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一致B:2021年年度报告(英文版) 下载公告
公告日期:2022-03-30

ChinaNationalAccordMedicinesCorporationLtd.

AnnualReport2021

March2022

SectionI.ImportantNotice,ContentsandInterpretationBoardofDirectors,SupervisoryCommittee,alldirectors,supervisorsandseniorexecutivesofChinaNationalAccordMedicinesCorporationLtd.(hereinafterreferredtoastheCompany)herebyconfirmthattherearenoanyfictitiousstatements,misleadingstatements,orimportantomissionscarriedinthisreport,andshalltakeallresponsibilities,individualand/orjoint,forthereality,accuracyandcompletionofthewholecontents.LinZhaoxiong,PrincipaloftheCompany,GuGuolin,personinchargerofaccountingworksandWangYing,personinchargeofaccountingorgan(accountingprincipal)herebyconfirmthattheFinancialReportof2021AnnualReportisauthentic,accurateandcomplete.AlldirectorsareattendedtheBoardMeetingforreportdeliberation.TheprofitdistributionplanthatdeliberatedandapprovedbytheBoardis:

basedontotalstockissued428,126,983shares,distributed6.00Yuan(taxincluded)bonusincashforevery10-shareholdbyallshareholders,0sharesbonusissued(taxincluded)andnocapitalizingofcommonreservescarriedout.

Contents

SctionIImportantNotice,ContentsandInterpretation ...... 1

SectionIICompanyProfileandMainFinancialIndexes ...... 5

SectionIIIManagementDiscussionandAnalysis ...... 10SectionIVCorporateGovernance..................................................................错误!未定义书签。SectionVEnviornmentalandSocialResponsibility.....................................错误!未定义书签。SectionVIImportantEvents ...... 83

SectionVIIChangesinsharesandparticularaboutshareholders...........错误!未定义书签。9SectionVIIIPreferredStock.........................................................................错误!未定义书签。9SectionIXBonds............................................................................................错误!未定义书签。0SectionXFinancialReport............................................................................错误!未定义书签。1

DocumentsAvailableforReference

I.ThefinancialstatementscarriedwiththesignatureandsealsofthepersoninchargeoftheCompany,personinchargerofaccountingworksandpersoninchargeofaccountingorgan(accountingsupervisor);

II.TheoriginalauditreportbearingthesealofaccountingfirmandtheoriginalauditreportsignedandsealbytheCPA;

III.OriginaltextofalldocumentsoftheCompanyaswellasthemanuscriptoftheannouncementdisclosedonthewebsitedesignatedbyCSRC.

Interpretation

Items

ItemsReferstoContents
ListedCompany,Company,theCompany,SinopharmAccord,theGroupReferstoChinaNationalAccordMedicinesCorporationLtd.
SINOPHARMReferstoChinaNationalPharmaceuticalGroupCorporation
SinopharmHoldingReferstoSinopharmGroupCo.,Ltd,ControllingshareholderoftheCompany
CompanyLawReferstoCompanyLawofthePeople’sRepublicofChina
SecuritiesLawReferstoSecuritiesLawofthePeople’sRepublicofChina
Yuan,10thousandYuan,100millionYuanReferstoRMB,RMB10thousand,RMB100million
Terminology:Refersto
4DbusinessReferstoSPDhospitallogisticssupplychainextensionbusiness,IVDdiagnosticreagentbusiness,CSSDdisinfectionservice,andMWDequipmentlifecyclemanagementbusiness
GPOReferstoGrouppurchasingorganizations
Abbreviation:Refersto
SinopharmHoldingGuangzhouReferstoSinopharmHoldingGuangzhouCo.,Ltd.
GuodaDrugstoreReferstoSinopharmHoldingGuodaDrugstoreCo.,Ltd.
SinopharmHoldingGuangxiReferstoSinopharmHoldingGuangxiCo.,Ltd.
ChinaNationalZhijunReferstoChinaNationalZhijun(Shenzhen)PharmaceuticalCo.,Ltd.
ZhijunPharmacyTradeReferstoShenzhenZhijunPharmacyTradeCo.,Ltd.
ZhijunPingshanReferstoChinaNationalZhijun(Shenzhen)PingshanPharmaceuticalCo.,Ltd.
MainLuckPharmaceuticalsReferstoShenzhenMainLuckPharmaceuticalsInc.

SectionIICompanyProfileandMainFinancialIndexesI.Companyinformation

Shortformofthestock

ShortformofthestockSinopharmAccord,AccordBStockcode000028,200028
StockexchangeforlistingShenzhenStockExchange
NameoftheCompany(inChinese)国药集团一致药业股份有限公司
ShortformoftheCompany(inChinese)国药一致
ForeignnameoftheCompany(ifapplicable)ChinaNationalAccordMedicinesCorporationLtd.
ShortformofforeignnameoftheCompany(ifapplicable)SinopharmAccord
LegalrepresentativeLinZhaoxiong
Registrationsadd.AccordPharm.Bldg,No.15,BaGuaSiRoad,FutianDistrict,Shenzhen,GuangdongProvince
Codeforregistrationsadd518029
HistoricalchangesintheregistrationaddressNochanges
Officesadd.AccordPharm.Bldg,No.15,BaGuaSiRoad,FutianDistrict,Shenzhen,GuangdongProvince
Codesforofficeadd.518029
Company’sInternetWebSitehttp://www.szaccord.com.cn
E-mailgyyz0028@sinopharm.com

II.Person/Waytocontact

SecretaryoftheBoardSecuritiesaffairsrepresentative
NameChenChangbingWangZhaoyu
Contactadd.AccordPharm.Bldg.,No.15,BaGuaSiRoad,FutianDistrict,Shenzhen,GuangdongProvinceAccordPharm.Bldg.,No.15,BaGuaSiRoad,FutianDistrict,Shenzhen,GuangdongProvince
Tel.+(86)75525875222+(86)75525875222
Fax.+(86)75525195435+(86)75525195435
E-mailgyyzinvestor@sinopharm.comgyyz0028@sinopharm.com

III.Informationdisclosureandpreparationplace

WebsiteoftheStockExchangewheretheannualreportoftheCompanydisclosedSecuritiesTimes,ChinaSecuritiesJournal,HongKongCommercialDaily
MediaandWebsitewheretheannualreportofthehttp://www.szse.cn;http://www.cninfo.com.cn

Companydisclosed

Companydisclosed
PreparationplaceforannualreportSecretariatoftheBoardofDirectors

IV.RegistrationchangesoftheCompany

Organizationcode91440300192186267U
Changesofmainbusinesssincelisting(ifapplicable)Nochange.
Previouschangesforcontrollingshareholders(ifapplicable)Nochange.

V.Otherrelevantinformation

CPAengagedbytheCompany

NameofCPAErnst&YoungCPA(SpecialGeneralpartnership)
Officesadd.forCPA21/F,ChinaResourcesBuilding,No.5001,ShennanEastRoad,LuohuDistrict,Shenzhen
SigningaccountantDengDongmei,LiYuanfeng

SponsorengagedbytheCompanyforperformingcontinuoussupervisiondutiesinreportingperiod

□Applicable√NotapplicableFinancialconsultantengagedbytheCompanyforperformingcontinuoussupervisiondutiesinreportingperiod

□Applicable√NotapplicableVI.Mainaccountingdataandfinancialindexes

Whetherithasretroactiveadjustmentorre-statementonpreviousaccountingdata

□Yes√No

20212020Changesinthecurrentyearoverthepreviousyear(+,-)2019
Operatingrevenue(RMB)68,357,809,571.9959,649,455,012.0314.60%52,786,807,476.28
NetprofitattributabletoshareholdersofthelistedCompany(RMB)(Note1)1,336,427,752.221,401,892,593.23-4.67%1,267,931,291.32
NetprofitattributabletoshareholdersofthelistedCompanyafterdeductingnon-recurringgainsandlosses(RMB)1,286,305,975.281,369,652,035.50-6.09%1,226,765,271.97
Netcashflowarisingfromoperatingactivities(RMB)1,655,180,976.871,502,746,598.4710.14%2,012,653,189.74

Basicearningspershare(RMB/Share)(Note1)

Basicearningspershare(RMB/Share)(Note1)3.123.27-4.59%2.96
Dilutedearningspershare(RMB/Share)3.123.27-4.59%2.96
WeightedaverageROE(Note1)9.29%10.49%1.20percentagepointsdown10.31%
Year-endof2021Year-endof2020Changesatendofthecurrentyearcomparedwiththeendofpreviousyear(+,-)Year-endof2019
Totalassets(RMB)42,783,682,431.8139,594,533,471.658.05%34,028,843,214.20
Netassetsattributabletoshareholderoflistedcompany(RMB)14,924,938,052.5013,948,322,652.337.00%12,911,140,435.88

Note1:NetprofitattributabletoshareholdersofthelistedCompanyhas4.67%declinedfromayearearlier,basicEPSdrop4.59%correspondingly,weightedaverageROEdecreasedby1.20percentagepoints,mainlybecauseaccordingtotheresultsofimpairmenttestsongoodwillandintangibleassetsfortheyear,followtheprincipleofprudence,thegoodwillandintangibleassets(brandrightsandsalesnetwork)fromsubordinatesubsidiary-ShanghaiDingqunEnterpriseManagementConsultingCo.,Ltd(andtheSinopharmHoldingTianhePharmaceuticalCo.,Ltd)arebeingaccruedbytheCompany,foundmoreinNoticeonAssetsImpairmentProvisionbyChinaNationalAccordMedicinesCorporationLtd.(NoticeNo.:2022-03).Meanwhile,thereare1155newdirector-operatedstoresopenedin2021intheretailsector,withthelargeinitialinvestmentandnonbenefitsgeneratedtemporaryandmultipleinfluencesasindustrypoliciesandepidemic,theprofitspaceshrinks.Theloweroneofnetprofitbeforeandafterdeductingtheextraordinarygains/lossesinthelastthreefiscalyearsisnegative,andtheauditreportoflastyearshowsthattheabilitytocontinueoperatingisuncertain

□Yes√NoTheloweroneofnetprofitbeforeandafterdeductingtheextraordinarygains/lossesisnegative

□Yes√NoVII.DifferenceoftheaccountingdataunderaccountingrulesinandoutofChina

1.Differenceofthenetprofitandnetassetsdisclosedinfinancialreport,underbothIAS(InternationalAccountingStandards)andChineseGAAP(GenerallyAcceptedAccountingPrinciples)

□Applicable√Notapplicable

TheCompanyhadnodifferenceofthenetprofitornetassetsdisclosedinfinancialreport,undereitherIAS(InternationalAccountingStandards)orChineseGAAP(GenerallyAcceptedAccountingPrinciples)intheperiod.

2.Differenceofthenetprofitandnetassetsdisclosedinfinancialreport,underbothforeignaccountingrulesandChineseGAAP(GenerallyAcceptedAccountingPrinciples)

□Applicable√NotapplicableTheCompanyhadnodifferenceofthenetprofitornetassetsdisclosedinfinancialreport,undereitherforeignaccountingrulesorChineseGAAP(GenerallyAcceptedAccountingPrinciples)intheperiod.VIII.Quarterlymainfinancialindex

InRMB

Firstquarter

FirstquarterSecondquarterThirdquarterFourthquarter
Operatingrevenue16,049,966,325.7517,113,125,561.6417,046,925,131.1818,147,792,553.42
Netprofitattributabletoshareholdersofthelistedcompany328,800,560.24412,644,453.01332,710,261.54262,272,477.43
Netprofitattributabletoshareholdersofthelistedcompanyafterdeductingnon-recurringgainsandlosses321,593,612.98399,360,795.24323,929,049.31241,422,517.75
Netcashflowarisingfromoperatingactivities-306,748,999.241,536,122,282.81190,693,254.22235,114,439.08

Whethertherearesignificantdifferencesbetweentheabove-mentionedfinancialindexoritstotalnumberandtherelevantfinancialindexdisclosedinthecompany’squarterlyreportandsemi-annualreport

□Yes√No

IX.Itemsandamountsofextraordinaryprofit(gains)/loss

√Applicable□Notapplicable

InRMB

Item202120202019Note
Gains/lossesfromthedisposalofnon-currentasset(includingthewrite-offthataccruedforimpairmentofassets)2,819,900.345,969,522.102,340,925.97Thegainsondisposalofright-to-useassesarisingfromoff-leaseintheperiod
Governmentalsubsidyreckonedintocurrentgains/losses(whilecloselyrelatedwiththe75,900,940.5465,568,137.3549,299,242.48Mainlyforreceivingofallkindsofspecialsubsidies

normalbusinessoftheCompany,thegovernmentsubsidythataccordwiththeprovisionofnationalpoliciesandarecontinuouslyenjoyedinlinewithacertainstandardquotaorquantityareexcluded)

normalbusinessoftheCompany,thegovernmentsubsidythataccordwiththeprovisionofnationalpoliciesandarecontinuouslyenjoyedinlinewithacertainstandardquotaorquantityareexcluded)etc.intheperiod
Investmentcostswhileacquiringsubsidiaries,jointventuresandassociatedenterprise,lessthanfairvalueoftheidentifiablenetassetsfrominvestedenterprisewhichshouldbeenjoined219,279.0070.9614.65Negativegoodwillfromsubsidiaryacquisition.
Currentnetgain/lossesofthesubsidiarymergerunderthesamecontrolfrombeginningoftheperiodtocombinationdate-4,059,241.89
Switchbackofprovisionfordepreciationofaccountreceivablethatindividuallytestedforimpairment1,491,750.76578,362.651,310,345.38
Gainsandlossesfromexternalentrustedloans3,460,037.16
Consigningfeereceivedforconsignedoperation961,488.75
Othernon-operatingincomeandexpenditureexceptfortheaforementioneditems20,642,938.09-11,819,894.6017,179,002.78Thenon-operatingincomearisingfromthewrittenoffamountthatdoesnotneedtobepaidduringtheperiod
Othergains/lossessatisfyadefinitionofextraordinarygains/losses3,891,236.813,835,445.51508,168.93
Less:Impactonincometax24,001,469.5916,223,813.4217,317,723.70
Impactonminorityshareholders’equity(post-tax)30,842,799.0116,628,761.5711,554,752.41
Total50,121,776.9432,240,557.7341,166,019.35--

Detailsofothergains/lossessatisfyadefinitionofextraordinarygains/losses:

□Applicable√NotapplicableTherearenoothergains/lossesitemsthatsatisfythedefinitionofextraordinarygains/lossesintheCompany.Explaintheitemsdefinedasextraordinaryprofit(gain)/lossaccordingtothelistsofextraordinaryprofit(gain)/lossinQ&AAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiestothePublic---ExtraordinaryProfit/loss

□Applicable√NotapplicableTherearenoitemsdefinedasextraordinaryprofit(gain)/lossaccordingtothelistsofextraordinaryprofit(gain)/lossinQ&AAnnouncementNo.1onInformationDisclosureforCompaniesOfferingTheirSecuritiestothePublic---ExtraordinaryProfit/loss

SectionIIIManagementDiscussionandAnalysisI.IndustrytheCompanyoperatesduringthereportingperiodTheCompanyshallcomplywiththerelevantdisclosurerequirementforretailingindustriesofShenzhenStockExchangeSelf-RegulatoryGuidelinesforListedCompaniesNo.3-DisclosureofIndustryInformation

(1)Macroenvironmentoftheindustry2021isthefirstyearofChina’s14

thFive-YearPlan,macroenvironmentcontinuestochanges.Undertheepidemicbackground,China’seconomycontinuestorecoverwithsteadygrowthinGDPandhigh-qualityindevelopment;withfrequentlyintroductionofthemedicalreformpolicy,thecountry’simplementationofHealthyChinaStrategyhaspromotedthebalanceddistributionofhigh-qualitymedicalresources;Theaggravatingtrendofagingpopulationanduniversalthree-childpolicymadethemarketdemandofhealthindustry,sanatoriaserviceindustrycombiningmedicalcare&healthcareandpediatricdrugsgettinghigher.WiththereleaseofOutlineDevelopmentPlanfortheGuangdong-HongKong-MacaoGreaterBayAreaandintroductionofseveralpolices,theconstructionofGreaterBayAreaintermsofhealthcareearnsanewprofit.

(2)Basicinformation,developmentstagesandperiodicfeaturesoftheindustryIn2021,thepharmaceuticalindustryembracegreaterchallengesandopportunitiesduetothecontinuessoaringofpharmaceuticalmarket,sustainabledeepeningofmedicalinsurance,hospitalanddrugindustryco-reformationandintensiveintroductionofmedicalindustry.

1.DevelopmentofpharmaceuticalterminalmarketIn2021,terminalmarketofthepharmaceuticalstartingwarmingup.However,affectedbythenumerousspreadofepidemicandaccelerationofthecentralizedprocurement,developmentofpharmaceuticalterminalmarketcontinuestobeunderpressure.AccordingtothestatisticsofthePDB(datareleasedbyPHIIC)domesticsamplehospitalsmarket,themarketsizeofsamplehospitalsinthefirstthreequartersof2021reboundedby10.24%comparedtothesameperiodof2020.However,duetothelowerbasenumberin2020andaffectedbyfactorsasepidemicandcentralizedprocurement,thegrowthofhospitalmarketmonth-on-monthcontinuestoslowdown.Thethirdquarterof2021onlyhas1.86%upfromthesecondquarter,thesalesfromhospitalmarketinthewholeyearof2021haveacertaingapwiththatof2019.

AccordingtothedrugretailsfromChinaMonitorHealth(CMH),salesvolumeoftheretailpharmaciesincreasedby3.0%nationwideinthefirstthreequartersof2021.Inthesecondhalfoftheyear,undertheinfluenceofrecurrenceofepidemicinlocalareasofthecountry,theepidemicprevention&controlmeasuresofretailpharmaciesinsomeareasarebecomingstricter.Banonthesaleofepidemicdrugsandaffectedbythecentralizedprocurementofmedicalinstitutions,somepatientsreturnedtothehospitalsandprimarymedicalinstitutions,thecustomerflowfromretailpharmacieshasbeenchallengedwithjust0.3%upmonth-to-monthinthethirdquarter.

2.PharmaceuticalindustrypolicesandinfluencesThemedicalindustrypolicesintensivelyintroduced,andco-reformationofmedicalinsurance,hospitalanddrugindustryarecontinueddeepeningin2021.Intermsofmedicine,mainlyinvolvesthepoliciesasdrugregistration&approval,bulkdrugs,drugpatent,drugvigilance,TCMandformulagranuledevelopment;Intermsofmedicalinsurance,policiesasvolume-basedprocurement,adjustment&negotiationofmedicalinsurancecatalogue,medicalinsurance“dualchannel”,DRG/DIPpaymentandmedicalinsuranceforurban&ruralresidentsareincluded;andintermsofmedicaltreatment,mainlyincludeslong-termprescriptions,reformsatpublichospitals,hierarchicalmedical,reformationofmedicalhealthcareservicesandexperienceofSanming’smedicalreformationinpromoting.

(1)Normalization&institutionalizationofvolume-basedprocurementandgradualexpansionofcoveragehaveagreatimpactonpharmaceuticalindustrySixbatchesofcentralizedprocurementfordrugsareorganizedbythestate,234kindsofdrugsprocuredintotal,andthemarketamountaccountsforaround30%ofthechemicalandbiologicaldrugsprocuredbypublicmedicalinstitutions.Specialprocurementofinsulinwascarriedoutin2021,expandingthecentralizedprocurementfromchemicaldrugstobiologicaldrugsforthefirsttime.Centralizedprocurementofhigh-valuemedicalconsumablesarefocusoncardiologyandorthopedics,thetwomostconcernedareastothegeneralpublic.Theconcentratedpurchaseofheartstenthasbeenrunningforayearsmoothly,and1.69millionselectedstentsbeingused,nearly

1.6timesoftheannualagreedprocurementquantity.In2021,theconcentratedpurchaseofjointprosthesisareorganizedbythestateagainstorthopedicconsumableswhichismorecomplicatetofurtherexpandthecoverageofreforms.

Impactofvolume-basedprocurementonpharmaceuticalbusiness:squeezedsalesrevenueandgrossmarginhaveagreatimpactontherevenuegrowthandprofitspaceofthecommercialenterprises;soaringdistributioncosts,higherdemandingofdeliveryfrequencyforcentralizedprocurementvarieties,especiallytheprimarycareinstitutionsnewlyoperates,thesinglepurchasingquantityissmallandfrequencyofdeliveryishigh,whichincreasesthedistributioncostssignificantly;thedistancehadbeenenlargedbetweenmedicalcommercialenterprises,andtheincrementofcentralizedprocurementvarietiesbringschallengesandopportunitiestothecommercialenterprises:duetothefactorsasscaling,collectivization,informatizaionandcapitalchain,thepunycommercialenterpriseshavebeenunabletosustainandundertake

theburdenofvolume-basedprocurement;Instead,thelargepharmaceuticalcommercialenterprisesownsnumerousvarietyofreserves,abundanceincapital,fastdeliverycapabilityandwiderangeofhospitalaccounts,whichprovidesconvenientconditionsforenterprises.Althoughtheoverallgrossprofitfromdistributiondecreased,theindustrystatuswillbefurtherconsolidatedaspartofthecostsdigestedbysizeeffectofvolume-basedprocurement.Impactofvolume-basedprocurementonpharmacyretail:Winingvarietiesareselectedbycuttingprices,andthepriceshangupsidedownamongvarietiesoperatedindrugstore,facingpressuretoreducetheprices.eventhoughparticipateincentralizedprocurementandsolvethechannelproblems,westillfacingpricepressure;monomerpharmacieshavelostthecompetitiveadvantagesunderthetrendofcentralizedprocurementwhenthespeedofmergers&acquisitionaccelerated,therateofchainfordrugstoresimproveonemorestepastheaccelerationofpharmacymergers&acquisition;speedinguptheonlinelayoutandreducingthedrugprices,thedrugstoregraduallydevelopsonlinebusinessastheoperationcostsgoesup.

(2)Promotingestablishmentofhierarchiccareandmedicalpartnerships,thegrassrootsmarketisgraduallybeingopenedupOnNovember4,2021,theNationalHealthCommissionprintedandissuedthe1,000CountiesProjects-WorkPlanoftheComprehensiveCapacityImprovementforCounty-levelHospitals(2021-2025),tomeettheneedsofpeoplesincountyaresformedicalservicesasthestartingpoint,consolidatedandexpendedtheeffectiveconnectionbetweentheachievementsinpovertyalleviationandruralrevitalization,speedingupandimprovethehierarchiccaresystem,promotingthecounty-levelhospitalstoahigh-qualitydevelopmentstage.Andstrivefor5yearsofhardworking,1000county-levelhospitalsatleastacrossthecountryhavereachedthemedicalservicestandardofthird-classhospitals,layingasolidfoundationforachievingthesolutionofgeneraldiseasesincitiesandcounties.On22November2021,thegeneralofficeofNationalHealthCommissionprintedandissuedtheNoticeonPromotionofSanming’sExperienceinHierarchicMedicalandEstablishmentofMedicalPartnership,itisproposedtobuildahierarchicmedicalpatternwithprimarydiagnosisconstruction,two-wayreferralandupper&lowerlinkage,focusonpromotinghigh-qualitydevelopmentofpublichospitals,andadvancing8keytasksofhierarchicmedicalandconstructionofmedicalpartnership.Thehierarchicmedicalandconstructionofmedicalpartnershipwillforcethehospitaljointprocurementandmedicalinsurance-pricedtotheground.Firstly,unifythecatalog.Theminimumthresholdfordrugsincatalogwillbeprice;expendingthepromotionareas,onceintheprocurementcatalog,itmeanstheproductshaveaccesstomultiplehospitalswithinthemedicalpartnership,thehuge-crowdstrategyinthepastthatrunningtothehospitalfordrugsisexpectedtoreducecosts.Secondly,unifythedistribution.Theinitiativeofmedical

institutionstoupstreamdistributionbusinessandpharmaceuticalenterpriseshasbeenimprovedgreatly,whethersecondbargainingordistribution,paymentcollection,thetrendofmedicalinstitutionsuppressupper-and-midstreamindustry&commerceishardertoreverse.Finally,volume-basedprocurement.Quantityandpricingconnectedandreducingpricebyquantity,onthebasisofcentralizedprocurement,everysinglemedicalpartnershipfurtherbargainingonvolume-basedpricingwithasecondbargainingresulted.

(3)The“dualchannel”helptheimplementationofmedicineswithnegotiatedpricesandbeneficialtotheretailbusinessdevelopmentThedualchannelpolicyacceleratedtheprescriptioncirculationandseparationofdispensingfromprescription(SDP),someofthefunctionoforiginalin-hospitalmanagementofdrugsaretransferringtotheoutsideofthehospital,toensureequalrulesofpaymentbymedicalinsuranceforcompliantinstitutionsbothinandoutofthehospital;relevantnationalmeetingalsoindicatedthatthesupervisionformedicalinsurancefundwillbestrengthenedbyenhancingtheprescriptioncirculationcenterasthecore.Inthefuture,underthebackgroundofpolicyguidance,complianceandincreasingrequirementsforprofessionalism,thecompetitivenessofpharmaceuticalleadingenterpriseswillbeenhancedandtheindustryconcentrationwillfurtherimproved.

II.MainbusinessoftheCompanyduringthereportingperiod

TheCompanyshallcomplywiththerelevantdisclosurerequirementforretailingindustriesofShenzhenStockExchangeSelf-RegulatoryGuidelinesforListedCompaniesNo.3-DisclosureofIndustryInformation(i)MainbusinessoftheCompanyincludespharmaceuticaldistributionandpharmaceuticalretail,specificallyasfollows:

1.Inthefieldofpharmaceuticaldistribution,theCompanymainlybasedinGuangdong&Guangxi,leadinginthescaleofpharmaceuticaldistributioninthetworegions.Asof31December2021,therewere1,092secondary&tertiarymedicalinstitutions;7,870grass-rootsmedicalclientsand6,414retailterminalcustomers(chainpharmacies,singlestores,andself-paypharmacyinhospitals).Intermsofdistribution,GuangdongandGuangxiregionshavesubdividedtheformatmarkets,pharmaceuticaldistributionandapparatusconsumables,retaildirectsalesandretaildiagnosisandtreatment,medicalinstrumentlinkage,retaildevelopment,andtheentireindustrybusinessmaintainsarelativelyleadingpositionintheindustry;innovativebusinesscontinuestodevelopnewcustomercooperationmodelsandbecomeamedicalsupplychainmanagementsolutionandserviceproviders;improvenationallogisticsplanningandconstruction,providethird-partylogisticsprofessionalservices,andcreateleadinglogisticsandsupplychainservicecapabilities.Throughcontinuousintegrationofdistributionandlogistics,deeppenetrationintotheterminalmarketandimprovingthestepwisedistributionnetwork.Tobuildanintelligentsupplychain,committedtobecomethepharmaceuticalandhealthproducts&serviceproviderwiththemostinfluential,thehighestshares,themostcomprehensivevariety,thebestserviceandthefastestdistributioninSouthChina.

2.Inthepharmaceuticalretailfield,GuodaDrugstoreisaleadingpharmaceuticalretailerinsalesscalethroughoutthecountryBytheendof2021,GuodaDrugstorehasoperated8,798stores,covering20provinces,autonomousregionsandmunicipalities,whichhasformedadrugstorenetworkscoveringeasternandnorthernChina,southerncoastalcities,andgraduallyexpandedintonortheast,centralplainsandinlandcities,thesalesscaleofwhichhasexceeded22billions,maintaintheleadingsaleswithinindustry;Guodadrugstore,thebusinessofwhichweremainlyrelyingonsocialretaildrugstores,hasbeenputtinggreatattentiononthedevelopmentofprofessionalservicesystemwithmedicalresourcesascorecompetitiveness,buildingagroupofstoreswithprofessionalcommercialactivities,whichareabletoprovideretailsandtherapyservicesthatintegratingmedicalserviceandhealth-careproductssalesandcooperatewithhospitals;atthesametime,theCompanyhasbeenvigorouslydevelopingnewbusiness,exploringandexpandingnewsaleschannels,improvingprofessionalservices,beingdedicatedtotransitfromatraditionalmedicalretailintoaninnovativeserviceenterprise.Bymeansofconventionalproductsretailmanagement,improvingmajorbrandsandexploringbusinesscooperationwithsupplier,acceleratingtheestablishmentandimprovementofDTPbusinessandcontinuationofhealthcareservicesystem,Guodahasbuiltindustry-leadingprofessionalserviceability.(ii)Businessmodels

1.Businessofdistribution

(1)ProcurementmodelIntermsofprocurement,thecompanyhasestablishedaprocurementmechanismof"frontend--backend"divisionoflaborandcooperation,whicheffectivelyreducestheprocurementcost.The"frontend"isthepurchasingdepartment,which,accordingtobusinessneeds,looksforsupplyofgoods,establishesfirst-runvarieties,comparespricesandconductsbusinessnegotiationsonproductqualityrequirements,leadtime,supplypriceandpaymentterms,inaddition,effectivelymanagessuppliers,includingsupplierqualification,servicequality,integritydegree,etc.,establishessupplierfiles,andorganizessupplierevaluations.The"backend"isthesupplychaindepartment,whichisresponsibleforintegratingsupplychainresources,graspingsupplychaininformationasawhole,realizingprofessionaldivisionoflabor,promotingintegratedmanagement,creatingintegratedservicebackground,assistingthe"frontend"business,andcompletingdailypurchasecontractsandorders.

(2)SalesmodelIntermsofsalesmodel,thecompanyhascarriedouttransformationandinnovationaccordingtothe"onebodyandtwowings"strategyofdistributionsector.Fortraditionalbusiness,thedistributionimplementsthebusinessmodelof"networksubmersion"insouthernChina,andisthemainchannelsupplierofdrugsinGuangdongandGuangxi,andhasachievedfullcoverageofthenationalpharmaceuticalmarket.Atthesametime,wewillbuildspecialbusinessessuchasequipment,medicalbeauty,medicalcareandhealth,TCMdecoctionpiecesandimport,andvigorouslyexpandtheendmarketssuchasbasic-levelmedicalinstitutionsandprivatehospitalstoimproveproductsupplyguaranteeandbasic-levelnetworkcoveragecapability.

Theretaildirectsellingbusinessundertakesthecompany’s"integrationofwholesaleandretail"strategy,promotesthenationalretailterminallayout,anddeeplydevelopsinsouthernChinaandradiatedacrossthecountrybasedonthenationaltoponehundred+professionalDTPdrugstores,projectcentralizedprocurement,thethirdterminalagentsandotherdistributionnetworks;Atthesametime,thecompanyprovidescustomerswithone-stopoverallsolutionsanddiversifiedvalue-addedservicesandinnovativeservices;1)Promotetheimplementationofmedicalserviceinnovationmodelthroughhospitalsupplychainproject,equipmentSPD,regionaldistribution,regionalmedicalservices(inspection,disinfection),andoutsourcingandacceptanceofprescriptionsprescriptiondispensingandundertaking,etc..ThesubsidiariesSinopharmHoldingGuangzhouMedicalTechnologyCo.,Ltd.,SinopharmHoldingGuangzhouMedicalManagementCo.,Ltd.,andSinopharmHoldingGuangzhouMedicalSupplyChainServiceCo.,Ltd.havecarriedouteffectivebusinessexpansionandpracticeonprofessionalserviceproductssuchasmedicalequipmentlifecyclemanagement,reagentconsumablesanddisinfectionbusiness.2)Intermsofthird-partylogisticsbusiness,weundertakethewarehousing,distributionandothervalue-addedservicesforthird-partycustomerssuchaspharmaceuticalequipmentmanufacturers,pharmaceuticalequipmentbusiness,centersfordiseasecontrol,vaccinemanufacturers,etc.,andprovideprofessionalthird-partylogisticssolutionsforintegratedbusinessessuchasthird-partybondedlogisticstonationalwarehousing,distributionandlogisticsservices.

(3)LogisticsanddistributionmodelAfterlong-termdevelopmentandaccumulation,thelogisticscenterhasestablishedacompletemodernpharmaceuticallogisticsservicesystem,andintegratedwarehousinganddistributionandintelligentsupplychainserviceabilities.Thelogisticscenterhasmorethan180,000squaremetersofwarehousespaceandmorethan260self-operatedtransportvehiclesinGuangdongandGuangxi.Theservedcustomersincludeupstreamanddownstreamclientsofdistributionandoperationheadquarters,third-partylogisticscustomersincludeinnovativepharmaceuticalcompanies,diseasecontrolcustomers,pharmaceuticalequipmentmanufacturersandcommercialcompanies,vaccinemanufacturers,etc.Thedistributionscopecoversthewholecountry.Distributionterminalsincludedirectsellingcustomersofhospitals,basic-levelmedicalcustomers,smallsocialmedicalcustomers,commercialcustomers,retaildirectsellingcustomers,centersfordiseasecontrol,individuals,etc.RelyingonthenationallogisticsresourcesofSinopharmHoldingandcombinedwiththeresourcesofcarriers,thelogisticscenterhasachievedfullcoverageofnationalurbanandruralmedicallogistics.Thecompany'slogisticsproductsmainlyincludewarehousinginspectionservices,storageservices,deliveryservices,insuranceandsupplychainoptimizationandothervalue-addedservices;aswellasdeliveryservicesinmedialtransportationcities,specialcarservicesformedicines,medialexpressdeliveryservices,supplychainoptimizationandothervalue-addedservices.

2.Retailbusiness

(1)ProcurementmodelTheprocurementmodelofGuodaDrugstoreisdividedintocentralizedprocurementandlocalprocurement.Theprocurementmodelofcentralizedprocurementcanbedividedintounifiedsigningseparatepurchasingand

unifiedsigningunifiedpurchasing.Forunifiedsigningseparatepurchasing,theheadquartersuniformlysignstripartitecontract(headquarters,regionalcompanyandsupplier),andtheregionalcompanydirectlypurchasesfromsupplier.Forunifiedsigningunifiedpurchasing,theheadquartersandsuppliersignthecontracts,theheadquarterscentralizedlygathersthegoodsandthendistributestoregionalcompanyforsales.Theprocurementmodeloflocalprocurementisthattheregionalcompanydirectlysignscontractswithsupplier,andpurchasesandsellsbyitself.In2021,thesalesofcentralizedprocurementaccountedfor44%,whilethesalesoflocalprocurementaccountedfor56%.

(2)SalesmodelTheretailbusinessofGuodaDrugstoreismainlycarriedoutintheformofchainoperation,includingcompany-ownedstoresandfranchisedstores.ByTheendofDecember2021,therewere8,798storeintotal,including7,257directlyownedstores,1,541franchisedstores,covering20provincial-levelmarkets;themainbusinessisChinesepatentdrugsandgenericmedicines,traditionalChinesemedicinedecoctionpieces,medicalequipment,healthfood,healthyfoodandsupplies,etc..Intermsofbusinessmodel,itactivelypromotesonlinetoofflineInternet+medicine,andexplores"5+X"retailanddiagnosisandtreatmentinnovativestorescombiningtraditionalChinesemedicine,Westernmedicine,rehabilitationandphysiotherapyservices.Atthesametime,itcontinuouslyoptimizestheslowdiseasediagnosisandtreatmentandmembermanagementnewmodel,nowtherearenearly24millionactivemembers,establisheshealthrecordsforcustomerswithchronicdisease,followupandpaycloseattentioninalongterm,andcooperateswithtoprankedsuppliersathomeandabroad,constantlyenhancesprofessionalpharmaceuticalaffairsserviceability,providequalityhealthproductsandservicesforthemajorityofthepeople,andfulfillsthesocialresponsibilityofastate-ownedenterprise.

