitherformed the expected liabilities, nor had an effect on normal operation and management of the Company.
IX. Penalty and rectification
□ Applicable √ Not applicableNo penalty and rectification for the Company in Period.
X. Integrity of the Company and its controlling shareholders and actual controllers
√Applicable □ Not applicableIn the reporting period, integrity of the Company and its controlling shareholders and actual controllers is good and they do not havea relatively large amount of due existing debt with court's effective judgments.
XI. Implementation of the Company’s stock incentive plan, employee stock ownership plan or
other employee incentives
□ Applicable √ Not applicable
The Company has no equity incentive plan, employee stock ownership plans or other employee incentives in Period.
XII. Major related transaction
1. Related transaction with routine operation concerned
(1) Related transaction with routine operation concerned can be found in “12. Related party and related transaction” carried inSection X. Financial Report;(2) The related transactions are settled in cash and by notes, found more in “Announcement on Expected Routine Related Transactionfor Year of 2018” (Notice No.: 2018-8) released on Juchao Website dated 22 March 2018;(3) The “Proposal of Expected Routine Related Transactions with Subordinate Enterprise for Year of 2018” was deliberated andapproved by 30
th
session of 7
th
BOD held on 21 March 2018. During the reporting period, related sales takes 22.39% in totalexpected amount for the whole year, and related procurement takes 40.40% in total expected amount for the whole year.
2. Related transactions by assets acquisition and sold
□ Applicable √ Not applicableNo related transactions by assets acquisition and sold for the Company in reporting period.
3. Related transactions of mutual investment outside
□ Applicable √ Not applicableNo main related transactions of mutual investment outside for the Company in reporting period.
4. Contact of related credit and debt
□ Applicable √ Not applicableThe Company had no contact of related credit and debt in the reporting period.
5. Other related transactions
□ Applicable √ Not applicableThe Company had no other related transaction in the period
XIII. Non-operational fund occupation from controlling shareholders and its related party
□ Applicable √ Not applicableNo non-operational fund occupation from controlling shareholders and its related party in period.
XIV. Significant contract and implementations
1. Trusteeship, contract and leasing
(1) Trusteeship
□ Applicable √ Not applicableNo trusteeship for the Company in reporting period.
(2) Contract
□ Applicable √ Not applicableNo contract for the Company in reporting period.
(3) Leasing
□ Applicable √ Not applicableNo leasing for the Company in reporting period.
2. Major guarantees
√Applicable □ Not applicable
(1) Guarantees
In 10 thousand Yuan
| Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries) | ||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening (Date of signing agreement) | Actual guarantee limit | Guarantee type | Guarantee term | Implemented (Y/N) | Guarantee for related party (Y/N) |
| Total approving external guarantee in report period (A1) | 0 | Total actual occurred external guarantee in report period (A2) | 0 | |||||
| Total approved external guarantee at the end of report period ( A3) | 0 | Total actual balance of external guarantee at the end of report period (A4) | 0 | |||||
| Guarantee between the Company and the subsidiaries | ||||||||
| Name of the Company guaranteed | Related Announcement disclosure | Guarantee limit | Actual date of happening (Date of signing agreement) | Actual guarantee limit | Guarantee type | Guarantee term | Implemented (Y/N) | Guarantee for related party |
| date | (Y/N) | |||||||
| Sinopharm Holding Shenzhen Jianmin Co., Ltd. | 2017-04-19 | 500 | 2017-10-12 | 310 | General assurance | 2017.10.12-2018.10.11 | N | N |
| Sinopharm Holding Shenzhen Medicine Co., Ltd | 2017-04-19 | 500 | 2017-10-12 | 33.72 | General assurance | 2017.10.12-2018.10.11 | N | N |
| China National Accord Medicines Corporation Ltd. | 2017-04-19 | 25,000 | 2017-07-13 | 18,956.45 | General assurance | 2017.7.13-2018.7.13 | N | N |
| China National Accord Medicines Corporation Ltd. | 2017-04-19 | 20,000 | 2017-11-23 | 10,942.49 | General assurance | 2017.11.23-2018.5.22 | N | N |
| Sinopharm Holding Shenzhen Yanfeng Co., Ltd. | 2017-04-19 | 9,000 | 2017-10-17 | 3,008.65 | General assurance | 2017.10.17-2018.10.11 | N | N |
| Sinopharm Holding Shenzhen Yanfeng Co., Ltd. | 2018-03-22 | 5,000 | 2018-05-23 | 2,700 | General assurance | 2018.05.23-2018.11.22 | N | N |
| Sinopharm Holding Shenzhen Yanfeng Co., Ltd. | 2018-03-22 | 7,000 | 2018-06-13 | 5,500 | General assurance | 2018.06.13-2019.06.12 | N | N |
| Sinopharm Holding Jiangmen Ren Ren Co., Ltd. | 2017-04-19 | 1,000 | 2017-11-06 | 0 | General assurance | 2017.11.6-2018.10.11 | N | N |
| Foshan Nanhai Medicine Co., Ltd. | 2017-04-19 | 5,000 | 2017-07-31 | 0 | General assurance | 2017.7.31-2018.7.31 | N | N |
| Foshan Nanhai Medicine Co., Ltd. | 2017-04-19 | 5,000 | 2017-10-16 | 95.75 | General assurance | 2017.10.16-2018.10.11 | N | N |
| Foshan Nanhai Medicine Co., Ltd. | 2017-04-19 | 5,000 | 2017-12-01 | 2,061.73 | General assurance | 2017.12.1-2018.12.1 | N | N |
| Foshan Nanhai Uptodate & Special Medicines Co. Ltd. | 2017-04-19 | 5,000 | 2017-07-31 | 0 | General assurance | 2017.7.31-2018.7.31 | N | N |
| Foshan Nanhai Uptodate & Special Medicines Co. Ltd. | 2018-03-22 | 5,000 | 2018-05-23 | 0 | General assurance | 2018.5.23-2019.5.22 | N | N |
| Foshan Nanhai Uptodate & Special Medicines Co. Ltd. | 2017-04-19 | 6,000 | 2017-10-16 | 273.92 | General assurance | 2017.10.16-2018.10.11 | N | N |
| Foshan Nanhai Uptodate & Special Medicines Co. Ltd. | 2017-04-19 | 5,000 | 2017-12-01 | 1,155.6 | General assurance | 2017.12.1-2018.12.1 | N | N |
| Sinopharm Holding Guangzhou Co., Ltd. | 2018-03-22 | 35,000 | 2018-05-20 | 9,885.95 | General assurance | 2018.5.20-2019.5.20 | N | N |
| Sinopharm Holding Guangzhou Co., Ltd. | 2017-04-19 | 30,000 | 2017-11-28 | 14,939.95 | General assurance | 2017.11.28-2018.11.28 | N | N |
| Sinopharm Holding Guangzhou Co., Ltd. | 2017-04-19 | 25,000 | 2017-07-24 | 888.51 | General assurance | 2017.7.24-2018.7.23 | N | N |
| Sinopharm Holding Guangzhou Co., Ltd. | 2018-03-22 | 60,000 | 2018-06-07 | 30,679.04 | General assurance | 2018.6.7-2018.9.24 | N | N |
| Sinopharm Holding Guangzhou Co., Ltd. | 2017-04-19 | 15,000 | 2017-08-16 | 0 | General assurance | 2017.8.16-2018.8.16 | N | N |
| Sinopharm Holding Guangzhou Co., Ltd. | 2017-04-19 | 35,000 | 2017-10-11 | 3,183.8 | General assurance | 2017.10.13-2018.10.11 | N | N |
| Sinopharm Holding Guangzhou Co., Ltd. | 2018-03-22 | 40,000 | 2018-06-05 | 25,841.32 | General assurance | 2018.6.5-2019.6.4 | N | N |
| Sinopharm Holding Guangzhou Co., Ltd. | 2018-03-22 | 40,000 | 2018-05-09 | 30,143.62 | General assurance | 2018.5.9-2019.5.8 | N | N |
| Sinopharm Holding Guangzhou Co., Ltd. | 2018-03-22 | 20,000 | 2018-06-01 | 15,343.73 | General assurance | 2018.6.22-2019.6.21 | N | N |
| Sinopharm Holding Guangzhou Co., Ltd. | 2018-03-22 | 50,000 | 2018-05-29 | 19,018.56 | General assurance | 2018.5.29-2019.5.29 | N | N |
| Sinopharm Holding Guangzhou Co., Ltd. | 2017-04-19 | 20,000 | 2017-05-10 | 291.39 | General assurance | 2017.5.10-2018.5.9 | N | N |
| Sinopharm Holding Guangzhou Co., Ltd. | 2018-03-22 | 60,000 | 2018-06-13 | 11,470.2 | General assurance | 2018.6.13-2019.6-12 | N | N |
| Sinopharm Holding Guangzhou Co., Ltd. | 2018-03-22 | 80,000 | 2018-04-17 | 916.88 | General assurance | 2018.4.17-2019.4.16 | N | N |
| Sinopharm Holding Guangdong Yuexing Co., Ltd. | 2018-03-22 | 5,000 | 2018-05-20 | 2,905.31 | General assurance | 2018.5.20-2019.5.20 | N | N |
| Sinopharm Holding Guangdong Yuexing Co., Ltd. | 2017-04-19 | 5,000 | 2017-10-12 | 4,676.23 | General assurance | 2017.10.13-2018.10.11 | N | N |
| Sinopharm Holding Guangdong Yuexing Co., Ltd. | 2017-04-19 | 5,000 | 2018-01-05 | 676.55 | General assurance | 2018.1.5-2018.10.31 | N | N |
| Sinopharm Holding Guangdong Yuexing Co., Ltd. | 2018-03-22 | 5,000 | 2018-06-22 | 198.92 | General assurance | 2018.6.22-2019.6.21 | N | N |
| Sinopharm Holding Foshan Co., Ltd | 2017-04-19 | 1,500 | 2017-10-16 | 1,086.18 | General assurance | 2017.10.16-2018.10.11 | N | N |
| Sinopharm | 2017-04-19 | 3,000 | 2017-12-29 | 936.36 | General | 2017.12.29- | N | N |
| Holding Guangdong Hengxing Co., Ltd. | assurance | 2018.12.29 | ||||||
| Sinopharm Holding Zhaoqing Co., Ltd. | 2017-04-19 | 2,000 | 2017-10-26 | General assurance | 2017.10.26--2018.10.11 | N | N | |
| Sinopharm Holding Liuzhou Co., Ltd. | 2017-04-19 | 9,000 | 2017-10-13 | 0 | General assurance | 2017.10.13-2018.10.11 | N | N |
| Sinopharm Holding Liuzhou Co., Ltd. | 2018-03-22 | 5,000 | 2018-06-21 | 4,975.99 | General assurance | 2018.6.21-2019.6.20 | N | N |
| Sinopharm Holding Liuzhou Co., Ltd. | 2017-04-19 | 6,000 | 2018-03-14 | 5,169.93 | General assurance | 2018.3.14-2019.1.2 | N | N |
| Guangdong Southern Pharmaceutical Foreign Trade Co., Ltd. | 2018-03-22 | 15,000 | 2018-07-01 | 12,036.45 | General assurance | 2018.7.1-2019.6.30 | N | N |
| Guangdong Southern Pharmaceutical Foreign Trade Co., Ltd. | 2018-03-22 | 2,500 | 2018-04-17 | 184.97 | General assurance | 2018.4.17-2019.4.16 | N | N |
| Sinopharm Holding Guangxi Co., Ltd. | 2017-04-19 | 20,000 | 2017-11-15 | 14,519.25 | General assurance | 2017.11.15-2018.11.18 | N | N |
| Sinopharm Holding Guangxi Co., Ltd. | 2017-04-19 | 28,000 | 2017-10-13 | 4,397.31 | General assurance | 2017.10.13-2018.10.11 | N | N |
| Sinopharm Holding Guangxi Co., Ltd. | 2017-04-19 | 25,000 | 2017-11-09 | 10,447.96 | General assurance | 2017.11.9-2018.11.8 | N | N |
| Sinopharm Holding Guangxi Co., Ltd. | 2018-03-22 | 10,000 | 2018-05-22 | 9,978.85 | General assurance | 2018.5.22-2018.11.22 | N | N |
| Sinopharm Holding Guangxi Co., Ltd. | 2017-04-19 | 10,000 | 2017-09-04 | 0 | General assurance | 2017.9.4-2018.9.4 | N | N |
| Sinopharm Holding Guangxi Co., Ltd. | 2018-03-22 | 5,000 | 2018-06-05 | 2,999.86 | General assurance | 2018.6.5-2019.6.5 | N | N |
| Sinopharm Holding Guangxi Co., Ltd. | 2018-03-22 | 5,000 | 2018-06-05 | 0 | General assurance | 2018.6.5-2019.6.5 | N | N |
| Sinopharm Holding Meizhou Co., Ltd. | 2017-04-19 | 1,000 | 2017-10-12 | 0 | General assurance | 2017.10.12-2018.10.11 | N | N |
| Sinopharm Holding Zhongshan Co., Ltd. | 2017-04-19 | 1,000 | 2017-10-12 | 0 | General assurance | 2017.10.12-2018.10.11 | N | N |
| Sinopharm Holding Zhongshan Co., Ltd. | 2018-03-22 | 1,000 | 2018-06-14 | 0 | General assurance | 2018.6.14-2019.6.13 | N | N |
| Sinopharm Holding Shantou | 2017-04-19 | 500 | 2017-10-12 | 500 | General assurance | 2017.10.12-2018.10.11 | N | N |
| Co., Ltd. | ||||||||
| Sinopharm Holding Huizhou Co., Ltd. | 2017-04-19 | 1,000 | 2017-10-12 | 396.45 | General assurance | 2017.10.12-2018.10.11 | N | N |
| Sinopharm Holding Zhanjiang Co., Ltd. | 2017-04-19 | 1,000 | 2017-10-12 | 11.16 | General assurance | 2017.10.12-2018.10.11 | N | N |
| Sinopharm Holding Zhuhai Co., Ltd. | 2017-04-19 | 1,000 | 2017-10-12 | 0 | General assurance | 2017.10.12-2018.10.11 | N | N |
| Sinopharm Holding Dongguan Co., Ltd. | 2017-04-19 | 2,000 | 2017-10-12 | 0 | General assurance | 2017.10.12-2018.10.11 | N | N |
| Total amount of approving guarantee for subsidiaries in report period (B1) | 455,500 | Total amount of actual occurred guarantee for subsidiaries in report period (B2) | 523,821.28 | |||||
| Total amount of approved guarantee for subsidiaries at the end of reporting period (B3) | 789,500 | Total balance of actual guarantee for subsidiaries at the end of reporting period (B4) | 283,738.99 | |||||
| Guarantee between the subsidiaries and the subsidiaries | ||||||||
| Name of the Company guaranteed | Related Announcement disclosure date | Guarantee limit | Actual date of happening (Date of signing agreement) | Actual guarantee limit | Guarantee type | Guarantee term | Implemented (Y/N) | Guarantee for related party (Y/N) |
| Sinopharm Holding Guoda Drugstore Yangzhou Dadesheng Chain Co., Ltd. | 2017-04-19 | 1,000 | 2017-11-01 | 0 | General assurance | 2017.11.1-2018.11.1 | N | N |
| Fujian Guoda Drugstore Chain Co., Ltd. | 2018-03-22 | 2,275 | 2018-04-20 | 977.96 | General assurance | 2018.4.20-2019.4.19 | N | N |
| Sinopharm HoldingGuoda Drugstore Guangdong Co., Ltd. | 2017-04-19 | 3,000 | 2017-06-09 | 2,503.59 | General assurance | 2017.6.9-2019.6.8 | N | N |
| Sinopharm Holding Guoda Drugstore Guangdong Co., Ltd. | 2017-04-19 | 3,000 | 2017-06-01 | 2,124.69 | General assurance | 2017.6.1-2018.6.1 | N | N |
| Taishan Sinopharm Holding Guoda Qunkang Drugstore Chain Co., Ltd. | 2018-03-22 | 500 | 2018-06-02 | 158 | General assurance | 2018.6.2-2019.6.1 | N | N |
| Sinopharm Holding Guoda Drugstore Guangxi Chain Co., Ltd. | 2017-04-19 | 2,000 | 2017-10-10 | 1,424.3 | General assurance | 2017.10.10-2018.10.9 | N | N |
| Sinopharm Holding Guoda Drugstore Jiangmen Chain Co., Ltd. | 2017-04-19 | 2,000 | 2017-10-28 | 3.6 | General assurance | 2017.10.28-2018.10.27 | N | N |
| Sinopharm Holding Guoda Drugstore Inner Mongolia Co., Ltd. | 2017-04-19 | 3,000 | 2017-04-24 | 1,329.12 | General assurance | 2017.4.24-2018.4.23 | N | N |
| Sinopharm Holding Guoda Drugstore Inner Mongolia Co., Ltd. | 2018-03-22 | 3,000 | 2018-04-25 | 0 | General assurance | 2018.4.25-2019.4.24 | N | N |
| Sinopharm Holding Guoda Drugstore Inner Mongolia Co., Ltd. | 2017-04-19 | 6,000 | 2017-10-10 | 5,581.83 | General assurance | 2017.10.10-2018.10.9 | N | N |
| Shanxi Guoda Wanmin Drugstore Chain Co., Ltd. | 2017-04-19 | 3,000 | 2017-05-01 | 3,000 | General assurance | 2017.5.1-2018.5.1 | N | N |
| Shanxi Guoda Wanmin Drugstore Chain Co., Ltd. | 2018-03-22 | 5,000 | 2018-05-16 | 0 | General assurance | 2018.5.16-2019.5.15 | N | N |
| Shanxi Guoda Wanmin Drugstore Chain Co., Ltd. | 2017-04-19 | 3,000 | 2017-06-01 | 0 | General assurance | 2017.6.1-2018.6.1 | N | N |
| Sinopharm Holding Guoda Drugstore Shenyang Chain Co., Ltd. | 2017-04-19 | 5,000 | 2017-09-01 | 4,668.36 | General assurance | 2017.9.1-2018.9.1 | N | N |
| Sinopharm Holding Guoda Drugstore Shenyang Chain Co., Ltd. | 2018-03-22 | 6,000 | 2018-04-23 | 1,367.09 | General assurance | 2018.4.23-2019.4.22 | N | N |
| Sinopharm Holding Guoda Drugstore Shenyang Chain Co., Ltd. | 2017-04-19 | 3,000 | 2017-06-01 | 0 | General assurance | 2017.6.1-2018.6.1 | N | N |
| Sinopharm Holding Guoda Drugstore Shenyang Chain Co., Ltd. | 2017-04-19 | 6,000 | 2017-06-28 | 1,328.76 | General assurance | 2017.6.28-2018.6.28 | N | N |
| Sinopharm Holding Guoda Drugstore Shenyang Chain Co., Ltd. | 2017-04-19 | 6,000 | 2017-06-29 | 5,161.54 | General assurance | 2017.8.23-2018.8.23 | N | N |
| Sinopharm Holding Guoda Drugstore Shenyang Chain Co., Ltd. | 2017-04-19 | 15,000 | 2017-10-10 | 10,540.16 | General assurance | 2017.10.10-2018.10.9 | N | N |
| Sinopharm Holding Guoda Drugstore Shanxi YiYuan Chain Co., Ltd. | 2017-04-19 | 6,000 | 2017-05-01 | 2,204.49 | General assurance | 2017.5.15-2018.4.18 | N | N |
| Sinopharm Holding Guoda Drugstore Shanxi YiYuan Chain Co., Ltd. | 2017-04-19 | 4,000 | 2017-09-22 | 3,516.88 | General assurance | 2017.9.22-2018.9.21 | N | N |
| Sinopharm Holding Guoda Drugstore Shanxi YiYuan Chain Co., Ltd. | 2017-04-19 | 2,800 | 2017-12-29 | 2,644.69 | General assurance | 2017.12.29-2018.12.28 | N | N |
| Sinopharm Holding Guoda Drugstore Shanxi YiYuan Chain Co., Ltd. | 2017-04-19 | 2,800 | 2018-02-05 | 2,784.47 | General assurance | 2018.2.5-2019.2.4 | N | N |
| Hunan Guoda Minshentang Drugstore Chain Co., Ltd. | 2017-04-19 | 2,000 | 2017-10-20 | 1,327.71 | General assurance | 2017.10.20-2018.10.19 | N | N |
| Ningxia Guoda Drugstore Chain Co., Ltd. | 2017-04-19 | 2,000 | 2018-01-12 | 1,113 | General assurance | 2018.1.12-2019.1.11 | N | N |
| Sinopharm Holding Guoda Drugstore Yangzhou Dadesheng Chain Co., Ltd. | 2017-04-19 | 2,000 | 2017-10-10 | 963.73 | General assurance | 2017.10.10-2018.10.9 | N | N |
| Sinopharm Holding Guoda Drugstore Jiangmen Chain Co., Ltd. | 2018-03-22 | 2,000 | 2018-04-01 | 1,143.22 | General assurance | 2018.4.1-2019.4.1 | N | N |
| Sinopharm Holding Guoda Drugstore Shanghai Chain Co., Ltd. | 2018-03-22 | 4,000 | 2018-04-01 | 3,073.28 | General assurance | 2018.4.1-2019.4.1 | N | N |
| Sinopharm Holding Guoda Drugstore Henan Chain Co., Ltd. | 2018-03-22 | 3,000 | 2018-05-11 | 247.38 | General assurance | 2018.5.11-2019.5.10 | N | N |
| Shanxi Guoda Wanmin Drugstore Chain Co., Ltd. | 2018-03-22 | 5,000 | 2018-04-28 | 2,247 | General assurance | 2018.4.28-2019.4.27 | N | N |
| Sinopharm Holding Guoda Drugstore Shanxi YiYuan Chain Co., Ltd. | 2018-03-22 | 3,000 | 2018-04-23 | 2,999.57 | General assurance | 2018.4.23-2019.4.22 | N | N |
| Sinopharm Holding Guoda Drugstore Inner Mongolia Co., Ltd. | 2018-03-22 | 2,000 | 2018-04-24 | 300.74 | General assurance | 2018.4.24-2019.4.23 | N | N |
| China National Hebei Lerentang Medicine Chain Co., Ltd. | 2018-03-22 | 2,000 | 2018-04-12 | 467.56 | General assurance | 2018.4.12-2019.4.11 | N | N |
| Sinopharm HoldingGuoda Drugstore Guangdong Co., Ltd. | 2018-03-22 | 3,000 | 2018-05-18 | 1,984.87 | General assurance | 2018.5.18-2019.5.17 | N | N |
| Total amount of approving guarantee for subsidiaries in report period (C1) | 40,775 | Total amount of actual occurred guarantee for subsidiaries in report period | 87,203.39 | |||||
| (C2) | |||
| Total amount of approved guarantee for subsidiaries at the end of reporting period (C3) | 123,375 | Total balance of actual guarantee for subsidiaries at the end of reporting period (C4) | 67,187.59 |
| Total amount of guarantee of the Company( total of three abovementioned guarantee) | |||
| Total amount of approving guarantee in report period (A1+B1+C1) | 496,275 | Total amount of actual occurred guarantee in report period (A2+B2+C2) | 611,024.67 |
| Total amount of approved guarantee at the end of report period (A3+B3+C3) | 912,875 | Total balance of actual guarantee at the end of report period (A4+B4+C4) | 350,926.58 |
| The proportion of the total amount of actually guarantee in the net assets of the Company (that is A4+ B4+C4) | 35.41% | ||
| Including: | |||
Explanation on guarantee with composite way
(2) Guarantee outside against the regulation
□ Applicable √ Not applicableNo guarantee outside against the regulation in Period.
3. Other material contracts
□ Applicable √ Not applicableNo other material contracts for the Company in reporting period.
XV. Social responsibility
1. Major environment protection
The listed Company and its subsidiary whether belongs to the key sewage units released from environmental protection departmentvoluntary disclosure
| Company /subsidiary | Name of Major Pollutants and Particular Pollutants | Emission Method | Quantity of Discharge Outlet | Distribution of Discharge Outlet | Emission Concentration | Executed Pollutant Discharge Standards | Total Emissions | Approved Total Emissions | Excessive Discharge |
| China National Zhijun | COD | Tube Discharge | 1 | Discharge Outlet of Waste Water | 21.91 mg/l | “Water Pollution Emission Limits” of Guangdong Province （DB44/26-2001） | 0.65 | 6.6 | N |
| China National Zhijun | BOD | Tube Discharge | 1 | Discharge Outlet of Waste Water | 3.32 mg/l | “Water Pollution Emission Limits” of | 0.099 | 1.5 | N |
| Guangdong Province （DB44/26-2001） | |||||||||
| China National Zhijun | SS | Tube Discharge | 1 | Discharge Outlet of Waste Water | 2.46 mg/l | “Water Pollution Emission Limits” of Guangdong Province （DB44/26-2001） | 0.073 | 4.4 | N |
| China National Zhijun | Ammonia Nitrogen | Tube Discharge | 1 | Discharge Outlet of Waste Water | 2.22 mg/l | “Water Pollution Emission Limits” of Guangdong Province （DB44/26-2001） | 0.066 | 0.7 | N |
| China National Zhijun | Phosphate | Tube Discharge | 1 | Discharge Outlet of Waste Water | 0.02 mg/l | “Water Pollution Emission Limits” of Guangdong Province （DB44/26-2001） | 0.593 | 36.9 | N |
| Zhijun Pingshan | COD | Tube Discharge | 1 | Discharge Outlet of Waste Water | 8mg/L | CLASS GB3838-2002IV WATER QUALITY STANDARDS AND GB21908-2008 NEW PROJECT | 0.6 | 2.63 | N |
| Zhijun Pingshan | BOD | Tube Discharge | 1 | Discharge Outlet of Waste Water | 2.3mg/L | CLASS GB3838-2002IV WATER QUALITY STANDARDS AND GB21908-2008 NEW PROJECT | 0.2 | 0.53 | N |
| Zhijun Pingshan | SS | Tube Discharge | 1 | Discharge Outlet of Waste Water | 9mg/L | CLASS GB3838-2002IV WATER QUALITY STANDARDS AND GB21908-2008 NEW PROJECT | 0.7 | 2.63 | N |
| Zhijun Pingshan | Ammonia Nitrogen | Tube Discharge | 1 | Discharge Outlet of Waste Water | 0.3mg/L | CLASS GB3838-2002IV WATER QUALITY | 0.02 | 0.18 | N |
Construction and operation of pollution prevention and control facilitiesAt present, the above-mentioned environmental pollution key monitoring units in which the Company has ashareholding have established pollution prevention and control facilities for wastewater. In the daily managementprocess, enterprises establish management procedures and operating instructions for environmental protectionfacilities, and ensure the normal and compliant operation of anti-pollution facilities through systemimplementation and responsibility implementation. All enterprises are continuously investing funds and steppingup the transformation and improvement of pollution prevention and control facilities to ensure the stable operationof pollution prevention facilities and improve the disposal capacity of environmental protection facilities.Environmental impact assessment of construction projects and other environmental protection administrativelicensesAt present, the projects of all key monitoring units have carried out environmental impact assessments andobtained 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 emergenciesAt present, the above-mentioned environmental pollution key monitoring units in which the Company has ashareholding have formulated the Emergency Plan for Environmental Emergencies and reported them accordingto 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 schemeAt present, the above-mentioned environmental pollution key monitoring units in which the Company has ashareholding have established environmental self-detection scheme and plan, and implemented self-inspection,third-party detection and other monitoring methods according to the government requirements. Relevantmonitoring 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 subsidiariesare not listed as key pollutant discharge units announced by the environmental protection department.
Relevant information on environment protection
Nil
2. Execution of social responsibility of targeted poverty alleviation
The Company temporarily not to carry out a targeted poverty alleviation in the peirod, and there are no follow-up plans either.
XVI. Explanation on other significant events
√Applicable □ Not applicable
The proposal on the wholly-owned subsidiary Sinopharm Holding Guoda Drugstore Co.,Ltd., Bringing inStrategic Investors by Means of Capital Increase and Share Expansion was deliberated and approved on the 25
th
meeting of the 7
th
session of Board of Directors On Sep. 4
th
, 2017, and the wholly-owned subsidiary SinopharmHolding Guoda Drugstore Co., Ltd (hereinafter referred to as “Guoda Drugstore”) has got the approval of bringingin one strategic investor by means of capital increase and share expansion, taking assets assessment report as thereference of pricing. The Company was publicly listed on the Shanghai United Assets and Equity Exchange on
September 20, 2017, and collected an intentional investor, Walgreens Boots Alliance (NASDAQ Code: WBA), asthe actual controller, it subscribed for the equity of Guoda Drugstore by taking its wholly-owned subsidiaryestablished in Hong Kong, Walgreens Boots Alliance (Hong Kong) Investments Limited (hereinafter referred to
as “WBAHKIL”), as the capital increase entity to subscribe the equity of Guoda Drugstore with the capital
increase amount of RMB 2,766,700,000. It holds 40% equity of Guoda Drugstore after the capital increase. At thebeginning of December 2017, in accordance with the equity transaction rules, the Company, Guoda Drugstore andWBAHKIL jointly signed the Registration Capital Increase and Subscription Agreement.On March 23, 2018, the Company received the Written Decision on Nonperformance of Further Review
(SFLCSH [2018] No. 104) issued by the Ministry of Commerce of the People’s Republic of China, which was
transferred from Walgreens Boots Alliance Investment Luxembourg Co., Ltd.At the end of June 2018, Guoda Drugstore obtained the registration receipt for the establishment of a foreign-
invested enterprise from the Commerce Commission of Jing’an District, Shanghai Municipality, and completed
the industrial and commercial registration on June 28, 2018.
| Overview | Disclosure date | Index for annoucement published on website |
| Notice of Progress of the wholly-owned subsidiary of the Company, Guoda Drugstore has brought in strategic investors by means of capital increase and share expansion: | 2018-03-24 | Juchao Website（http://www.cninfo.com.cn） |
| Notice of Progress of the wholly-owned subsidiary of the Company, Guoda Drugstore has brought in strategic investors by means of capital increase and share expansion: | 2018-06-30 | Juchao Website（http://www.cninfo.com.cn） |
XVII. Significant event of subsidiary of the Company
√Applicable □ Not applicableSee “XVI. Explanation on other significant events
Section VI. Changes in Shares and Particulars about Shareholders
I. Changes in Share Capital
1. Changes in Share Capital
In Share
| Before the Change | Increase/Decrease in the Change (+, -) | After the Change | |||||||
| Amount | Proportion | New shares issued | Bonus shares | Capitalization of public reserve | Others | Subtotal | Amount | Proportion | |
| I. Restricted shares | 65,497,028 | 15.30% | 65,497,028 | 15.30% | |||||
| 2. State-owned legal person’s shares | 60,380,743 | 14.10% | 60,380,743 | 14.10% | |||||
| 3. Other domestic shareholding | 5,116,285 | 1.20% | 5,116,285 | 1.20% | |||||
| Including: Domestic legal person’s shares | 5,114,297 | 1.19% | 5,114,297 | 1.19% | |||||
| Domestic nature person shares | 1,988 | 0.00% | 1,988 | 0.00% | |||||
| II. Unrestricted shares | 362,629,955 | 84.70% | 362,629,955 | 84.70% | |||||
| 1. RMB Ordinary shares | 307,744,355 | 71.88% | 307,744,355 | 71.88% | |||||
| 2. Domestically listed foreign shares | 54,885,600 | 12.82% | 54,885,600 | 12.82% | |||||
| III. Total shares | 428,126,983 | 100.00% | 428,126,983 | 100.00% | |||||
Reasons for share changed□Applicable √Not applicable
Approval of share changed□Applicable √Not applicable
Ownership transfer of share changed□ Applicable √ Not applicableInfluence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to commonshareholders of Company in latest year and period□ Applicable √ Not applicableOther information necessary to disclose for the Company or need to disclosed under requirement from security regulators
□ Applicable √ Not applicable
2. Changes of restricted shares
□ Applicable √ Not applicable
II. Securities issuance and listing
□ Applicable √ Not applicable
III. Number of shareholders and share-holding
In Share
| Total common shareholders at period-end | 19,539 | Total preference shareholders with voting rights recovered at end of reporting period (if applicable) (see Note 8) | 0 | |||||||
| Particulars about shares held above 5% by common shareholders or top ten common shareholders | ||||||||||
| Shareholders | Nature of shareholder | Proportion of shares held | Number of common shares held at period-end | Changes in reporting period | Amount of restricted common shares held | Amount of un-restricted common shares held | Number of share pledged/frozen | |||
| State of share | Amount | |||||||||
| Sinopharm Group Co., Ltd | State-owned corporate | 56.06% | 239,999,991 | 55,057,700 | 184,942,291 | |||||
| HTHK/CMG FSGUFP-CMG FIRST STATE CHINA GROWTH FD | Overseas corporate | 2.37% | 10,141,182 | 0 | 10,141,182 | |||||
| China Life Insurance Co., Ltd. – tradition –general insurance products -005L-CT001 Shen | Domestic non state-owned corporate | 2.02% | 8,654,592 | 0 | 8,654,592 | |||||
| China United Property Insurance Company | Domestic non state-owned corporate | 1.42% | 6,092,905 | 0 | 6,092,905 | |||||
| Limited – Traditional Insurance Products | |||||||||
| China National Pharmaceutical Foreign Trade Corp. | State-owned corporate | 1.24% | 5,323,043 | 5,323,043 | 0 | ||||
| GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED | Overseas corporate | 1.19% | 5,086,260 | 0 | 5,086,260 | ||||
| New China Life Insurance Co., Ltd. – Bonus – Individual bonuses - -018L-FH002 Shen | Domestic non state-owned corporate | 0.98% | 4,199,772 | 0 | 4,199,772 | ||||
| # Beijing Haoqing Fortune Investment Management Co., Ltd. – Haoqing Value Stable No.8 Investment Fund | Domestic non state-owned corporate | 0.96% | 4,118,716 | 0 | 4,118,716 | ||||
| UBS AG LONDON BRANCH | Overseas corporate | 0.89% | 3,818,884 | 0 | 3,818,884 | ||||
| Central Huijin Investment Ltd. | State-owned corporate | 0.89% | 3,804,400 | 0 | 3,804,400 | ||||
| Explanation on associated relationship among the aforesaid shareholders | Sinopharm Group Co., Ltd. and China National Pharmaceutical Foreign Trade Corporation have the same actual controller, which is China National Pharmaceutical Group Corporation. It is unknown that there exists no associated relationship or belongs to the 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 | |||||||||
| Shareholders | Amount of un-restrict common shares held at period- | Type of shares | |||||||
| end | Type | Amount | |
| Sinopharm Group Co., Ltd | 184,942,291 | RMB ordinary shares | 184,942,291 |
| HTHK/CMG FSGUFP-CMG FIRST STATE CHINA GROWTH FD | 10,141,182 | Domestically listed foreign shares | 10,141,182 |
| China Life Insurance Co., Ltd. – tradition –general insurance products -005L-CT001 Shen | 8,654,592 | RMB ordinary shares | 8,654,592 |
| China United Property Insurance Company Limited – Traditional Insurance Products | 6,092,905 | RMB ordinary shares | 6,092,905 |
| GUOTAI JUNAN SECURITIES(HONGKONG) LIMITED | 5,086,260 | Overseas listed foreign share | 5,086,260 |
| New China Life Insurance Co., Ltd. – Bonus – Individual bonuses - -018L-FH002 Shen | 4,199,772 | RMB ordinary shares | 4,199,772 |
| # Beijing Haoqing Fortune Investment Management Co., Ltd. – Haoqing Value Stable No.8 Investment Fund | 4,118,716 | RMB ordinary shares | 4,118,716 |
| UBS AG LONDON BRANCH | 3,818,884 | Domestically listed foreign shares | 3,818,884 |
| Central Huijin Investment Ltd. | 3,804,400 | RMB ordinary shares | 3,804,400 |
| Bank of China – Harvest Medical Care Securities Investment Fund | 2,943,225 | RMB ordinary shares | 2,943,225 |
| Expiation on associated relationship or consistent actors within the top 10 un-restrict shareholders and between top 10 un-restrict shareholders and top 10 shareholders | It is unknown that there exists no associated relationship or belongs to the consistent actionist among the other tradable shareholders regulated by the Management Measure of Information Disclosure on Change of Shareholding for Listed Companies. | ||
| Explanation on shareholders involving margin business about top ten common stock shareholders with un-restrict shares held (if applicable) (see note4) | Beijing Haoqing Fortune Investment Management Co., Ltd. – Haoqing Value Stable No.8 Investment Fund holds shares of the Company through margin trading and negotiable securities account that is 4,118,716 shares in total. | ||
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 √ NoThe top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the Company have nobuy-back agreement dealing in reporting period.
IV. Changes of controlling shareholders or actual controller
Changes of controlling shareholders in reporting period□ Applicable √ Not applicableChanges of controlling shareholders had no change in reporting period.Changes of actual controller in reporting period□ Applicable √ Not applicableChanges of actual controller in reporting period had no change in reporting period.
Section VII. Preferred Stock
□ Applicable √ Not applicableThe Company has no preferred stock in reporting period.
Section VIII. Directors, Supervisors and Senior Executives
I. Changes of shares held by directors, supervisors and senior executives
□ Applicable √ Not applicableShares held by directors, supervisors and senior executives have no changes in reporting period, found more details in Annual Report
2017.
II. Resignation and dismissal of directors, supervisors and senior executives
√ Applicable □ Not applicable
| Name | Title | Type | Date | Reasons |
| Xiong Chuxiong | Independent director | Expiration of the term of office | 2018-04-17 | Expiration of the office term for 7th BOD |
| Xiao Shengfang | Independent director | Expiration of the term of office | 2018-04-17 | Expiration of the office term for 7th BOD |
| Wang Huaiqin | Staff supervisor | Expiration of the term of office | 2018-04-17 | Expiration of the office term for 7th Supervisory Committee |
| Lian Wanyong | Director | Election | 2018-04-17 | New director of 8th BOD |
| Li Dongjiu | Director | Election | 2018-04-17 | New director of 8th BOD |
| Ou Yongliang | Independent director | Election | 2018-04-17 | New independent director of 8th BOD |
| Chen Shengqun | Independent director | Election | 2018-04-17 | New independent director of 8th BOD |
| Lang Baochun | Staff supervisor | Election | 2018-04-17 | New staff supervisor of 8th Supervisory Committee |
Section IX. Corporate Bond
Whether the Company has a corporation bonds that issuance publicly and listed on stock exchange and without due on the datewhen semi-annual report approved for released or fail to cash in full on dueNo
Section X Financial ReportingI.Report of the Auditors
Consolidated financial statements for the six months ended 30 June 2018 haven’t been audited.