(3)LogisticsanddistributionmodelThelogisticsandwarehousingmanagementmodeloftheheadquartersandsubsidiariesofGuodaDrugstorehastwomaintypes,thefirstisself-operatedlogisticsmodel,namelythesubsidiariesrentwarehousesforthewarehousinganddistributionservicesofstoresandexternalcustomers,thesecondisthemodeltoentruststatecontrolsystemforlogisticsdistribution,namelythesubsidiariesentrustthelocalstatecontrolsystemforstorageandtransportationbasedonfactorssuchascostorresourcesharing.Atpresent,entrusteddistributionaccountsfor27%.Therearethreemodesoftransportation,i.e.self-operateddistribution,entrustingathirdpartyfortransportation,andmixedtransportationmanagement-self-operated+entrustedmode.(iii)Thecompany's2021annualperformanceandmainworkTheyear2021wasasignificantmomentofthehundredthanniversaryofthecommunistpartyofChinaandakeynodeinthehistoryintersectionofthe"twoonehundredyears",pandemicpreventionandcontrolandsocio-economicdevelopmentwereunderpressureathome,SinopharmAccordadheredtoXiJinpingThoughtonSocialismwithChineseCharacteristicsforaNewEra,thoroughlyimplementedthespiritsofthethe19

thNationalCongressoftheCPCandallthepreviousplenarysessionsofthe19

th

CentralCommitteeoftheC.P.C.,fullyimplementedthegeneralrequirementsofpartybuildingandtheparty’sorganizationalprincipleinthenewera,

earnestlyimplementedthedeploymentrequirementsofSINOPHARMandSinopharmHolding,focusedonthestrategicpolicyof"technologyenergized,serviceupgrade,wholesaleandretailintegration,andindustry-financedualdrive",andcontinuedtopromotethe"14

th

Five-Year"strategicplanningofSinopharmAccord's"1-2-6",i.e.onecoredualnetworksandsixplatforms.Undertheannualworkingideaof"buildinganewdevelopmentpatternandsustaininghigh-qualitydevelopment",40,000employeesofSinopharmAccordmadeconcertedeffortsandachievedthegoalofopeninganewsituation,respondingtothechangingsituationandstabilizingtheoverallsituationatthefirstyearofthe"14

th

Five-yearPlan".Operationin2021Intheyearof2021,undertheinfluenceofCOVID-19andpoliciesascentralizedprocurementofdrugs,inthefaceofpressure,multiplemeasuresweretakenbySinopharmAccordtostartheyearwithvigor.Cumulativeoperationrevenuereached68,358millionyuanfortheyear,a14.60%increasedonay-o-ybasis;operationprofithas1,952millionyuan,declinedby9.77%fromayearearlierandthenetprofitattributabletoshareholderoflistedcompanyamountedto1336millionyuanwith4.67%downonay-o-ybasis.Themainreasonfordeclinedinprofitisaccordingtotheresultsofimpairmenttestsongoodwillandintangibleassetsfortheyear,followtheprincipleofprudence,thegoodwillandintangibleassets(brandrightsandsalesnetwork)fromsubordinatesubsidiary-ShanghaiDingqunEnterpriseManagementConsultingCo.,Ltd(andtheSinopharmHoldingTianhePharmaceuticalCo.,Ltd)arebeingaccruedbytheCompany.Meanwhile,thereare1155newdirector-operatedstoresopenedin2021intheretailsector,withthelargeinitialinvestmentandnonbenefitsgeneratedtemporaryandmultipleinfluencesasindustrypoliciesandepidemic,theprofitspaceshrinks.In2021,SinopharmAccordachievedatotaloperatingrevenueof46,833millionyuanindistributionbusiness,ay-o-yincreaseof14.03%;netprofitachieved947millionyuan,ay-o-ygrowthof10.74%,ofwhich:revenuefromtraditionalmedicaldirect-salesof31,900millionyuan,ay-o-yincreaseof15%;retaildirectsalesrevenueof6,200millionyuan,1%upfromayearearlier;retaildiagnosisandtreatmentrevenueof2,000millionyuan,19%uponay-o-ybasisandcommercialdistributionrevenueof5,200millionyuan,19%growthonay-o-ybasis.In2021,GuodaDrugstorecompletedanoperatingrevenueof22,478millionyuanintotal,ay-o-ygrowthof

15.64%,thenetprofitamountedas184millionyuan,61.38%downfromayearearlier.Thenetprofitattributabletoparentcompanywas65millionyuan,ay-o-ydeclineof80.88%,ofwhich:retail(directoperationstoresandfranchisedstoresincluded)revenueof17,990millionyuan,16.3%upfromayearearlier;revenuefromterminaldistributionof4,100millionyuan,ay-o-yincreaseof15%.Theaccumulativeinvestmentincomefromassociateswas333millionyuanfortheyearof2021,ay-o-ydecreaseof5.91%.

1.Centralenterprisetakestheresponsibilitytofightagainsttheepidemic

AsofDecember2021,subsidiariesofSinopharmAccordhaveobtained67(including2centralmedicalreservequalifications;12provincial&municipal-levelqualifications;25reservesofdirectfundallocationfromcentral;28qualificationsforgovernmentepidemicprevention&controlandspecialprocurement)qualificationsformedicineandanti-epidemicsuppliesreserves,andcompletedemergencydistributionofsuppliestomanyepidemicareasinGuangdongandGuangxisuccessively.Undertakingthewarehousing&distributionoperationfordiseasecontrol&preventionvaccineinvaryareaswithintheGuangdongandGuangxi,settingupaspecialcommandgroup/operationteamforvaccineswithrapidresponseonduty24hoursaday.Nearly2,000squaremetersofcoldstoragehasbeencontributedand120refrigeratedtrucksonduty,undertaking60%ofthewarehousing&distributionservicesforCOVID-19inGuangdongProvince,40diseasecontrolcentershavebeencontractedandcovering1,700vaccinationsitesapproximately.TheCompanyassistedinthedeliveryofmorethan3.4milliondosesofCOVID-19vaccinesinGuangxiProvinceandcoveringmorethan130vaccinationsites.Intheclosedenvironmentofthepandemicoutbreakquarantinezone,GuodaDrugstoreandthedistributionprofessionalpharmacies,SinopharmAccord’ssubordinates,providedemergencymedicineservices,respondedtopandemicpreventionandcontrolrequirementsofthelocalgovernment,launchedonlineemergencymodeof"enterpriseWeChatgroupcustomerserviceguide+storeorderreceiving,logisticsspecialvehicledistribution",openednormally,andprovidedprofessionalconsultationanddeliveryservicesforpatientswithchronicdiseasesinthequarantineareas.WeassistedhospitalsinopeningInternetprescriptioncirculationchannelstomeettheneedsofpatientsinquarantineareasforonlinefurtherconsultationanddruguse.Anumberofsubsidiariesofthecompanyhavewonanti-epidemicawardsfromthegovernmentandindustryassociations.ThemeritoriousdeedsofthecompanyinfightingagainstCOVID-19pandemichavebeenincludedinthebriefingonstudyandeducationofpartyhistorycarriedoutbythestate-ownedassetssystemofGuangdongProvinceandintheGuangdongYouthLeagueNewsoftheGuangdongCommunistYouthLeague.

2.DistributionbusinessofSinopharmAccord:consolidatedtraditionalbusiness,developedinnovativebusiness,andconstantlyimprovedmarketcompetitiveness

(1)Traditionalbusiness:

Thetraditionalbusinessfurtherstimulatedvitality,becamestrongerandbigger,andledtheindustry.ThedistributionbusinessofSinopharmAccordhasactivelyseizedtheopportunityofthecentralizedprocurementpolicyandfullyobtainedthedistributionrightsofthecentralizedprocurementvarieties,andtheannualdistributionrateofallnationalandprovincialcentralizedprocurementpointsinGuangdongandGuangxiexceeded95%,andthepointdistributionraterankedatthetop.Atthesametime,weactivelyseizedthedual-channelmarketopportunityandstrivedfortherighttodistributedual-channelproducts.Theentrusteddistributionrateofproductsexceeded80%.Thelinkageofpurchaseandsalesacceleratedtheicebreakingofupstreamanddownstream,andthemarketsharecontinuedtoincrease;promotedmarketingtransformation,builtaprofessionalmarketingteaminthefieldoftumoursandchronicdiseases,andcarriedoutin-depthCSOcooperationmodel;strengthenedthedevelopmentandintroductionofnewpotentialsuppliers,andcontinuedtooptimizethelevel-to-

levelmanagementofsuppliers,theinstitutionalizationpromotedthedevelopmentofsuppliercooperationprojects,andintroduced700newproductsthroughmultiplechannels.ThegainrateofTCMdecoctionpiecesinhospitalsincreased,andthemarketexpansionofrefineddecoctionpiecesachievedinitialresults,withayear-on-yearincreaseof45%inoverallbusiness;andthemedicalbeautyhaslaunchedaC-endmarketingmodel.

(2)Retaildirectselling:

Promotedthenationaltop100chainprojects,increasedthedepthofcooperation,andimprovedproductintroduction.Acceleratedthenetworklayoutofmemberstores,thetotalnumberofmemberstoreshasreached1,313,andthesalesincreasedby66%onayear-on-yearbasis.ContinuedtogivefullplaytotheB2Badvantages,optimizedonlineplatformservices,increasedonlinemarketableproductspecifications,andmadesalespromotionfortargetedproductspecificationstoincreasethecustomers'onlineorderingfrequency.

(3)Retaildiagnosisandtreatment:

ContinuedtoacceleratethelayoutofretaildiagnosisandtreatmentstoresinGuangdongandGuangxi.Therewere120drugstores(anetincreaseof20storesthroughouttheyear)ofSinopharmHoldinginGuangdongandGuangxi,including91storesinGuangdongand29storesinGuangxi.35storeshaveobtainedthe"two-channel"qualification,andcontinuedtogivefullplaytothebrandadvantagesof"medicalinsurance+commercialinsurance",withasteadygrowthtrendinsales.Therewere31prescriptioncirculationprojects,thetotalcirculationvolumeincreasedby124%.

(4)Equipmentconsumablesbusiness:

Activelyexpandedandbuiltbusinessplatformswithupstreammanufacturers,setupamedicaldeviceexperiencecenter,exploredthemarketingmodelofhomemedicaldevices,formedaclinicalserviceteam,realizedtheextensionoftheservicefunctionofcommercialplatform,exploredthecooperationmodeloflargeaccesstomedicaldevices,anddevelopedtheprovincialintegrationofmedicaldevices.

(5)Innovativebusiness:

Activelypromotedservicetransformation,anddevelopedthein-hospitaltoClogistics/services,homeandcommunitymedicalcareandhealthcare,medicalunion/medicalcommunityprimarymedicalservices,retaildiagnosisandtreatment/retaildirectsellingandotherdirections.Integratedresources,promotedtheprofessionalandplatform-basedconstructionofinnovativebusiness,andsetupindustrybenchmark.Forexample,theprescriptioncirculationprojectoftheFirstAffiliatedHospitalofSunYat-senUniversityandthemedicalconsumablesSPDprojectofShenzhenSecondPeople'sHospitalwonthetoptendemonstrationcasesofpharmaceuticalsupplychainserviceinnovation.ThemedicalsuppliesSPDmanagementserviceprojectofAffiliatedHospitalofYoujiangMedicalUniversityforNationalities,thewholeprocesstraceabilitysystemofTCMdecoctionpiecesandtheintelligentallocationscheme(TSD+scheme)wereawardedasexcellentcasesofpharmaceuticalsupplychain.

(6)Third-partylogistics:

Vigorouslydevelopedthird-partylogisticsservices,addedSinopharmHoldingGuangzhouShanghaiequipmentwarehouse,SinopharmHoldingGuangzhoupublicbondedwarehouse.Diseasecontrolbusinesshadayear-on-yeargrowthof197%,innovativepharmaceuticalbusinesshadayear-on-yeargrowthof201%,pharmaceuticalequipmentbusinesshadayear-on-yeargrowthof15%.Thevaccinebusinessmaintaineditsleadingpositionintheregionalmarket.

3.BusinessofGuodaDrugstore:focusedonstrategy,improvedqualityandefficiency,consolidatedthestockbusinessscale,andexploredinnovativebusinessdevelopment

(1)AcceleratedthenetworklayoutofthewholenetworkandpromotetheexpansionandsubmersionofstoresBytheendof2021,GuodaDrugstorehadatotalof8,798stores,anincreaseof1,138storescomparedwiththebeginningoftheyear,amongwhich,newlyopened1,155direct-salestoresandclosed347stores,anetincreaseof808stores,andanetincreaseof93franchisedstores.Thegrowthrateofnewlyopenedstoreshitarecordhigh.244storesinvolvedintheinvestmentandacquisitionproject,7storesweretransferred.Furthersankthenetworklayout,expandedthecountymarket,hasestablished58countystores.Acceleratedthedevelopmentoffranchisebusiness,setupthefranchisemanagementdepartment,integratedthebrandadvantagesandresourceadvantagesofGuoda,unifiedthestandardprocess,andformedastandardizedmanagementmode.

(2)Focusedonbuildingself-operatede-commerceplatformsandcontinuouslypromotedonlineandofflineintegrationFocusedonthedevelopmentandconstructionofself-supportingplatforms,whichhavebeenlaunchedatmorethan6,000storesin26regionalcompanies.Builtthewe-mediaplatformofGuodaDrugstore,sofar14regionalsubsidiarieshaveopened28WeChatvideoaccounts.ImprovedtheO2Ooperationqualityofthird-parties,thenumberofonlinestoresincreasedto7,000,andtheoperatingvarietiesincreasedto2,000SKU/stores.O2Ogrossmarginkeptincreasing,andO2OdrugsalesatnightintroducedtrafficplatformssuchasPingAnGoodDoctor.Theannualsalesofe-commercebusiness(includingB2C)reached2230million,anincreaseof99.6%onayear-on-yearbasis.

(3)Continuedtoinnovatebusinessmodelsandcreatenewpharmaceuticalretail

1)Activelycarriedouttheprescriptionoutflowprojectandbuiltinternethospitals:inresponsetothe"two-channel"policyofmedicalinsurance,newlyincreased13medicalinsurancestoresthroughouttheyear;cooperatedwith16internethospitalplatforms,launchedprescriptionoutflowprojectsinShenzhen,InnerMongolia,Xinjiang,JilinandShenyang,createdone-stopserviceof"internetdiagnosisandtreatment+onlineprescriptioncirculation+homedeliveryofdrugs".JointlyandnewlyestablishedJiarenMedicalandHealth(Hainan)Co.,Ltd.,andhasobtainedthelicenseofinternethospitalandcompletedsystemconnection.

2)Createdanewretailmodelandpromotedserviceupgrading:createdthefirstnewconceptstoreintegratingSPS+bighealth,andthestoredesignwonthe"TopTenDrugstoreRetailModelInnovationAward";340stores

wereopen24hoursadaytoprovidedrugpurchaseservicesatnight;setup217pandaself-servicemedicinevendingmachinestoprovideintelligentserviceforself-servicemedicinepurchasing.

3)Exploredtheconstructionofdigitalintelligenceunattendedpharmacy:activelyexploreddigitalshelves+machinevision+multi-sensorfusiontechnologytorealizethenon-inductivepayment,artificialintelligenceassistingin-storecustomersandtrackingofpurchaseddrugs,andotherdigitalapplicationscenarios,piloted"non-inductivepayment"atShenzhenGuodaDrugstore,andpiloted"two-dimensionalbarcodepayment"atShanghaiLonghuaEastRoadstore.

(4)Continuedtopayattentiontotheimprovementofgrossprofit,andsetupaprojectteamfortheimprovementofgrossprofit(procurement,commodities,privatebrands,marketingandoperation),focusingontheadjustmentofsalesstructureandthecontrolofgrossprofitmarginofcommodities.Themainindicatorofgrossprofitmarginbasicallyreachedtheannualtarget.

(5)VigorouslypromotedthesystematicdevelopmentofprivatebrandsPromotedthebusinesssystematicconstructionofprivatebrands,OEMbusinessofprivatebrandsand"Guozhi"productsincreasedby115%onayear-on-yearbasis.Creatednewmodelsandnewgrowthpoints,andcreatedthesalesmodeloftrend-settingproduct"JieBaoNuo"cottonpadsandtheinnovativedevelopmentmodelofindustrialandcommercialcooperationofSinopharmsystem.

(6)ContinuedtobuildaprofessionalpharmaceuticalservicesystemCarriedoutdrugandinformationplatformtraining,covering31,863shopassistantsandmanagementpersonnelnationwide,focusingonfivemodules:professionalbasis,patienteducation,practicalapplication,chronicdiseasecommoditiesandrelatedcommodities.Organizedthetrainingoflicensedpharmacists,and476employeesobtainedthequalificationoflicensedpharmacists.Providedhealthmanagementservices,providedprofessionalservicesformorethan7millionchronicdiseasemembersthroughhealthdetection,memberfiling,healtheducationandmedicationguidanceandothermeans.Improvedthemembershipstickiness,GuodaDrugstorehascooperatedwiththethird-partyYiyouhuitobuildthemembershipplatform,andhascarriedout7cooperationprojectswithNovartis,Merck,Huizhi,Celebrex,Weiguandothermanufacturers.

4.Improvedquality,increasedefficiencyandsoughtbenefitsRegularlypromotedthespecialworkofimprovingqualityandefficiency.Increasedthecapitalconcentration,enjoyedthetaxpreference,revitalizedresourcesandsavedcosts.Thehumanresourcesinputandbusinessmaintainedgoodcoordination,andthepersonnelscalecontinuedtobedynamicallyoptimized.Thegrowthrateoftheteamscalewasmuchlowerthanthegrowthrateoftherevenuescale.Acceleratedthecontinuousoptimizationofthecompany'sbusinessstructure,andcontinuedtocarryoutthereductionin"accountsreceivableandinventory".Adoptedoneenterpriseonepolicyforsubordinateloss-makingenterprises,refinedthemeasurestostoplosses,andincreasedtheintensityofspecialassessment.

5.ContinuedtopromotecomprehensivedigitaltransformationPromotedintegratedmanagementofinformationandcontinuouslyoptimizedmanagementprocessesandbusinesslinkswithdigitalprojects.Strengthenedbasicmanagementofinformation,establishedastableandefficientsupportsystemforinfrastructureequipment,carriedoutdatabaseinspectionandoptimization,andcompletedtheconstructionofGuangzhou-Shenzhendisasterrecoveryplatform.Promotedtheimplementationofdigitalprojectsofmanagementplatformandbusinesssystem,improvedthefinancialsharingplatform,GuoduDrugstoreswitchedtoNCunifiedfinancialplatform,andpilotedthelaunchoffinancialrobots.Distributioncenteredonthestrategicdeploymentof"onebodyandtwowings",andcarriedouttheconnectionofautomationspecialprojectsforsupplychain,micromall,dualchannel,prescriptioncirculation,etc..GuoduDrugstorehaspromotedtheestablishmentofanumberofdigitaltransformationprojectssuchasunmannedintelligentpharmacy,optimizedbusinesssystem,promotedtheonlineuseoftheunifiedDTPsystem,andoptimizedandconstructedtheonlinemallsystemandOMSsystem.

6.Technologyenergized,optimizedtheefficiencyofthesupplychainContinuedtopromotethelogisticsnetworkplanning,atpresent,thecompanyhas61self-operated+entrustedlogisticscenters,withatotalareaof370,000squaremeters,whichhaveestablishedtheindicatorsystemforsupplychainlogisticsmonitoringthroughoutthecountry,carriedoutthenationallogisticsplanningandB2B2Cplanningfortheintegrationofwholesaleandretail,brokethescatteredlayoutof"oneplaceonewarehouse",improvedtheefficiencyofwarehousenetwork.Madeoverallarrangementsforlogisticsandwholesaleandzerointegration,jointsupply,jointinventory,andjointnetwork.Promotedthedigitalintelligencetransformationoflogisticswarehouses,createdthe3Asmartlogisticssolution(AS/RS+AMR+AI),usedOCR+AIvisualidentificationsystem,SinopharmGroupGuangdongLogisticsintroducedmechanicalarm,AGVintelligentvehicleandotherintelligentequipmenttoopenuplogisticsmanagementsystem,thewarehousingdensityincreasedby10%,overallefficiencyincreasedby25%.AGVunmannedwarehouserealizeditsownFYWMSsystemdockingAGVscheduling,realizedmulti-floorintelligentequipmentscheduling,andeffectivelyimprovedsupplychainefficiency.

7.ContinuedtopromotethecorestrategyofintegratingwholesaleandretailingExploredtheconnotationandvalueof"integratingwholesaleandretail"andpromotedtheextensionofresourcestotheupstreamanddownstreamoftheindustrialchain.Launchedtheexpansionofthepilotareafortheintegrationofwholesaleandretail,andadded10regionsincludingShanxiandInnerMongoliaforpromotioninatotalof15regions.Basedontheprincipleof"oneplace,onepolicy",thepilotprojectcontinuedtobepromoteddynamicallyandreliedontheoperationcharacteristicsofeachregiontooutputeffectivebusinessmodelsandprofitmodels.ThecoordinatedsalesofwholesaleandretailinGuangdongProvincereached1030million.Operationoftheretailstoresduringthereportingperiod:

1.Bytheendof2021,GuodaDrugstorehas7,257direct-salestores,salesrevenueamountedto16,640millionyuan;andhas1,541franchisedstores,thedistributionrevenueamountedas1,340millionyuan.

Region

RegionDirect-salestoreFranchisedoutlet
NumbersSalesrevenue(in10thousandYuan)NumbersDistributionrevenue(in10thousandYuan)
North4,6271,034,75966961,877
EastChina1,086261,09460357,809
SouthChina555157,4001177,390
CentralChina31256,6651476,397
Northwest346105,8735108
Southwest33148,49200
Total7,2571,664,2831,541133,581

Note:North:Liaoning,Shanxi,InnerMongolia,Beijing,Tianjin,Hebei,Jiling;EastChina:Shanghai,Jiangsu,Anhui,Shandong,Fujian,Zhejiang;SouthChina:Guangdong,Guangxi;CentralChina:Henan,Hunan;Northwest:Ningxia,Xinjiang;Southwest:Yunnan

(1)Therewere1,155newdirect-salestoresopenedand347closedin2021,anetincreaseof808stores.

RegionDirect-salestore
NumberofstoreincreasedTotalarea(squaremeters)
North74877,154
EastChina17019,529
SouthChina9911,382
CentralChina323,212
Northwest616,539
Southwest455,248
Total1155123,064

(2)MedicalinsurancequalificationofthestoresAsofDecember31,2021,theCompanyhas7,257chainstoreswithdirectlyselling,and6,338pharmacystoresobtainedthequalificationof“Designatedretailpharmaciesofmedicalinsurance”,representing87%ofthetotalpharmaciesoftheCompany.

RegionNumberofstoresStoresobtainedthequalificationofRatiointotalpharmaciesin

“Designatedretailpharmaciesofmedical

insurance”

“Designatedretailpharmaciesofmedicalinsurance”regions
North4,6274,17090%
EastChina1,08685579%
SouthChina55545883%
CentralChina31225080%
Northwest34629585%
Southwest33131094%
Total7,2576,33887%

2.Changeofmainsellingindex

YearPercustomertransaction(RMB)ProportionofprescriptiondrugsProportionofmedicalinsurancesalesindirect-salestoresProportionofthedirectmembersalesProportionoftransactiontimesofdirectmembers
20209052%41%67%59%
20219054%41%70%64%

(1)Classifyaccordingtoregion

RegionAmountofsalesgrowth(tax-free,in10thousandyuan)GrossmarginNetprofitratio
North209,21123%3%
EastChina-4,17621%0%
SouthChina-2,43124%1%
CentralChina-5,14826%1%
Northwest24,06420%2%
Southwest29,82841%8%

(2)Operatingefficiencyofdirect-salestoresduringthereportingperiod

RegionNumberofstoresOperatingareaofthestores(squaremeters)Dailyaverageefficiency(tax-included,Yuan/SquareMeters)Rentalefficiency(tax-included,annualsalesvolume/rental)
North4627575,9924815
EastChina1086136,4915214
SouthChina55564,1026515
CentralChina31236,3014314
Northwest34641,1157128
Southwest33140,2003311

Note:Dailyaverageefficiency=Averagedailyoperatingincome/Operatingareaofthestores;Averagedailyoperatingrevenue=Operatingrevenue(tax-included)ofthestoreintheYear/OperatingdaysofstoreintheYear.

Rentalefficiency=Annualsalesvolume/Yearlyrental

3.Top10storesintermsofoperatingrevenueThecumulativeoperatingrevenuefromtop10storestakes6.4%inGuodaDrugstore’soveralloperatingrevenue.

Nameofthestore

NameofthestoreAddress地址DateofopeningBuildingarea(m2)OperationmodePropertyownership
HeadstoreofLerentang1/F,No.57QingyuanStreet2010/9/161206DirectlyoperatedRentalproperties
Headstore(1/F,2/F)No.65TongdaoNorthStreet,HuiminDistrict,Hohhot2003/3/181290.35DirectlyoperatedRentalproperties
YiYuanZongliStoreOppositetheoutpatientdepartmentofShandaFirstHospital,No.88JiefangSouthRoad2002/9/27821.8DirectlyoperatedRentalproperties
YiYuanErYuanStoreOppositetheShandaSecondHospital,No.232WuyiRoad,XinghualingDistrict,Taiyuan,ShanxiProvince2011/2/14629.9DirectlyoperatedRentalproperties
XidanGoldenElephantNo.114XidanNorthStreet,XichengDistrict,Beijing1997/5/3783.66DirectlyoperatedRentalproperties
ShowroomNorth1/F,No.816Building,SungangStorageDistrict,Bao’anNorthRoad2006/12/23260DirectlyoperatedRentalproperties
YangzhouBaiyulanPharmacyMallNo.511WenchangMiddleRoad1991/9/1840DirectlyoperatedRentalproperties
BuXinvillageNo.101,1/FPodiumXilongLiyuan,BeiliSouthRoad,LuohuDistrict,Shenzhen2017/4/1337DirectlyoperatedRentalproperties
XiamenNewSpecialDrugstoreNo.14Shop,ZhenhaiGarden,No.97ZhenhaiRoad,SimingDistrict2005/3/30133DirectlyoperatedRentalproperties
LianhuaNorthLianhuaBuilding,LianhuaSecondVillage,HongliWestRoad,FutianDistrict,2003/12/1120.33DirectlyoperatedRentalproperties

Shenzhen

4.Structureofthecategoryatretailterminal

ShenzhenCategory

Category20212020
RxDrug54.40%52.11%
OTC25.60%25.83%
Householdhealthproducts5.30%4.29%
Healthcareproducts4.60%5.03%
TCM4.00%1.25%
Proportionofothercategories3.80%3.00%
Personalcare1.20%0.34%
Conveniencefood0.90%0.84%
Homeconvenience0.20%7.33%
Total100%100%

5.PurchasingandsuppliesGoodssuppliersofGuodaDrugstorearemainlyexternalsuppliersandassistaffiliatedenterpriseofSINOPHARMandprivatebrands.Topfivesuppliersforyearof2021:

RankingPurchaseamount(taxincluded)(10thousandyuan)Procurementratio
No.182,276.793.9%
No.265,267.623.1%
No.356,673.882.7%
No.456,620.112.7%
No.550,971.502.4%

6.MembermanagementandservicebusinessIn2021,themembershipsalesaccountedfor67%withnochangeinthesharesfrom2020.Atthesametime,thenumberofmembertransactionsin2021hasincreasedby25%fromayearearlier.Theproportionofmembertransactionsintotaltransactionsincreasedfrom56%in2018to64%in2021.Thenumberofmembertransactionshasmaintainedasteadyannualgrowthduringthecontinuousimprovementofsalesinthepastthreeyears,whichplayedakeysupportingroleinthesteadyimprovementofthecompany'sperformance.TheCompanyhasimproveditsoperatingefficiencybyoptimizingtheproductstructure.In2021,thepercustomertransactionfrommemberswas108yuanwhile82yuanfromnon-members.Themaindifference

betweenmembersandnon-membersliesinthedegreeofbrandrecognitionandthedifferentiationofthetypesofgoodspurchased.

7.WarehousingandlogisticsduringthereportingperiodBytheendof2021,GuodaDrugstorehasatotalof33logisticcenters/distributioncentersin20provinces(including9commissionedlogisticsand24ownedlogistics)andownswarehousingof190,000squaremetersnationwide;ofwhich,1463squaremetersforcoldstoragewith3880cubicmetersinvolume,whichareusedforstorageandcirculationofnormaltemperature,shadyandcool,andrefrigeratedproducts,guaranteedthecommoditydistributionforallcustomers;owns173logisticvehiclesinthecountryand20vehiclesforrefrigeration;NumberofthelogisticsworkforcenationwidefromGuodawas1387;theannualthroughputhave20,490,000piecesthroughoutthecountryandannualorderswere98,860,000pieces.

8.On-linesalesduringthereportingperiodIn2021,on-linesaleshaveagrowthof56%fromayearearlier,including33%upfromself-operatedplatform,thethird-partyO2Obusinessincreasedby93%onay-o-ybasisand8%upfromB2Cbusiness.O2Onetworklayoutcoveringmorethan7,000storesin23provincesnationwide.

9.UndertakeprescriptionoutflowandchronicdiseasemanagementWiththecontinuousdeepeningofthenationalpharmaceuticalreform,thebasisofthemodelofrealizingthehighaddedvalueofmedicinewithdoctors'laborhasbeencollapsedthroughpoliciessuchasvolume-basedprocurement,centralizedbidding,anddual-channel,andprescriptionoutflowhasgraduallybecomeatrend.In2021,theoverallprescriptionsalesofGuodaDrugstorewas9,980million(includingDTP),ayear-on-yearincreaseof21.3%.TookXinjiangregionasanexample,thesalesofprescriptiondrugsin2021was720million(includingDTP),ayear-on-yearincreaseof60%.Thesalesofprescriptiondrugshavehadamajorimpactonchaindrugstores.Inordertobetterundertaketheprescriptionoutflow,itisnecessarytostrengthenprofessionalservicecapacityandestablishchronicdiseasemanagementteam.In2021,GuodaDrugstoreorganizedweeklyonlinelearningfordiabetesspecialistsandhypertensionspecialists,covering26regions,andtrained2,593diabetesspecialistsand2,568hypertensionspecialists.Atotalof1.01millionmembersofdiabetesand970,000membersofhypertensionhavebeenrecorded,andthesalesofdiabetesandhypertensionproductsincreasedby11.7%and14.2%onayear-on-yearbasis.

10.DevelopmentofinnovativebusinessIn2021,theinnovativebusinessofGuodaDrugstorewasdrivenbythebusinessmodelofdoctor+medicine+insurance.InNovember2021,JialongHealthCo.,Ltd.,inwhichGuodaDrugstoreholdsstakes,obtainedthequalificationofHainanInternetHospital,layingafoundationforGuodaDrugstoretorealizeonlineservicesand

medicaltreatment.Intermsofcommercialinsurance,thesalesincreasedby159%onayear-on-yearbasisin2021,involvingmulti-facetedbusinessattemptssuchasfundinsurance,seriousdiseasesandchronicdiseases.Thee-commercebusinesscontinuedtomaintainrapidgrowthintheconstructionofself-operatedplatformsandO2O.Theself-operatedplatformsrealizedemployeecommissionmodel,introducedsomebighealthproductsforonlinedistribution,in2021,GuodaDrugstoreachievedbreakthroughsintheself-mediaandlivebroadcastbusiness,completedmorethan340livebroadcasts,workedwithMeituan,Ele.meandothercooperativebrandstocreateshortvideosandotherpublicity,andenhancedtheoverallbrandimageofthecompany.Meanwhile,theself-servicedrugpurchasemachinebusiness,whichhadbeenpilotedandexploredsince2019,achievedagoodbreakthroughin2021.Bytheendof2021,atotalof217self-servicedrugpurchasemachineswereinstalledinairports,stations,hospitals,enterprises,parks,pharmaciesandotherchannels.

III.Corecompetitivenessanalysis

1.StrongnetworkcoverageandlayoutRelyingontheperfectdistributionnetworkandvarietyresources,SinopharmAccordhasunifiedthewholesaleandretailresources.TheCompanyownscompletedrugdistributionnetwork,salesofallformshaveachievedasteadygrowth.

(1)Therewere27prefecture-levelcitiesinGuangdongandGuangdongfullycovermedicalinstitutionsatalllevels,smallsocialmedicalinstitutions,andretailchainsingle-storeterminals;intermsofretaildiagnosisandtreatment,DTPandhospital-sidepharmacies(SinopharmHoldingDrugstore)reaching120;

(2)GuodaDrugstorehas8,798retailstoresandchainnetworkspans20provincesandautonomousregions,coveringmorethan150citiesinChina.

2.AbundantvarietyresourcesAfteryearsofhardwork,theCompany’sdistributionbusinesshasaccumulatedrichvarietyresourcesinpharmaceuticals,consumablesandotherfields,andestablishedextensivecooperativerelationswiththousandsofdomesticmanufacturersandcommercialenterprises,andestablishedstablebusinessrelationshipswithhundredsofimportandjointventures,theoveralloperatingproductregulationsexceed60,000.GuodaDrugstoreoperatesnearly180,000merchandises.Withitsrelativelycomprehensivepurchasingnetworkandyearsofexperienceincommoditymanagement,GuodaDrugstorehasestablishedamerchandisesystemwithwidecoverage,highprofessionalization,andrichvarieties.

3.CompletelogisticsanddistributionsystemIntermsofdistribution,warehousingandtransportationnetwork,thelogisticscenterhasmorethan180,000squaremetersofwarehousespaceinGuangdongandGuangxi;5logisticscenters,23distributioncenters,and1

transferstationhaveformedasteppedlogisticsdistributionnetwork.RelyingonSinopharmHolding'snationallogisticsresourcesandcombinedwiththecarrierresources,wehaveachievedfullcoverageofnationalurbanandruralmedicallogistics.Intermsofinformatizationandautomation,ithasamodernlogisticsmanagementsystem,includingWMSwarehousemanagementsystem,TMSintelligentdispatchingsystem,logisticsvisualizationsystem,AGVgoods-to-personsystem,mechanicalarmandfive-sidedscanningcodeinstrument,torealizethedigitalizationandintelligentizationoflogistics,andcontinuouslyimprovetheefficiencyandqualityoflogisticsservices.Intermsofoperationmanagement,ithasimplementedunifiedstandardizedoperationnormsandmanagement,andimplementedintegratedqualitymanagementsystem,integratedinformationmanagement,integratedoperationmanagement.Ithasimplementedunifiedplanning,unifieddeployment,andunifiedmanagementforlogisticsresourcesmanagement.GuodaDrugstoreownsanationwidemodernlogisticsanddistributionsystem,andthelogisticswarehousesarelocatedin20provinces,has33large-and-smalllogisticswarehouses,coveringanareaofabout190,000squaremetersintotal.Theheadquarterslogisticsmanagementisresponsibleforthelogisticswarehousesmanagementofallthesubsidiaryinthecountry,makesplanningandconstructionforthelogisticsnetwork,andcollectsandanalyzestheinformationofeachwarehouse,itisthehighestlogisticsmanagementorganization.Theheadquarterslogisticsprovidesthemainlinedistributionofthecollectivelypurchasedcommoditiestoeachwarehouse,andthesubsidiaries’logisticsofeachregionprovidesallcommoditydistributiontolocalstoresandexternalcustomers.Thecompanieswithwholesalequalificationscanalsodowholesaledistributionbetweenwarehouses.

4.AdvantagesofstoreswithmedicalinsuranceresourcesanddualchannelIntermsofdistributionandretail,bytheendof2021,37pharmaciesin24citiesinGuangdongandGuangxihaveobtainedthequalificationof"dual-channel"pharmacy.Amongthem,25storesin14citiesinGuangdongprovincehaveobtainedthequalificationof"dual-channel"pharmacy,servingmorethan100,000oftheinsuredintotal,theirprofessionalandmeticulousserviceshavebeenapprovedbythelocalinsured,medicalinsurance,hospitalsandindustryassociations.Intermsofthedevelopmentofpharmaceuticalretail,thesubsidiariesofGuodaDrugstoregenerallyhaveahigherabilitytoobtainmedicalinsuranceresources,witharelativelyhighproportionofmedicalinsurancesalesandstableoperation.Bytheendof2021,therewere6,338medicalinsurancestores,andthesalesofdirectly-operatedmedicalinsurancestores,includingtax,reached16.69billionyuan,roseby17%onayear-on-yearbasis.Thesalesofdirectly-operatedmedicalinsurancecards,includingtax,amountedto7.4billionyuan,roseby26%onayear-on-yearbasis.Therewere102dual-channelstoreswithcumulativesalesof2.8billionyuan.

5.TheadvantagesofComplianceTheCompanyhadabigleadunderanincreasinglystringentregulatoryenvironmentforthereasonthatithaskeptemphasizinglegalizationandcomplianceintheprocessofoperationandmanagement.

6.TheSinopharmbrandwithuniqueinfluentialBrandoftheCompanyanddistribution,industrychild-brandandcontrollingshareholderandactualcontroller’sbrandcomedowninonecontinuousline,dependingonpowerfulforceofcentralenterprises,theCompany’spopularityandinfluenceareprominentdaybydayintheindustry.

IV.Mainbusinessanalysis

1.OverviewFoundmorein“II.MainbusinessoftheCompanyduringthereportingperiod”inSectionIIIManagementDiscussionandAnalysis”

2.Revenueandcost

(1)Constituteofoperationrevenue

InRMB

2021

20212020Increase/decreasey-o-y(+,-)
AmountRatioinoperationrevenueAmountRatioinoperationrevenue
Totaloperationrevenue68,357,809,571.99100%59,649,455,012.03100%14.60%
Accordingtoindustries
Pharmaceuticaldistribution47,415,894,164.7969.36%41,771,721,959.6070.03%13.51%
Retailpharmacy20,546,784,164.4230.06%17,626,007,757.9629.55%16.57%
Other395,131,242.780.58%251,725,294.470.42%56.97%
Accordingtoproducts
Pharmaceuticals60,694,809,091.7088.79%54,004,558,520.0790.54%12.39%
Medicaldevicesanddisposables5,831,199,233.198.53%4,010,735,060.666.72%45.39%
Diagnosticreagents994,724,313.551.46%947,638,322.631.59%4.97%
Medicalequipment441,945,690.770.65%434,797,814.200.73%1.64%
Other395,131,242.780.57%251,725,294.470.42%56.97%
Accordingtoregion
China68,357,809,571.99100.00%59,649,455,012.03100.00%14.60%
Accordingtosalesmodel
Directsales38,830,595,892.4356.80%34,359,157,282.4657.60%13.01%
Directoperated20,185,616,638.5729.53%17,322,376,918.9129.04%16.53%
Distribution8,585,298,272.3612.56%7,412,564,677.1412.43%15.82%
Franchise361,167,525.850.53%303,630,839.050.51%18.95%

Other

Other395,131,242.780.58%251,725,294.470.42%56.97%

(2)Abouttheindustries,products,regionsandsalesmodelaccountingforover10%ofthecompany’soperatingincomeoroperatingprofit

√Applicable□Notapplicable

InRMB

OperatingrevenueOperatingcostGrossprofitratioIncrease/decreaseofoperatingrevenuey-o-yIncrease/decreaseofoperatingcosty-o-yIncrease/decreaseofgrossprofitratioy-o-y
Accordingtoindustries
Pharmaceuticaldistribution47,415,894,164.7944,666,346,065.225.80%13.51%13.93%-0.34%
Retailpharmacy20,546,784,164.4215,429,302,517.2624.91%16.57%16.31%0.17%
Accordingtoproducts
Pharmaceuticals60,694,809,091.7053,331,853,978.6412.13%12.39%12.48%-0.07%
Accordingtoregion
China68,357,809,571.9960,339,298,052.2411.73%14.60%14.73%-0.10%
Accordingtosalesmodel
Directsales38,830,595,892.4336,407,984,196.226.24%13.01%13.40%-0.31%
Directoperated20,185,616,638.5715,419,114,595.9823.61%16.53%16.34%0.12%
Distribution8,585,298,272.368,258,361,869.003.81%15.82%16.33%-0.42%

Undercircumstancesofadjustmentinreportingperiodforstatisticscopeofmainbusinessdata,adjustedmainbusinessbasedonlatestoneyear’sscopeofperiod-end

□Applicable√Notapplicable

(3)Incomefromphysicalsaleslargerthanincomefromlabors

√Yes□No

IndustryItemUnit20212020Increase/decreasey-o-y(+,-)
MedicinecirculationSalesYuan67,962,678,329.2159,397,729,717.5614.42%
InventoryYuan7,632,642,537.466,298,008,008.8121.19%

Explanationonreasonsforthey-o-ychangeofmorethan30%inrelevantdata

□Applicable√Notapplicable

(4)FulfillmentofthesignificantsalescontractsorsignificantprocurementcontractsignedbytheCompanyuptothereportingperiod

□Applicable√Notapplicable

(5)ConstituteofoperationcostAccordingtoindustry

InRMB

Industries

IndustriesItem20212020Increase/decreasey-o-y(+,-)
AmountRatioinoperationcostAmountRatioinoperationcost
PharmaceuticaldistributionSalescost44,666,346,065.2274.03%39,206,149,975.9374.55%13.93%
RetailpharmacySalescost15,429,302,517.2625.57%13,265,264,981.8225.22%16.31%
OtherOthercost243,649,469.760.40%120,352,506.620.23%102.45%

NoteN/A

(6)WhetherthechangesinthescopeofconsolidationinReportingPeriod

√Yes□NoDetailsofthechangesinthescopeofconsolidationinreportingPeriodfoundmoreinNoteVIofSectionX.FinancialReport.

(7)Majorchangesoradjustmentinbusiness,productorserviceoftheCompanyinReportingPeriod

□Applicable√Notapplicable

(8)Majorsalesandmainsuppliers

MajorsalesclientoftheCompany

Totaltopfiveclientsinsales(RMB)3,290,310,903.48
Proportionintotalannualsalesvolumefortopfiveclients4.80%
Ratioofrelatedpartiesinannualtotalsalesamongthetopfiveclients0.00%

InformationoftopfiveclientsoftheCompany

Serial

SerialNameSalesamount(RMB)Proportionintotalannualsales
1No.1986,633,581.551.44%
2No.2693,712,842.711.01%
3No.3569,811,978.700.83%
4No.4542,410,122.370.79%
5No.5497,742,378.150.73%
Total--3,290,310,903.484.80%

Othersituationofmainclients

□Applicable√NotapplicableMainsuppliersoftheCompany

Totalpurchaseamountfromtopfivesuppliers(RMB)7,149,354,710.42
Proportionintotalannualpurchaseamountfortopfivesuppliers11.24%
Ratioofrelatedpartiesinannualtotalsalesamongthetopfivesuppliers1.44%

InformationoftopfivesuppliersoftheCompany

SerialSuppliersPurchaseamount(RMB)Proportionintotalannualpurchases
1No.14,198,796,922.266.60%
2No.2913,988,957.831.44%
3No.3707,108,393.821.11%
4No.4676,680,463.561.06%
5No.5652,779,972.951.03%
Total--7,149,354,710.4211.24%

OthernotesofmainsuppliersoftheCompany

□Applicable√Notapplicable

3.Expenses

InRMB

2021

20212020Increase/decreasey-o-y(+,-)Noteofmajorchanges
Sellingexpenses4,752,862,965.093,943,134,095.7520.54%Mainlyduetotheincrementalimpactbroughtbyacquisition,aswellasincreaseinthey-o-ygrowthoflaborcosts,depreciationofright-to-useassetsandrentalfeesfromcompanyexpansion,alargerincreaseincurrentsalesexpensesresultedcomparedwiththesameperiodoflastyear
Administrativeexpenses1,045,635,601.171,008,178,815.783.72%Nomajorchangesoccurred
Financecosts212,482,801.90119,855,169.8577.28%Mainlyduetothelarge-scaleacquisitionin2020,andcorrespondingconsiderationfortheacquisitionarepaidinsuccession,theinterestfromdepositdeclinedcorrespondinglyforthedecreaseofbankdeposit.

4.R&Dexpenses

□Applicable√Notapplicable

5.Cashflow

InRMB

Item20212020Increase/decreasey-o-y(+,-)
Totalcashinflowsfromoperatingactivities72,335,807,374.2663,412,452,004.1514.07%
Totalcashoutflowsfromoperatingactivities70,680,626,397.3961,909,705,405.6814.17%
Netcashflowsfromoperatingactivities1,655,180,976.871,502,746,598.4710.14%
Totalcashinflowsfrominvestingactivities173,179,559.74211,813,981.71-18.24%
Totalcashoutflowsfrominvestingactivities628,711,629.742,995,043,135.68-79.01%
Netcashflowsfrominvestingactivities-455,532,070.00-2,783,229,153.9783.63%
Netcashflowsfrominvestingactivities1,055,771,929.931,166,552,513.20-9.50%
Totalcashoutflowsfromfinancingactivities2,927,412,453.052,906,975,331.010.70%

Netcashflowsfromfinancingactivities

Netcashflowsfromfinancingactivities-1,871,640,523.12-1,740,422,817.81-7.54%
Netdecreasedamountofcashandcashequivalent-671,601,035.64-3,020,957,912.1777.77%

Mainreasonsfory-o-ymajorchangesinaspectofrelevantdata

√Applicable□Notapplicable

(1)Totalcashoutflowsfrominvestingactivitieshas79.01%downfromayearearlier,mainlybecausethepaymentforsubsidiaryacquisitionincurrentperiodbyGuodaDrugstoredecreasedcomparedwiththesameperiodofpreviousyear;

(2)Netcashflowsfrominvesting:has83.63%upfromayearearlier,mainlybecausethepaymentforsubsidiaryacquisitionincurrentperiodbyGuodaDrugstoredecreasedcomparedwiththesameperiodofpreviousyear;

(3)Netdecreasedamountofcashandcashequivalent:has77.77%upfromayearearlier,mainlybecausethepaymentforsubsidiaryacquisitionincurrentperiodbyGuodaDrugstoredecreasedcomparedwiththesameperiodofpreviousyear;andthecashreceivedfromsalesandprovinglaborserviceincreasedwiththesoaringoperationrevenueintheperiod.ReasonsofmajordifferencebetweenthecashflowofoperationactivityinreportperiodandnetprofitoftheCompany

□Applicable√Notapplicable

V.Analysisofthenon-mainbusiness

□Applicable√NotapplicableVI.Analysisofassetsandliabilities

1.Majorchangesofassetscomposition

InRMB

Year-endof2021Year-beginof2021Ratiochanges(+,-)Notesofmajorchanges
AmountRatiointotalassetsAmountRatiointotalassets
Cashandbankbalances5,126,159,080.9411.98%5,998,204,295.8715.15%-3.17%Nomajorchangesoccurred
Accountreceivable15,964,603,345.9137.31%13,799,971,014.2234.85%2.46%Nomajorchangesoccurred
Contractassets29,061,159.520.07%15,177,731.640.04%0.03%Nomajorchangesoccurred
Inventories7,621,541,595.0817.81%6,285,010,674.4615.87%1.94%Nomajorchangesoccurred
Investmentproperties113,981,497.230.27%127,444,379.940.32%-0.05%Nomajorchangesoccurred

Long-termequityinvestments

Long-termequityinvestments2,459,832,546.745.75%2,287,019,627.995.78%-0.03%Nomajorchangesoccurred
Fixassets868,626,258.432.03%854,191,083.272.16%-0.13%Nomajorchangesoccurred
Constructioninprogress49,849,506.700.12%46,631,190.230.12%0.00%Nomajorchangesoccurred
Right-to-useassets2,575,240,340.006.02%2,356,952,392.995.95%0.07%Nomajorchangesoccurred
Short-termborrowings1,930,467,146.384.51%1,612,187,020.124.07%0.44%Nomajorchangesoccurred
Contractliabilities431,303,231.371.01%368,600,357.140.93%0.08%Nomajorchangesoccurred
Long-termborrowings71,637,173.890.17%31,637,173.890.08%0.09%Nomajorchangesoccurred
Leaseliabilities1,375,427,877.283.21%1,303,054,163.903.29%-0.08%Nomajorchangesoccurred

Foreignassetsaccountforahighproportion

□Applicable√Notapplicable

2.Assetsandliabilitymeasuredbyfairvalue

√Applicable□Notapplicable

InRMB

1.Assetsandliabilitiesatfairvalue2021

Inputappliedinthemeasurementoffairvalue
QuotedpricesinactivemarketsSignificantobservableinputsSignificantunobservableinputsTotal
Level1Level2Level3
Continuousmeasurementoffairvalue
Receivablesfinancing-1,027,226,940.21-1,027,226,940.21
Otherinvestmentinequityinstruments-62,488,312.99-62,488,312.99
Othernon-currentfinancialassets--135,974,908.51135,974,908.51

-

-1,089,715,253.20135,974,908.511,225,690,161.71

2020

Inputappliedinthemeasurementoffairvalue

Inputappliedinthemeasurementoffairvalue
QuotedpricesinactivemarketsSignificantobservableinputsSignificantunobservableinputsTotal
Level1Level2Level3
Continuousmeasurementoffairvalue
Receivablesfinancing-1,404,987,700.38-1,404,987,700.38
Otherinvestmentinequityinstruments-99,488,340.28-99,488,340.28
Othernon-currentfinancialassets--120,972,350.24120,972,350.24

-

-1,504,476,040.66120,972,350.241,625,448,390.90

2.Assetsandliabilitiesdisclosedatfairvalue

2021

Inputappliedinthemeasurementoffairvalue
QuotedpricesinactivemarketsSignificantobservableinputsSignificantunobservableinputsTotal
Level1Level2Level3

Long-termborrowings

Long-termborrowings-71,637,173.89-71,637,173.89

2020

Inputappliedinthemeasurementoffairvalue
QuotedpricesinactivemarketsSignificantobservableinputsSignificantunobservableinputsTotal
Level1Level2Level3

Long-termborrowings

Long-termborrowings-31,637,173.89-31,637,173.89

WhetherthemeasurementattributeformainassetsoftheCompanyhavechangedsignificantlyinthereportingperiod

□Yes√No

3.Assetsrightrestrictiontillendofreportingperiod

2021

20212020Note

Cashandcashequivalents

Cashandcashequivalents392,646,858.59593,091,037.88(1)
Notesreceivablethatwereendorsed31,886,681.194,095,283.92(2)
Receivablesfinancingthatwerepledged-2,620,000.00(3)

424,533,539.78

424,533,539.78599,806,321.80

(1)Asat31December2021,theGrouphaddepositsofbankacceptancebills,Medicalreservefunds,andotherrestrictedcashofRMB392,646,858.59(31December2020:RMB593,091,037.88)(AnnotationV-1inSectionX.FinancialReport)(2)Asat31December2021,theGrouphadnotesreceivableofRMB31,886,681.19(31December2020:notesreceivableofRMB4,095,283.92),whichwereendorsedbutnothavematured(AnnotationV-2inSectionX.FinancialReport)(3)Asat31December2021,theGrouphadnopledgedreceivablesfinancing(31December2020:2,620,000.00)(AnnotationV-4inSectionX.FinancialReport)VII.Investmentanalysis

1.Overallsituation

√Applicable□Notapplicable

(1)Duringthereportingperiod,theCompanyacquiredthetwoenterprisesincashwithcombinedunderthedifferentcontrol,includingYunnanGuodaDishengPharmaceuticalCo.,Ltd.(70%equity)andYunnanGuodaDishengPharmacyChainCo.,Ltd.(70%equity).NewsubsidiariesareestablishedbytheCompany,includingGuodaDrugstore(Heze)Co.,Ltd.(51%equity),SinopharmHoldingGuigangPharmacyCo.,Ltd.(100%equity)andHunanGuodaDrugstoreMedicineCo.,Ltd.(100%equity).

(2)Duringthereportingperiod,theCompanycompletedthecapitalcontributionforGuodaWanminHuiminKangweiPharmacyLvliangCo.,LtdandSinopharmHoldingGuodaJianfeng(Jiangmen)MedicineChainCo.,Ltd,-thenewenterprisesestablishedin2020,andpartofthecapitalcontributionforLiaoningHuludaoGuodaDrugstoreCo.,Ltd-thenewenterpriseestablishedin2020.

(3)Duringthereportingperiod,theCompanycompletedthecapitalincreasetoShanghaiPudongPharmaceuticalandHerbalMaterialsCo.,Ltd(75%equity)andShanghaiYanghetangPharmaceuticalChainOperationCo.,Ltd.(100%equity),aftercapitalincrease,theshareholdingratioremainedunchanged.

(4)Duringthereportingperiod,theCompanyacquiredtheassetsof15directoperatedstoresunderSinopharmHoldingNantongPujiPharmacyChainCo.,Ltdand32directoperatedstoresunderShanxiHuiminKangwei

DrugstoreChainCo.,Ltdincash.

(5)Duringthereportingperiod,theCompanytakes25%equityofJialong(Hainan)HealthManagementGroupCo.,Ltd.

(6)TheCompanysubscribestheSinopharmZhongjinMedicalIndustryFund(phaseII)duringthereportingperiod.Initialcapitalcontributionhasbeenpaid.FoundmoreinAnnotationV-(12),AnnotationVIandAnnotationVIIinSectionX.FinancialReport.

2.Themajorequityinvestmentobtainedinthereportingperiod

□Applicable√Notapplicable

3.Themajornon-equityinvestmentdoinginthereportingperiod

□Applicable√Notapplicable

4.Financialassetsinvestment

(1)Securitiesinvestment

□Applicable√NotapplicableThecompanyhadnosecuritiesinvestmentinthereportingperiod.

(2)Derivativeinvestment

□Applicable√NotapplicableThecompanyhadnoderivativeinvestmentinthereportingperiod.

5.Applicationofraisedproceeds

□Applicable√NotapplicableTheCompanyhadnoapplicationofraisedproceedsinthereportingperiod.VIII.Salesofmajorassetsandequity

1.Salesofmajorassets

□Applicable√NotapplicableTheCompanyhasnosalesofmajorassetsinthePeriod.

2.Salesofmajorequity

□Applicable√NotapplicableIX.Analysisofmainholdingcompanyandstock-jointlycompanies

√Applicable□NotapplicableSubsidiaryandjoint-stockenterprisewithanimpactofmorethan10%ontheCompany’snetprofit

InRMB

Company

name

CompanynameTypeMainbusinessRegistercapitalTotalassetsNetassetsOperatingrevenueOperatingprofitNetprofit
SinopharmHoldingGuangzhouCo.,Ltd.SubsidiarySalesofdrugs,medicalapparatusandinstruments,freighttransportation,storage,loadingandunloading,glasswares,cosmeticsanddailymerchandise;otherbusinessservices,otherprofessionalconsultation,variousgoodsagencyandforself-operation,import&exportoftechnology,housesleasing3,553,249,393.1718,509,814,495.034,863,231,359.8435,615,183,095.63916,466,812.83681,500,987.20
SinopharmHoldingGuodaDrugstoreCo.,Ltd.(note1)SubsidiaryChinesetraditionalpatentmedicine,chemicalpreparations,antibiotics,bio-chemicalmedicine,biologicalmedicine,diagnosismedicine,biologicalmedicinewithfeaturesoftreatmentanddiagnosis,shapedpackingfood,chemicalproducts,andvariouscommodityandtechniqueholdbyself-supportandagencyaswellasimport&exportoftechnology1,683,333,333.0015,983,835,238.555,682,312,476.1122,477,630,028.55296,932,584.24184,049,100.87

SinopharmHoldingGuangxiCo.,Ltd.

SinopharmHoldingGuangxiCo.,Ltd.SubsidiaryRetailanddistributioninrespectofpharmaceuticalproductsandmedicalapparatusandinstruments,wholesaleandretailsofhealthproducts521,407,965.794,942,831,190.031,228,470,399.976,547,103,824.95198,578,757.26174,291,465.30

Particularaboutsubsidiariesobtainedordisposedinreportperiod

√Applicable□Notapplicable

CompanynameThemethodofobtainingandhandlingsubsidiariesduringthereportperiodTheinfluencetothewholeproductionandperformance
YunnanGuodaDishengPharmaceuticalCo.,Ltd.AcquisitionExpandthebusinesslayoutofmedicinedistributioninlocalarea,andwithoutmajorinfluenceonperformanceoftheCompany
YunnanGuodaDishengPharmacyChainCo.,Ltd.AcquisitionExpandthebusinesslayoutofmedicineretailinlocalarea,andwithoutmajorinfluenceonperformanceoftheCompany
GuodaDrugstore(Heze)Co.,Ltd.EstablishmentExpandthebusinesslayoutofmedicineretailinlocalarea,andwithoutmajorinfluenceonperformanceoftheCompany
SinopharmHoldingGuigangPharmacyCo.,LtdEstablishmentExpandthebusinesslayoutofmedicineretailinlocalarea,andwithoutmajorinfluenceonperformanceoftheCompany
HunanGuodaDrugstoreMedicineCo.,Ltd.EstablishmentExpandthebusinesslayoutofmedicinedistributioninlocalarea,andwithoutmajorinfluenceonperformanceoftheCompany

Explanationonmainholdingandstock-jointlyenterpriseNote1:ThenetprofitofGuodaDrugstore,asubsidiaryoftheCompany,decreasedby61.38%comparedwiththesameperiodoflastyear,whichwasmainlyduetotheresultsoftheimpairmenttestongoodwillandintangibleassetsthisyear.Followingtheprincipleofprudence,GuodaDrugstoremadeprovisionforimpairmentofgoodwillandintangibleassets(branduserightsandsalesnetwork)ofitssubsidiaries,ShanghaiDingqunEnterpriseManagementConsultingCo.,Ltd.(andSinopharmHoldingTianheJilinPharmaceuticalCo.,Ltd.),pleaseseedetailsintheNoticeonProvisionsforImpairmentofChinaNationalAccordMedicinesCorporationLtd.(No.:2022-03).Atthesametime,therewere1155newlyopeneddirect-operatedstoresin2021,ofwhichtheinitialinvestmentwaslargeandthebenefitshavenotyetappeared.Duetomultipleinfluencessuchasindustrypoliciesandthepandemic,theprofitspaceshrank.

X.StructuredvehiclecontrolledbytheCompany

□Applicable√NotapplicableXI.FutureDevelopmentProspects

(i)Industrypatternandtrend

(1)Astheconcentrationofthepharmaceuticalindustryincreases,thebusinessmodelwillbereconstructed.AccordingtotheGuidingOpinionsonPromotingHigh-qualityDevelopmentofDrugCirculationIndustryinthe"14th

Five-yearPlan"PeriodissuedbytheMinistryofCommerce,theoverallgoalby2025istocultivate1-3large-scaledigitalandcomprehensivedrugcirculationenterprisesofover500billionyuanand5-10large-scaledigitalandcomprehensivedrugcirculationenterprisesofover100billionyuan,andthedrugretailchainrateiscloseto70%.Itcanbeseenthatthestatesupportsandencouragestheformationofanationalandregionalleadingpattern,whethertheupstreamoriginaldrugmanufacturers,genericdrugmanufacturers,orthemidstreamdistributionenterprises,willacceleratetheriseofmarketconcentration,whilethesmallandmediumsizecirculationenterpriseswithweakcomprehensivestrengthwillbeeliminated,thebusinessmodelofthecirculationindustrywillbereconstructed.

(2)Withtheaccelerationandexpansionofcentralizedprocurement,thegrossprofitmarginisfurtherreduced.Thescopeofvolume-basedcentralizedprocurementwillcontinuetoexpand,drugpriceswillfurtherdecrease,andgrossprofitmarginwillbefurtherreduced.Chemicalmedicine,Chinesepatentmedicineandbiologicalmedicinewillcarryoutvolume-basedcentralizedprocurementinanall-roundway,andhigh-valuemedicalconsumableswillfocusonorthopedicconsumables,drugballoons,dentalimplantsandothervarieties.Atthesametime,cross-regionalalliancevolume-basedprocurementwithquantitywillgraduallybecomeatrend;whilemoreandmorevarietiesofChinesepatentmedicineandbiologicalagentswillbeincludedinthecentralizedprocurement.Withthefurtherexpansionofcentralizedprocurement,thegrossmarginofpharmaceuticalconsumableswillfurtherdecline.

(3)Theinnovation,transformationandupgradingofthepharmaceuticalmarkethasacceleratedthereshuffleoftheindustry.Asthemedicalreformentersthedeepend,themedicalecologyhaschangedgreatlyduetovolume-basedprocurementandmedicalinsurancenegotiation.Policiesencourageinnovation.Inthefaceofthenewpattern,traditionalpharmaceuticalenterprisesseektransformationinmarketingmodels,researchanddevelopmentstrategies,overseaslayoutsandotheraspectstocopewithorleadthedevelopmentoftheindustrytrends.Accordingtothenationalpolicyorientationandtheincreasinglyfiercecompetitionamongcirculationenterprises,circulationenterpriseswillconstantlypromotebusinessmodelinnovationandserviceinnovation,andimprovebusinessperformancewhilesteadilydevelopingthescale.

(4)Theincreaseinmarketdemandforpharmaceuticalconsumptionanddiversifiedpaymentfundswilljointlysupportthescaleofthepharmaceuticalretailmarket.AccordingtotheforecastofMENET.COM.CN,by2029,themarketsizeofretaildrugstoreterminalalonewillreach1.15trillionyuan.

(5)Innovativedrugs,traditionalChinesemedicineandothercategorieswillbecomethemainforcedrivingthepharmaceuticalretailmarketinChina.Accordingtothe"14thFive-YearPlan"forPharmaceuticalIndustryDevelopmentjointlyissuedbytheninegovernmentdepartmentsonJanuary2022,aninnovation-drivendevelopmentpatternwillbefullyformed,withmoreoriginalinnovativedrugsand"leading"products,Chinawillbecomeanimportantsourceofglobalpharmaceuticalinnovation.AccordingtotheforecastofIQVIA,inthenextfiveyears,drivenbytheincreaseinthenumberandconsumptionofinnovativedrugsonthemarket,China'spharmaceuticalexpenditurewillgrowata3.8%CAGR,andthegrowthwillbemainlydrivenbytheinnovatorbranddrugs,withaCAGRof10.4%from2022to2026.Retailpharmacieswillenjoythiswaveofout-of-hospitalmarketdividendoftheseinnovativedrugsthroughthe"dualchannel"qualification.

(6)Withthereformof"linkageofmedicalservices,medicalinsurance,andmedicine",thedrugpriceshavedroppedcomprehensively,theretailpharmaciesneedtoacceleratethedevelopmentandtransformationdrivenbyinnovativeservicesandcultivatenewrevenuegrowthpoints.Comparedwiththetransformationandinnovationideasoftheworld-classenterprises,suchastheinnovativemedicalandhealthservicestrategyofWalgreensBootsAlliance,andvigorouslydevelopshealthcareclinicservicessuchasVillageMD,andHealthCorner.(ii)Possiblerisks

1.TheCOVID-19pandemiccontinuestoaffect.AlthoughtheCOVID-19pandemichasbeeneffectivelybroughtundercontrolinChina,therearestillsporadicoutbreaks.Incaseofanoutbreakwithinthecompany'sbusinessarea,thedeclineofoutpatientvisitsandoutpatientdrugconsumptionwillstillhaveasignificantimpactonthecompany'sbusinesswithinthecurrentstrictpreventionandcontrolmeasures.

2.Policyrisks:Nationalpolicieshavedirectguidanceandinfluenceonthedevelopmentofpharmaceuticalretailindustry.Underthepremiseofcontrollingthecostofmedicalinsurance,thecentralizedandvolume-basedprocurementofdrugshavebecomenormalizedandinstitutionalized,andthepricesofdrugshavedroppedinanall-roundway.Inadditiontofull-scaleincreaseinthevarietyandquantityofdrugsbycentralizedprocurement,drugpricelinkagemechanismhasalsobeensuccessivelyimplementedinsomeregions.Thesupplychainabilityandprofitabilityofretaildrugstoresarefacingchallenges.Atthesametime,thesupervisionofmedicalinsurancefundisbecomingstricter.Theinformatizationconstructionofmedicalinsurancewillbeacceleratedcomprehensively,andanationalunifiedmedicalinsuranceinformationplatformwillbebuilt.Inthefuture,thenationalunifiedmedicalinsuranceinformationplatformwillbeverticallyandhorizontallyconnected,internallyandexternallyinterconnected,andecologicallyintegrated,andthemedicalinsuranceinformationwillbecomprehensivelytransparent.Thesupervisionofmedicalinsurancefundwillbeupgradedcomprehensively,withhigherrequirementsoncomplianceoperationofpharmacies,thecompliancecostsofpharmacieswillincrease.

PoliciesonrulesofInternetdiagnosisandtreatmenthavebeenissued,andstrictrestrictionshavebeenimposedonissuingprescriptionsforthefirstvisitandonthestatisticsofmedicationinformation.Businessoperationsofdrugstoressuchasonlinediagnosisandtreatmentandpharmaceuticale-commercealsofacegreatercompliancerequirements.

3.Marketchangesandmarketcompetitionrisks:Thepharmaceuticalretailindustryhasenteredastageofhigh-qualitydevelopment,thegrowthrateofmarketsizehassloweddown,whiletheoverallnumberofstoresisstillincreasing.Inthisenvironment,thecompetitionintheindustryintensifies,allmajorchainstoresareseizingtheopportunitytoexpandtheirstorevolumebymeansofself-opening,franchising,andmergersandacquisitions,andtheindustryconcentrationcontinuestoincrease.Theuptrendofcustomerflowinofflinedrugstoresisblocked,whichisnotonlysqueezedbyonlinechannels,butalsoaffectedbythereturnofsomepatientstohospitalscausedbycentralizedprocurement.Retailpharmaciesfacechallengesfromhorizontalcompetition,onlinechannelcompetition,andcompetitionfrommedicalinstitutions,especiallyprimarymedicalinstitutions.Asascale-leadingchaindrugstoreenterpriseintheindustry,GuodaDrugstorehasastorenetworkcovering20provincesandcitiesacrossthecountry.BackedbySinopharmGroupandSinopharmAccord,ithascompetitiveadvantagesinsupplychaincapabilities,hospitalchannelresources,brandvalue,andlogisticscapabilities.However,astheindustrycompetitionintensifies,therearestillchallengestomaintaintheindustry'sleadingposition,scaleandcompetitiveadvantage.

4.Publicopinionrisks:ThepopularityoftheInternethasledtotherapidspreadofnetworkinformation.Withthecontinuousexpansionofonlinesocialnetworks,thespreadofinformationisnotonlythroughtraditionalmedia,butalsothroughthedynamicsofsocialaccountsharing,sopublicopinionhasbecomeamoreimportantrisk.

5.Compliancerisks:Inrecentyears,drugmanagementhasbecomestricterandGSPregulationshavebecomemorestringent.Forexample,theappearanceinconformityofTraditionalChineseMedicinedecoctionpiecesandthemoldandmoth-eatendrugsarealltreatedascounterfeitandinferiormedicines.Penaltiesforviolationshavebeenincreased.Inadditiontoexposureandgraduallyrisingfines,penaltiessuchasrevocationofmedicalinsurancequalificationshavealsooccurredfromtimetotime.Theimplementationoftheneweditionofthe"DrugAdministrationLaw"meansthatwewillfacethemostseverepunishmentunderthestrongestsupervision.Governmentmarketmanagementactivitiessuchasmonitoring,inspectionandpunishmentincooperationwithpandemicmanagementarealsobecomingmorefrequent.

6.Theriskofgoodwillimpairments:On31December2021,thebookvalueofgoodwillinconsolidatefinancialstatementlistedas2,776millionYuan,anddistributedtotheassetsgroupofdistributiondivisionandretaildivision.InaccordancewiththeAccountingStandardsforBusinessEnterprises,theCompanycarriedoutannualimpairmenttestforthegoodwill.ImpairmentofgoodwillwillreleasedontheNoteIII.-17and33,NoteV-18listedundertheSectionX.FinancialReport

(iii)Thecompany’sbusinessplanIn2022,SinopharmAccordwillcontinuetocomprehensivelystrengthentheleadershipoftheparty,accuratelygraspthenewdevelopmentstage,thoroughlyimplementthenewdevelopmentconcept,andacceleratetheconstructionofanewdevelopmentpattern.Takinghigh-qualitydevelopmentasthemainlinegoal,guidedbythe"14thFive-YearPlan"strategicplan,focusingoncustomervalue,andtaking"technologicalempowerment,serviceupgrade,wholesaleandretailintegration,andindustry-financedualdrive"asthecoredevelopmentmeasures,wewillbuilda"1-2-6"digitalmedicalandhealthcareservicesystembasedonomni-channel,full-category,andfull-lifecycle.,paycloseattentiontothedevelopment,changesandtrendsofthenationalmedicalreformpolicy,strengthentheresearchandjudgmentofindustrypolicytrends,coordinateeffortstoensuresteadygrowth,makestructuraladjustments,promoteinnovation,strengthenscienceandtechnology,andguardagainstrisks,and"seekchangeinstability"and"increasestabilityinchange"toachievehigh-qualitydevelopment.

1.Puttheemphasisondevelopmentofbothinternalgrowthandexternalexpansion,andmaintainaleadingpositionintheindustryStrengthentheguidanceofstrategicplanning,whilesteadilydevelopingtraditionalbusinesses,wewilldoagoodjobininternalinnovationanddevelopmentandexternalM&Aexpansiontocontinuouslyincreasemarketshares.Strengthenthedistributionsegmentandconsolidatetheleadingposition;expandtheretailsegmentandimproveprofitability.

2.Comparewithfirst-classmanagementimprovementandenhanceenterprisecompetitivenessMakeupforweakness,deepenorganizationalreformandmanagementinnovation,promotethemodernizationofmanagementcapabilitiesandmanagementsystems,andimprovesupportforstrategyimplementationandbusinesstransformation.Focusonhumanresourceefficiencyandbenefitgoals,optimizethedevelopmentofmanagement,talents,andorganizations,andmaintainahighmatchingrateandahighsupplyrateamongtalents,strategies,andbusiness.Customer-oriented,insistonmanagementimprovementandvaluecreation.Focusingoncustomerneedsandcombinedwithbusinessscenariostoacceleratetheapplicationofbigdata,artificialintelligenceandothertechnologies,strengthenthepromotionofdigitaltransformationprojects,anddriveinnovativeservicesandsupplychainupgradeswithdigitization.

3.Adjustthestructuretopromotetransformationandbuildanewvalue-drivenbusinessmodelGraspthechangesindemandintheupstreamanddownstreamoftheindustrialchain,focusoncustomervalueorientation,buildanomni-channel,full-industry-chain,andfull-life-cycleservicesystem,andwindevelopmentopportunitiesintheinnovativeservicetrack.

4.DistributionofSinopharmAccordfocusesonthestrategyof"onebodyandtwowings",andcontinuesthetransformation,innovationanddevelopment

Strengthenstrategicgoalorientation,facechanges,focusonshare,andimproveefficiency.Continuetodevelopretailbusiness,improvenetwork,enrichvarieties,coordinatewholesaleandretail,andmakecharacteristicdevelopment,soastostrengthenandupgradecompetitiveadvantages.Establishamarketingservicesystem,integratewholesaleandretailnetworkresources,expandCSOproductprojects,promotemarketingsystemandteambuilding,andimprovethemarketingservicecapabilitiesofmedicalinstitutionsandendconsumers.Continuetopromotebusinesstransformationandinnovation,integratedigitaltransformationandsupplychainoptimizationintothebusiness,andachievemodelbreakthroughandscaleimprovementofinnovativebusiness.Providecomprehensive4Doverallservicesolutionstoenhanceintegratedservicecapabilities;continuetoexpandtheleadingadvantagesofSPDbusiness,promotetheupgradeofserviceplatformsandoperationandmaintenancecapabilities;continuetopromotetheupgradeofvalue-addedservicesofthird-partylogistics,andexploreandbuildwarehousedistribution+coldchain+SPD+2C+logisticsservicecapability.

5.GuodaDrugstorequicklyexpandsitsscale,anddigsdeepintothemarkettoimproveefficiencyStrengthenstrategicguidance,furtherincreaseregionalbusinessintegrationandacceleratethemergersandacquisitionsofintentionalcooperationprojects,enhanceself-openingstoresandfranchisecooperation,acceleratenationalretaillayout,furtherfillblankmarkets,andexpandnewprovincial-levelmarketlayouts.Continuetopromotethenationalintegratedoperation,enhancetheadvantagesofeconomiesofscale,andbuildthecorecompetitivenessofGuoda.Strengthentheonlinelayout,focusonincreasingtheconstructionofself-operatedplatformsandInternethospitals,andexplorethelayoutofcommercialhealthinsurance.Activelyrespondtothe"dual-channel"policy,andstrivetoachievefullcoverageofdual-channeldesignatedpharmaciesinallprovincesandcities.Strengthenthebreakthroughofallproductsandthecombinedactionbetweenpurchaseandsales,systematicallypromotetheimprovementofgrossprofitmargin,andcontinuetopromotethedevelopmentofitsownbrandproductseriesandtheconstructionofmarketingsystem.Promotetheintegrationofretailbrandresourcesinanorderlymanner,andstrengthentheretailbrandinfluenceof"GuodaDrugstore".Continuetopromotedigitaltransformation,andcontinuouslyimproveprofessionalservicecapabilities.

6.Promotethefullcoverageofwholesaleandretailintegration,andexplorevariousmodelsforoperationContinuetopromotethefusionofwholesaleandretailintegrationofSinopharmAccord,inaccordancewiththemodelof"onepolicyforoneplace,dynamicpromotion"andbasedontheoperationcharacteristicsofvariousregions,andoutputeffectivebusinessmodelsandprofitmodels.Onthebasisoftheoriginal15pilotareas,add13areastoachievefullcoverageof28areasacrossthecountry.Encourageregionalexplorationofbusinessintegration,equityintegration,organizationalintegration,membershipstoresandothermodeloperations,andcontinuetopromoteall-roundcoordinationofwholesaleandretailintegrationthroughbusinessprocurementcoordination,logisticscoordination,combinedactionofretailequipment,andmanagementcoordination.

7.Guidebyhigh-qualitypartybuilding,andcreateacleanandpositivedevelopmentenvironment

Comprehensivelystrengthentheparty'spoliticalandideologicalbuilding,andadheretotheintegrationofpartyleadershipandcorporategovernance.Deepentheconstructionofprimarypartyorganizations,andpromotecomprehensiveandstrictgovernanceoftheparty.Cultivateandcreateawarm,profound,broadandhighcorporateculturethatmatchesthedevelopmentofthe"14

th

Five-YearPlan"strategicplanofSinopharmAccordtohelpthedevelopmentofthecompany.