CONSOLIDATED BALANCE SHEET
As at 30 June 2018
(Expressed in Renminbi Yuan)
| ASSETS | Note V | 30 June 2018 | 31 December 2017 |
| Current assets | |||
| Cash and bank balances | 1 | 3,943,595,560.58 | 4,191,655,438.51 |
| Notes receivable | 2 | 1,021,697,370.21 | 1,504,194,764.08 |
| Accounts receivable | 3 | 9,441,542,367.19 | 7,589,412,679.88 |
| Advances to suppliers | 4 | 456,680,224.23 | 516,778,117.47 |
| Interest receivable | 5 | 47,507.80 | 61,441.11 |
| Other receivables | 6 | 698,672,023.18 | 657,871,058.54 |
| Inventories | 7 | 4,245,354,625.22 | 3,781,858,238.12 |
| Other current assets | 8 | 91,769,652.56 | 78,947,644.62 |
| Total current assets | 19,899,359,330.97 | 18,320,779,382.33 | |
| Non-current assets | |||
| Financial assets available-for-sale | 9 | 13,685,760.00 | 13,685,760.00 |
| Long-term equity investments | 10 | 1,756,735,242.44 | 1,650,619,373.09 |
| Investment properties | 11 | 149,409,723.79 | 153,678,339.11 |
| Fixed assets | 12 | 550,102,564.29 | 551,710,434.02 |
| Construction in progress | 13 | 30,805,874.11 | 22,947,258.99 |
| Intangible assets | 14 | 314,816,778.00 | 325,751,430.88 |
| Goodwill | 15 | 830,729,152.75 | 830,729,152.75 |
| Long-term prepaid expenses | 16 | 261,074,227.40 | 252,247,050.79 |
| Deferred tax assets | 17 | 76,070,138.33 | 79,472,883.06 |
| Other non-current assets | 18 | 130,226,885.24 | 142,022,462.75 |
| Total non-current assets | 4,113,656,346.35 | 4,022,864,145.44 | |
| Total assets | 24,013,015,677.32 | 22,343,643,527.77 |
The accompanying notes form an integral part of these financial statements
CONSOLIDATED BALANCE SHEET (Continued)
As at 30 June 2018
(Expressed in Renminbi Yuan)
| LIABILITIES | Note V | 30 June 2018 | 31 December 2017 |
| Current liabilities | |||
| Short-term borrowings | 19 | 2,051,139,651.67 | 1,561,354,521.64 |
| Notes payable | 20 | 2,373,628,140.86 | 2,732,437,828.42 |
| Accounts payable | 21 | 7,230,024,480.35 | 6,144,221,000.10 |
| Advances from customers | 22 | 178,425,087.30 | 216,938,239.32 |
| Employee benefits payable | 23 | 150,685,442.26 | 215,656,526.54 |
| Tax payable | 24 | 223,351,730.76 | 223,752,900.24 |
| Interest payable | 25 | 10,378,213.91 | 7,311,819.65 |
| Dividends payable | 26 | 8,889,443.11 | 11,889,443.11 |
| Other payables | 27 | 1,024,176,704.11 | 1,011,128,397.26 |
| Non-current liabilities due within one year | 28 | 5,651,227.56 | 5,434,770.70 |
| Other current liabilities | 29 | 114,239.45 | 112,817.65 |
| Total current liabilities | 13,256,464,361.34 | 12,130,238,264.63 | |
| Non-current liabilities | |||
| Long-term borrowings | 30 | 31,600,000.00 | 31,600,000.00 |
| Long-term payables | 31 | 6,604,575.84 | 9,332,537.14 |
| Payable for specific projects | 33 | 800,000.00 | 800,000.00 |
| Deferred income | 34 | 121,995,380.11 | 125,082,372.53 |
| Long-term employee benefits payable | 32 | 1,636,000.00 | 1,777,000.00 |
| Deferred tax liabilities | 18 | 69,864,262.88 | 71,883,253.02 |
| Other non-current liabilities | 35 | 45,427,343.31 | 45,427,343.31 |
| Total non-current liabilities | 277,927,562.14 | 285,902,506.00 | |
| Total liabilities | 13,534,391,923.48 | 12,416,140,770.63 |
The accompanying notes form an integral part of these financial statements
CONSOLIDATED BALANCE SHEET (Continued)
As at 30 June 2018
(Expressed in Renminbi Yuan)
| SHAREHOLDERS’ EQUITY | Note V | 30 June 2018 | 31 December 2017 |
| Shareholders’ equity | |||
| Share capital | 36 | 428,126,983.00 | 428,126,983.00 |
| Capital surplus | 37 | 3,181,826,407.20 | 3,181,429,064.99 |
| Other equity instruments | - | - | |
| Surplus reserve | 38 | 214,063,491.50 | 214,063,491.50 |
| Retained earnings | 39 | 6,086,241,746.42 | 5,572,952,806.39 |
| Shareholders’ equity attributable to shareholders of the parent | 9,910,258,628.12 | 9,396,572,345.88 | |
| Non-controlling interests | 568,365,125.72 | 530,930,411.26 | |
| Total shareholders’ equity | 10,478,623,753.84 | 9,927,502,757.14 | |
| Total liabilities and shareholders’ equity | 24,013,015,677.32 | 22,343,643,527.77 |
The accompanying notes form an integral part of these financial statements
The financial statements have been signed by:
Legal representative: Financial controller: Head of Accounting Department
CONSOLIDATED INCOME STATEMENT
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
| Note V | For the six months ended 30 June 2018 | For the six months ended 30 June 2017 | ||
| Operating revenue | 40 | 20,779,166,699.67 | 20,524,807,669.57 | |
| Less: Operating costs | 40 | 18,367,643,723.84 | 18,364,034,450.83 | |
| Tax and surcharge | 41 | 56,620,527.25 | 63,185,620.86 | |
| Selling expenses | 42 | 1,273,588,756.07 | 1,110,446,938.17 | |
| Administrative expenses | 43 | 351,820,063.78 | 340,636,051.11 | |
| Finance costs | 44 | 57,541,544.32 | 44,498,778.76 | |
| Impairment loss | 45 | (517,852.98) | 96,757.16 | |
| Add: Investment income | 46 | 162,693,771.35 | 146,726,039.90 | |
| Incl: Investment income from associates | 162,662,271.35 | 146,676,039.90 | ||
| Gain on disposal of assets | 47 | 4,281,164.61 | 485,085.66 | |
| Other income | 48 | 10,589,212.57 | 7,958,493.67 | |
| Operating profits | 850,034,085.92 | 757,078,691.91 | ||
| Add: Non-operating income | 49 | 5,498,951.11 | 6,056,142.83 | |
| Incl: Gain from disposal of non-current assets | - | - | ||
| Less: Non-operating expenses | 50 | 1,797,292.80 | 3,559,988.09 | |
| Incl: Loss from disposal of non-current assets | - | - | ||
| Total profit | 853,735,744.23 | 759,574,846.65 | ||
| Less: Income taxes | 51 | 164,486,734.32 | 160,041,107.63 | |
| Net profit | 689,249,009.91 | 599,533,739.02 | ||
| Incl: Net profit of acquiree before business combinations involving enterprises under common control | - | - | ||
| Net Profit from continuing operations | 689,249,009.91 | 599,533,739.02 | ||
| Net profit attributable to shareholders of the parent | 641,727,034.93 | 556,125,318.19 | ||
| Profit or loss of non-controlling interests | 47,521,974.98 | 43,408,420.83 | ||
| Total comprehensive income | 689,249,009.91 | 599,533,739.02 | ||
| Incl: Total comprehensive income for the year attributable to owners of the parent | 641,727,034.93 | 556,125,318.19 | ||
| Total comprehensive income for the year attributable to non-controlling interests | 47,521,974.98 | 43,408,420.83 | ||
| Earnings per share | ||||
| Basic earnings per share | 1.50 | 1.30 | ||
| Diluted earnings per share | 1.50 | 1.30 | ||
The accompanying notes form an integral part of these financial statements
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
| 2018 | Shareholders’ equity attributable to shareholders of the parent | Non-controlling interests | Total equity | |||||
| Share capital | Other equity instrument | Capital surplus | Surplus reserve | Retained earnings | Subtotal | |||
| Closing balance of the preceding year | 428,126,983.00 | - | 3,181,429,064.99 | 214,063,491.50 | 5,572,952,806.39 | 9,396,572,345.88 | 530,930,411.26 | 9,927,502,757.14 |
| Business combination involving enterprises under common control | - | - | - | - | - | - | - | - |
| Opening balance of the current year | 428,126,983.00 | - | 3,181,429,064.99 | 214,063,491.50 | 5,572,952,806.39 | 9,396,572,345.88 | 530,930,411.26 | 9,927,502,757.14 |
| Movements in the current year | - | - | 397,342.21 | - | 513,288,940.03 | 513,686,282.24 | 37,434,714.46 | 551,120,996.70 |
| (1) Total comprehensive income | - | - | - | - | 641,727,034.93 | 641,727,034.93 | 47,521,974.98 | 689,249,009.91 |
| (2) Capital paid and reduced by owners | - | - | 397,342.21 | - | - | 397,342.21 | 26,721,512.76 | 27,118,854.97 |
| 1.Capital injection by owners | - | - | - | - | - | - | 24,381,200.00 | 24,381,200.00 |
| 2.Business combination involving enterprises under common control | - | - | - | - | - | - | - | - |
| 3.Others | - | - | 397,342.21 | - | - | 397,342.21 | 2,340,312.76 | 2,737,654.97 |
| (3) Profit distribution | - | - | - | - | (128,438,094.90) | (128,438,094.90) | (36,808,773.28) | (165,246,868.18) |
| 1.Distribution to equity owners | - | - | - | - | (128,438,094.90) | (128,438,094.90) | (36,808,773.28) | (165,246,868.18) |
| 2.Others | - | - | - | - | - | - | - | - |
| Closing balance of the current year | 428,126,983.00 | - | 3,181,826,407.20 | 214,063,491.50 | 6,086,241,746.42 | 9,910,258,628.12 | 568,365,125.72 | 10,478,623,753.84 |
The accompanying notes form an integral part of these financial statements
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For the year ended 31 December 2017
(Expressed in Renminbi Yuan)
| 2017 | Shareholders’ equity attributable to shareholders of the parent | Non-controlling interests | Total equity | |||||
| Share capital | Other equity instruments | Capital surplus | Surplus reserve | Retained earnings | Subtotal | |||
| Closing balance of the preceding year | 362,631,943.00 | 65,495,040.00 | 3,151,518,024.92 | 181,315,971.50 | 4,689,189,642.51 | 8,450,150,621.93 | 463,832,912.18 | 8,913,983,534.11 |
| Business combination involving enterprises under common control | - | - | 1,200,000.00 | - | 1,076,241.59 | 2,276,241.59 | 1,517,494.39 | 3,793,735.98 |
| Opening balance of the current year | 362,631,943.00 | 65,495,040.00 | 3,152,718,024.92 | 181,315,971.50 | 4,690,265,884.10 | 8,452,426,863.52 | 465,350,406.57 | 8,917,777,270.09 |
| Movements in the current year | 65,495,040.00 | (65,495,040.00) | 28,711,040.07 | 32,747,520.00 | 882,686,922.29 | 944,145,482.36 | 65,580,004.69 | 1,009,725,487.05 |
| (1) Total comprehensive income | - | - | - | - | 1,057,791,930.67 | 1,057,791,930.67 | 98,946,915.42 | 1,156,738,846.09 |
| (2) Capital paid and reduced by owners | 65,495,040.00 | (65,495,040.00) | 28,711,040.07 | - | (1,075,583.99) | 27,635,456.08 | 20,214,810.63 | 47,850,266.71 |
| 1.Capital injection by owners | 5,114,297.00 | (5,114,297.00) | - | - | - | - | 14,873,000.00 | 14,873,000.00 |
| 2.Significant reorganization | 60,380,743.00 | (60,380,743.00) | (3,430,029.00) | - | - | (3,430,029.00) | - | (3,430,029.00) |
| 3.Business combination involving enterprises under common control | - | - | (1,200,000.00) | - | (1,075,583.99) | (2,275,583.99) | (1,517,055.99) | (3,792,639.98) |
| 4.Business combination not involving enterprises under common control | - | - | - | - | - | - | 6,858,866.62 | 6,858,866.62 |
| 5.Others | - | - | 33,341,069.07 | - | - | 33,341,069.07 | - | 33,341,069.07 |
| (3) Profit distribution | - | - | - | 32,747,520.00 | (174,029,424.39) | (141,281,904.39) | (53,581,721.36) | (194,863,625.75) |
| 1. Withdrawal of statutory surplus reserve | - | - | - | 32,747,520.00 | (32,747,520.00) | - | - | - |
| 2.Distribution to equity owners | - | - | - | - | (141,281,904.39) | (141,281,904.39) | (53,581,721.36) | (194,863,625.75) |
| Closing balance of the current year | 428,126,983.00 | - | 3,181,429,064.99 | 214,063,491.50 | 5,572,952,806.39 | 9,396,572,345.88 | 530,930,411.26 | 9,927,502,757.14 |
The accompanying notes form an integral part of these financial statements
CONSOLIDATED CASH FLOW STATEMENT
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
| Note V | For the six months ended 30 June 2018 | For the six months ended 30 June 2017 | |
| 1.CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Cash received from sales of good or rendering of services | 22,055,082,715.59 | 21,970,884,180.09 | |
| Tax refunds | 1,593,193.21 | 5,740,675.89 | |
| Cash receipts related to other operating activities | 52 | 311,984,787.60 | 98,022,828.67 |
| Sub-total of cash inflows from operating activities | 22,368,660,696.40 | 22,074,647,684.65 | |
| Cash paid for goods and services | 19,799,894,631.80 | 19,734,413,196.28 | |
| Cash paid to and on behalf of employees | 956,322,585.28 | 864,562,267.50 | |
| Cash paid for all types of taxes | 548,616,793.36 | 601,078,629.47 | |
| Cash payments related to other operating activities | 52 | 838,468,976.76 | 646,256,160.00 |
| Sub-total of cash outflows from operating activities | 22,143,302,987.20 | 21,846,310,253.25 | |
| Net cash flows from operating activities | 53 | 225,357,709.20 | 228,337,431.40 |
| 2.CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Cash received from recovery of investments | - | - | |
| Cash received from returns on investments | 78,825,446.85 | 58,647,191.65 | |
| Net cash received from disposal of fixed assets, intangible assets and other long-term assets | 6,064,099.87 | 171,059.95 | |
| Net cash received from disposal of subsidiaries and other business units | - | - | |
| Cash receipts related to other investing activities | 52 | 48,766,145.15 | 87,027,340.19 |
| Sub-total of cash inflows from investing activities | 133,655,691.87 | 145,845,591.79 |
The accompanying notes form an integral part of these financial statements
CONSOLIDATED CASH FLOW STATEMENT (Continued)
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
| Note V | For the six months ended 30 June 2018 | For the six months ended 30 June 2017 | |
| 2.CASH FLOWS FROM INVESTING ACTIVITIES(Continued) | |||
| Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | 97,867,494.61 | 82,123,615.39 | |
| Cash paid for acquisition of investments | 10,000,000.00 | 71,120,000.00 | |
| Net cash paid for acquisition of subsidiaries and other business units | 52 | - | 14,706,789.56 |
| Net cash paid from disposal of subsidiaries and other business units | 52 | - | - |
| Cash payments related to other investing activities | 52 | 43,999,800.00 | 70,175,078.90 |
| Sub-total of cash outflows from investing activities | 151,867,294.61 | 238,125,483.85 | |
| Net cash flows from investing activities | (18,211,602.74) | (92,279,892.06) | |
| 3.CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Cash proceeds from investments by others | 11,781,200.00 | 9,075,000.00 | |
| Incl: Cash received from capital contributions from non-controlling shareholders of subsidiaries | 11,781,200.00 | 9,075,000.00 | |
| Cash received from borrowings | 40,775,440.04 | 233,533,871.46 | |
| Cash receipts related to other financing activities | 53 | 83,745,164.60 | 90,932,396.75 |
| Sub-total of cash inflows from financing activities | 136,301,804.64 | 333,541,268.21 | |
| Cash repayments for debts | 79,670,200.30 | 201,503,745.30 | |
| Cash payments for distribution of dividends or profit and interest expenses | 226,149,759.15 | 215,828,281.10 | |
| Incl: Profit and dividends paid to non-controlling shareholders of subsidiaries | 40,392,215.98 | 30,408,202.08 | |
| Cash payments related to other financing activities | 53 | 118,725,719.23 | 178,991,574.67 |
| Sub-total of cash outflows from financing activities | 424,545,678.68 | 596,323,601.07 | |
| Net cash flows from financing activities | (288,243,874.04) | (262,782,332.86) |
The accompanying notes form an integral part of these financial statements
CONSOLIDATED CASH FLOW STATEMENT (Continued)
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
| Note V | For the six months ended 30 June 2018 | For the six months ended 30 June 2017 | |
| 4.EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 314,863.47 | - | |
| 5.NET INCREASE IN CASH AND CASH EQUIVALENTS | 53 | (80,782,904.11) | (126,724,793.52) |
| Add: Cash and cash equivalents at beginning of the year | 3,673,498,691.48 | 3,150,915,425.49 | |
| 6.CASH AND CASH EQUIVALENTS AT END OF YEAR | 53 | 3,592,715,787.37 | 3,024,190,631.97 |
The accompanying notes form an integral part of these financial statements
COMPANY BALANCE SHEET
As at 30 June 2018
(Expressed in Renminbi Yuan)
| ASSETS | Note XIV | 30 June 2018 | 31 December 2017 |
| Current assets | |||
| Cash and bank balances | 1,521,055,158.90 | 1,776,696,342.87 | |
| Notes receivable | 63,423,575.48 | 64,799,618.07 | |
| Accounts receivable | 1 | 553,496,096.71 | 480,467,760.92 |
| Advances to suppliers | 1,230,913.18 | 1,138,312.26 | |
| Interest receivable | 1,861,132.76 | 1,844,294.10 | |
| Dividends receivable | - | - | |
| Other receivables | 2 | 1,629,938,110.28 | 1,516,037,945.71 |
| Inventories | 193,931,164.48 | 172,022,676.96 | |
| Other current assets | 39,482.38 | 788,964.90 | |
| Total current assets | 3,964,975,634.17 | 4,013,795,915.79 | |
| Non-current assets | |||
| Long-term equity investments | 3 | 7,297,085,972.70 | 7,180,306,084.56 |
| Investment properties | 2,359,843.19 | 2,763,831.92 | |
| Fixed assets | 17,398,259.52 | 13,831,103.54 | |
| Construction in progress | - | - | |
| Intangible assets | 1,501,299.51 | 1,287,775.78 | |
| Long-term deferred expenses | 5,003,173.65 | 5,543,217.86 | |
| Deferred tax assets | 3,293,246.89 | 2,764,724.75 | |
| Other non-current assets | 67,397,698.11 | 71,808,611.00 | |
| Total non-current assets | 7,394,039,493.57 | 7,278,305,349.41 | |
| Total assets | 11,359,015,127.74 | 11,292,101,265.20 |
The accompanying notes form an integral part of these financial statements
COMPANY BALANCE SHEET (Continued)
As at 30 June 2018
(Expressed in Renminbi Yuan)
| LIABILITIES | 30 June 2018 | 31 December 2017 | |
| Current liabilities | |||
| Short-term borrowings | 694,424,900.71 | 707,000,000.00 | |
| Notes payable | 227,485,804.97 | 239,563,961.30 | |
| Accounts payable | 462,200,812.82 | 434,886,685.35 | |
| Advances from customers | 3,941,540.07 | 1,912,503.90 | |
| Employee benefits payable | 24,654,592.33 | 33,592,851.93 | |
| Tax payables | 41,130,974.27 | 42,386,907.00 | |
| Interest payable | 547,681.64 | 669,533.78 | |
| Other payables | 1,056,082,762.67 | 1,415,053,655.18 | |
| Non-current liabilities due within one year | - | - | |
| Other current liabilities | 114,239.45 | 112,817.65 | |
| Total current liabilities | 2,510,583,308.93 | 2,875,178,916.09 | |
| Non-current liabilities | |||
| Long-term borrowings | 31,600,000.00 | 31,600,000.00 | |
| Payables for specific projects | 800,000.00 | 800,000.00 | |
| Deferred income | 1,824,963.62 | 2,054,250.00 | |
| Long-term employee benefits payable | - | - | |
| Deferred tax liabilities | 3,773,319.00 | 3,773,319.00 | |
| Total non-current liabilities | 37,998,282.62 | 38,227,569.00 | |
| Total liabilities | 2,548,581,591.55 | 2,913,406,485.09 |
The accompanying notes form an integral part of these financial statements
COMPANY BALANCE SHEET (Continued)
As at 30 June 2018
(Expressed in Renminbi Yuan)
| SHAREHOLDERS’ EQUITY | 30 June 2018 | 31 December 2017 | |
| Shareholders’ equity | |||
| Share capital | 428,126,983.00 | 428,126,983.00 | |
| Capital surplus | 4,407,488,826.34 | 4,407,091,484.13 | |
| Surplus reserves | 214,063,491.50 | 214,063,491.50 | |
| Other equity instruments | - | - | |
| Retained earnings | 3,760,754,235.35 | 3,329,412,821.48 | |
| Total shareholders’ equity | 8,810,433,536.19 | 8,378,694,780.11 | |
| Total liabilities and shareholders’ equity | 11,359,015,127.74 | 11,292,101,265.20 |
The accompanying notes form an integral part of these financial statements
COMPANY INCOME STATEMENT
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
| Note XIV | For the six months ended 30 June 2018 | For the six months ended 30 June 2017 | |
| Operating revenue | 4 | 1,687,621,355.83 | 1,658,600,818.96 |
| Less: Operating costs | 4 | 1,614,717,473.91 | 1,600,647,589.46 |
| Tax and surcharge | 2,016,368.93 | 5,062,317.16 | |
| Selling expenses | 25,894,795.45 | 22,844,614.29 | |
| Administrative expenses | 33,679,106.75 | 24,917,988.21 | |
| Finance costs | (19,369,880.08) | (37,042,967.55) | |
| Impairment loss | 623,542.31 | (32,604.71) | |
| Add: Investment income | 5 | 534,840,744.46 | 508,360,741.85 |
| Incl: Investment income from associates | 173,326,290.14 | 155,838,740.45 | |
| Gain on disposal of assets | - | 1,087.38 | |
| Other income | 1,299,345.14 | 641,300.00 | |
| Operating profits | 566,200,038.16 | 551,207,011.33 | |
| Add: Non-operating income | 33.08 | 184,531.96 | |
| Incl: Gain from disposal of non-current assets | - | - | |
| Less: Non-operating expenses | 127,688.63 | 1,011,760.15 | |
| Incl: Loss from disposal of non-current assets | - | - | |
| Total profit | 566,072,382.61 | 550,379,783.14 | |
| Less: Income taxes | 6,292,873.84 | 21,856,015.57 | |
| Net profit | 559,779,508.77 | 528,523,767.57 | |
| Net Profit from continuing operations | 559,779,508.77 | 528,523,767.57 | |
| Total comprehensive income | 559,779,508.77 | 528,523,767.57 |
The accompanying notes form an integral part of these financial statements
COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
| 2018 | Share capital | Other equity instruments | Capital surplus | Surplus reserve | Retained earnings | Total equity |
| Closing balance of the preceding year | 428,126,983.00 | - | 4,407,091,484.13 | 214,063,491.50 | 3,329,412,821.48 | 8,378,694,780.11 |
| Others | - | - | - | - | - | - |
| Opening balance of the current year | 428,126,983.00 | - | 4,407,091,484.13 | 214,063,491.50 | 3,329,412,821.48 | 8,378,694,780.11 |
| Movements in the current year | - | - | 397,342.21 | - | 431,341,413.87 | 431,738,756.08 |
| (1) Total comprehensive income | - | - | - | - | 559,779,508.77 | 559,779,508.77 |
| (2) Capital paid and reduced by owners | - | - | 397,342.21 | - | - | 397,342.21 |
| 1. Capital injection by owners | - | - | - | - | - | - |
| 2. Significant reorganization | - | - | - | - | - | - |
| 3. Others | - | - | 397,342.21 | - | - | 397,342.21 |
| (3) Profit distribution | - | - | - | - | (128,438,094.90) | (128,438,094.90) |
| 1. Distribution to owners | - | - | - | - | (128,438,094.90) | (128,438,094.90) |
| Closing balance of the current year | 428,126,983.00 | - | 4,407,488,826.34 | 214,063,491.50 | 3,760,754,235.35 | 8,810,433,536.19 |
The accompanying notes form an integral part of these financial statements
COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Continued)
For the Year ended 31 December 2017
(Expressed in Renminbi Yuan)
| 2017 | Share capital | Other equity instruments | Capital surplus | Surplus reserve | Retained earnings | Total equity |
| Closing balance of the preceding year | 362,631,943.00 | 65,495,040.00 | 4,381,845,619.03 | 181,315,971.50 | 2,829,823,727.08 | 7,821,112,300.61 |
| Others | - | - | - | - | - | - |
| Opening balance of the current year | 362,631,943.00 | 65,495,040.00 | 4,381,845,619.03 | 181,315,971.50 | 2,829,823,727.08 | 7,821,112,300.61 |
| Movements in the current year | 65,495,040.00 | (65,495,040.00) | 25,245,865.10 | 32,747,520.00 | 499,589,094.40 | 557,582,479.50 |
| (1) Total comprehensive income | - | - | - | - | 673,618,518.79 | 673,618,518.79 |
| (2) Capital paid and reduced by owners | 65,495,040.00 | (65,495,040.00) | 25,245,865.10 | - | - | 25,245,865.10 |
| 1. Capital injection by owners | 5,114,297.00 | (5,114,297.00) | - | - | - | - |
| 2. Significant reorganization | - | - | - | - | - | - |
| 3. Others | 60,380,743.00 | (60,380,743.00) | 25,245,865.10 | - | - | 25,245,865.10 |
| (3) Profit distribution | - | - | - | 32,747,520.00 | (174,029,424.39) | (141,281,904.39) |
| 1. Transferred from surplus reserve | - | - | - | 32,747,520.00 | (32,747,520.00) | - |
| 2. Distribution to owners | - | - | - | ( - | (141,281,904.39) | (141,281,904.39) |
| Closing balance of the current year | 428,126,983.00 | - | 4,407,091,484.13 | 214,063,491.50 | 3,329,412,821.48 | 8,378,694,780.11 |
The accompanying notes form an integral part of these financial statements
COMPANY CASH FLOW STATEMENT
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
| For the six months ended 30 June 2018 | For the six months ended 30 June 2017 | ||
| 1.CASH FLOWS FROM OPERATING ACTIVITIES | |||
| Cash received from sales of good or rendering of services | 1,787,065,555.60 | 1,691,499,935.88 | |
| Cash receipts related to other operating activities | 43,943,301.92 | 16,864,750.56 | |
| Sub-total of cash inflows from operating activities | 1,831,008,857.52 | 1,708,364,686.44 | |
| Cash paid for goods and services | 1,655,107,446.18 | 1,590,317,986.60 | |
| Cash paid to and on behalf of employees | 44,855,325.83 | 40,727,189.33 | |
| Cash paid for all types of taxes | 18,706,775.51 | 28,888,466.38 | |
| Cash payments related to other operating activities | 36,183,479.25 | 17,091,927.42 | |
| Sub-total of cash outflows from operating activities | 1,754,853,026.77 | 1,677,025,569.73 | |
| Net cash flows from operating activities | 76,155,830.75 | 31,339,116.71 | |
| 2. CASH FLOWS FROM INVESTING ACTIVITIES | |||
| Cash received from returns of investments | 187,137,437.23 | 202,011,829.53 | |
| Cash receipts related to other investing activities | 857,940,000.00 | 1,979,269,200.00 | |
| Sub-total of cash inflows from investing activities | 1,045,077,437.23 | 2,181,281,029.53 | |
| Cash paid for acquisition of fixed assets, intangible assets and other long-term assets | 6,044,462.78 | 3,921,020.07 | |
| Cash paid for investment | 10,000,000.00 | 1,019,000,000.00 | |
| Net cash paid for purchasing subsidiaries and other business | - | 16,840,000.00 | |
| Cash payments related to other investing activities | 1,051,642,980.00 | 1,424,861,720.90 | |
| Sub-total of cash outflows from investing activities | 1,067,687,442.78 | 2,464,622,740.97 | |
| Net cash flows from investing activities | (22,610,005.55) | (283,341,711.44) | |
The accompanying notes form an integral part of these financial statements
COMPANY CASH FLOW STATEMENT (Continued)
For the six months ended 30 June 2018
(Expressed in Renminbi Yuan)
| For the six months ended 30 June 2018 | For the six months ended 30 June 2017 | ||
| 3. CASH FLOWS FROM FINANCING ACTIVITIES | |||
| Cash received from borrowings | 10,000,000.00 | 41,600,000.00 | |
| Cash receipts related to other financing activities | 8,065,884,436.80 | 7,272,687,714.06 | |
| Sub-total of cash inflows from financing activities | 8,075,884,436.80 | 7,314,287,714.06 | |
| Cash repayments for debts | 10,000,000.00 | 41,600,000.00 | |
| Cash payments for distribution of dividends or profit and interest expenses | 144,898,008.66 | 143,087,008.08 | |
| Cash payments related to other financing activities | 8,230,488,300.78 | 7,131,182,482.56 | |
| Sub-total cash outflows from financing activities | 8,385,386,309.44 | 7,315,869,490.64 | |
| Net cash flows from financing activities | (309,501,872.64) | (1,581,776.58) | |
| 4.EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS | 314,863.47 | - | |
| 5. NET INCREASE IN CASH AND CASH EQUIVALENTS | (255,641,183.97) | (253,584,371.31) | |
| Add: Cash and cash equivalents at beginning of the year | 1,776,696,342.87 | 1,342,041,409.86 | |
| 6. CASH AND CASH EQUIVALENTS AT END OF YEAR | 1,521,055,158.90 | 1,088,457,038.55 |
The accompanying notes form an integral part of these financial statements
Notes to financial statements
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
I Profile of the Company
(1) Historical development and basic information
As approved by the People’s Government of Shenzhen (SFBF (1993) No.356), China National AccordMedicines Corporation Ltd. (hereinafter referred to as the “the Company”), formerly known as ShenzhenHealth Mineral Water Corp., Ltd., was registered as a joint stock liability limited company on 1 February1993 through stock transformation. In March 1993, with the approval from the Shenzhen Branch of thePeople’s Bank of China, the Company issued 30 million A shares (including 16.5 million public shares,3.5 million employee shares and 10 million corporation shares) and 20 million B shares. After thisissuance, the Company’s share capital was RMB105 million. Through convert capital surplus into sharecapital, bonus issues and issuance of shares for years, the share capital of the Company increased toRMB428,126,983 as at 30 June 2018.
In November 2000, the Company entered into an Assets Exchange Agreement with ShenzhenInvestment Management Company, the original major shareholder of the Company, to exchange all theassets and liabilities of the Company as of 31 August 2000 for Shenzhen Investment ManagementCompany’s 100% equity interests in 11 pharmaceutical companies and certain properties as well as 51%equity interests in Shenzhen Tefa Modern Computer Co., Ltd. The above assets exchange proposal wasapproved by shareholders in the Second Extraordinary General Meeting on December 29, 2000. Thetransaction was completed on 8 January 2001.
On 18 February 2004, the Company’s original major shareholder, Shenzhen Investment ManagementCompany, entered into a Stock Transfer Agreement with Sinopharm Group Co., Ltd. (hereinafter referredto as “Sinopharm Group”) to transfer its 43.33% shares in the Company to Sinopharm Group. The legalprocedures of the above equity transfer were completed on 9 December 2004. At the same time, asapproved 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), thenature of these shares was changed from state-owned stock to state-owned legal entity stock andSinopharm Group became the largest shareholder of the Company.
On 14 April 2006, the Company’s proposal on reformation of segregated stocks was approved. To gainliquidity for the restricted stocks of the Company, the holders of the restricted stocks of the Companyagreed to pay the following consideration: based on the stock registration as of 27 April 2006, theCompany issued bonus shares on 28 April 2006 at the ratio of 3 shares to every 10 A shares toliquidated A-shareholders which went public on the same day. After this bonus issue, the total number ofshares of the Company remained unchanged with corresponding changes in the composition ofshareholdings.
On March 14 2014, the company issued 74,482,543 ordinary shares (A shares) through the non-publicoffering. Par value per share is RMB1 yuan. The shares shall not be transferred within 36 months sincethe issued day. The total number of shares of the Company was 362,631,943 since the date of issue.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
I Profile of the Company (Continued)
(1) Historical development and basic information (Continued)
As of 31 October 2016, the company issued RMB65,495,040.00 ordinary shares (A shares) through thenon-public offering. Par value per share is RMB1 yuan. Through the non-public offering, the Companyacquired the companies under common control, including Sinopharm Holding Guoda Pharmacy Co.,
Ltd. (“Guoda Pharmacy”), Foshan Nanhai Medicine Group Co., Ltd.(“Foshan Nanhai”),GuangdongSouth Pharmaceutical Foreign Trade Co., Ltd. (“South Pharma & Trade), Guangdong Dong FangUptodate & Special Medicines Co., Ltd. (“ Guangdong Uptodate & Special Medicines”) by issuingshares and raised supporting funds by issuing shares to Ping An Asset Management Co., Ltd.(“Ping AnAsset Management”) to acquire non-controlling interest of South Pharma & Trade. The relevant shares
were successfully issued and listed on 5 January 2017.
As of 30 June 2018, the total share capital was RMB428,126,983.
The Company is registered with Shenzhen Administration for Industry & Commerce. Its Uniform SocialCredit Code is 91440300192186267U. The operation period of the Company is from 2 August 1986 tothe long term. The registered capital of the Company is RMB428,126,983. The legal representative ofthe Company is Lin Zhaoxiong.
The approved scope of business of the Company and its subsidiaries (together “the Group”) includes:
the wholesale of traditional Chinese medicine preparations, bulk pharmaceutical drugs, chemicalpreparations, bulk antibiotic drugs, antibiotic preparations, biochemical drugs, biological products(including vaccines and in vitro diagnostic reagents psychotropic drugs and preparations, narcotic drugs,toxic drugs for medical use, protein assimilation preparation and peptide hormones; trade of dietarysupplement; research, development and consultation services of pharmaceutical packaging materialsand pharmaceutical industry products; industrial investment holding; domestic trade; material supplyand marketing industry (other than special licensing); sale of ambulances; trade of second-class andthird- class medical equipment; project investment; property management and lease of self-ownedproperties; pharmacovigilance and medical information consulting; parking operation; logistics andrelated services; package agency business; logistic design; import and export services (excludingprojects that are prohibited by the country; limited projects has to be approved before operating).
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
I Profile of the Company (Continued)
(2) The Group’s parent and ultimate parent company is Sinopharm Group and China National
Pharmaceutical Group Corporation respectively.
(3) These financial statements were authorized for issue by the board of directors of the Company
on 24 Augustl 2018.
II Basis of preparation
The financial statements were prepared in accordance with the Basic Standard and specific standardsof the Accounting Standards for Business Enterprises issued by the Ministry of Finance on 15 February2006 and the specific accounting standards and the relevant regulations issued thereafter (hereafter
collectively referred to as the “Accounting Standards for Business Enterprises” or “CAS”), and the
disclosure requirements in the Preparation Convention of Information Disclosure by Companies
Offering Securities to the Public No.15 – General Rules on Financial Reporting issued by the China
Securities Regulatory Commission.
These financial statements are prepared on a going concern basis.
Except for certain financial instruments, the financial statements have been prepared using historicalcost as the principle of measurement. Where assets are impaired, provisions for asset impairment aremade in accordance with the relevant requirements.
The Group has made accounting policies and accounting estimates according to its own operation andproduction characteristics, which are mainly reflected in the bad debt provision for account receivables
(NoteⅢ(10)), inventory costing methods (NoteⅢ(11)), depreciation methods for fixed assets andamortization method for intangible assets (NoteⅢ(14),Note III(17)), judgement basis for capitalization ofdevelopment costs (NoteⅢ(17)) , impairment of long-term assets (NoteⅢ(20)), revenue recognition(NoteⅢ(24)).
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates
(1) Statement of compliance with the Accounting Standards for Business Enterprises
The financial statements of the Company for the period ended 30 June 2018 are in compliance with theAccounting Standards for Business Enterprises, and truly and completely present the financial positionof the Group and the Company as of 30 June 2018 and the operating results, cash flows and otherinformation of the Group and the Company for the year then ended.
(2) Accounting year
The Company’s accounting year starts on 1 January and ends on 31 December.
(3) Functional currency
The functional currency is Renminbi (RMB).
(4) Business combinations
(a) Business combinations involving entities under common control
Assets and liabilities (including goodwill arising from ultimate controlling shareholder’s acquisition of the
party being absorbed) that are obtained by the absorbing party in a business combination shall bemeasured 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 theconsideration paid for the combination (or the aggregate face value of shares issued as consideration)shall be adjusted to share premium under capital surplus. If the capital surplus is not sufficient to absorb
the difference, any excess shall be adjusted against retained earnings. The transaction costs of issuing
equity securities or debt securities for business combination are recognized at the initial recognitionamount of equity securities or debt securities.
(b) Business combinations involving enterprises not under common control
The cost of combination and identifiable net assets obtained by the acquirer in a business combinationare measured at fair value at the acquisition date. Where the cost of the combination exceeds the
acquirer’s interest in the fair value of the acquirer’s identifiable net assets, the difference is recognizedas goodwill; where the cost of combination is lower than the acquirer’s interest in the fair value of theacquirer’s identifiable net assets, the difference is recognized in profit or loss for the current period.
Costs directly attributable to the combination are included in profit or loss in the period in which they areincurred. Transaction costs associated with the issue of equity or debt securities for the businesscombination are included in the initially recognized amounts of the equity or debt securities.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(4) Business combinations (Continued)
Where the business combination not involving enterprises under common control which is achieved in
stages, the acquirer’s previously held equity interests in the acquiree are remeasured at the fair value
on the acquisition date, with the difference between fair value and carrying amount recognized as
investment income for the current period. If the acquirer’s previously held equity interests of theacquiree 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 the acquirer’s previously held other equity instruments, the fair value of OCI accumulated
before the acquisition date are transferred into retained earnings.
(5) Preparation of consolidated financial statements
The consolidated financial statements comprise the financial statements of the Company and all of itssubsidiaries.
Subsidiaries are consolidated from the date on which the Group obtains control and are de-consolidated from the date that such control ceases. For a subsidiary that is acquired in a businesscombination involving enterprises under common control, it is included in the consolidated financialstatements from the date when it, together with the Company, comes under common control of theultimate controlling party. The portion of the net profits realized before the combination date ispresented separately in the consolidated income statement.
In preparing the consolidated financial statements, where the accounting policies and the accountingperiods of the Company and subsidiaries are inconsistent, the financial statements of the subsidiariesare adjusted in accordance with the accounting policies and the accounting period of the Company. Forsubsidiaries acquired from business combinations involving enterprises not under common control, theindividual financial statements of the subsidiaries are adjusted based on the fair value of the identifiablenet assets at the acquisition date.
All significant intra-group balances, transactions and unrealized profits are eliminated in the
consolidated financial statements. The portion of a subsidiary’s equity and the portion of a subsidiary’s
net profits, losses and comprehensive income for the period not attributable to the Company arerecognized as non-controlling interests and presented separately in the consolidated financialstatements within equity, net profits and total comprehensive income respectively. Unrealized gain orloss from selling assets to subsidiaries fully offsets the net income attributable to equity holders of thecompany. Unrealized gain or loss from purchasing assets from subsidiaries offsets the net incomeattributable to equity holders of the company and attributable to the non-controlling interest by thedistribution proportion regarding the Company and the subsidiary. Unrealized gain or loss fromtransaction between subsidiaries offsets the net income attributable to equity holders of the companyand attributable to the non-controlling interest by the distribution proportion regarding the Company andthe selling side of the subsidiaries. If different recognition perspectives for the same transaction arise
within different accounting identities setup, there is an adjustment for the transaction from the Group’s
perspective.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(6) Acquisition of non-controlling interests in controlled subsidiaries
The Company acquires equity from the minority shareholders after taking control of the subsidiary, in
the consolidated financial statements, the subsidiary’s assets, liabilities should be measured from the
combination or acquisition date. The difference between the carrying amount of acquisition of non-controlling interest and the net assets proportion calculated by the original share percentage since theacquisition date should be recognized in capital surplus. If the capital surplus is insufficient to dilute, theretained earnings shall be adjusted.
(7) Cash and cash equivalents
Cash and cash equivalent comprise cash on hand, deposits that can be readily drawn on demand, andshort-term and highly liquid investments that are readily convertible to known amounts of cash and aresubject to an insignificant risk of changes in value.
(8) Foreign currency translation
Foreign currency transact translated into RMB using the exchange rates prevailing at the dates of thetransactions.
At the balance sheet date, monetary items denominated in foreign currencies are translated into RMBusing the spot exchange rates on the balance sheet date. Exchange differences arising from thesetranslations are recognized in profit or loss for the current period, except for those attributable to foreigncurrency borrowings that have been taken out specifically for the acquisition or construction ofqualifying assets, which are capitalized as part of the cost of those assets. Non-monetary itemsdenominated in foreign currencies that are measured at historical costs are translated at the balancesheet date using the spot exchange rates at the date of the transactions. The effect of exchange ratechanges on cash is presented separately in the cash flow statement.
(9) Financial instruments
(a) Financial assets
(i) Classification of financial assets
Financial assets are classified into the following categories at initial recognition, including: financialassets measured at amortised cost, financial assets measured at fair value through othercomprehensive income, and financial assets measured at fair value through profit or loss. At initialrecognition, the Group measures a financial assets at its fair value plus, in the case of a financial assetnot at a fair value through profit or loss, transaction costs that are directly attributable to the acquisitionof the financial asset.
Transaction expenses of financial assets measured at fair value through profit or loss are expensed in
profit or loss, and those of others are included in receivables’ original book value.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(9) Financial instruments (Continued)
(a) Financial assets (Continued)
(ii) Recognition and measurement
Subsequent measurement of financial assets depends on the Group’s business model for managing the
asset and the cash flow characterisitics of the asset.
Financial assets measured at amortised cost
Assets that are held for collection of contractual cash flows where those cash flows represent solelypayments of principal and interest are measured at amortised cost. A gain or loss on a debt investmentthat is measured at amortised cost and is not part of a hedging relationship is recognized in profit orloss when the asset is derecognized or impaired. Interest income from thses financial asset is includedin finance income using the effective interest rate method.
Financial assets measured at fair value through other comprehensive income
Where the Group’s management has elected to present fair value gains and losses on equity
investments in other comprehensive income, there is no subsequence reclassification of fair value gainsand losses to profit or loss. Dividends from such investments continue to be recognized in investment
income when the Group’s right to receive payments is established.
Financial assets measured subsequently at fair value through profit or loss
For this kind of fincial asset, it measured subsequently at fair value, and the movement of fair value isrecorded in profit or loss
(iii) Impairment of financial assets
The Group assesses the expected credit losses associated with its financial assets measured atamortised cost on a forward looking basis. The impairment methodology applied depends on whetherthere has been a significant increase in credit risk .
For trade receivables, the Group applies the simplified approach, which requires expected lifetimelosses to be recognized from initial recognition of the receivables.
(iv) Derecognition of financial assets
A financial asset is derecognized when any of the following criteria is met: (i) the contractual rights toreceive the cash flows from the financial asset expire; (ii) the financial asset has been transferred andthe Group transfers substantially all the risks and rewards of ownership of the financial asset to thetransferee; or (iii) the financial asset has been transferred and the Group has not retained control of thefinancial asset, although the Group neither transfers nor retains substantially all the risks and rewards ofownership of the financial asset.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(9) Financial instruments (Continued)
(a) Financial assets (Continued)
(iv) Derecognition of financial assets (Continued)
On derecognition of a financial asset, the difference between the carrying amount and the sum of theconsideration received and the cumulative changes in fair value that had been recognized directly inequity is recognized in profit or loss.
(b) Financial liabilities
Financial liabilities are classified into the following categories at initial recognition, including financialliabilities measured at fair value through profit or loss, and other financial liabilities. Transactionexpenses of financial liabilities measured at fair value through profit or loss are expensed in profit or
loss, and those of others are included in receivables’ original book value.
Subsequent measurement of financial liabilities depends on their catagories:
Other financial liabilitiesFor other fincial liabilities, it measured subsequently at amortized value.
(c) Offset of financial instruments
A financial asset and a financial liability shall be offset and the net amount presented in the balancesheet when both of the following conditions are satisfied: 1) the enterprise has a legal right to set off therecognized amounts and the legal right is currently enforceable; 2) the enterprise intends either to settleon a net basis or to realize the financial asset and settle the financial liability simultaneously.
(d) Transfer of financial assets
A financial asset is derecognized when the Group has transferred substantially all the risks and rewardsof the asset to the referee. A financial asset is not derecognized when the Group retains substantially allthe risks and rewards of the asset.
When the Group has neither transferred nor retained substantially all the risks and rewards of the asset,it either i) derecognizes the transferred asset when it has transferred control of the asset; or ii)continues to recognize the transferred asset to the extent of the Group's continuing involvement, inwhich case, the Group also recognizes an associated liability.
Continuing involvement that takes the form of a guarantee over the transferred financial asset ismeasured at the lower of the original carrying amount of the asset and the guarantee amount. Theguarantee amount is the maximum amount of consideration that the Group could be required to repay.III Summary of significant accounting policies and accounting estimates (Continued)
(10) Receivables
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Receivables comprise notes receivable, accounts receivable and other receivables. Accountsreceivable arising from the sale of goods or rendering of services are initially recognized at fair value ofthe contractual payments from the buyers or service recipients.
(a) Receivables with amounts that are individually significant and subject to separate assessment
for provision for bad debts
Receivables with amounts that are individually significant are subject to assessment forimpairment on the individual basis. If there exists objective evidence that the Group will not beable to collect the amount under the original terms, a provision for impairment of that receivableis made.
The criterion for determining individually significant amounts is that any individual amount ismore than RMB5 million.
The method of providing for bad debts for those individually significant amounts is as follows:
the amount of the present value of the future cash flows expected to be derived from thereceivable below its carrying amount.
(b) Receivables that are subject to provision for bad debts on the grouping basis
Receivables with amounts that are not individually significant and those receivables that havebeen individually assessed for impairment and have not been found impaired are classified intocertain groupings based on their credit risk characteristics. The provision for bad debts isdetermined based on the historical loss experience for the groupings of receivables with similarcredit risk characteristics, taking into consideration of the current circumstances.
A provision for impairment of the receivables is made based on the ageing of receivables at thefollowing percentage:
| Provision ratios used for accounts receivable | Provision ratios used for other receivables | |
| Within 1 year | 0-5% | 0-5% |
| 1 to 2 years | 5-10% | 5-10% |
| 2 to 3 years | 10-30% | 10-30% |
| 3 to 4 years | 20-50% | 20-50% |
| 4 to 5 years | 20-80% | 20-80% |
| More than 5 years | 20-100% | 20-100% |
(c) Receivables with amounts that are not individually significant but subject to separate
assessment for provision for bad debts
The reason for making separate assessment for provision for bad debts is that there existsobjective evidence that the Group will not be able to collect the amount under the original termsof the receivable.
The provision for bad debts is determined based on the amount of the present value of thefuture cash flows expected to be derived from the receivable below its carrying amount.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(10) Receivables (Continued)
(d) When the Group transfers the accounts receivable to the financial institutions without recourse,
the difference between the proceeds received from the transaction and their carrying amountsand the related taxes is recognized in profit or loss for the current period.
(11) Inventories
(a) Classification
Inventories include raw materials, work in progress, finished goods, delegate processingsupplies and turnover materials, and are measured at the lower of cost and net realizablevalue.
(b) Costing of inventories
Cost is determined on the weighted average method. The cost of finished goods and work inprogress comprises raw materials, direct labor and an allocation of systematically allocatedoverhead expenditures incurred based on the normal operating capacity.
(c) Basis for determining net realizable values of inventories and method for making provisions for
decline in the value of inventories
Provisions for declines in the value of inventories are determined at the excess amount of thecarrying value of the inventories over their net realizable value. Net realizable value isdetermined based on the estimated selling price in the ordinary course of business, less theestimated costs to completion and estimated costs necessary to make the sale and relatedtaxes.
(d) The Group adopts the perpetual inventory system.
(e) Amortization methods of low value consumables and packaging materials
Turnover materials include low value consumables and packaging materials, which areexpensed when issued.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(12) Long-term equity investments
Long-term equity investments comprise the Company’s long-term equity investments in its subsidiariesand the Group’s long-term equity investments in its associates.
Subsidiaries are the investees over which the Company is able to exercise control. Associates are theinvestees that the Group has significant influence on their financial and operating policies.
Investments in subsidiaries are measured using the cost method in the Company’s financial statements,
and adjusted by using the equity method when preparing the consolidated financial statements.Interests in associates are accounted for using the equity method.
(a) Determination of investment cost
For long-term equity investments acquired through a business combination: for long-term equityinvestments acquired through a business combination involving enterprises under common control, the
investment cost shall be the absorbing party’s share of the carrying amount of shareholders’ equity of
the party being absorbed at the combination date; for long-term equity investments acquired through abusiness combination involving enterprises not under common control, the investment cost shall be thecombination cost.
(b) Subsequent measurement and recognition of related profit or loss
For long-term equity investments accounted for using the cost method, they are measured at the initialinvestment costs, and cash dividends or profit distribution declared by the investees are recognized asinvestment income in profit or loss.
For long-term equity investments accounted for using the equity method, where the initial investment
cost of a long-term equity investment exceeds the Group’s share of the fair value of the investee’s
identifiable net assets at the acquisition date, the long-term equity investment is measured at the initial
investment cost; where the initial investment cost is less than the Group’s share of the fair value of theinvestee’s identifiable net assets at the acquisition date, the difference is included in profit or loss and
the cost of the long-term equity investment is adjusted upwards accordingly.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(12) Long-term equity investments (Continued)
For long-term equity investments accounted for using the equity method, the Group recognizes theinvestment income according to its share of net profit or loss of the investee. The Group discontinuesrecognizing its share of net losses of an investee after the carrying amount of the long-term equity
investment together with any long-term interests that, in substance, form part of the investor’s net
investment in the investee are reduced to zero. However, if the Group has obligations for additionallosses and the criteria with respect to recognition of provisions under the accounting standards oncontingencies are satisfied, the Group continues recognizing the investment losses and the provisions.
For changes in shareholders’ equity of the investee other than those arising from its net profit or loss,
other comprehensive income, and profit distribution, the Group adjusts the book value of the investmentand records capital surplus accordingly. The carrying amount of the investment is reduced by the
Group’s share of the profit distribution or cash dividends declared by an investee.
The unrealized profits or losses arising from the intra-group transactions amongst the Group and its
investees are eliminated in proportion to the Group’s equity interest in the investees, and then based on
which the investment gains or losses are recognized. For the loss on the intra-group transactionamongst the Group and its investees attributable to asset impairment, any unrealized loss is noteliminated.
(c) Basis for determining existence of control, joint control or significant influence over investees
Control is the power to govern the financial and operating policies of the investee so as to obtainbenefits from its operating activities. In determining whether the Company is able to exercise controlover the investee, the effect of potential voting rights over the investee is considered, such asconvertible debts and warrants currently exercisable.
Significant influence is the power to participate in the financial and operating policy decisions of theinvestee, but is not control or joint control over those policies.
(d) Impairment of long-term equity investments
The carrying amount of long-term equity investments in subsidiaries and associates is reduced to therecoverable amount when the recoverable amount is less than the carrying amount (Note III (21)).
(13) Investment properties
Investment properties, including land use rights that have already been leased out, buildings that areheld for the purpose of leasing, and buildings that are being constructed or developed for the purpose ofleasing in future, are measured initially at cost. Subsequent expenditures incurred in relation to anInvestment properties are included in the cost of the Investment properties when it is probable that theassociated economic benefits will flow to the Group and their costs can be reliably measured;otherwise, the expenditures are recognized in profit or loss in the period in which they are incurred.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(13) Investment properties (Continued)
The Group adopts the cost model for subsequent measurement of investment properties. Buildings andland use rights are depreciated or amortized to their estimated net residual values over their estimateduseful lives. The estimated useful lives, the estimated net residual values that are expressed as apercentage of cost and the annual depreciation (amortization) rates of investment properties are asfollows:
Estimated useful life Estimated residual value Annual depreciation (amortization)rates
Buildings 12-35 years 0-5% 2.71-7.92%Land use rights 30-50 years - 2.00-3.33%
When an Investment properties is transferred to owner-occupied properties, it is reclassified as a fixedasset or intangible asset at the date of the transfer. When an owner-occupied property is transferred outfor earning rentals or for capital appreciation, the fixed asset or intangible asset is reclassified as aninvestment property at its carrying amount at the date of the transfer.
The Investment properties’ estimated useful life, net residual value and depreciation (amortization)
method applied are reviewed and adjusted as appropriate at each end of year.
An Investment properties is derecognized on disposal or when the Investment properties is permanentlywithdrawn from use and no future economic benefits are expected from its disposal. The net amount ofproceeds from sale, transfer, retirement or damage of an Investment properties after its carryingamount and related taxes and expenses is recognized in profit or loss for the current period.
The carrying amount of an Investment properties is reduced to the recoverable amount if therecoverable amount is below the carrying amount (Note III (20)).
(14) Fixed assets
(a) Recognition and initial measurement of fixed assets
Fixed assets comprise buildings, machinery and equipment, motor vehicles, other equipment andleasehold improvements.
Fixed assets are recognized when it is probable that the related economic benefits will flow to theGroup and the costs can be reliably measured. Fixed assets purchased or constructed by the Groupare initially measured at cost at the acquisition date. The fixed assets contributed by the Stateshareholders at the reorganization of the Company into a corporation entity are recognized based onthe revaluated amounts approved by the State-owned Assets Administration Department.
Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset when it isprobable that the associated economic benefits will flow to the Group and the related cost can bereliably measured. The carrying amount of the replaced part is derecognized. All the other subsequentexpenditures are recognized in profit or loss in the period in which they are incurred.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(14) Fixed assets (Continued)
(b) Depreciation methods of fixed assets
Fixed assets are depreciated using the straight-line method to allocate the cost of the assets to theirestimated residual values over their estimated useful lives. For the fixed assets that have been providedfor impairment loss, the related depreciation charge is prospectively determined based upon theadjusted carrying amounts over their remaining useful lives.
The estimated useful lives, the estimated residual values expressed as a percentage of cost and theannual depreciation rates are as follows:
Estimated useful lives Estimated residual value Annual depreciationrates
Buildings 20-35 years 0-5% 2.71-5.00%Machinery and equipment 5-14 years 3-6% 6.79-19.40%Motor vehicles 3-10 years 0-5% 9.50-33.33%Other equipment 3-10 years 0-5% 9.50-33.33%Leasehold improvements within 5 years 0% 20% andabove
The estimated useful life, the estimated net residual value of a fixed asset and the depreciation methodapplied to the asset are reviewed, and adjusted as appropriate at least at each end of year.
(c) The carrying amount of fixed assets is reduced to the recoverable amount when therecoverable amount is less than the carrying amount (Note III (20)).
(d) Recognition basis and measurement method for financing leased fixed assets.
Finance leases are leases with the whole risks and rewards related to the asset substantiallytransferred. Fixed assets leased under finance lease are recognized with at smaller value of the fairvalue and minimum lease payments. The difference between the book value and the minimum leasepayments should be recognized as unrecognized financing charges (Note III (27) (b)).
Fixed assets leased under finance lease are depreciated using the same policy as that those fixedassets owned by the company. For those leased assets that the ownership of the assets can beascertained by the expiration date, the assets should be depreciated within estimated useful lives.Otherwise, the assets should be depreciated within the shorter period of the leasing period andestimated useful lives.
(e) Disposal of fixed assets
A fixed asset is derecognized on disposal or when no future economic benefits are expected from itsuse or disposal. The amount of proceeds from disposal on sale, transfer, retirement or damage of afixed asset net of its carrying amount and related taxes and expenses is recognized in profit or loss forthe current period.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(15) Construction in progress
Construction in progress is measured at actual cost. Actual cost comprises construction costs,installation costs, borrowing costs that are eligible for capitalization and other costs necessary to bringthe fixed assets ready for their intended use. Construction in progress is transferred to fixed assetswhen the assets are ready for their intended use, and depreciation begins from the following month.The carrying amount of construction in progress is reduced to the recoverable amount when therecoverable amount is less than the carrying amount (Note III (20)).
(16) Borrowing costs
The borrowing costs that are directly attributable to the acquisition and construction of a fixed asset thatneeds a substantially long period of time for its intended use commence to be capitalized and recordedas part of the cost of the asset when expenditures for the asset and borrowing costs have beenincurred, and the activities relating to the acquisition and construction that are necessary to prepare theasset for its intended use have commenced. The capitalization of borrowing costs ceases when theasset under acquisition or construction becomes ready for its intended use and the borrowing costsincurred thereafter are recognized in profit or loss for the current period. Capitalization of borrowingcosts is suspended during periods in which the acquisition or construction of a fixed asset is interruptedabnormally and the interruption lasts for more than 3 months, until the acquisition or construction isresumed.
For the specific borrowings obtained for the acquisition or construction of a fixed asset qualifying forcapitalization, the amount of borrowing costs eligible for capitalization is determined by deducting anyinterest income earned from depositing the unused specific borrowings in the banks or any investmentincome arising on the temporary investment of those borrowings during the capitalization period.
For the general borrowings obtained for the acquisition or construction of a fixed asset qualifying forcapitalization, the amount of borrowing costs eligible for capitalization is determined by applying theweighted average effective interest rate of general borrowings, to the weighted average of the excessamount of cumulative expenditures on the asset over the amount of specific borrowings. The effectiveinterest rate is the rate at which the estimated future cash flows during the period of expected durationof the borrowings or an applicable shorter period are discounted to the initial amount of the borrowings.
(17) Intangible assets
Intangible assets include land use rights, computer software, technology patents, trademarks anddistribution network, which are initially recognized at cost. Intangible assets contributed by state-ownedshareholders during the Company reorganization were recorded based on the valuation amountapproved by the State-owned Assets Supervision and Management Department.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(17) Intangible assets (Continued)
| Categories | Useful lives | |
| Land use rights | Between the approved useful period and the Company’s operating period | |
| Software | 3-5 years | |
| Trademarks | 5-10 years | |
| Technology patents | 5 years | |
| Distribution network | 20 years | |
| Franchising rights | 10 years | |
| Favorable leases | 17-20 years |
A land use right granted by government with an infinite useful life would not be amortized. Other landuse rights are amortized on the straight-line basis over their approved useful period. If the acquisitioncosts of land use rights and the buildings located thereon cannot be reliably allocated between the landuse rights and the buildings, all of the acquisition costs are recognized as fixed assets.
For an intangible asset with a finite useful life, review of its useful life and amortization method isperformed at each end of year, with adjustments made as appropriate. For an intangible asset without adefinite useful life, review of its useful life is performed at each end of year.
The expenditure on an internal research and development project is classified into expenditure on theresearch phase and expenditure on the development phase based on its nature and whether there ismaterial uncertainty that the research and development activities can form an intangible asset at end ofthe project.
Expenditure for investigation, evaluation and selection of production process and new drugs researchesis recognized in profit or loss in the period in which it is incurred. Expenditure on the designation,measurement of the final utilization of the production process and new drugs before mass production, iscapitalized only if all of the following conditions are satisfied:
?development of the production process and new drugs has been fully demonstrated by the
technical team;
?management has approved the budget of drug production development and new drugs;
?market research analysis suggests that the products produced by the new production
technology are able to be promoted;
?adequate technical, financial and other resources to complete the development and the ability
to use or sell the intangible asset;
?the expenditure attributable to the intangible asset during its development phase can be reliably
measured.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(17) Intangible assets (Continued)
Other development costs that do not meet the conditions above are recognized in profit or loss in theperiod in which they are incurred. Development costs previously recognized as expenses are notrecognized as an asset in a subsequent period. Capitalized expenditure on the development phase ispresented as development costs in the balance sheet and transferred to intangible assets at the datethat the asset is ready for its intended use.
The carrying amount of intangible assets is reduced to the recoverable amount when the recoverableamount is less than the carrying amount (Note III (20)).
(18) Long-term prepaid expenses
Long-term prepaid expenses include the expenditure for improvements to fixed assets under operatingleases, and other expenditures that have been made but should be recognized as expenses over morethan one year in the current and subsequent periods. Long-term prepaid expenses are amortized on thestraight-line basis over the expected beneficial period and are presented at actual expenditure net ofaccumulated amortization.
(19) Governmental medical reserve funds and specially approved reserving materials
Appointed by the PRC Government, CNPGC is responsible for purchasing, allocating and providing thegovernmental medical reserves, which include the medical products, traditional Chinese medicine andmedical appliances for nation-wide emergency rescue and disaster relief. Appointed by the Government
of Guangxi Province, Sinopharm Medicine Holding Guangxi Co., Ltd. (“Sinopharm Guangxi”), a
subsidiary of the Company, is responsible for purchasing, allocating and providing the medicalreserves, which include the medical products needed for serious disasters, epidemics and otheremergencies as well as endemic diseases in Guangxi Province. In accordance with the regulation ofCNPGC, as being the enterprise who bears the obligation for specially approved medical reservingmaterials, the medical reserve funds received from the PRC Government or local government arerecognized as other non-current liabilities. The Group reserves the specially approved medicalreserving materials according to the reserve program (by category and by quantity), applies dynamicmanagement and recognizes as other non-current assets.
(20) Impairment of long-term assets
Fixed assets, construction in progress, intangible assets with finite useful lives, long-term prepaidexpenses and investment properties measured using the cost model and long-term equity investmentsin subsidiaries and associates are tested for impairment if there is any indication that an asset may beimpaired at the balance sheet date. If the result of the impairment test indicates that the recoverableamount of the asset is less than its carrying amount, a provision for impairment and an impairment loss
are recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount.The recoverable amount is the higher of an asset’s fair value less costs to sell and the present value of
the future cash flows expected to be derived from the asset. Provision for asset impairment isdetermined and recognized on the individual asset basis. If it is not possible to estimate the recoverableamount of an individual asset, the recoverable amount of a group of assets to which the asset belongsis determined. A group of assets is the smallest group of assets that is able to generate independentcash inflows.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(20) Impairment of long-term assets (Continued)
Goodwill that is separately presented in the financial statements，intangible assets with infinite useful
lives and capitalized development costs are tested at least annually for impairment, irrespective ofwhether there is any indication that it may be impaired. In conducting the test, the carrying value ofgoodwill is allocated to the related asset groups or groups of asset groups which are expected to benefitfrom the synergies of the business combination. If the result of the test indicates that the recoverableamount of an asset group or group of asset groups, including the goodwill allocated, is lower than itscarrying amount, the corresponding impairment loss is recognized. The impairment loss is firstdeducted from the carryingamount of goodwill that is allocated to the asset group or group of asset groups, and then deductedfrom the carrying amount of other assets within the asset groups or groups of asset groups in proportionto the carrying amount of other assets.
Once the above Impairment loss is recognized, it will not be reversed for the value recovered in thesubsequent periods.
(21) Employee benefits
Employee benefits mainly include short-term employee benefits, post-employment benefits, terminationbenefits and other long-term employee benefits incurred in exchange for service rendered byemployees or various forms of rewards or compensation due to severance of labor relation.
(a) Short-term employee benefits
Short-term employee benefits include wages or salaries, bonuses, allowances and subsidies, staffwelfare, medical insurance, work injury insurance, maternity insurance, housing funds, and labor unionfunds and employee education funds. The employee benefits are recognized in the accounting period inwhich the service has been rendered by the employees, and as costs of assets or expenses towhichever the employee service is attributable.
(b) Post-employment benefits (defined contribution plans)
The Company classifies post-employment benefit plans into either defined contribution plans or definedbenefit plans. Defined contribution plans are post-employment benefit plans under which the Companypays fixed contributions into a separate fund and will have no obligation to pay further contributions; anddefined benefit plans are post-employment benefit plans other than defined contribution plans. Duringthe reporting period, the Company's post-employment benefits mainly include basic pensions,unemployment insurance and enterprise annuity, both of which belong to the defined contribution plans.
Basic pensions
The Company’s employees participate in the defined basic pension insurance plan set up and
administered by local labor and social protection authorities. Basic pensions are provided monthlyaccording to stipulated bases and proportions to local labor and social security contribution. Whenemployees retire, local labor and social security institutions have a duty to pay the basic pensioninsurance to them. The amounts payable are recognized as liabilities based on the above provisions inthe accounting period in which the service has been rendered by the employees, and as costs of assetsor expenses to whichever the employee service is attributable.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(21) Employee benefits (Continued)
(c) Termination benefits
The Group recognizes the debt and the gain or loss, when offering compensation for terminating thelabor contract before the due date, or encouraging the staff to resign voluntarily, at the earlier of whenthe Group cannot unilaterally withdraw the labor relation plan and when the Group recognizes the costrelating to recombinant involving the payment of termination benefits.
(d) Retirement benefits
The Group provides retirement benefits to employees who accept the internal retirement arrangements.Retirement benefits refer to the salary and social security contribution provided to those staff whovoluntarily quit the job with approval from the management team, before the retirement age.
The group offers retirement benefits from the date when the arrangement begins, to the date when thestaff reaches the retirement age. The liability including salary and security contribution funds isrecognized when conditions for recognition are meet, regarding to the period from the staff leaves theposition to the normal retirement date. Difference arising from the changes in actuarial assumptions forretirement benefits and adjustments in welfare standard, will be accounted for in the current profits andlosses.
Retirement benefits that are expected to be paid within one year from the balance sheet date aredisclosed as current liabilities.
(22) Provisions
An obligation related to a contingency shall be recognized by the Group as a provision when all of thefollowing conditions are satisfied, except contingent considerations and contingent liabilities assumed ina business combination not involving enterprises under common control:
(1) The obligation is a present obligation of the Group;(2) It is probable that an outflow of economic benefits from the Group will be required to settle theobligation; and(3) The amount of the obligation can be measured reliably.
The provisions are initially measured at the best estimate of the expenditure required to settle therelated present obligation, taking into account factors pertaining to a contingency such as the risks,uncertainties and time value of money as a whole. The carrying amount of provisions is reviewed at thebalance sheet date. Where there is clear evidence that the carrying amount of a provision does notreflect the current best estimate, the carrying amount is adjusted to the current best estimate.
Contingent liabilities of the acquiree obtained in a business combination shall be measured at fair valuein initial recognition. After initial recognition, subsequent measurement is conducted using the higher oftheamount recognized by provisions and the amount of initial recognition deducting the accumulatedamortization amount determined by the principles of revenue recognition.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(23) Dividend distribution
Cash dividend distribution is recognized as a liability in the period in which it is approved by shareholder
at the annual shareholders’ meeting.
(24) Revenue recognition
Revenue is recognized when control of the goods or services has been transferred to customers.
Revenue from the sale of products directly to customers, is recognized when control the goodstransferred, being when the products are accepted by customers. The customers have full dicretion
over the products, and there is no un-fufilled obligation that could affect the cutomers’ acceptance of the
products.
The Group provides freight, storage and other services to external parties. The freights are recognizedon a percentage-of-completion basis, and determined on the time propotion method. Other revenue isdetermined in accordance with the amount provided in the service period stipulated in the contract.
The Group shall recognise a refund liability if the Group receives consideration from a customer andexpects to refund some or all of that consideration to the customer. A refund liability is measured at theamount of consideration received (or receivable) for which the entity does not expect to be entitled (ieamounts not included in the transaction price). The refund liability (and corresponding change in thetransaction price and, therefore, the contract liability) shall be updated at the end of each reportingperiod for changes in circumstances.
The Group, offers a customer loyalty programme where points earned through the purchase of goodscan only be redeemed for goods provided by Sinopharm Group Zhijun (Shenzhen) Pharmaceutical Co.,Ltd. or other free goods. The fair value of the consideration received or receivable in respect of theinitial sale is allocated between the award credits and the other components of the sale. Fair value ofaward points is measured on the basis of the value of the awards (that is, goods or services) for whichthey could be redeemed, the fair value of the award credits should take account of expected forfeituresas well as the discounts or incentives that would otherwise be offered to customers who have notearned award credits from an initial sale.
Determing whether revenue of the Group should be reported gross or net is based on a continuingassessment of various factors. Since the Group has sole discretion in determing the pricing, takes fullresponsibility of a good or service provided to the customers, and also is responsible for the risk
associated with the goods before change of control over the goods, and the customers’ complaints and
requests, the Group considers it controls the specified goods or services before their delivery to itscustomers and is a principal in the transactions. Accordingly, the Group recognizes revenue in thegross basis. Otherwise, the Group records the net amount earned as commissions from products soldor services provided.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(24) Revenue recognition (Continued)
When another party is involved in providing goods or services to a customer, the Group determineswhether the nature of its promise is a performance obligation to provide the specified goods or servicesitself as a principal or to arrange for those goods or services to be provided by the other party as anagent. The Group determines whether it is a principal or an agent for each specified good or servicepromised to the customer. A specified good or service is a distinct good or service (or a distinct bundleof goods or services) to be provided to the customer. If a contract with a customer includes more thanone specified good or service, an entity could be a principal for some specified goods or services andan agent for others.
Interest income is recognized and measured based on the loan period and the actual interest rate.
Rental income is recognized and measured based to the straight-line method during the rental period.
(25) Government grants
Government grants are transfers of monetary or non-monetary assets from the government to theGroup at nil consideration, including refund of taxes and financial subsidies, etc.
A government grant is recognized when the conditions attached to it can be complied with and thegovernment grant can be received. For a government grant in the form of transfer of monetary assets,the grant is measured at the amount received or receivable. For a government grant in the form oftransfer ofnon-monetary assets, it is measured at fair value; if the fair value is not reliably determinable, the grantis measured at nominal amount.
A government grant related to an asset is a grant received aimed to create a long-term asset bycontracting or other methods. A government grant related to income is any grant other than governmentgrants related to assets.
A government grant related to an asset is recognized as deferred income, and evenly amortized toprofit or loss over the useful life of the related asset. Government grants measured at nominal amountsare recognized immediately in profit or loss for the current period.
For government grants related to income, where the grant is a compensation for related expenses orlosses to be incurred by the Group in the subsequent periods, the grant is recognized as deferredincome, and included in profit or loss over the periods in which the related costs are recognized; wherethe grant is a compensation for related expenses or losses already incurred by the Group, the grant isrecognized immediately in profit or loss for the current period.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(26) Income tax
Income tax comprises current and deferred tax. Income tax is recognized as income or an expense in
profit or loss of the current period, or recognized directly in shareholders’ equity if it arises from abusiness combination or relates to a transaction or event which is recognized directly in shareholders’
equity.The Group measures a current tax asset or liability arising from the current and prior period based onthe amount of income tax expected to be paid by the Group or returned by tax authority calculatedaccording to related tax laws.
Deferred tax assets and deferred tax liabilities are calculated and recognized based on the differencesarising between the tax bases of assets and liabilities and their carrying amounts (temporarydifferences). Deferred tax asset is recognized for the deductible losses that can be carried forward tosubsequent years for deduction of the taxable profit in accordance with the tax laws. No deferred taxliability is recognized for a temporary difference arising from the initial recognition of goodwill. Nodeferred tax asset or deferred tax liability is recognized for the temporary differences resulting from theinitial recognition of assets or liabilities due to a transaction other than a business combination, whichaffects neither accounting profit nor taxable profit (or deductible loss). At the balance sheet date,deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to applyto the period when the asset is realized or the liability is settled.
Deferred tax assets are only recognized for deductible temporary differences, deductible losses and taxcredits to the extent that it is probable that taxable profit will be available in the future against which thedeductible temporary differences, deductible losses and tax credits can be utilized.
Deferred tax assets and liabilities are offset when:
? the deferred taxes are related to the same tax payer within the Group and the same taxation
authority; and,
? that tax payer has a legally enforceable right to offset current tax assets against current tax
liabilities.
Deferred tax liabilities are recognized for temporary differences arising from investments in subsidiariesand associates, except where the Group is able to control the timing of the reversal of the temporarydifference, and it is probable that the temporary difference will not reverse in the foreseeable future.When it is probable that the temporary differences arising from investments in subsidiaries, andassociates will be reversed in the foreseeable future and that the taxable profit will be available in thefuture against which the temporary differences can be utilized, the corresponding deferred tax assetsare recognized.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(27) Leases
Finance leases are leases with the whole risks and rewards related to the asset substantiallytransferred. The other kinds of leases are nominated operating leases.
(a) Operating leases
Lease payments under an operating lease are recognized on a straight-line basis over the period of thelease, and are either capitalized as part of the cost of related assets or charged as an expense for thecurrent period.
Lease income under an operating lease is recognized on a straight-line basis over the period of thelease.
(b) Finance leases
Fixed assets leased under finance leases are recognized at the smaller value of the fair value andpresent value of the minimum lease payments. The difference between the book value and theminimum lease payments should be recognized as unrecognized financing charges, and amortizedwithin the leasing period. The minimum lease payments net off the unrecognized financing chargesshould be classified as long-term payables.
(28) Discontinued operations
A discontinued operation is a component of an enterprise that either has been disposed of or isclassified as held for sale, and is separately identifiable operationally and for financial reporting purpose,and satisfies one of the following conditions:
(1) Represents a separate major line of business or geographical area of operations;(2) Is part of a single coordinated plan to dispose of a separate major line of business or
geographical area of operation;(3) Is a subsidiary acquired exclusively with a view to resale.
(29) Segment information
The Group identifies operating segments based on the internal organization structure, managementrequirements and internal reporting system, and discloses segment information of reportable segmentswhich is determined on the basis of operating segments.
An operating segment is a component of the Group that satisfies all of the following conditions: (1) thecomponent is able to earn revenues and incur expenses from its ordinary activities; (2) whose operating
results are regularly reviewed by the Group’s management to make decisions about resources to be
allocated to the segment and to assess its performance, and (3) for which the information on financialposition, operating results and cash flows is available to the Group. If two or more operating segmentshave similar economic characteristics and satisfy certain conditions, they are aggregated into one singleoperating segment.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(30) Critical accounting estimates
The Group continually evaluates the critical accounting estimates and key judgments applied based onhistorical experience and other factors, including expectations of future events that are believed to bereasonable.
(a) Critical accounting estimates and key assumptions
The critical accounting estimates and key assumptions that have a significant risk of causing a materialadjustment to the carrying amounts of assets and liabilities within the next accounting year are outlinedbelow:
(i) Accounting estimates on impairment of goodwill
The Group tests annually whether goodwill has suffered any impairment. The recoverable amount ofasset groups and groups of asset groups is the present value of the future cash flows expected to bederived from them. These calculations require the use of estimates (Note V (16)).
If management revises the gross margin that is used in the calculation of the future cash flows of assetgroups and groups of asset groups, and the revised gross margin is lower than the one currently used,the Group would need to recognize further impairment against goodwill and fixed assets.
If management revises the pre-tax discount rate applied to the discounted cash flows, and the revisedpre-tax discount rate is higher than the one currently applied, the Group would need to recognize furtherimpairment against goodwill and fixed assets.
If the actual gross margin/pre-tax discount rate is higher/lower than management’s estimates, the
impairment loss of goodwill previously provided for is not allowed to be reversed by the Group.
(ii) Accounting estimates on impairment of accounts receivable
In accordance with the Group’s accounting policy (Note III (10)), the Group’s management tests
annually whether receivables have suffered any impairment. Impairment of receivables has been
assessed by taking into account the customers’ credit history and financial position together with thecurrent market conditions. Even if the Group’s management has made bad debt provision for theexpected loss at its best estimate, there is a possibility that changes in customers’ financial position or
market conditions will alter the result.
(iii) Accounting estimates on impairment of inventories
In accordance with the Group’s accounting policy (Note III (11) (c)), the Group’s management estimates
the net realizable value of the inventory. Net realizable value is determined based on the estimatedselling price in the ordinary course of business, less the estimated costs to completion and estimated
costs necessary to make the sale and related taxes. Even if the Group’s management has made stock
provision for the expected impairment at its best estimate, there is a possibility that changes in marketconditions will alter the result.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(30) Critical accounting estimates (Continued)
(a) Critical accounting estimates and key assumptions (Continued)
(iv) Sales return
A refund liability is measured at the amount of consideration received (or receivable) for which the entitydoes not expect to be entitled (ie amounts not included in the transaction price). The refund liability (andcorresponding change in the transaction price and, therefore, the contract liability) shall be updated at theend of each reporting period for changes in circumstances.
(v) Customer loyalty programme
The fair value of the consideration received or receivable in respect of the initial sale is allocatedbetween the award credits and the other components of the sale. Fair value of award points ismeasured on the basis of the value of the awards (that is, goods or services) for which they could beredeemed, the fair value of the award credits should take account of expected forfeitures as well as thediscounts or incentives that would otherwise be offered to customers who have not earned awardcredits from an initial sale.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(30) Critical accounting estimates (Continued)
(b) Changes in accounting policies
Accounting policies of revenue were altered in accordance with the requirement of Notice on Issuing
and Revising Accounting Standard No. 14 – Revenue by Ministry of Finance. And those of financial
instruments were also altered in accordance with the requirement of Notice on Issuing and Revising
Accounting Standard No. 22 – Recognization and Measurement of Financial Instruments, No. 23 –Transfer of Financial Instruments, No. 24 – Hedging Instruments, and No.37 – Disclosures of Financial
Instruments. The Group adopted these standards since January 1, 2018. The alteration of these
accounting policies had no effect on the net profit of the Group as well as the stockholders’ equity of the
Group.
| The content and reasons of changes in accounting policies | Procedures | Remarks |
| In 5th July 2017, Notice on Issuing and Revising Accounting Standard No. 14 – Revenue was announced by Ministry of Finance. The enterprises listed in Mainland and abroad simultaneously should adopt the standard since 1st January 2018, while others should adopt it since 1st January 2020. | Agreed in the meeting of board of directors held in 22nd August 2018. | The Group adopted this new standard since 1st January 2018. The adoption of this standard did not lead to the significant changes in revenue recognition. It had no effect on the net profit, total assets and total liabilities of the Group. 。 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
III Summary of significant accounting policies and accounting estimates (Continued)
(30) Critical accounting estimates (Continued)
(b) Changes in accounting policies (Continued)
| The content and reasons of changes in accounting policies | Procedures | Remarks |
| Notice on Issuing and Revising Accounting Standard No. 22 – Recognization and Measurement of Financial Instruments, No. 23 – Transfer of Financial Instruments, No. 24 – Hedging Instruments, and No.37 – Disclosures of Financial Instruments were announced by Ministry of Finance in 2017. The enterprises listed in Mainland and abroad simultaneously should adopt the standard since 1st January 2018, while others should adopt it since 1st January 2019. | Agreed in the meeting of board of directors held in 22nd August 2018. | (1) The percentages of voting interests held by the Group in Shanghai Guoda Shuguang Pharmacy Co., Ltd, Shanghai Guoren Pharmacy Co., Ltd., Sinopharm Holding Hubei Guoda Pharmacy Co., Ltd., Hunan Zhongbai pharmaceutical investment Co., Ltd. and Sinopharm Health Online Co., Ltd. are 25%, 10%, 10%, 6.31% and 8.06%, respectively. However, the Group neither appoint the directors and key management for those 5 companies, nor involve in or affect the financial or operating decision-making process or ordinary course of business of those companies. Therefore, the Group had no significant influence over the above companies and recognized its investments in those companies as available-for-sale equity instruments. The Group recorded these assets as available-for-sale financial assets. After adopting new standard, these assets were recorded in financial assets measured at fair value through other comprehensive income. The alteration had no effect on the retained earnings, other comprehensive income and other data in comparative period. (2) According to the new standard, the Group should assess the expected credit losses associated with its financial assets measured at amortized cost on a forward looking basis. The impairment methodology applied depends on whether there has been a significant increase in credit risk. The management considered that although the Group adopted new standard, it could still assess the provision of bad debt on the grouping basis. And it had no significant effect on the financial statements of the Group. |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
| IV | Taxation |
| 1. | Main categories and rates of taxes: | ||
| Categories | Tax base | Tax rate | |
| Corporate income tax (“CIT”) | Taxable income | 15%,20% or 25% | |
| Value added tax (“VAT”) | Taxable value added amount (Tax payable is calculated using the taxable sales amount multiplied by the effective tax rate less deductible VAT input of the current period) | 0%,3%,5%,6%,10%,11%,16% or 17% | |
| Business tax | Revenue from rental income, interest income and etc. (from 1 January 2016 to 30 April 2016) | 5% | |
| City maintenance and construction tax | Amount of VAT | 5% or 7% | |
| Educational surcharge | Amount of VAT | 3% | |
| Local educational surcharge | Amount of VAT | 2% | |
2. Tax preferences
(a) In 2014, the Group’s subsidiary Sinopharm Holding Guangxi Logistics Co., Ltd. (“Sinopharm
Guangxi Logistics”) was approved by the Guangxi Local Tax Bureau to enjoy a tax discount
applicable to corporations in the region of Western Development to pay income tax at a tax rate of
15%. In 2016，due to the real estate relocation income, the operating revenue’s proportion is
below 70%, which does not meet the requirements of the preferential tax rate, so SinopharmGuangxi Logistics was subject to a corporate income tax rate of 25% during the year.
From May to December of 2015, eight subsidiaries in Guangxi Province of the Group, including
Sinopharm Guangxi, Sinopharm Holding Liuzhou Co., Ltd. (“Sinopharm Liuzhou”) , SinopharmHolding Beihai Co., Ltd (“Sinopharm Beihai”), Sinopharm Holding Guilin Co., Ltd. (“SinopharmGuilin”), Sinopharm Holding Guigang Co., Ltd. (“Sinopharm Guigang”), Sinopharm Holding YulinCo., Ltd. (“Sinopharm Yulin”), Sinopharm Holding Baise Co., Ltd (“Sinopharm Baise”)andSinopharm Holding Wuzhou Co., Ltd. (“Sinopharm Wuzhou”) were all approved by the Guangxi
Local Tax Bureau to enjoy a tax concession of Western Development at a preferential CIT rate of15%. The applicable period for Sinopharm Guangxi, Sinopharm Liuzhou and Sinopharm Beihai is1 January 2014 to 31 December 2020, and that for the other 5 subsidiaries is 1 January 2015 to 31December 2020.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
IV Taxation (Continued)
2. Tax preferences (Continued)
(b) The Urumqi Head Office, Changji Branch and Karamay Branch of Sinopharm Holding Xinjiang New
& Special Medicines Chain Store Co., Ltd. (“Xinjiang New & Special Medicines”), a subsidiary of
the Group, shall pay tax at a rate of 15% by jurisdictions
According to the Circular of the Ministry ofFinance, the State Administration of Taxation, the General Administration of Customs on IssuesConcerning Tax Policies for the Further Development of the Western Regions (Cai shui [2011]No.58), enterprises from encouraged industries in the Western Regions, could enjoy a reducedCIT rate of 15% from 1 January 2011 to 31 December 2020. According to the reply to RegistrationForm for Items Enjoying Preferential Treatments in Corporate Income Tax by local tax authorities,in 2016 and 2017, the Urumqi Head Office, Changji Branch and Karamay Branch of Xinjiang New& Special Medicines were subject to a reduced CIT rate of 15%.
According to Ning cai (shui) fa [2012] No.957, Ningxia Guoda Pharmacy Chain Store Co., Ltd., asubsidiary of the Group, was qualified for the enterprise from encouraged industries of WesternDevelopment. Therefore, in 2016 and 2017, the company was exempt from the local retainedportion of the corporate income tax (40%), and therefore subject to a CIT rate of 15%.
According to Cai shui [2011] No.58 and Notices on Tax Reduction and Exemption (Hu shi hui guoshui deng zi [2014] No. 37), Sinopharm Holding Guoda Neimenggu Pharmacy Chain Store Co.,Ltd., a subsidiary of the Group, was entitled to the preferential tax rate for the further developmentof the Western Regions. Therefore the company is entitled to a preferential CIT rate of 15%.
According to the tax reduction and exemption conditions under the Circular of Local TaxationBureau of the Autonomous Region on Printing and Distributing the Administration andImplementation Measures for Preferential Corporate Income Tax (Gui di shui fa [2009] No. 150),Sinopharm Holding Guoda Guangxi Pharmacy Chain Store Co., Ltd., received the Written Decisionon Approval and Confirmation of Preferential Tax from local taxation bureau of Liuzhou city on 21May 2015, which approved that the company was subject to a CIT rate of 15% in 2016 and 2017.
(c) The Corporate Income Tax Law of the People's Republic of China stipulates in Article 28 that,
small low-profit enterprises are subject to corporate income tax at a rate of 20%. TheImplementation Rules for the Corporate Income Tax Law of the People's Republic of Chinastipulate in Article 92 that, small low-profit enterprises refer to enterprises operating in industriesnot restricted or prohibited by the State and satisfying following conditions: 1. For industrialenterprises, the annual taxable income does not exceed RMB300,000; the number of employeesdoes not exceed 100 and the total assets does not exceed RMB30 million; 2. for other industries,the annual taxable income does not exceed RMB300,000; the number of employees does notexceed 80 and the total assets does not exceed RMB10 million.
In addition, according to the Circular on Issues Concerning the Preferential Policies for CorporateIncome Tax for Small Low-profit Enterprises (Cai shui [2015] No. 34), Announcement of the StateAdministration of Taxation on Issues concerning the Implementation of the Further Expansion ofthe Scope of Small Low-profit Enterprises (Cai shui [2015] No.99), small low-profit enterprises withannual taxable income of RMB300,000 or less enjoy a tax reduction of 50% of the income andpays income tax at a rate of 20%. That is, the applicable corporate income tax rate is 10%.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements
1. Cash and bank balances
| 30 June 2018 | 31 December 2017 | |||
| Cash on hand | 3,721,460.75 | 6,208,674.32 | ||
| Cash at banks | 3,588,994,326.62 | 3,667,290,017.16 | ||
| Other cash balances | 350,879,773.21 | 518,156,747.03 | ||
| 3,943,595,560.58 | 4,191,655,438.51 |
At 30 June 2018, other cash balances were consisted of letter credit deposits amounting toRMB228,116.00 (31 December 2017: RMB258,800.00), bank acceptance notes deposits amounting toRMB350,651,657.21 (31 December 2017: RMB514,638,979.04). At the peiod end, there was no pledgeloans deposits (31 December 2017: RMB3,258,967.99).