XII.Receptionofresearch,communicationandinterviewsduringthereportingperiod

√Applicable□Notapplicable

Time

TimeLocationWayReceptionobjectTypeMaincontentsofthediscussionandtheinformationprovidedBasicsituationindexofinvestigation
2021-04-12AccordPharmacyBldg.TelephoningInstitutionsInstitutionsPerformanceandoperationoftheCompanyRecordoftheinvestorrelationsactivities(No.:2021-1)
2021-04-28AccordPharmacyBldg.FieldresearchInstitutionsInstitutions,individualBasicoperatingsituationoftheCompanyandfutureoutlookResolutionoftheAnnualGeneralMeeting2020(NoticeNo.:2021-19)
2021-06-25AccordPharmacyBldg.FieldresearchInstitutionsInstitutions,individualBasicoperatingsituationoftheCompanyResolutionoftheFirstExtraordinaryShareholders’GeneralMeetingof2021(NoticeNo.:2021-25)
2021-11-30AccordPharmacyBldg.OtherIndividualIndividualBasicoperatingsituationoftheCompanyandfutureoutlookOnlinecollectivereceptiondayforinvestorsoflistedcompaniesinShenzhen2021https://rs.p5w.net/html/130747.shtml

SectionIV.CorporateGovernance

I.CorporategovernanceoftheCompanyDuringthereportingperiod,thecompanystrictlyfollowedtherequirementsoftheCompanyLaw,SecuritiesLaw,GovernmentGuidelinesforListedCompaniesandtherelevantlawsandregulationsoftheChinaSecuritiesRegulatoryCommissionandShenzhenStockExchange,continuouslyimprovedthecompany’scorporategovernancestructure,andestablishedandimprovedthecompany’sinternalcontrol.Thegeneralmeetingofshareholders,theboardofdirectorsandtheboardofsupervisorshavestandardizedoperations,independentdirectorsandspecializedcommitteesoftheboardofdirectorshaveperformedtheirrespectiveduties,continuouslystrengthenedcompanymanagement,controlledandpreventedrisks,standardizedcompanyoperations,andimprovedoperationalefficiency.Thecompanygraduallyformedagovernancemechanismwithclearpowersandresponsibilities,standardizedoperations,mutualcoordination,andmutualchecksandbalancesamongpowerinstitutions,decision-makinginstitutions,supervisoryinstitutions,andmanagers.Duringthereportingperiod,thecompanystrengthenedinternalcoordinationandcommunication,revisedandimprovedinternalcontrolmechanismasRulesofProcedureoftheBoardandMeasuresfortheAdministrationofRelatedTransactions,andsortedoutvariousworkprocesses,andfurtherimprovedthecompany’smanagementqualityandoperationalefficiency.Atthesametime,itcontinuouslystrengthenedthemanagementofinsideinformation,furtherimprovedtheprocesssystemsofinsideinformationmanagement,strengthenedthedisclosureofinformation,improvedthemanagementofinvestorrelations,strengthenedandimprovedthemanagementofaffiliatedcompanies,sothatthecompany’sstandardoperationlevelhasbeenfurtherimproved.Inthefuture,thecompanywillcontinuetostrictlyimplementthespecificrequirementsoftheregulatoryagencies,strengthentheimplementation,improvetheevaluationmechanism,andimprovethecorporategovernancestructure,atthesametime,strengthensupervision,andstrivetopromotegovernancetoahigherlevel.

IsthereanydifferencebetweentheactualconditionofcorporategovernanceandrelevantregulationsaboutcorporategovernanceforlistedcompanyfromCSRC?

□Yes√NoTherearenodifferencesbetweentheactualconditionofcorporategovernanceandrelevantregulationsaboutcorporategovernanceforlistedcompanyfromCSRC.

II.IndependenceoftheCompanyrelativetocontrollingshareholderandtheactualcontrollerinensuringtheCompany’sassets,personnel,finance,organizationandbusinessesTheCompanytotallyseparatesfromthecontrollingshareholdersinbusiness,personnel,assets,institutions,financialandotheraspects,withindependentandcompleteself-managementability.

1.Thebusiness:theCompanywasindependentfromcontrollingshareholders,havingacompletebusinesssystemandself-managingability;thecompanyhasindependentprocurementandsalessystemthusallprocurementandsalesisinchargeofthepurchasingdepartmentandsubordinatesubsidiary;eachsegmentisseparated;theCompanyisalegalmarketpersonwithindependentoperation.

2.Personnel:proceduresofthecontrollingshareholdernominatingdirectorsandgeneralanddeputygeneralmanagerarelegal;nointerveneontheappointmentandremovalofpersonnelmadebytheboardofdirectorsandshareholders’meetinghappened;theCompanysetupindependenthumanresourcedepartment,responsibleforassessment,trainingandsalaryreviewonstaff,makingrulesandregulationsandhandbooktheemployeesshouldabideby.Labor,personnel,wagesandpension,medicalinsuranceandotherinsuranceareindependentlymanaged.

3.Institution:productionandoperationmechanismandadministrativemanagementiscompletelyindependentfromthecontrollingshareholderoractualcontroller;officesandsitesofbusinessoperationseparatefromthecontrollingshareholder;theCompanyestablishedcorporategovernancestructurewheretheboardofdirectors,boardofsupervisorsandmanagerscarryouttheirdutiesandexercisetheirrespectivedutiesinaccordancewithrelevantprovisionsofthearticlesofassociation.

4.Asset:propertyandrightsrelationshipbetweentheCompanyandthecontrollingshareholderisclear,withindependentoperations;thecompanyhasindependentproductionsystem,auxiliaryproductionsystemandsupportingsystem;industrialpropertyrights,trademarks,non-patentedtechnologyandotherintangibleassetsownedbytheCompanyanditssubsidiary.

5.Financialaspects:theCompanyestablishedindependentfinancialdepartmentsandindependentfinancialaccountingsystem;theCompanyopenedabankaccountindependently;thefinancialstaffisindependentwithouttakingpart-timeandreceivingremunerationinthecontrollingshareholder;theCompanypaystaxindependently.

III.Horizontalcompetition

√Applicable□Notapplicable

Type

TypeTypesofaffiliationswithlistedcompaniesNameofcompanyNatureofthecompanyReasonSolutionmeasureWorkscheduleandfollow-upplan
HorizontalcompetitionControllingshareholderSinopharmHoldingSASACDistributionsubsidiaryofSinopharmHoldingestablishedsomesocialretailpharmacy,whichmighthavehorizontalcompetitionwiththeGuodaDrugstore,theInDecember2016,SinopharmHoldingissuedacommitmentletterofavoidinghorizontalcompetitionwithSinopharmAccord,andpromiseOnJuchaoWebsite,theNoticeonRelatedTransactionsofControllingShareholdersMeettheCommitmentsandSolvetheHorizontalCompetitionAmongSocial

subordinateenterpriseofthelistedcompanyafterrestructuring

subordinateenterpriseofthelistedcompanyafterrestructuringtosolvethehorizontalcompetitioninrespectofpharmaceuticalretailbusinessinanappropriatewaywithinfiveyearssincethedatewhenreorganizationcompleted

RetailPharmacy(NoticeNo.:2021-42)andtheNoticeonProgressofEnteringtheLetterofIntentbyControllingSubsidiary(NoticeNo.:2022-05)werereleasedbytheCompanyrespectivelyonDecember31,2021andMarch25,2021,matterswithhorizontalcompetitionconcernedarecontinuingtoberesolved.
HorizontalcompetitionTheactualcontrollerSINOPHARMSASACDistributionsubsidiaryofSINOPHARMestablishedsomesocialretailpharmacy,whichmighthavehorizontalcompetitionwiththeGuodaDrugstore,thesubordinateenterpriseofthelistedcompanyafterrestructuringInDecember2016,SINOPHARMissuedacommitmentletterofavoidinghorizontalcompetitionwithSinopharmAccord,andpromisetosolvethehorizontalcompetitioninrespectofpharmaceuticalretailbusinessinanappropriatewaywithinfiveyearssincethedatewhenreorganizationcompletedOnJuchaoWebsite,theNoticeonRelatedTransactionsofControllingShareholdersMeettheCommitmentsandSolvetheHorizontalCompetitionAmongSocialRetailPharmacy(NoticeNo.:2021-42)andtheNoticeonProgressofEnteringtheLetterofIntentbyControllingSubsidiary(NoticeNo.:2022-05)werereleasedbytheCompanyrespectivelyonDecember31,2021andMarch25,2021,matterswithhorizontalcompetitionconcernedarecontinuingtoberesolved.

IV.AGM(AnnualGeneralMeeting)andextraordinaryshareholders’generalmeetingheldinthePeriod

1.AGM

SessionofmeetingTypeRatioofinvestorparticipationDateDateofdisclosureIndexofdisclosure
AnnualGeneralMeetingof2020AGM64.31%April28,2021April29,2021“NoticeofResolutionofAGMof2020”No.:2021-
19
Firstextraordinarygeneralmeetingof2021Extraordinarygeneralmeeting63.27%June25,2021June26,20212021-25“NoticeofResolutionofFirstextraordinarygeneralmeetingof2021”No.:2021-25

2.Requestforextraordinarygeneralmeetingbypreferredstockholderswhosevotingrightsrestore

□Applicable√Notapplicable

V.Directors,supervisorsandseniorofficers

1.Basicinformation

NameTitleWorkingstatusSexAgeStartdatedofofficetermEnddateofofficetermSharesheldatperiod-begin(share)StockoptionsNumberofrestrictedsharesgranted(share)Numberofsharesincreasedinthisperiod(share)Numberofsharesdecreasedinthisperiod(share)Otherchanges(share)Sharesheldatperiod-end(share)Reasonsforincreaseordecreaseofshares
ChenShengqunIndependentdirectorCurrentlyinofficeM59April17,20181,500000001,500
ChenChangbinDeputyGM,SecretaryoftheBoardCurrentlyinofficeM54January13,20152,651000002,651
Total------------4,151000004,151--

Duringthereportingperiod,whethertherewasanydepartureofdirectorsandsupervisorsanddismissalofSeniorOfficers

√Yes□NoInMarch2021,Mr.LiDongjiuappliedforresignationasdirectorof8

thBOD,memberofstrategycommitteeoftheBoardandmemberoflegal&compliancecommitteeoftheBoardduetotheworkadjustment.InNovember2021,Mr.ZhouSongappliedforresignationasdirectorof9

th

BOD,memberofriskinternalcontrol&auditingcommitteeoftheBoardandmemberoflegal&compliancecommitteeoftheBoardduetotheworkarrangement.

Changesofdirectors,supervisorsandseniorexecutives

√Applicable□Notapplicable

Name

NameTitleTypeDateReasons
LiDongjiuDirectorOfficeleavingMarch2,2021Adjustmentofworkarrangement,andnolongerservesasDirectorandotherpositionoftheCompany
ZhaoXiaochuanDeputyGMAppointmentMay21,2021Adjustmentofworkarrangement
JiangXiuchangDirectorLeavingattheendofthetermofofficeJune25,2021ChangeofBoardofDirectors
LiXiaojuanDirectorBeelectedJune25,2021ChangeofBoardofDirectors
ZhouSongDirectorBeelectedJune25,2021ChangeofBoardofDirectors
LiuTianyaoDeputyGMLeavingattheendofthetermofofficeSeptember30,2021Leavingattheendofthetermofoffice
ZhouSongDirectorOfficeleavingNovember3,2021Adjustmentofworkarrangement,andolongerservesasDirectorandotherpositionoftheCompany

2.Post-holding

Professionalbackground,majorworkingexperienceandpresentmainresponsibilitiesinCompanyofdirectors,supervisorsandseniorexecutiveatthepresent

1.MembersofBODMr.LiuYong,joinedSinopharmGroupCo.,LtdinJanuary2003andservesasexecutivedirectorandpresidentofSinopharmHoldingsinceNovember2017andactsasdeputypartysecretaryofSinopharmHoldingsinceJanuary2018;Mr.Liuownover26yearsofworkingexperience,amongwhich,over23yearsarerelatedtomanagementexperienceinmedicineandhealthcareproductsindustry.Heisapharmacist-in-chargeandlicensedpharmacist.DuringtheperiodfromJuly1992toJuly1999,Mr.LiuworkedintheShanghaiPharma,andsuccessivelyservedasdeputygeneralmanagerofthemarketingdepartmentofShanghaiBranchofChinaNationalPharmaceuticalGroupCorporationandShanghaiGuodaDrugstoreChainCompanyLimitedfromJuly1999toApril2003.Mr.LiuservedasGMandpartysecretaryoftheSinopharmHoldingShenyangCo.,LtdfromApril2003toNovember2009;adeputypresidentofSinopharmHoldingfromJanuary2009toNovember2017;theSecretaryoftheBoardofSinopharmHoldingfromOctober2016toNovember2017andGeneralCounselofSinopharmHoldingfromJanuary2014toDecember2017.Currently,healsoactsastheDirectorofSINOPHARM,SinopharmHoldingGuodaDrugstoreCo.,Ltd.,ChinaNationalScientificInstruments&MaterialsCo.,LtdandChinaNationalMedicalEquipmentCo.,Ltd.;andexecutiveDirectorofSinopharmHoldingDistributionCenterCo.,Ltd.,andchairmanofSinopharmHoldingHongKongCo.,Ltd.andSinopharm

CICC(Shanghai)PrivateEquityInvestmentManagementCo.,Ltd.Mr.LiuservesasDirectorofthe7

thBODoftheCompanysinceJanuary2017andChairmanofthe7

th

,8thand9thBODoftheCompanysinceOctober2017.Mr.LianWanyongisvicepresidentofSinopharmGroupCo.,Ltd.HejoinedChinaNationalPharmaceutical(Group)CorporationGuangzhouCompanyin1996andsuccessivelyservedasproductdirectorofYuexingPharmaceuticalCo.,Ltd.andseniorproductmanagerofHongKongTianjianInternationalCo.,Ltd.FromAugust2002toJanuary2004,heservedasdeputymanagerofthefinancialdepartmentofBarrlaboratories,Inc.,USA.FromJanuary2004toJune2005,hewasappointedasmanagerofoperationalauditdepartmentofChinaMedicinalMaterialsGroupCompany.FromJuly2005toJanuary2008,hewasappointedasdeputydirectoroffinancialassetmanagementdepartmentanddirectorofinvestmentmanagementdepartmentofChinaNationalPharmaceutical(Group)Corporation.FromDecember2010toFebruary2014,heservedasdeputygeneralmanagerofBeijingSinopharmAssetManagementCenter,fromApril2014toJanuary2018,heservedasdeputydirectorofthePolicyResearchOfficeofChinaNationalPharmaceuticalGroupCorporation.SinceJanuary2018,hehasbeenservingasvicepresidentofSinopharmGroupCo.,Ltd.,andMr.LianisconcurrentlyservingaschairmanofSinopharmHoldingAnhuiCo.,Ltd.,SinopharmHoldingHubeiCo.,Ltd.,andSinopharmHoldingChangshaCo.,Ltd.,anddirectorofChinaNationalMedicinesCorporationLtd.,directorofSinopharmCICC(Shanghai)PrivateEquityInvestmentManagementCo.,Ltd.,directorofWestChinaDentalCo.,LtdandDirectorofSinopharmHoldingHunanCo.,Ltd.HeservesasDirectorof8

th

and9thBODoftheCompanysinceApril2018.Ms.LiXiaojuanisthechieffinancialofficerofSinopharmGroupCo.,Ltd.FromApril2001toFebruary2005,shesuccessivelyservedastheprojectmanagerofBeijingTianhuaAccountingFirmandthedeputydirectorofthestrategiccooperationdepartmentofTOPSUNGroupCo.,Ltd.;fromFebruary2005toAugust2010,shesuccessivelyservedasthemanagerofthefinancialdepartment,directoroftheauditingandsupervisoryoffice,andmanageroftheauditdepartmentofChinaNationalPharmaceuticalIndustryCo.,Ltd.;fromAugust2010toFebruary2021,shesuccessivelyservedasdeputydirectoroftheinvestmentmanagementdepartment,deputydirectoranddirectoroftheauditdepartment,anddirectorofthefinancedepartmentofSinopharm;ChiefFinancialOfficerofthecompany;sinceMarch2021,sheservesasthechieffinancialofficerofSinopharmGroupCo.,Ltd.,andnowconcurrentlyservesasthepresidentofSinopharmGroupGuizhouCo.,Ltd.andHutchisonWhampoaSinopharmPharmaceutical(Shanghai)Co.,Ltd.,anddirectorofChinaNationalMedicinesCorporationLtd.,andSinopharmHoldingHongKongCo.,Ltd.,andsheisadirectoroftheninthboardofdirectorsofthecompanyfromJune2021.Mr.WuYijian,secretaryoftheboardofSinopharmGroupCompanyLimited,andconcurrentlyservesasthepresidentofmanysubsidiariessuchasSinopharmGroupShanxiandSinopharmInnerMongolia.SinceJuly1993,heservedinSanjiuEnterpriseGroupandsuccessivelyservedasthesalesdirectorofSanjiuMedical&PharmaceuticalTradingCo.,Ltd.,thechiefoperatingofficerofSanjiuMedical&PharmaceuticalChainCo.,Ltd.,andthedeputygeneralmanagerofShanghaiSanjiuTechnologyDevelopmentCo.,Ltd.SinceJune2004,heservedinFosunPharmaceuticalGroup,andsuccessivelyservedasgeneralmanagerofShanghaiFosun

PharmaceuticalInvestmentCo.,Ltd.,generalmanagerofShanghaiFosunPharmaceuticalCo.,Ltd.,andgeneralmanagerofShanghaiFumeiPharmacyCo.,Ltd.From2014totheendof2015,heservedasthevicepresidentofShanghaiYuyuanTouristMartCo.,Ltd.Mr.WuiscurrentlyservingasthepresidentofChinaNationalShanxiCo.,Ltd,SinopharmHoldingShanxiCo.,ltd,SinopharmHoldingInnerMongoliaCo.,Ltd.,ChinaNationalHealthOnlineCo.,Ltd,andadirectorofSinopharmCICC(Shanghai)PrivateEquityInvestmentManagementCo.,Ltd.FromSeptember2016toMay2019,heconcurrentlyservedasthechairmanoftheboardofsupervisorsofSinopharmAccord.FromNovember2020,heservesasadirectorofthe8

th

and9

thboardofdirectorsoftheCompany.Mr.LinZhaoxiong:DirectorandGMofSinopharmAccord.Hasservedasdeputymanagerandmanagerofpharmaceuticaldepartment,managerofPharmaceuticalcorporationsanddirectorofoperationandmanagementdepartmentduringhisworkinChinaPharmaceutical(Group)GuangzhouCo.,LtdfromJanuary1999toDecember2003insuccession;HehasactedasthedeputygeneralmanagerofSinopharmHoldingGuangzhouCo.,Ltd;thegeneralmanagerofSinopharmHoldingGuangzhouCo.,LtdfromDecember2006toDecember2008;HehasservedasthedeputygeneralmanageroftheCompanyfromDecember2008toMarch2016;MrLinservesasthechairmanofSinopharmHoldingGuodaDrugstoreCo.,LtdsinceOctober2017;andGMoftheCompanysinceMarch2016,Directorofthe7

th

,8

thand9thBODoftheCompanysinceApril2016.Mr.LinMinisthedeputygeneralmanageroftheCompany.HeworkedinChinaNationalPharmaceutical(Group)GuangzhouCompanyfromJanuary2001toNovember2003,successivelyservedasassistantmanageranddeputymanagerofPharmaceuticalDepartment,deputypurchasingmanagerofPharmaceuticalCompany,andservedascitypharmaceuticalsalesdirectorofSinopharmGuangzhouCo.,Ltd.fromNovember2003toJanuary2005,fromJanuary2005toDecember2008,heservedasdeputygeneralmanagerofSinopharmHoldingGuangzhouCo.,Ltd.,andconcurrentlyservedasgeneralmanagerofSinopharmHoldingGuangzhouCo.,Ltd.fromMarch2016toSeptember2021.HeservedasdeputygeneralmanageroftheCompanysinceDecember2008,fromNovember2020,hehasbeenservingasadirectorofthe8

th

and9thboardofdirectorsoftheCompany.Mr.ChenHonghui,ProfessoranddoctoralsupervisorinManagementofLingnan(University)College.FromJuly1993toJune2003,heworkedintheSchoolofManagementofWuhanUniversityofScienceandTechnologyasateachingassistantandlecturer.FromJuly2003untilnow,hehasbeenworkinginLingnan(University)Collegeandmanagementcollegeasanassociateprofessorandprofessor.From2007to2012,heservedasthedeputydeanofLingnan(University)College;from2008to2019,heservedasthedirectoroftheBusinessManagementDepartmentandEconomicManagementDepartmentofLingnan(University)College.Mr.ChenisconcurrentlyservingasthevicechairmanofGuangdongInternationalSocialResponsibility,independentdirectorofCabbeenFashionLimited,andindependentdirectorofGuangzhouGrandbuyCo.,Ltd.SinceMarch2017,hehasbeenservingasanindependentdirectorofthe7

th

,8

th

and9

th

boardofdirectorsoftheCompany.

Mr.OuYongliang,PracticingLawyerofChina,VicePresidentofGuangdongProvinceLawSociety,the8

th

and

thvicepresidentofAllChinaLawyersAssociation,the9

th

and10

th

presidentofGuangdongLawyersAssociation,directorofGuangdongHopesunLawFirm,chairmanofGuangdongPublicWelfareFoundationforPromotingtheRuleofLaw,memberofthe12thGuangdongProvincialCommitteeofCPPCC,expertconsultantofthe11thPartyCongressoftheGuangdongProvincialCommitteeoftheCommunistPartyofChina,legislativeconsultantofthe12

th

StandingCommitteeofGuangdongProvincialPeople'sCongress,speciallyinvitedmemberofthe11thGuangdongProvincialCommitteeoftheCPPCC,memberofJudgesandProcuratorsSelectionCommitteeofGuangdongProvince,representativeoftheNinthCongressoftheGuangzhouMunicipalityoftheCommunistPartyofChina,anarbitratoroftheShanghaiInternationalArbitrationCommission,anarbitratoroftheShenzhenInternationalArbitrationCommission,anarbitratoroftheGuangzhouArbitrationCommission.SinceApril2018,hehasbeenservingasanindependentdirectorofthe8

th

and9thboardofdirectorsoftheCompany.Mr.ChenShengqunisanassociateresearcherandsenioraccountant,hehasbeenteachingattheShanghaiNationalAccountingInstitutesince2013.Mr.ChencameoutofthepostdoctoralresearchstationofShanghaiUniversityofFinanceandEconomicsin1998asthefirstpostdoctoralfellowinmanagementaccounting.HewasemployedasaseniorresearcherattheCAFRCenteroftheHongKongPolytechnicUniversityandiscurrentlyavisitingprofessorofEDPcurriculumattheXiamenUniversity.Since1998,Mr.ChenhasservedasdirectorofthefinancedivisionofChinaPacificInsuranceCo.,Ltd.,in2002,hewastransferredtoserveasdeputygeneralmanagerofthefinancingplandepartmentofChinaPacificInsuranceCo.,Ltd.(presidingwork),attheendof2003,hejoinedChinaReinsuranceGroupandsuccessivelyservedasgeneralmanagerofthefundapplicationdepartmentofChinaContinentInsurance(concurrentlygeneralmanagerofthestrategicdevelopmentdepartment,andgeneralmanagerassistantofChinaReAssetManagementCompany.Heservesasindependentdirectorofthe

th

and9

th

BODoftheCompanysinceApril2018.Ms.SuWeiwei:Doctorofpharmacy,secondaryprofessorofSchoolofLifeSciencesofSunYat-SenUniversityandadoctoralsupervisor.SheworkedinGuangdongpharmaceuticalUniversityfromJuly1987toApril2000,andsuccessivelyservedasateachingassistant,lecturers,associateprofessorandprofessor,sheservesasasecondaryprofessorinSunYat-SenUniversitysinceMay2000.Ms.SuWeiweihavedevotedherselftotheresearchanddevelopmentofinnovativedrugsformanyyears,andachievedtwochemicalclinicalpermissionforfirst-typenewdrugsandoneclinicalpermissionforthefifth-typenewdrugsofTCM(traditionalChinesemedicine),owns88itemswithindependentintellectualpropertyrights.Heservesasindependentdirectorofthe

th

and9

th

BODoftheCompanysinceJanuary2019.

2.MembersofBOSMr.WenDeyong,joinedSinopharmGroupCo.,Ltd.inSeptember2017,andhasbeenservingasanon-executivedirectorofSinopharmGroupCo.,Ltd.tothisday.FromSeptember1995toMay2016,Mr.Wenservedasatechnicianinthehydro-acupunctureworkshopofChongqingNo.6PharmaceuticalFactory,fieldsalesmanof

salesdepartmentofChongqingYaoPharma,salesdirectorofChongqingYaoPharmaCo.,Ltd.,generalmanagerofsalesdepartment2ofChongqingYaoPharmaCo.,Ltd.,generalmanagerofNorthernCompanyofChongqingHaisimanPharmaceuticalCo.,Ltd.,vicepresidentofChongqingYaoPharma,presidentofChongqingYaoPharma,currentlyservesascontactpresidentofShanghaiFosunPharmaceutical(Group)Co.,Ltd.,theCo-ChairmanandPresidentofgenericdrugs&manufacturingdivision,directorofpharmaceuticalbusinessmanagementcommittee,andservedasvicepresidentofFosunPharmaceuticalfromJune2016toOctober2020,seniorVicePresidentofFosunPharmaceuticalfromOctober2020toJanuary2022;Hehasbeenthechairmanoftheboardofsupervisorsofthe8

th

and9th

boardofsupervisorsoftheCompanysinceJuly2019.Ms.LiuJingyun,DirectorofthecapitaldepartmentofSinopharmGroupCo.,Ltd.andhesuccessivelyholdateachingpostinNanjingRadioandTelevisionUniversity,worksinSinopharmGroupCo.,Ltd.sinceNovember2003andservesasdeputydirectorofassetsmanagementdepartment,directorofthefinancial&assetsmanagementdept.andDirectorofministryoffinanceandcreditmanagement.Sheservesassupervisorofthe7

th

,

thand9thsupervisorycommitteeoftheCompanysinceSeptember2016.Ms.ChenGuojing:sheworkedinShenzhenAccordMedicinalMaterialsCompanyinDecember1999,nowsheservesastheofficedirectoranddirectorofsecuritydepartmentanddirectoroflegalcompliancedepartmentintheCompany.Ms.ChenservedasthefinancialmanageranddeputychiefofFinanceandFundsDepartmentoftheCompanyfromJune2005toDecember2013,sheisthememberoftradeunionfederationsoftheCompanyandchairmanofthefirsttradeunionsinceMarch2009;sheservedaschief(part-time)oftheauditingdepartmentoftheCompanyfromJanuary2013toAugust2017,andchief(part-time)oftheriskandoperationmanagementoftheCompanyfromJanuary2014toMay2016.Sheservesasstaffsupervisorofthe8

thand9

th

supervisorycommitteeoftheCompanysinceAugust2018.

3.SeniorexecutiveMr.LinZhaoxiong,foundinaforesaidpreviousworkexperience.Mr.LinMin,foundinaforesaidpreviousworkexperience.Mr.LinXinyang:DeputyGMoftheCompany.HetooktheturnsofdeputyGMofNanfangPharm.Co.,deputyGMofChinaPharmaceutical(Group)GuangzhouCompanyYuexingCompany,generalsupervisorofPDofSinopharmHoldingGuangzhouCompanysuccessivelysinceJanuary1996;tookthepostofdeputyGMofSinopharmHoldingGuangzhouCompanyfromJanuary2004toSeptember2021;servesasdeputyGMoftheCompanysinceJanuary2005.Mr.LangBaochunisdeputysecretaryofthepartycommittee,secretaryofthedisciplinarycommittee,chairmanofthelaborunionandgeneralcounseloftheCompany.FromSeptember2007toMarch2008,heservedasdeputydirectorofgeneralofficeofSinopharmGroupCo.,Ltd.,fromMarch2008toDecember2009,heservedas

generalmanagerofShanghaiChuanghuiInvestmentCo.,Ltd.,fromJanuary2010toMay2010,heservedasdirectoroftheresearchofficeofShanghaiShibeiHi-Tech(Group)Co.,Ltd.,fromJune2010toSeptember2011,heservedasdeputydirectorofthepresident’sofficeofSinopharmGroupCo.,Ltd.,fromOctober2011toDecember2015,heservedasdirectorofthestrategicplanningdepartmentofSinopharmGroupCo.,Ltd.,fromJanuary2016toJune2017,heservedassecretaryofthepartycommitteeofSinopharmGuodaDrugstoreCo.,Ltd.,fromMarch2016toFebruary2018,heservedasdeputysecretaryofthepartycommitteeandsecretaryofthedisciplinarycommitteeoftheCompany.SinceMarch2018,hehasbeenservingasdeputysecretaryofthepartycommittee,secretaryofthedisciplinarycommittee,andchairmanofthelaborunionoftheCompany.HeservesasGeneralCounseloftheCompanysinceAugust2018Mr.GuGuolinisthechieffinancialofficeroftheCompany.HejoinedSinopharmGroupCo.,Ltd.inMay2011,andservedastheseniormanagerofthefinancialmanagementdepartmentofSinopharmGroupCo.,Ltd.fromMaytoJuly2011;fromJuly2011toMay2014,heservedasthechieffinancialofficerofSinopharmHoldingNingxiaCo.,Ltd.SinceMay2014,hehasservedasthechieffinancialofficerofSinopharmSichuanPharmaceuticalGroupCo.,Ltd.andconcurrentlyasthechieffinancialofficerofSinopharmHoldingSichuanPharmaceuticalCo.,Ltd.SinceMay2020,hehasbeenservingasthechieffinancialofficeroftheCompany.Mr.ChenChangbin:DeputyGMoftheCompany,andSecretaryoftheBoard.HehasservedassecretaryofboardofdirectorsoftheCompanysinceDecember2000;hehasalsoworkedasthedirectorofplanninginvestmentmanagementdepartmentoftheCompanyaswellasassistantgeneralmanager,inchargeofstrategicplanning,investmentandmergersandacquisitions,capitaloperation,affairsrelatedtothreemajormeetingsandinternationalco-operation.HehasactedasthedeputygeneralmanageroftheCompanysinceApril2017.

Post-holdinginshareholder’sunit

√Applicable□Notapplicable

Name

NameNameofshareholder’sunitPositioninshareholder’sunitCommencementdateoftenureTerminationdateWhethertoreceivecompensationandallowancesintheshareholders’unit(Y/N)
LiuYongSinopharmGroupCo.,LtdExecutiveDirector,PresidentNovember1,2017Y
LiuYongSinopharmGroupCo.,LtdDeputypartysecretaryJanuary1,2018Y
LianWanyongSinopharmGroupCo.,LtdDeputyPresidentJanuary1,2018Y

LiXiaojuan

LiXiaojuanSinopharmGroupCo.,LtdCFOMarch1,2021Y
WuYijianSinopharmGroupCo.,LtdSecretaryoftheBoardJanuary1,2019Y
LiuJingyunSinopharmGroupCo.,LtdDirectorofCapitaldepartmentJuly1,2016Y

Post-holdinginotherunit

√Applicable□Notapplicable

NameNameofotherunitsPositioninotherunitCommencementdateoftenureTerminationdateWhethertoreceivecompensationandallowancesinotherunit(Y/N)
LiuYongChinaNationalMedicinesCorporationLtd.DirectorNovember1,2017
LiuYongSinopharmHoldingGuodaDrugstoreCo.,Ltd.DirectorOctober1,2017
LiuYongChinaNationalScientificInstruments&MaterialsCo.,Ltd.DirectorDecember1,2018
LiuYongChinaNationalMedicalEquipmentCo.,Ltd.DirectorDecember1,2018
LiuYongSinopharmHoldingDistributionCenterCo.,Ltd.ExecutiveDirectorAugust1,2020
LiuYongSinopharmHoldingHongKongCo.,Ltd.ChairmanJanuary1,2021
LiuYongSinopharmCICC(Shanghai)PrivateEquityInvestmentManagementCo.,Ltd.ChairmanJanuary1,2021
LianWanyongChinaNationalMedicinesCorporationLtdDirectorDecember1,2017
LianWanyongSinopharmCICC(Shanghai)PrivateEquityInvestmentManagementCo.,Ltd.DirectorJuly1,2018
LianWanyongWestChinaDentalCo.,LtdDirectorJanuary1,2019
LianWanyongSinopharmHoldingAnhuiCo.,Ltd.ChairmanJanuary1,2019
LianWanyongSinopharmHoldingChangshaCo.,Ltd.ChairmanJune1,2019
LianWanyongSinopharmHoldingHubeiCo.,Ltd.ChairmanJanuary1,2020
LianWanyongSinopharmHoldingHunanCo.,Ltd.DirectorMarch1,2020
LiXiaojuanSinopharmHoldingGuzhouMongoliaCo.,Ltd.ChairmanApril1,2021

LiXiaojuan

LiXiaojuanSinopharmHoldingHutchisonWhampoaPharmaceuticals(Shanghai)Co.,Ltd.ChairmanApril1,2021
LiXiaojuanChinaNationalMedicinesCorporationLtd.DirectorApril1,2021
LiXiaojuanSinopharmHoldingGroupH.K.Co.,Ltd.DirectorJune1,2021
WuYijianChinaNationalShanxiCo.,LtdChairmanMarch1,2019
WuYijianSinopharmHoldingShanxiCo.,ltdChairmanMarch1,2019
WuYijianSinopharmHoldingInnerMongoliaCo.,Ltd.ChairmanMarch1,2019
WuYijianSinopharmCICC(Shanghai)PrivateEquityInvestmentManagementCo.,Ltd.DirectorMarch1,2019
WuYijianChinaNationalHealthOnlineCo.,Ltd.ChairmanMay1,2020

Punishmentofsecuritiesregulatoryauthorityinrecentthreeyearstothecompany’scurrentandoutgoingdirectors,supervisorsandseniormanagementduringthereportingperiod

□Applicable√Notapplicable

3.Remunerationfordirectors,supervisorsandseniorexecutivesDecision-makingprocedures,recognitionbasisandpaymentfordirectors,supervisorsandseniorexecutives

(i)Remunerationdecisionprocedureofdirectors,supervisors,seniormanagement:

TheCompanyimplementedtheannualsalarysystemforseniorexecutivesbasedonthe2021annualperformanceappraisal(scheme)onmanagementstaff,paidannualsalaryremunerationaccordingtotheappraisalresults.Remunerationandappraisalcommitteeofthecompany'sboardofdirectorsisresponsiblefortheformulationandexaminationofsalaryplanandprogramaswellasformulationandexaminationofsalaryplanandassessmentstandardsofdirectors(notincludingtheindependentdirectors),supervisorsandseniorexecutives.Theyalsoevaluatetheperformanceassessmentofdirectors,supervisorsandseniorofficersinaccordancewiththeassessmentcriteria,compensationscheme.(ii)RemunerationdeterminingbasisThemainprinciplesofmakingstandardofcompensationare:(1)thecompany'soverallbusinessandtheprofitlevel;(2)theoverallsalarylevelanddynamicindexoverpastyears;(3)differenceinpositionandduty;(4)relativeimportanceandrisksofposition;(5)relatedpostsalarylevelinthesameindustry;(6)individualprofessionalability.(iii)ActualpaymentExecutivesgetmonthlybasicsalaryandannualsalaryaftertheissuanceofannualexamination.Remunerationfordirectors,supervisorsandseniorexecutivesinreportingperiod

In10thousandYuan

NameTitleSex(F/M)AgePost-holdingstatusTotalremunerationReceivedremuneration

beforetaxobtainedfromtheCompany

beforetaxobtainedfromtheCompanyfromrelatedpartyoftheCompany(Y/N)
LiuYongChairmanM52Currentlyinoffice0Y
JiangXiuchangDirectorM57Officeleaving0Y
LianWanyongDirectorM51Currentlyinoffice0Y
LiDongjiuDirectorM56Officeleaving0Y
LiXiaojuanDirectorF45Currentlyinoffice0Y
ZhouSongDirectorM39离任0Y
WuYijianDirectorM51Currentlyinoffice0Y
LinZhaoxiongDirector,GMM54Currentlyinoffice250N
LinMinDirector,PartySecretary,DeputyGMM57Currentlyinoffice225N
ChenHonghuiIndependentdirectorM50Currentlyinoffice12N
OuYongliangIndependentdirectorM52Currentlyinoffice12N
ChenShengqunIndependentdirectorM59Currentlyinoffice12N
SuWeiweiIndependentdirectorF62Currentlyinoffice12N
WenDeyongChairmanofsupervisorycommitteeM50Currentlyinoffice0Y
LiuJingyunSupervisorF45Currentlyinoffice0Y
ChenGuojingStaffsupervisorF51Currentlyinoffice83.78N
ZhaoXiaochuanDeputyGMM58Officeleaving83.33N
LiuTianraoDeputyGMM42Officeleaving131.25N
LinXinyangDeputyGMM57Currentlyinoffice175N

LangBaochun

LangBaochunDeputypartysecretary,Secretaryofcommitteefordisciplineinspection,GeneralcounselM58Currentlyinoffice175N
GuGuolinCFOM46Currentlyinoffice162.5N
ChenChangbinDeputyGM,SecretaryoftheBoardM54Currentlyinoffice162.5N
Total--------1,496.36--

VI.Responsibilityperformanceofdirectorsduringthereportingperiod

1.Theboardofdirectorsduringthereportingperiod

SessionofmeetingDateofmeetingDisclosuredateMeetingresolutions
The22thsessionof8thboardofdirectorsFebruary26,2021February27,2021Resolutionannouncementonthe22thsessionof8thboardofdirectors
The23thsessionof8thboardofdirectorsMarch31,2021April2,2021Resolutionannouncementontheboardofdirectors
The24thsessionof8thboardofdirectorsApril23,2021April24,2021Fulltextofthefirstquarterreportof2021
The1stExtraordinaryMeetingofthe8thBoardofDirectorsof2021May21,2021May22,2021Resolutionannouncementonthe1stExtraordinaryMeetingofthe8thBoardofDirectorsof2021
The25thsessionof8thboardofdirectorsJune8,2021June9,2021Resolutionannouncementonthe25thsessionof8thboardofdirectors
The1stsessionof9thboardofdirectorsJuly16,2021July17,2021Resolutionannouncementonthe1stsessionof9thboardofdirectors
The2ndsessionof9thboardofdirectorsAugust13,2021August17,2021Resolutionannouncementonsemi-annualreportoftheboardofdirectors
The1stExtraordinaryMeetingofthe9thBoardofDirectorsofSeptember30,2021October8,2021Resolutionannouncementonthe1stExtraordinaryMeetingof

2021

2021the9thBoardofDirectorsof2021
The3rdsessionof9thboardofdirectorsOctober19,2021October20,2021ThirdQuarterReportof2021
The4thsessionof9thboardofdirectorsDecember30,2021December31,2021Resolutionannouncementonthe4thsessionof9thSupervisoryboard

2.TheattendingofdirectorstoBoardmeetingsandshareholdersgeneralmeeting

TheattendingofdirectorstoBoardMeeting&shareholdersgeneralmeeting
DirectorTimesofBoardmeetingsupposedtoattendinthereportperiodTimesofPresenceTimesofattendingbycommunicationTimesofentrustedpresenceTimesofAbsenceAbsenttheMeetingforthesecondtimeinarow(Y/N)Timesattendingtheshareholdersgeneralmeeting
LiuYong105500N0
JiangXiuchang52300N0
LianWanyong105500N1
LiDongjiu11000N0
LiXiaojuan53200N0
ZhouSong42200N0
WuYijian105500N0
LinZhaoxiong105500N2
LinMin105500N2
ChenHonghui105500N1
OuYongliang105500N1
ChenShengqun105500N1
SuWeiwei104510N1

ExplanationofabsenttheBoardMeetingforthesecondtimeinarow

3.ObjectionforrelevanteventsfromdirectorsDirectorscomeupwithobjectionaboutCompany’srelevantmatters

□Yes√NoDirectorshavenoobjectionsforrelevanteventsinreportingperiod

4.Otherexplanationaboutresponsibilityperformanceofdirectors

Theopinionsfromdirectorshavebeenadopted

√Yes□NoExplanationonadvicethataccepted/notacceptedfromdirectorsDuringthereportingperiod,directorsoftheCompanyperformedtheirdutiesinacareful,diligent,dedicatedattitudeinaccordancewithrequirementsofrelevantlaws,regulationsandprovisions,offeredsomeusefulsuggestionsandopinionsonbusinessdecision-making,legalaffairs,financialmanagementandotheraspects;carefullyexaminedimportantmattersthoseneededopinionsofindependentdirectors,madeindependentjudgmentsandissuedawrittenindependentopiniononmajorrelatedtransactions,dailyrelatedtransactions,accountancyhiringandothermatters,playingapositiveroleinsafeguardingthelegitimaterightsandinterestsofsmallshareholders.Besides,Companydirectorsplayedanimportantroleinoperationofspecializedcommittee.Atthesametime,theCompanycanguaranteeCompanydirectorsofthesamerighttoknow.Duringthereportingperiod,CompanydirectorshavenoobjectionontherelatedissuesoftheCompany.VII.Thespecializedcommitteesundertheboardduringthereportingperiod

Committeename

CommitteenameMembersNumberofmeetingsheldDateofmeetingMeetingcontentImportantcommentsandsuggestionsmadeOtherperformanceofdutiesSpecificcircumstancesoftheobjection(ifapplicable)
RiskInternalControlandAuditCommitteeoftheBoardChenShengqun(convener),ChenHonghui,OuYongliang,SuWeiwei,JiangXiuchang,LianWanyong,LinZhaoxiongandLinMin1March24,20211.FinancialReportof2020;2.SummaryReportonErnst&YoungCPA(SpecialGeneralpartnership)EngagedintheAuditingWorkforyearof2020;3.ProposalonRenewaloftheInstitutionforAnnualReportandAuditingofInternalControlforyearof2021;4.Consent

InternalcontrolSelf-AssessmentReport2020;SinopharmAccord-SpecialReportontheDepositandUseofProceedsforyearof2020.

InternalcontrolSelf-AssessmentReport2020;SinopharmAccord-SpecialReportontheDepositandUseofProceedsforyearof2020.
RemunerationandAppraisalCommitteeoftheBoardChenHonghui(convener),ChenShengqun,OuYongliang,SuWeiwei,LiuYong,JiangXiuchangandWuYijian1March26,2021Reviewtheremunerationdisclosedforthedirectors,supervisorsandseniorexecutivesforyearof2020Consent
NominationCommitteeoftheBoardSuWeiwei(convener),ChenShengqun,OuYongliang,LiuYongandLinZhaoxiong1June7,2021ApprovedtheProposalonDeliberationoftheQualificationofDirectorsof9thBODoftheCompanyAfterreviewing,the7non-independentdirectorsof9thBOD,nominatedbyshareholdersandthe4independentdirectorsof9thBOD,nominatedby8thBOD,are

qualifiedtoservesasthedirectorofthelistedcompany.

VIII.WorksfromSupervisoryCommittee

TheCompanyhasrisksinreportingperiodthatfoundinsupervisoryactivityfromsupervisorycommittee

□Yes√NoSupervisorycommitteehasnoobjectionaboutsupervisioneventsinreportingperiod.IX.Particularsofworkforce

1.Numberofstaff,professionalcompositionandeducationbackground

qualifiedtoservesasthedirectorofthelistedcompany.Thenumberofcurrentemployeesofparentcompanyatperiod-end(people)

Thenumberofcurrentemployeesofparentcompanyatperiod-end(people)120
Thenumberofcurrentemployeesofmainsubsidiariesatperiod-end(people)39,266
Totalnumberofcurrentemployeesatperiod-end(people)39,386
Thetotalnumberofemployeesinpayroll(people)39,386
Thetotalnumberofretiredstaffandworkersthattheparentcompanyandmainsubsidiariesneedtobearthecosts(people)1,731
Professionalcomposition
CategoryofprofessionalcompositionNumberofprofessionalcomposition(people)
Productionstaff20
Salesman30,522
Technicalstaff333
Financialstaff753
Administrativestaff150
Other7,608
Total39,386
Educationbackground
CategoryofeducationNumber(people)
Post-graduatequalificationandabove192
Undergraduate6,153
Juniorcollege15,254
Collegedegree17,787
Total39,386

2.RemunerationpolicySinopharmAccordandthesubordinateenterprisesprovideperfectcompensationandbenefitsforthestaff,thecompensationleveliscloselycombinedwithorganization(totalamountoflabor,compensationstrategy,jobvalue),staff(capacitydevelopment,performanceresults),andmarket(marketlevel,talentcompetition).Thecompanyadjuststheremunerationforstaffhavingabilitiesandcontributionseveryyearbytheresponsibilitysorting,positionevaluation,targetremunerationrangepositioning,andthestaffannualworkperformanceandabilityassessment;atthesametime,performancebonusesandperformancecloselylinktogether,andrealizewin-winoftheinterestsofcompanyandtheinterestsofemployees.Payattentiontotheincomegrowthrequirementsoflow-incomegroups,developannualwagegrowthprogram,andimplementafterthedeliberationandapprovaloftheworkers'congress.

3.TrainingprogramsSinopharmAccordanditssubordinatecompaniesattachgreatimportancetobuildinglearningorganizations,investtrainingresourceseveryyeartotrainanddevelopemployeesatalllevels.In2021,thetrainingworkwasmoreproactiveinpromotingthetransformationintermsoflearningsharing,trainingempowermentandtalentdevelopment.Withtheheadquartersasthehub,connectedtotheoperationheadquarters,andpromotedtheintegratedconstructionoftheknowledgeandexperiencesharingsystemandthetraining.Intheformoftrainingprograms,releasedthepowerfuldrivingforceofthetalentengine,improvedorganizationalcapabilities,andacceleratedthelearningandsharingoforganizationalexperiencetoenablehigh-qualitydevelopmentofbusiness.

(1)Optimizethetrainingmanagementsystem,revisethetrainingsystemmanagementsystem,theemployeetrainingmanagementsystem,theinternaltrainermanagementsystem,theemployeecontinuingeducationmanagementsystem,theinternmanagementsystem,theinternallecturermanagementsystem,optimizeinternaltrainersmanagementprocess,annualtrainingneedsandplanmanagementprocess,andtrainingimplementationprocess.

(2)Theheadquarters,operationheadquarters,andkeysubsidiariesallsetupfull-timetrainingpoststoassistmanagersatalllevelstocarryoutemployeetraining.Thecompanyhaspromotedathree-leveltrainingmodelthroughoutthecompany,designedandcompiledthe"2021SinopharmAccordTrainingManagementWorkGuideManual".Forthefirsttime,themanualintegratesthepastworkexperienceofSinopharmAccord’strainingandthefollow-upworkrequirementsintoastandardworkmanual,whichissharedwithallstafftrainingmanagersofSinopharmAccordtolearntogether,andservesasanimportantreferenceforHRlinesandmanagerstopromotethetrainingwork.

(3)AccordheadquartersunitedwiththejointoperationheadquarterstoorganizeofflinetrainingfornewcadresofSinopharmAccord's"DragonCultivationPlan"in2021.Inthisproject,bycombiningthecultivatingrouteof

"enteringthemodel-roleconversion-managementimprovement"withthetrainingof"learningknowledgeonline",communicatingoffline,trainingskills,post-trainingjobtransformation",acceleratedthegrowthrateofnewcadres,accumulatedtalentsforthecompany'slong-termhigh-qualitydevelopment,andincreasedstrongdevelopmentmomentum.

(4)Accordheadquarterscooperatedwiththeoperationheadquartersandsubsidiaries,andlaunchedthedouble-excellentplannerclassPKcompetitionwiththethemeofinnovation.ThiscompetitioncoveredallthestaffofSinopharmAccord,withthegoalofoutputtinghigh-qualityinnovativethemedcoursewareandsupportinglecturers,theexcellentinnovativecoursesweredisseminatedandsharedintheAccordsystemafterthecompetition,whichwasalarge-scaleeventpavingthewayforthefutureplanningoftheinternaltrainersysteminthe14

th

Five-YearPlan.Morethan220peopleparticipatedinthelarge-scalecompetition.Afterthecompetition,theexcellentparticipatinglecturerswereorganizedtogivelessons.

(5)Thehumanresourcecenterunitedwiththehumanresourcedepartmentofthedistributionoperationheadquarters,themixingcultivationproject"PerformanceImprovementProject"thattook"SPDbusiness"astheentrypoint,aimedatimprovingworkrelatedto"SPDbusiness",andtook"onlinelearning,offlinetraining,practiceaftertraining"astheoperationmodewonthe2021PerformanceImprovementBestPracticeAwardoftheInternationalSocietyforPerformanceImprovement.

(6)Continuedtopromoteonlinetraining.The"SinopharmOnlineLearning"platformhasopenedmorethan5,400accounts,coveringallsubsidiariesacrossthecountry,andtheaverageonlinelearninghoursofallemployeesexceeds33hours.

4.Laboroutsourcing

√Applicable□Notapplicable

Totalnumberofworkinghoursoflaboroutsourcing(Hour)

Totalnumberofworkinghoursoflaboroutsourcing(Hour)3,489,048
Totalremunerationpaidoflaboroutsourcing(RMB)85,338,901.00

X.Profitdistributionplanandcapitalizingofcommonreservesplan

Formulation,ImplementationandAdjustmentofProfitDistributionPolicyEspeciallyCashDividendpolicyduringtheReportingPeriod

√Applicable□Notapplicable

On28April2021,theprofitdistributionplanforyearof2020wasdeliberatedandapprovedbyannualgeneralmeetingof2020,thatistakingtotal428,126,983sharesasbase,distributed8.00yuan(taxincluded)foreach10sharesincash.Theannouncementof2020interestdistributionimplementationwasreleasedon11June2021by

theBoard(publishedinSecuritiesTimes,ChinaSecuritiesJournal,HongKongCommercialDailyandJuchaoWebsitehttp://www.cninfo.com.cn),theprofitdistributionplanforyearof2020wascompleted,anddividendforpublicshareswasdistributedtotheaccountofshareholdersdated21June2021(A-share)and23June2021(B-share)respectively.

Specialexplanationoncashdividendpolicy

Specialexplanationoncashdividendpolicy
SatisfyregulationsofGeneralMeetingorrequirementofArticleofAssociation(Y/N):Y
Well-definedandclearlydividendstandardsandproportion(Y/N):Y
Completedrelevantdecision-makingprocessandmechanism(Y/N):Y
Independentdirectorsperformdutiescompletelyandplayaproperrole(Y/N):Y
Minorityshareholdershaveopportunitytoexpressopinionsanddemandstotallyandtheirlegalrightsarefullyprotected(Y/N):Y
Conditionandproceduresarecomplianceandtransparentwhilethecashbonuspolicyadjustedorchanged(Y/N):Notapplicable

TheCompanyisprofitableduringthereportingperiodandtheparentcompanyhaspositiveprofitavailablefordistributiontoshareholderswithoutcashdividenddistributionplanproposed

□Applicable√NotapplicableProfitdistributionplanandcapitalizingofcommonreservesplanforthePeriod

√Applicable□Notapplicable

Numberofbonussharesforeach10shares(Share)0
Numberofdividendsforeach10shares(Yuan)(taxincluded)6.00
Numberofconversionsforeach10shares(Share)0.00
Baseofthesharesforthedistribution(Share)428,126,983
Cashdividendamount(Yuan)(taxincluded)256,876,189.80
Amountofcashdividendsbyotherways(e.g.sharerepurchased)(Yuan)0.00
Totalcashdividends(includingotherways)(Yuan)256,876,189.80
Distributableprofit(Yuan)6,499,660,099.63
Proportionoftotalcashdividends(includingotherways)tothetotalprofitdistributed100%
Currentcashdividend
IftheCompanyisinamaturestageofdevelopmentandhasmajorcapitalexpendituresarrangement,theminimumproportionofcashdividendintheprofitdistributionshouldbe40%whencarryingouttheprofitdistribution
Explanationontheprofitdistributionplanforcapitalreservetransferring

XI.ImplementationoftheCompany’sstockincentiveplan,employeestockownershipplanorotheremployeeincentives

□Applicable√NotapplicableTheCompanyhasnoequityincentiveplan,employeestockownershipplansorotheremployeeincentives.

XII.Constructionandimplementationofinternalcontrolsystemduringthereportingperiod

1.ConstructionandimplementationofinternalcontrolDuringthereportingperiod,thecompanyupdatedandimprovedtheinternalcontrolsysteminaccordancewiththeguidelinesoftheBasicNormsforEnterpriseInternalControlandcombinedwithchangesintheinternalandexternalenvironment,internalorganizationsandmanagementrequirements,andcomprehensivelysortedoutandrevisedthebusinessprocessesofeachlinkofthecompany,therebymakingtheinternalcontrolsystemmoreperfect.Thecompany'sriskinternalcontrolmanagementsystem,whichiscomposedoftheriskandinternalcontrolauditcommitteeandtheinternalauditdepartment,supervisesandevaluatesthecompany'sinternalcontrolmanagement.Thecompany'sinternalcontrolcancoverthemainaspectsofthecompany'soperationandmanagement,andtherearenomajoromissions;theunits,businessesandmattersandhigh-riskfieldsincludedintheevaluationscopehavecoveredthemainaspectsofthecompany'soperationandmanagement,andtherearenomajoromissions;thecompany'sinternalcontroldesignissound,reasonable,theimplementationofinternalcontrolhasbeenbasicallyeffective,andtherearenomajoromissions.Throughtheoperation,analysisandevaluationoftheinternalcontrolsystem,thecompanyhaseffectivelypreventedrisksinoperationandmanagementandpromotedtherealizationofthegoalofinternalcontrol.

2.DetailsofmajordefectsinICappraisalreportthatfoundinreportingperiod

□Yes√NoXIII.Managementandcontrolsonthesubsidiaryduringreportingperiod

Nameofcompany

NameofcompanyIntegrationplanIntegrationprogressProblemsencounteredinintegrationActionstakenResolveprogressFollow-upresolutionplan
N/AN/AN/AN/AN/AN/AN/A

XIV.Internalcontrolself-assessmentreportorinternalcontrolauditreport

1.AppraisalReportofInternalControl

Disclosuredateoffullinternalcontrolevaluationreport

DisclosuredateoffullinternalcontrolevaluationreportMarch30,2022
Disclosureindexoffullinternalcontrolevaluationreport“Self-evaluationreportofinternalcontrolfor2021ofChinaNationalAccordMedicinesCorporationLtd.”inJuchaowebsite(http://www.cninfo.com.cn)
Theratioofthetotalassetsofunitsincludedinthescopeofevaluationaccountingforthetotalassetsonthecompany'sconsolidatedfinancialstatements100.00%
Theratiooftheoperatingincomeofunitsincludedinthescopeofevaluationaccountingfortheoperatingincomeonthecompany'sconsolidatedfinancialstatements100.00%
DefectsEvaluationStandards
CategoryFinancialReportsNon-financialReports
QualitativecriteriaFinancialreportdefectsaremainlyjudgedanddecidedbythedegreeofinfluenceandthelikelihoodofoccurrencetothemisstatementsoffinancialreportscausedbydefects.(1)Significantdefects:acombinationofoneormultipleinternalcontroldefectsthatexistsininternalcontrolandmaycausethematerialmisstatementsinfinancialstatementscannotbeprevented,foundorcorrectedintime;(2)Majordefects:acombinationofoneormultipleinternalcontroldefectsthatexistsininternalcontrolandhaslowerseveritylevelthansignificantdefectsbutstillshouldbeconcernedbythesuperintendentsofenterprisefinancialreports;(3)Commondefects:otherdefectsexceptforsignificantandmajordefects.Non-financialreportdefectsaremainlyjudgedanddecidedbythedegreeofinfluenceandthelikelihoodofoccurrenceofdefectstothevalidityofbusinessprocess.(1)Significantdefects:acombinationofoneormultipleinternalcontroldefectsthatmaycausetheenterprise’sseriousdeviationtointernalcontrolobjectives;(2)Majordefects:acombinationofoneormultipleinternalcontroldefectswhoseseveritylevelandeconomicconsequencesarelowerthansignificantdefectsbutstillmaycausetheenterprise’sdeviationtointernalcontrolobjectives;(3)Commondefects:otherdefectsexceptforsignificantandmajordefects.
QuantitativestandardAquantitativecriteriondeterminesthedegreeofimportanceofmisstatements(includingmissingreports)intheconsolidatedstatementsoflistedAquantitativecriteriondeterminesthedegreeofimportanceofthecompany’sdefectsbasedontheamountofdirectlossandthedegreeofsignificant

companiesbasedontheconsolidatedstatementdata.

(1)Significantdefects:equaltoorgreaterthan5%ofprofitbeforetax;

(2)Majordefects:Between1%and5%ofprofitbeforetax;

(3)Commondefects:Lessthanorequalto1%ofprofitbeforetax

companiesbasedontheconsolidatedstatementdata.(1)Significantdefects:equaltoorgreaterthan5%ofprofitbeforetax;(2)Majordefects:Between1%and5%ofprofitbeforetax;(3)Commondefects:Lessthanorequalto1%ofprofitbeforetaxinfluencetothecompany.(1)Significantdefects:theamountofdirectpropertylossisormorethan10millionYuan,orhasbeenofficiallydisclosedandcausednegativeeffectstoperiodicreportdisclosureofthejoint-stockcompanies;(2)Majordefects:theamountofdirectpropertylossisbetween5millionand10millionYuan,orhasbeenpunishedbythenationalgovernmentdepartmentsbuthasnotcausednegativeeffectstoperiodicreportdisclosureofthejoint-stockcompanies;(3)Commondefects:theamountofdirectpropertylossisbetween0.1millionand5millionYuan,orhasbeenpunishedbytheprovincialorsub-provincialgovernmentdepartmentsbuthasnotcausednegativeeffectstoperiodicreportdisclosureofthejoint-stockcompanies.
Amountofsignificantdefectsinfinancialreports0
Amountofsignificantdefectsinnon-financialreports0
Amountofimportantdefectsinfinancialreports0
Amountofimportantdefectsinnon-financialreports0

2.Auditingreportofinternalcontrol

√Applicable□Notapplicable

DeliberationsinAuditReportofInternalControl
Accordingtorelevantregulationsand“BasicRulesofInternalControlforEnterprises”,ChinaNationalAccordMedicinesCorporationLtd.inallmajoraspects,keepsanefficiencyofinternalcontroloffinancialreportdated31December2021
DisclosuredetailsofauditreportofinternalcontrolDisclosed
Disclosuredateofauditreportofinternalcontrol(full-text)March30,2022

Indexofauditreportofinternalcontrol(full-text)

Indexofauditreportofinternalcontrol(full-text)“AuditReportofInternalControlofChinaNationalAccordMedicinesCorporationLtd.”releasedonJuchaoWebsite(http://www.cninfo.com.cn)
OpiniontypeofauditingreportofICStandardunqualified
Whetherthenon-financialreporthadmajordefectsNo

CarriedoutmodifiedopinionforinternalcontrolauditreportfromCPA

□Yes√NoTheinternalcontrolauditreport,issuedbyCPA,hasconcertedopinionwithself-evaluationreport,issuedfromtheBoard

√Yes□NoXV.RectificationofSelf-examinationProblemsinSpecialGovernanceActionsinListedCompanyAccordingtotheOpinionsonFurtherImprovingtheQualityofListedCompanies(GF[2020]No.14)oftheStateCouncil,sincethecompanyreceivedtheNoticeofShenzhenSecuritiesRegulatoryBureauonPromotingtheMainResponsibilityofListedCompaniesintheAreaUnderAdministrationtoImprovetheGovernanceLevelandAchieveHighQualityDevelopment(SZJGSZ[2020]No.128)fromtheChinaSecuritiesRegulatoryCommissionShenzhenSecuritiesRegulatoryBureau,itconductedaseriousself-examinationofthecompanyinstrictaccordancewithrelevantlawsandadministrativeregulations,suchastheCompanyLawandtheSecuritiesLaw,aswellastheArticlesofAssociation,theRulesofProcedurefortheGeneralMeetingofShareholders,theRulesofProcedureoftheBoardofDirectors,theRulesofProcedureoftheBoardofSupervisorsandotherinternalrulesandregulations.Theproblemsfoundinthisself-examinationandtherectificationareasfollows:

1.Thecompanyhadasituationwheretherewasnoelectionatexpirationoftermsofofficeoftheboardofdirectors.Specificrectification:ThetermofofficeoftheeighthboardofdirectorsandtheeighthboardofsupervisorsofthecompanyexpiredonApril17,2021.OnApril2,2021,thecompanydisclosedthe"IndicativeAnnouncementonthePostponementofElectionatExpirationofTermofOfficeoftheBoardofDirectorsandtheBoardofSupervisors".OnJune8,2021,thecompanyheldthetwenty-fifthmeetingoftheeighthboardofdirectorsandtheeighteenthmeetingoftheeighthboardofsupervisors,andheldthefirstextraordinarygeneralmeetingofshareholdersin2021onJune25,2021,atwhichtherelevantproposalsontheelectionoftheninthboardofdirectorsandtheboardofsupervisorsofthecompanywerereviewedandapproved,andtheelectionwascompleted.Completiontimeofofrectification:June25,2021

2.Thecompanyhadasituationwherethedirectors,supervisorsandseniorexecutivesfailedtoattend(asnon-votingattendees)orentrustotherstoattendthegeneralmeetingofshareholders,theboardofdirectorsmeeting,theboardofsupervisorsmeetingandothermeetingsontheirbehalfasrequired.Specificrectification:Aftertheself-examination,thecompany'sboardofficeimmediatelyreiteratedtothecompany'sdirectors,supervisorsandseniorexecutivestheregulatoryrequirementsforholdingageneralmeetingofshareholders:"Whenthecompanyholdsageneralmeetingofshareholders,alldirectors,supervisorsandthesecretaryoftheboardshallattendthemeeting,andmanagersandotherseniorexecutivesshallattendthemeetingasnonvotingattendees.”Thedirectors,supervisorsandseniorexecutiveswhowereindeedunabletoattendtheshareholders’meetingduetotheimpactofthepandemic,thecompanywilluseITtechnology(networkvideo+teleconferencesystem,etc.)toprovidepositiveconditionsfordirectors,supervisorsandseniorexecutivestocommunicatewithshareholdersinrealtimeindifferentplaces,andprovidegreaterconvenienceforthemtoperformtheirduties.Completiontimeofofrectification:April28,2021Takingthisself-examinationandrectificationactivityasanopportunity,thecompanycarefullyorganizedthedirectors,supervisorsandseniorexecutivestostudytheOpinionsonFurtherImprovingtheQualityofListedCompanies,keepthe"FourAwes"inmind,adheretothefourbottomlinesof"notdisclosingfalseinformation,notengagingininsidertrading,notmanipulatingmarketprices,andnotharmingtheinterestsoflistedcompanies”.Infuture,thecompanywillconscientiouslyimplementtherectificationmeasures,effectivelyimprovethestandardoperationlevelandcorporategovernanceeffectivenessofstate-controlledlistedcompanies,andstrivetobecomeagovernancemodelforstate-controlledlistedcompanies.

SectionV.EnvironmentalandSocialResponsibility

1.Majorenvironmental

ThelistedCompanyanditssubsidiarywhetherbelongstothekeysewageunitsreleasedfromenvironmentalprotectiondepartment

□Yes√NoAdministrativepunishmentforenvironmentalproblemsduringthereportingperiod

Nameofcompanyorsubsidiary

NameofcompanyorsubsidiaryReasonforpunishmentViolationPunishmentresultTheimpactontheproductionandoperationoflistedcompaniesTheCompany'srectificationmeasures
N/AN/AN/AN/AN/AN/A

Otherenvironmentalinformationdisclosedrefertokeypolluters

Company/subsidiaryNameofMajorPollutantsandParticularPollutantsEmissionMethodQuantityofDischargeOutletDistributionofDischargeOutletEmissionConcentrationExecutedPollutantDischargeStandardsTotalEmissionsApprovedTotalEmissionsExcessiveDischarge
MainLuckPharmaceuticalsCODNanotubesemissions1DischargeOutletofWasteWater15mg/LDischargeStandardsofWaterPollutantsforPharmaceuticalindustryMixing/CompoundingandFormulationCategory-GB21908-20080.030ton/year0.12ton/yearN/A
MainLuckPharmaceuticalsAmmoniaNitrogenNanotubesemissions1DischargeOutletofWasteWater0.5mg/LDischargeStandardsofWaterPollutantsforPharmaceuticalindustryMixing/CompoundingandFormulationCategory-GB21908-20080.001ton/year0.02ton/yearN/A
MainLuckPharmaceuticalsPhosphateNanotubesemissions1DischargeOutletofWasteWater0.05mg/lDischargeStandardsofWaterPollutantsforPharmaceuticalindustryMixing/CompoundingandFormulationCategory-GB21908-20080.0001ton/year0.001ton/yearN/A
MainLuckBODNanotubes1Discharge5mg/LDischargeStandardsofWater0.01ton/y0.04ton/yN/A

Pharmaceuticals

PharmaceuticalsemissionsOutletofWasteWaterPollutantsforPharmaceuticalindustryMixing/CompoundingandFormulationCategory-GB21908-2008earear
MainLuckPharmaceuticalsSSNanotubesemissions1DischargeOutletofWasteWater5mg/LDischargeStandardsofWaterPollutantsforPharmaceuticalindustryMixing/CompoundingandFormulationCategory-GB21908-20080.01ton/year0.04ton/yearN/A
SinopharmWeiqidaPharmaceuticalCo.,Ltd.(District1)CODNanotubesemissions1DischargeOutletofWasteWater240.08㎎/LGrade-B(GB/T31962-2015)inWastewaterQualityStandardsforDischargetoMunicipalSewers717.162640N/A
SinopharmWeiqidaPharmaceuticalCo.,Ltd.(District1)AmmoniaNitrogenNanotubesemissions1DischargeOutletofWasteWater1.03㎎/LGrade-B(GB/T31962-2015)inWastewaterQualityStandardsforDischargetoMunicipalSewers3.13350.7N/A
SinopharmWeiqidaPharmaceuticalCo.,Ltd.(District2)CODNanotubesemissions1DischargeOutletofWasteWater132.18㎎/LGrade-B(GB/T31962-2015)inWastewaterQualityStandardsforDischargetoMunicipalSewers199.971440N/A
SinopharmWeiqidaPharmaceuticalCo.,Ltd.(District2)AmmoniaNitrogenNanotubesemissions1DischargeOutletofWasteWater2.55㎎/LGrade-B(GB/T31962-2015)inWastewaterQualityStandardsforDischargetoMunicipalSewers3.27256.5N/A
SinopharmWeiqidaPharmaceuticalCo.,Ltd.(District2)ParticulatesOrganisedemissions1Exhaustexhaustport3.12㎎/m?DB14/1929-2019-LandmarkofEmissionStandardofAirPollutantsforBoiler1.9819.683N/A
SinopharmWeiqidaPharmaceuticalCo.,Ltd.(District2)SulfurdioxideOrganisedemissions1Exhaustexhaustport8.19㎎/m?DB14/1929-2019-LandmarkofEmissionStandardofAirPollutantsforBoiler5.4168.733N/A
SinopharmNitrogen1Exhaust19.02㎎/m?DB14/1929-2019-13.95101.88N/A

WeiqidaPharmaceuticalCo.,Ltd.(District2)

WeiqidaPharmaceuticalCo.,Ltd.(District2)oxidesOrganisedemissionsexhaustportLandmarkofEmissionStandardofAirPollutantsforBoiler
ChinaNationalZhijun(Shenzhen)PharmaceuticalCo.,Ltd.CODNanotubesemissions1DischargeOutletofWasteWater24㎎/LTable2intheDischargeStandardofWaterPollutantsforPharmaceuticalIndustryMixing/CompoundingandFormulationCategoryGB21908-20081.531205.3874N/A
ChinaNationalZhijun(Shenzhen)PharmaceuticalCo.,Ltd.AmmoniaNitrogenNanotubesemissions1DischargeOutletofWasteWater0.9269㎎/LTable2intheDischargeStandardofWaterPollutantsforPharmaceuticalIndustryMixing/CompoundingandFormulationCategoryGB21908-20080.059100.8979N/A
ChinaNationalZhijun(Shenzhen)PharmaceuticalCo.,Ltd.TotalphosphorusNanotubesemissions1DischargeOutletofWasteWater0.04㎎/LTable2intheDischargeStandardofWaterPollutantsforPharmaceuticalIndustryMixing/CompoundingandFormulationCategoryGB21908-20080.00260N/AN/A
ChinaNationalZhijun(Shenzhen)PingshanPharmaceuticalCo.,Ltd.CODNanotubesemissions1DischargeOutletofWasteWater19.58㎎/LThemorestricterstandardsbetweenWaterPollutantsforPharmaceuticalIndustryMixing/CompoundingandFormulationCategory(GB21908-2008)andtheIV-water(AmmoniaNitrogenuptogradeV)inEnvironmentalQualityStandardforSurfaceWater(GB3838-2002)1.3762.628N/A
ChinaNationalZhijun(Shenzhen)PingshanPharmaceuticalCo.,Ltd.AmmoniaNitrogenNanotubesemissions1DischargeOutletofWasteWater0.211㎎/LThemorestricterstandardsbetweenWaterPollutantsforPharmaceuticalIndustryMixing/CompoundingandFormulationCategory(GB21908-2008)andtheIV-water(AmmoniaNitrogenuptogradeV)inEnvironmentalQualityStandardforSurfaceWater(GB3838-2002)0.0140.1752N/A

ChinaNationalZhijun(Shenzhen)PingshanPharmaceuticalCo.,Ltd.

ChinaNationalZhijun(Shenzhen)PingshanPharmaceuticalCo.,Ltd.TotalphosphorusNanotubesemissions1DischargeOutletofWasteWater0.02㎎/LThemorestricterstandardsbetweenWaterPollutantsforPharmaceuticalIndustryMixing/CompoundingandFormulationCategory(GB21908-2008)andtheIV-water(AmmoniaNitrogenuptogradeV)inEnvironmentalQualityStandardforSurfaceWater(GB3838-2002)0.00080.02628N/A
ShanghaiTianweiBiopharmaceuticalCo.,Ltd.CODNanotubesemissions1DischargeOutletofWasteWater105.89mg/LTheDischargeStandardofPollutantsforBio-pharmaceuticalIndustry(DB31/373-2010)3.22515.5382N/A
ShanghaiTianweiBiopharmaceuticalCo.,Ltd.AmmoniaNitrogenNanotubesemissions1DischargeOutletofWasteWater1.73mg/LTheDischargeStandardofPollutantsforBio-pharmaceuticalIndustry(DB31/373-2010)0.0541.2012N/A
ShanghaiTianweiBiopharmaceuticalCo.,Ltd.TotalnitrogenNanotubesemissions1DischargeOutletofWasteWater7.51mg/LTheDischargeStandardofPollutantsforBio-pharmaceuticalIndustry(DB31/373-2010)0.2291.8263N/A
ShanghaiTianweiBiopharmaceuticalCo.,Ltd.TotalphosphorusNanotubesemissions1DischargeOutletofWasteWater0.72mg/LTheDischargeStandardofPollutantsforBio-pharmaceuticalIndustry(DB31/373-2010)0.0240.238N/A
SinopharmChuankangPharmaceuticalCo.,Ltd.CODNanotubesemissions1DischargeOutletofWasteWater62.28mg/LWastewaterQualityStandardsforDischargetoMunicipalSewers(GB/T31962-2016)1.113111.33N/A
SinopharmChuankangPharmaceuticalCo.,Ltd.AmmoniaNitrogenNanotubesemissions1DischargeOutletofWasteWater1.58mg/LWastewaterQualityStandardsforDischargetoMunicipalSewers(GB/T31962-2016)0.02831.02N/A
SinopharmChuankangPharmaceutiTotalphosphorusNanotubesemissions1DischargeOutletofWasteWater0.836mg/LWastewaterQualityStandardsforDischargetoMunicipalSewers(GB/T31962-2016)0.01490.181N/A

calCo.,Ltd.

calCo.,Ltd.
JiangsuWeiqidaPharmaceuticalCo.,Ltd.CODNanotubesemissions1DischargeOutletofWasteWater287.78IntegratedWastewaterDischargeStandard(GB8978-1996)-Tertiarystandardsintable-432.3846.82N/A
JiangsuWeiqidaPharmaceuticalCo.,Ltd.AmmoniaNitrogenNanotubesemissions1DischargeOutletofWasteWater2.87IntegratedWastewaterDischargeStandard(GB8978-1996)-Tertiarystandardsintable-40.314.21N/A
JiangsuWeiqidaPharmaceuticalCo.,Ltd.TotalnitrogenNanotubesemissions1DischargeOutletofWasteWater21.76IntegratedWastewaterDischargeStandard(GB8978-1996)-Tertiarystandardsintable-41.885.696N/A
JiangsuWeiqidaPharmaceuticalCo.,Ltd.TotalphosphorusNanotubesemissions1DischargeOutletofWasteWater1.92IntegratedWastewaterDischargeStandard(GB8978-1996)-Tertiarystandardsintable-40.210.65N/A
SinopharmYixinPharmaceuticalCo.,Ltd.CODNanotubesemissions1DischargeOutletofWasteWater7.0145mg/LProtocolconcentration0.61922.44N/A
SinopharmYixinPharmaceuticalCo.,Ltd.AmmoniaNitrogenNanotubesemissions1DischargeOutletofWasteWater0.0706mg/LProtocolconcentration0.00580.39N/A
SinopharmYixinPharmaceuticalCo.,Ltd.NoxOrganisedemissions1Exhaustexhaustport0.4123kg/hEmissionStandardofAirPollutantsforBoilers(GB13271-2014)2.82944.64N/A
ShanghaiModernHasen(Shangqiu)PharmaceuticalCo.,Ltd.CODNanotubesemissions1DischargeOutletofWasteWater66.82mg/LIndirectDischargeStandardofWaterPollutantsforPharmaceuticalIndustryChemicalSynthesisProductsCategory(DB41/756-2012)13.928395.144N/A
ShanghaiModernHasen(Shangqiu)PharmaceuticalCo.,Ltd.AmmoniaNitrogenNanotubesemissions1DischargeOutletofWasteWater2.30mg/LIndirectDischargeStandardofWaterPollutantsforPharmaceuticalIndustryChemicalSynthesisProductsCategory(DB41/756-2012)0.5055713.239N/A

ConstructionandoperationofpollutionpreventionandcontrolfacilitiesAtpresent,theabove-mentionedenvironmentalpollutionkeymonitoringunitsinwhichtheCompanyhasashareholding(anditsaffiliates)haveestablishedpollutionpreventionandcontrolfacilitiesforwastewater.Inthedailymanagementprocess,enterprisesestablishmanagementproceduresandoperatinginstructionsforenvironmentalprotectionfacilities,andensurethenormalandcompliantoperationofanti-pollutionfacilitiesthroughsystemimplementationandresponsibilityimplementation.Allenterprisesarecontinuouslyinvestingfundsandsteppingupthetransformationandimprovementofpollutionpreventionandcontrolfacilitiestoensurethestableoperationofpollutionpreventionfacilitiesandimprovethedisposalcapacityofenvironmentalprotectionfacilities.EnvironmentalimpactassessmentofconstructionprojectsandotherenvironmentalprotectionadministrativelicensesAtpresent,theprojectsofallkeymonitoringunitshavecarriedoutenvironmentalimpactassessmentsandobtainedapprovals.Theprojectstobebuiltalsocarryouttherelevantadministrativereviewproceduresaccordingtothe“threesimultaneous”requirementsoftheenvironmentalprotectionfacilitiesoftheconstructionproject.EmergencyplanforenvironmentalemergenciesAtpresent,theabove-mentionedenvironmentalpollutionkeymonitoringunitsinwhichtheCompanyhasashareholding(anditsaffiliates)haveformulatedtheEmergencyPlanforEnvironmentalEmergenciesandreportedthemaccordingtotheregulatoryrequirementsofthelocalregulatoryauthorities.Accordingtothemanagementrequirementsoftheemergencyplan,thekeyunitsregularlycarryoutemergencyplandrillstofurtherprovidetheenterprises’emergencyresponsecapability.Environmentalself-monitoringschemeAtpresent,theabove-mentionedenvironmentalpollutionkeymonitoringunitsinwhichtheCompanyhasashareholding(anditsaffiliates)haveestablishedenvironmentalself-detectionschemeandplan,andimplementedself-inspection,third-partydetectionandothermonitoringmethodsaccordingtothegovernmentrequirements.Relevantmonitoringdataandreportshavebeenarchivedandsaved.Measurestakentoreducingthecarbonemissionsduringthereportingperiodandtheireffectiveness

√Applicable□Notapplicable(i)Promotetheapplicationofthe"fournewtechnologies".