2. Notes receivable
| 30 June 2018 | 31 December 2017 | |||
| Trade acceptance notes | 750,395,988.43 | 584,211,909.22 | ||
| Bank acceptance notes | 271,301,381.78 | 919,982,854.86 | ||
| 1,021,697,370.21 | 1,504,194,764.08 |
At 30 June 2018 and 31 December 2017, there were no notes receivable that were pledged
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
2.Notes receivable (Continued)
| Notes receivable endorsed or discounted by the Group to other parties which were not yet due at 30 June 2018 and 31 December 2017 are as follows: | |||||||||
| 30 June 2018 | |||||||||
| Derecognized | Not derecognized | ||||||||
| Trade acceptance notes | - | 209,881,899.63 | |||||||
| Bank acceptance notes | 706,198,208.44 | - | |||||||
| 706,198,208.44 | 209,881,899.63 | ||||||||
| As at 30 June 2018 and 31 December 2017, notes that were converted into accounts receivable due to the drawer’s inability to settle the note on maturity date are as follows: | |||||||||
| 30 June 2018 | |||||||||
| Bank acceptance notes | 868,060.00 | ||||||||
| Trade acceptance notes | 14,804,431.01 | ||||||||
| 15,672,491.01 | |||||||||
3. Accounts receivable
| The accounts receivable by category are analyzed below: | ||||||||||||
| 30 June 2018 | 31 December 2017 | |||||||||||
| Gross carrying amount | Provision for bad debt | Gross carrying amount | Provision for bad debt | |||||||||
| Amount | Proportion | Amount | Proportion | Amount | Proportion | Amount | Proportion | |||||
| Individually significant items for which provision for bad debt is recognized separately | 575,496,544.28 | 6.07% | 11,858,368.75 | 2.06% | 497,346,019.41 | 6.52% | 11,968,509.21 | 2.41% | ||||
| Items for which provision for bad debt is recognized by group | 8,860,337,753.97 | 93.43% | 28,158,497.05 | 0.32% | 7,106,178,799.93 | 93.09% | 26,069,970.29 | 0.37% | ||||
| Not individually significant Items for which provision for bad debt is recognized separately | 47,417,171.54 | 0.50% | 1,692,236.80 | 3.57% | 29,813,325.95 | 0.39% | 5,886,985.91 | 19.75% | ||||
| 9,483,251,469.79 | 100.00% | 41,709,102.60 | 0.44% | 7,633,338,145.29 | 100.00% | 43,925,465.41 | 0.58% | |||||
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
3. Accounts receivable (Continued)
| At 30 June 2018, accounts receivable that are individually significant and individually assessed for provisions are as follows: | |||||||
| Accounts receivable(by company) | Carrying amount | Bad debt provision | Rate | Assessment for impairment | |||
| Receivable of medical insurance | 425,708,736.16 | 282,897.53 | 0.07% | Part of the medical insurance receivable takes longer to collect, and has risk of default | |||
| Receivable of E-Business | 47,432,657.88 | - | 0.00% | Receivable of E-Business with no risk of recoverability | |||
| Receivable of Franchises | 43,303,952.30 | 16,292.93 | 0.04% | Receivable of Franchises with no risk of recoverability | |||
| Sinopharm Group Co., Ltd. | 30,140,408.15 | - | 0.00% | Receivable due from a related party with low risk of recoverability | |||
| Daton Xin Jian Kang Hospital | 17,351,611.50 | - | 0.00% | Receivable due from a fixed cooperative hospital with no risk of recoverability | |||
| Receivable of medical insurance | 11,559,178.29 | 11,559,178.29 | 100.00% | Part of the medical insurance receivable takes longer to collect, and has risk of default | |||
| Total | 575,496,544.28 | 11,858,368.75 | - | - | |||
| The accounts receivable for which the Group recognized provision for bad debt using the aging analysis method are presented as follows | ||||||||||
| 30 June 2018 | ||||||||||
| Carrying amount | Bad debt provision | |||||||||
| Amount | Amount | Proportion | ||||||||
| Within 1 year | 8,817,097,861.51 | 24,372,754.71 | 0.28% | |||||||
| 1 to 2 years | 33,418,766.48 | 1,918,465.80 | 5.74% | |||||||
| 2 to 3 years | 5,871,978.85 | 660,521.64 | 11.25% | |||||||
| Over 3 years | 3,949,147.13 | 1,206,754.90 | 30.56% | |||||||
| 8,860,337,753.97 | 28,158,497.05 | 0.32% | ||||||||
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
3. Accounts receivable (Continued)
| The provision for bad debt was RMB7,628,609.34 in 30 June 2018, including RMB9,827,439.11 recovered or reversed. Important recovered or reversed bad debt items are listed below: | |||||
| Recovered or reversed amount | Way of recovery | ||||
| Guangdong Tasly Yue Jian Pharmaceutical Co., Ltd. | 4,083,065.20 | Amount received due to the lawsuit | |||
| Tianjin Social Security Fund Management Centre | 200,000.00 | Amount reversed | |||
| Yunfu People’s Hospital | 172,831.60 | Amount received | |||
| People’s Hospital of Deqing County | 96,757.20 | Amount received | |||
| Zhaoqing Chinese Medical Hospital | 84,623.81 | Amount received | |||
| Health Centre of Heshan City Yayao Town | 54,698.00 | Amount received | |||
| Others | 140,430.23 | Amount received | |||
| 4,832,406.04 | |||||
| Accounts receivable written off in 30 June 2018 are analysed below: | ||
| Company | Amount | |
| Shenzhen Bainian Out-patient Department | 28,571.84 | |
| Company | Nature of the receivable | Amount | Reason | Procedure performed | Related party transaction or not | ||
| Shenzhen Bainian Out-patient Department | Receivables of goods sold | 28,571.84 | Non-recoverable | Written off according to company policy | No | ||
| As at 30 June 2018, the top five accounts receivable by customer are summarised below: | |||||
| Amount | Bad debt provision amount | % of the total accounts receivable | |||
| The top five accounts receivable total | 648,539,647.93 | 1,806,641.25 | 6.84% | ||
| In 30 June 2018, accounts receivable of RMB1,703,007,115.68 have been factored to a financial institute. |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
4. Advances to suppliers
| (a) | The aging of advances to suppliers is analyzed below: | ||||
| 30 June 2018 | 31 December 2017 | ||||
| Amount | % of total balance | Amount | % of total balance | ||
| Within 1 year | 451,853,929.99 | 98.95% | 507,613,407.19 | 98.23% | |
| 1 to 2 years | 3,573,044.24 | 0.78% | 7,410,774.78 | 1.43% | |
| 2 to 3 years | 1,253,250.00 | 0.27% | 1,753,935.50 | 0.34% | |
| Above 3 years | - | 0.00% | - | 0.00% | |
| 456,680,224.23 | - | 516,778,117.47 | - | ||
| The prepayment aged for more than a year is mainly the advance made by South Pharma & Trade to suppliers for equipment to be resold to the hospitals amounting to RMB4,826,294.24 (31 December 2017: RMB9,164,710.28) as the hospital equipment procurement is a large project and takes a long time to complete. | |||||
| (b) | As at 30 June 2018, the top five advances to suppliers by customer are summarized below: | |||
| Amount | Proportion of total balance | |||
| Total amount of top five advances to suppliers | 47,114,151.95 | 10.32% | ||
5. Interest receivable
| 30 June 2018 | 31 December 2017 | ||
| Fixed deposits | - | - | |
| Entrusted Loans | 47,507.80 | 61,441.11 | |
| 47,507.80 | 61,441.11 | ||
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
6. Other receivables
| (a) | Other receivables and related provision for bad debts by category are analyzed below: |
| 30 June 2018 | 31 December 2017 | |||||||||||
| Carrying amount | Bad debt provision | Carrying amount | Bad debt provision | |||||||||
| Amount | % | Amount | % | Amount | % | Amount | % | |||||
| Individually significant and subject to separate impairment assessment | 217,091,197.85 | 30.37% | 9,268,199.70 | 4.27% | 355,636,071.62 | 52.84% | 8,980,000.00 | 2.53% | ||||
| Receivable accounts with similar credit risk | 485,835,323.29 | 67.95% | 4,122,008.68 | 0.85% | 282,169,420.65 | 41.93% | 2,782,712.61 | 0.99% | ||||
| Individually not significant but individually evaluated for impairment | 12,028,679.44 | 1.68% | 2,892,969.02 | 24.05% | 35,176,616.14 | 5.23% | 3,348,337.26 | 9.52% | ||||
| 714,955,200.58 | 100.00% | 16,283,177.40 | 2.28% | 672,982,108.41 | 100.00% | 15,111,049.87 | 2.25% | |||||
| (b) | As at 30 June 2018, impairment provision for other receivables individually significant are analyzed as below: | ||||
| Amount | Bad debt provision | Rate | Assessment for impairment | ||
| Shanghai Shyndec Pharmaceutical Co., Ltd. (“Morden Pharma”) | 101,166,758.92 | - | - | Receivable due from a related party with low risk of recoverability | |
| Deposit | 95,782,045.77 | 288,199.70 | 0.30% | Cash deposit, no risk of recoverable, no provision | |
| Shanghai Roche Pharmaceutical Co., Ltd. | 11,162,393.16 | - | - | Price reduction compensation for DTP medicine | |
| Shenzhen YinghaiTechnology Investment Co., Ltd | 8,980,000.00 | 8,980,000.00 | 100.00% | The ageing is over 5 years | |
| 217,091,197.85 | 9,268,199.70 | - | |||
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
6. Other receivables (Continued)
| (c) | Provisions for impairment of the receivables which are within a similar risk group are analyzed below: | ||||
| 30 June 2018 | |||||
| Carrying amount | Bad debt provision | ||||
| amount | Amount | Rate | |||
| Within 1 year | 456,116,259.07 | 2,147,110.50 | 0.47% | ||
| 1 to 2 years | 10,122,384.98 | 152,153.35 | 1.50% | ||
| 2 to 3 years | 4,810,948.33 | 436,170.53 | 9.07% | ||
| Above 3 years | 14,785,730.91 | 1,386,574.30 | 9.38% | ||
| 485,835,323.29 | 4,122,008.68 | 0.85% | |||
| (d) | |||
| Nature | 30 June 2018 | 31 December 2017 | |
| Deposits | 271,993,381.60 | 226,111,186.83 | |
| Receivable due from related parties | 114,539,922.50 | 127,922,489.88 | |
| Petty cash advance to employees | 16,905,695.03 | 13,392,873.34 | |
| Entrusted borrowings | 44,000,000.00 | 44,000,000.00 | |
| Receivable of equity transactions | 8,980,000.00 | 8,980,000.00 | |
| Others | 258,536,201.45 | 252,575,558.36 | |
| 714,955,200.58 | 672,982,108.41 | ||
| (e) | Bad debt provision of other receivables in 2018 was RMB2,284,955.11 (2017: RMB747,448.78), with the recovered or reversed amount of RMB1,112,827.58 (2017: 929,511.16 ). | ||||||
| (f) | There were no other receivables written off in the current year. | ||||||
| (g) | As at 30 June 2018，the top 5 parties that owed the largest amounts of other receivable balances are analyzed below: | ||||||
| Nature | Amount | Age | % of total amount | Provision of bad debt | |||
| Morden Pharma | Recivables of merge | 101,166,758.92 | Within 2 year | 14.15% | - | ||
| Guangdong Pharmaceutical electronic trading platform | Pharmaceutical trading platform repayment not yet cleared | 90,619,946.24 | Within 1 year | 12.67% | - | ||
| Sinopharm Group Zhijun (Suzhou) Pharmaceutical Co., Ltd. (“Zhijun Suzhou”) | Entrusted borrowings | 44,000,000.00 | Within 1 year | 6.15% | - | ||
| TCM-Integrated Cancer Center of Southern Medical University | Deposit of logistics extension services project | 30,000,000.00 | Within 1 year | 4.20% | - | ||
| Shenyang Social Security Administration | Medical insurance deposi | 26,870,049.18 | Within 1 year | 3.76% | - | ||
| 292,656,754.34 | 40.93% | - | |||||
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
7. Inventories
| (a) | Inventories by category are analyzed below: | |||||||
| 30 June 2018 | 31 December 2017 | |||||||
| Book value | Provision | Net book value | Book value | Provision | Net book value | |||
| Raw materials | 1,526,166.46 | - | 1,526,166.46 | 1,181,095.08 | - | 1,181,095.08 | ||
| Work in progress | 1,252,296.05 | - | 1,252,296.05 | 129,098.02 | - | 129,098.02 | ||
| Finished goods | 4,243,417,987.75 | 6,667,841.42 | 4,236,750,146.33 | 3,785,146,957.42 | 6,840,110.55 | 3,778,306,846.87 | ||
| Low cost consumables | 5,826,016.38 | - | 5,826,016.38 | 2,241,198.15 | - | 2,241,198.15 | ||
| 4,252,022,466.64 | 6,667,841.42 | 4,245,354,625.22 | 3,788,698,348.67 | 6,840,110.55 | 3,781,858,238.12 | |||
| (b) | Provision for declines in value of inventories is analysed below: |
| 1 January 2018 | Increases | Decreases | 30 June 2018 | ||||
| charge | Other | Reversal or Written off | Other | ||||
| Finished goods | 6,840,110.55 | 2,390,647.06 | 2,562,916.19 | - | 6,667,841.42 | ||
| 6,840,110.55 | 2,390,647.06 | 2,562,916.19 | - | 6,667,841.42 | |||
| (c) | Provision of inventories is determined according to the gap between the net realizable value and the inventory book value. |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
8. Other current assets
| 30 June 2018 | 31 December 2017 | |||
| Input VAT to be credited | 91,576,950.50 | 78,014,460.84 | ||
| Corporate income tax to be deducted | 192,702.06 | 933,183.78 | ||
| Others | - | - | ||
| 91,769,652.56 | 78,947,644.62 |
9. Financial assets available-for-sale
（1） Financial assets available-for-sale
| 30 June 2018 | 31 December 2017 | |||||||
| Book value | Provision | Net book value | Book value | Provision | Net book value | |||
| Available-for-sale equity instruments | 13,685,760.00 | - | 13,685,760.00 | 13,865,760.00 | 180,000.00 | 13,685,760.00 | ||
| - Measured at cost | - | - | - | 13,865,760.00 | 180,000.00 | 13,685,760.00 | ||
| - Measured at fair value through other comprehensive income | 13,685,760.00 | - | 13,685,760.00 | - | - | - | ||
| 13,685,760.00 | - | 13,685,760.00 | 13,865,760.00 | 180,000.00 | 13,685,760.00 | |||
（2） Financial assets available-for-sale measured at fair value
| Classificantion | Equity investments available for sale | Debt instrument available for sale | Total | |
| Fair value | 13,685,760.00 | - | 13,685,760.00 |
Notice:
According to “CSA No.22- Financial Instrument Measurement and Recognition” and “CSA No.37- Financial
Instrument Disclosure”, the boarder regonized the assets as financial assets measured at fair value
through other comprehensive income
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
9. Financial assets available-for-sale
（3） Financial assets available-for-sale measured at cost
| Investee | Carrying amount | Impairment provision | Shareholding (%) | received for the year | ||||||
| Opening | Increase | Decrease | Closing | Opening | Increase | Decrease | Closing | |||
| Sinopharm Health Online Co., Ltd. | 12,000,000.00 | - | (12,000,000.00) | - | - | - | - | - | 8.06 | - |
| Sinopharm Holding Hubei Guoda Pharmacy Co., Ltd. | 1,000,000.00 | - | (1,000,000.00) | - | - | - | - | - | 10.00 | - |
| Hunan Zhongbai pharmaceutical investment Co., Ltd. | 315,000.00 | - | (315,000.00) | - | - | - | 6.31 | 31,500.00 | ||
| Shanghai Guoda Shuguang Pharmacy Co., Ltd. | 270,760.00 | - | (270,760.00) | - | - | - | - | - | 25.00 | - |
| Xinxiang Golden Elephant. | 180,000.00 | - | (180,000.00) | - | (180,000.00) | - | 180,000.00 | - | 18.00 | - |
| Shanghai Guoren Pharmacy Co., Ltd. | 100,000.00 | - | (100,000.00) | - | - | - | - | - | 10.00 | - |
| 13,865,760.00 | - | 13,865,760.00 | - | (180,000.00) | - | 180,000.00 | - | - | 31,500.00 | |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
10. Long-term equity investments
Associates in 2018
| Investee | 1 January 2018 | Changes in the year | 30 June 2018 | Provision for impairment | |||||
| Additional Investment | Profit of loss under equity method | Other changes in equity | Cash dividend declared by investee | Other | |||||
| Associates | |||||||||
| Shenzhen Main Luck Pharmaceutical Inc. (“Main Luck Pharmaceutical”). | 239,046,738.14 | - | 29,983,887.32 | - | - | - | 269,030,625.46 | - | |
| Zhijun Medicine | 291,042,921.20 | - | 61,373,560.78 | - | (58,111,254.57) | - | 294,305,227.41 | - | |
| Zhijun Trade | 7,676,142.69 | - | 853,674.01 | - | (664,795.03) | - | 7,865,021.67 | - | |
| Zhijun Suzhou | 46,199,728.91 | - | (10,671,086.78) | - | - | - | 35,528,642.13 | - | |
| Pingshan Medicine | 68,686,804.33 | - | 15,453,485.62 | - | (9,719,480.71) | - | 74,420,809.24 | - | |
| Morden Pharma | 979,174,050.62 | - | 65,661,682.41 | 397,342.21 | (8,641,853.20) | 193,639.30 | 1,036,784,861.34 | - | |
| Shanghai Beiyi Guoda Pharmaceutical Co. Ltd. | 9,518,694.65 | - | 659,783.20 | - | - | - | 10,178,477.85 | - | |
| Shanghai Liyi Pharmacy Co., Ltd. | 771,408.05 | - | - | - | - | - | 771,408.05 | - | |
| Sinopharm Jienuo Medical Treatment Service Guangdong Co., Ltd. (“Guangdong Jie nuo”) | 8,502,884.50 | - | (652,715.21) | - | - | - | 7,850,169.29 | - | |
| Shanghai Dingqun Management & Consulting Co. , Ltd | - | 20,000,000.00 | - | - | - | - | 20,000,000.00 | - | |
| Dongyuan Accord Pharmaceutical Chain Co., Ltd. | 396,638.32 | - | - | - | - | - | 396,638.32 | 396,638.32 | |
| 1,651,016,011.41 | 20,000,000.00 | 162,662,271.35 | 397,342.21 | (77,137,383.51) | 193,639.30 | 1,757,131,880.76 | 396,638.32 | ||
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
11. Investment properties
Subsequent measurement under the cost model:
| 2018 | Buildings and constructions | Land use right | Total | |
| Original cost | ||||
| Opening balance | 245,932,518.64 | 23,370,084.72 | 269,302,603.36 | |
| Purchase | 45,481.13 | - | 45,481.13 | |
| Transfer from fixed assets | 4,605,965.69 | - | 4,605,965.69 | |
| Transfer to fixed assets | 6,209,855.73 | - | 6,209,855.73 | |
| Transfer to intangible assets | 470,783.88 | - | 470,783.88 | |
| Closing balance | 243,903,325.85 | 23,370,084.72 | 267,273,410.57 | |
| Accumulated depreciation and amortization | ||||
| Opening balance | 106,139,314.25 | 8,184,950.00 | 114,324,264.25 | |
| Provision | 4,506,346.47 | 249,314.66 | 4,755,661.13 | |
| Transfer from fixed assets | 1,192,262.29 | - | 1,192,262.29 | |
| Transfer to fixed assets | 3,420,626.15 | - | 3,420,626.15 | |
| Transfer to intangible assets | 287,874.74 | - | 287,874.74 | |
| Closing balance | 108,129,422.12 | 8,434,264.66 | 116,563,686.78 | |
| Provision for impairment | ||||
| Opening balance | 1,300,000.00 | - | 1,300,000.00 | |
| Closing balance | 1,300,000.00 | - | 1,300,000.00 | |
| Carrying amount | ||||
| At end of year | 134,473,903.73 | 14,935,820.06 | 149,409,723.79 | |
| At beginning of the year | 138,493,204.39 | 15,185,134.72 | 153,678,339.11 |
（2）The fixed asset failing to accomplish certification of title
| Items | Carrying amount | Reason for outstanding property right certificates | |
| Reconstruction of old town | 65,329,796.40 | Sinopharm Guangxi Logistics leased the property. As at 30 June 2018, the original cost is RMB70,085,820.00 and the Accumulated depreciation and amortization is RMB4,756,023.60. The certification of title is in progress. |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
12. Fixed assets
| 2018 | |||||||
| Buildings | Machinery | Vehicles | Other equipment | Fixed asset improvements | Total | ||
| Original cost | |||||||
| Opening balance | 456,161,611.21 | 183,752,571.14 | 87,999,790.56 | 259,281,585.41 | 30,111,198.47 | 1,017,306,756.79 | |
| Purchase | 11,609,004.98 | 7,511,943.05 | 2,537,492.46 | 8,854,897.18 | 6,106,795.57 | 36,620,133.24 | |
| Transfer from construction in progress | - | 2,066,324.80 | - | - | - | 2,066,324.80 | |
| Transfer from Investment properties | 6,209,855.73 | - | - | - | - | 6,209,855.73 | |
| Business combination not involving enterprises under common control | - | - | - | - | - | - | |
| Transfer to Investment properties | 4,605,965.69 | - | - | - | - | 4,605,965.69 | |
| Disposal of subsidiaries | - | - | - | - | - | - | |
| Disposal or retirement | - | 1,176,437.95 | 3,672,293.82 | 1,263,162.39 | 1,110,799.64 | 7,222,693.80 | |
| Closing balance | 469,374,506.23 | 192,154,401.04 | 86,864,989.20 | 266,873,320.20 | 35,107,194.40 | 1,050,374,411.07 | |
| Accumulated depreciation | |||||||
| Opening balance | 149,119,755.22 | 73,601,067.33 | 59,221,772.87 | 154,689,144.23 | 28,964,583.12 | 465,596,322.77 | |
| Provision | 6,394,173.54 | 11,961,644.96 | 3,796,763.45 | 9,720,011.38 | 6,493,533.09 | 38,366,126.42 | |
| Transfer from Investment properties | 3,420,626.15 | - | - | - | - | 3,420,626.15 | |
| Transfer to Investment properties | 1,192,262.29 | - | - | - | - | 1,192,262.29 | |
| Disposal of subsidiaries | - | - | - | - | - | - | |
| Disposal or retirement | - | 1,037,763.79 | 3,142,894.82 | 979,173.35 | 759,134.31 | 5,918,966.27 | |
| Closing balance | 157,742,292.62 | 84,524,948.50 | 59,875,641.50 | 163,429,982.26 | 34,698,981.90 | 500,271,846.78 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
12. Fixed assets (Continued)
| 2018(Continued) | |||||||
| Buildings | Machinery | Vehicles | Other equipment | Fixed asset improvements | Total | ||
| Provision for impairment | |||||||
| Opening balance | - | - | - | - | - | - | |
| Disposal of subsidiaries | - | - | - | - | - | - | |
| Closing balance | - | - | - | - | - | - | |
| Carrying amount | |||||||
| At end of year | 311,632,213.61 | 107,629,452.54 | 26,989,347.70 | 103,443,337.94 | 408,212.50 | 550,102,564.29 | |
| At beginning of the year | 307,041,855.99 | 110,151,503.81 | 28,778,017.69 | 104,592,441.18 | 1,146,615.35 | 551,710,434.02 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
12. Fixed assets (Continued)
(a) Fixed assets held under finance leases are presented as follows:
| 2018 | ||||
| Original cost | Accumulated depreciation | Provision for impairment | Carrying amount | |
| Machinery | 25,065,579.83 | 8,994,037.20 | - | 16,071,542.63 |
(b) Fixed assets without official property right certificates
| Items | Carrying amount | Reason for outstanding property right certificates |
| Buildings | 27,867,743.48 | In the process |
(c) As at 30 June 2018, there were no fixed assets that were leased under operating leases.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
13. Construction in progress
| 30 June 2018 | 31 December 2017 | ||||||
| Carrying balance | Provision for impairment | Carrying amount | Carrying balance | Provision for impairment | Carrying amount | ||
| Warehouse improvement project | 3,563,091.66 | - | 3,563,091.66 | 1,009,314.93 | - | 1,009,314.93 | |
| New office building project | 1,056,812.98 | - | 1,056,812.98 | 765,882.63 | - | 765,882.63 | |
| Supply chain extension project | 8,234,723.40 | - | 8,234,723.40 | 8,193,935.70 | - | 8,193,935.70 | |
| Software project | 8,038,066.18 | - | 8,038,066.18 | 3,926,271.33 | - | 3,926,271.33 | |
| Other projects | 9,913,179.89 | - | 9,913,179.89 | 9,051,854.40 | - | 9,051,854.40 | |
| 30,805,874.11 | - | 30,805,874.11 | 22,947,258.99 | - | 22,947,258.99 | ||
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
13. Construction in progress (Continued)
| (a) | Changes of significant construction in progress |
Changes of significant construction in progress in 2018 are presented as follows:
| Project name | Budget | At beginning of the year | Increase | Decrease | At end of year | Source of funds | Proportion of investment to budget (%) | |||||
| Transferred to fixed assets | Transferred to intangible assets | Transfer to long term prepaid expense | Disposal of subsidiaries | Others | ||||||||
| Warehouse improvement project | 6,808,651.57 | 1,009,314.93 | 3,919,831.35 | - | - | - | - | 1,366,054.62 | 3,563,091.66 | Other | 70.65% | |
| New office building Project | 1,410,920.18 | 765,882.63 | 290,930.35 | - | - | - | - | - | 1,056,812.98 | Other | 86.80% | |
| Supply chain extension project | 32,144,615.39 | 8,193,935.70 | 2,107,112.50 | 2,066,324.80 | - | - | - | - | 8,234,723.40 | Other | 87.41% | |
| Software project | 10,880,000.00 | 3,926,271.33 | 4,111,794.85 | - | - | - | - | - | 8,038,066.18 | Other | 30.00% | |
| Other construction projects | 207,890,962.32 | 9,051,854.40 | 1,939,425.82 | - | - | - | - | 1,078,100.33 | 9,913,179.89 | Other | 5.21% | |
| 259,135,149.46 | 22,947,258.99 | 12,369,094.87 | 2,066,324.80 | - | - | - | 2,444,154.95 | 30,805,874.11 | - | - | ||
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
13. Construction in progress (Continued)
| (a) | Changes of significant construction in progress（Continued） |
| Project name | Budget | Progress（%） | Accumulated amount of interest capitalized | Incl: interest capitalized in current year | Capitalization rate (%) |
| Warehouse improvement project | 6,808,651.57 | 70.65% | - | - | - |
| New office building project | 1,410,920.18 | 86.80% | - | - | - |
| Supply chain extension project | 32,144,615.39 | 87.41% | - | - | - |
| Software project | 10,880,000.00 | 30.00% | - | - | - |
| Other construction projects | 207,890,962.32 | 5.21% | - | - | - |
| 259,135,149.46 | - | - | - | - |
For the six month ended 30 June 2018, the original cost of construction in progress transferred to fixed assets amounted to RMB2,066,324.80 (For the six monthended 30 June 2017: RMB1,687,272.11), the original cost of construction in progress transferred to long term prepaid expense amounted to RMB2,444,154.95(For the six month ended 30 June 2017: RMB14,725,268.66) and there is no construction in progress transferred to intangible assets (For the six month ended 30June 2017: RMB15,395,443.32).
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
14. Intangible assets
| 2018 | Land use right | Software | Sales network | Trademarks | Franchise | Total | |
| Original cost | |||||||
| Opening balance | 60,481,989.28 | 126,128,809.36 | 112,117,142.86 | 159,219,850.00 | 710,000.00 | 458,657,791.50 | |
| Purchase | - | 1,925,352.60 | - | - | - | 1,925,352.60 | |
| Transfer from construction in progress | - | - | - | - | - | - | |
| Transfer from investment properties | 470,783.88 | - | - | - | - | 470,783.88 | |
| Disposal of subsidiaries | - | - | - | - | - | - | |
| Transfer to investment properties | - | - | - | - | - | - | |
| Transfer to long term prepaid expense | - | - | - | - | - | - | |
| Disposal or retirement | 1,210,000.00 | 1,210,000.00 | |||||
| Closing balance | 59,742,773.16 | 128,054,161.96 | 112,117,142.86 | 159,219,850.00 | 710,000.00 | 459,843,927.98 | |
| Accumulated amortization | |||||||
| Opening balance | 26,667,841.47 | 55,408,075.33 | 35,086,476.18 | 15,033,967.64 | 710,000.00 | 132,906,360.62 | |
| Provision | 288,177.06 | 6,268,956.05 | 2,802,928.57 | 2,472,852.94 | - | 11,832,914.62 | |
| Transfer from investment properties | 287,874.74 | - | - | - | - | 287,874.74 | |
| Disposal of subsidiaries | - | - | - | - | - | - | |
| Transfer to investment properties | - | - | - | - | - | - | |
| Transfer to long term prepaid expense | - | - | - | - | - | - | |
| Disposal or retirement | - | - | - | - | - | - | |
| Closing balance | 27,243,893.27 | 61,677,031.38 | 37,889,404.75 | 17,506,820.58 | 710,000.00 | 145,027,149.98 |
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
14. Intangible assets (Continued)
| 2018 (Continued) | Land use right | Software | Sales network | Trademarks | Franchise | Total | |
| Provision for impairment | |||||||
| Opening balance | - | - | - | - | - | - | |
| Disposal of subsidiaries | - | - | - | - | - | - | |
| Closing balance | - | - | - | - | - | - | |
| Carrying amount | |||||||
| At end of the year | 32,498,879.89 | 66,377,130.58 | 74,227,738.11 | 141,713,029.42 | - | 314,816,778.00 | |
| At beginning of the year | 33,814,147.81 | 70,720,734.03 | 77,030,666.68 | 144,185,882.36 | - | 325,751,430.88 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
14. Intangible assets (Continued)
As at 30 June 2018, there were no intangible assets arising from internal research anddevelopment (30 June 2017: none)
As at30 June 2018, intangible assets without the right certificates as below,
| Items | Carrying amount | Reason for outstanding property right certificates |
| Land use right | 4,000,000.00 | In the process |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
15. Goodwill
(1) Goodwill cost
| 30 June 2018 | Opening balance | Increase | Decrease | Closing balance |
| Jiangmen Renren Medical Co., Ltd. (“Sinopharm Jiangmen”) | 27,392,317.73 | - | - | 27,392,317.73 |
| Sinopharm Holding Shenzhen Yanfeng Co., Ltd. (“Sinopharm Yanfeng”) | 16,868,644.87 | - | - | 16,868,644.87 |
| Sinopharm Holding Zhaoqing Co., Ltd. (“Sinopharm Zhaoqing”) | 2,594,341.53 | - | - | 2,594,341.53 |
| Sinopharm Holding Shaoguan Co., Ltd. (“Sinopharm Shaoguan”) | 1,686,496.80 | - | - | 1,686,496.80 |
| Sinopharm Holding Meizhou Co., Ltd. (“Sinopharm Meizhou”) | 1,610,819.66 | - | - | 1,610,819.66 |
| Sinopharm Holding Huizhou Co., Ltd. (“Sinopharm Huizhou”) | 923,184.67 | - | - | 923,184.67 |
| Sinopharm Holding Zhanjiang Co., Ltd. (“Sinopharm Zhanjiang”) | 282,135.55 | - | - | 282,135.55 |
| Sinopharm Holding Dongguan Co., Ltd. (“Sinopharm Dongguan”) | 1,499.02 | - | - | 1,499.02 |
| South Pharma & Trade | 2,755,680.62 | - | - | 2,755,680.62 |
| Foshan Nanhai | 88,877,850.51 | - | - | 88,877,850.51 |
| Sinopharm Holding Zhuhai Co.,Ltd.(Sinopharm Zhuhai) | 6,772,561.47 | - | - | 6,772,561.47 |
| Sinopharm Holding Maoming Co., Ltd. (“Sinopharm Maoming”) | 66,417.07 | - | - | 66,417.07 |
| Sinopharm Holding Guoda ForMe Medicines (Shanghai) Co., Ltd. ( “ForMe Medicines”) | 3,033,547.53 | - | - | 3,033,547.53 |
| Sinopharm Holding Guoda ForMe Pharmacy Chain Store Co., Ltd. (“ForMe Pharmacy Chain Store”) | 19,405,450.23 | - | - | 19,405,450.23 |
| Sinopharm Holding Guoda Shanxi Yiyuan Pharmacy Chain Store Co., Ltd. | 9,080,100.00 | - | - | 9,080,100.00 |
| Sinopharm Holding Guoda Yangzhou Dadesheng Pharmacy Chain Store Co., Ltd. | 7,979,000.00 | - | - | 7,979,000.00 |
| Zhejiang Guoda Pharmacy Co., Ltd. | 3,045,183.85 | - | - | 3,045,183.85 |
| Guoda Shenyang Tianyitang Pharmacy Chain | 1,687,942.92 | - | - | 1,687,942.92 |
| Sinopharm Holding Guoda Shenyang Pharmacy Chain Store Co., Ltd. | 39,360,015.16 | - | - | 39,360,015.16 |
| Sinopharm Holding Guoda Nanjing Pharmacy Chain Store Co., Ltd. | 11,598,341.12 | - | - | 11,598,341.12 |
| Sinopharm Holding Guoda Shandong Pharmacy Chain Store Co., Ltd. | 29,110,409.46 | - | - | 29,110,409.46 |
| Quanzhou Guoda Pharmacy Chain Store Co., Ltd. | 41,298,622.59 | - | - | 41,298,622.59 |
| Shanxi Guoda Wanmin Pharmacy Chain Store Co., Ltd. | 65,025,000.00 | - | - | 65,025,000.00 |
| Sinopharm Holding Hunan Guoda Minshengtang Pharmacy Chain Co., Ltd. | 41,165,574.64 | - | - | 41,165,574.64 |
| Liyang Guoda People Pharmacy Chain Store Co., Ltd. | 107,275,095.74 | - | - | 107,275,095.74 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
15. Goodwill (Continued)
(1)Goodwill cost (Continued)
| 30 June 2018 (Continued) | Opening balance | Increase | Decrease | Closing balance |
| Business combination not involving enterprises under common control | Disposal | |||
| Sinopharm Holding Guoda Henan Pharmacy Chain Store Co., Ltd. | 22,666,179.77 | - | - | 22,666,179.77 |
| Sinopharm Holding Guoda Neimenggu Pharmacy Chain Store Co., Ltd. | 70,485,777.00 | - | - | 70,485,777.00 |
| Sinopharm Guoda Pharmacy Jiangmen Chain Co., Ltd. | 77,350,000.00 | - | - | 77,350,000.00 |
| Fujian Guoda Pharmacy Chain Store Co., Ltd. | 1,567,250.76 | - | - | 1,567,250.76 |
| Sinopharm Holding Guoda Pharmacy Chain Store Shanghai Co., Ltd. | 5,028,638.00 | - | - | 5,028,638.00 |
| Beijing Golden Elephant Pharmacy Medicine Chain Company Limited (“Beijing Golden Elephant”) | 63,546,507.81 | - | - | 63,546,507.81 |
| Beijing Yangqiao Rongzhi Golden Elephant Pharmacy Company Limited | 593,616.55 | - | - | 593,616.55 |
| Xiaoyi Guoda Wanmin Baicaotang Pharmacy Chain Store Co., Ltd. (“Xiaoyi Wanmin”) | 15,866,680.00 | - | - | 15,866,680.00 |
| Shijiazhuang Lerentang Yikang Pharmacy Chain Store Co., Ltd. (“Hebei Yikang”) | 29,482,149.57 | - | - | 29,482,149.57 |
| Shenzhen Guanganli Pharmacy Chain Store Co., Ltd. store acquisition | 13,420,000.00 | - | - | 13,420,000.00 |
| Guoda Taishan | 26,826,120.55 | - | - | 26,826,120.55 |
| 855,729,152.75 | - | - | 855,729,152.75 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
15. Goodwill (Continued)
(2)Provision of impairment loss
Changes in provision for impairment of goodwill are presented as follows:
| 2018 | Opening balance | Increase | Decrease | Closing balance | |
| Quanzhou Guoda Pharmacy Chain Store Co., Ltd. | 25,000,000.00 | - | - | 25,000,000.00 |
The method of goodwill impairment testing process, parameter and recognition of impairment loss:
The recoverable amount of asset groups and groups of asset groups is calculated by using the
estimated cash flows according to the five-year budget approved by management. Managementdetermines budgeted gross margin based on historical experience and forecast on marketdevelopment. The discount rates determined by management are the pre-tax interest rates whichreflect the risks specific to the related asset groups and groups of asset groups. The aboveassumptions are used to assess the recoverable amount of each asset group and group of assetgroups within the corresponding operating segment.
16. Long-term prepaid expenses
| 2018 | Opening balance | Additions | Amortization | Other decrease | Closing balance | |
| Fixed asset improvement expenditure | 199,209,837.80 | 47,172,150.82 | 37,044,188.47 | 1,059,643.27 | 208,278,156.88 | |
| Acquisition expenditure to obtain the right to operate | 49,013,331.48 | 4,191,488.00 | 3,801,140.68 | - | 49,403,678.80 | |
| Others | 4,023,881.51 | 161,478.68 | 792,968.47 | - | 3,392,391.72 | |
| 252,247,050.79 | 51,525,117.50 | 41,638,297.62 | 1,059,643.27 | 261,074,227.40 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
17. Deferred tax assets/liabilities
| (a) | Deferred tax assets before offseting | |||||
| 30 June 2018 | 31 December 2017 | |||||
| Deductible temporary differences | Deferred tax assets | Deductible temporary differences | Deferred tax assets | |||
| Provision for impairment of assets | 65,649,831.79 | 15,142,434.13 | 66,273,264.14 | 16,274,860.36 | ||
| Deductible tax loss | 92,143,605.37 | 22,824,595.10 | 115,556,647.93 | 28,705,915.53 | ||
| Accrued payroll | 38,401,349.70 | 9,046,959.71 | 60,250,524.89 | 14,540,506.81 | ||
| Accrued expenses | 83,904,219.01 | 20,394,682.93 | 47,994,796.55 | 11,141,862.66 | ||
| Deferred revenue | 29,041,585.51 | 7,198,990.94 | 30,837,426.91 | 7,540,824.20 | ||
| Others | 6,946,672.66 | 1,462,475.52 | 5,424,788.24 | 1,268,913.50 | ||
| 316,087,264.04 | 76,070,138.33 | 326,337,448.66 | 79,472,883.06 | |||
| (b) | Deferred tax liabilities before offseting | |||||
| 30 June 2018 | 31 December 2017 | |||||
| Taxable temporary differences | Deferred tax liabilities | Taxable temporary differences | Deferred tax liabilities | |||
| Fair value adjustment for business combination not involving enterprises under common control | 233,836,821.08 | 58,459,205.27 | 239,773,296.84 | 59,943,324.20 | ||
| Changes in fair value | 45,620,230.45 | 11,405,057.61 | 53,300,601.31 | 11,939,928.82 | ||
| 279,457,051.53 | 69,864,262.88 | 293,073,898.15 | 71,883,253.02 | |||
| Deferred tax assets and liabilities are presented after being offset against each other: | ||||||
| 30 June 2018 | 31 December 2017 | |||||
| Deferred tax assets/liabilities -Net | Temporary differences after set-off | Deferred tax assets/liabilities - Net | Temporary differences after set-off | |||
| Deferred tax assets | 76,070,138.33 | 79,472,883.06 | ||||
| Deferred tax liabilities | 69,864,262.88 | 71,883,253.02 | ||||
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
17. Deferred tax assets/liabilities (Continued)
| (c) | The deductible temporary differences and deductible losses that were not recognized as deferred tax assets are presented as follows: | ||
| 30 June 2018 | 31 December 2017 | ||
| Deductible temporary differences | 886,927.95 | 1,480,000.00 | |
| Deductible loss (i) | 21,759,547.45 | 21,759,547.45 | |
| 22,646,475.40 | 23,239,547.45 | ||
| (i) For those loss-making subsidiaries, as it is not considered probable that taxable profit will be available against which the tax losses can be utilized, the Group has not recognized deferred tax assets arising from accumulated losses amounting to RMB21,759,547.45 which are tax deductible under the tax law. | |||
| The aforesaid unrecognized deductible losses will due: | |||
| 30 June 2018 | 31 December 2017 | ||
| 2018 | 2,970,715.21 | 2,970,715.21 | |
| 2019 | 3,159,690.78 | 3,159,690.78 | |
| 2020 | 4,835,260.23 | 4,835,260.23 | |
| 2021 | 2,641,220.49 | 2,641,220.49 | |
| 2022 | 8,152,660.74 | 8,152,660.74 | |
| 21,759,547.45 | 21,759,547.45 | ||
(note) As some subsidiaries are still making loss, and it’s uncertainty that the loss-making subsidiarie
can obtain enough taxable income to offset against the loss in the future. So the group do notrecognised deferred tax assets which came from the deductible loss of RMB 21,759,547.45 .
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
18. Other non-current assets
| 30 June 2018 | 31 December 2017 | |
| Prepayment for investment (Note 1) | 60,000,000.00 | 60,000,000.00 |
| Physical assets reserve specifically authorized | 43,002,651.70 | 45,074,249.27 |
| Prepayment for a rental fee (Note 2) | 13,728,510.39 | 17,506,780.28 |
| Prepayment for project and equipment | 13,495,723.15 | 19,441,433.20 |
| 130,226,885.24 | 142,022,462.75 | |
| Note 1 On March 2017, the Group subscribed to Sinopharm Zhongjin medical industry fund, as its limited partner. The total investment which amounted to RMB200 million, will be paid within 3 years gradually. The total amount paid unitl now was 30% of the total investment which was RMB60 million. The amount which should be paid in current year have not been settled. Note 2: The prepayment for a rental fee which is over one year is recognized at other non-current assets for the Group. | ||
19. Short-term borrowings
| 30 June 2018 | 31 December 2017 | |||
| Credit borrowings | 1,841,257,752.04 | 1,413,638,993.97 | ||
| Discounted notes | 209,881,899.63 | 147,715,527.67 | ||
| 2,051,139,651.67 | 1,561,354,521.64 | |||
| As at 30 June 2018, the annual interest rate for the above borrowings was 4.65% (31 December 2017: 4.34%). As at 30 June 2018, credit borrowings of RMB1,423,611,601.11 were guaranteed by the Company and its subsidiaries (31 December 2017: credit borrowings of RMB1,156,302,581.02 were guaranteed by the Company and its subsidiaries.), guaranteed borrowings of RMB122,986,581.52 (31 December 2017: RMB147,715,527.67) were guaranteed by Sinopharm Group. | ||||
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
20. Notes payable
| 30 June 2018 | 31 December 2017 | ||||
| Commercial acceptance notes | 40,893,576.65 | 60,129,565.95 | |||
| Bank acceptance notes | 2,332,734,564.21 | 2,672,308,262.47 | |||
| 2,373,628,140.86 | 2,732,437,828.42 |
At 30 June 2018，balance of notes payable at maturity was RMB0.00. (31 December 2017：RMB
19,900.00).
21. Accounts payable
| 30 June 2018 | 31 December 2017 | ||||
| Trade payables | 7,230,024,480.35 | 6,144,221,000.10 |
At 30 June 2018, the total amount of accounts payable aged over one year wasRMB391,213,598.73(31 December 2017: RMB269,295,585.18 ), and the payment has not yetbeen cleared.
22. Advances from customers
| 30 June 2018 | 31 December 2017 | ||||
| Sales received in advance | 178,425,087.30 | 216,938,239.32 |
At 30 June 2018, the total amount of accounts payable aged over one year wasRMB3,598,442.48(31 December 2017: RMB16,618,324.72).
23. Employee benefits payable
| 2018 | At beginning of the year | Increase | Decrease | At end of the year | |
| Short-term employee benefits (a) | 209,320,163.70 | 828,379,586.12 | 897,398,633.92 | 140,301,115.90 | |
| Post-employment benefits (defined contribution plan)(b) | 5,596,277.12 | 83,185,725.88 | 78,979,669.66 | 9,802,333.34 | |
| Termination benefits (c) | 740,085.72 | 587,663.14 | 745,755.84 | 581,993.02 | |
| 215,656,526.54 | 912,152,975.14 | 977,124,059.42 | 150,685,442.26 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
23. Employee benefits payable (Continued)
| (a) | Short-term employee benefits |
| 2018 | At beginning of year | Increase | Decrease | At end of year | ||||
| Salaries, bonuses, allowances and grants | 193,078,506.49 | 721,571,753.11 | 790,541,221.26 | 124,109,038.34 | ||||
| Staff welfare | 2,602,805.92 | 21,451,963.99 | 22,876,399.30 | 1,178,370.61 | ||||
| Social security contribution | 1,363,649.32 | 41,911,740.91 | 40,873,381.07 | 2,402,009.16 | ||||
| Incl: Medical insurance | 1,130,984.41 | 37,059,846.24 | 36,185,027.55 | 2,005,803.10 | ||||
| Work injury insurance | 10,541.55 | 1,788,839.75 | 1,680,745.39 | 118,635.91 | ||||
| Maternity insurance | 222,123.36 | 3,063,054.92 | 3,007,608.13 | 277,570.15 | ||||
| Housing funds | 929,089.33 | 28,300,167.29 | 28,485,275.01 | 743,981.61 | ||||
| Labor union funds and employee education funds | 10,178,562.87 | 14,254,035.42 | 13,705,147.37 | 10,727,450.92 | ||||
| Other short-term benefits | 1,167,549.77 | 889,925.40 | 917,209.91 | 1,140,265.26 | ||||
| Total | 209,320,163.70 | 828,379,586.12 | 897,398,633.92 | 140,301,115.90 |
| (b) | Defined contribution plan |
| 2018 | At beginning of year | Increase | Decrease | At end of year | ||||||
| Basic pension insurance | 1,739,623.34 | 79,178,966.66 | 76,578,569.12 | 4,340,020.88 | ||||||
| Unemployment insurance | 221,831.21 | 2,274,056.40 | 2,062,541.82 | 433,345.79 | ||||||
| Contribution to pension fund | 3,634,822.57 | 1,732,702.82 | 338,558.72 | 5,028,966.67 | ||||||
| 5,596,277.12 | 83,185,725.88 | 78,979,669.66 | 9,802,333.34 | |||||||
Note：
For half year of 2018, the Group provided other termination benefits for severing labor relations ofRMB69,075.00 (2017: RMB117,149.03).
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
24. Tax payable
| 30 June 2018 | 31 December 2017 | |||
| Value-added tax | 82,014,625.51 | 85,843,903.33 | ||
| Corporate Income taxes | 100,059,775.47 | 102,947,883.38 | ||
| Individual income tax payable | 11,467,041.74 | 3,921,305.41 | ||
| City maintenance and construction surtax | 7,179,360.17 | 6,691,713.89 | ||
| Educational surcharge payable | 5,219,506.77 | 4,862,588.43 | ||
| Water conservancy fund payable | 5,216,011.64 | 5,356,119.89 | ||
| Stamp duty | 3,350,847.10 | 4,166,596.91 | ||
| Property tax | 811,622.69 | 971,268.99 | ||
| Land use tax payable | 187,073.98 | 513,790.48 | ||
| Others | 7,845,865.69 | 8,477,729.53 | ||
| 223,351,730.76 | 223,752,900.24 |
25. Interest payable
| 30 June 2018 | 31 December 2017 | |||
| Interest payable | ||||
| - interest on long-term borrowings | 35,440.24 | 38,984.28 | ||
| - interest on short-term borrowings | 10,316,727.99 | 6,968,878.69 | ||
| Factoring interest paybale | 10,856.93 | - | ||
| Interest payable to former shareholder | 15,188.75 | 303,956.68 | ||
| 10,378,213.91 | 7,311,819.65 |
26. Dividend payable
| 30 June 2018 | 31 December 2017 | |||
| Shanghai Fosun Pharmaceutical (Group) Co., Ltd. | 4,835,511.58 | 4,835,511.58 | ||
| Luqi Zhong | 1,853,188.06 | 4,103,188.06 | ||
| Lunan Zhong | 345,928.44 | 765,928.44 | ||
| Xiangjun Zhong | 271,800.92 | 601,800.92 | ||
| Meiluo Pharmaceutical Co., Ltd. | 164,170.07 | 164,170.07 | ||
| Ganyin Bai | 29,204.73 | 29,204.73 | ||
| Zhenfang Zhang | 1,389,639.31 | 1,389,639.31 | ||
| 8,889,443.11 | 11,889,443.11 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
27. Other payables
| 30 June 2018 | 31 December 2017 | |||
| Payables for factoring programs | 305,380,394.63 | 388,729,758.59 | ||
| Deposit | 231,443,810.46 | 129,662,851.39 | ||
| Payables arising from acquisition of subsidiaries | 80,432,813.17 | 109,445,960.00 | ||
| Payables for construction in progress and equipment | 50,543,206.13 | 98,293,860.11 | ||
| Accrued selling and distribution expenses | 128,398,461.81 | 96,065,832.84 | ||
| Payables to individuals | 49,879,370.07 | 34,316,089.64 | ||
| Payables for rentals | 13,320,632.62 | 27,766,119.66 | ||
| Payables for land transfer payments | 18,071,000.00 | 18,071,000.00 | ||
| Payables to related parties | 20,450,723.24 | 15,817,669.33 | ||
| Temparary loan | 15,800,000.00 | 15,800,000.00 | ||
| Collection of others | 18,182,500.61 | 8,430,347.08 | ||
| Others | 92,273,791.37 | 68,728,908.62 | ||
| 1,024,176,704.11 | 1,011,128,397.26 |
At 30 June 2018, other payables due within 1 year amounted to RMB 184,112,776.75(31 December2017: RMB 136,676,639.91 ). It is mainly consisted of construction cost payable, companyborrowings payable, deposits and etc.
28. Non-current liabilities due within 1 year
| 30 June 2018 | 31 December 2017 | |||
| Finance lease payables | 5,651,227.56 | 5,434,770.70 | ||
| 5,651,227.56 | 5,434,770.70 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
29. Other current liabilities
| 30 June 2018 | 31 December 2017 | |||
| Output VAT to be recognized | 114,239.45 | 112,817.65 |
30. Long-term borrowings
| 30 June 2018 | 31 December 2017 | ||||
| Credit borrowings (a) | 31,600,000.00 | 31,600,000.00 | |||
| 31,600,000.00 | 31,600,000.00 | ||||
| (a) At 30 June 2018, the entrusted borrowings of RMB31,600,000.00 were provided by Sinopharm Group through Group Financial Co. | |||||
| At 30 June 2018, the annual interest rate of above-mentioned borrowings was 4.04% (31 December 2017: 4.40%). | |||||
31. Long-term payables
| 30 June 2018 | 31 December 2017 | ||||
| Finance lease payables | 12,255,803.40 | 14,767,307.84 | |||
| Less: due within one year | (5,651,227.56) | (5,434,770.70) | |||
| 6,604,575.84 | 9,332,537.14 |
32. Long-term employee benefits payable
| 30 June 2018 | 31 December 2017 | |||
| Early retirement benefits payable | 1,636,000.00 | 1,777,000.00 | ||
| Less: Retirement benefits payable – within 1 year (Note V (24)(c)) | - | - | ||
| 1,636,000.00 | 1,777,000.00 |
33. Payable for specific projects
| 2018 | ||||||||
| At beginning of year | Increase | Decrease | At end of year | |||||
| Special funds granted by government | 800,000.00 | - | - | 800,000.00 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
34. Deferred income
| 2018 | Opening balance | Increase | Decrease | Closing balance | Reasons of derred income | ||||
| Government grants | 96,725,183.34 | - | 2,663,153.60 | 94,062,029.74 | Government grants | ||||
| Promotion Rewards Program | 28,357,189.19 | 1,189,038.59 | 1,612,877.41 | 27,933,350.37 | The fair value of promotion rewards | ||||
| 125,082,372.53 | 1,189,038.59 | 4,276,031.01 | 121,995,380.11 |
| As at 30 June 2018, deferred income from government grants are as follow: | |||||||
| Government grants program | Opening balance | Addition in the year | Amount included in non-operating income in the year | Amount included in other income in the year | Closing balance | Asset related/ income related | |
| Resettlement Compensation (i) | 78,253,849.73 | - | 1,349,204.28 | - | 76,904,645.45 | Asset related | |
| Guangxi Logistics Project | 6,949,832.98 | - | - | 248,203.20 | 6,701,629.78 | Asset related | |
| Logistics standardization project | 3,361,259.39 | - | - | 273,123.42 | 3,088,135.97 | Asset related | |
| A comprehensive experimental modern service industry subsidies | 1,800,000.00 | - | - | 150,000.00 | 1,650,000.00 | Asset related | |
| Shared Logistics Center (completed) | 270,858.75 | - | - | 9,400.20 | 261,458.55 | Asset related | |
| Other projects | 6,089,382.49 | - | - | 633,222.50 | 5,456,159.99 | income related | |
| 96,725,183.34 | - | 1,349,204.28 | 1,313,949.32 | 94,062,029.74 | |||
Due to the implementation of urban planning for old town reconstruction in Nanning, the operatingcenter of Guangxi Logistics which was located in Longteng Road District, Nanning City, was to bereconstructed in another place. According to the agreement signed between Guangxi Logistics and thereal estate developer, Guangxi Logistics would obtain a compensation of RMB120,250,000.00,including cash of RMB50,000,000.00 and property in constructing equaling a value ofRMB70,250,000.00. Cash compensation of RMB 50,000,000.00 was received in May 2012. In year2015, construction properties with a value of RMB70,250,000.00 were built and delivered, and hadbeen recognized as investment properties (Note V (18)).The compensation relating the capital expenditure in the reconstruction of the new logistic center inanother place, amounting to RMB93.32 million was recognized as deferred revenue, and would beamortized and recognized in the income statement within the expected useful lives using the straightline method (Note V(71)), and the other cash compensation, which amount approximates to RMB26.93million, was recognized in the income statement in 2012.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
35. Other non-current liabilities
| 30 June 2018 | 31 December 2017 | ||||
| Governmental medical reserve funds | 45,427,343.31 | 45,427,343.31 | |||
| Certain medical reserves funds were received by the Group from the PRC government and local government for purchasing medical products (including medicines) required to respond to serious disasters, epidemics and other emergencies. | |||||
36. Share capital
| 2018 | At beginning of year | At end of year | ||||||||
| Shares | 428,126,983.00 | 428,126,983.00 | ||||||||
37. Capital surplus
| 2018 | At beginning of year | Increase | Decrease | At end of year | |
| Share premium | 2,118,174,787.27 | - | - | 2,118,174,787.27 | |
| Significant reorganization | 1,173,907,763.19 | - | - | 1,173,907,763.19 | |
| Transition reserves from investments in associates reclassified from capital surplus to other comprehensive income | 2,020,250.22 | - | - | 2,020,250.22 | |
| Transfer of capital surplus recognized under the previous accounting system | 2,650,322.00 | - | - | 2,650,322.00 | |
| Others | (115,324,057.69) | 397,342.21 | - | (114,926,715.48) | |
| 3,181,429,064.99 | 397,342.21 | - | 3,181,826,407.20 |
Capital surplus-others increased by RMB397,342.21 when other changes in equity of ModernPharmaceutical resulted in adjustment of long-term equity investment and an increase of capitalsurplus by RMB397,342.21.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
38. Surplus reserve
| At beginning of year | Increase | Decrease | At end of year | ||
| Surplus reserve | 214,063,491.50 | - | - | 214,063,491.50 | |
| 214,063,491.50 | - | - | 214,063,491.50 |
39. Retained earnings
| 30 June 2018 | 31 December 2017 | ||
| Retained earnings at the end of the prior year | 5,572,952,806.39 | 4,689,189,642.51 | |
| A business combination involving enterprises under common control | - | 1,076,241.59 | |
| Retained earnings at beginning of year after retrospective adjustment and restatement | 5,572,952,806.39 | 4,690,265,884.10 | |
| Add: Net profit attributable to the parent | 641,727,034.93 | 1,057,791,930.67 | |
| Deduct: Withdrew surplus reserve | - | (32,747,520.00) | |
| Ordinary share cash dividends payable | (128,438,094.90) | (141,281,904.39) | |
| Others | - | (1,075,583.99) | |
| Retained earnings at end of year | 6,086,241,746.42 | 5,572,952,806.39 |
40. Operating revenue and cost
| For the six months ended 30 June 2018 | For the six months ended 30 June 2017 | ||||
| Revenue | Cost | Revenue | Cost | ||
| main operations | 20,606,027,974.57 | 18,355,002,752.42 | 20,372,097,755.35 | 18,352,591,276.82 | |
| Other operating | 173,138,725.10 | 12,640,971.42 | 152,709,914.22 | 11,443,174.01 | |
| 20,779,166,699.67 | 18,367,643,723.84 | 20,524,807,669.57 | 18,364,034,450.83 | ||
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
41. Tax and surcharges
| For the six month ended 30 June 2018 | For the six month ended 30 June 2017 | |||
| City maintenance and construction tax | 22,352,680.77 | 24,931,171.70 | ||
| Educational surcharge | 16,112,625.97 | 18,243,233.02 | ||
| Property tax | 3,075,856.41 | 3,345,273.43 | ||
| Land tax | 245,070.74 | 172,937.56 | ||
| Vehicle and vessel use tax | 98,966.20 | 98,180.93 | ||
| Stamp duty | 14,200,426.96 | 14,569,034.12 | ||
| Others | 534,900.20 | 1,825,790.10 | ||
| 56,620,527.25 | 63,185,620.86 |
42. Selling expenses
| For the six month ended 30 June 2018 | For the six month ended 30 June 2017 | |||
| Employees payroll and welfare benefits | 659,176,548.69 | 582,798,944.53 | ||
| Rental expenses | 322,805,173.33 | 285,053,247.11 | ||
| Transportation charges | 33,086,676.72 | 29,416,679.32 | ||
| Depreciation expenses | 26,125,384.59 | 21,860,957.80 | ||
| Promotion and marketing expenses | 18,454,328.54 | 16,881,877.36 | ||
| Office allowances | 16,283,197.98 | 15,153,489.34 | ||
| Entertainment expenses | 11,357,532.12 | 11,158,406.02 | ||
| Storage expenses | 14,866,861.14 | 23,155,581.32 | ||
| Travel allowances | 3,415,890.36 | 3,425,411.69 | ||
| Market development fees | 3,255,084.76 | 250,938.26 | ||
| Conference expenses | 1,654,991.62 | 2,800,521.29 | ||
| Others | 163,107,086.22 | 118,490,884.13 | ||
| 1,273,588,756.07 | 1,110,446,938.17 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
43. Administrative expenses
| For the six month ended 30 June 2018 | For the six month ended 30 June 2017 | |||
| Employees payroll and welfare benefits | 248,803,724.84 | 237,320,475.09 | ||
| Rental expenses | 18,347,245.83 | 17,030,347.32 | ||
| Depreciation expenses | 12,732,380.45 | 14,130,107.15 | ||
| Office allowances | 11,877,499.56 | 13,498,455.92 | ||
| Amortization of intangible assets | 8,272,613.85 | 7,873,617.35 | ||
| Entertainment expenses | 6,428,775.38 | 5,878,571.05 | ||
| Amortization of long-term deferred expenses | 4,518,905.10 | 4,478,646.05 | ||
| Vehicle management expenses | 4,435,451.82 | 4,100,271.65 | ||
| Travel allowances | 4,323,679.13 | 3,538,432.83 | ||
| Utilities | 2,713,666.76 | 3,714,057.62 | ||
| Taxations | 2,241,415.79 | 4,087,147.80 | ||
| Conference expenses | 2,059,875.35 | 718,993.59 | ||
| Repairing fees | 1,624,550.73 | 1,665,071.14 | ||
| Others | 23,440,279.19 | 22,601,856.55 | ||
| 351,820,063.78 | 340,636,051.11 |
44. Finance costs
| For the six month ended 30 June 2018 | For the six month ended 30 June 2017 | |||
| Interest expenses | 83,356,367.18 | 59,569,071.77 | ||
| Less: Interest income | (23,082,233.56) | (17,460,371.42) | ||
| Cash discount | (21,542,580.44) | (13,655,314.59) | ||
| Exchanges loss/(gain) | 329,665.40 | (283,622.22) | ||
| Others | 18,480,325.74 | 16,329,015.22 | ||
| 57,541,544.32 | 44,498,778.76 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
45. Impairment loss
| For the six month ended 30 June 2018 | For the six month ended 30 June 2017 | |||
| Inventories provision | 508,849.26 | (836,741.23) | ||
| Bad debt allowance | (1,026,702.24) | 933,498.39 | ||
| Impairment in fixed assets | - | - | ||
| Impairment in goodwill | - | - | ||
| (517,852.98) | 96,757.16 |
46. Investment income
| For the six month ended 30 June 2018 | For the six month ended 30 June 2017 | |||
| Investment income from long-term equity investments under the equity method | 162,662,271.35 | 146,775,417.29 | ||
| Investment income from disposal of subsidiaries | - | - | ||
| Gain from remeasurement of fair value of remaining equity interest upon loss of control | - | - | ||
| Investment income from available-for-sale financial assets | 31,500.00 | 50,000.00 | ||
| Remeasurement loss of fair value when achieved subsidary in stages | - | (99,377.39) | ||
| 162,693,771.35 | 146,726,039.90 |
47. Gain on disposal of assets
| For the six month ended 30 June 2018 | For the six month ended 30 June 2017 | |||
| Gain on disposal of fixed assets | 389,144.70 | 554,192.50 | ||
| Gain on disposal of intangible assets | 3,892,019.91 | - | ||
| Gain on disposal of other non-current assets | - | (69,106.84) | ||
| 4,281,164.61 | 485,085.66 |
48. Other income
| For the six month ended 30 June 2018 | For the six month ended 30 June 2017 | ||||
| Government grants related to daily activities | 10,589,212.57 | 7,958,493.67 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
49. Non-operating income
| For the six month ended 30 June 2018 | For the six month ended 30 June 2017 | Amount classified as non-recurring profit or loss | |||
| Government grants (Note a) | 1,349,204.28 | 1,349,204.28 | 1,349,204.28 | ||
| Gain on disposal of non-current assets | 2,303.00 | 1,363.70 | 2,303.00 | ||
| Incl: Gain on disposal of fixed assets | - | - | - | ||
| Gain from writing off the unnecessary payment | 2,898,512.62 | 2,249,156.84 | 2,898,512.62 | ||
| Gain arising from donation | - | - | - | ||
| Others | 1,248,931.21 | 2,456,418.01 | 1,248,931.21 | ||
| 5,498,951.11 | 6,056,142.83 | 5,498,951.11 |
All non-operating income was wholly classified as non-recurring profit or loss for the six month ended
Note a:
| Government grants which was recorded in profit or loss are as follow： | ||||
| For the six month ended 30 June 2018 | For the six month ended 30 June 2017 | Related to asset/income | ||
| Resettlement Compensation of Guangxi Logistics | 1,349,204.28 | 1,349,204.28 | Asset related | |
50. Non-operating expenses
| For the six month ended 30 June 2018 | For the six month ended 30 June 2017 | Amount classified as non-recurring profit or loss | |||
| Donation expenses | 60,000.00 | 59,900.00 | 60,000.00 | ||
| Losses on disposal of non-current assets | 28,525.01 | 284,142.93 | 28,525.01 | ||
| Incl: Losses on disposal of fixed assets | 8,300.35 | 284,142.93 | 8,300.35 | ||
| Penalty expenses | 1,194,388.28 | 1,925,449.66 | 1,194,388.28 | ||
| Others | 514,379.51 | 1,290,495.50 | 514,379.51 | ||
| 1,797,292.80 | 3,559,988.09 | 1,797,292.80 | |||
| Non-operating cost was wholly classified as non-recurring profit or loss for the six month ended 30 June 2018. | |||||
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
51. Income taxes
| For the six month ended 30 June 2018 | For the six month ended 30 June 2017 | |||
| Current income tax | 163,102,979.73 | 162,853,639.57 | ||
| Deferred income tax | 1,383,754.59 | (2,812,531.94) | ||
| 164,486,734.32 | 160,041,107.63 |
| The reconciliation from income tax calculated based on applicable tax rates and total profit presented in the consolidated financial statements to the income taxes is listed below: | ||||
| For the six month ended 30 June 2018 | ||||
| Total profit | 853,735,744.23 | |||
| Income taxes calculated at applicable tax rates | 213,433,936.06 | |||
| Lower tax rates enacted by local authorities | (12,404,268.99) | |||
| Adjustment of income tax expense of previous year | (799,186.91) | |||
| Income not subject to tax | (40,673,442.84) | |||
| Expenses not deductible for tax | 4,061,292.94 | |||
| Utilization of previously unrecognized tax losses | 16,701.91 | |||
| Deductible loss on unconfirmed deferred tax assets at end of the year | 951,711.58 | |||
| Impact of the temporary discrepancy on unconfirmed deductible deferred tax assets at end of the year | (100,009.43) | |||
| Income tax | 164,486,734.32 | |||
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
52. Notes to items in the cash flow statement
| (a) | Cash receipts related to other operating activities | |||||||||||||
| 2018 | 2017 | |||||||||||||
| Government grants except tax return | 10,345,223.64 | 1,349,204.28 | ||||||||||||
| Rent income | 37,793,728.50 | 28,140,527.98 | ||||||||||||
| Operational restricted bank deposits received | 88,156,799.79 | 4,067,748.35 | ||||||||||||
| Interest income | 22,642,258.30 | 17,412,415.01 | ||||||||||||
| Others | 153,046,777.37 | 47,052,933.05 | ||||||||||||
| 311,984,787.60 | 98,022,828.67 | |||||||||||||
| (b) | Cash paid relating to other operating activities | |||||||||||||
| 2018 | 2017 | |||||||||||||
| Rental expenses | 341,152,419.16 | 302,083,594.43 | ||||||||||||
| Entertainment expenses | 17,786,307.50 | 17,036,977.07 | ||||||||||||
| Shipping expenses | 33,086,676.72 | 29,416,679.32 | ||||||||||||
| Travel expenses | 7,739,569.49 | 6,963,844.52 | ||||||||||||
| Storage expenses | 14,866,861.14 | 23,155,581.32 | ||||||||||||
| Office expenses | 28,160,697.54 | 28,651,945.26 | ||||||||||||
| Advertising expenses | 18,454,328.54 | 16,881,877.36 | ||||||||||||
| Others | 377,222,116.67 | 222,065,660.72 | ||||||||||||
| 838,468,976.76 | 646,256,160.00 | |||||||||||||
| (c) | Cash received relating to other investing activities | |||||||
| 2018 | 2017 | |||||||
| Received Entrusted loan payments from Zhijun Suzhou | 44,000,000.00 | - | ||||||
| Received funds of acquiring Sinopharm Guangzhou Huadu | 4,680,000.00 | - | ||||||
| Received deposits returned by Shyndec | - | 75,259,200.00 | ||||||
| Others | 86,145.15 | 11,768,140.19 | ||||||
| 48,766,145.15 | 87,027,340.19 | |||||||
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
52. Notes to items in cash flow statement (Continued)
| (d) | Cash paid relating to other investing activities | |||
| 2018 | 2017 | |||
| Entrusted loan payments to Zhijun Suzhou | 43,999,800.00 | 44,000,000.00 | ||
| Others | - | 26,175,078.90 | ||
| 43,999,800.00 | 70,175,078.90 |
| (e) | Cash received relating to other financing activities | |||
| 2018 | 2017 | |||
| Received bank factoring money | - | 59,676,813.84 | ||
| Received security deposit of pledged borrowings | 79,825,164.60 | 31,255,582.91 | ||
| Others | 3,920,000.00 | - | ||
| 83,745,164.60 | 90,932,396.75 | |||
| (f) | Cash payments relating to other financing activities | |||
| 2018 | 2017 | |||
| Repayment of bank factoring | 64,002,739.23 | - | ||
| Cash paid for acquisition of non-controlling interests | 54,722,980.00 | 158,996,642.00 | ||
| Repayment of entrusted borrowings provided by Sinopharm Group | - | 13,415,363.07 | ||
| Others | - | 6,579,569.60 | ||
| 118,725,719.23 | 178,991,574.67 | |||
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
53. Supplementary information of cash flow statement
| (a) | Reconciliation of net profit to cash flows from operating activities | ||
| For the six month ended 30 June 2018 | For the six month ended 30 June 2017 | ||
| Net profit | 689,249,009.91 | 599,533,739.02 | |
| Adjustments: Provision for asset impairment | (506,814.18) | 422,321.11 | |
| Depreciation of fixed assets and investment properties | 38,366,126.42 | 35,222,304.68 | |
| Amortization of intangible assets | 11,832,914.62 | 12,273,709.34 | |
| Amortization of long-term prepaid expenses | 41,638,297.62 | 31,374,523.14 | |
| Gains on disposal of fixed assets, and other non-current assets | (4,254,942.60) | (202,306.43) | |
| Financial expenses | 82,449,854.36 | 28,528,443.16 | |
| Investment income | (162,693,771.35) | (146,726,039.90) | |
| Decrease/(increase) of deferred tax assets | 3,402,744.73 | (1,641,139.11) | |
| Decrease of deferred tax liabilities | (2,018,990.14) | (2,666,680.74) | |
| Decrease/(increase) of inventory | (463,324,117.97) | 113,733,297.36 | |
| (Increase)/decrease in operating receivables items | (1,298,602,834.11) | (1,127,697,064.94) | |
| Increase/(decrease) in operating payables items | 1,170,553,090.12 | 596,195,867.27 | |
| Others | 119,267,141.77 | 89,986,457.44 | |
| Net cash generated from operating activities | 225,357,709.20 | 228,337,431.40 | |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
53. Supplementary information of cashflow statement (Continued)
| (c) | Movement of cash | ||
| For the six month ended 30 June 2018 | For the six month ended 30 June 2017 | ||
| Cash at end of year | 3,592,715,787.37 | 3,024,190,631.97 | |
| Less: cash at beginning of year | 3,673,498,691.48 | 3,150,915,425.49 | |
| Net increase in cash | (80,782,904.11) | (126,724,793.52) |
| (d) | Acquisition of subsidiaries and operating units | ||
| For the six month ended 30 June 2018 | |||
| Cash and cash equivalents paid for acquisitions of subsidiaries and other business units | 16,380,000.00 | ||
| Incl: Sinopharm Zhuhai | - | ||
| Sinopharm Guangzhou Huadu | 16,380,000.00 | ||
| Maoming Yongsheng Medicines Co., Ltd.（Maoming Yongsheng） | - | ||
| Less: Cash held by subsidiaries at the acquisition date | 21,146,145.15 | ||
| Incl: Sinopharm Zhuhai | - | ||
| Sinopharm Guangzhou Huadu | 21,146,145.15 | - | |
| Maoming Yongsheng | - | ||
| Net cash outflow on acquisition of the subsidiaries and business units | (4,766,145.15) |
| (e) | Cash | ||
| 30 June 2018 | 31 December 2017 | ||
| Cash | 3,592,715,787.37 | 3,673,498,691.48 | |
| Incl: Cash on hand | 3,721,460.75 | 6,208,674.32 | |
| Bank deposits on demand | 3,588,994,326.62 | 3,667,290,017.16 | |
| Ending banlance cash and cash equivalent | 3,592,715,787.37 | 3,673,498,691.48 | |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
V Notes to the consolidated financial statements (Continued)
54. Notes to changes in shareholders’ equity
Capital surplus-others increased by RMB397,342.21 when other changes in equity of ModernPharmaceutical resulted in adjustment of long-term equity investment and an increase of capitalsurplus by RMB397,342.21.
55. Assets under restricted ownership or right to use
| Book value | Reasons | |||
| Cash and cash equivalents | 350,879,773.21 | Deposits of bank acceptance notes, depostis for letter of credit | ||
| Notes receivables | 209,881,899.63 | Notes receivable endorsed but not due, notes receivable discounted but not due. | ||
| 560,761,672.84 | ||||
56. Foreign monetary items
| 30 June 2018 | ||||
| Original currency | Exchange rate | Equivalent to RMB | ||
| Short-term borrowings | 10,000.00 | 6.3978 | 63,978.00 | |
| US dollar | 10,000.00 | 6.3978 | 63,978.00 | |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VI. Changes in the scope of consolidation
1. Business combination not involving enterprises under common control
(1) Business combination not involving enterprises under common control during the current
period
| Name of the entity acquired | Equity acquisition date | Equity acquisition cost | Equity acquisition ratio | Equity acquisition method | Date of acquisition | Basis for determining the acquisition date | Revenue of the entity acquired from the acquisition date to the end of period | Net income of the entity acquired from the acquisition date to the end of period | ||
| Sinopharm Holding Guangzhou Huadu Co., Ltd. | Apr.26th 2018 | 16,380,000.00 | 70.00% | Cash | Apr.30th 2018 | Acquisition of controlling interest | 0.00 | (415,654.72) | ||
Other information：
In April 2018, the Group increased capital in Guangzhou Honoka red Pharmaceutical Co., Ltd.to 70% for RMB 16,380,000.00 to constitue a business combination involving enterprises notunder common control. After the increase of capital, Guangzhou Honoka red Pharmaceutical
Co., Ltd. changed it’s name to Sinopharm Holding Guangzhou Huadu Co., Ltd..The acquisition
was completed on April 30
th
2018 and included in the consolidation scope of the company.
(2) Cost of combination and Goodwill
| Cost of combination | Sinopharm Holding Guangzhou Huadu Co., Ltd. | |
| Cash | 16,380,000.00 | |
| Total cost of combination | 16,380,000.00 | |
| Less: Fair value shares of identifiable net assets obtained | 16,380,729.29 | |
| The amount of Goodwill / Cost of combination less than fair value shares of identifiable net assets obtained | (729.29) |
Illustration for the method of determining fair value of the cost of combination and for contingentconsideration and its variation:
Fair value of the cost of combination is determined by the consideration actually paid.
(3) Identifiable assets and liabilities of the acquired entity on the acquisition date
| Sinopharm Holding Guangzhou Huadu Co., Ltd. | |||
| Fair value | Carrying amount | ||
| Cash and bank balances | 16,466,145.15 | 16,466,145.15 | |
| Accounts receivable | 8,111,461.42 | 8,111,461.42 | |
| Advances to suppliers | 2,140,000.00 | 2,140,000.00 | |
| Other receivables | 1,751,932.93 | 1,751,932.93 | |
| Accounts payable | 244,940.00 | 244,940.00 | |
| Tax payables | 1,341,300.52 | 1,341,300.52 | |
| Other payables | 24,587,265.45 | 24,587,265.45 | |
| Net assets | 2,296,033.53 | 2,296,033.53 | |
Method of determining fair value of the identifiable assets and liabilities:
Determined by valuation price.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VI. Changes in scope of consolidation (Continued)
2. Changes in scope of consolidation for other reasons
Establishment of subsidiaries:
| 30 June 2018 | 30 June 2018 | ||
| Net assets | Net profits | Remarks | |
| Sinopharm Holding Guoda Haohai Pharmacy Co., Ltd. (a) | - | - | New establishment |
| Sinopharm Holding Foshan Medical Consumables Supply Chain Co., Ltd. (b) | 7,994,832.20 | (5,167.80) | New establishment |
| Sinopharm Holding Medical Supply Chain Services (Guangxi) Co., Ltd. (c) | 19,583,025.78 | (416,974.22) | New establishment |
| Sinopharm Holding Baiyi Pharmacy Guangxi Co., Ltd. (d) | 1,938,956.56 | (61,043.44) | New establishment |
a. On 18 January 2018, the Group and Shanghai Linhong Medical Equipment Co., Ltd. set up
Sinopharm Holding Guoda Haohai Pharmacy Co., Ltd. registered capital subscribed RMB408,000.00 and RMB 392,000.00 respctively. As of 30 June 2018, funding has not yet beencompleted.
b. On 30 January 2018, the Group and Shenzhen Qingniu Medical Investment Co., Ltd. set
upSinopharm Holding Foshan Medical Consumables Supply Chain Co., Ltd., subscription ofregistered capital of RMB 8,000,000.00 for which the Group has indirect holding of 70%.
c. On 4 January 2018, the Group, Guorun Medical Supply Chain Service (Shanghai) Co., Ltd. and
Guangxi Deyiyuan Medical Investment Center (Limited Partnership) set upSinopharm HoldingMedical Supply Chain Services (Guangxi) Co., Ltd., registered capital subscribedRMB6,120,000.00, RMB5,880,000.00 and RMB8,000,000.00 respectively. As of 30 June 2018,fundings of RMB3,060,000.00, RMB2,940,000.00 and RMB4,000,000.00 has been completedrespectively.
d. On 24 April 2018, the Group and Baise Jian’an Medical Chain Co., Ltd. set upSinopharm
Holding Baiyi Pharmacy Guangxi Co., Ltd., registered capital subscribed RMB1,020,000.00 andRMB980,000.00 respectively. As of 30 June 2018, funding has not yet been completed.
3. Cancellation of subsidiary
| Subsidiaries | Principal place of business | Place of incorporation | Registered capital (RMB 0.000) | Nature of business | Shareholding | Reason for no longer being a subsidiary | ||
| Direct | Indirect | |||||||
| Tangshan Lerentang Pharmacy Chain Store Co., Ltd.e | Tangshan | Tangshan | 300 | Wholesale and sales of medicines and health products | - | 100% | Absorption merger | |
e. In March 2018, Tangshan Lerentang Pharmacy Chain Store Co., Ltd. completed industrial andcommercial cancellation procedures, and cancelled corporate body.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VII Interests in other entities
| 1． | Interests in subsidiaries |
| (1) | The composition of the Group: |
| Subsidiaries | Principal place of business | Place of incorporation | Nature of business | Shareholding | Ways of acquisition | ||
| Direct | Indirect | ||||||
| Sinopharm Guilin | Guilin | Guilin | Commercial | - | 100.00% | Establishment | |
| Sinopharm Baise | Baise | Baise | Commercial | - | 100.00% | Establishment | |
| Sinopharm Holding Zhongshan Co., Ltd. (“Sinopharm Zhongshan") | Zhongshan | Zhongshan | Commercial | 100.00% | - | Establishment | |
| Sinopharm Guigang | Guigang | Guigang | Commercial | - | 100.00% | Establishment | |
| Sinopharm Beihai | Beihai | Beihai | Commercial | - | 100.00% | Establishment | |
| Guangzhou Medical Treatment | Guangzhou | Guangzhou | Commercial | - | 51.00% | Establishment | |
| Shenzhen Jianmin Pharmaceutical Co., Ltd. (“Sinopharm Jianmin") | Shenzhen | Shenzhen | Commercial | 100.00% | - | Business combinations involving entities under common control | |
| Sinopharm Holding Shenzhen Traditional & Herbal Medicine Co., Ltd. (“Sinopharm Traditional & Herbal Medicine") | Shenzhen | Shenzhen | Commercial | 100.00% | - | Business combinations involving entities under common control | |
| Sinopharm Holding Shenzhen Logistics Co., Ltd. (“Shenzhen Logistics") | Shenzhen | Shenzhen | Services | 100.00% | - | Business combinations involving entities under common control | |
| Sinopharm Holding Guangzhou Co., Ltd. (“Sinopharm Guangzhou") | Guangzhou | Guangzhou | Commercial | 100.00% | - | Business combinations involving entities under common control | |
| Sinopharm Holding Guangdong Hengxing Co., Ltd. (“Sinopharm Hengxing") | Guangzhou | Guangzhou | Commercial | 100.00% | - | Business combinations involving entities under common control | |
| Sinopharm Yulin | Yulin | Yulin | Commercial | - | 100.00% | Business combinations involving entities under common control | |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
| VII | Interests in other entities (Continued) | ||||||||
| 1. | Interests in subsidiaries (Continued) | ||||||||
| (1) | The composition of the Group (Continued): | ||||||||
| Subsidiaries | Principal place of business | Place of incorporation | Nature of business | Shareholding | Ways of acquisition | ||
| Direct | Indirect | ||||||
| Sinopharm Liuzhou | Liuzhou | Liuzhou | Commercial | 51.00% | - | Business combinations involving entities under common control | |
| Guangdong Huixin Investment Co., Ltd. (“Huixin Investment”) | Guangzhou | Guangzhou | Service | 100.00% | - | Business combinations involving entities under common control | |
| Sinopharm Holding Foshan Co., Ltd. (“Sinopharm Foshan") | Foshan | Foshan | Commercial | 100.00% | - | Business combinations involving entities under common control | |
| Sinopharm Holding Guangdong Yuexing Co., Ltd. (“Sinopharm Yuexing”) | Guangzhou | Guangzhou | Commercial | 100.00% | - | Business combinations involving entities under common control | |
| Sinopharm Holding Guangdong Logistics Co., Ltd. (“Guangdong Logistic”) | Guangzhou | Guangzhou | Service | 100.00% | - | Business combinations involving entities under common control | |
| Sinopharm Guangxi | Nanning | Nanning | Commercial | 100.00% | - | Business combinations involving entities under common control | |
| Guangxi Logistic | Nanning | Nanning | Service | - | 100.00% | Business combinations involving entities under common control | |
| Sinopharm Wuzhou | Wuzhou | Wuzhou | Commercial | - | 99.90% | Business combinations involving entities under common control | |
| Sinopharm Holding Dongguan Co., Ltd. (“Sinopharm Dongguan") | Dongguan | Dongguan | Commercial | 100.00% | - | Business combinations involving entities not under common control | |
| Sinopharm Holding Zhanjiang Co., Ltd. (“Sinopharm Zhanjiang") | Zhanjiang | Zhanjiang | Commercial | 100.00% | - | Business combinations involving entities not under common control | |
| Sinopharm Holding Yanfeng Co., Ltd. (“Sinopharm Yanfeng ") | Shenzhen | Shenzhen | Commercial | 51.00% | - | Business combinations involving entities not under common control | |
| Sinopharm Holding Meizhou Co., Ltd. (“Sinopharm Meizhou") | Meizhou | Meizhou | Commercial | 100.00% | - | Business combinations involving entities not under common control | |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
| VII | Interests in other entities (Continued) |
| 1． | Interests in subsidiaries (Continued) |
| (1) | The composition of the Group (Continued): |
| Subsidiaries | Principal place of business | Place of incorporation | Nature of business | Shareholding | Ways of acquisition | ||
| Direct | Indirect | ||||||
| Sinopharm Holding Huizhou Co., Ltd.("Sinopharm Huizhou") | Huizhou | Huizhou | Commercial | 100.00% | - | Business combinations involving entities not under common control | |
| Sinopharm Holding Zhaoqing Co., Ltd.("Sinopharm Zhaoqing") | Zhaoqing | Zhaoqing | Commercial | 100.00% | - | Business combinations involving entities not under common control | |
| Sinopharm Holding Jiangmeng Renren Medical Co., Ltd.(“Sinopharm Jiangmen”) | Jiangmen | Jiangmen | Commercial | 100.00% | - | Business combinations involving entities not under common control | |
| Sinopharm Holding Shaoguan Co., Ltd.("Sinopharm Shaoguan") | Shaoguan | Shaoguan | Commercial | 70.00% | - | Business combinations involving entities not under common control | |
| Sinopharm Shantou | Shantou | Shantou | Commercial | 100.00% | - | Business combinations involving entities not under common control | |
| Foshan Nanhai Medicine Co., Ltd. | Foshan | Foshan | Commercial | 100.00% | - | Business combinations involving entities under common control | |
| Foshan Nanhai Uptodate & Special Medicines Co., Ltd. | Foshan | Foshan | Commercial | - | 100.00% | Business combinations involving entities under common control | |
| Foshan Nanhai Medicine Co., Ltd. | Foshan | Foshan | Commercial | - | 100.00% | Business combinations involving entities under common control | |
| Guangdong Uptodate & Special Medicines | Guangzhou | Guangzhou | Commercial | 100.00% | - | Business combinations involving entities under common control | |
| Guangdong South Pharmaceutical Foreign Trade Co., Ltd. | Guangzhou | Guangzhou | Commercial | 100.00% | - | Business combinations involving entities under common control | |
| Sinopharm Zhuhai | Zhuhai | Zhuahai | Commercial | 100.00% | - | Business combination not involving enterprises under common control | |
| Sinopharm Maoming | Maoming | Maoming | Commercial | 100.00% | - | Business combination not involving enterprises under common control | |
| Sinopharm Holding Guangzhou Medical Treatment Technology Co., Ltd. | Guangzhou | Guangzhou | Commercial | - | 51.00% | Establishment | |
| Sinopharm Holding Guangzhou Medical Supply Chain Co., Ltd. | Guangzhou | Guangzhou | Commercial | - | 51.00% | Establishment | |
| Sinopharm Heyuan | Heyuan | Heyuan | Commercial | - | 70.00% | Business combination not involving enterprises under common control | |
| Sinopharm Holding Foshan Medical Consumables Supply Chain Co., Ltd. | Foshan | Foshan | Commercial | - | 70.00% | Establishment | |
| Sinopharm Holding Medical Supply Chain Services (Guangxi) Co., Ltd. | Nanning | Nanning | Commercial | - | 30.60% | Establishment | |
| Sinopharm Holding Guoda Haohai Pharmacy Co., Ltd. | Shanghai | Shanghai | Commercial | - | 51.00% | Establishment | |
| Sinopharm Holding Guangzhou Huadu Co., Ltd. | Guangzhou | Guangzhou | Commercial | - | 70.00% | Business combination not involving enterprises under common control | |
| Sinopharm Holding Baiyi Pharmacy Guangxi Co., Ltd. | Nanning | Nanning | Commercial | - | 51.00% | Establishment | |
| Sinopharm Holding Guoda Pharmacy Co., Ltd. | Shanghai | Shanghai | Commercial | - | 100.00% | Business combinations involving entities under common control | |
| Sinopharm Holding Guoda Pharmacy Chain Store Shanghai Co., Ltd. | Shanghai | Shanghai | Commercial | - | 100.00% | Business combinations involving entities under common control | |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
| VII. | Interests in other entities (Continued) |
| 1． | Interests in subsidiaries (Continued) |
| (1) | The composition of the Group (Continued) |
| Subsidiaries | Principal place of business | Place of incorporation | Nature of business | Shareholding | Ways of acquisition | ||
| Direct | Indirect | ||||||
| Beijing Guoda Pharmacy Chain Store Co., Ltd. | Beijing | Beijing | Commercial | - | 100.00% | Business combinations involving entities under common control | |
| Tianjin Guoda Pharmacy Chain Store Co., Ltd. | Tianjin | Tianjin | Commercial | - | 80.00% | Business combinations involving entities under common control | |
| Guangxi Guoda Pharmacy Consulting Chain Store Co., Ltd. | Nanning | Nanning | Commercial | - | 100.00% | Business combinations involving entities under common control | |
| Sinopharm Holding Guoda Pharmacy Guangdong Co., Ltd. | Shenzhen | Shenzhen | Commercial | - | 100.00% | Business combinations involving entities under common control | |
| Sinopharm Guoda Pharmacy Guangxi Chain Co., Ltd. | Liuzhou | Liuzhou | Commercial | - | 100.00% | Business combinations involving entities under common control | |
| Zhejiang Guoda Pharmacy Co., Ltd. | Hangzhou | Hangzhou | Commercial | - | 100.00% | Business combinations involving entities under common control | |
| Sinopharm Holding Guoda Yangzhou Dadesheng Pharmacy Chain Store Co., Ltd. | Yangzhou | Yangzhou | Commercial | - | 93.68% | Business combinations involving entities under common control | |
| Ningxia Guoda Pharmacy Chain Store Co., Ltd. | Yinchuan | Yinchuan | Commercial | - | 70.00% | Business combinations involving entities under common control | |
| Sinopharm Holding Guoda Nanjing Pharmacy Chain Store Co., Ltd. | Nanjing | Nanjing | Commercial | - | 60.00% | Business combinations involving entities under common control | |
| Sinopharm Holding Guoda Shandong Pharmacy Chain Store Co., Ltd. | Linyi | Linyi | Commercial | - | 55.00% | Business combinations involving entities under common control | |
| Sinopharm Holding Guoda Shenyang Pharmacy Chain Store Co., Ltd. | Shenyang | Shenyang | Commercial | - | 51.00% | Business combinations involving entities under common control | |
| Fujian Guoda Pharmacy Chain Store Co., Ltd. | Xiamen | Xiamen | Commercial | - | 100.00% | Business combinations involving entities under common control | |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
| VII. | Interests in other entities (Continued) | |||||
| 1． | Interests in subsidiaries (Continued) | |||||
| (1) | The composition of the Group (Continued) | |||||
| Subsidiaries | Principal place of business | Place of incorporation | Nature of business | Shareholding | Ways of acquisition | ||
| Direct | Indirect | ||||||
| Anhui Guoda Pharmacy Chain Store Co., Ltd. | Hefei | Hefei | Commercial | - | 60.00% | Business combinations involving entities under common control | |
| Quanzhou Guoda Pharmacy Chain Store Co., Ltd. | Quanzhou | Quanzhou | Commercial | - | 51.00% | Business combinations involving entities under common control | |
| Shanxi Guoda Wanmin Pharmacy Chain Store Co., Ltd. | Taiyuan | Taiyuan | Commercial | - | 85.00% | Business combinations involving entities under common control | |
| Sinopharm Holding Hunan Guoda Minshengtang Pharmacy Chain Co., Ltd. | Hengyang | Hengyang | Commercial | - | 51.00% | Business combinations involving entities under common control | |
| Liyang Guoda People Pharmacy Chain Store Co., Ltd. | Liyang | Liyang | Commercial | - | 80.00% | Business combinations involving entities under common control | |
| Sinopharm Holding Guoda Henan Pharmacy Chain Store Co., Ltd. | Pingdingshan | Pingdingshan | Commercial | - | 60.00% | Business combinations involving entities under common control | |
| Sinopharm Holding Guoda Neimenggu Pharmacy Chain Store Co., Ltd. | Hohhot | Hohhot | Commercial | - | 96.70% | Business combinations involving entities under common control | |
| Sinopharm Hebei Lerentang Pharmacy Chain Store Co., Ltd. | Shijiazhuang | Shijiazhuang | Commercial | - | 60.00% | Business combinations involving entities under common control | |
| Sinopharm Guoda Pharmacy Jiangmen Chain Co., Ltd. | Jiangmen | Jiangmen | Commercial | - | 65.00% | Business combinations involving entities under common control | |
| Sinopharm Holding Guoda Shanxi Yiyuan Pharmacy Chain Store Co., Ltd. | Taiyuan | Taiyuan | Commercial | - | 80.00% | Business combinations involving entities under common control | |
| Sinopharm Holding Xinjiang New & Special Medicines Chain Store Co., Ltd. | Urumqi | Urumqi | Commercial | - | 51.00% | Business combinations involving entities under common control | |
| Sinopharm Holding Guoda ForMe Medicines (Shanghai) Co., Ltd. | Shanghai | Shanghai | Commercial | - | 97.00% | Business combinations involving entities under common control | |
| Sinopharm Holding Guoda ForMe Pharmacy Chain Store Co., Ltd. (Formerly “Shanghai ForMe YiXing Pharmacy Chain Store Co., Ltd.”) | Shanghai | Shanghai | Commercial | - | 99.76% | Business combinations involving entities under common control | |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
| VII. | Interests in other entities (Continued) | ||||||
| 1． | Interests in subsidiaries (Continued) | ||||||
| (1) | The composition of the Group (Continued) | ||||||
| Subsidiaries | Principal place of business | Place of incorporation | Nature of business | Shareholding | Ways of acquisition | ||
| Direct | Indirect | ||||||
| Beijing Golden Elephant Pharmacy Medicine Chain Company Limited | Beijing | Beijing | Commercial | - | 53.13% | Business combinations involving entities under common control | |
| Shanxi Tongfeng Pharmacy Logistics Co., Ltd. | Taiyuan | Taiyuan | Commercial | - | 100.00% | Business combinations involving entities under common control | |
| Datong Guoda Wanmin Pharmacy Chain Store Co., Ltd. | Datong | Datong | Commercial | - | 100.00% | Business combinations involving entities under common control | |
| Changzhi Guoda Wanmin Pharmacy Chain Store Co., Ltd. | Changzhi | Changzhi | Commercial | - | 51.00% | Business combinations involving entities under common control | |
| Shanxi Guoda Wanmin Clinic Management Chain Co., Ltd. | Taiyuan | Taiyuan | Medical services | - | 100.00% | Business combinations involving entities under common control | |
| Shanghai Guoda Shanghong Qibao Pharmacy Co., Ltd. | Shanghai | Shanghai | Commercial | - | 51.00% | Business combinations involving entities under common control | |
| Zhejiang Intlmedicine Pharmacy Dongshan Co., Ltd. | Hangzhou | Hangzhou | Commercial | - | 51.00% | Business combinations involving entities under common control | |
| Shanghai Guoda Dongsheng Pharmacy Co., Ltd. | Shanghai | Shanghai | Commercial | - | 100.00% | Business combinations involving entities under common control | |
| Sinopharm Guoda Drug Store (Shenzhen) Chain Co., Ltd. | Shenzhen | Shenzhen | Commercial | - | 100.00% | Business combinations involving entities under common control | |
| Sinopharm Holding Guoda Pharmacy Guangzhou Chain Co., Ltd. | Guangzhou | Guangzhou | Commercial | - | 100.00% | Business combinations involving entities under common control | |
| Shanghai Guoda Changxin Pharmacy Co., Ltd. | Shanghai | Shanghai | Commercial | - | 100.00% | Business combinations involving entities under common control | |
| Shanghai Guodong Chinese Traditional Medicine Clinic Co., Ltd. | Shanghai | Shanghai | Medical clinic | - | 100.00% | Business combinations involving entities under common control | |
| Shanghai Guoda Dongxin Pharmacy Chain Store Co., Ltd. | Shanghai | Shanghai | Commercial | - | 100.00% | Business combinations involving entities under common control | |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
| VII. | Interests in other entities (Continued) | |
| 1． | Interests in subsidiaries (Continued) | |
| (1) | The composition of the Group (Continued) | |
| Subsidiaries | Principal place of business | Place of incorporation | Nature of business | Shareholding | Ways of acquisition | ||
| Direct | Indirect | ||||||
| Shanghai Yutaitang Chinese Traditional Medicine Clinic Co., Ltd. | Shanghai | Shanghai | Commercial | - | 100.00% | Business combinations involving entities under common control | |
| Beijing Yangqiao Rongzhi Golden Elephant Pharmacy Company Limited | Beijing | Beijing | Commercial | - | 50.79% | Business combinations involving entities under common control | |
| Sanhe Liyang Golden Elephant Pharmacy Co., Ltd. | Langfang | Langfang | Commercial | - | 100.00% | Business combinations involving entities under common control | |
| Xiaoyi Guoda Wanmin Baicaotang Pharmacy Chain Store Co., Ltd. | Xiaoyi | Xiaoyi | Commercial | - | 70.00% | Business combinations involving entities under common control | |
| Sinopharm Holding Guoda Pharmacy Hulun Buir Co., Ltd. | Hulun Buir | Hulun Buir | Commercial | - | 51.00% | Business combinations involving entities under common control | |
| Shijiazhuang Lerentang Yikang Pharmacy Chain Store Co., Ltd. | Shijiazhuang | Shijiazhuang | Commercial | - | 100.00% | Business combinations involving entities under common control | |
| Shanghai ForMe Pharmacy Co., Ltd. | Shanghai | Shanghai | Commercial | - | 100.00% | Business combinations involving entities under common control | |
| Sinopharm Holding Ulanqab Co., Ltd. | Ulanqab | Ulanqab | Commercial | - | 60.00% | Establishment | |
| Sinopharm Guoda Pharmacy Qinhuangdao Chain Co., Ltd. | Qinhuangdao | Qinhuangdao | Commercial | - | 51.00% | Business combinations involving entities under common control | |
| Taishan Sinopharm Holding Guoda Qunkang Pharmacy Chain Store Co., Ltd. | Taishan | Taishan | Commercial | - | 70.00% | Business combinations involving entities under common control | |
| Beijing Golden Elephant Fuxing Technology Co., Ltd. | Beijing | Beijing | Commercial | - | 80.00% | Business combinations involving entities under common control | |
| Sinopharm Lerentang | Shijiazhuang | Shijiazhuang | Commercia | - | 100% | mbinations involving entities under common control | |
| GuoDa Drugstore Manzhouli Co., Ltd | Manzhouli | Manzhouli | Commercial | - | 51.00% | Establishment | |
| Sinopharm Guoda Pharmacy Maanshan Chain Store Co., Ltd. | Anshan | Anshan | Commercial | - | 51.00% | Establishment | |
| Sinopharm Guoda Pharmacy Yongsheng (Shanghai) Co., Ltd. | Shanghai | Shanghai | Commercial | - | 55.00% | Establishment | |
| Sanhe Lixin Golden Elephant Pharmacy Co., Ltd. | Langfang | Langfang | Commercial | - | 100.00% | Establishment | |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VII. Interests in other entities (Continued)
2. Interests in associates
| Principal place of business | Place of incorporation | Nature of business | Shareholding(%) | Accounting | |||
| Direct | Indirect | ||||||
| Associates | |||||||
| Shenzhen Main Luck Pharmaceutical Co., Ltd. ("Main Luck Pharmaceutical ") | Shenzhen | Shenzhen | Manufacturing | 35.19% | - | Equity | |
| Sinopharm Group Zhijun(Suzhou) Pharmaceutical Co., Ltd. | Suzhou | Suzhou | Manufacturing | 33.00% | - | Equity | |
| Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd. | Shenzhen | Shenzhen | Manufacturing | 49.00% | - | Equity | |
| Shenzhen Zhijun Pharmaceutical Trade Co., Ltd. | Shenzhen | Shenzhen | Commercial | 49.00% | - | Equity | |
| Sinopharm Group Zhijun(Shenzhen) Pingshan Pharmaceutical Co., Ltd. | Shenzhen | Shenzhen | Manufacturing | 49.00% | - | Equity | |
| Shanghai Shyndec Pharmaceutical Co., Ltd. (“Shyndec Pharmaceutical”) | Shanghai | Shanghai | Manufacturing | 16.00% | - | Equity | |
| 上海鼎群企业管理咨询有限公司 | Shanghai | Shanghai | 商务服务业 | 2.53% | Equity | ||
| Shanghai Beiyi Guoda pharmaceutical Co. Ltd. | Shanghai | Shanghai | Commercial | - | 26.00% | Equity | |
| Shanghai Liyi Pharmacy Co., Ltd | Shanghai | Shanghai | Commercial | - | 35.00% | Equity | |
| Sinopharm Jienuo Medical Treatment Service Guangdong Co., Ltd. | Guangzhou | Guangzhou | Commercial | - | 29.00% | Equity | |
| Dongyuan accord pharmaceutical chain Co., Ltd. | Heyuan | Heyuan | Commercial | - | 45.00% | Equity | |
Accoding to the Articles of Association and investment aggrement, the board of directors of ShanghaiDingqun Enterprise Management Consulting consisted of three directors, in which one were appointed bythe Group, accounting for 33.33% of voting rights.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VII. Interests in other entities (Continued)
3. Summarised financial information of significant associate
| 30 June 2018 | 30 June 2017 | |
| Shanghai Shyndec Pharmaceutical Co., Ltd. | Shanghai Shyndec Pharmaceutical Co., Ltd. | |
| Current assets | 8,210,661,752.98 | 6,919,923,607.58 |
| Non-current assets | 8,136,876,492.43 | 8,250,667,440.18 |
| Total assets | 16,347,538,245.41 | 15,170,591,047.76 |
| Current liabilities | 6,124,167,753.55 | 5,390,426,266.96 |
| Non-current liabilities | 2,190,226,473.72 | 2,132,391,027.26 |
| Total liabilities | 8,314,394,227.27 | 7,522,817,294.22 |
| Non-controlling interests | 1,502,385,107.44 | 1,474,395,375.11 |
| Shareholders’ equity attributable to shareholders of the parent | 6,530,758,910.70 | 6,173,378,378.43 |
| Portion of net assets calculated by shareholding ratio | 1,036,784,861.34 | 979,174,050.63 |
| Carrying value of equity investment in joint ventures | 1,036,784,861.34 | 979,174,050.63 |
| Operating revenue | 5,853,255,169.05 | 4,579,660,856.59 |
| Net profit | 575,258,204.58 | 524,753,028.55 |
| Total comprehensive income | 575,258,204.58 | 524,753,028.55 |
| Dividends received from joint ventures this year | 8,641,853.20 | 22,468,818.32 |
VIIl. Risks related to financial instruments
1. Classification of financial instruments
The fair values of each category of financial instruments that reasonably approximate to their
carrying amounts at the end of the reporting period are as follows:
30 June 2018
| Financial assets | Borrowings and receivables | Available-for-sale financial assets | Total |
| Cash and bank balances | 3,943,595,560.58 | - | 3,943,595,560.58 |
| Notes receivable | 1,021,697,370.21 | - | 1,021,697,370.21 |
| Accounts receivable | 9,441,542,367.19 | - | 9,441,542,367.19 |
| Interest receivable | 47,507.80 | - | 47,507.80 |
| Other receivables | 698,672,023.18 | - | 698,672,023.18 |
| Available-for-sale financial assets | - | 13,685,760.00 | 13,685,760.00 |
| 15,105,554,828.96 | 13,685,760.00 | 15,119,240,588.96 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VIIl. Risks related to financial instruments (Continued)
1. Classification of financial instruments (Continued)
31 December 2017
| Financial assets | Borrowings and receivables | Available-for-sale financial assets | Total |
| Cash and bank balances | 4,191,655,438.51 | - | 4,191,655,438.51 |
| Notes receivable | 1,504,194,764.08 | - | 1,504,194,764.08 |
| Accounts receivable | 7,589,412,679.88 | - | 7,589,412,679.88 |
| Interest receivable | 61,441.11 | - | 61,441.11 |
| Other receivables | 657,871,058.54 | - | 657,871,058.54 |
| Available-for-sale financial assets | - | 13,685,760.00 | 13,685,760.00 |
| 13,943,195,382.12 | 13,685,760.00 | 13,956,881,142.12 |
| Financial liabilities | 30 June 2018 | 31 December 2017 |
| Short-term borrowings | 2,051,139,651.67 | 1,561,354,521.64 |
| Notes payable | 2,373,628,140.86 | 2,732,437,828.42 |
| Accounts payable | 7,230,024,480.35 | 6,144,221,000.10 |
| Dividends payable | 8,889,443.11 | 11,889,443.11 |
| Other payables | 1,024,176,704.11 | 1,011,128,397.26 |
| Non-current liabilities due within one year | 5,651,227.56 | 5,434,770.70 |
| Interest payable | 10,378,213.91 | 7,311,819.65 |
| Long-term borrowings | 31,600,000.00 | 31,600,000.00 |
| Long-term payables | 6,604,575.84 | 9,332,537.14 |
| 12,742,092,437.41 | 11,514,710,318.02 |
2. Transfer of financial assets
Transferred financial assets that are not derecognized in their entiretyAs at 30 June 2018, the Group had endorsed commercial bills receivable (the "Endorsed Bills")to certain of its suppliers in order to settle accounts payable due to such suppliers of RMB0 (31December 2017: RMB0 ). During the year, the Group operated a number of discounting businessthrough several banks in China. At 30 June 2018, the carrying value thereof wasRMB209,881,899.63 (31 December 2017: RMB147,715,527.67). In the opinion of the directors,the Group has retained the substantial risks and rewards, which include default risks relating tosuch Endorsed Bills, and accordingly, it continued to recognize the full carrying amounts of theEndorsed Bills and the associated accounts payable settled. Subsequent to the Endorsement,the Group did not retain any rights on the use of the Endorsed Bills, including the sales, transferor pledge of the Endorsed Bills to any other third parties. As at 30 June 2018, the carrying valueof accounts payable settled by the Group totalled RMB209,881,899.63 (31 December 2017:
RMB147,715,527.67).
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VIIl. Risks related to financial instruments (Continued)
2. Transfer of financial assets (Continued)
Transferred financial assets that are derecognized in their entirety in which continuinginvolvement existsAs at 30 June 2018, the Group had endorsed commercial bills receivable (the "Endorsed Bills")to certain of its suppliers in order to settle accounts payable due to such suppliers ofRMB706,198,208.44(31 December 2017: RMB667,900,939.97). During the year, the Groupoperated a number of discounting business through several banks in China. At 30 June 2018,the carrying value thereof was RMB361,130,021.33 (31 December 2016: RMB367,011,030.59).The Derecognized Bills had a maturity of 1 to 12 months at the end of the reporting period. Inaccordance with the Law of Negotiable Instruments, the holders of the Derecognized Bills have
a right of recourse against the Group if the accepting banks default (the “ContinuingInvolvement”). In the opinion of the directors, the Group has transferred substantially all risks
and rewards relating to the Derecognized Bills. Accordingly, it has derecognized the fullcarrying amounts of the Derecognized Bills and the associated accounts payable. Themaximum exposure to loss from the Group's Continuing Involvement in the Derecognized Billsand the undiscounted cash flows to repurchase these Derecognized Bills is equal to their
carrying amounts. In the opinion of the directors, the fair values of the Group’s Continuing
Involvement in the Derecognized Bills are not significant.