1.ThewestwallofZhanjiangDistributionCenterofGuangdongLogisticsisseverelyexposedtosunlight,thetemperatureofwarehouseincreasesafterthewallabsorbsheat,sothecoolingintensityoftheair-conditioningunitincreases.Itisproposedtosealthewallwiththermalinsulationboardtoeffectivelycutofftheheattransferofthewallandreducetheenergyconsumptionoftheairconditioner.

2.MostofthefloorsoftheGaotangwarehousearemainlymadeofsteelframestructureandcolorsteelplate,andthewarehousehasbeeninuseformorethantenyears,withtheagingofmaterials,theinsulationeffectdecreases,resultinginincreasedenergyconsumptionofwarehouseairconditioning.Itisproposedtopaintalayerofthermalinsulationcoatingontheroofofthewarehousetoeffectivelyblockthetransferofexternalheat,whichcanreducetheindoortemperatureofthewarehousebyabout5-10°C,achievingthegoalofenergysaving,environmentalprotectionandreducingelectricityconsumption.

3.HenanGuodainvestedmorethan300,000yuantoreplacetheoriginal2dieseltransportvehicleswithnewenergyelectricvehicles.Thetotalmileagethisyearwasabout25,810kilometers,thetotalpowerconsumption

was14,450kWhatacostofabout14,450yuan,convertingcomprehensiveenergyconsumptionof1.77tons.Comparedwithdieselvehicles,thecomprehensiveenergyconsumptionreducedby2.34tonsonayear-on-yearbasis,adecreaseofabout57%,andsavedcostofabout12,500yuan.(ii)Strengthenenergyconsumptionmanagementandcontrol,economiesgofirst

1.Reducethecostofusingthepublicvehicles.Theofficialbusinessvehiclesshallbemanageduniformly,andthesystemofdispatchingvehiclesshallbereviewedandapprovedbytheoffice,soastoreducethenumberofseparateorrepeateddispatchingofvehicles,andprivateuseofpublicvehiclesisstrictlyprohibited.Strengthenthemanagementofvehicleuse,andimplementsystemssuchasfixed-pointrefuelingandsinglevehiclefuelconsumptionregistration.Minimizethelosscausedbyhumanfactorsasmuchaspossible.In2021,SinopharmAccord'svehiclefuelconsumptiondroppedby33.48tonscomparedwiththesameperiodlastyear.Thenextstepistofocusonplanningthemonitoringofvehiclefuelconsumption.

2.Strictlyeconomizeonelectricity.Thecompanystartsfromsavingakilowatt-hourofelectricitytoblockthewasteloopholes.Firstly,strengthenthemanagementofelectricalequipment:whenusingofficeautomationequipmentsuchascomputers,printers,andcopiers,itisrequiredtominimizestandbyconsumption.Secondly,replacethepassagewayandcorridorlightingwithenergy-savinglamps,andsettimeandvoicecontroldevicestoautomaticallyturnonandoff,whichbetterputanendtothephenomenonofeternallighting.Thirdly,addspongestripstoallthewindowstoimprovethetightnessofdoorsandwindows,andopentheairconditionerseasonallytosaveelectricity.

3.Strengthenwaterconservation.Strengthenthedailymaintenanceandmanagementofwaterequipment,getintothehabitofturningoffthetapwhenleaving,preventleakage,andbettereliminatethephenomenonthatthewaterkeepsrunning.ReasonsfornotdisclosingotherenvironmentalinformationTheabovecompaniesarealljointstockcompaniesoftheCompany.Neitherthecompanynoritsholdingsubsidiariesbelongtothekeypollutantdischargeunitsannouncedbytheenvironmentalprotectiondepartment.

II.SocialResponsibility“SocialResponsibilityReportofSinopharmAccordin2021”canbeseeninJuchaowebsitereleasedonthesamedate(http://www.cninfo.com.cn)

III.ConsolidatingandexpandingtheachievementsofpovertyalleviationandruralrevitalizationTheCompanyhasnotcarriedouttargetedpovertyalleviationinthereportingperiod

SectionVI.ImportantEventsI.Implementationofcommitment

1.CommitmentscompletedinPeriodandthosewithoutcompletedtillendofthePeriodfromactualcontroller,shareholders,relatedparties,purchaserandcompanies

√Applicable□Notapplicable

Commitment

reason

CommitmentreasonPromisebyTypeofcommitmentsContentofcommitmentsCommitmentdateCommitmenttermImplementation
Sharereformcommitment
CommitmentsinreportofacquisitionorequitychangeSinopharmHoldingCommitmentofshareholders""Asalargepharmaceuticalcommercialenterprisewhosebusinessinvolvespharmaceuticalwholesaleandretail,SinopharmHoldingmayoverlapwiththeCompanyingeographicalsegmentationduringitsfuturebusinessdevelopment.Toavoidthepotentialpeercompetitionbroughtbysuchgeographicaloverlap,SinopharmHoldingundertakesthat,uponthetransferofsharesofSinopharmHoldingGuangzhouitheldtoSinopharmAccord,“1.itwillnotnewly-establishorbroadenwithinGuangdonganybusinessoperationthatactuallycompetewiththatofSinopharmAccord,orsetupanynewsubsidiariesorsubordinateenterpriseswhoengageinsuchbusiness.2.ItwillenterintobusinessdelineationwithSinopharmAccordandSinopharmHoldingGuangzhou,therebygivingthethreepartiescleargeographicalareastocarryoutpharmaceuticalwholesaleandretailbusinesses,soastoavoidpotentialpeercompetition.Apartfromabove,SinopharmHoldingwillnolongernewly-establishany2005-06-21Long-termeffectiveNormallyimplementing

enterprisethatmaycompetewithSinopharmAccordintheproductionandR&Dofpharmaceuticalproducts.”

enterprisethatmaycompetewithSinopharmAccordintheproductionandR&Dofpharmaceuticalproducts.”
CommitmentsinassetsreorganizationSinopharmGroupCo.,LtdCommitmentsonhorizontalcompetition,relationtransactionandcapitaloccupation"SinopharmHoldingmadecommitmentsintheReportaboutChinaNationalAccordMedicinesCorporationLtd.PurchasingAssetsandRaisingSupportingFundsandRelatedTransactionsbyAssetSale,StockIssuanceandCashPaymentthattheCompanyshallbethecontrollingshareholderofChinaNationalAccordMedicinesCorporationLtd.(hereinafterreferredtoasSinopharmAccord)uptotheissuedateofthiscommitmentletter,afterthecompletionofthismajorassetsreorganization(hereinafterreferredtoas“thisreorganization”),SinopharmAccordshallnolongerholdsharesoroperaterelevantbusinessesofpharmaceuticalindustry,themainbusinesswillbecomethenationalpharmaceuticalretailandpharmaceuticaldistributionbusinessinGuangdongandGuangxi.InordertosupportthebusinessdevelopmentofSinopharmAccordandavoidhorizontalcompetitionwithSinopharmAccordanditscontrollingenterprises,theCompanymadefollowingirrevocablecommitmentsandpromises:1,afterthecompletionofthisreorganization,asforthesocialretaildrugstoreassetsexceptforSinopharmHoldingGuodaDrugstoreCo.,Ltd.anditssubsidiariesandbranchesownedorcontrolledbytheCompany,theCompanypromisedtotakeappropriatemeasurestosolvethehorizontalcompetitionprobleminthepharmaceuticalretailbusinessbetweentheCompanyandSinopharmAccordwithin5yearssincethecompletion2016-12-28Long-termeffectiveNormallyimplementing

dateofthisreorganization.2.TheCompany'swayofresolvinghorizontalcompetitionproblemsincludesandisnotlimitedtopurchasingthesocialretaildrugstoreassetssubordinatedtotheCompanybySinopharmAccord,takingtheentrustedoperation,leasingorcontractingoperationbySinopharmAccordanditscontrollingenterprisesinaccordancewiththemethodspermittedtonationallawstoholdorcontrolthesocialretaildrugstoreassets,ortransferringthecontrollingstakeofthesocialretaildrugstoreassetsbytheCompany.3.Iftheshareholdersofthesocialretaildrugstoreassets(hereinafterreferredtoas"thethirdparty")oftheCompanyortheenterprisescontrolledbytheCompanyhaveoraregoingtoperformthepreemptiverightsunderthesameconditionsinaccordancewithrelevantlawsandcorrespondingArticlesofAssociation,thentheabovecommitmentwillnotbeapplicable,butinthiscase,theCompanyshouldtryitsutmosttourgethethirdpartytowaiveitspreemptiverights.IftheCompanyisunabletourgethethirdpartytogiveupthepreemptiverights,theCompanywillurgetheenterprisescontrolledbytheCompanytotransferthesocialretaildrugstoreassetstothethirdpartytosolvethehorizontalcompetitionproblem.4.ThepharmaceuticaldistributionassetscurrentlyownedorcontrolledbytheCompanyaredistributedoutsideGuangdongandGuangxiregions,thereisnohorizontalcompetitionwithSinopharmAccord,theCompanywillnotengageinthesameorsimilaroperationbusinessestoSinopharm

AccordinGuangdongandGuangxiinthefuture,iftheCompanyanditsholdingenterprisesobtainthenewbusinessopportunitiesconstitutingsubstantialhorizontalcompetition(hereinafterreferredtoascompetitivenewbusiness)withinthepharmaceuticaldistributionbusinessscopeofSinopharmAccordinGuangdongandGuangxi,theCompanywillsendwrittennoticetoSinopharmAccordandtryitsutmosttofirstlyprovidethenewbusinessopportunitiestoSinopharmAccordoritsholdingenterprisesaccordingtothereasonableandfairtermsandconditionssoastoavoidthehorizontalcompetitionwithSinopharmAccordanditsholdingenterprises.5.Sincetheissuedateofthiscommitmentletter,theCompanypromisestoindemnifySinopharmAccordforallactuallosses,damagesandexpensescausedbytheCompanyinviolationofanycommitmentsunderthiscommitmentletter.6.Thiscommitmentletterterminateswhenfollowingcircumstancesoccur(subjecttotheearlierone):(1)theCompanyisnolongerthecontrollingshareholderofSinopharmAccord;or(2)thesharesofSinopharmAccordterminatethelistingatthestockexchange.”

AccordinGuangdongandGuangxiinthefuture,iftheCompanyanditsholdingenterprisesobtainthenewbusinessopportunitiesconstitutingsubstantialhorizontalcompetition(hereinafterreferredtoascompetitivenewbusiness)withinthepharmaceuticaldistributionbusinessscopeofSinopharmAccordinGuangdongandGuangxi,theCompanywillsendwrittennoticetoSinopharmAccordandtryitsutmosttofirstlyprovidethenewbusinessopportunitiestoSinopharmAccordoritsholdingenterprisesaccordingtothereasonableandfairtermsandconditionssoastoavoidthehorizontalcompetitionwithSinopharmAccordanditsholdingenterprises.5.Sincetheissuedateofthiscommitmentletter,theCompanypromisestoindemnifySinopharmAccordforallactuallosses,damagesandexpensescausedbytheCompanyinviolationofanycommitmentsunderthiscommitmentletter.6.Thiscommitmentletterterminateswhenfollowingcircumstancesoccur(subjecttotheearlierone):(1)theCompanyisnolongerthecontrollingshareholderofSinopharmAccord;or(2)thesharesofSinopharmAccordterminatethelistingatthestockexchange.”
SINOPHARMCommitmentsonhorizontalcompetition,relationtransactionandcapitaloccupation“SINOPHARMmadecommitmentsintheReportaboutChinaNationalAccordMedicinesCorporationLtd.PurchasingAssetsandRaisingSupportingFundsandRelatedTransactionsbyAssetSale,StockIssuanceandCashPaymentthattheCompanyshallbetheactualcontrollerofChinaNationalAccordMedicinesCorporationLtd.(hereinafterreferredtoasSinopharmAccord)uptothe2016-12-28Long-termeffectiveNormallyimplementing

issuedateofthiscommitmentletter,afterthecompletionofthismajorassetsreorganization(hereinafterreferredtoas“thisreorganization”),SinopharmAccordshallnolongerholdsharesoroperaterelevantbusinessesofpharmaceuticalindustry,themainbusinesswillbecomethenationalpharmaceuticalretailandpharmaceuticaldistributionbusinessinGuangdongandGuangxi.InordertosupportthebusinessdevelopmentofSinopharmAccordandavoidhorizontalcompetitionwithSinopharmAccordanditscontrollingenterprises,theCompanymadefollowingirrevocablecommitmentsandpromises:1,afterthecompletionofthisreorganization,asforthesocialretaildrugstoreassetsexceptforSinopharmGroupGuodaDrugstoreCo.,Ltd.anditssubsidiariesandbranchesownedorcontrolledbytheCompany,theCompanypromisedtotakeappropriatemeasurestosolvethehorizontalcompetitionprobleminthepharmaceuticalretailbusinessbetweentheCompanyandSinopharmAccordwithin5yearssincethecompletiondateofthisreorganization.2.TheCompany'swayofresolvinghorizontalcompetitionproblemsincludesandisnotlimitedtopurchasingthesocialretaildrugstoreassetssubordinatedtotheCompanybySinopharmAccord,takingtheentrustedoperation,leasingorcontractingoperationbySinopharmAccordanditscontrollingenterprisesinaccordancewiththemethodspermittedtonationallawstoholdorcontrolthesocialretaildrugstoreassets,ortransferringthecontrollingstakeofthesocialretaildrugstore

assetsbytheCompany.3.Iftheshareholdersofthesocialretaildrugstoreassets(hereinafterreferredtoas"thethirdparty")oftheCompanyortheenterprisescontrolledbytheCompanyhaveoraregoingtoperformthepreemptiverightsunderthesameconditionsinaccordancewithrelevantlawsandcorrespondingArticlesofAssociation,thentheabovecommitmentwillnotbeapplicable,butinthiscase,theCompanyshouldtryitsutmosttourgethethirdpartytowaiveitspreemptiverights.IftheCompanyisunabletourgethethirdpartytogiveupthepreemptiverights,theCompanywillurgetheenterprisescontrolledbytheCompanytotransferthesocialretaildrugstoreassetstothethirdpartytosolvethehorizontalcompetitionproblem.4.ThepharmaceuticaldistributionassetscurrentlyownedorcontrolledbytheCompanyaredistributedoutsideGuangdongandGuangxiregions,thereisnohorizontalcompetitionwithSinopharmAccord,theCompanywillnotengageinthesameorsimilaroperationbusinessestoSinopharmAccordinGuangdongandGuangxiinthefuture,iftheCompanyanditsholdingenterprisesobtainthenewbusinessopportunitiesconstitutingsubstantialhorizontalcompetition(hereinafterreferredtoascompetitivenewbusiness)withinthepharmaceuticaldistributionbusinessscopeofSinopharmAccordinGuangdongandGuangxi,theCompanywillsendwrittennoticetoSinopharmAccordandtryitsutmosttofirstlyprovidethenewbusinessopportunitiestoSinopharmAccordoritsholdingenterprisesaccordingtothe

reasonableandfairtermsandconditionssoastoavoidthehorizontalcompetitionwithSinopharmAccordanditsholdingenterprises.5.Thiscommitmentletterterminateswhenfollowingcircumstancesoccur(subjecttotheearlierone):(1)theCompanyisnolongertheactualcontrollerofSinopharmAccord;or(2)thesharesofSinopharmAccordterminatethelistingatthestockexchange.”

reasonableandfairtermsandconditionssoastoavoidthehorizontalcompetitionwithSinopharmAccordanditsholdingenterprises.5.Thiscommitmentletterterminateswhenfollowingcircumstancesoccur(subjecttotheearlierone):(1)theCompanyisnolongertheactualcontrollerofSinopharmAccord;or(2)thesharesofSinopharmAccordterminatethelistingatthestockexchange.”
Commitmentsmakeininitialpublicofferingorre-financingSinopharmHoldingCommitmentofshareholders"SinopharmHoldingmadecommitmentsintheCommitmentLetterAboutSinopharmGroupCo.,Ltd.toAvoidHorizontalCompetition:“First,theCompanyandtheCompany’swholly-owned,controllingorotherenterpriseswithactualcontrol(inadditiontoSinopharmAccordanditscontrollingenterprises,hereinafterthesame)don’thavebusinessesandoperationsconstitutingthesubstantialhorizontalcompetitiontoSinopharmAccordanditscontrollingenterprises.Second,theCompanyandtheCompany’swholly-owned,controllingorotherenterpriseswithactualcontrolshallnotengage,participateinordobusinessesandactivitiesinGuangdongandGuangxiwhichconstitutesubstantialcompetitiontoSinopharmAccordandpharmaceuticalbusinessservices.Third,theCompanyandtheCompany’swholly-owned,controllingorotherenterpriseswithactualcontrolshallnotengage,participateinordobusinessesandactivitieswhichconstitutesubstantialcompetitiontoSinopharmAccordandpharmaceuticalindustrybusinesses.Fourth,theCompanyshallnottakeadvantageofthecontroltoSinopharmAccordtodamagethelegitimaterightsandinterestsofSinopharmAccordand2013-09-05Long-termeffectiveControllingshareholderisimplementinrealearnest,SinopharmAccordwillactivelyurgedthecontrollingshareholderandactualcontrollertofulfillcommitments

othershareholders(especiallymediumandsmallshareholders).Thiscommitmentlettertakeseffectfromtheissuedate,andremainsineffectfortheentireperiodwhentheCompanyactsasthecontrollingshareholderoritsrelatedpartyofSinopharmAccord.Withintheeffectiveperiodofthecommitment,iftheCompanyviolatesthiscommitmentandcausesalosstoSinopharmAccord,theCompanywilltimelymakefullcompensationforSinopharmAccord.”

othershareholders(especiallymediumandsmallshareholders).Thiscommitmentlettertakeseffectfromtheissuedate,andremainsineffectfortheentireperiodwhentheCompanyactsasthecontrollingshareholderoritsrelatedpartyofSinopharmAccord.Withintheeffectiveperiodofthecommitment,iftheCompanyviolatesthiscommitmentandcausesalosstoSinopharmAccord,theCompanywilltimelymakefullcompensationforSinopharmAccord.”
SinopharmHoldingCommitmentofshareholders"SinopharmHoldingmadecommitmentsintheCommitmentLetterAboutSinopharmGroupCo.,Ltd.toRegulatetheRelatedTransactionswithChinaNationalAccordMedicinesCorporationLtd.:“First,whentheCompanyiscontrollingSinopharmAccord,theCompanyandthecompaniesandenterprisesdirectlyandindirectlycontrolledbytheCompany(“relatedparty”forshort)willstrictlyregulatetherelatedtransactionswithSinopharmAccordanditscontrollingenterprises.Second,fortherelatedtransactionsthatcannotbeavoidednorhavereasonablereasonstooccur,theCompanyandrelatedpartyshallsignnormativerelatedtransactionagreementinaccordancewithrelevantlawswithSinopharmAccord.SinopharmAccordimplementstheapprovalproceduresandfulfillstheinformationdisclosureobligationsoftherelatedtransactionsaccordingtorelevantlaws,regulations,rules,othernormativedocumentsandtheconstitutionsofSinopharmAccord.Third,fortherelatedtransactionsthatcannotbeavoidedorhavereasonablereasonstooccur,theCompanyand2013-09-05Long-termeffectiveControllingshareholderisimplementinrealearnest,SinopharmAccordwillactivelyurgedthecontrollingshareholderandactualcontrollertofulfillcommitments

relatedpartyshallabidebytheopen,fairandjustmarketprinciplesandconfirmthepriceofrelatedtransactionsinaccordancewiththepricethattheindependentthirdpartywithoutassociationsetsforthesameandsimilartransactions,andensurethefairnessofthepriceoftherelatedtransactions.Fourth,whentheboardofdirectorsandthegeneralmeetingofstockholdersofSinopharmAccordvoteontherelatedtransactionsinvolvingtheCompanyandotherenterprisescontrolledbytheCompany,theCompanyshallfulfillthenecessaryobligationsthattheassociateddirectorsandassociatedshareholdersabstainfromvotinginaccordancewiththerelevantprovisions,andabidebythelegalproceduresforapprovingrelatedtransactionsandtheinformationdisclosureobligations.Fifth,theCompanyguaranteestoparticipateintheshareholders'generalmeeting,equallyexercisethecorrespondingrightsandtakethecorrespondingobligationsinaccordancewiththeconstitutionsofSinopharmAccord,nottotakeadvantageofcontrollingshareholderstatustoseekimproperbenefitsorutilizerelatedtransactionstoillegallytransferthefundsandprofitsofSinopharmAccord,andnottodamagethelegitimaterightsandinterestsofothershareholders(especiallythemediumandsmallshareholders)ofSinopharmAccord.Sixth,thiscommitmentlettercomesintoforcefromtheissuedateandremainsineffectfortheentireperiodwhentheCompanyactsasthecontrollingshareholderoritsrelatedpartyofSinopharmAccord.Withinthe

effectiveperiodofthecommitment,iftheCompanyviolatesthiscommitmentandcausesalosstoSinopharmAccord,theCompanywilltimelymakefullcompensationforSinopharmAccord.”

effectiveperiodofthecommitment,iftheCompanyviolatesthiscommitmentandcausesalosstoSinopharmAccord,theCompanywilltimelymakefullcompensationforSinopharmAccord.”
SINOPHARMCommitmentofactualcontroller""SINOPHARMmadecommitmentsintheCommitmentLetterAboutChinaNationalPharmaceuticalGroupCorporationtoAvoidHorizontalCompetitionwithChinaNationalAccordMedicinesCorporationLtd.:“First,inthenextfiveyears,Sinopharmplanstotakeappropriatemeasures(includingassetsreplacementoracquisition,equityreorganization,etc.)toresolvethehorizontalcompetitionbetweenSinopharmWeiqidaandSinopharmAccord.Second,inadditiontothepastmattersandmattersdisclosedinthiscommitmentletter,theCompanyandtheCompany’swholly-owned,controllingorotherenterpriseswithactualcontrolrights(exceptforSinopharmAccordanditscontrollingenterprises,thesameasbelow)shallnotdirectlyengagedin,participateinordothebusinessesanactivitiesconstitutingactualcompetitiontotheproductionandoperationofSinopharmAccordinChina.TherelevantcommitmentsaboutavoidinghorizontalcompetitionthattheCompanymadeinthepaststillremainineffect.Third,theCompanyshallnottakeadvantageofthecontrolrelationshiptoSinopharmAccordtodamagethelegitimaterightsandinterestsofSinopharmAccordanditsshareholders(especiallythemediumandsmallshareholders).Fourth,thiscommitmentlettercomesintoforcefromtheissuedateandremainsin2013-10-16Long-termeffectiveActualControllerisimplementinrealearnest,SinopharmAccordwillactivelyurgedthecontrollingshareholderandactualcontrollertofulfillcommitments

effectfortheentireperiodwhentheCompanyactsasthecontrollingshareholderoritsrelatedpartyofSinopharmAccord.”

effectfortheentireperiodwhentheCompanyactsasthecontrollingshareholderoritsrelatedpartyofSinopharmAccord.”
SINOPHARMCommitmentofactualcontroller"SINOPHARMmadecommitmentsintheCommitmentLetterAboutSinopharmGroupCo.,Ltd.toRegulatetheRelatedTransactionswithChinaNationalAccordMedicinesCorporationLtd.:“First,whentheCompanyiscontrollingSinopharmAccord,theCompanyandthecompaniesandenterprisesdirectlyandindirectlycontrolledbytheCompany(“relatedparty”forshort)willstrictlyregulatetherelatedtransactionswithSinopharmAccordanditscontrollingenterprises.Second,fortherelatedtransactionsthatcannotbeavoidedorhavereasonablereasonstooccur,theCompanyandrelatedpartyshallsignnormativerelatedtransactionagreementinaccordancewithrelevantlawswithSinopharmAccord.SinopharmAccordimplementstheapprovalproceduresandfulfillstheinformationdisclosureobligationsoftherelatedtransactionsaccordingtorelevantlaws,regulations,rules,othernormativedocumentsandtheconstitutionsofSinopharmAccord.Third,fortherelatedtransactionsthatcannotbeavoidedorhavereasonablereasonstooccur,theCompanyandrelatedpartyshallabidebytheopen,fairandjustmarketprinciplesandconfirmthepriceofrelatedtransactionsinaccordancewiththepricethattheindependentthirdpartywithoutassociationsetsforthesameandsimilartransactions,andensurethefairnessofthepriceoftherelatedtransactions.Fourth,whentheboardofdirectorsandthegeneralmeetingof2013-09-22Long-termeffectiveActualControllerisimplementinrealearnest,SinopharmAccordwillactivelyurgedthecontrollingshareholderandactualcontrollertofulfillcommitments

2.ConcerningassetsorprojectoftheCompany,whichhasprofitforecast,andreportingperiodstillinforecastingperiod,explainreasonsofreachingtheoriginalprofitforecast

□Applicable√Notapplicable

II.Non-operationalfundoccupationfromcontrollingshareholdersanditsrelatedparty

√Applicable□Notapplicable

stockholdersofSinopharmAccordvoteontherelatedtransactionsinvolvingtheCompanyandotherenterprisescontrolledbytheCompany,theCompanyshallfulfillthenecessaryobligationsthattheassociateddirectorsandassociatedshareholdersabstainfromvotinginaccordancewiththerelevantprovisions,andabidebythelegalproceduresforapprovingrelatedtransactionsandtheinformationdisclosureobligations.Fifth,theCompanyguaranteesnottotakeadvantageofactualcontrollerstatustoseekimproperbenefitsorutilizerelatedtransactionstoillegallytransferthefundsandprofitsofSinopharmAccord,andnottodamagethelegitimaterightsandinterestsofothershareholders(especiallythemediumandsmallshareholders)ofSinopharmAccord.Sixth,thiscommitmentlettercomesintoforcefromtheissuedateandremainsineffectfortheentireperiodwhentheCompanyactsastheactualcontrolleroritsrelatedpartyofSinopharmAccord.

Sharehol

dersorrelatedparty

ShareholdersorrelatedpartyTypeofrelatedDurationforoccupyingCausesOpeningamountNewfundsoccupiedinthereportingperiodTotalamountreimbursedinthereportingperiodClosingamountBalanceasofthedatewhenannualreportdisclosedReimbursementmethodexpectedReimbursementamountexpectedRepaymenttimeexpected(Month)
SinopharmZhijun(Suzhou)PharmaceuticalCo.,Ltd.OtherJan.of2018-presentEntrustedloan4,633.420.000.004,633.424,633.42Other
Total4,633.420.000.004,633.424,633.42----
Totalvalueatendoftheperiodasapercentageofthelatestauditednetassets0.31%
RelevantdecisionproceduresThe“proposaloncontinuetoprovideentrustedloanstoSinopharmZhijun(Suzhou)PharmaceuticalCo.,Ltd.”wasdeliberatedandapprovedby29thsessionof7thBODdatedJanuary26,2018
Explanationonreasonsfornewoccupationofnon-operationfundsbycontrollingshareholdersanditsrelatedpartiesintheperiod,prosecutionofthoseresponsibleandmeasuresproposedbytheBoardNotapplicable
Explanationonreasonsforfailuretopayofftheoccupationofnon-operationfundsasschedule,prosecutionofthoseresponsibleandmeasuresproposedbytheBoardSinopharmZhijun(Suzhou)PharmaceuticalCo.,Ltdfailedtocollectedtheentrustedloansoverdue,onMay11,2021,theCourtruledthatSinopharmZhijun(Suzhou)PharmaceuticalCo.,Ltdwasbankruptanddesignatedlocalgovernmentasthebankruptcyadministration.Atpresent,thematterisinthestageofdeclarationofclaimfiling,andtheCompanyhasmadeafullprovisionforbaddebtsontheentrustedloanduetotheprincipleofprudence.
SpecifauditopinionofthefundoccupationbyCPAFoundmoreinthe“ExplanationonFundOccupationbyControllingShareholdersanditsRelatedPartiesforyearof2021”releasedonMarch30,2022
Reasonsfortheinconsistencybetweenthenon-operationfundoccupationbycontrollingshareholdersanditsrelatedpartiesdisclosedinAnnualReportandtheNotapplicable

SpecificAuditOpinion

III.Externalguaranteeoutoftheregulations

□Applicable√NotapplicableNoexternalguaranteeoutoftheregulationsoccurredintheperiod.IV.Statementonthelatest“modifiedauditreport”byBOD

□Applicable√NotapplicableV.ExplanationfromBoardofDirectors,SupervisoryCommitteeandIndependentDirectors(ifapplicable)for“QualifiedOpinion”thatissuedbyCPA

□Applicable√Notapplicable

VI.Explanationofthechangesinaccountingpolices,accountingestimatesorcorrectionofsignificantaccountingerrorscomparedwiththefinancialreportofthepreviousyear

□Applicable√NotapplicableTheCompanyhadnochangesinaccountingpolicies,accountingestimatesorcorrectionofsignificantaccountingerrorsduringthereportingperiod.VII.Comparewithlastyear’sfinancialreport;explainchangesinconsolidationstatement’sscope

√Applicable□NotapplicableDetailsofchangesinconsolidationstatement’sscopecanbeseeninNoteVIofSectionX.FinancialReport.

VIII.Appointmentandnon-reappointment(dismissal)ofCPA

Accountingfirmappointed

SpecificAuditOpinionNameofdomesticaccountingfirm

NameofdomesticaccountingfirmErnst&YoungCPA(SpecialGeneralpartnership)
Remunerationfordomesticaccountingfirm(in10thousandYuan)621.48
Continuouslifeofauditingservicefordomesticaccountingfirm6
NameofdomesticCPADengDongmei,LiYuanfen

ContinuouslifeofCPAfromthedomesticaccountingfirmforauditingservice

ContinuouslifeofCPAfromthedomesticaccountingfirmforauditingserviceDengDongmei(1year),LiYuanfen(3years)
Nameofforeignaccountingfirm(ifapplicable)N/A
Continuouslifeofauditingserviceforforeignaccountingfirm(ifapplicable)N/A
NameofforeignCPA(ifapplicable)N/A
ContinuouslifeofauditingserviceforforeignCPA(ifapplicable)N/A

Re-appointedaccountingfirmsinthisperiod

□Yes√NoAppointmentofinternalcontrolauditingaccountingfirm,financialconsultantorsponsor

√Applicable□NotapplicableInthePeriod,theCompanyengagedErnst&YoungCPA(SpecialGeneralpartnership)astheauditbodyforinternalcontrol,andauditingchargeforinternalcontrolamountingas1,120,982.00yuan.

IX.Particularaboutdelistingafterannualreportdisclosed

□Applicable√NotapplicableX.Bankruptcyreorganization

□Applicable√NotapplicableNobankruptcyreorganizationfortheCompanyinreportingperiod.XI.SignificantlitigationandarbitrationoftheCompany

□Applicable√NotapplicableNosignificantlitigationandarbitrationoccurredinthereportingperiod.XII.Penaltyandrectification

□Applicable√NotapplicableNopenaltyandrectificationfortheCompanyinreportingperiod.XIII.Integrityofthecompanyanditscontrollingshareholdersandactualcontrollers

√Applicable□Notapplicable

Inreportingperiod,controllingshareholderandactualcontrolleroftheCompanyhasasoundintegrity,andtherearenocasesoffailuretoimplementtheeffectivejudgementofthecourtandthelargeamountofdebtdueandunliquidated

XIV.Majorrelatedtransaction

1.Relatedtransactionwithroutineoperationconcerned

√Applicable□Notapplicable

Related

party

RelatedpartyRelationshipTypeoftransactionContentPricingprinciplesPrice(in10thousandyuan)Amount(in10thousandyuan)PercentageoftheamountinsimilartransactionsTradingamountapproved(in10thousandyuan)Whetherovertheapprovedlimitedornot(Y/N)ClearingformforrelatedtransactionAvailablesimilarmarketprice(in10thousandyuan)DateofdisclosureIndexofdisclosure引
SinopharmHoldingDistributionCenterCo.,Ltd.HasthesamecontrollingshareholderPurchasingofgoodsPurchasingofgoodsMarketprice105,178.02105,178.021.65%160,000NCashandnotessettlement105,178.022021-04-02JuchaoWebsite:NoticeNo.:2021-09
ChinaNationalMedicinesCorporationLtdHasthesamecontrollingshareholderPurchasingofgoodsPurchasingofgoodsMarketprice75,120.4075,120.401.18%90,000NCashandnotessettlement75,120.402021-04-02JuchaoWebsite:NoticeNo.:2021-09
Total----180,298.42--250,000----------
DetailofsalesreturnwithmajoramountinvolvedN/A
Reporttheactualimplementationoftheday-to-dayrelatedtransactionswhichwereprojectedabouttheirtotalamountbytypesduringthereportingperiod(ifapplicable)Therelatedtransactionsaresettledbycashandnote,accordingtothe“proposalonpredictionoftheroutinerelatedtransactionsbetweentheCompanyanditssubsidiariesandrelatedpartiesforyearof2021”deliberatedandapprovedby23rdsessionof8thBODheldonMarch31,2021,andthe“NoticeonPredictionofRoutineRelatedTransactionsin2021”(NoticeNo.:2021-09)releasedonApril2,2021,duringthereportingperiod,salesofgoodsfromrelatedpartiesaccountedfor67.27%oftheamountpredictedforthewholeyear;purchasingofgoodsfromrelatedpartiesaccountedfor76.87%oftheamountpredictedforthewholeyear;therentalincomeofhousesandequipmentfromrelatedpartiesaccountedfor38.66%oftheamountpredictedforthewholeyear;theexpenditureofleasingforhousesandequipmentfromrelatedpartiesaccountedfor79.24%of

theamountpredictedforthewholeyear;thelaborservicesprovidedfromrelatedpartiesaccountedfor68.46%oftheamountpredictedforthewholeyear;thelaborservicereceivedbyrelatedpartiesaccountedfor36.20%oftheamountpredictedforthewholeyearandtotalothervaryrelatedtransactionsaccountedfor74.91%oftheamountpredictedforthewholeyear.

theamountpredictedforthewholeyear;thelaborservicesprovidedfromrelatedpartiesaccountedfor68.46%oftheamountpredictedforthewholeyear;thelaborservicereceivedbyrelatedpartiesaccountedfor36.20%oftheamountpredictedforthewholeyearandtotalothervaryrelatedtransactionsaccountedfor74.91%oftheamountpredictedforthewholeyear.
Reasonsformajordifferencesbetweentradingpriceandmarketreferenceprice(ifapplicable)Notapplicable

2.Relatedtransactionsbyassetsacquisitionandsold

□Applicable√NotapplicableNorelatedpartytransactionsbyassetsacquisitionandsoldfortheCompanyinPeriod.

3.Mainrelatedtransactionsofmutualinvestmentoutside

□Applicable√NotapplicableNomainrelatedtransactionsofmutualinvestmentoutsidefortheCompanyinreportingperiod.

4.Contactofrelatedcreditanddebt

□Applicable√NotapplicableNocontactofrelatedcreditanddebtoccurredinthereportingperiod.

5.Contactwiththerelatedfinancecompanies

√Applicable□NotapplicableDepositbusiness

RelatedpartyRelationshipMaximumdailydepositlimit(in10thousandyuan)DepositinterestraterangeOpeningbalance(in10thousandyuan)AmountforthePeriodEndingBalance(10thousandyuan)
TotaldepositamountforthePeriod(10thousandyuan)ThetotalamountwithdrawninthePeriod(10thousandyuan)
ChinaNationalFinanceCorporationLtdThesameultimatecontrollingshareholder30,0000.35%-1.89%10,177.99213,307.07223,287.62197.44

Loanbusiness

Relatedparty

RelatedpartyRelationshipLoanline(10thousandyuan)LoaninterestraterangeOpeningBalance(10thousandyuan)AmountforthePeriodEndingBalance(10thousandyuan)
TotalloanamountforthePeriod(10thousandyuan)TotalrepaymentamountforthePeriod(10thousandyuan)
ChinaNationalFinanceCorporationLtdThesameultimatecontrollingshareholder100,0003.50%-3.70%1,432.28130,884.13123,089.049,227.37

Creditextensionorotherfinancialbusiness

RelatedpartyRelationshipTypeofbusinessTotalamount(10thousandyuan)Actualamount(10thousandyuan)
ChinaNationalFinanceCorporationLtdThesameultimatecontrollingshareholderCredit100,000130,884.13
ChinaNationalFinanceCorporationLtdThesameultimatecontrollingshareholderBankacceptancebilldiscount87,693.7787,693.77
ChinaNationalFinanceCorporationLtdThesameultimatecontrollingshareholderEntrustedloan3,1603,160

6.TransactionsbetweenthefinancecompanycontrolledbytheCompanyandrelatedparties

□Applicable√NotapplicableTherearenodeposits,loans,creditsorotherfinancialbusinessbetweenthefinancecompaniescontrolledbytheCompanyandrelatedparties

7.Othermajorrelatedtransactions

□Applicable√NotapplicableNoothermajorrelatedpartytransactionsoccurredintheperiod.XV.Significantcontractandimplementations

1.Trusteeship,contractandleasing

(1)Trusteeship

□Applicable√Notapplicable

TheCompanyhadnotrusteeshipinthereportingperiod.

(2)Contract

□Applicable√NotapplicableNocontractfortheCompanyinreportingperiod.

(3)Leasing

□Applicable√NotapplicableNoleasingfortheCompanyinreportingperiod.

2.Majorguarantees

√Applicable□Notapplicable

In10thousandYuan

ParticularsabouttheexternalguaranteeoftheCompanyandthesubsidiaries(Barringtheguaranteeforsubsidiaries)

ParticularsabouttheexternalguaranteeoftheCompanyandthesubsidiaries(Barringtheguaranteeforsubsidiaries)
NameoftheCompanyguaranteedRelatedAnnouncementdisclosuredateGuaranteelimitActualdateofhappeningActualguaranteelimitGuaranteetypeCollateral(ifapplicable)Counter-guaranteesituation(ifapplicable)GuaranteetermImplemented(Y/N)Guaranteeforrelatedparty(Y/N)
Notapplicable
GuaranteebetweentheCompanyandthesubsidiaries
NameoftheCompanyguaranteedRelatedAnnouncementdisclosuredateGuaranteelimitActualdateofhappeningActualguaranteelimitGuaranteetypeCollateral(ifapplicable)Counter-guaranteesituation(ifapplicable)GuaranteetermImplemented(Y/N)Guaranteeforrelatedparty(Y/N)
SinopharmHoldingGuangzhouCo.,Ltd.April2,202130,000May20,202130,000Jointliabilityassurance2021.05.20-2022.05.20NY
SinopharmHoldingGuangzhouCo.,Ltd.April2,202170,000May10,202137,572.58Jointliabilityassurance2021.05.10-2022.05.09NY

SinopharmHoldingGuangzhouCo.,Ltd.

SinopharmHoldingGuangzhouCo.,Ltd.April2,202150,000December27,20213,677.27Jointliabilityassurance2021.12.27-2022.12.26NY
SinopharmHoldingGuangzhouCo.,Ltd.April2,202115,000June28,2021Jointliabilityassurance2021.06.28-2022.06.27NY
SinopharmHoldingGuangzhouCo.,Ltd.April2,202195,000May20,202160,959.61Jointliabilityassurance2021.05.20-2022.05.20NY
SinopharmHoldingGuangzhouCo.,Ltd.April2,202115,000July14,20212,992.12Jointliabilityassurance2021.07.14-2022.07.13NY
SinopharmHoldingGuangzhouCo.,Ltd.April2,202120,000October20,20211,924.47Jointliabilityassurance2021.10.20-2022.10.19NY
SinopharmHoldingGuangzhouCo.,Ltd.April2,202142,000September23,2021Jointliabilityassurance2021.09.23-2022.09.23NY
SinopharmHoldingGuangdongYuexingCo.,Ltd.April2,20215,000May20,20214,396.63Jointliabilityassurance2021.05.20-2022.05.20NY
SinopharmHoldingGuangdongYuexingCo.,Ltd.April2,202112,000October20,202110,563.1Jointliabilityassurance2021.10.20-2022.10.19NY
SinopharmHoldingGuangdongYuexingCo.,Ltd.April2,202115,000May10,20217,127.6Jointliabilityassurance2021.05.10-2022.05.09NY
SinopharmHoldingGuangdongApril2,20213,000December1,20212,879.59Jointliabilityassuranc2021.12.01-2022.11.30NY

YuexingCo.,Ltd.

YuexingCo.,Ltd.e
SinopharmHoldingGuangdongYuexingCo.,Ltd.April22,20205,000November20,2020210.07Jointliabilityassurance2020.11.20-2021.11.19NY
SinopharmHoldingGuangdongHengxingCo.,Ltd.April2,202115,000October22,20212,674.29Jointliabilityassurance2021.10.22-2022.10.22NY
SinopharmHoldingGuangdongHengxingCo.,Ltd.April2,20213,000April28,202145.09Jointliabilityassurance2021.04.28-2022.04.27NY
SinopharmHoldingFoshanCo.,Ltd.April2,2021500October20,202177.02Jointliabilityassurance2021.10.20-2022.10.19NY
SinopharmHoldingFoshanCo.,Ltd.April2,20212,000May10,2021180.21Jointliabilityassurance2021.05.10-2022.05.10NY
SinopharmHoldingFoshanCo.,Ltd.April22,20202,500March23,202122.44Jointliabilityassurance2021.03.23-2022.03.22NY
SinopharmHoldingZhaoqingCo.,Ltd.April2,20212,500October20,2021997.87Jointliabilityassurance2021.10.20-2022.10.19NY
SinopharmHoldingZhaoqingCo.,Ltd.April2,20212,000June1,2021593.32Jointliabilityassurance2021.06.01-2022.05.11NY
SinopharmHoldingZhaoqingCo.,Ltd.April2,20213,000June30,202199.39Jointliabilityassurance2021.06.30-2022.06.29NY

GuangdongNanfangPharmaceuticalForeignTradeCo.,Ltd.

GuangdongNanfangPharmaceuticalForeignTradeCo.,Ltd.April2,202119,500July1,202112,633.74Jointliabilityassurance2021.07.01-2022.06.30NY
GuangdongNanfangPharmaceuticalForeignTradeCo.,Ltd.April2,202115,000October13,20214,137Jointliabilityassurance2021.10.13-2022.10.12NY
GuangdongNanfangPharmaceuticalForeignTradeCo.,Ltd.April2,202110,000December5,20211,132.07Jointliabilityassurance2021.12.05-2022.11.18NY
FoshanNanhaiMedicineCo.,Ltd.April2,20211,500October20,2021270.56Jointliabilityassurance2021.10.20-2022.10.19NY
FoshanNanhaiMedicineCo.,Ltd.April22,202010,000March22,20212,236.08Jointliabilityassurance2021.03.22-2022.03.21NY
FoshanNanhaiMedicineCo.,Ltd.April22,20207,000March1,2021Jointliabilityassurance2021.03.01-2022.02.28NY
FoshanNanhaiMedicineCo.,Ltd.April2,20212,500September10,2021923Jointliabilityassurance2021.09.10-2022.09.10NY
FoshanNanhaiMedicineCo.,Ltd.April2,20213,000June24,20212,579.02Jointliabilityassurance2021.06.24-2022.05.11NY
FoshanNanhaiUptodate&April2,20212,000October20,202180.76Jointliabilityassuranc2021.10.20-2022.10.19NY

SpecialMedicinesCo.Ltd.

SpecialMedicinesCo.Ltd.e
FoshanNanhaiUptodate&SpecialMedicinesCo.Ltd.April22,202010,000March22,20213,702.73Jointliabilityassurance2021.03.22-2022.03.21NY
FoshanNanhaiUptodate&SpecialMedicinesCo.Ltd.April22,20207,000March1,2021Jointliabilityassurance2021.03.01-2022.02.28NY
FoshanNanhaiUptodate&SpecialMedicinesCo.Ltd.April2,20212,500September10,2021Jointliabilityassurance2021.09.10-2022.09.10NY
FoshanNanhaiUptodate&SpecialMedicinesCo.Ltd.April2,20213,000June24,2021Jointliabilityassurance2021.06.24-2022.05.11NY
SinopharmHolding(Jiangmen)Co.,Ltd.April2,20211,500October20,2021716.46Jointliabilityassurance2021.10.20-2022.10.19NY
SinopharmHolding(Jiangmen)Co.,Ltd.April2,20215,000May26,20213,866.04Jointliabilityassurance2021.05.26-2022.05.11NY
SinopharmHolding(Jiangmen)Co.,Ltd.April2,20214,000May31,2021280.9Jointliabilityassurance2021.05.31-2022.05.31NY
SinopharmHoldingMeizhouCo.,April2,20211,000October20,2021999.87Jointliabilityassuranc2021.10.20-2022.10.19NY

Ltd.

Ltd.e
SinopharmHoldingMeizhouCo.,Ltd.April2,20215,000June3,20214,526.57Jointliabilityassurance2021.06.03-2022.05.11NY
SinopharmHoldingMeizhouCo.,Ltd.April2,20216,000June21,20211,420.43Jointliabilityassurance2021.06.21-2022.03.19NY
SinopharmHoldingZhongshanCo.,Ltd.April2,20211,000October20,2021600Jointliabilityassurance2021.10.20-2022.10.19NY
SinopharmHoldingZhongshanCo.,Ltd.April2,20212,000August17,2021370Jointliabilityassurance2021.08.17-2022.08.16NY
SinopharmHoldingZhongshanCo.,Ltd.April2,20213,000May26,20212,232.21Jointliabilityassurance2021.05.26-2022.05.11NY
SinopharmHoldingShantouCo.,Ltd.April2,2021500October20,2021500Jointliabilityassurance2021.10.20-2022.10.19NY
SinopharmHoldingShantouCo.,Ltd.April2,20213,000October21,20211,000Jointliabilityassurance2021.10.21-2022.06.28NY
SinopharmHoldingShantouCo.,Ltd.April2,20212,000June3,2021800.27Jointliabilityassurance2021.06.03-2022.05.11NY
SinopharmHoldingHuizhouCo.,Ltd.April2,20211,000October20,2021652.69Jointliabilityassurance2021.10.20-2022.10.19NY
SinopharmHoldingHuizhouCo.,Ltd.April22,20203,000October20,202025.63Jointliabilityassurance2020.10.20-2021.10.19NY

SinopharmHoldingHuizhouCo.,Ltd.

SinopharmHoldingHuizhouCo.,Ltd.April2,20214,000June3,20212,145.87Jointliabilityassurance2021.06.03-2022.05.11NY
SinopharmHoldingZhanjiangCo.,Ltd.April2,20212,000October20,20211,935Jointliabilityassurance2021.10.20-2022.10.19NY
SinopharmHoldingZhanjiangCo.,Ltd.April2,20215,000October25,20211,816.38Jointliabilityassurance2021.10.25-2022.10.24NY
SinopharmHoldingZhanjiangCo.,Ltd.April2,20218,000May19,20214,630.48Jointliabilityassurance2021.05.19-2022.05.19NY
SinopharmHoldingZhuhaiCo.,Ltd.April2,20211,000October20,20211,000Jointliabilityassurance2021.10.20-2022.10.19NY
SinopharmHoldingZhuhaiCo.,Ltd.April2,20213,000July8,20212,125.8Jointliabilityassurance2021.07.08-2022.07.07NY
SinopharmHoldingZhuhaiCo.,Ltd.April2,20214,000June1,20213,994.07Jointliabilityassurance2021.06.01-2022.05.11NY
SinopharmHoldingZhuhaiCo.,Ltd.April2,20214,000May1,2021Jointliabilityassurance2021.07.01-2022.04.28NY
SinopharmHoldingDongguanCo.,Ltd.April2,20212,000October20,20211,527.79Jointliabilityassurance2021.10.20-2022.10.19NY
SinopharmHoldingDongguanCo.,Ltd.April2,20213,000June3,20211,075.81Jointliabilityassurance2021.06.03-2022.05.11NY
SinopharmApril2,5,000July1,20211,851.53Joint2021.07.01-NY

HoldingDongguanCo.,Ltd.

HoldingDongguanCo.,Ltd.2021liabilityassurance2022.02.27
GuangdongDongfangNewSpecialMedicineCo.,LtdApril2,202110,000May10,20217,373.5Jointliabilityassurance2021.05.10-2022.05.09NY
GuangdongDongfangNewSpecialMedicineCo.,LtdApril2,20215,000April2,20214,998.57Jointliabilityassurance2021.04.02-2022.04.01NY
GuangdongDongfangNewSpecialMedicineCo.,LtdApril2,20213,000July13,20212,860.13Jointliabilityassurance2021.07.13-2022.07.12NY
GuangdongDongfangNewSpecialMedicineCo.,LtdApril2,20219,000October13,20217,444.06Jointliabilityassurance2021.10.13-2022.10.12NY
GuangdongDongfangNewSpecialMedicineCo.,LtdApril2,20214,000October20,20213,999.1Jointliabilityassurance2021.10.20-2022.10.19NY
GuangdongDongfangNewSpecialMedicineCo.,LtdApril2,20212,500August19,20212,180.31Jointliabilityassurance2021.08.19-2022.08.18NY
GuangdongDongfangNewSpecialMedicineCo.,LtdApril2,20213,000May19,20212,998.61Jointliabilityassurance2021.05.19-2022.05.11NY
SinopharmHoldingShaoguanApril2,20211,000October20,20211,000JointliabilityassurancTheminorityshareholdershavesignedthe2021.10.20-2022.10.19NY

Co.,Ltd.

Co.,Ltd.eequitypledgecontractandregisteredtheirequitypledges
SinopharmHoldingShaoguanCo.,Ltd.April2,20213,000June11,20212,253.95JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.06.11-2022.05.11NY
SinopharmHoldingMaomingCo.,Ltd.April2,20214,500May31,2021841.86Jointliabilityassurance2021.05.31-2022.05.11NY
SinopharmHoldingMaomingCo.,Ltd.April2,20215,000August16,2021Jointliabilityassurance2021.08.16-2022.03.19NY
SinopharmHoldingGuangzhouHuaduCo.,Ltd.April2,20213,000October22,2021657.51JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.10.22-2022.10.22NY
SinopharmHoldingGuangzhouHuaduCo.,Ltd.April2,20212,000September27,202136.54JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.09.27-2022.09.26NY
SinopharmHoldingGuangzhouHuaduCo.,Ltd.April22,20203,000February24,2021592.73JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.02.24-2022.02.23NY
SinopharmHoldingApril2,20215,000June3,20213,680JointliabilityTheminorityshareholders2021.06.03-2022.05.11NY

HeyuanCo.,Ltd.

HeyuanCo.,Ltd.assurancehavesignedtheequitypledgecontractandregisteredtheirequitypledges
SinopharmHoldingHeyuanCo.,Ltd.April2,20213,000May6,2021JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.05.06-2022.03.19NY
SinopharmHoldingFoshanMedicalSuppliesSupplyChainCo.,Ltd.April22,20201,000March1,20213.59JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.03.01-2022.02.28NY
SinopharmAccord(Guangzhou)MedicineCo.,Ltd.April2,20212,000May18,2021JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.05.18-2022.05.11NY
SinopharmAccord(Yangjiang)MedicineCo.,Ltd.April2,20215,000June1,2021JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.06.01-2022.05.11NY
SinopharmHoldingGuangxiCo.,Ltd.April2,202130,000May25,202115,581.7Jointliabilityassurance2021.05.25-2022.05.25NY
SinopharmHoldingGuangxiCo.,Ltd.April2,202116,000October20,202111,083.91Jointliabilityassurance2021.10.20-2022.10.19NY
SinopharmApril2,15,000August27,10,323.75Joint2021.08.27-NY

HoldingGuangxiCo.,Ltd.

HoldingGuangxiCo.,Ltd.20212021liabilityassurance2022.08.26
SinopharmHoldingGuangxiCo.,Ltd.April2,202110,000December31,2021Jointliabilityassurance2021.12.31-2022.12.30NY
SinopharmHoldingGuangxiCo.,Ltd.April2,202125,000June28,20216,932.51Jointliabilityassurance2021.06.28-2022.06.28NY
SinopharmHoldingGuangxiCo.,Ltd.April2,202110,000September3,2021Jointliabilityassurance2021.09.03-2022.06.30NY
SinopharmHoldingGuangxiCo.,Ltd.April2,202120,000May20,202113,848.08Jointliabilityassurance2021.05.20-2022.05.20NY
SinopharmHoldingLiuzhouCo.,Ltd.April2,20215,000October20,20211,964.52JointliabilityassuranceTheminorityshareholdershavesignedthecounter-guaranteecontract2021.10.20-2022.10.19NY
SinopharmHoldingLiuzhouCo.,Ltd.April2,202110,000July21,20212,761.75JointliabilityassuranceTheminorityshareholdershavesignedthecounter-guaranteecontract2021.07.21-2022.07.20NY
SinopharmHoldingLiuzhouCo.,Ltd.April22,202010,000March4,20213,368.64JointliabilityassuranceTheminorityshareholdershavesignedthecounter-guaranteecontract2021.03.04-2022.02.08NY
SinopharmHoldingLiuzhouCo.,Ltd.April2,20215,000September29,20213,133.76JointliabilityassuranceTheminorityshareholdershavesignedthecounter-guarantee2021.09.29-2022.07.01NY

contract

contract
SinopharmHoldingLiuzhouCo.,Ltd.April2,20219,000May17,20213,000JointliabilityassuranceTheminorityshareholdershavesignedthecounter-guaranteecontract2021.05.17-2022.05.16NY
SinopharmHoldingBeihaiCo.,Ltd.April2,20212,000May20,20211,500Jointliabilityassurance2021.05.20-2022.05.20NY
SinopharmHoldingBeihaiCo.,Ltd.April2,20213,000May26,20213,000Jointliabilityassurance2021.05.26-2022.05.25NY
SinopharmHoldingGuigangCo.,Ltd.April2,20212,000May26,20212,000Jointliabilityassurance2021.05.26-2022.05.25NY
SinopharmHoldingWuzhouCo.,Ltd.April22,20202,000August7,20202,000Jointliabilityassurance2020.08.07-2021.08.07NY
SinopharmHoldingGuigangCo.,Ltd.April22,20201,000January29,20211,000Jointliabilityassurance2021.01.29-2022.01.28NY
SinopharmHoldingGuilinCo.,Ltd.April2,20212,000May26,20212,000Jointliabilityassurance2021.05.26-2022.05.25NY
SinopharmHoldingYulinCo.,Ltd.April2,20213,000May26,20212,000Jointliabilityassurance2021.05.26-2022.05.25NY
SinopharmHoldingMedicineSupplyChainService(Guangxi)Co.,Ltd.April2,2021706August20,2021JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.08.20-2022.08.19NY

SinopharmHoldingShenzhenYanfengCo.,Ltd.

SinopharmHoldingShenzhenYanfengCo.,Ltd.April2,20214,000October20,20213,340JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.10.20-2022.10.19NY
SinopharmHoldingShenzhenYanfengCo.,Ltd.April2,20218,000October11,2021863.96JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.10.26-2022.10.11NY
SinopharmHoldingShenzhenYanfengCo.,Ltd.April2,20214,000December1,2021974.25JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.12.01-2022.11.30NY
SinopharmHoldingShenzhenYanfengCo.,Ltd.April2,20215,000July8,2021140JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.07.08-2022.05.27NY
SinopharmHoldingShenzhenJianminCo.,ltd.April2,20213,000October20,20212,490.06Jointliabilityassurance2021.10.20-2022.10.19NY
SinopharmHoldingShenzhenJianminCo.,ltd.April2,20212,000December8,20211,680Jointliabilityassurance2021.12.08-2022.11.18NY
SinopharmHoldingShenzhenJianminCo.,April2,20211,000December1,2021998.48Jointliabilityassurance2021.12.01-2022.11.30NY

ltd.

ltd.
SinopharmHoldingShenzhenJianminCo.,ltd.April2,20213,000June22,2021Jointliabilityassurance2021.06.22-2022.05.11YY
SinopharmHoldingShenzhenMedicinalMaterialsCo.,Ltd.April2,20211,500June22,2021Jointliabilityassurance2021.06.22-2022.05.11YY
SinopharmHoldingShenzhenMedicinalMaterialsCo.,Ltd.April2,2021500October20,2021Jointliabilityassurance2021.10.20-2022.10.19NY
SinopharmAccordMedicalDevices(Shenzhen)Co.,Ltd.April2,20213,000October20,20212,360.02JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.10.20-2022.10.19NY
SinopharmAccordMedicalDevices(Shenzhen)Co.,Ltd.April22,20203,000March24,20212,500JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.03.24-2022.03.24NY
SinopharmAccordMedicalDevices(Shenzhen)Co.,Ltd.April2,20215,000November22,20215,000JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.11.22-2022.05.11NY
Totalamountofapprovingguaranteeforsubsidiariesinreportperiod(B1)865,206Totalamountofactualoccurredguaranteefor1,294,382.95

subsidiariesinreportperiod(B2)

subsidiariesinreportperiod(B2)
Totalamountofapprovedguaranteeforsubsidiariesattheendofreportingperiod(B3)877,206Totalbalanceofactualguaranteeforsubsidiariesattheendofreportingperiod(B4)381,547.28
Guaranteesofsubsidiariestosubsidiaries
NameoftheCompanyguaranteedRelatedAnnouncementdisclosuredateGuaranteelimitActualdateofhappeningActualguaranteelimitGuaranteetypeCollateral(ifapplicable)Counter-guaranteesituation(ifapplicable)GuaranteetermImplemented(Y/N)Guaranteeforrelatedparty(Y/N)
BeijingJinxiangDrugstoreMedicineChainCo.,LtdApril2,20214,200December24,20212,203.87Jointliabilityassurance2021.12.24—2022.12.23NY
FujianGuodaDrugstoreChainCo.,Ltd.April2,20211,200August13,2021763.33Jointliabilityassurance2021.08.13—2022.08.12NY
FujianGuodaDrugstoreChainCo.,Ltd.April2,20211,800November2,20211,281.77Jointliabilityassurance2021.11.02—2022.11.01NY
FujianGuodaMedicinesCo.,Ltd.April2,2021600August13,2021444.74Jointliabilityassurance2021.08.13—2022.08.12NY
GuodaDrugstore(Pu'er)SongmaoCo.,Ltd.April2,20211,200June10,2021790.53JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.06.10—2022.05.12NY
GuodaYiheDrugstoreJilinCo.,Ltd.April2,20214,080September10,20213,990.96Jointliabilityassurance2021.09.10—2022.09.10NY

ChinaNationalHebeiLerentangMedicineChainCo.,Ltd.

ChinaNationalHebeiLerentangMedicineChainCo.,Ltd.April2,20213,000December24,20212,752.49JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.12.24—2022.12.23NY
ChinaNationalHebeiLerentangMedicineChainCo.,Ltd.April2,20214,800November2,20214,797.21JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.11.02—2022.11.01NY
ChinaNationalHebeiLerentangMedicineChainCo.,Ltd.April2,20219,000June8,20214,224.86JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.06.08—2022.05.12NY
SinopharmHoldingGuodaForMePharmacyShanghaiChainCo.,Ltd.April2,20211,800July9,2021270.29Jointliabilityassurance2021.07.09—2022.05.24NY
SinopharmHoldingGuodaForMePharmacyShanghaiChainCo.,Ltd.April2,20211,800November23,2021896.24Jointliabilityassurance2021.11.23—2022.04.22NY
SinopharmHoldingGuodaShanxiMedicinesCo.,Ltd.April2,202113,200July12,202113,230Jointliabilityassurance2021.07.12—2022.05.12NY
SinopharmHoldingGuodaShanxiApril2,20216,000November2,20216,000Jointliabilityassuranc2021.11.02—NY

MedicinesCo.,Ltd.

MedicinesCo.,Ltd.e2022.11.01
SinopharmHoldingGuodaDrugstore(Shenzhen)ChainCo.,Ltd.April2,20211,800December24,20211,045.73Jointliabilityassurance2021.12.24—2022.12.23NY
SinopharmHoldingGuodaDrugstoreBayanNurCo.,Ltd.April2,2021600June4,2021594.77JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.06.04—2022.05.12NY
SinopharmHoldingGuodaDrugstoreGuangdongCo.,Ltd.April2,20216,000November2,20212,115.66Jointliabilityassurance2021.11.02—2022.11.01NY
SinopharmHoldingGuodaDrugstoreGuangdongCo.,Ltd.April2,20211,800December24,2021308.03Jointliabilityassurance2021.12.24—2022.12.23NY
SinopharmHoldingGuodaDrugstoreGuangdongCo.,Ltd.April2,20216,000June22,20214,139.96Jointliabilityassurance2021.06.22—2022.05.12NY
SinopharmHoldingGuodaDrugstoreGuangxiChainCo.,Ltd.April2,20211,800November2,2021293.54Jointliabilityassurance2021.11.02—2022.11.01NY
SinopharmApril2,600December340.09Joint2021.12.24NY

HoldingGuodaDrugstoreGuangxiChainCo.,Ltd.

HoldingGuodaDrugstoreGuangxiChainCo.,Ltd.202124,2021liabilityassurance—2022.12.23
SinopharmHoldingGuodaDrugstoreHenanChainCo.,Ltd.April2,20211,200December24,2021959.28JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.12.24—2022.12.23NY
SinopharmHoldingGuodaDrugstoreHenanChainCo.,Ltd.April2,20211,800August18,20211,787.35JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.08.18—2022.05.12NY
SinopharmHoldingGuodaDrugstoreHulunBuirCo.,Ltd.April2,2021600June4,2021595.13Jointliabilityassurance2021.06.04—2022.05.12NY
SinopharmHoldingGuodaDrugstoreHulunBuirCo.,Ltd.April2,2021600November2,2021522.41Jointliabilityassurance2021.11.02—2022.11.01NY
SinopharmHoldingGuoda(Jiangmen)PharmaceuticalCo.,Ltd.April2,20211,800November2,2021722.55JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.11.02—2022.11.01NY
SinopharmHoldingGuoda(Jiangmen)April2,20211,200April2,2021610.36JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledge2021.04.02—2022.04.01NY

PharmaceuticalCo.,Ltd.

PharmaceuticalCo.,Ltd.contractandregisteredtheirequitypledges
SinopharmHoldingGuoda(Jiangmen)PharmaceuticalCo.,Ltd.April2,20211,800December24,2021622.91JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.12.24—2022.12.23NY
SinopharmHoldingGuoda(Jiangmen)PharmaceuticalCo.,Ltd.April22,20203,000December28,20201,570.21JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2020.12.28—2021.12.27NY
SinopharmHoldingGuodaDrugstoreNanjingChainCo.,Ltd.April2,2021600December24,2021504.09JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.12.24—2022.12.23NY
SinopharmHoldingGuodaDrugstoreInnerMongoliaCo.,LtdApril2,20211,800November4,2021687.58JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.11.04—2022.11.03NY
SinopharmHoldingGuodaDrugstoreInnerMongoliaCo.,LtdApril2,20211,800July22,20211,799.07JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.07.22—2022.07.22NY
SinopharmHoldingGuodaDrugstoreInnerApril2,20216,000November2,20215,888.73JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractand2021.11.02—2022.11.01NY

MongoliaCo.,Ltd

MongoliaCo.,Ltdregisteredtheirequitypledges
SinopharmHoldingGuodaDrugstoreInnerMongoliaCo.,LtdApril2,20214,800December24,2021760.72JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.12.24—2022.12.23NY
SinopharmHoldingGuodaDrugstoreInnerMongoliaCo.,LtdApril2,20211,800June7,20211,771.69JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.06.07—2022.05.12NY
SinopharmHoldingGuodaDrugstoreInnerMongoliaCo.,LtdApril2,20216,600December30,2021JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.12.30—2022.12.29NY
SinopharmHoldingGuodaDrugstoreShanxiYiyuanChainCo.,Ltd.April2,20215,040May6,20211,136.95JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.05.06—2022.05.05NY
SinopharmHoldingGuodaDrugstoreShanxiYiyuanChainCo.,Ltd.April22,20203,600November28,20201,851.66JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2020.11.28—2021.11.27NY
SinopharmHoldingGuodaDrugstoreShanxiYiyuanChainApril2,20213,000November8,20212,785.24JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheir2021.11.08—2022.11.07NY

Co.,Ltd.

Co.,Ltd.equitypledges
SinopharmHoldingGuodaDrugstoreShanxiYiyuanChainCo.,Ltd.April2,20219,000November2,20218,952.94JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.11.02—2022.11.01NY
SinopharmHoldingGuodaDrugstoreShanxiYiyuanChainCo.,Ltd.April2,20215,400December6,20213,663.23JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.12.06—2022.12.05NY
SinopharmHoldingGuodaDrugstoreShanxiYiyuanChainCo.,Ltd.April2,20214,200June8,20214,158.69JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.06.08—2022.05.12NY
SinopharmHoldingGuodaDrugstoreShanghaiChainCo.,Ltd.April2,20211,800December13,2021Jointliabilityassurance2021.12.13—2022.04.22NY
SinopharmHoldingGuodaDrugstoreShanghaiChainCo.,Ltd.April2,20212,400June20,20211,961.58Jointliabilityassurance2021.06.20—2022.06.20NY
SinopharmHoldingGuodaDrugstoreShanghaiChainCo.,Ltd.April2,20212,400July16,2021Jointliabilityassurance2021.07.16—2022.07.16NY

SinopharmHoldingGuodaDrugstoreShanghaiChainCo.,Ltd.

SinopharmHoldingGuodaDrugstoreShanghaiChainCo.,Ltd.April2,20213,000July9,20211,827.27Jointliabilityassurance2021.07.09—2022.05.24NY
SinopharmHoldingGuodaDrugstoreShenyangChainCo.,Ltd.April2,20216,000December24,20211,328.35JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.12.24—2022.12.23NY
SinopharmHoldingGuodaDrugstoreShenyangChainCo.,Ltd.April2,20216,000December16,20213,626.66JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.12.16—2022.12.16NY
SinopharmHoldingGuodaDrugstoreShenyangChainCo.,Ltd.April2,202115,000November2,202111,099.87JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.11.02—2022.11.01NY
SinopharmHoldingGuodaDrugstoreShenyangChainCo.,Ltd.April2,202113,800June1,202113,797.89JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.06.01—2022.05.12NY
SinopharmHoldingGuodaDrugstoreUlanqabCo.,Ltd.April2,2021600June4,202120.84JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.06.04—2022.05.12NY

SinopharmHoldingGuodaDrugstoreXinjiangNewSpecialMedicineChainCo.,Ltd.

SinopharmHoldingGuodaDrugstoreXinjiangNewSpecialMedicineChainCo.,Ltd.April2,20213,000December6,20211,089.96Jointliabilityassurance2021.12.06—2022.12.06NY
SinopharmHoldingGuodaDrugstoreXinjiangNewSpecialMedicineChainCo.,Ltd.April2,20214,800May26,20214,765.48Jointliabilityassurance2021.05.26—2022.05.12NY
SinopharmHoldingGuodaDrugstoreYangzhouDadeshengChainCo.,Ltd.April2,20211,200November2,2021853.23Jointliabilityassurance2021.11.02—2022.11.01NY
SinopharmHoldingGuodaDrugstoreYangzhouDadeshengChainCo.,Ltd.April2,20211,200December24,2021980.09Jointliabilityassurance2021.12.24—2022.12.23NY
SinopharmHoldingTianheJilinMedicinesCo.,Ltd.April2,20216,000November9,20214,004.43JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.11.09—2022.11.08NY
SinopharmHoldingApril2,20213,000November2,20212,641.2JointliabilityTheminorityshareholders2021.11.02—NY

TianheJilinMedicinesCo.,Ltd.

TianheJilinMedicinesCo.,Ltd.assurancehavesignedtheequitypledgecontractandregisteredtheirequitypledges2022.11.01
SinopharmHoldingTianheJilinMedicinesCo.,Ltd.April2,20216,000April28,20211,316.77JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.04.28—2022.04.27NY
HunanGuodaMinshentangDrugstoreChainCo.,Ltd.April2,20211,800November2,20211,211.89JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.11.02—2022.11.01NY
HunanGuodaMinshentangDrugstoreChainCo.,Ltd.April2,20211,200December24,2021614.48JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.12.24—2022.12.23NY
LiaoningChengdaFangyuanMedicineChainCo.,Ltd.April2,202115,000June22,202111,540.81Jointliabilityassurance2021.06.22—2022.06.21NY
LiaoningChengdaFangyuanMedicineChainCo.,Ltd.April2,20216,000December24,20214,217.04Jointliabilityassurance2021.12.24—2022.12.23NY
LiaoningChengdaFangyuanMedicineChainCo.,April2,20214,800June1,20214,794.3Jointliabilityassurance2021.06.01—2022.05.12NY

Ltd.

Ltd.
LiaoningChengdaFangyuanMedicineChainCo.,Ltd.April2,20216,000November2,20213,445.24Jointliabilityassurance2021.11.02—2022.11.01NY
LiaoningGuodaMedicinesCo.,Ltd.April2,20213,000November2,2021Jointliabilityassurance2021.11.02—2022.11.01NY
LiaoningGuodaMedicinesCo.,Ltd.April2,20213,000June1,20212,999.46Jointliabilityassurance2021.06.01—2022.05.12NY
InnerMongoliaGuodaMedicineCo.,Ltd.April2,20212,400June7,20212,399.56Jointliabilityassurance2021.06.07—2022.05.12NY
NingxiaGuodaDrugstoreChainCo.,Ltd.April2,20212,400September6,20212,383.2Jointliabilityassurance2021.09.06—2022.09.06NY
NingxiaGuodaDrugstoreChainCo.,Ltd.April2,20211,200December24,2021Jointliabilityassurance2021.12.24—2022.12.23NY
ShanxiGuodaWanminDrugstoreChainCo.,Ltd.April2,20213,600December22,20211,980JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.12.22—2022.12.21NY
ShanxiGuodaWanminDrugstoreChainCo.,Ltd.April2,20212,400August17,2021720JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractand2021.08.17—2022.02.04NY

registeredtheirequitypledges

registeredtheirequitypledges
ShanxiGuodaWanminDrugstoreChainCo.,Ltd.April2,20213,600July15,20213,600JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.07.15—2022.07.15NY
ShanxiGuodaWanminDrugstoreChainCo.,Ltd.April2,202115,000June8,202111,940JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.06.08—2022.05.12NY
ShanxiGuodaWanminDrugstoreChainCo.,Ltd.April2,20217,200November2,20217,200JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.11.02—2022.11.01NY
ShanxiGuodaWanminDrugstoreChainCo.,Ltd.April2,20213,000April29,2021JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.04.29—2022.04.15NY
YanjiXiangheMedicinesCo.,Ltd.April2,20211,800June8,20211,200JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheirequitypledges2021.06.08—2022.05.12NY
YushuDinghePharmaceuticalTechnologyCo.,Ltd.April2,20211,800June8,2021415.14JointliabilityassuranceTheminorityshareholdershavesignedtheequitypledgecontractandregisteredtheir2021.06.08—2022.05.12NY

equitypledges

equitypledges
Totalamountofapprovingguaranteeforsubsidiariesinreportperiod(C1)291,720Totalamountofactualoccurredguaranteeforsubsidiariesinreportperiod(C2)792,084.85
Totalamountofapprovedguaranteeforsubsidiariesattheendofreportingperiod(C3)298,320Totalbalanceofactualguaranteeforsubsidiariesattheendofreportingperiod(C4)201,809.61
TotalamountofguaranteeoftheCompany(totalofthreeabovementionedguarantee)
Totalamountofapprovingguaranteeinreportperiod(A1+B1+C1)1,156,926Totalamountofactualoccurredguaranteeinreportperiod(A2+B2+C2)2,086,467.8
Totalamountofapprovedguaranteeattheendofreportperiod(A3+B3+C3)1,175,526Totalbalanceofactualguaranteeattheendofreportperiod(A4+B4+C4)583,356.89
TheproportionofthetotalamountofactuallyguaranteeinthenetassetsoftheCompany(thatisA4+B4+C4)39.09%
Including:
Amountofguaranteeforshareholders,actualcontrolleranditsrelatedparties(D)0
Thedebtsguaranteeamountprovidedfortheguaranteedpartieswhoseassets-liabilityratioexceed70%directlyorindirectly(E)0
ProportionoftotalamountofguaranteeinnetassetsoftheCompanyexceed50%(F)0
Totalamountoftheaforesaidthreeguarantees(D+E+F)0
Explanationsonpossiblybearingjointandseveralliquidatingresponsibilitiesforundueguarantees(ifapplicable)0
Explanationsonexternalguaranteeagainstregulatedprocedures(ifapplicable)0

Explanationonguaranteeusingthecompositeway

3.Entrustotherstocashassetmanagement

(1)Trustfinancing

□Applicable√NotapplicableTheCompanyhadnotrustfinancinginthereportingperiod.