As part of its normal business, the Group entered into an accounts receivable factoring
arrangement (the “Arrangement”) without recourse and transferred certain accounts receivable
to a bank. In the opinion of the directors, the Group has transferred substantially all risks andrewards under the arrangement. Accordingly, it has derecognized the full carrying amounts ofthe associated accounts receivable. The original carrying value of the derecognized accountsreceivable transferred under the Arrangement that have not been settled as at 30 June 2018amounted to RMB761,574,518.74 (31 December 2017: RMB525,614,331.67).
As of 30 June 2018, the Group has not recognized any gain or loss on the date of transfer. Nogain or loss were recognized from derecognized financial assets in which ContinuingInvolvement exists, both during the year or cumulatively.
As of 30 June 2018, the Group has not recognized any gain or loss on the date of transfer ofthe Derecognized Bills. No gains or losses were recognized from the Continuing Involvement,both during the year or cumulatively.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VIIl. Risks related to financial instruments (Continued)
3. Risks of financial instruments
The main purpose and policies of financial risk managementThe Group's principal financial instruments comprise bank borrowings and cash and short termdeposits. The main purpose of these financial instruments is to raise finance for the Group'soperations. The Group has various other financial assets and liabilities such as accountsreceivable and accounts payable, which arise directly from its operations.
The main risks arising from the Group's financial instruments are interest rate risk, liquidity risk,foreign currency risk and credit risk.
Credit riskCredit risk is managed on the basis of the Group. Credit risk mainly arises from cash at banksand on hand, accounts receivable, other receivables and notes receivable, etc.
The Group expects that there is no significant credit risk associated with cash at banks since it isdeposited with state-owned banks and other medium or large sized listed banks. Managementdoes not expect that there will be any significant losses from non-performance by thesecounterparties.
In addition, the Group has policies to limit the credit exposure on accounts receivable, otherreceivables and notes receivable. The Group assesses the credit quality of and sets credit limitson its customers by taking into account their financial position, the availability of guarantees fromthird parties, their credit history and other factors such as current market conditions. The Groupwill confirm the balances with its clients regarding the accounts receivable semi-annually, andassess the recoverability of each account receivable, by using individual evaluation and similarcredit risk group methods. The credit history of the customers is regularly monitored by theGroup. In respect of customers with a poor credit history, the Group will use written paymentreminders, or shorten or cancel credit periods, to ensure the overall credit risk of the Group islimited to a controllable extent.
Liquidity riskCash flow forecasting is performed by each subsidiary of the Group and aggregated by the
Group’s finance department in its headquarter. The Group’s finance department at its
headquarter monitors rolling forecasts of the Group's short-term and long-term liquidityrequirements to ensure it has sufficient cash and securities that are readily convertible to cash tomeet operational needs. In the meanwhile, the Group continually monitors the terms of the debtcovenants in the loan agreements, ensuring that sufficient unutilized commitments from majorfinancial institutions, in order to meet the short-term and long-term liquidity requirements.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VIII Risks related to financial instruments (Continued)
3. Risks of financial instruments (Continued)
Liquidity risk (Continued)
The maturity analysis of the Group's financial liabilities as at the end of the reporting period, based on the contractual undiscounted cash flows, is as follows:
| 30 June 2018 | ||||||||||
| Within 1 year | 1 to 2 years | 2 to 5 years | Above 5 years | Total | ||||||
| Short-term borrowings | 2,070,582,956.14 | - | - | - | 2,070,582,956.14 | |||||
| Notes payable | 2,373,628,140.86 | - | - | - | 2,373,628,140.86 | |||||
| Accounts payable | 7,230,024,480.35 | - | - | - | 7,230,024,480.35 | |||||
| Interest payables | 10,378,213.91 | - | - | - | 10,378,213.91 | |||||
| Dividend payables | 8,889,443.11 | - | - | - | 8,889,443.11 | |||||
| Other payables | 1,024,176,704.11 | - | - | - | 1,024,176,704.11 | |||||
| Current portion of non-current liabilities | 5,651,227.56 | - | - | - | 5,651,227.56 | |||||
| Long-term payables | - | 3,716,803.49 | 2,887,772.35 | - | 6,604,575.84 | |||||
| Long-term borrowings | 1,293,570.14 | 32,695,104.58 | 33,988,674.72 | |||||||
| 12,724,624,736.18 | 36,411,908.07 | 2,887,772.35 | 12,763,924,416.60 | |||||||
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VIII Risks related to financial instruments (Continued)
3. Risks of financial instruments (Continued)
Liquidity risk (Continued)
| 31 December 2017 | ||||||||||
| Within 1 year | 1 to 2 years | 2 to 5 years | Above 5 years | Total | ||||||
| Short-term borrowings | 1,574,233,015.06 | - | - | - | 1,574,233,015.06 | |||||
| Notes payable | 2,732,437,828.42 | - | - | - | 2,732,437,828.42 | |||||
| Accounts payable | 6,144,221,000.10 | - | - | - | 6,144,221,000.10 | |||||
| Interest payables | 7,311,819.65 | - | - | - | 7,311,819.65 | |||||
| Dividend payables | 11,889,443.11 | - | - | - | 11,889,443.11 | |||||
| Other payables | 1,011,128,397.26 | - | - | - | 1,011,128,397.26 | |||||
| Current portion of non-current liabilities | 7,304,197.88 | - | - | - | 7,304,197.88 | |||||
| Long-term payables | - | 7,304,197.88 | 4,987,438.87 | - | 12,291,636.75 | |||||
| Long-term borrowings | 1,293,570.14 | 1,293,570.14 | 32,043,003.47 | - | 34,630,143.75 | |||||
| 11,489,819,271.62 | 8,597,768.02 | 37,030,442.34 | - | 11,535,447,481.98 | ||||||
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VIII Risks related to financial instruments (Continued)
4. Market risk
Interest rate risk
The Group's interest rate risk arises from long-term borrowings from banks. Financial liabilitiesissued at floating rates expose the Group to cash flow interest rate risk. Financial liabilities issuedat fixed rates expose the Group to fair value interest rate risk. The Group determines the relativeproportions of its fixed rate and floating rate contracts depending on the prevailing marketconditions. As at 30 June 2018, if the floating interest rates of the long-term interest-bearingborrowings increases or decreases by 50 base points, while other factors does not change, the
Group’s net income will decrease or increase by RMB118,500 (31 December 2017: RMB118,500).
Increases in interest rates will increase the cost of new borrowings and the interest expenses with
respect to the Group’s outstanding floating rate borrowings, and therefore could have a materialadverse effect on the Group’s financial position. The Group’s finance department at its headquarter
continuously monitors the interest rate position of the Group and makes decisions with reference tothe latest market conditions. The Group may enter into interest rate swap agreements to mitigate itsexposure to interest rate risk. During first half of 2018 and 2017, the Group did not enter into anyinterest rate swap agreements.
For the year ended 30 June 2018, the Group has long-term interest-bearing borrowings withfloating interest rates amounted to RMB31,600,000.00 (31 December 2017: RMB31,600,000.00).
Currency risk
The Group’s major operational activities are carried out in Mainland China and a majority of the
transactions are denominated in RMB. The Group is exposed to foreign exchange risk arising fromthe recognized assets and liabilities, and future transactions denominated in foreign currencies,
primarily with respect to United States dollars and Hong Kong dollars. The Group’s finance
department at its headquarter is responsible for monitoring the amounts of assets and liabilities,and transactions denominated in foreign currencies. The Group may consider entering into forwardexchange contracts or currency swap contracts to mitigate the foreign exchange risk.
As at 30 June 2018, if the currency had weakened/strengthened by 5% against the United States
dollar while all other variables had been held constant, the Group’s net profit for the year would
increase/decrease by RMB0 (2017: RMB0).
As at 30 June 2018, if the currency had weakened/strengthened by 5% against the Hong Kong
Dollar while all other variables had been held constant, the Group’s net profit for the year would
increase/decrease by RMB0 (2017: RMB0 ).
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
VIII Risks related to financial instruments (Continued)
5. Capital management
The Company’s primary objective for managing capital is to ensure that it maintains a strong creditrating and healthy capital ratio in order to support its business, maximize shareholders’ value and
benefit related parties. Management also aims to maintain a capital structure that ensures thelowest cost of capital available to the entity.
Management adjusts the capital structure through adjusting dividend payments to shareholders,returning capital to shareholders, issuing new shares or selling assets to reduce debts.
The Group’s total capital is the total shareholders’ equity in the balance sheet. The Group does not
adopt an asset ratio as a compulsory factor to govern capital investment.
The gearing ratios of the Group as at the end of the reporting periods were as follows:
| 30 June 2018 | 31 December 2017 | |
| Gearing ratio | 56.36% | 55.57% |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
IX Disclosure of fair value
1. The fair value of financial assets and liabilities recorded in fair value
| Fair value at period end | ||||
| Level 1 | Level 2 | Level 3 | Total | |
| Financial assets available-for-sale | - | - | 13,685,760.00 | 13,685,760.00 |
| （1）Debt investment | - | - | - | - |
| （2）Equity investment | - | - | 13,685,760.00 | 13,685,760.00 |
| （3）Others | - | - | - | - |
The results of fair value measurement are categorized within the fair value hierarchy, described asfollows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities;
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair
value are observable, either directly or indirectly; and
Level 3: techniques which use inputs which have a significant effect on the recorded fair value thatare not based on observable market data.
(1) Assets that are measured at fair value on a recurring basis
The Group has no assets that are measured at fair value on a recurring basis.
(2) Assets that are measured at fair value on a non-recurring basis
The Group has no assets that are measured at fair value on a non-recurring basis.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
1. Parent
| Registered address | Nature of business | Share capital (RMB’0,000) | Proportion of ownership interest in the Company | Proportion of voting power in the Company | |
| Sinopharm Group | Shanghai | Industrial investment holding, trustee of a pharmaceutical enterprise, assets reorganization, distribution and retail of medicines and pharmaceutical products, etc. | 276,709.51 | 56.06% | 56.06% |
The ultimate controlling party of the Company is CNPGC.
2. Subsidiaries
Refer to Note VII (1) for details of subsidiaries.
3. Associates
Refer to Note VII (2) for details of associates.
| Company name | Related party relationships |
| Shenzhen Main Luck Pharmaceutical Co., Ltd. | Associate |
| Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd. | Associate |
| Shenzhen Zhijun Pharmaceutical Trade Co., Ltd. | Associate |
| Sinopharm Group Zhijun(Shenzhen) Pingshan Pharmaceutical Co., Ltd. | Associate |
| Shanghai Modern Pharmaceutical Co., Ltd. (Modern Pharmaceutical) | Associate |
| Sinopharm Group Zhijun(Suzhou) Pharmaceutical Co., Ltd. | Associate |
| Shanghai Dingqun Enterprise Management Consulting Co., Ltd. | Associate |
| Sinopharm Jienuo Medical Treatment Sevice Guangdong Co., Ltd. | Associate |
| Shanghai Beiyi Guoda pharmaceutical Co. Ltd. | Associate |
| Shanghai Liyi Drug Store Co.,Ltd | Associate |
| Dongyuan accord pharmaceutical chain Co., Ltd. | Associate |
4. Other related parties
| Company name | Related party relationships |
| China Otsuka Pharmaceutical Co., Ltd. | Associate of CNPGC |
| Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. | Associate of CNPGC |
| Changchun Changsheng Gene Pharmaceutical Co., Ltd. | Associate of CNPGC |
| Shenzhen Wanwei Medicine trading Co., Ltd. | Subsidiary of Main Luck Pharmaceutical |
| Sinopharm Holding Financing Lease Co., Ltd. | Associate of Sinopharm Group |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
| Company name | Related party relationships |
| China Otsuka Pharmaceutical Co., Ltd. | Associate of CNPGC |
| Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. | Associate of CNPGC |
| Changchun Changsheng Gene Pharmaceutical Co., Ltd. | Associate of CNPGC |
| Shenzhen Wanwei Medicine trading Co., Ltd. | Subsidiary of Main Luck Pharmaceutical |
| Yichang Humanwell Pharmaceutical Co., Ltd. | Associate of Sinopharm Group |
| Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Co., Ltd. | Associate of Sinopharm Group |
| Sinopharm Health Online Co., Ltd.. | Associate of Sinopharm Group |
| Shanghai Guoda Lingyun Pharmacy Co., Ltd. | Associate of Sinopharm Group |
| Sichuan Kang Daxin Pharmaceutical Co., Ltd | Associate of Sinopharm Group |
| Hubei Medical Group Co., Ltd. | Associate of Sinopharm Group |
| Shanghai Fosun Pharmaceutical (Group) Co., Ltd.("Fosun Pharm") | Shareholder who has significant influence over Sinopharm Group |
| Chongqing Yaoyou Pharmaceutical Co., Ltd. | Subsidiary of Fosun Pharm |
| Sichuan Hexin Pharmaceutical Co., Ltd. | Subsidiary of Fosun Pharm |
| Shanghai Chaohui Pharmecurical Co., Ltd. | Subsidiary of Fosun Pharm |
| Tibet Yaopharma Co., Ltd. | Subsidiary of Fosun Pharm |
| Shenyang Hongqi Pharmaceutical Co., Ltd. | Subsidiary of Fosun Pharm |
| Jiangsu Wanbang Pharmacy Marketing Co., Ltd. | Subsidiary of Fosun Pharm |
| Chongqing Haisiman Pharmaceutical Co., Ltd. | Subsidiary of Fosun Pharm |
| Jinzhou AoHong Pharmaceuticals Co., Ltd. | Subsidiary of Fosun Pharm |
| Hunan Dongting Pharmaceutical Co., Ltd. | Subsidiary of Fosun Pharm |
| Suzhou Erye Pharmaceutical Limited Company | Subsidiary of Fosun Pharm |
| Foshan Chancheng District Central Hospital | Subsidiary of Fosun Pharm |
| Foshan Chanyixing Medicine Development Co Ltd. | Subsidiary of Fosun Pharm |
| Foshan Chancheng Pharmaceutical Co., Ltd. | Subsidiary of Fosun Pharm |
| Shenzhen Hengsheng Hospital | Subsidiary of Fosun Pharm |
| Guilin South pharmaceutical Co., Ltd. | Subsidiary of Fosun Pharm |
| Shanghai Transfusion Technology Co., Ltd. | Subsidiary of Fosun Pharm |
| Jiangsu Huanghe Pharmaceutical Co., Ltd. | Subsidiary of Fosun Pharm |
| Jiangsu Fuxing Pharmaceutical Trading Co., Ltd. | Subsidiary of Fosun Pharm |
| Group Financial Co.Group Financial Co. | Controlled by CNPGC |
| Sinopharm Group Guangdong Medicine Device Co., Ltd. | Controlled by CNPGC |
| Huayi Pharmaceutical Co., Ltd. | Controlled by CNPGC |
| Sichuan Jiangyouzhongbafuzi Technology Development Co., Ltd. | Controlled by CNPGC |
| Guizhou Tongjitang Pharmaceutical Co., Ltd. | Controlled by CNPGC |
| Anhui Jingfang Pharmaceutical Co., Ltd. | Controlled by CNPGC |
| Guangdong Medi-World Pharmaceutical Co., Ltd. | Controlled by CNPGC |
| Shandong Lu Ya Pharmaceutical Co., Ltd. | Controlled by CNPGC |
| Foshan Fengliaoxing Pharmaceutical Co., Ltd. | Controlled by CNPGC |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
| Company name | Related party relationships |
| China Otsuka Pharmaceutical Co., Ltd. | Associate of CNPGC |
| Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. | Associate of CNPGC |
| Changchun Changsheng Gene Pharmaceutical Co., Ltd. | Associate of CNPGC |
| Shenzhen Wanwei Medicine trading Co., Ltd. | Subsidiary of Main Luck Pharmaceutical |
| Winteam Pharmaceutical Group Ltd. | Controlled by CNPGC |
| Chengdu Rongsheng Pharmacy Co., Ltd. | Controlled by CNPGC |
| Lanzhou Institute of Biological Products Co., Ltd. | Controlled by CNPGC |
| Shantou Jinshi Powder Injection Co., Ltd. | Controlled by CNPGC |
| China National Pharmaceutical Industry Co., Ltd. | Controlled by CNPGC |
| Sinopharm Group Weiqida Medicine Co., Ltd. | Controlled by CNPGC |
| Shanghai Modern Hasen (Shangqiu) Pharmaceutical Co., Ltd. | Controlled by CNPGC |
| Shanghai Shyndec Pharmaceutical Marketing Co., Ltd. | Controlled by CNPGC |
| Sinopharm Group Rongsheng Pharmaceutical Co., Ltd. | Controlled by CNPGC |
| Wuhan Zhonglian Pharmaceutical Group Co., Ltd. | Controlled by CNPGC |
| The Fourth Pharmaceutical Co., Ltd. of Zhonglian Group | Controlled by CNPGC |
| Sinopharm Chuan Kang Pharmaceutical Co., Ltd. | Controlled by CNPGC |
| China National Pharmaceutical Foreign Trade Corporation | Controlled by CNPGC |
| Sinopharm Group Yibin Pharmaceuticals Co., Ltd. | Controlled by CNPGC |
| Sinopharm Zhuhai Medical Instrument Co., Ltd. | Controlled by CNPGC |
| Sinopharm Fujian Medical Examination Co., Ltd. | Controlled by CNPGC |
| Beijing Huasheng Pharmaceutical Biotechnology Development Co., Ltd. | Controlled by CNPGC |
| Beijing Huamiao Pharmaceutical Co., Ltd. | Controlled by CNPGC |
| Sinopharm Xinjiang Pharmaceutical Co., Ltd. | Controlled by CNPGC |
| Sinopharm Holding Sanyi Medicine (Wuhu) Co., Ltd. | Controlled by CNPGC |
| Sinopharm Shantou Jinshi Pharmaceutical Co., Ltd. | Controlled by CNPGC |
| Sinopharm Hebei Medical Instrument Co., Ltd. | Controlled by CNPGC |
| Sinopharm Fengliaoxing (Foshan) Medicines Co., Ltd. | Controlled by CNPGC |
| China National Scientific Instruments & Materials Imp/Exp Shenzhen Co., Ltd. | Controlled by CNPGC |
| CMDC Guizhou Qiannan Co., Ltd. | Controlled by CNPGC |
| Fujian CMDC Co., Ltd. | Controlled by CNPGC |
| Sinopharm Fengliaoxing Medical Hospital Co., Ltd. | Controlled by CNPGC |
| Beijing Tiantan Biological Products Co., Ltd. | Controlled by CNPGC |
| Sinopharm Guangdong Medical Examination Co., Ltd. | Controlled by CNPGC |
| Sinopharm Group Shanghai Medicine Device Co., Ltd. | Controlled by CNPGC |
| Foshan Dezhong Pharmaceutical Co., Ltd. | Controlled by CNPGC |
| Chengdu Institute of Biological Products Co., Ltd. | Controlled by CNPGC |
| China National of Traditional&Herbal Medicine Co., Ltd. | Controlled by CNPGC |
| Sinopharm Chongqing Pharmaceutical and Medical Industry Design Institute | Controlled by CNPGC |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
| Company name | Related party relationships |
| China Otsuka Pharmaceutical Co., Ltd. | Associate of CNPGC |
| Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. | Associate of CNPGC |
| Changchun Changsheng Gene Pharmaceutical Co., Ltd. | Associate of CNPGC |
| Shenzhen Wanwei Medicine trading Co., Ltd. | Subsidiary of Main Luck Pharmaceutical |
| Sinopharm (Guangzhou) Medical Equipment Co., Ltd. | Controlled by CNPGC |
| China Sinopharm International Corporation | Controlled by CNPGC |
| Shanghai Shangsheng Biological Products Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Tianjin Binhai Pharmaceutical Co., Ltd. | Controlled by Sinopharm Group |
| Shanghai Tongyu Information Technology Co., Ltd. | Controlled by Sinopharm Group |
| Guorun Medical Supply Chain Services (Shanghai) Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Group Southwest Medicine Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Tianjin Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Hunan Co., Ltd. | Controlled by Sinopharm Group |
| China National Medicines Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Group Guorui Medicine Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Beijing Huahong Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Sub Marketing Center Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Henan Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Fuzhou Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Shandong Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Dezhou Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Hainan Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Fujian Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Guizhou Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Lianyungang Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Lerentang Pharmaceutical Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Lerentang Shijiazhuang Medicine Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Shanxi Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Le-Ren-Tang Medicine Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Shanxi Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Shenyang Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Yangzhou Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Lunan Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Beijing Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Hulun Buir Co., Ltd. | Controlled by Sinopharm Group |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
| Company name | Related party relationships |
| China Otsuka Pharmaceutical Co., Ltd. | Associate of CNPGC |
| Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. | Associate of CNPGC |
| Changchun Changsheng Gene Pharmaceutical Co., Ltd. | Associate of CNPGC |
| Shenzhen Wanwei Medicine trading Co., Ltd. | Subsidiary of Main Luck Pharmaceutical |
| Sinopharm Holding Inner Mongolia Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Pingdingshan Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Jiangsu Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Xiamen Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Suzhou Co., Ltd. | Controlled by Sinopharm Group |
| Shanghai Merro Pharmaceutical Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Changzhou Medical Logistics Center Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Changzhou Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Ningxia Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Shanxi Instrument Branch Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Beijing Kangchen Bio-Pharmaceutical Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Wuxi Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Lerentang Hebei Medical Instrument Trade Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Dalian Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Jinan Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Tianjin Distribution Center Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Donghong Medical (Shanghai) Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Yancheng Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Jinzhou Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Rizhao Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Putian Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Group Shanxi Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Chengdu Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Quanzhou Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Kashi New & Special Drugs Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Anhui Co., Ltd. | Controlled by Sinopharm Group |
| Beijing Tongyu Information Technology Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Ulanqab Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Hubei Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Zhihui Minsheng (Tianjin) Medicine Co., Ltd. | Controlled by Sinopharm Group |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
| Company name | Related party relationships |
| China Otsuka Pharmaceutical Co., Ltd. | Associate of CNPGC |
| Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. | Associate of CNPGC |
| Changchun Changsheng Gene Pharmaceutical Co., Ltd. | Associate of CNPGC |
| Shenzhen Wanwei Medicine trading Co., Ltd. | Subsidiary of Main Luck Pharmaceutical |
| Sinopharm Holding Shanxi Jincheng Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Zhejiang Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Changsha Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Nanping Newforce Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Yangzhou Biological Medicine Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Taizhou Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Wende Medicine Nanjing Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Dalian Hecheng Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Lerentang Qinhuangdao Medicine Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Tongliao Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Jiangxi Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Group Chemical Reagent Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Ordos Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Tianjin North Medicine Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Yongzhou Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Jinhua Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Lerentang Tangshan Medicine Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Chongqing Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Prospect Dentech (Beijing) Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Biopharmaceutical (Tianjin) Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Group Medicine Logistic Co., Ltd. | Controlled by Sinopharm Group |
| China National Pharmaceutical Logistics Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Hubei Hongyuan Medicine Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Wuhu Co., Ltd.. | Controlled by Sinopharm Group |
| Sinopharm Holding Lu'an Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Suzhou Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Jiling Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Liaocheng Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Yunnan Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Honghe Co., Ltd. | Controlled by Sinopharm Group |
| Yuxi Sinopharm Medicine Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Hainan Hongyi Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Gansu Co., Ltd. | Controlled by Sinopharm Group |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
| Company name | Related party relationships |
| China Otsuka Pharmaceutical Co., Ltd. | Associate of CNPGC |
| Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. | Associate of CNPGC |
| Changchun Changsheng Gene Pharmaceutical Co., Ltd. | Associate of CNPGC |
| Shenzhen Wanwei Medicine trading Co., Ltd. | Subsidiary of Main Luck Pharmaceutical |
| Sinopharm Holding Longyan Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Ningde Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Nanchang Pharmacy Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Tongren Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Zunyi Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Guizhou Medical Equiment Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Jilin Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Jilin Pharmacy Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Siping Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Wenzhou Co., Ltd | Controlled by Sinopharm Group |
| Sinopharm Holding Nantong Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Heilongjiang Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Lerentang Hengshui Medicine Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Lerentang Baoding Medicine Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Qinghai Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Sichuan Pharmaceutical Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Zhangzhou Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Huaian Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Xiangyang Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Xinxiang Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Hongrun Medical Business Service (Shanghai) Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Huangshi Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Xinxiang Chain Store Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Qianxinan Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Group Shanghai Co., Ltd. | Controlled by Sinopharm Group |
| Beijing Sinopharm Tianyuan Real Estate & Property Management Co., Ltd. | Controlled by Sinopharm Group |
| Xinjiang Baitong Property Service Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Group Shanghai Management Consulting Branch Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Huaideju Pharmaceutical (Xiamen) Co., Ltd. | Controlled by Sinopharm Group |
| Pudong New Area of Shanghai Pharmaceutical Medicine Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Xinyu Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Holding Hunan Weian Pharmacy Medicine Chain Company Ltimited. | Controlled by Sinopharm Group |
| Sinopharm Holding Jiaozuo Co., Ltd. | Controlled by Sinopharm Group |
| Sinopharm Xinjiang Korla Pharmaceutical Co., Ltd. Sinopharm Xinjiang Korla | Controlled by Sinopharm Group |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
| Company name | Related party relationships |
| China Otsuka Pharmaceutical Co., Ltd. | Associate of CNPGC |
| Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. | Associate of CNPGC |
| Changchun Changsheng Gene Pharmaceutical Co., Ltd. | Associate of CNPGC |
| Shenzhen Wanwei Medicine trading Co., Ltd. | Subsidiary of Main Luck Pharmaceutical |
| Pharmaceutical Co., Ltd. | |
| Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd | Non-controlling interest of a subsidiary |
| Hunan Minshengtang Investment Co., Ltd. | Non-controlling interest of a subsidiary |
| Shenyang Pharmaceutical Co., Ltd | Non-controlling interest of a subsidiary |
| Lerentang Investment Group Co., Ltd. | Non-controlling interest of a subsidiary |
| Pingdingshan Pusheng Pharmaceutical Co., Ltd. | Non-controlling interest of a subsidiary |
| Linyi Medical Group Co., Ltd. | Non-controlling interest of a subsidiary |
| Huang Lijin Huang Lijin | Non-controlling interest of a subsidiary |
| Guangdong Jiyuantang Development Co., Ltd. | Non-controlling interest of a subsidiary |
| Shenzhen Jiufeng Investment Co., Ltd. | Non-controlling interest of a subsidiary |
| Taishan Qunkang Pharmacy Co., Ltd. | Non-controlling interest of a subsidiary |
| Zhang Zhenfang Zhang Zhenfang | Non-controlling interest of a subsidiary |
| Hangzhou Xihu Business Group Corporation | Non-controlling interest of a subsidiary |
| Guangxi Deyiyuan Medical Investment Center (Limited Partnership) | Non-controlling interest of a subsidiary |
| Baise Jianan Medicine Chain Co., Ltd. | Non-controlling interest of a subsidiary |
| Heyuan Mairui Trading Co., Ltd. | Non-controlling interest of a subsidiary |
| Wang Yang Wang Yang | Family member of the non-controlling shareholder of a subsidiary |
| Gu Jinfang Gu Jinfang | Controller of non-controlling interest of a subsidiary |
| Nanjing Yuanguang Trading Co., Ltd. | Controlled by non-controlling interest of a subsidiary |
| Taishan Xiangranhui Trade Co., Ltd | Controlled by non-controlling interest of a subsidiary |
| Shaoguan Wujiang District Muyang Medicine Information Consultant Co., Ltd. | Controlled by non-controlling interest of a subsidiary |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties
(1) Related party transactions –goods and services
Purchase of goods and receiving of services from related parties
| Related party | Type of transaction | 2018 | 2017 |
| Sinopharm Holding Sub Marketing Center Co., Ltd. | Purchase of goods | 515,167,083.81 | 503,647,182.73 |
| China National Medicines Co., Ltd. | Purchase of goods | 237,636,101.58 | 192,328,445.40 |
| Sinopharm Holding Shanxi Co., Ltd. | Purchase of goods | 156,466,334.83 | 105,080,688.10 |
| Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd. | Purchase of goods | 127,271,627.94 | 100,523,284.41 |
| Sinopharm Group Co., Ltd. | Purchase of goods | 95,150,353.69 | 246,228,882.09 |
| Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. | Purchase of goods | 90,145,795.30 | 86,204,005.23 |
| Sinopharm Holding Shanxi Co., Ltd. | Purchase of goods | 83,517,976.15 | 75,921,179.25 |
| Sinopharm Le-Ren-Tang Medicine Co., Ltd. | Purchase of goods | 79,259,083.01 | 79,720,630.75 |
| Sinopharm Holding Shenyang Co., Ltd. | Purchase of goods | 63,689,297.73 | 48,659,442.34 |
| Lanzhou Institute of Biological Products Co., Ltd. | Purchase of goods | 52,860,000.00 | 30,600,000.00 |
| Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd. | Purchase of goods | 39,872,567.55 | 31,547,957.86 |
| Sinopharm Holding Lunan Co., Ltd. | Purchase of goods | 39,298,409.81 | 22,663,023.60 |
| Jiangsu Wanbang Pharmacy Marketing Co., Ltd. | Purchase of goods | 33,623,739.18 | 34,629,877.72 |
| Sinopharm Holding Beijing Co., Ltd. | Purchase of goods | 23,822,442.41 | 21,094,588.81 |
| Jinzhou AoHong Pharmaceuticals Co., Ltd. | Purchase of goods | 23,749,213.17 | - |
| Sinopharm Holding Yangzhou Co., Ltd. | Purchase of goods | 23,005,232.97 | 25,252,127.28 |
| Sinopharm Holding Hunan Co., Ltd. | Purchase of goods | 22,435,971.65 | 9,503,424.67 |
| Chongqing Yaoyou Pharmaceutical Co., Ltd. | Purchase of goods | 21,508,305.23 | 16,356,695.13 |
| Sinopharm Holding Inner Mongolia Co., Ltd. | Purchase of goods | 18,984,953.29 | 17,911,878.26 |
| Sinopharm Holding Lerentang Pharmaceutical Co., Ltd. | Purchase of goods | 16,967,826.05 | 14,552,984.64 |
| Winteam Pharmaceutical Group Ltd. | Purchase of goods | 15,331,219.12 | 4,095,720.68 |
| Sinopharm Holding Pingdingshan Co., Ltd. | Purchase of goods | 14,446,097.55 | 17,629,734.37 |
| Shenzhen Main Luck Pharmaceutical Co., Ltd. | Purchase of goods | 14,173,934.35 | 18,163,682.64 |
| China National Pharmaceutical Foreign Trade Corporation | Purchase of goods | 13,645,110.09 | 2,074,302.37 |
| Sinopharm Holding Jiangsu Co., Ltd. | Purchase of goods | 12,276,533.11 | 13,721,003.83 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions –goods and services (Continued)
Purchase of goods and receiving of services from related parties (Continued)
| Related party | Type of transaction | 2018 | 2017 |
| Sinopharm Lerentang Shijiazhuang Medicine Co., Ltd. | Purchase of goods | 10,465,965.70 | 14,140,996.60 |
| Shenzhen Wanwei Medicine Trading Co., Ltd. | Purchase of goods | 10,428,796.93 | 12,411,303.09 |
| Suzhou Erye Pharmaceutical Limited Company | Purchase of goods | 9,554,764.03 | - |
| Sinopharm Holding Xiamen Co., Ltd. | Purchase of goods | 9,246,131.91 | 9,257,962.72 |
| Sinopharm Holding Fujian Co., Ltd. | Purchase of goods | 9,171,420.33 | 11,822,333.08 |
| Chengdu Rongsheng Pharmacy Co., Ltd. | Purchase of goods | 8,958,139.00 | 10,163,100.00 |
| Sinopharm Holding Shanxi Instrument Branch Co., Ltd. | Purchase of goods | 7,410,730.23 | 3,895,843.72 |
| Sinopharm Holding Henan Co., Ltd. | Purchase of goods | 6,575,293.46 | 2,394,853.44 |
| Sinopharm Holding Suzhou Co., Ltd. | Purchase of goods | 6,247,553.79 | 8,828,494.63 |
| Sinopharm Holding Ningxia Co., Ltd. | Purchase of goods | 6,113,483.50 | 5,691,842.49 |
| Sinopharm Chuan Kang Pharmaceutical Co., Ltd. | Purchase of goods | 5,794,907.91 | - |
| Sinopharm Group Zhijun (Shenzhen) PingShan Pharmaceutical Co., Ltd. | Purchase of goods | 5,519,530.03 | 4,251,111.59 |
| Sinopharm Holding Fuzhou Co., Ltd. | Purchase of goods | 4,703,935.11 | 3,003,163.81 |
| Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd. | Purchase of goods | 4,670,243.13 | 2,222,406.63 |
| Sinopharm Holding Changzhou Medical Logistics Center Co., Ltd. | Purchase of goods | 4,530,675.45 | 7,317,867.44 |
| Yichang Humanwell Pharmaceutical Co., Ltd. | Purchase of goods | 4,513,583.78 | 4,109,780.72 |
| Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd. | Purchase of goods | 3,676,515.83 | 933,727.04 |
| Sinopharm Holding Jinan Co., Ltd. | Purchase of goods | 3,621,583.69 | 1,832,235.96 |
| Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical Co., Ltd. | Purchase of goods | 3,614,733.64 | 4,544,410.21 |
| Sinopharm Holding Beijing Huahong Co., Ltd. | Purchase of goods | 3,550,261.18 | 3,843,243.29 |
| Sinopharm Group Guorui Medicine Co., Ltd. | Purchase of goods | 3,735,052.72 | 65,812.60 |
| Shandong Lu Ya Pharmaceutical Co., Ltd. | Purchase of goods | 2,909,280.05 | - |
| Sinopharm Holding Changzhou Co., Ltd. | Purchase of goods | 2,900,395.11 | 7,051,762.45 |
| Tibet Yaopharma Co., Ltd. | Purchase of goods | 2,761,512.07 | - |
| Sinopharm Holding Wuxi Co., Ltd. | Purchase of goods | 2,453,393.36 | 2,736,138.04 |
| Pudong New Area of Shanghai Pharmaceutical Medicine Ltd. | Purchase of goods | 2,298,554.23 | - |
| Sinopharm Holding Jinzhou Co., Ltd. | Purchase of goods | 2,249,516.98 | 1,199,028.41 |
| Sinopharm Holding Beijing Kangchen Bio-Pharmaceutical Co., Ltd. | Purchase of goods | 2,240,460.54 | 3,179,370.11 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions –goods and services (Continued)
Purchase of goods and receiving of services from related parties (Continued)
| Related party | Type of transaction | 2018 | 2017 |
| Shanghai Merro Pharmaceutical Co., Ltd. | Purchase of goods | 2,016,321.47 | 8,681,736.93 |
| Foshan Fengliaoxing Pharmaceutical Co., Ltd. | Purchase of goods | 2,015,702.90 | 320,789.59 |
| Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd. | Purchase of goods | 2,003,690.59 | 1,111,214.17 |
| Sinopharm Lerentang Hebei Medical Instrument Trade Co., Ltd. | Purchase of goods | 1,889,376.44 | 2,446,393.63 |
| Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd. | Purchase of goods | 1,799,439.15 | 2,203,729.99 |
| Sinopharm Holding Tianjin Co., Ltd. | Purchase of goods | 1,598,345.37 | 1,531,041.56 |
| Sinopharm Group Rongsheng Pharmaceutical Co., Ltd. | Purchase of goods | 1,574,958.10 | 367,123.16 |
| Guizhou Tongjitang Pharmaceutical Co., Ltd. | Purchase of goods | 1,536,282.82 | 783,375.17 |
| Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd. | Purchase of goods | 1,451,522.48 | 866,286.88 |
| Sinopharm Holding Yancheng Co., Ltd. | Purchase of goods | 1,402,672.48 | 1,321,450.59 |
| Sichuan Hexin Pharmaceutical Co., Ltd. | Purchase of goods | 1,094,458.11 | (288.55) |
| Shenyang Hongqi Pharmaceutical Co., Ltd. | Purchase of goods | 1,058,670.33 | 509,884.44 |
| Shanghai Shyndec Pharmaceutical Marketing Co., Ltd. | Purchase of goods | 995,510.64 | 1,019,792.18 |
| Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd. | Purchase of goods | 921,863.31 | 1,117,427.20 |
| Sinopharm Holding Putian Co., Ltd. | Purchase of goods | 895,532.89 | 1,060,202.09 |
| Sinopharm Holding Dalian Co., Ltd. | Purchase of goods | 769,041.46 | 1,933,096.74 |
| Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Co., Ltd. | Purchase of goods | 763,625.20 | 321,124.91 |
| Sinopharm Holding Shandong Co., Ltd. | Purchase of goods | 718,163.95 | - |
| Sinopharm Holding Hulun Buir Co., Ltd. | Purchase of goods | 713,341.49 | 18,397,145.25 |
| Huayi Pharmaceutical Co., Ltd. | Purchase of goods | 695,732.52 | - |
| Sinopharm Holding Donghong Medical (Shanghai) Co., Ltd. | Purchase of goods | 615,989.84 | 1,398,400.16 |
| Sinopharm Holding Rizhao Co., Ltd. | Purchase of goods | 586,905.03 | 1,070,541.55 |
| Sinopharm Holding Tongliao Co., Ltd. | Purchase of goods | 584,726.70 | 74,569.23 |
| Guangdong Medi-World Pharmaceutical Co., Ltd. | Purchase of goods | 584,223.16 | - |
| Sinopharm Holding Anhui Co., Ltd. | Purchase of goods | 539,726.50 | 251,374.86 |
| Sinopharm Holding Quanzhou Co., Ltd. | Purchase of goods | 509,662.25 | 693,843.09 |
| Sinopharm Holding Yangzhou Biological Medicine Co., Ltd. | Purchase of goods | 444,000.00 | - |
| Wuhan Zhonglian Pharmaceutical Group Co., Ltd. | Purchase of goods | 435,887.39 | 583,749.71 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions –goods and services (Continued)
Purchase of goods and receiving of services from related parties (Continued)
| Related party | Type of transaction | 2018 | 2017 |
| Sinopharm Holding Changsha Co., Ltd. | Purchase of goods | 414,897.11 | - |
| Sinopharm Holding Kashi New & Special Drugs Co., Ltd. | Purchase of goods | 400,421.76 | 488,097.76 |
| Hunan Dongting Pharmaceutical Co., Ltd. | Purchase of goods | 340,441.92 | 135,686.75 |
| Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co., Ltd. | Purchase of goods | 335,484.62 | 72,490.93 |
| Shanghai Chaohui Pharmaceutical Co., Ltd. | Purchase of goods | 330,363.62 | - |
| Shantou Jinshi Powder Injection Co., Ltd. | Purchase of goods | 330,119.93 | - |
| Sinopharm Holding Ulanqab Co., Ltd. | Purchase of goods | 308,191.79 | 142,060.09 |
| Sinopharm Holding Zhejiang Co., Ltd. | Purchase of goods | 289,516.54 | - |
| Sinopharm Holding Dalian Hecheng Co., Ltd. | Purchase of goods | 262,027.99 | - |
| China Otsuka Pharmaceutical Co., Ltd. | Purchase of goods | 241,236.29 | 2,811,496.30 |
| Sinopharm Holding Dezhou Co., Ltd. | Purchase of goods | 228,731.52 | 228,117.43 |
| Shanghai Modern Hasen (Shangqiu) Pharmaceutical Co., Ltd. | Purchase of goods | 200,544.82 | - |
| Sinopharm Lerentang Qinhuangdao Medicine Co., Ltd. | Purchase of goods | 193,277.45 | 116,087.32 |
| China National Pharmaceutical Industry Co., Ltd. | Purchase of goods | 188,275.39 | 80,821.92 |
| Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd. | Purchase of goods | 173,484.94 | 923.08 |
| Sinopharm Group Southwest Medicine Co., Ltd. | Purchase of goods | 153,389.66 | - |
| Sinopharm Holding Lianyungang Co., Ltd. | Purchase of goods | 153,111.27 | - |
| Shanghai Modern Pharmaceutical Co., Ltd. (Modern Pharmaceutical) | Purchase of goods | 142,521.39 | - |
| Sinopharm Group Yibin Pharmaceuticals Co., Ltd. | Purchase of goods | 121,618.26 | 4,666.51 |
| Sinopharm Shantou Jinshi Pharmaceutical Co., Ltd. | Purchase of goods | 109,039.96 | 55,299.53 |
| Sinopharm Holding Hainan Co., Ltd. | Purchase of goods | 97,450.60 | - |
| Sinopharm Group Shanxi Co., Ltd. | Purchase of goods | 87,596.90 | 862,803.50 |
| Sinopharm Holding Zhihui Minsheng (Tianjin) Medicine Co., Ltd. | Purchase of goods | 80,410.58 | - |
| Sinopharm Holding Guizhou Co., Ltd. | Purchase of goods | 73,729.75 | - |
| Sinopharm Holding Taizhou Co., Ltd. | Purchase of goods | 73,304.23 | - |
| Sinopharm Holding Biopharmaceutical (Tianjin) Co., Ltd. | Purchase of goods | 63,648.72 | (1,108.71) |
| Sinopharm Holding Sanyi Medicine (Wuhu) Co., Ltd. | Purchase of goods | 58,952.78 | 102,930.09 |
| Sichuan Jiangyouzhongbafuzi Technology Development Co., Ltd. | Purchase of goods | 49,297.30 | 22,300.88 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions –goods and services (Continued)
Purchase of goods and receiving of services from related parties (Continued)
| Related party | Type of transaction | 2018 | 2017 |
| Sinopharm Holding Yongzhou Co., Ltd. | Purchase of goods | 38,141.67 | 22,688.00 |
| Chongqing Haisiman Pharmaceutical Co., Ltd. | Purchase of goods | 33,895.38 | 22,055,921.01 |
| Sinopharm Group Weiqida Medicine Co., Ltd. | Purchase of goods | 31,965.52 | - |
| Sinopharm Holding Wende Medicine Nanjing Co., Ltd. | Purchase of goods | 27,310.34 | - |
| The Fourth Pharmaceutical Co., Ltd. of Zhonglian Group | Purchase of goods | 24,295.86 | 112,080.00 |
| Sinopharm Lerentang Tangshan Medicine Co., Ltd. | Purchase of goods | 20,598.94 | 14,862.40 |
| Sinopharm Holding Nanping Newforce Co., Ltd. | Purchase of goods | 15,315.32 | - |
| Sinopharm Holding Shanxi Jincheng Co., Ltd. | Purchase of goods | 11,481.46 | - |
| Sinopharm Zhuhai Medical Instrument Co., Ltd. | Purchase of goods | 9,564.95 | - |
| Sinopharm Hebei Medical Instrument Co., Ltd. | Purchase of goods | 6,533.84 | 29,467.36 |
| Sinopharm Prospect Dentech (Beijing) Co., Ltd. | Purchase of goods | 4,073.48 | 2,101.14 |
| Beijing Huamiao Pharmaceutical Co., Ltd. | Purchase of goods | 2,649.79 | - |
| Sinopharm Group Guangdong Medicine Device Co., Ltd. | Purchase of goods | 1,770.86 | - |
| Sinopharm Holding Jinhua Co., Ltd. | Purchase of goods | 38.80 | 15,569.23 |
| Sinopharm Xinjiang Pharmaceutical Co., Ltd. | Purchase of goods | 12.82 | - |
| Sinopharm Holding Tianjin Distribution Center Co., Ltd. | Purchase of goods | - | 1,452,364.83 |
| Sinopharm Holding Chengdu Co., Ltd. | Purchase of goods | - | 809,743.62 |
| Sinopharm Fujian Medical Examination Co., Ltd. | Purchase of goods | - | 680,423.93 |
| Beijing Huasheng Pharmaceutical Biotechnology Development Co., Ltd. | Purchase of goods | - | 219,374.28 |
| Guizhou Longlife Pharmacertical Co., Ltd. | Purchase of goods | - | 188,738.84 |
| Beijing Tongyu Information Technology Co., Ltd. | Purchase of goods | - | 175,351.00 |
| Sinopharm Holding Hubei Co., Ltd. | Purchase of goods | - | 137,617.16 |
| Sinopharm Holding Jiangxi Co., Ltd. | Purchase of goods | - | 69,941.45 |
| Sinopharm Group Chemical Reagent Co., Ltd. | Purchase of goods | - | 46,153.84 |
| Sinopharm Holding Tianjin North Medicine Co., Ltd. | Purchase of goods | - | 23,066.70 |
| Sinopharm Holding Chongqing Co., Ltd. | Purchase of goods | - | 9,230.76 |
| Sinopharm Fengliaoxing (Foshan) Medicines Co., Ltd. | Purchase of goods | - | 2,332.96 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions –goods and services (Continued)
Purchase of goods and receiving of services from related parties (Continued)
| Related party | Type of transaction | 2018 | 2017 |
| China National Scientific Instruments & Materials Imp/Exp Shenzhen Co., Ltd. | Purchase of goods | - | (1,598,611.60) |
| Sinopharm Holding Ordos Co., Ltd. | Purchase of goods | (10,667.01) | 35,826.67 |
| Anhui Jingfang Pharmaceutical Co., Ltd. | Purchase of goods | (13,269.30) | 460,506.20 |
| Sinopharm Group Medicine Logistic Co., Ltd. | Storage and transport cost | 6,666,668.71 | 7,395,406.16 |
| Sinopharm Health Online Co., Ltd. | Consulting service fee | 6,085,895.22 | 3,071,581.63 |
| Shanghai Beiyi Guoda pharmaceutical Co. Ltd. | Consulting service fee | 1,263,962.22 | 589,442.86 |
| Shanghai Tongyu Information Technology Co., Ltd. | Information system access fee | 98,113.21 | 98,113.21 |
| China National Pharmaceutical Logistics Co., Ltd. | Storage and transport cost | 44,030.65 | 28,856.97 |
| Sinopharm Holding Tianjin Binhai Pharmaceutical Co., Ltd. | Information system access fee | 7,075.47 | - |
| Sinopharm Group Co., Ltd. | Consulting service fee | - | 5,982.51 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions –goods and services (Continued)
Sale of goods and rendering of services
| Related party | Type of transaction | 2018 | 2017 |
| Sinopharm Group Co., Ltd. | Sale of goods | 54,514,170.65 | 5,593,686.39 |
| Shanghai Beiyi Guoda pharmaceutical Co. Ltd. | Sale of goods | 49,727,338.63 | 51,483,490.91 |
| Foshan Chancheng Pharmaceutical Co., Ltd. | Sale of goods | 42,375,781.14 | 33,011,056.01 |
| Sinopharm Holding Hainan Co., Ltd. | Sale of goods | 29,338,160.25 | 36,385,390.99 |
| Sinopharm Holding Hainan Hongyi Co., Ltd. | Sale of goods | 24,127,524.50 | 25,628,473.91 |
| Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd. | Sale of goods | 17,376,808.71 | 13,060,212.97 |
| Sinopharm Holding Wenzhou Co., Ltd. | Sale of goods | 10,830,194.79 | 16,144,827.68 |
| Pudong New Area of Shanghai Pharmaceutical Medicine Ltd. | Sale of goods | 10,524,551.98 | |
| Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd. | Sale of goods | 9,738,902.57 | 9,566,003.52 |
| Sinopharm Sichuan Pharmaceutical Co., Ltd. | Sale of goods | 9,061,104.38 | 37,145,400.72 |
| Sinopharm Holding Sub Marketing Center Co., Ltd. | Sale of goods | 8,970,804.72 | 12,124,282.34 |
| Sinopharm Holding Henan Co., Ltd. | Sale of goods | 8,736,054.45 | 15,920,365.63 |
| Sinopharm Holding Nantong Co., Ltd. | Sale of goods | 8,717,338.95 | 10,668,342.56 |
| Shenzhen Hengsheng Hospital | Sale of goods | 8,215,885.93 | |
| Sinopharm Le-Ren-Tang Medicine Co., Ltd. | Sale of goods | 7,728,482.84 | 29,700,260.69 |
| Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd. | Sale of goods | 7,489,471.75 | 137,615.38 |
| Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd. | Sale of goods | 6,837,559.00 | 28,222,286.50 |
| Sinopharm Holding Beijing Co., Ltd. | Sale of goods | 5,770,691.44 | 46,330,723.11 |
| Sinopharm Holding Yunnan Co., Ltd. | Sale of goods | 5,713,012.18 | 13,882,513.85 |
| Sinopharm Holding Yangzhou Co., Ltd. | Sale of goods | 5,144,530.81 | 4,983,173.28 |
| Sinopharm Holding Beijing Huahong Co., Ltd. | Sale of goods | 4,816,641.92 | 18,809,022.65 |
| Sinopharm Holding Shandong Co., Ltd. | Sale of goods | 4,577,546.05 | 54,609,405.93 |
| Foshan Chancheng District Central Hospital | Sale of goods | 4,504,644.96 | 4,152,584.46 |
| Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical Co., Ltd. | Sale of goods | 4,409,528.78 | 2,315,354.12 |
| Sinopharm Holding Hubei Co., Ltd. | Sale of goods | 3,772,162.27 | 36,728,642.88 |
| Sinopharm Holding Shanxi Co., Ltd. | Sale of goods | 2,577,305.96 | 1,347,127.61 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions –goods and services (Continued)
Sale of goods and rendering of services
| Related party | Type of transaction | 2018 | 2017 |
| China National Medicines Co., Ltd. | Sale of goods | 1,740,716.75 | 2,063,573.21 |
| Foshan Chanyixing Medicine Development Co Ltd. | Sale of goods | 1,450,198.02 | 1,405,871.30 |
| Sinopharm Holding Gansu Co., Ltd. | Sale of goods | 1,353,030.00 | 2,884,856.13 |
| Sinopharm Holding Hunan Co., Ltd. | Sale of goods | 1,308,950.82 | 5,020,059.72 |
| Sinopharm Holding Dalian Co., Ltd. | Sale of goods | 1,263,047.36 | 486,071.84 |
| Shanghai Merro Pharmaceutical Co., Ltd. | Sale of goods | 1,223,626.19 | 3,234,923.55 |
| Sinopharm Holding Jilin Co., Ltd. | Sale of goods | 1,172,196.27 | 3,009,786.08 |
| Sinopharm Holding Anhui Co., Ltd. | Sale of goods | 1,168,187.29 | 366,059.49 |
| Sinopharm Holding Guizhou Co., Ltd. | Sale of goods | 1,042,466.52 | 5,972,815.92 |
| Sinopharm Holding Tianjin Co., Ltd. | Sale of goods | 1,029,758.40 | 8,825,649.05 |
| Sinopharm Group Southwest Medicine Co., Ltd. | Sale of goods | 1,006,172.43 | 15,591,867.75 |
| Sinopharm Holding Fujian Co., Ltd. | Sale of goods | 979,220.98 | 6,048,503.32 |
| Sinopharm Holding Zhejiang Co., Ltd. | Sale of goods | 921,282.05 | 6,829,401.70 |
| Sinopharm Holding Shanxi Co., Ltd. | Sale of goods | 917,123.69 | 6,299,521.58 |
| Hubei Medical Group Co., Ltd. | Sale of goods | 853,130.68 | - |
| Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd. | Sale of goods | 673,847.93 | 4,235.90 |
| Yuxi Sinopharm Medicine Co., Ltd. | Sale of goods | 625,927.21 | - |
| Shanghai Guoda Lingyun Pharmacy Co., Ltd. | Sale of goods | 540,476.78 | 713,931.05 |
| Sinopharm Group Shanxi Co., Ltd. | Sale of goods | 486,510.78 | 844,560.30 |
| Sinopharm Holding Donghong Medical (Shanghai) Co., Ltd. | Sale of goods | 448,887.64 | 201,902.45 |
| Sinopharm Holding Changzhou Co., Ltd. | Sale of goods | 435,840.01 | - |
| Sinopharm Holding Jiangxi Co., Ltd. | Sale of goods | 371,671.87 | 647,485.30 |
| Sinopharm Holding Wuxi Co., Ltd. | Sale of goods | 349,203.27 | 215,010.22 |
| Sinopharm Holding Heilongjiang Co., Ltd. | Sale of goods | 324,789.98 | 2,720,546.27 |
| Sinopharm Holding Dalian Hecheng Co., Ltd. | Sale of goods | 301,982.46 | 366,975.51 |
| Sinopharm Holding Ningxia Co., Ltd. | Sale of goods | 240,539.93 | 6,303,526.27 |
| Sinopharm Holding Inner Mongolia Co., Ltd. | Sale of goods | 239,130.68 | 366,510.94 |
| Sinopharm Holding Chengdu Co., Ltd. | Sale of goods | 215,685.18 | 1,227,783.73 |
| Sinopharm Holding Yongzhou Co., Ltd. | Sale of goods | 203,544.77 | - |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions –goods and services (Continued)
Sale of goods and rendering of services
| Related party | Type of transaction | 2018 | 2017 |
| Sinopharm Holding Ulanqab Co., Ltd. | Sale of goods | 175,775.17 | 92,908.28 |
| Sinopharm Holding Changzhou Medical Logistics Center Co., Ltd. | Sale of goods | 175,352.41 | 291,901.64 |
| Sinopharm Holding Qinghai Co., Ltd. | Sale of goods | 168,653.68 | 1,759,644.99 |
| Sinopharm Holding Chongqing Co., Ltd. | Sale of goods | 145,147.69 | 125,938.47 |
| Sinopharm Holding Guizhou Medical Equiment Co., Ltd. | Sale of goods | 133,404.19 | - |
| Sinopharm Holding Huaian Co., Ltd. | Sale of goods | 128,653.00 | 440,133.12 |
| Sinopharm Holding Wuhu Co., Ltd. | Sale of goods | 127,195.59 | - |
| Sinopharm Holding Shenyang Co., Ltd. | Sale of goods | 103,846.57 | 3,907,366.12 |
| Sinopharm Holding Suzhou Co., Ltd. | Sale of goods | 103,840.63 | - |
| Sinopharm Holding Hubei Hongyuan Co., Ltd. | Sale of goods | 97,162.40 | - |
| Sinopharm Holding Jilin Pharmacy Co., Ltd. | Sale of goods | 91,435.98 | - |
| Sinopharm Group Zhijun (Shenzhen) PingShan Pharmaceutical Co., Ltd. | Sale of goods | 79,279.28 | - |
| Sinopharm Holding Lu'an Co., Ltd. | Sale of goods | 66,987.18 | - |
| Sinopharm Holding Putian Co., Ltd. | Sale of goods | 64,610.68 | 637,366.11 |
| Sinopharm Holding Tianjin North Medicine Co., Ltd. | Sale of goods | 58,775.86 | - |
| Sinopharm Holding Longyan Co., Ltd. | Sale of goods | 58,172.99 | 114,780.52 |
| Sinopharm Holding Nanchang Pharmacy Co., Ltd. | Sale of goods | 54,017.59 | - |
| Dongyuan accord pharmaceutical chain Co., Ltd. | Sale of goods | 39,393.65 | - |
| Sinopharm Holding Zunyi Co., Ltd. | Sale of goods | 35,054.94 | - |
| Sinopharm Holding Xinxiang Co., Ltd. | Sale of goods | 34,164.62 | - |
| Sinopharm Holding Huangshi Co., Ltd. | Sale of goods | 34,025.78 | 87,938.08 |
| Sinopharm Holding Siping Co., Ltd. | Sale of goods | 26,548.13 | - |
| Sinopharm Holding Ningde Co., Ltd. | Sale of goods | 23,864.90 | 603,115.39 |
| Sinopharm Holding Tongren Co., Ltd. | Sale of goods | 21,011.20 | - |
| Sinopharm Holding Hongrun Medical Business Service (Shanghai) Co., Ltd. | Sale of goods | 19,240.32 | - |
| Sinopharm Holding Jiling Co., Ltd. | Sale of goods | 19,035.54 | - |
| Sinopharm Fengliaoxing Medical Hospital Co., Ltd. | Sale of goods | 16,804.60 | 2,175.11 |
| Sinopharm Holding Liaocheng Co., Ltd. | Sale of goods | 15,596.82 | - |
| Fujian CMDC Co., Ltd. | Sale of goods | 13,988.00 | - |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions –goods and services (Continued)
Sale of goods and rendering of services
| Related party | Type of transaction | 2018 | 2017 |
| Sinopharm Lerentang Baoding Medicine Co., Ltd. | Sale of goods | 12,991.45 | - |
| CMDC Guizhou Qiannan Co., Ltd. | Sale of goods | 12,712.58 | - |
| Sinopharm Lerentang Hengshui Medicine Co., Ltd. | Sale of goods | 12,108.38 | - |
| Sinopharm Holding Honghe Co., Ltd. | Sale of goods | 9,595.25 | - |
| Sinopharm Zhuhai Medical Instrument Co., Ltd. | Sale of goods | 9,119.70 | - |
| Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd. | Sale of goods | 7,617.49 | - |
| Sinopharm Holding Fuzhou Co., Ltd. | Sale of goods | 6,927.14 | 6,073,301.78 |
| Sinopharm Holding Hulun Buir Co., Ltd. | Sale of goods | 4,570.00 | 5,955,618.61 |
| Hunan Minshengtang Investment Co., Ltd. | Sale of goods | - | 4,378,542.02 |
| Sinopharm Holding Quanzhou Co., Ltd. | Sale of goods | - | 2,300,292.62 |
| Sinopharm Holding Lunan Co., Ltd. | Sale of goods | - | 1,004,572.65 |
| Sinopharm Holding Zhangzhou Co., Ltd. | Sale of goods | - | 750,514.60 |
| Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co., Ltd. | Sale of goods | - | 598,153.85 |
| Sinopharm Group Guangdong Medicine Device Co., Ltd. | Sale of goods | - | 557,307.70 |
| Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Co., Ltd. | Sale of goods | - | 409,246.96 |
| China Otsuka Pharmaceutical Co., Ltd. | Sale of goods | - | 153,846.15 |
| China National Scientific Instruments & Materials Imp/Exp Shenzhen Co., Ltd. | Sale of goods | - | 121,846.14 |
| Sinopharm Holding Xiangyang Co., Ltd. | Sale of goods | - | 109,542.99 |
| Sinopharm Xinxiang Chain Store Co., Ltd. | Sale of goods | - | 66,445.13 |
| Sichuan Kang Daxin Pharmaceutical Co., Ltd. | Sale of goods | - | 33,230.76 |
| Beijing Tiantan Biological Products Co., Ltd. | Sale of goods | - | 7,692.31 |
| Sinopharm Holding Qianxinan Co., Ltd. | Sale of goods | - | 7,478.63 |
| Sinopharm Guangdong Medical Examination Co., Ltd. | Sale of goods | - | 802.05 |
| China National Medicines Co., Ltd. | Transport and storage income | 3,580,698.30 | 3,785,126.52 |
| Sinopharm Group Medicine Logistic Co., Ltd. | Transport and storage income | 294,804.62 | 1,133,089.80 |
| Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd. | Meal fee | 294,180.00 | 266,360.00 |
| Sinopharm Group Zhijun (Shenzhen) PingShan Pharmaceutical Co., Ltd. | Transport and storage income | 122,242.00 | 110,434.27 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions –goods and services (Continued)
Sale of goods and rendering of services
| Related party | Type of transaction | 2018 | 2017 |
| Sinopharm Holding Shanxi Co., Ltd. | Consulting service income | 9,433.96 | 28,301.88 |
| Guizhou Tongjitang Pharmaceutical Co., Ltd. | Consulting service income | 8,285.71 | - |
| Winteam Pharmaceutical Group Ltd. | Consulting service income | 2,023.58 | 6,580.11 |
| Sinopharm Holding Shanxi Instrument Branch Co., Ltd. | Other income | 1,132.08 | 22,830.19 |
| Sinopharm Holding Sub Marketing Center Co., Ltd. | Consulting service income | - | 51,379.25 |
| Shenzhen Wanwei Medicine Trading Co., Ltd. | Transport and storage income | - | 38,808.71 |
| Sinopharm Holding Shanxi Co., Ltd. | Other income | - | 19,433.96 |
| Shenzhen Main Luck Pharmaceutical Co., Ltd. | Transport and storage income | - | 18,277.71 |
| Shenzhen Zhijun Pharmaceutical Trade Co., Ltd. | Meal fee | - | 17,461.63 |
| Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd. | Other income | - | 13,650.94 |
| Sinopharm Health Online Co., Ltd. | Consulting service income | - | 10,697.08 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(2) Related party transactions - leases
| (a) As the lessor | |||
| Type of assets under leases | Income from leases in 2018 | Income from leases in 2017 | |
| Sinopharm Group Zhijun (Shenzhen) Pharmaceutical Co., Ltd. | Building | 351,428.58 | 637,142.88 |
| Shenzhen Zhijun Pharmaceutical Trade Co., Ltd. | Building | 285,714.30 | - |
| China National Medicines Co., Ltd. | Building | 45,714.29 | 45,714.29 |
| Sinopharm Holding Sub Marketing Center Co., Ltd. | Building | - | 22,857.14 |
| (b) As the lessee | ||||
| Type of assets under leases | Expenses from leases in 2018 | Expenses from leases in 2017 | ||
| Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd. | Building | 5,461,904.76 | 4,780,000.00 | |
| Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd. | Building | 3,914,124.76 | 4,239,560.37 | |
| Sinopharm Group Shanghai Co., Ltd. | Building | 3,790,426.48 | 3,574,131.14 | |
| Beijing Sinopharm Tianyuan Real Estate & Property Management Co., Ltd. | Equipment | 3,750,000.00 | 3,750,000.00 | |
| Shenyang Pharmaceutical Co., Ltd. | Building | 3,548,219.75 | 3,263,809.62 | |
| Sinopharm Group Medicine Logistic Co., Ltd. | Building | 3,539,999.98 | 3,539,999.98 | |
| Lerentang Investment Group Co., Ltd. | Building | 2,277,892.99 | 2,700,000.00 | |
| Hunan Minshengtang Investment Co., Ltd. | Building | 2,027,673.99 | 1,548,351.84 | |
| Sinopharm Holding Yangzhou Co., Ltd. | Building | 1,862,857.14 | 1,862,857.14 | |
| Linyi Medical Group Co., Ltd. | Building (Store) | 1,329,859.65 | - | |
| Pingdingshan Pusheng Pharmaceutical Co., Ltd. | Building | 1,277,732.57 | 2,402,965.82 | |
| Guangdong Jiyuantang Development Co., Ltd. | Building | 1,192,864.11 | 611,398.72 | |
| Nanjing Yuanguang Trading Co., Ltd. | Building | 866,794.89 | - | |
| Linyi Medical Group Co., Ltd. | Building (Warehouse, Office) | 706,516.80 | - | |
| Shaoguan Wujiang District Muyang Medicine Information Consultant Co., Ltd. | Building | 470,161.86 | 470,161.86 | |
| Taishan Xiangranhui Trade Co., Ltd | Building | 451,963.88 | - | |
| Zhang Zhenfang | Building | 402,499.98 | 402,499.98 | |
| Wang Yang | Building | 262,857.12 | 262,857.12 | |
| Sinopharm Group Co., Ltd. | Building | 259,915.02 | 259,915.04 | |
| Sinopharm Holding Kashi New & Special Drugs Co., Ltd. | Building | 236,051.50 | 212,179.81 | |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(2) Related party transactions – leases (Continued)
| (b) As the lessee (continued) | |||||
| Type of assets under leases | Expenses from leases in 2018 | Expenses from leases in 2017 | |||
| Sinopharm Holding Beijing Co., Ltd. | Building | 235,714.29 | 221,944.46 | ||
| Sinopharm Holding Shanxi Co., Ltd. | Building | 234,017.16 | 297,653.30 | ||
| Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd. | Building | 184,253.18 | 184,253.33 | ||
| Gu Jinhua | Building | 178,800.00 | 596,654.10 | ||
| Beijing Sinopharm Tianyuan Real Estate & Property Management Co., Ltd. | Building | 173,523.81 | 254,544.44 | ||
| China National Medicines Co., Ltd. | Building | 153,750.00 | 199,563.50 | ||
| Hangzhou Xihu Business Group Corporation | Building | 132,823.81 | 126,500.00 | ||
| Sinopharm Xinjiang Pharmaceutical Co., Ltd. | Building | 130,208.30 | 125,000.04 | ||
| Shenzhen Jiufeng Investment Co., Ltd. | Building | 89,260.15 | - | ||
| Taishan Qunkang Pharmacy Co., Ltd. | Building | 74,170.32 | - | ||
| Xinjiang Baitong Property Service Co., Ltd. | Building | 44,581.16 | 34,551.74 | ||
| Sinopharm Group Zhijun (Shenzhen) PingShan Pharmaceutical Co., Ltd. | Park | 35,428.57 | - | ||
| Sinopharm Holding Fujian Co., Ltd. | Building | 6,571.38 | 1,999.98 | ||
| Huang Lijin | Building | - | 819,144.15 | ||
| Taishan Qunkang Pharmacy Co., Ltd. | Building | - | 81,271.80 | ||
| Linyi Medical Group Co., Ltd. | Building | - | 2,010,483.23 | ||
| Sinopharm Group Xinjiang Pharmaceutical Co., Ltd. | Building | - | 27,000.00 | ||
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(3) Related party transactions – Financing
| Related party | Amount | Inception | Maturity | Note |
| Borrowed from | ||||
| Group Financial Co. | 28,864,324.33 | 6.February.2018 | 31.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 17,745,523.36 | 8.June.2018 | 31.July.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 16,989,310.72 | 8.June.2018 | 2.July.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 15,000,000.00 | 6.February.2018 | 9.May.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 15,000,000.00 | 8.June.2018 | 9.July.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 14,421,033.37 | 8.June.2018 | 31.July.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 13,299,616.90 | 6.February.2018 | 9.June.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 10,427,104.57 | 8.June.2018 | 9.August.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 10,000,000.00 | 8.June.2018 | 25.July.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 10,000,000.00 | 8.June.2018 | 25.August.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 9,154,974.69 | 6.February.2018 | 31.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 8,492,564.70 | 6.February.2018 | 31.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 6,533,003.82 | 23.May.2018 | 27.June.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 5,824,599.68 | 8.June.2018 | 31.July.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 5,494,215.57 | 29.January.2018 | 25.July.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 5,397,269.57 | 8.June.2018 | 25.August.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 4,829,908.00 | 6.February.2018 | 25.April.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 3,500,231.10 | 23.May.2018 | 28.September.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 3,203,901.98 | 8.June.2018 | 25.July.2018 | Discount on commercial acceptance notes |
| Guorun Medical Supply Chain Services (Shanghai) Co., Ltd. | 3,200,000.00 | 27.June.2018 | 26.June.2018 | Short-term borrowings |
| Group Financial Co. | 2,985,850.00 | 8.June.2018 | 25.July.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 2,586,003.25 | 6.February.2018 | 9.April.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 2,500,661.99 | 8.June.2018 | 9.July.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 2,000,000.00 | 23.May.2018 | 28.June.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 2,000,000.00 | 23.May.2018 | 19.October.2018 | Discount on bank acceptance notes |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
| Related party | Amount | Inception | Maturity | Note |
| Borrowed from | ||||
| Group Financial Co. | 1,819,472.43 | 29.January.2018 | 25.July.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,782,632.39 | 6.February.2018 | 31.May.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 1,727,218.03 | 8.June.2018 | 31.August.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 1,721,826.42 | 29.January.2018 | 26. August.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,614,923.40 | 29.January.2018 | 25.June.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,567,611.66 | 8.June.2018 | 31.July.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 1,424,501.98 | 8.June.2018 | 3.November.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 1,350,000.00 | 29.January.2018 | 27.June.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,020,299.50 | 6.February.2018 | 26.April.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 1,009,120.49 | 8.June.2018 | 30.September.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 1,000,000.00 | 23.May.2018 | 30.July.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 23.May.2018 | 17.October.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 25.July.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 25.July.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 25.July.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 25.July.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 25.July.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 25.July.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 26.August.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 26.August.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 26.August.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 26.August.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 26.August.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 26.August.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 28.June.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 28.June.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 28.June.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 28.June.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 28.June.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 28.June.2018 | Discount on bank acceptance notes |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
| Related party | Amount | Inception | Maturity | Note |
| Borrowed from | ||||
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 28.June.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 28.June.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 27.March.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 27.March.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 27.March.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 27.March.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 1,000,000.00 | 29.January.2018 | 27.March.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 30.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 30.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 27.April.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 27.April.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 27.April.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 31.May.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 31.May.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
| Related party | Amount | Inception | Maturity | Note |
| Borrowed from | ||||
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.April.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.April.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.April.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.April.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.April.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.April.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.April.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.April.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.April.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.April.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.April.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.April.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 999,000.00 | 11.February.2018 | 25.April.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 965,711.76 | 29.January.2018 | 27.March.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 960,382.84 | 23.May.2018 | 30.June.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 881,196.30 | 23.May.2018 | 13.July.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 866,989.11 | 11.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 832,908.92 | 23.May.2018 | 20.October.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 773,422.00 | 8.June.2018 | 26.July.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 762,190.80 | 6.February.2018 | 26.May.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 726,717.56 | 23.May.2018 | 26.July.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 725,482.85 | 23.May.2018 | 8.September.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 705,466.20 | 6.February.2018 | 30.June.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 700,894.97 | 23.May.2018 | 7.September.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 700,000.00 | 23.May.2018 | 26.September.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 682,963.15 | 29.January.2018 | 28.June.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 663,946.00 | 8.June.2018 | 26.August.2018 | Discount on commercial acceptance notes |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
| Related party | Amount | Inception | Maturity | Note |
| Borrowed from | ||||
| Group Financial Co. | 662,209.60 | 23.May.2018 | 26.July.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 644,139.50 | 11.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 637,825.05 | 11.February.2018 | 25.April.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 630,654.72 | 23.May.2018 | 12.June.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 626,307.92 | 23.May.2018 | 27.July.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 605,037.40 | 8.June.2018 | 26.September.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 603,985.26 | 11.February.2018 | 30.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 579,670.29 | 23.May.2018 | 23.July.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 572,565.64 | 8.June.2018 | 31.October.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 509,183.55 | 23.May.2018 | 23.August.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 483,944.32 | 6.February.2018 | 25.March.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 448,347.26 | 11.February.2018 | 27.April.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 234,565.32 | 23.May.2018 | 28.July.2018 | Discount on bank acceptance notes |
| Group Financial Co. | 217,124.56 | 11.February.2018 | 31.May.2018 | Discount on commercial acceptance notes |
| Group Financial Co. | 147,903.08 | 8.June.2018 | 25.July.2018 | Discount on commercial acceptance notes |
| Lend to | ||||
| Sinopharm Group Zhijun(Suzhou) Pharmaceutical Co., Ltd. | 44,000,000.00 | 26.January.2018 | 25. January.2019 | Entrusted loan |
(4) Related party asset transfer
| Type of transaction | 2018 | 2017 | |
| Sinopharm Holding Tianjin Binhai Pharmaceutical Co., Ltd. | Purchase of construction in progress | 21,794.87 | |
| Shanghai Tongyu Information Technology Co., Ltd. | Purchase of intangible asset | 46,153.85 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(5) Other related party transactions
| 2018 | 2017 | |
| (a) Remuneration for key management personnel | 2,981,250.00 | 2,507,458.00 |
| (b) Interest expense | |||
| Related party | Category | 2018 | 2017 |
| Group Financial Co. | Payment of notes discount interest | 3,411,652.84 | 3,150,834.52 |
| China National Pharmaceutical Group Corporation | Payment of entrusted loan interest | 641,469.02 | 134,673.05 |
| Sinopharm Holding Financing Lease Co., Ltd. | Payment of financing lease interest | 623,402.17 | 837,111.29 |
| Guorun Medical Supply Chain Services (Shanghai) Co., Ltd. | Payment of related parties loan interest | 1,778.67 | - |
| Group Financial Co.. | Payment of loan interest | - | 688,598.96 |
| 4,678,302.70 | 4,811,217.82 | ||
| (c) Interest income | |||
| Related party | Category | 2018 | 2017 |
| Sinopharm Group Zhijun (Suzhou) Pharmaceutical Co., Ltd. | Entrusted loan interest | 1,549,650.99 | 937,951.77 |
| Group Financial Co. | Deposit interest | 387,479.46 | 129,656.35 |
| Shanghai Shyndec Pharmaceutical Co., Ltd. | Other interest | - | 47,628.66 |
| 1,937,130.45 | 1,115,236.78 | ||
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
6. Commitments between the Group and related parties
| 2018 RMB‘0,000 | 2017 RMB‘0,000 | |
| Leases | ||
| Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd. | 3,439.50 | 2,580.00 |
| Shenyang Pharmaceutical Co., Ltd. | 3,000.00 | 700.00 |
| Sinopharm Holding Yangzhou Co., Ltd. | 978.00 | 1,173.60 |
| Linyi Medical Group Co., Ltd. | 959.42 | 429.97 |
| Sinopharm Group Medicine Logistic Co., Ltd. | 806.70 | - |
| Guangdong Jiyuantang Development Co., Ltd. | 685.50 | - |
| Nanjing Yuanguang Trading Co., Ltd. | 672.00 | 463.09 |
| Taishan Xiangranhui Trade Co., Ltd | 551.18 | 527.54 |
| Pingdingshan Pusheng Pharmaceutical Co., Ltd. | 512.85 | 162.11 |
| Sinopharm Group Shanghai Co., Ltd. | 488.79 | 4,032.80 |
| Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd. | 352.45 | 877.80 |
| Lerentang Investment Group Co., Ltd. | 263.50 | 527.00 |
| Shaoguan Wujiang District Muyang Medicine Information Consultant Co., Ltd. | 216.08 | 263.09 |
| Gu Jinhua | 213.96 | 289.06 |
| Sinopharm Group Co., Ltd. | 147.29 | 173.28 |
| Sinopharm Holding Beijing Co., Ltd. | 146.00 | 166.42 |
| Taishan Qunkang Pharmacy Co., Ltd. | 93.01 | 53.36 |
| Beijing Sinopharm Tianyuan Real Estate & Property Management Co., Ltd. | 86.90 | - |
| Wang Yang | 82.80 | 110.40 |
| China National Medicines Co., Ltd. | 75.00 | 94.50 |
| Hangzhou Xihu Business Group Corporation | 73.99 | 87.93 |
| Shenzhen Jiufeng Investment Co., Ltd. | 58.00 | - |
| Sinopharm Holding Kashi New & Special Drugs Co., Ltd. | 48.54 | 52.89 |
| Sinopharm Xinjiang Pharmaceutical Co., Ltd. | 27.56 | 40.69 |
| Sinopharm Holding Fujian Co., Ltd. | 1.96 | 2.65 |
| Hunan Minshengtang Investment Co., Ltd. | - | 841.86 |
| Sinopharm Group Zhijun (Shenzhen) PingShan Pharmaceutical Co., Ltd. | - | - |
| Xinjiang Baitong Property Service Co., Ltd. | - | - |
| Zhang Zhenfang | - | 80.50 |
| Shenzhen Jiufeng Investment Co., Ltd. | - | 78.00 |
| Sinopharm Holding Shanxi Co., Ltd. | - | 49.14 |
| Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd. | - | 45.31 |
| 13,980.97 | 13,902.99 | |
| Lease out | ||
| Sinopharm Group Zhijun (Shenzhen) Pharmaceutical Co., Ltd. | - | 35.14 |
| Shenzhen Zhijun Pharmaceutical Trade Co., Ltd. | - | 28.57 |
| Sinopharm Group Medicine Logistic Co., Ltd. | - | 16.94 |
| - | 80.65 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
7. Amounts due from related parties
| Accounts receivable | 2018 | 2017 | ||
| Related party | Gross carrying amount | Provision for bad debt | Gross carrying amount | Provision for bad debt |
| Foshan Chancheng Pharmaceutical Co., Ltd. | 36,703,959.69 | 207,364.54 | 21,934,107.53 | 175,357.55 |
| Sinopharm Group Co., Ltd. | 30,140,408.15 | - | 15,369,464.29 | - |
| Shanghai Beiyi Guoda pharmaceutical Co. Ltd. | 18,617,164.50 | - | 17,897,203.42 | - |
| Sinopharm Holding Hainan Co., Ltd. | 10,514,385.94 | - | 14,215,247.85 | - |
| Sinopharm Holding Hainan Hongyi Co., Ltd. | 8,529,182.80 | - | 8,091,971.32 | - |
| Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd. | 4,589,946.00 | - | 2,157,970.20 | - |
| Sinopharm Health Online Co., Ltd. | 4,525,649.68 | - | 9,422,294.03 | - |
| Sinopharm Holding Sub Marketing Center Co., Ltd. | 4,190,027.84 | - | 2,804,530.25 | - |
| Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd. | 4,124,312.92 | - | 8,809,915.50 | - |
| Sinopharm Sichuan Pharmaceutical Co., Ltd. | 3,976,185.33 | - | 662,971.38 | - |
| Foshan Chancheng District Central Hospital | 3,576,265.62 | 20,670.88 | 2,529,205.51 | 12,659.85 |
| China National Medicines Co., Ltd. | 3,501,874.71 | - | 2,676,276.13 | - |
| Shenzhen Hengsheng Hospital | 3,490,867.82 | - | - | - |
| Sinopharm Le-Ren-Tang Medicine Co., Ltd. | 3,339,262.36 | - | 3,637,345.22 | - |
| Pudong New Area of Shanghai Pharmaceutical Medicine Ltd. | 2,854,404.51 | - | 7,370,859.93 | - |
| Sinopharm Holding Nantong Co., Ltd. | 2,722,425.92 | - | 1,704,073.87 | - |
| Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd. | 2,635,080.55 | - | 1,005,726.44 | - |
| Sinopharm Holding Yunnan Co., Ltd. | 2,532,060.95 | - | 1,035,424.32 | - |
| Sinopharm Holding Henan Co., Ltd. | 1,557,141.42 | - | 1,154,757.68 | - |
| Sinopharm Holding Beijing Huahong Co., Ltd. | 1,375,881.06 | - | 506,804.30 | - |
| Sinopharm Holding Hubei Co., Ltd. | 1,339,756.44 | - | 2,748,951.80 | - |
| Sinopharm Holding Beijing Co., Ltd. | 1,296,500.16 | - | 90,046.08 | - |
| Sinopharm Holding Shanxi Co., Ltd. | 1,265,918.60 | - | 1,200,884.28 | - |
| Sinopharm Holding Wenzhou Co., Ltd. | 1,230,357.78 | - | 1,158,304.46 | - |
| Sinopharm Holding Shandong Co., Ltd. | 1,225,393.60 | - | 588,056.32 | - |
| Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd. | 1,148,175.69 | - | 4,323,084.16 | - |
| Foshan Chanyixing Medicine Development Co Ltd. | 987,490.80 | 3,943.78 | 673,746.17 | 2,421.30 |
| Sinopharm Holding Yangzhou Co., Ltd. | 935,414.27 | - | 1,296,112.24 | - |
| Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd. | 675,756.00 | - | 130,704.00 | - |
X. Related party relationships and transactions (Continued)
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
7. Amounts due from related parties (Continued)
| Accounts receivable(continued) | 2018 | 2017 | ||||
| Related party | Gross carrying amount | Provision for bad debt | Gross carrying amount | Provision for bad debt | ||
| Sinopharm Holding Guizhou Co., Ltd. | 639,918.78 | - | 170,986.79 | - | ||
| Sinopharm Holding Hunan Co., Ltd. | 595,452.08 | - | 43,981.92 | - | ||
| Sinopharm Holding Jilin Co., Ltd. | 492,849.62 | - | 565,721.74 | - | ||
| Sinopharm Holding Tianjin Co., Ltd. | 416,379.20 | - | 135,626.56 | - | ||
| Sinopharm Holding Anhui Co., Ltd. | 391,641.84 | - | 33,633.20 | - | ||
| Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical Co., Ltd. | 329,296.00 | - | 380,649.04 | - | ||
| Shanghai Merro Pharmaceutical Co., Ltd. | 249,999.26 | - | 612,664.66 | - | ||
| Sinopharm Holding Fujian Co., Ltd. | 235,092.24 | - | 180,055.08 | - | ||
| Sinopharm Holding Shanxi Co., Ltd. | 229,324.80 | - | 36,481.28 | - | ||
| Sinopharm Holding Ningxia Co., Ltd. | 227,560.68 | - | 1,104,953.59 | - | ||
| Sinopharm Group Southwest Medicine Co., Ltd. | 224,193.04 | - | 16,558.20 | - | ||
| Sinopharm Holding Dalian Co., Ltd. | 214,854.56 | - | 541,531.52 | - | ||
| Shanghai Guoda Lingyun Pharmacy Co., Ltd. | 209,212.66 | - | 270,164.54 | - | ||
| Sinopharm Holding Donghong Medical (Shanghai) Co., Ltd. | 179,629.32 | - | 124,991.20 | - | ||
| Sinopharm Group Medicine Logistic Co., Ltd. | 155,588.33 | - | 189,151.95 | - | ||
| Yuxi Sinopharm Medicine Co., Ltd. | 146,026.37 | - | 146,026.37 | - | ||
| Sinopharm Holding Qinghai Co., Ltd. | 108,180.98 | - | 27,315.00 | - | ||
| Sinopharm Holding Gansu Co., Ltd. | 98,794.08 | - | - | - | ||
| Sinopharm Holding Ulanqab Co., Ltd. | 97,118.11 | - | - | - | ||
| Hubei Medical Group Co., Ltd. | 85,653.12 | - | 113,688.23 | - | ||
| Sinopharm Holding Heilongjiang Co., Ltd. | 76,328.00 | - | 50,000.00 | - | ||
| Sinopharm Holding Tianjin North Medicine Co., Ltd. | 68,180.00 | - | - | - | ||
| Sinopharm Holding Nanchang Pharmacy Co., Ltd. | 62,660.40 | - | - | - | ||
| Sinopharm Holding Dalian Hecheng Co., Ltd. | 62,495.50 | - | 168,912.00 | - | ||
| Sinopharm Group Shanxi Co., Ltd. | 52,792.80 | - | 127,541.80 | - | ||
| Sinopharm Holding Changzhou Medical Logistics Center Co., Ltd. | 44,066.56 | - | 67,701.92 | - | ||
| Sinopharm Holding Huangshi Co., Ltd. | 39,317.00 | - | - | - | ||
| Sinopharm Group Zhijun (Shenzhen) PingShan Pharmaceutical Co., Ltd. | 39,204.00 | - | 19,980.00 | - | ||
| Sinopharm Holding Chengdu Co., Ltd. | 35,908.41 | - | 144,788.41 | - | ||
X. Related party relationships and transactions (Continued)
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
7. Amounts due from related parties (Continued)
| Accounts receivable(continued) | 2018 | 2017 | ||
| Related party | Gross carrying amount | Provision for bad debt | Gross carrying amount | Provision for bad debt |
| Sinopharm Holding Wuxi Co., Ltd. | 30,260.00 | - | 61,247.00 | - |
| Sinopharm Holding Fuzhou Co., Ltd. | 15,192.00 | - | - | - |
| Sinopharm Holding Putian Co., Ltd. | 15,192.00 | - | - | - |
| Sinopharm Holding Longyan Co., Ltd. | 15,192.00 | - | - | - |
| Sinopharm Holding Zunyi Co., Ltd. | 12,238.80 | - | - | - |
| Sinopharm Holding Jiangxi Co., Ltd. | 11,188.52 | - | 129,605.63 | - |
| Sinopharm Holding Honghe Co., Ltd. | 11,130.50 | - | - | - |
| Sinopharm Holding Xinxiang Co., Ltd. | 9,789.00 | - | - | - |
| Sinopharm Holding Ningde Co., Ltd. | 7,596.00 | - | - | - |
| Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd. | 3,534.90 | - | 6,780.30 | - |
| Sinopharm Holding Hongrun Medical Business Service (Shanghai) Co., Ltd. | 2,316.62 | - | - | - |
| Sinopharm Fengliaoxing Medical Hospital Co., Ltd. | 2,278.20 | - | 4,611.25 | 14.56 |
| Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co., Ltd. | - | - | 155,520.00 | - |
| Sinopharm Holding Zhejiang Co., Ltd. | - | - | 716,400.00 | - |
| Sinopharm Xinxiang Chain Store Co., Ltd. | - | - | 20,066.29 | - |
| Sinopharm Holding Changzhou Co., Ltd. | - | - | 483,328.40 | - |
| China National Pharmaceutical Foreign Trade Corporation | - | - | 1,327.42 | - |
| Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Co., Ltd. | - | - | 72,992.40 | - |
| Shanghai Liyi Drug Store Co.,Ltd | - | - | 35,579.55 | - |
| Linyi Medical Group Co., Ltd. | - | - | 2,538.80 | - |
| Sinopharm Holding Huaian Co., Ltd. | (19.40) | - | - | - |
| Sinopharm Holding Hulun Buir Co., Ltd. | (33,295.45) | - | 982,776.96 | - |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
7. Amounts due from related parties (Continued)
| Notes receivable | 2018 | 2017 | ||||||
| Related party | Gross carrying amount | Provision for bad debt | Gross carrying amount | Provision for bad debt | ||||
| Sinopharm (Guangzhou) Medical Equipment Co., Ltd. | 20,000,000.00 | - | - | - | ||||
| Sinopharm Holding Hainan Co., Ltd. | 6,160,961.40 | - | 3,650,933.87 | - | ||||
| Sinopharm Le-Ren-Tang Medicine Co., Ltd. | 900,000.00 | - | - | - | ||||
| Sinopharm Holding Hubei Co., Ltd. | 243,000.00 | - | - | - | ||||
| Sinopharm Group Zhijun (Shenzhen) PingShan Pharmaceutical Co., Ltd. | 80,000.00 | - | - | - | ||||
| Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd. | - | - | 161,555.40 | - | ||||
| Sinopharm Holding Shanxi Co., Ltd. | - | - | 500,000.00 | - | ||||
| Sinopharm Holding Henan Co., Ltd. | - | - | 1,500,000.00 | - | ||||
| Sinopharm Holding Inner Mongolia Co., Ltd. | - | - | 136,172.00 | - | ||||
| Sinopharm Holding Nantong Co., Ltd. | - | - | 2,240,000.00 | - | ||||
| Sinopharm Holding Dalian Hecheng Co., Ltd. | - | - | 116,885.00 | - | ||||
| Foshan Chancheng Pharmaceutical Co., Ltd. | - | - | 8,149,623.63 | - | ||||
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
7. Amounts due from related parties (Continued)
| Other receivables | 2018 | 2017 | ||
| Related party | Gross carrying amount | Provision for bad debt | Gross carrying amount | Provision for bad debt |
| Sinopharm Group Medicine Logistic Co., Ltd. | 5,001,939.98 | - | 1,398,849.53 | - |
| Sinopharm Group Zhijun(Suzhou) Pharmaceutical Co., Ltd. | 44,000,000.00 | - | 44,000,000.00 | - |
| Guorun Medical Supply Chain Services (Shanghai) Co., Ltd. | 2,940,000.00 | - | - | - |
| Sinopharm Holding Sub Marketing Center Co., Ltd. | 8,120.00 | - | - | - |
| Sinopharm Holding Henan Co., Ltd. | 67,526.20 | - | - | - |
| Sinopharm Holding Jiaozuo Co., Ltd. | 21,476.00 | - | - | - |
| Sinopharm Holding Fujian Co., Ltd. | 5,476.29 | - | - | - |
| Shanghai Modern Pharmaceutical Co., Ltd. (Modern Pharmaceutical) | 101,166,758.92 | - | 125,181,658.92 | - |
| Wuhan Zhonglian Pharmaceutical Group Co., Ltd. | 5,000.00 | 500.00 | 5,000.00 | 500.00 |
| Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd. | 79,791.10 | 600.00 | 17,060.30 | 300.00 |
| Guangxi Deyiyuan Medical Investment Center (Limited Partnership) | 4,000,000.00 | - | - | - |
| China National Medicines Co., Ltd. | 115,340.85 | - | - | - |
| Sinopharm Holding Shanxi Co., Ltd. | - | - | 100,000.00 | |
| Baise Jianan Medicine Chain Co., Ltd. | 980,000.00 | - | - | - |
| Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd. | 100,000.00 | - | 100,000.00 | - |
| Sinopharm Lerentang Hebei Medical Instrument Trade Co., Ltd. | 48,493.16 | - | 48,493.16 | - |
| Sinopharm Health Online Co., Ltd. | - | - | 1,071,427.97 | - |
| Advances to suppliers | 2018 | 2017 | ||
| Related party | Gross carrying amount | Provision for bad debt | Gross carrying amount | Provision for bad debt |
| Hunan Minshengtang Investment Co., Ltd. | 4,466,242.71 | - | 2,670,438.92 | - |
| Sinopharm Holding Shanxi Co., Ltd. | 3,119,762.79 | - | 287,996.37 | - |
| Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd. | 1,532,954.29 | - | 2,025,021.70 | - |
| Sinopharm Group Co., Ltd. | 1,327,141.31 | - | 1,963,516.79 | - |
| Sinopharm Chuan Kang Pharmaceutical Co., Ltd. | 717,145.38 | - | - | |
| Linyi Medical Group Co., Ltd. | 596,733.21 | - | - | |
| Nanjing Yuanguang Trading Co., Ltd. | 395,816.01 | - | 168,168.19 | - |
| Sinopharm Xinjiang Korla Pharmaceutical Co., Ltd. | 264,360.50 | - | 264,360.50 | - |
| Sinopharm Holding Kashi New & Special Drugs Co., Ltd. | 241,371.50 | - | 25,200.00 | - |
| Sinopharm Holding Shanxi Co., Ltd. | 234,017.13 | - | 5,502,363.26 | - |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
7. Amounts due from related parties (Continued)
| Advances to suppliers (continued) | 2018 | 2017 | ||
| Related party | Gross carrying amount | Provision for bad debt | Gross carrying amount | Provision for bad debt |
| Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd. | 213,574.68 | - | - | - |
| Chongqing Yaoyou Pharmaceutical Co., Ltd. | 211,092.00 | - | - | - |
| Guizhou Tongjitang Pharmaceutical Co., Ltd. | 154,778.29 | - | - | - |
| Anhui Jingfang Pharmaceutical Co., Ltd. | 150,708.40 | - | - | - |
| Chengdu Rongsheng Pharmacy Co., Ltd. | 143,348.00 | - | 633.13 | - |
| Sinopharm Holding Beijing Co., Ltd. | 130,000.00 | - | 117,500.00 | - |
| Sinopharm Group Yibin Pharmaceuticals Co., Ltd. | 112,426.00 | - | - | - |
| Shanghai Modern Hasen (Shangqiu) Pharmaceutical Co., Ltd. | 88,685.38 | - | - | - |
| China National Medicines Co., Ltd. | 78,750.00 | - | 183,033.71 | - |
| Beijing Sinopharm Tianyuan Real Estate & Property Management Co., Ltd. | 72,000.00 | - | - | - |
| Xinjiang Baitong Property Service Co., Ltd. | 67,427.65 | - | 10,867.40 | - |
| Suzhou Erye Pharmaceutical Limited Company | 50,220.00 | - | - | - |
| Sinopharm Holding Sub Marketing Center Co., Ltd. | 35,181.20 | - | 1,025.86 | - |
| Taishan Qunkang Pharmacy Co., Ltd. | 26,140.03 | - | - | - |
| Sinopharm Holding Lerentang Pharmaceutical Co., Ltd. | 7,960.00 | - | - | - |
| Sinopharm Holding Tianjin Co., Ltd. | 7,705.88 | - | - | - |
| China Sinopharm International Corporation | 7,314.00 | - | - | - |
| Winteam Pharmaceutical Group Ltd. | 1,927.17 | - | 19,160.00 | - |
| Sinopharm Holding Hunan Co., Ltd. | - | - | 3,136.32 | - |
| Sinopharm Group Guorui Medicine Co., Ltd. | - | - | 279,120.00 | - |
| Sinopharm Holding Fujian Co., Ltd. | - | - | 5,476.24 | - |
| Sinopharm Holding Yangzhou Co., Ltd. | - | - | 4,127.79 | - |
| Sinopharm Holding Suzhou Co., Ltd. | - | - | 7,676.52 | - |
| Guilin South pharmaceutical Co., Ltd. | - | - | 20,000.00 | - |
| Jinzhou AoHong Pharmaceuticals Co., Ltd. | - | - | 20,136,997.60 | - |
| Shanghai Shangsheng Biological Products Co., Ltd. | - | - | 1,271,300.00 | - |
| Sinopharm Xinjiang Pharmaceutical Co., Ltd. | - | - | 42,708.30 | - |
| Sinopharm Group Zhijun (Shenzhen) PingShan Pharmaceutical Co., Ltd. | - | - | 158.49 | - |
| Gu Jihua | - | - | 78,420.01 | - |
| Sinopharm Holding Jinhua Co., Ltd. | - | - | 38.80 | - |
| Sinopharm Holding Tianjin Distribution Center Co., Ltd. | - | - | 1,735.14 | - |
| Sinopharm Holding Shenyang Co., Ltd. | - | - | 1,334,883.98 | - |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties
| Related party | 2018 | 2017 |
| Accounts payable | ||
| Sinopharm Holding Sub Marketing Center Co., Ltd. | 185,434,546.68 | 143,908,467.08 |
| China National Medicines Co., Ltd. | 50,999,852.95 | 28,362,452.88 |
| Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd. | 38,736,408.80 | 37,504,845.76 |
| Sinopharm Holding Shanxi Co., Ltd. | 37,706,274.33 | 244,476.98 |
| Fresenius Kabi Huarui Pharmaceuticals Co., Ltd. | 35,753,944.33 | 16,003,934.07 |
| Sinopharm Le-Ren-Tang Medicine Co., Ltd. | 28,095,649.43 | - |
| Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd. | 19,956,249.97 | 19,742,833.00 |
| Sinopharm Group Co., Ltd. | 19,380,143.87 | 45,203,988.04 |
| Lanzhou Institute of Biological Products Co., Ltd. | 18,300,000.00 | - |
| Jiangsu Wanbang Pharmacy Marketing Co., Ltd. | 18,191,902.38 | 10,003,320.16 |
| Sinopharm Holding Shenyang Co., Ltd. | 11,775,646.40 | - |
| Sinopharm Holding Lerentang Pharmaceutical Co., Ltd. | 11,678,984.58 | 7,796,905.93 |
| Sinopharm Holding Lunan Co., Ltd. | 11,599,866.46 | 152,924.30 |
| Sinopharm Holding Beijing Co., Ltd. | 10,395,045.63 | 1,148,947.27 |
| Sinopharm Holding Inner Mongolia Co., Ltd. | 10,291,898.39 | 2,664,468.46 |
| Chongqing Yaoyou Pharmaceutical Co., Ltd. | 10,162,662.09 | 5,449,975.66 |
| Winteam Pharmaceutical Group Ltd. | 8,836,641.73 | 1,291,002.80 |
| Sinopharm Holding Fujian Co., Ltd. | 8,523,446.87 | 3,717,579.24 |
| Sinopharm Holding Jiangsu Co., Ltd. | 6,712,929.75 | 7,730,787.92 |
| Sinopharm Holding Shanxi Instrument Branch Co., Ltd. | 6,108,785.26 | 4,089,563.14 |
| Suzhou Erye Pharmaceutical Limited Company | 6,043,499.78 | - |
| Shenzhen Wanwei Medicine Trading Co., Ltd. | 4,844,806.71 | 4,240,123.65 |
| Shenzhen Main Luck Pharmaceutical Co., Ltd. | 4,827,911.78 | 6,520,471.48 |
| Sinopharm Holding Yangzhou Co., Ltd. | 4,754,359.23 | 5,987,057.82 |
| Jinzhou AoHong Pharmaceuticals Co., Ltd. | 4,663,433.10 | - |
| Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd. | 4,540,260.42 | 1,141,702.25 |
| Sinopharm Lerentang Shijiazhuang Medicine Co., Ltd. | 4,086,875.36 | 2,106,607.37 |
| Sinopharm Holding Pingdingshan Co., Ltd. | 3,648,364.61 | 8,178,253.43 |
| Tibet Yaopharma Co., Ltd. | 3,148,580.21 | - |
| Sinopharm Holding Ningxia Co., Ltd. | 2,799,537.02 | 2,809,371.28 |
| Sinopharm Group Zhijun (Shenzhen) PingShan Pharmaceutical Co., Ltd. | 2,714,815.09 | 1,350,614.09 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
| Related party | 2018 | 2017 |
| Accounts payable (Continued) | ||
| Sinopharm Holding Shanxi Co., Ltd. | 2,652,903.44 | - |
| Sinopharm Holding Xiamen Co., Ltd. | 2,630,865.97 | 4,006,491.37 |
| Sinopharm Holding Changzhou Medical Logistics Center Co., Ltd. | 2,131,769.27 | 2,792,663.08 |
| Yichang Humanwell Pharmaceutical Co., Ltd. | 2,073,807.37 | 2,620,139.37 |
| Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd. | 2,057,833.38 | 803,559.06 |
| Sinopharm Holding Beijing Huahong Co., Ltd. | 1,874,216.57 | 1,277,513.68 |
| Sinopharm Holding Fuzhou Co., Ltd. | 1,616,691.28 | 996,015.17 |
| Sinopharm Holding Hulun Buir Co., Ltd. | 1,600,453.94 | 2,902,181.03 |
| Sinopharm Lerentang Hebei Medical Instrument Trade Co., Ltd. | 1,582,888.55 | 1,708,132.21 |
| Sinopharm Holding Jinan Co., Ltd. | 1,374,865.44 | 71,695.99 |
| Sinopharm Holding Hunan Co., Ltd. | 1,364,062.66 | 148,565.65 |
| Foshan Fengliaoxing Pharmaceutical Co., Ltd. | 1,358,827.63 | 1,380,114.57 |
| China Otsuka Pharmaceutical Co., Ltd. | 1,352,547.35 | 1,073,847.85 |
| Sinopharm Holding Beijing Kangchen Bio-Pharmaceutical Co., Ltd. | 1,297,375.21 | 1,095,793.12 |
| Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical Co., Ltd. | 1,074,129.27 | 321,836.11 |
| Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd. | 935,712.46 | 482,357.79 |
| Sinopharm Holding Henan Co., Ltd. | 875,000.19 | 1,526,472.33 |
| Shanghai Transfusion Technology Co., Ltd. | 779,650.00 | 251,500.00 |
| Sinopharm Group Rongsheng Pharmaceutical Co., Ltd. | 773,028.14 | 197,304.23 |
| Sinopharm Holding Changzhou Co., Ltd. | 762,677.30 | 156,301.06 |
| Sinopharm Holding Wuxi Co., Ltd. | 744,575.65 | 234,944.25 |
| Sinopharm Holding Shandong Co., Ltd. | 718,163.95 | - |
| Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd. | 713,718.67 | 495,022.50 |
| Sinopharm Holding Suzhou Co., Ltd. | 710,094.01 | 656,992.49 |
| Shenyang Hongqi Pharmaceutical Co., Ltd. | 588,503.90 | 394,762.85 |
| Huayi Pharmaceutical Co., Ltd. | 532,096.11 | - |
| Pudong New Area of Shanghai Pharmaceutical Medicine Ltd. | 521,871.90 | 798,390.65 |
| Wuhan Zhonglian Pharmaceutical Group Co., Ltd. | 503,372.84 | 526,750.40 |
| Hunan Dongting Pharmaceutical Co., Ltd. | 488,665.79 | 110,111.27 |
| Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Co., Ltd. | 456,155.01 | 363,937.65 |
| Sinopharm Holding Yangzhou Biological Medicine Co., Ltd. | 444,000.00 | 24,852.45 |
| Sinopharm Holding Dalian Co., Ltd. | 437,980.07 | 80,166.00 |
| Sinopharm Group Guorui Medicine Co., Ltd. | 366,991.38 | 34,649.98 |
X. Related party relationships and transactions (Continued)
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
8. Amounts due to related parties (Continued)
| Related party | 2018 | 2017 |
| Accounts payable (Continued) | ||
| Sinopharm Holding Donghong Medical (Shanghai) Co., Ltd. | 363,060.90 | 46,098.20 |
| Sichuan Hexin Pharmaceutical Co., Ltd. | 350,457.93 | - |
| China National Pharmaceutical Foreign Trade Corporation | 341,551.34 | 2,035,108.96 |
| Shantou Jinshi Powder Injection Co., Ltd. | 319,759.20 | - |
| Sinopharm Holding Jinzhou Co., Ltd. | 306,370.88 | 520,194.75 |
| Chongqing Haisiman Pharmaceutical Co., Ltd. | 275,753.91 | 438,368.99 |
| Guizhou Tongjitang Pharmaceutical Co., Ltd. | 240,306.88 | 557,491.17 |
| Chengdu Rongsheng Pharmacy Co., Ltd. | 235,668.87 | - |
| Shanghai Merro Pharmaceutical Co., Ltd. | 232,663.76 | 311,639.09 |
| Anhui Jingfang Pharmaceutical Co., Ltd. | 226,349.94 | 275,317.28 |
| Sinopharm Holding Dezhou Co., Ltd. | 209,815.57 | 239,430.02 |
| Sinopharm Group Shanxi Co., Ltd. | 206,588.00 | - |
| Chengdu Institute of Biological Products Co., Ltd. | 183,600.00 | - |
| Sinopharm Group Southwest Medicine Co., Ltd. | 177,932.00 | - |
| Sinopharm Holding Anhui Co., Ltd. | 171,254.00 | - |
| Sinopharm Holding Tongliao Co., Ltd. | 165,592.89 | 440,884.70 |
| Shanghai Modern Pharmaceutical Co., Ltd. (Modern Pharmaceutical) | 163,448.94 | 12,807.61 |
| Sinopharm Holding Putian Co., Ltd. | 161,557.66 | 149,819.81 |
| Sinopharm Holding Lianyungang Co., Ltd. | 155,264.40 | - |
| Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co., Ltd. | 155,194.84 | 42,425.80 |
| Shanghai Chaohui Pharmaceutical Co., Ltd. | 152,724.16 | 8,938.82 |
| Jiangsu Fuxing Pharmaceutical Trading Co., Ltd | 139,480.00 | 183,799.20 |
| Sinopharm Holding Yancheng Co., Ltd. | 122,112.27 | 960.10 |
| Sinopharm Holding Kashi New & Special Drugs Co., Ltd. | 105,211.32 | 155,512.79 |
| Sinopharm Shantou Jinshi Pharmaceutical Co., Ltd. | 96,434.97 | 55,307.67 |
| Sinopharm Holding Changsha Co., Ltd. | 92,749.70 | - |
| Guangdong Medi-World Pharmaceutical Co., Ltd. | 87,519.32 | 248,787.32 |
| Sinopharm Holding Taizhou Co., Ltd. | 86,054.00 | 94,976.03 |
| Sinopharm Holding Dalian Hecheng Co., Ltd. | 84,645.00 | - |
| The Fourth Pharmaceutical Co., Ltd. of Zhonglian Group | 82,099.79 | 77,147.00 |
| Sinopharm Holding Ulanqab Co., Ltd. | 80,963.40 | 133,641.00 |
| Sinopharm Holding Zhihui Minsheng (Tianjin) Medicine Co., Ltd. | 80,410.58 | - |
| Sinopharm Holding Quanzhou Co., Ltd. | 77,881.33 | 106,979.43 |
| Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd. | 75,814.60 | 150,269.45 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
| Related party | 2018 | 2017 |
| Accounts payable (Continued) | ||
| Foshan Dezhong Pharmaceutical Co., Ltd. | 58,320.10 | 98,779.60 |
| Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd. | 55,598.69 | - |
| China National Pharmaceutical Industry Co., Ltd. | 54,841.86 | 52,320.00 |
| Sinopharm Holding Tianjin Co., Ltd. | 52,844.12 | 88,599.65 |
| Shandong Lu Ya Pharmaceutical Co., Ltd. | 52,819.07 | 1,507,459.07 |
| Sinopharm Holding Zhejiang Co., Ltd. | 46,789.67 | 55,459.28 |
| Sinopharm Holding Sanyi Medicine (Wuhu) Co., Ltd. | 45,404.17 | 74,439.47 |
| Sinopharm Holding Wende Medicine Nanjing Co., Ltd. | 42,760.80 | - |
| Jiangsu Huanghe Pharmaceutical Co., Ltd. | 35,363.79 | 53,331.64 |
| Sichuan Jiangyouzhongbafuzi Technology Development Co., Ltd. | 33,454.55 | 8,648.65 |
| Sinopharm Holding Ordos Co., Ltd. | 33,195.00 | 55,635.00 |
| Sinopharm Holding Yongzhou Co., Ltd. | 30,907.44 | 30,163.49 |
| Sinopharm Holding Biopharmaceutical (Tianjin) Co., Ltd. | 30,235.86 | 20,509.50 |
| Shanghai Modern Hasen (Shangqiu) Pharmaceutical Co., Ltd. | 29,921.40 | 30,918.42 |
| Sinopharm Group Yibin Pharmaceuticals Co., Ltd. | 29,603.90 | 23,030.00 |
| Sinopharm Group Shanghai Medicine Device Co., Ltd. | 16,603.02 | 16,603.02 |
| Sinopharm Holding Liaocheng Co., Ltd. | 16,197.93 | 16,197.93 |
| Sinopharm Holding Shanxi Jincheng Co., Ltd | 13,110.09 | - |
| Sinopharm Lerentang Qinhuangdao Medicine Co., Ltd. | 11,086.50 | - |
| Sinopharm Hebei Medical Instrument Co., Ltd. | 7,644.60 | 3,564.00 |
| Sinopharm Group Zhijun(Suzhou) Pharmaceutical Co., Ltd. | 6,408.00 | - |
| Sinopharm Holding Rizhao Co., Ltd. | 5,292.81 | - |
| Sinopharm Prospect Dentech (Beijing) Co., Ltd. | 2,548.01 | 1,206.00 |
| Changchun Changsheng Gene Pharmaceutical Co., Ltd. | 1,492.91 | 14,232.00 |
| Guilin South pharmaceutical Co., Ltd. | 1,211.92 | 1,201.12 |
| Sinopharm Holding Huaideju Pharmaceutical (Xiamen) Co., Ltd. | 1,113.85 | 1,113.85 |
| Sinopharm Fengliaoxing (Foshan) Medicines Co., Ltd. | 767.28 | 149.02 |
| Beijing Huasheng Pharmaceutical Biotechnology Development Co., Ltd. | 637.01 | 637.01 |
| Shenzhen Zhijun Pharmaceutical Trade Co., Ltd. | 534.20 | 534.20 |
| Sinopharm Holding Chongqing Co., Ltd. | 117.64 | 117.64 |
| Sinopharm Zhuhai Medical Instrument Co., Ltd. | 104.31 | - |
| Shanghai Shyndec Pharmaceutical Marketing Co., Ltd. | 77.76 | 566,354.26 |
| Sinopharm Holding Tianjin Distribution Center Co., Ltd. | 35.32 | - |
| Sinopharm Group Weiqida Medicine Co., Ltd. | 28.93 | 28.93 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
| Related party | 2018 | 2017 |
| Accounts payable (Continued) | ||
| Linyi Medical Group Co., Ltd. | 10.47 | 10.47 |
| Sinopharm Holding Xinyu Co., Ltd. | 0.01 | 0.01 |
| Sinopharm Group Shanghai Management Consulting Branch Co., Ltd. | - | - |
| Beijing Huamiao Pharmaceutical Co., Ltd. | - | 339,889.47 |
| Sinopharm Holding Chengdu Co., Ltd. | - | 104,102.57 |
| Guizhou Longlife Pharmacertical Co., Ltd. | - | 103,560.00 |
| Sinopharm ShanXi Ruifulai Pharmaceutical Co., Ltd. | - | 63,081.60 |
| Sinopharm Holding Jiangxi Co., Ltd. | - | 30,372.00 |
| Sinopharm Xinjiang Pharmaceutical Co., Ltd. | - | 27,692.31 |
| Sinopharm Holding Tianjin North Medicine Co., Ltd. | - | 19,275.46 |
| Related party | 2018 | 2017 |
| Notes payable | ||
| Sinopharm Holding Shanxi Co., Ltd. | 96,633,609.80 | 96,829,230.00 |
| Sinopharm Holding Shenyang Co., Ltd. | 77,441,965.84 | 40,215,446.25 |
| Sinopharm Holding Sub Marketing Center Co., Ltd. | 74,535,975.61 | 91,320,346.11 |
| Sinopharm Holding Shanxi Co., Ltd. | 43,255,070.00 | 29,931,650.00 |
| Sinopharm Holding Inner Mongolia Co., Ltd. | 8,725,011.77 | - |
| Sinopharm Lerentang Shijiazhuang Medicine Co., Ltd. | 6,146,830.73 | 4,180,000.97 |
| Lanzhou Institute of Biological Products Co., Ltd. | 3,760,000.00 | 21,600,000.00 |
| Sinopharm Holding Lerentang Pharmaceutical Co., Ltd. | 3,646,912.36 | 2,669,407.85 |
| Sinopharm Holding Xiamen Co., Ltd. | 3,589,479.22 | 8,573,712.86 |
| Sinopharm Holding Fujian Co., Ltd. | 3,582,375.49 | 6,294,466.11 |
| Sinopharm Holding Hunan Co., Ltd. | 3,525,946.06 | - |
| Sinopharm Holding Jinzhou Co., Ltd. | 2,823,753.72 | 647,386.99 |
| Sinopharm Holding Shanxi Instrument Branch Co., Ltd. | 2,508,000.00 | 2,051,364.70 |
| China National Medicines Co., Ltd. | 1,776,402.01 | 8,223,431.95 |
| Shenzhen Main Luck Pharmaceutical Co., Ltd. | 1,052,377.40 | - |
| Shenzhen Wanwei Medicine Trading Co., Ltd. | 995,346.00 | 1,495,728.00 |
| Chengdu Rongsheng Pharmacy Co., Ltd. | 953,756.00 | 1,760,000.00 |
| Sinopharm Holding Dalian Co., Ltd. | 645,404.90 | 295,145.94 |
| Sinopharm Holding Ningxia Co., Ltd. | 500,000.00 | 1,700,000.00 |
| Shanghai Shyndec Pharmaceutical Marketing Co., Ltd. | 369,006.80 | - |
| Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd. | 341,833.60 | 123,292.80 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
| Related party | 2018 | 2017 |
| Notes payable (Continued) | ||
| Sinopharm Holding Putian Co., Ltd. | 327,255.56 | 594,085.45 |
| Sinopharm Group Zhijun (Shenzhen) PingShan Pharmaceutical Co., Ltd. | 318,324.00 | 157,760.00 |
| Sinopharm Holding Quanzhou Co., Ltd. | 290,051.32 | 457,039.40 |
| Foshan Fengliaoxing Pharmaceutical Co., Ltd. | 201,891.16 | - |
| Sinopharm Holding Changsha Co., Ltd. | 110,056.00 | - |
| Sinopharm Group Rongsheng Pharmaceutical Co., Ltd. | 104,417.00 | 170,130.00 |
| Sinopharm Group Co., Ltd. | - | 60,681,897.22 |
| Chongqing Haisiman Pharmaceutical Co., Ltd. | - | 3,556,905.12 |
| Chongqing Yaoyou Pharmaceutical Co., Ltd. | - | 6,722,293.66 |
| Winteam Pharmaceutical Group Ltd. | - | 68,542.00 |
| Shenyang Hongqi Pharmaceutical Co., Ltd. | - | 780,010.90 |
| Sinopharm Holding Jinan Co., Ltd. | - | 240,000.00 |
| Sinopharm Le-Ren-Tang Medicine Co., Ltd. | - | 20,376,118.04 |
| Jiangsu Wanbang Pharmacy Marketing Co., Ltd. | - | 2,207,677.30 |
| Anhui Jingfang Pharmaceutical Co., Ltd. | - | 348,304.76 |
| Guizhou Tongjitang Pharmaceutical Co., Ltd. | - | 980,303.96 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
| Related party | 2018 | 2017 |
| Other payables | ||
| Sinopharm Group Co., Ltd. | 3,414,612.73 | 584,000.84 |
| Sinopharm Group Shanghai Co., Ltd. | 1,660,431.38 | - |
| Sinopharm Group Chemical Reagent Co., Ltd. | 175,700.00 | - |
| Sinopharm Holding Tianjin Binhai Pharmaceutical Co., Ltd. | 1,162,820.00 | 1,137,319.99 |
| Sinopharm Group Medicine Logistic Co., Ltd. | 9,106,938.25 | 4,128,793.99 |
| Guorun Medical Supply Chain Services (Shanghai) Co., Ltd. | 3,200,000.00 | - |
| China National Scientific Instruments & Materials Imp/Exp Shenzhen Co., Ltd. | 37,450.00 | 37,450.00 |
| China National of Traditional&Herbal Medicine Co., Ltd. | 1,300,000.00 | 1,300,000.00 |
| Sinopharm Chongqing Pharmaceutical and Medical Industry Design Institute | 6,712,832.46 | - |
| Shanghai Modern Pharmaceutical Co., Ltd. (Modern Pharmaceutical) | 503,462.18 | 503,462.18 |
| China National Pharmaceutical Foreign Trade Corporation | 6,437,142.44 | - |
| Shenzhen Wanwei Medicine Trading Co., Ltd. | 103,269.08 | - |
| Shenyang Pharmaceutical Co., Ltd. | 842,544.29 | 6,092,544.00 |
| Zhang Zhenfang | 1,907,499.98 | 1,505,000.00 |
| Pingdingshan Pusheng Pharmaceutical Co., Ltd. | 1,277,732.57 | 1,235,779.46 |
| Lerentang Investment Group Co., Ltd. | - | 3,027,759.85 |
| Shanghai Beiyi Guoda pharmaceutical Co. Ltd. | 855,341.63 | 496,651.75 |
| Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd. | - | 200,000.00 |
| Sinopharm Holding Sub Marketing Center Co., Ltd. | 37,782.33 | 37,782.33 |
| Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd. | 546,753.39 | 466,443.39 |
| China National Pharmaceutical Logistics Co., Ltd. | 8,445.56 | 7,424.97 |
| Sinopharm Health Online Co., Ltd. | 50,005.79 | - |
| Heyuan Mairui Trading Co., Ltd. | 672,396.36 | - |
| Sinopharm Holding Hunan Weian Pharmacy Medicine Chain Company Limited | 95,100.00 | 6,900.00 |
| Shenzhen Jiufeng Investment Co., Ltd. | - | 180,000.00 |
| Linyi Medical Group Co., Ltd. | - | 862,063.20 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
| Related party | 2018 | 2017 |
| Advances from customers | ||
| Sinopharm Holding Beijing Huahong Co., Ltd. | 976,210.65 | - |
| Sinopharm Holding Guizhou Medical Equiment Co., Ltd. | 275,090.49 | - |
| Sinopharm Holding Shenyang Co., Ltd. | 60,059.47 | 10,114.48 |
| Sinopharm Holding Wuhu Co., Ltd. | 45,576.00 | - |
| China National Pharmaceutical Foreign Trade Corporation | 24,941.19 | 12,505,381.84 |
| Sinopharm Holding Suzhou Co., Ltd. | 13,800.00 | - |
| Sinopharm Holding Lu'an Co., Ltd. | 4,750.00 | - |
| Sinopharm Zhuhai Medical Instrument Co., Ltd. | 4,074.00 | 11,512.00 |
| Fujian CMDC Co., Ltd. | 1,510.32 | - |
| Sinopharm Holding Chongqing Co., Ltd. | 755.62 | 755.62 |
| Dongyuan accord pharmaceutical chain Co., Ltd. | 62.00 | - |
| Sinopharm Holding Inner Mongolia Co., Ltd. | 41.80 | - |
| Sinopharm Xinxiang Chain Store Co., Ltd. | 0.01 | - |
| Sinopharm Holding Gansu Co., Ltd. | - | 28,914.27 |
| Sinopharm Holding Chengdu Co., Ltd. | - | 1,270.20 |
| Sinopharm Sichuan Pharmaceutical Co., Ltd. | - | 739,603.08 |
| Sinopharm Group Southwest Medicine Co., Ltd. | - | 676,734.09 |
| Sinopharm Group Co., Ltd. | - | 21,346.83 |
| Sinopharm Holding Hunan Co., Ltd. | - | 77,403.51 |
| Sinopharm Holding Beijing Co., Ltd. | - | 2,349,113.58 |
| Sinopharm Holding Shandong Co., Ltd. | - | 2,515,702.87 |
| Sinopharm Holding Lunan Co., Ltd. | - | 62,787.26 |
| Sinopharm Holding Nanping Newforce Co., Ltd. | - | 295,818.24 |
| Sinopharm Holding Suzhou Co., Ltd. | - | 7,676.52 |
| Sinopharm Holding Qinghai Co., Ltd. | - | 3,545.67 |
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
X. Related party relationships and transactions (Continued)
8. Amounts due to related parties (Continued)
| Related party | 30 June 2018 | 31December 2017 | |
| Interest payable | |||
| China National Pharmaceutical Group Corporation | 35,440.24 | 38,984.38 | |
| Guorun Medical Supply Chain Services (Shanghai) Co., Ltd. | 1,778.67 | - | |
| Entrusted borrowings | |||
| China National Pharmaceutical Group Corporation | 31,600,000.00 | 31,600,000.00 | |
| Other non-current liabilities | |||
| Sinopharm Group Co., Ltd. | 35,061,743.31 | 35,061,743.31 | |
| Short-term borrowings | |||
| Group Financial Co. | 122,986,581.52 | 147,715,527.67 | |
| Long-term payables | |||
| Sinopharm Holding Financing Lease Co., Ltd. | 7,557,432.82 | 9,332,537.14 | |
| Non-current liabilities due within one year | |||
| Sinopharm Holding Financing Lease Co., Ltd. | 5,651,227.56 | 5,434,770.70 | |
| Cash deposite with a related party | |||
| Group Financial Co. | 29,919,274.53 | 156,740,929.50 | |
Amounts due to related parties were interest-free and unsecured, with no fixed terms of repayment.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XI Commitments and contingencies
1. Commitments
| (1) | Capital commitments | ||
| Capital expenditures contracted for at the balance sheet date but not recognized in balance sheet are analyzed as follows: | |||
| 30 June 2018 | 31December 2017 | ||
| RMB‘0,000 | RMB‘0,000 | ||
| Buildings, machinery and equipment | 223.92 | 600.45 | |
| Investment commitments (Note) | 14,000.00 | 14,000.00 | |
Note: The Group subscribed to Sinopharm Zhongjin medical industry fund as its limitedpartner,and the total investment amounted to RMB200 million. The investors contribute year byyear in batch. The fund manager will send out payment notification to investors according to theactual progress of the project and the investors will commit to complete the payment in 3 year.The investors have paid 30% of the amount of contribution during 2017, namely RMB 60 million,
and the rest is RMB 140 million.
| (2) | Operating lease commitments | ||
| The future minimum lease payments due under the signed irrevocable operating leases contracts are summarized as follows: | |||
| 30 June 2018 | 31 December 2017 | ||
| RMB‘0,000 | RMB‘0,000 | ||
| Within one year | 51,747.87 | 49,860.66 | |
| Between 1 and 2 years | 41,329.26 | 39,575.48 | |
| Between 2 and 3 years | 30,422.97 | 29,537.37 | |
| Over 3 years | 43,819.79 | 51,138.78 | |
| 167,319.89 | 170,112.29 | ||
2. Contingencies
As of the balance sheet date, there were no contingencies that the Group was required todisclose.
Notes to financial statements (Continued)
For the Year ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XII Events after the balance sheet date
Guoda Pharmacy, a subsidiary of the Group, acquired a strategic investor which named
Walgreens Boots Alliance (Hong Kong) Investments Limited (“WBA”) through capital increase
amounting to RMB2.77 billion. Guoda Pharmacy became a sino-foreign joint enterprise sincebusiness registration finished in June 28, 2018. The registered capital is RMB1.68 billion,including RMB1.01 billion from the Group (60% of all shares) and RMB0.67 billion from WBA(40% of all shares). In July 4 2018, all related procedures have been finished.
XIII Other significant events
1. Segment reporting
Operating segments
For management purpose, the Group is organized into business units based on its product andservice and has four reportable operating segments as follows:
a) The Head Office, which is mainly engaged in investing and managing business;b) Pharmaceutical distribution segment, which is mainly engaged in the distribution of
medicine and pharmaceutical products to customers;c) Retail pharmacy segment, which is the managing the operation of Guoda Pharmacy;
Management monitors the results of the Group’s operating segments separately for the
purpose of making decisions about resource allocation and performance assessment. Segmentperformance is evaluated based on reportable segment profit, which is a measure of adjusted
profit before tax. The adjusted profit before tax is measured consistently with the Group’s profit
before tax except that finance costs, dividend income, non-operating income, non-operatingexpense, investment income, as well as head office and corporate expenses are excluded fromsuch measurement.
Inter-segment sales and transfers are transacted with reference to the selling prices used in thetransactions carried out with third parties at the then prevailing market prices.
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XIII Other significant events (Continued)
3. Segment reporting (Continued)
Operating segments (Continued)
Operating segment information as at and for the semi year ended
| Head Office | Pharmaceutical distribution | Retail | Elimination between segments | Total | |
| Revenue of main operations | - | 15,858,317,084.75 | 4,993,130,188.24 | (245,419,298.42) | 20,606,027,974.57 |
| Cost of main operations | - | (14,879,713,386.35) | (3,721,948,448.31) | 246,659,082.25 | (18,355,002,752.42) |
| Investment income | 162,655,203.36 | (652,715.21) | 659,783.20 | - | 162,662,271.35 |
| Net profit | 529,974,276.77 | 347,154,169.85 | 172,985,004.03 | (360,864,440.74) | 689,249,009.91 |
| Total assets | 10,680,924,970.49 | 16,539,616,967.79 | 5,605,478,618.09 | (8,813,004,879.05) | 24,013,015,677.32 |
| Total liabilities | (1,891,354,344.87) | (11,593,180,303.89) | (3,507,124,611.26) | 3,457,267,336.54 | (13,534,391,923.48) |
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XIV Notes to key items of the company financial statements
1. Accounts receivable
| (a) | The aging of accounts receivable and the related provision for bad debts is analyzed below: | ||||
| 30 June 2018 | |||||
| Amount | Provision for bad debts | ||||
| Within 1 year | 553,496,096.71 | - | |||
| 1 to 2 years | - | - | |||
| 2 to 3 years | - | - | |||
| 553,496,096.71 | - | ||||
| (b) | There were no increase, no reversal and no write-off of provision for bad for the six month ended 30 June 2018. | |||||||||||||||
| (c) | The accounts receivable and related provision for bad debts by category are analyzed below: | |||||||||||||||
| 30 June 2018 | 31 December 2017 | |||||||||||||||
| Amount | Provision for bad debts | Amount | Provision for bad debts | |||||||||||||
| amount | % of total balance | amount | rate | amount | % of total balance | amount | rate | |||||||||
| Accounts receivable with similar credit risk | 553,496,096.71 | 99.98% | - | - | 480,467,760.92 | 99.98% | - | - | ||||||||
| individually not significant but individually evaluated for impairment | 116,855.40 | 0.02% | 116,855.40 | 100.00% | 117,320.70 | 0.02% | 117,320.70 | 100.00% | ||||||||
| 553,612,952.11 | - | 116,855.40 | - | 480,585,081.62 | - | 117,320.70 | - | |||||||||
| As at 30 June 2018，there were no accounts receivable which were individually significant and for which the provision for bad debt was separately recognized. | ||||||||||||||||
| As at 30 June 2018, accounts receivable which is actually written off: | ||||||||||||||||
| Amount | ||||||||||||||||
| Shenzhen Centennial Clinic | 465.30 | |||||||||||||||
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XIV Notes to key items of the company financial statements (Continued)
1. Accounts receivable(Continued)
(d) the accumulated top five Accounts receivables by customer are analysed below:
| Amount | % of the total other receivable | Bad debt provision | |||
| Shenzhen Hospital of Southern Medical University | 55,567,087.27 | 3.41% | - | ||
| Shenzhen People's Hospital | 34,490,479.76 | 2.12% | - | ||
| Peking University Shenzhen Hospital | 29,293,468.53 | 1.80% | - | ||
| The university of Hong Kong – Shenzhen hospital | 21,317,591.27 | 1.31% | - | ||
| The Second People's Hospital of Shenzhen | 19,580,436.19 | 1.20% | - | ||
| 9.84% | - |
2. Other receivables
| (a) | Other receivables and related provision for bad debts by category are analyzed below: | |||||||||||
| 30 June 2018 | 31 December 2017 | |||||||||||
| Carrying amount | Bad debt provision | Carrying amount | Bad debt provision | |||||||||
| amount | % of total amount | amount | rate | amount | % of total amount | amount | rate | |||||
| Individually significant and subject to separate impairment assessment | 110,146,758.92 | 6.72% | 8,980,000.00 | 8.15% | 134,161,658.92 | 8.79% | 8,980,000.00 | 6.69% | ||||
| Receivable accounts with similar credit risk | 1,528,788,306.69 | 93.22% | 16,955.33 | - | 1,390,860,253.14 | 91.14% | 20,286.35 | - | ||||
| Individually not significant but individually evaluated for impairment | 989,623.95 | 0.06% | 989,623.95 | 100.00% | 1,010,023.95 | 0.07% | 993,703.95 | 98.38% | ||||
| 1,639,924,689.56 | 100.00% | 9,986,579.28 | 0.61% | 1,526,031,936.01 | 100.00% | 9,993,990.30 | 0.65% |
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XIV Notes to key items of the company financial statements (Continued)
2. Other receivables (Continued)
| (b) | As at 30 June 2018, impairment provision for other receivables individually significant is analyzed as follows: | |||||
| Amount | Bad debt provision | Rate | Assessment for impairment | |||
| Modern Pharmaceutical | 101,166,758.92 | - | - | Other receivable from related party, no uncertainty in recoverability | ||
| Shenzhen Yinghai Technology Investment Co., Ltd. | 8,980,000.00 | 8,980,000.00 | 100.00% | Uncertainty in recoverability | ||
| 110,146,758.92 | 8,980,000.00 | - | ||||
| (c) | Provisions for impairment of the receivables which have similar credit risk are analyzed below: | |||||
| 30 June 2018 | ||||||
| Carrying amount | Bad debt provision | |||||
| Amount | Amount | Rate | ||||
| Within 1 year | 1,528,612,874.88 | - | - | |||
| 1 to 2 years | 53,815.00 | 2,690.75 | 5.00% | |||
| 2 to 3 years | 100,587.85 | 10,058.79 | 10.00% | |||
| Over 3 years | 21,028.96 | 4,205.79 | 20.00% | |||
| 1,528,788,306.69 | 16,955.33 | - | ||||
| (d) | The other receivables by category are listed below: | |||
| 30 June 2018 | 31 December 2017 | |||
| Amounts due from subsidiaries and related party | 1,459,816,430.56 | 1,324,203,206.47 | ||
| Receivable from equity transaction | 8,980,000.00 | 8,980,000.00 | ||
| Deposit | 1,840,914.63 | 1,864,394.68 | ||
| Others | 169,287,344.37 | 190,984,334.86 | ||
| 1,639,924,689.56 | 1,526,031,936.01 | |||
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XIV Notes to key items of the company financial statements (Continued)
2. Other receivables (Continued)
| (e) | As at 30 June 2018, the accumulated top five other receivables by customer are analysed below: | |||||
| Nature | Amount | Aging | % of the total other receivable | Bad debt provision | ||
| Sinopharm Guangxi | Entrusted borrowings | 252,900,000.00 | Within 1 year | 15.42% | - | |
| Sinopharm Yuexing | Entrusted borrowings | 162,700,000.00 | Within 1 year | 9.92% | - | |
| Sinopharm Zhanjiang | Entrusted borrowings | 145,000,000.00 | Within 1 year | 8.84% | - | |
| Sinopharm Dongguan | Entrusted borrowings | 121,000,000.00 | Within 1 year | 7.38% | - | |
| Modern Pharmaceutical | Restructuring consideration receivable | 101,166,758.92 | Within 2 year | 6.17% | - | |
| 782,766,758.92 | 47.73% | - | ||||
3. Long-term equity investments
| 30 June 2018 | 31 December 2017 | ||||||
| Original value | Bad debt provision | Carrying amount | Original value | Bad debt provision | Carrying amount | ||
| Investments in subsidiaries | 5,594,679,427.58 | - | 5,594,679,427.58 | 5,594,679,427.58 | - | 5,594,679,427.58 | |
| Investments in associates | 1,742,336,545.12 | 39,930,000.00 | 1,702,406,545.12 | 1,625,556,656.98 | 39,930,000.00 | 1,585,626,656.98 | |
| 7,337,015,972.70 | 39,930,000.00 | 7,297,085,972.70 | 7,220,236,084.56 | 39,930,000.00 | 7,180,306,084.56 | ||
The long-term equity investments of the Company are not subject to restriction on conversion into cash.
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XIV Notes to key items of the company financial statements (Continued)
3. Long-term equity investments (Continued)
| (a) | Subsidiaries | ||||||||||
| 31 December 2017 | Increases | decrease | 30 June 2018 | Provision for impairment in the current period | Ending value of impairment provision | ||||||
| Sinopharm Jianming | 60,054,911.04 | - | - | 60,054,911.04 | - | - | |||||
| Sinopharm Shenzhen Material | 15,450,875.93 | - | - | 15,450,875.93 | - | - | |||||
| Shenzhen Logistics | 5,019,062.68 | - | - | 5,019,062.68 | - | - | |||||
| Sinopharm Guangzhou | 1,565,440,323.63 | - | - | 1,565,440,323.63 | - | - | |||||
| Sinopharm Hengxing | 91,763,288.00 | - | - | 91,763,288.00 | - | - | |||||
| Sinopharm Liuzhou | 21,407,965.79 | - | - | 21,407,965.79 | - | - | |||||
| Sinopharm Dongguan | 72,942,000.00 | - | - | 72,942,000.00 | - | - | |||||
| Huixin Investment | 64,416,937.72 | - | - | 64,416,937.72 | - | - | |||||
| Guangdong Logistics | 13,596,006.21 | - | - | 13,596,006.21 | - | - | |||||
| Sinopharm Yuexing | 243,459,326.27 | - | - | 243,459,326.27 | - | - | |||||
| Sinopharm Foshan | 45,995,065.51 | - | - | 45,995,065.51 | - | - | |||||
| Sinopharm Guangxi | 504,048,985.28 | - | - | 504,048,985.28 | - | - | |||||
| Sinopharm Zhanjiang | 131,769,864.65 | - | - | 131,769,864.65 | - | - | |||||
| Sinopharm Yanfeng | 38,207,800.00 | - | - | 38,207,800.00 | - | - | |||||
| Sinopharm Meizhou | 51,281,900.00 | - | - | 51,281,900.00 | - | - | |||||
| Sinopharm Huizhou | 36,644,200.00 | - | - | 36,644,200.00 | - | - | |||||
| Sinopharm Zhaoqing | 43,060,000.00 | - | - | 43,060,000.00 | - | - | |||||
| Sinopharm Jiangmen | 106,000,000.00 | - | - | 106,000,000.00 | - | - | |||||
| Sinopharm Zhongshan | 30,000,000.00 | - | - | 30,000,000.00 | - | - | |||||
| Sinopharm Shaoguan | 13,580,000.00 | - | - | 13,580,000.00 | - | - | |||||
| Sinopharm Shantou | 23,990,000.00 | - | - | 23,990,000.00 | - | - | |||||
| Guangdong South Pharmaceutical Foreign Trade Co., Ltd. | 401,922,987.18 | - | - | 401,922,987.18 | - | - | |||||
| Guangdong Uptodate & Special Medicines | 144,682,822.34 | - | - | 144,682,822.34 | - | - | |||||
| Guoda Pharmacy | 1,361,800,110.06 | - | - | 1,361,800,110.06 | - | - | |||||
| Foshan Nanhai Medicine Co., Ltd. | 462,682,298.01 | - | - | 462,682,298.01 | - | - | |||||
| Maoming Yogshen | 8,300,000.00 | - | - | 8,300,000.00 | - | - | |||||
| Sinopharm Zhuhai | 37,162,697.28 | - | - | 37,162,697.28 | - | - | |||||
| 5,594,679,427.58 | - | - | 5,594,679,427.58 | - | - | ||||||
Notes to financial statements (Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
XIV Notes to key items of the company financial statements (Continued)
3. Long-term equity investments (Continued)
| (b) | ||||||||||||
| Movement | ||||||||||||
| 31 December 2017 | Investment | Profit or loss under the equity method | Other changes in equity | Dividend declared | Other | 30 June 2018 | Provision of impairment | |||||
| Main Luck Pharmaceutical | 239,046,738.14 | - | 29,983,887.32 | - | - | - | 269,030,625.46 | - |
| Zhijun Suzhou | 39,930,000.00 | - | - | - | - | - | 39,930,000.00 | 39,930,000.00 |
| Zhijun Medicine | 291,042,921.20 | - | 61,373,560.78 | - | (58,111,254.57) | - | 294,305,227.41 | - |
| Zhijun Trade | 7,676,142.69 | - | 853,674.01 | - | (664,795.03) | - | 7,865,021.67 | - |
| Pingshan Medicine | 68,686,804.33 | - | 15,453,485.62 | - | (9,719,480.71) | - | 74,420,809.24 | - |
| Shanghai Shyndec Pharmaceutical Co., Ltd. | 979,174,050.62 | - | 65,661,682.41 | 397,342.21 | (8,641,853.20) | 193,639.30 | 1,036,784,861.34 | - |
| Shanghai Dingqun Enterprise Management Consulting Co., Ltd. | - | 20,000,000.00 | - | - | - | - | 20,000,000.00 | - |
| 1,625,556,656.98 | 20,000,000.00 | 173,326,290.14 | 397,342.21 | (77,137,383.51) | 193,639.30 | 1,742,336,545.12 | 39,930,000.00 |
Notes to financial statements (Continued)
For the Year ended 31 December 2016
(All amounts in Renminbi “RMB” unless otherwise stated)
XIV Notes to key items of the company financial statements (Continued)
4. Sales and cost of sales
| For the six months ended 30 June 2018 | For the six months ended 30 June 2017 | ||||
| Revenue | Cost | Revenue | Cost | ||
| main operations | 1,681,220,169.43 | 1,612,710,688.13 | 1,652,563,177.90 | 1,597,779,406.09 | |
| Other operating | 6,401,186.40 | 2,006,785.78 | 6,037,641.06 | 2,868,183.37 | |
| 1,687,621,355.83 | 1,614,717,473.91 | 1,658,600,818.96 | 1,600,647,589.46 | ||
5. Investment income
| For the six month ended 30 June 2018 | For the six month ended 30 June 2017 | |||
| Gain on long-term equity investment under cost method | 361,514,454.32 | 352,522,001.40 | ||
| Gain on long-term equity investment under equity method (Note XIV(3)(b)) | 173,326,290.14 | 155,838,740.45 | ||
| Investment income from disposal of other long-term equity investments | - | - | ||
| 534,840,744.46 | 508,360,741.85 | |||
| There is no major restriction on the collection of the gains on investments. | ||||
Appendix(Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Supplementary information to financial statements
1. Schedule of non-recurring profit or loss
| Amount for 30 June 2018 | Illustration | |
| Gains and losses from disposal of non-current assets, including write off of accrued asset impairment | 4,254,942.60 | Mainly contains income from disposal of intangible assets of Sinopharm Guangxi Logistics. |
| Government grants recognized in income statement for the current year, except for those closely related to the ordinary operation of the Company which the Group enjoyed constantly according to the allotment standards or quantitative criteria of the country | 11,938,416.85 | Mainly contains tax subsidies and financial incentives received during current period |
| Net profit and loss arising from the subsidiaries acquired in the business combinations involving enterprises under common control for the period from the beginning of the reporting period to the combination date | 729.29 | Mainly contains income arising from the acquisition of Sinopharm Holding Guangzhou Huadu Co., Ltd. |
| Reversal of bad debt provision for accounts receivable that were tested for impairment individually | 4,203,173.20 | Mainly contains the recovery of impairment provision for receivables individually significat during the current period |
| Profit or loss from outward entrusted borrowings | 1,549,650.99 | |
| Income from entrusted management services | 2,377,946.75 | |
| Less:Impact on income tax | 5,505,057.19 | |
| Impact on non-controlling interests after tax | 389,106.90 | |
| 18,430,695.59 | ||
Basis for preparation of detailed list of non-recurring profit or loss items:
Under the requirements in Explanatory announcement No. 1 on information disclosure by companies
offering securities to the public – non-recurring profit or loss (2008) (“Explanatory announcementNo.1”) from CSRC, nonrecurring profit or loss refer to those arising from transactions and events that
are not directly relevant to ordinary business, or that are relevant to ordinary business, but are soextraordinary that would have an influence on users of financial statements making proper judgmentson the performance and profitability of an enterprise.
Appendix(Continued)
For the six months ended 30 June 2018
(All amounts in Renminbi “RMB” unless otherwise stated)
Supplementary information to financial statements (Continued)
2. Return on equity (“ROE”) and earnings per share (“EPS”)
| Weighted average ROE (%) | Basic EPS (RMB/Share) | ||
| Basic EPS(RMB/Share) | Diluted EPS(RMB/Share) | ||
| Net profit attributable to ordinary shareholders of the parent | 6.64% | 1.50 | 1.50 |
| Net profit after deducting non-recurring profit or loss attributable to the Company’s ordinary shareholders of the parent | 6.45% | 1.46 | 1.46 |
The above-mentioned return on net assets and earnings per share were calculated according to theInformation Disclosure and Presentation Rules for Companies Making Public Offering of Securities No.9
– Calculation and Disclosure of Return on Net Assets and Earnings Per Share (revision 2010) issued by
the CSRC.
Note 1: There were no potential dilutive ordinary shares for the six months ended 30 June 2018 hence
no presentation of diluted EPS were provided.
Section XI. Documents Available for Reference
1. Accounting Statements carried with the signature and seals of legal representative, chief financial officer
and person in charge of accounting;
2. Original text of all documents of the Company as well as manuscript of the announcement disclosed inreporting period on Securities Times, China Securities Journal and Hong Kong Commercial Daily appointed
by the CSRC;
3. The Place Where the document placed: Office of Secretariat of the Board of Directors, Accord Pharm
Bldg., No. 15, Ba Gua Si Road, Futian District, Shenzhen