(2)Entrustedloans

□Applicable√NotapplicableThecompanyhadnoentrustedloansinthereportingperiod.

4.Othermaterialcontracts

□Applicable√NotapplicableNoothermaterialcontractsfortheCompanyinreportingperiod.XVI.Explanationonothersignificantevents

□Applicable√NotapplicableNoothersignificanteventsneedtoexplaininthereportingperiod.XVII.SignificanteventofsubsidiaryoftheCompany

□Applicable√Notapplicable

SectionVII.ChangesinSharesandParticularsaboutShareholdersI.ChangesinShareCapital

1.ChangesinShareCapital

InShare

BeforetheChange

BeforetheChangeIncrease/DecreaseintheChange(+,-)AftertheChange
AmountProportionNewsharesissuedBonussharesCapitalizationofpublicreserveOthersSubtotalAmountProportion
I.Restrictedshares5,508,8831.29%5,508,8831.29%
1.Sharesholdbythestate
2.State-ownedlegalperson’sshares5,505,7701.29%5,505,7701.29%
3.Otherdomesticshareholding3,1130.00%3,1130.00%
Including:Domesticlegalperson’sshares00.00%00.00%
Domesticnaturepersonshares3,1130.00%3,1130.00%
4.Foreignshareholding
Including:sharesholdbyoverseaslegalperson
Shareholdbyoverseasnaturalperson
II.Unrestrictedshares422,618,10098.71%422,618,10098.71%
1.RMBOrdinaryshares367,733,62585.89%367,733,62585.89%
2.Domesticallylistedforeignshares54,884,47512.82%54,884,47512.82%
3.Foreignshareslistedabroad
4.Other
III.Totalshares428,126,983100.00%428,126,983100.00%

Reasonsforsharechanged

□Applicable√NotapplicableApprovalofsharechanged

□Applicable√NotapplicableOwnershiptransferofsharechanged

□Applicable√NotapplicableInfluenceonthebasicEPSanddilutedEPSaswellasotherfinancialindexesofnetassetspershareattributabletocommonshareholdersofCompanyinlatestyearandperiod

□Applicable√NotapplicableOtherinformationnecessarytodisclosefortheCompanyorneedtodisclosedunderrequirementfromsecurityregulators

□Applicable√Notapplicable

2.Changesofrestrictedshares

□Applicable√NotapplicableII.Securitiesissuanceandlisting

1.Securityoffering(withoutpreferredstock)inReportingPeriod

□Applicable√Notapplicable

2.Changesoftotalsharesandshareholdersstructureaswellasexplanationonchangesofassetsandliabilitystructure

□Applicable√Notapplicable

3.Currentinternalstaffshares

□Applicable√NotapplicableIII.ParticularsaboutshareholderandactualcontrolleroftheCompany

1.AmountofshareholdersoftheCompanyandparticularsaboutsharesholding

InShare

Totalcommonstock

Totalcommonstock44,290Totalcommonstock42,450Totalpreferredshareholderswith0Totalpreferred0

shareholdersinreportingperiod-end

shareholdersinreportingperiod-endshareholdersatendoflastmonthbeforeannualreportdisclosedvotingrightsrecoveredatendofreportingperiod(ifapplicable)shareholderswithvotingrightsrecoveredatendoflastmonthbeforeannualreportdisclosed(ifapplicable)
Particularsaboutsharesheldabove5%byshareholdersortoptenshareholders
FullnameofShareholdersNatureofshareholderProportionofsharesheldTotalshareholdersattheendofreportperiodChangesinreportperiodAmountoflock-upsharesheldAmountofun-restrictedsharesheldInformationofsharespledged,taggedorfrozen
StateofshareAmount
SinopharmGroupCo.,Ltd.State-ownedCorporation56.06%239,999,9915,505,770234,494,221
FIRSTSENTIERINVESTORSGLOBALUMBRELLAFUNDPLC-FSSACHINAGROWTHFUNDForeignCorporation2.52%10,802,49510,802,495
HongKongSecuritiesClearingCompanyLtd.ForeignCorporation2.19%9,383,0119,383,011
ChinaNationalPharmaceuticalForeignTradeCorp.State-ownedCorporation1.24%5,323,0435,323,043
NationalSocialSecurityFund413PortfolioDomesticnonstate-ownedCorporation1.06%4,530,0324,530,032
BBHBOSS/AFIDELITYFD-CHINAFOCUSFDForeignCorporation0.78%3,358,7613,358,761
FidelityInvestmentManagement(HongKong)Limited-Client’sfundForeignCorporation0.54%2,301,7372,301,737
ICBC-GuolianAndeshengSmallSelectedSecuritiesInvestmentFundDomesticnonstate-ownedCorporation0.38%1,632,0001,632,000

VANGUARDEMERGINGMARKETSSTOCKINDEXFUND

VANGUARDEMERGINGMARKETSSTOCKINDEXFUNDForeignCorporation0.37%1,603,1891,603,189
CPICFund-ChinaPacificLifeInsuranceCo.,Ltd.-with-profitinsurance-CPICFundChinaPacificLifeEquityRelativeIncome(GuaranteedDividend)singleassetsmanagementplanDomesticnonstate-ownedCorporation0.34%1,470,2241,470,224
Strategyinvestorsorgeneralcorporationcomestop10shareholdersduetorightsissue(ifapplicable)
ExplanationonassociatedrelationshipamongtheaforesaidshareholdersSinopharmGroupCo.,Ltd.andChinaNationalPharmaceuticalForeignTradeCorporationhavethesameactualcontroller,whichisChinaNationalPharmaceuticalGroupCorporation.ItisunknownthatthereexistsnoassociatedrelationshiporbelongstotheconsistentactionistamongtheothertradableshareholdersregulatedbytheManagementMeasureofInformationDisclosureonChangeofShareholdingforListedCompanies.
Descriptionoftheaboveshareholdersinrelationtodelegate/entrustedvotingrightsandabstentionfromvotingrights.
Specialnoteontherepurchaseaccountamongthetop10shareholders(ifapplicable)
Particularabouttoptencommonshareholderswithun-restrictsharesheld
ShareholdersAmountofun-restrictcommonsharesheldatperiod-endTypeofshares
TypeAmount
SinopharmGroupCo.,Ltd.234,494,221RMBordinaryshares234,494,221
FIRSTSENTIERINVESTORSGLOBALUMBRELLAFUNDPLC-FSSACHINAGROWTHFUND10,802,495Domesticallylistedforeignshares10,802,495
HongKongSecuritiesClearingCompanyLtd.9,383,011RMBordinaryshares9,383,011
ChinaNationalPharmaceuticalForeignTradeCorp.5,323,043RMBordinaryshares5,323,043

NationalSocialSecurityFund413Portfolio

NationalSocialSecurityFund413Portfolio4,530,032RMBordinaryshares4,530,032
BBHBOSS/AFIDELITYFD-CHINAFOCUSFD3,358,761Domesticallylistedforeignshares3,358,761
FidelityInvestmentManagement(HongKong)Limited-Client’sfund2,301,737RMBordinaryshares2,301,737
ICBC-GuolianAndeshengSmallSelectedSecuritiesInvestmentFund1,632,000RMBordinaryshares1,632,000
VANGUARDEMERGINGMARKETSSTOCKINDEXFUND1,603,189Domesticallylistedforeignshares1,603,189
CPICFund-ChinaPacificLifeInsuranceCo.,Ltd.-with-profitinsurance-CPICFundChinaPacificLifeEquityRelativeIncome(GuaranteedDividend)singleassetsmanagementplan1,470,224RMBordinaryshares1,470,224
Expiationonassociatedrelationshiporconsistentactorswithinthetop10un-restrictshareholdersandbetweentop10un-restrictshareholdersandtop10shareholdersSinopharmGroupCo.,Ltd.andChinaNationalPharmaceuticalForeignTradeCorporationhavethesameactualcontroller,whichisChinaNationalPharmaceuticalGroupCorporation.ItisunknownthatthereexistsnoassociatedrelationshiporbelongstotheconsistentactionistamongtheothertradableshareholdersregulatedbytheManagementMeasureofInformationDisclosureonChangeofShareholdingforListedCompanies.
Explanationontop10shareholdersinvolvingmarginbusiness(ifapplicable)

Whethertoptencommonstockshareholdersortoptencommonstockshareholderswithun-restrictsharesheldhaveabuy-backagreementdealinginreportingperiod

□Yes√NoThetoptencommonstockshareholdersortoptencommonstockshareholderswithun-restrictsharesheldoftheCompanyhavenobuy-backagreementdealinginreportingperiod.

2.ControllingshareholderoftheCompany

Natureofcontrollingshareholders:centralstate-ownedholdingTypeofcontrollingshareholders:legalperson

ControllingshareholdersLegalperson/personinchargeoftheunitDateoffoundationOrganizationcodeMainoperationbusiness
SinopharmGroupCo.,Ltd.YuQingmingJanuary8,200374618434-4Industrialinvestmentholding;managementandassets

reorganizationentrustedbypharmaceuticalenterprise;Chinesemedicine,Chinesemedicinetablets,chemicalmedicinepreparations,chemicalrawmaterials,antibiotics,biochemicaldrugs,biologicalproducts,narcoticdrugs,psychotropicsubstances,toxicdrugsformedicaluse(compatiblewiththebusinessscope),medicineIVDReagents,vaccine,Anabolicagents,wholesaleofpeptidehormones,medicaldeviceoperation,foodsalesmanagement(non-physicalmethod),technologydevelopment,technologytransfer,technicalconsultation,technicalserviceinthefieldofmedicaltechnology,chemicalrawmaterialsandproducts(excepthazardouschemicals,monitoringchemicals,fireworksandfirecrackers,flammablesandexplosives,explosivesforcivilianuse),wholesaleofdisinfectionproducts,dailynecessities,textilesandknitwearandprotectiveequipmentformedicalstaff,salesoflaborprotectionsupplies,dailymask(non-medical)sales,logisticsandrelatedconsultingservices,operatingvarioustypesofgoodsandimportandexportoftechnology(notattacheddirectoryofimportandexportcommodities),butexcludedtheimportandexportofgoodsandtechnologytheStatelimitsorprohibitthecompany.Etc.(Withtheexceptionofprojectssubjecttoapprovalaccordingtothelaw,carryoutbusinessactivitiesindependentlyaccordingtothebusinesslicense)

reorganizationentrustedbypharmaceuticalenterprise;Chinesemedicine,Chinesemedicinetablets,chemicalmedicinepreparations,chemicalrawmaterials,antibiotics,biochemicaldrugs,biologicalproducts,narcoticdrugs,psychotropicsubstances,toxicdrugsformedicaluse(compatiblewiththebusinessscope),medicineIVDReagents,vaccine,Anabolicagents,wholesaleofpeptidehormones,medicaldeviceoperation,foodsalesmanagement(non-physicalmethod),technologydevelopment,technologytransfer,technicalconsultation,technicalserviceinthefieldofmedicaltechnology,chemicalrawmaterialsandproducts(excepthazardouschemicals,monitoringchemicals,fireworksandfirecrackers,flammablesandexplosives,explosivesforcivilianuse),wholesaleofdisinfectionproducts,dailynecessities,textilesandknitwearandprotectiveequipmentformedicalstaff,salesoflaborprotectionsupplies,dailymask(non-medical)sales,logisticsandrelatedconsultingservices,operatingvarioustypesofgoodsandimportandexportoftechnology(notattacheddirectoryofimportandexportcommodities),butexcludedtheimportandexportofgoodsandtechnologytheStatelimitsorprohibitthecompany.Etc.(Withtheexceptionofprojectssubjecttoapprovalaccordingtothelaw,carryoutbusinessactivitiesindependentlyaccordingtothebusinesslicense)
Equityofotherdomestic/oversealistedcompanycontrolbySinopharmGroupCo.,Ltd.hold54.72percentequityofChinaNationalMedicinesCorporationLtd(Stockcode:600511)uptotheendofPeriod.

controllingshareholderaswellasstock-jointinreportperiod

Changesofcontrollingshareholdersinreportingperiod

□Applicable√NotapplicableTheCompanyhadnochangesofcontrollingshareholdersinreportingperiod.

3.ActualcontrolleroftheCompanyandpersonsactinginconcertNatureofactualcontroller:centralstate-ownedassetsmanagementTypeofactualcontroller:legalperson

controllingshareholderaswellasstock-jointinreportperiodActualcontrolling

shareholders

ActualcontrollingshareholdersLegalperson/personinchargeoftheunitDateoffoundationOrganizationcodeMainoperationbusiness
ChinaNationalPharmaceuticalGroupCorporationLiuJingzhenMarch26,198710000588-8Chinesepatentdrug,traditionalChinesemedicinespreparedinready-to-useforms,traditionalChinesemedicinalmaterials,chemicalAPI,chemicalmedicinepreparation,antibiotics,biochemicaldrugandbiologicpharmacy(Licenseforpharmaceuticaltradingrunsuntil12May2020);mandatoryforpharmaceuticalenterprise,assetreorganization;consultingserviceofmedicineindustrialinvestment;exhibitionofmedicaldevices;consultingserviceswithmainbusinessconcerned.(theenterprisehasindependentchoicesonoperationitemsforbusiness;inrightofexequaturtorunifreferstopermissionoperation;operationactivitythatprohibitedorrestrictedbytheCityGovernmentarenotallowed)

Equityofdomestic/oversealistedcompanycontrolbyactualcontrollerinreportperiod

Equityofdomestic/oversealistedcompanycontrolbyactualcontrollerinreportperiodNameNameoflistedcompanywithsharesheldTotalshareholdersheld(10thousandshares)Proportionofsharesheld
SINOPHARMSinopharmHolding20,728.956.64%
SinopharmHoldingIndustrialInvestmentCo.,Ltd.157,155.6050.36%
SinopharmHoldingSinopharmHolding41,284.1754.72%
SinopharmHoldingSinopharmAccord24,000.0056.06%
SIPSSinopharmModern23,951.2623.32%
SinopharmAccordSinopharmModern16,714.2216.28%
ChinaBiotechnologyCo.,Ltd.BTBP62,673.6545.64%
ChengduInstituteofBiologicalProductsCo.,Ltd.4,848.433.53%
BeijingInstituteofBiologicalProductsCo.,Ltd.1,305.720.95%
SINOPHARMH.K.Co.,Ltd.ChinaTCM163,470.5632.46%
TaiChiGroupCo.,Ltd.TaiChiGroup15,381.2327.62%
ChongqingFulingDistrictXilanBiotechnologyCo.,Ltd.1,189.532.14%
ChongqingTaijiMedicinalAnimalandPlantResources36.730.07%

DevelopmentCo.,Ltd.

Changesofactualcontrollerinreportingperiod

□Applicable√NotapplicableNochangesofactualcontrollersfortheCompanyinreportingperiod.PropertyrightandcontrollingrelationshipbetweentheactualcontrollerandtheCompanyisasfollow:

ActualcontrollercontrollingtheCompanybyentrustorotherassetsmanagement

□Applicable√Notapplicable

4.Thetotalnumberofsharespledgedbycontrollingshareholdersorthefirstmajorityshareholderanditspersonsactinginconcertaccountsfor80%ofthesharesheldbythem

□Applicable√Notapplicable

5.Particularsaboutotherlegalpersonshareholderswithover10%sharesheld

□Applicable√Notapplicable

6.Limitationandreducingtheholdingsofsharesofcontrollingshareholders,actualcontrollers,restructuringsideandothercommitmentsubjects

□Applicable√Notapplicable

IV.Thespecificimplementationofsharesbuy-backduringthereportingperiod

Implementationprogressofsharesbuy-back

□Applicable√NotapplicableImplementationprogressofthereductionofrepurchasessharesbycentralizedbidding

□Applicable√Notapplicable

SectionVIII.PreferredStock

□Applicable√NotapplicableTheCompanyhadnopreferredstockinthePeriod.

SectionIX.Bonds

□Applicable√Notapplicable

SectionX.FinancialReport

AUDITOR’SREPORTErnst&YoungHuaMing(2022)ShenZiNo.61295118_H01

ChinaNationalAccordMedicinesCorporationLtd.TotheshareholdersofChinaNationalAccordMedicinesCorporationLtd.(I)Opinion

WehaveauditedthefinancialstatementsofChinaNationalAccordMedicinesCorporationLtd.(the“Company”),whichcomprisetheconsolidatedandthecompanybalancesheetsasat31December2021,andtheconsolidatedandthecompanyincomestatements,theconsolidatedandthecompanystatementsofchangesinequityandtheconsolidatedandthecompanystatementsofcashflowsfortheyearthenended,andnotestothefinancialstatements.Inouropinion,theaccompanyingfinancialstatementspresentfairly,inallmaterialrespects,theconsolidatedandthecompanyfinancialpositionasat31December2021,andtheconsolidatedandthecompanyfinancialperformanceandcashflowsfortheyearthenendedinaccordancewithAccountingStandardsforBusinessEnterprises(“ASBEs”).

(II)Basisforopinion

WeconductedourauditinaccordancewithChinaStandardsonAuditing(“CSAs”).OurresponsibilitiesunderthosestandardsarefurtherdescribedintheAuditor’sresponsibilitiesfortheauditofthefinancialstatementssectionofourreport.WeareindependentoftheCompanyinaccordancewithChinaCodeofEthicsforCertifiedPublicAccountants(the“Code”),andwehavefulfilledourotherethicalresponsibilitiesinaccordancewiththeCode.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovideabasisforouropinion.

(III)Keyauditmatters

Keyauditmattersarethosemattersthat,inourprofessionaljudgement,wereofmostsignificanceinourauditofthefinancialstatementsofthecurrentperiod.Thesematterswereaddressedinthecontextofourauditofthefinancialstatementsasawhole,andinformingouropinionthereon,andwedonotprovideaseparateopiniononthesematters.Foreachmatterbelow,ourdescriptionofhowourauditaddressedthematterisprovidedinthatcontext.WehavefulfilledtheresponsibilitiesdescribedintheAuditor’sresponsibilitiesfortheauditofthefinancialstatementssectionofourreport,includinginrelationtothesematters.Accordingly,ourauditincludedtheperformanceofproceduresdesignedtorespondtoourassessmentoftherisksofmaterialmisstatementofthefinancialstatements.Theresultsofourauditprocedures,includingtheproceduresperformedtoaddressthemattersbelow,providethebasisforourauditopinionontheaccompanyingfinancialstatements.

AUDITOR’SREPORT(Continued)

Ernst&YoungHuaMing(2022)ShenZiNo.61295118_H01

ChinaNationalAccordMedicinesCorporationLtd.(III)Keyauditmatters(continued)

Keyauditmatter

KeyauditmatterHowourauditaddressedthekeyauditmatter
Impairmentofgoodwill
ThecarryingvalueofgoodwillamountedtoRMB2,775,645,585.32asat31December2021andwasallocatedtotheCompany’sassetgroupsunderpharmaceuticaldistributionandpharmaceuticalretail.UnderASBEs,themanagementoftheCompanyisrequiredtoperformtheimpairmenttestforgoodwillannually.Theimpairmenttestisbasedontherecoverableamountsoftherespectiveassetgroupstowhichthegoodwillisallocated.Therecoverableamountsoftheassetgroupsaredeterminedaccordingtothepresentvalueoftheassetgroups'expectedfuturecashflows.Astheimpairmenttestprocessofgoodwillinvolvessignificantjudgementofthemanagement,thetestresultshighlydependonthemanagement'sestimatesandassumptions,suchastheestimationoftheforecastedfuturecashflowsandthediscountrateoftheassetgroups.Theseestimatesareaffectedbythemanagement'sjudgementonthefuturemarketandeconomicenvironment.Usingdifferentestimatesandassumptionswillsignificantlyimpacttherecoverablevalueoftheassetgroupsinwhichthegoodwillislocated.Therefore,thismatterwasimportanttoouraudit,andwedetermineditasakeyauditmatter.TheCompany’sdisclosuresaboutimpairmentofgoodwillareincludedinNoteIII(17.Impairmentofassets,33.Significantaccountingjudgementsandestimates)andNoteV(18.Goodwill)totheconsolidatedfinancialstatements.Theproceduresperformedtoaddressthismatterareasfollows:1)Performingwalk-throughtestingintheprocessrelatedtogoodwillandcontroltestingonidentifiedkeycontrolpoints;2)Involvinginternalevaluationexpertstoassistinevaluatingthegoodwillimpairmentmethodandforecastedkeyparametersadoptedbymanagementintheimpairmenttest,especiallythediscountrateandperpetualgrowthrate;3)Re-examiningthesalesrevenueandoperatingresultsofthefutureyearsadoptedinthecashflowforecast,comparingwiththehistoricaloperatingresultsoftherelatedassetgroups,especiallythefuturesalesgrowthrate,expectedgrossprofitmargin,relatedexpenses,etc.,andevaluatingtheanalysesmadebythemanagementontheimpactoftheCOVID-19epidemic;4)Performingsensitivitytestingonandanalysingkeyassumptionsusedinimpairmenttesting;and5)Re-examiningthesufficiencyofmanagement'sdisclosureregardinggoodwill.

AUDITOR’SREPORT(Continued)

Ernst&YoungHuaMing(2022)ShenZiNo.61295118_H01

ChinaNationalAccordMedicinesCorporationLtd.(III)Keyauditmatters(continued)

Keyauditmatter

KeyauditmatterHowourauditaddressedthekeyauditmatter
Impairmentofaccountsreceivable
MajorclientsoftheCompanyaremedicalestablishments,pharmacychainstores,monomerdrugstores,communitymedicalservicecentres,downstreamdistributioncompanies,etc.Asat31December2021,thecarryingvalueofaccountsreceivableintheconsolidatedfinancialstatementsoftheCompanywasRMB15,964,603,345.91.Themanagementclassifiestheaccountsreceivableintodifferentcombinationsofcreditriskcharacteristicswhileconsideringthefactorssuchasthecustomertype,creditperiodandcollectionhistory.Foreachcategoryofcombinationsofcreditriskcharacteristics,themanagementadoptstheexpectedcreditlossmodeltoestimateandmakeprovisionforbaddebts.Management'sestimationoftheexpectedcreditlosstakesintoaccountallreasonableandevidence-basedinformation,includingthecustomer'shistoricaldefaultrateandotherspecificfactors(suchasthecustomertype,collectionhistoryandbaddebtwrite-offs),aswellasforward-lookinginformationincombinationwithfactorssuchastheexpectedmacroeconomicenvironment.Inthemeantime,themanagementpaysattentiontothecollectionofaccountsreceivable,especiallyindividuallysignificantaccountsreceivableorlong-agedaccountsreceivabletoidentifyadditionalsignsofdefaultorimpairmentanddeterminewhetheradditionalbaddebtprovisionisrequired.Theproceduresperformedtoaddressthismatterareasfollows:1)Realisingandtestingmanagement’sinternalcontrolthatrelatedtotheimpairmentofaccountsreceivable;2)Re-examiningandevaluatingthe"ExpectedCreditLossModel"usedbythemanagementtoestimatebaddebtsofaccountsreceivable,includingthemanagement'sdivisionofdifferentcombinationsofcreditriskcharacteristicsofaccountsreceivable,theestimationoftheexpectedcreditlossonaccountsreceivableforcombinationsofcreditriskcharacteristics,andhistoricalandotherforward-lookinginformationusedintheestimation.Re-examinedthemanagement'sassessmentoftheimpactofCOVID-19epidemiconthecreditriskofcustomers;3)Discussingwiththemanagementregardingtherecoverabilityofindividuallysignificantaccountsreceivableorlong-agedaccountsreceivableandevaluatingtheadequacyofprovisionforbaddebts;and4)Re-examiningthesufficiencyofthemanagement’sdisclosurerelatedtoaccountsreceivable.

AUDITOR’SREPORT(Continued)

Ernst&YoungHuaMing(2022)ShenZiNo.61295118_H01

ChinaNationalAccordMedicinesCorporationLtd.(III)Keyauditmatters(continued)

Keyauditmatter

KeyauditmatterHowourauditaddressedthekeyauditmatter
Impairmentofaccountsreceivable(Continued)
Theclassificationofdifferentcategoriesofcombinationsofcreditriskcharacteristicsandtheestimationoftheexpectedcreditlossrateofaccountsreceivable,involvesignificantmanagement’sjudgementandestimation,withgreatestimationuncertainty,andthesettingofvariousparametersbasedonstatisticsandanalysisoftherelativelycomplexhistoricaldata.Therefore,thismatterwasimportanttoouraudit,andwedetermineditasakeyauditmatter.TheCompany’sdisclosuresaboutimpairmentofaccountsreceivableareincludedinNoteIII(8.Financialinstruments,33.Significantaccountingjudgementsandestimates)andNoteV(3.Accountsreceivable)totheconsolidatedfinancialstatements.

AUDITOR’SREPORT(Continued)

Ernst&YoungHuaMing(2022)ShenZiNo.61295118_H01

ChinaNationalAccordMedicinesCorporationLtd.(IV)Otherinformation

ThemanagementoftheCompanyisresponsiblefortheotherinformation.Theotherinformationcomprisestheinformationincludedintheannualreport,otherthanthefinancialstatementsandourauditor’sreportthereon.Ouropiniononthefinancialstatementsdoesnotcovertheotherinformationandwedonotexpressanyformofassuranceconclusionthereon.Inconnectionwithourauditofthefinancialstatements,ourresponsibilityistoreadtheotherinformationand,indoingso,considerwhethertheotherinformationismateriallyinconsistentwiththefinancialstatementsorourknowledgeobtainedintheauditorotherwiseappearstobemateriallymisstated.If,basedontheworkwehaveperformed,weconcludethatthereisamaterialmisstatementofthisotherinformation,wearerequiredtoreportthatfact.Wehavenothingtoreportinthisregard.(V)ResponsibilitiesofthemanagementandthosechargedwithgovernanceforthefinancialstatementsThemanagementoftheCompanyisresponsibleforthepreparationandfairpresentationofthefinancialstatementsinaccordancewithASBEs,andfordesigning,implementingandmaintainingsuchinternalcontrolasthemanagementdeterminesisnecessarytoenablethepreparationoffinancialstatementstobefreefrommaterialmisstatement,whetherduetofraudorerror.Inpreparingthefinancialstatements,managementisresponsibleforassessingtheCompany’sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthegoingconcernbasisofaccounting,unlessmanagementeitherintendstoliquidatetheCompanyortoceaseoperationsorhasnorealisticalternativebuttodoso.ThosechargedwithgovernanceareresponsibleforoverseeingtheCompany’sfinancialreportingprocess.

AUDITOR’SREPORT(Continued)

Ernst&YoungHuaMing(2022)ShenZiNo.61295118_H01

ChinaNationalAccordMedicinesCorporationLtd.(VI)Auditor’sresponsibilitiesfortheauditofthefinancialstatements

Ourobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsasawholearefreefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditor’sreportthatincludesouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewithCSAswillalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandaregenerallyconsideredmaterialif,individuallyorintheaggregate,theycouldreasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthesefinancialstatements.AspartofanauditinaccordancewithCSAs,weexerciseprofessionaljudgementandmaintainprofessionalscepticismthroughouttheaudit.Wealso:

(1)Identifyandassesstherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraud

orerror,designandperformauditproceduresresponsivetothoserisks,andobtainauditevidencethatissufficientandappropriatetoprovideabasisforouropinion.Theriskofnotdetectingamaterialmisstatementresultingfromfraudishigherthanforoneresultingfromerror,asfraudmayinvolvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol.

(2)Obtainanunderstandingofinternalcontrolrelevanttotheauditinordertodesignauditprocedures

thatareappropriateinthecircumstances.

(3)Evaluatetheappropriatenessofaccountingpoliciesusedandthereasonablenessofaccounting

estimatesandrelateddisclosuresmadebythemanagement.

(4)Concludeontheappropriatenessofmanagement’suseofthegoingconcernbasisofaccountingand,

basedontheauditevidenceobtained,whetheramaterialuncertaintyexistsrelatedtoeventsorconditionsthatmaycastsignificantdoubtontheCompany’sabilitytocontinueasagoingconcern.Ifweconcludethatamaterialuncertaintyexists,wearerequiredtodrawattentioninourauditor’sreporttotherelateddisclosuresinthefinancialstatementsor,ifsuchdisclosuresareinadequate,tomodifyouropinion.Ourconclusionsarebasedontheauditevidenceobtaineduptothedateofourauditor’sreport.However,futureeventsorconditionsmaycausetheCompanytoceasetocontinueasagoingconcern.

(5)Evaluatetheoverallpresentation,structureandcontentofthefinancialstatements,includingthe

disclosures,andwhetherthefinancialstatementsrepresenttheunderlyingtransactionsandeventsinamannerthatachievesfairpresentation.

(6)Obtainsufficientappropriateauditevidenceregardingthefinancialinformationoftheentitiesor

businessactivitieswithintheCompanytoexpressanopiniononthefinancialstatements.Weareresponsibleforthedirection,supervisionandperformanceofthegroupaudit.Weremainsolelyresponsibleforourauditopinion.

AUDITOR’SREPORT(Continued)

Ernst&YoungHuaMing(2022)ShenZiNo.61295118_H01

ChinaNationalAccordMedicinesCorporationLtd.(VI)Auditor’sresponsibilitiesfortheauditofthefinancialstatements(continued)Wecommunicatewiththosechargedwithgovernanceregarding,amongothermatters,theplannedscopeandtimingoftheauditandsignificantauditfindings,includinganysignificantdeficienciesininternalcontrolthatweidentifyduringouraudit.Wealsoprovidethosechargedwithgovernancewithastatementthatwehavecompliedwithrelevantethicalrequirementsregardingindependenceandtocommunicatewiththemallrelationshipsandothermattersthatmayreasonablybethoughttobearonourindependence,andwhereapplicable,relatedsafeguards.Fromthematterscommunicatedwiththosechargedwithgovernance,wedeterminethosemattersthatwereofmostsignificanceintheauditofthefinancialstatementsofthecurrentperiodandarethereforethekeyauditmatters.Wedescribethesemattersinourauditor’sreportunlesslaworregulationprecludespublicdisclosureaboutthematterorwhen,inextremelyrarecircumstances,wedeterminethatamattershouldnotbecommunicatedinourreportbecausetheadverseconsequencesofdoingsowouldreasonablybeexpectedtooutweighthepublicinterestbenefitsofsuchcommunication.

Ernst&YoungHuaMingLLPChineseCertifiedPublicAccountant:DengDongMei

(Engagementpartner)

ChineseCertifiedPublicAccountant:LiYuanFenBeijing,thePeople’sRepublicofChina28March2022

ImportantNoticeThisauditor’sreportisanEnglishtranslationoftheauditor’sreportfortheauditengagementswhichadoptCSAs.IncasetheEnglishversiondoesnotconformtotheChineseversion,theChineseversionprevails.

CHINANATIONALACCORDMEDICINESCORPORATIONLTD.CONSOLIDATEDBALANCESHEET31December2021ExpressedinRenminbiYuan

ASSETS

ASSETSNoteV31December202131December2020

Currentassets

Currentassets
Cashandbankbalances15,126,159,080.945,998,204,295.87
Notesreceivable2680,196,380.57622,115,477.04
Accountsreceivable315,964,603,345.9113,799,971,014.22
Receivablesfinancing41,027,226,940.211,404,987,700.38
Advancestosuppliers5520,930,545.31480,313,574.71
Otherreceivables6718,089,129.10535,228,747.69
Inventories77,621,541,595.086,285,010,674.46
Contractassets829,061,159.5215,177,731.64
Othercurrentassets9160,607,355.66121,082,863.45

Totalcurrentassets

Totalcurrentassets31,848,415,532.3029,262,092,079.46

Non-currentassets

Non-currentassets
Long-termequityinvestments102,459,832,546.742,287,019,627.99
Otherequityinstrumentinvestment1162,488,312.9999,488,340.28
Othernon-currentfinancialassets12135,974,908.51120,972,350.24
Investmentproperties13113,981,497.23127,444,379.94
Fixedassets14868,626,258.43854,191,083.27
Constructioninprogress1549,849,506.7046,631,190.23
Right-of-useassets162,575,240,340.002,356,952,392.99
Intangibleassets17669,926,562.82734,345,179.40
Goodwill182,775,645,585.322,747,375,281.11
Long-termprepaidexpenses19633,975,441.76457,705,276.09
Deferredtaxassets20129,740,169.7792,118,767.81
Othernon-currentassets21459,985,769.24408,197,522.84

Totalnon-currentassets

Totalnon-currentassets10,935,266,899.5110,332,441,392.19

Totalassets

Totalassets42,783,682,431.8139,594,533,471.65

Theaccompanyingnotesformanintegralpartofthesefinancialstatements.

CHINANATIONALACCORDMEDICINESCORPORATIONLTD.CONSOLIDATEDBALANCESHEET(CONTINUED)31December2021ExpressedinRenminbiYuan

LIABILITIESANDEQUITY

LIABILITIESANDEQUITYNoteV31December202131December2020

Currentliabilities

Currentliabilities
Short-termborrowings221,930,467,146.381,612,187,020.12
Notespayable237,660,216,823.687,520,165,274.69
Accountspayable249,057,718,968.147,697,451,142.50
Receiptsinadvance2519,289,567.4412,352,466.64
Contractliabilities26431,303,231.37368,600,357.14
Employeebenefitspayable27340,197,125.33357,212,047.10
Taxpayable28337,164,080.19316,867,149.16
Otherpayables291,714,746,986.461,599,166,881.14
Non-currentliabilitiesduewithinoneyear30848,328,648.14748,732,059.89
Othercurrentliabilities3139,585,469.6524,787,078.55

Totalcurrentliabilities

Totalcurrentliabilities22,379,018,046.7820,257,521,476.93

Non-currentliabilities

Non-currentliabilities
Long-termborrowings3271,637,173.8931,637,173.89
Leaseliabilities331,375,427,877.281,303,054,163.90
Long-termpayables346,938,189.006,938,189.00
Long-termemployeebenefitspayable351,202,000.001,319,000.00
Provisions36-68,808,166.79
Deferredincome3786,917,051.7889,843,583.37
Deferredtaxliabilities20175,948,328.93205,921,408.66
Othernon-currentliabilities38664,381,065.65740,862,989.59

Totalnon-currentliabilities

Totalnon-currentliabilities2,382,451,686.532,448,384,675.20

Totalliabilities

Totalliabilities24,761,469,733.3122,705,906,152.13

Theaccompanyingnotesformanintegralpartofthesefinancialstatements.

CHINANATIONALACCORDMEDICINESCORPORATIONLTD.CONSOLIDATEDBALANCESHEET(CONTINUED)31December2021ExpressedinRenminbiYuan

LIABILITIESANDEQUITY

LIABILITIESANDEQUITYNoteV31December202131December2020

Equity

Equity
Sharecapital39428,126,983.00428,126,983.00
Capitalsurplus404,371,802,107.434,372,504,053.72
Othercomprehensiveincome4121,874,198.3638,483,017.72
Surplusreserves42214,063,491.50214,063,491.50
Retainedearnings439,889,071,272.218,895,145,106.39

Totalequityattributabletoownersof

theparent

Totalequityattributabletoownersoftheparent14,924,938,052.5013,948,322,652.33
Non-controllinginterests3,097,274,646.002,940,304,667.19

Totalequity

Totalequity18,022,212,698.5016,888,627,319.52

Totalliabilitiesandequity

Totalliabilitiesandequity42,783,682,431.8139,594,533,471.65

Thefinancialstatementshavebeensignedby:

Legalrepresentative:Financialcontroller:HeadofAccountingDepartment:

Theaccompanyingnotesformanintegralpartofthesefinancialstatements.

CHINANATIONALACCORDMEDICINESCORPORATIONLTD.CONSOLIDATEDINCOMESTATEMENTYearended31December2021ExpressedinRenminbiYuan

NoteV

NoteV20212020

Operatingrevenue

Operatingrevenue4468,357,809,571.9959,649,455,012.03
Less:Operatingcosts4460,339,298,052.2452,591,767,464.37
Taxesandsurcharges45169,467,568.27154,631,447.20
Sellingexpenses464,752,862,965.093,943,134,095.75
Administrativeexpenses471,045,635,601.171,008,178,815.78
Financecosts48212,482,801.90119,855,169.85
Including:Interestexpense288,038,760.87258,189,163.79
Interestincome74,297,769.23136,455,990.10
Add:Otherincome49103,418,063.1072,363,808.19
Investmentincome50292,380,503.40283,951,956.10
Including:Investmentincomefromassociates333,397,116.38354,345,705.65
Incomefromthederecognitionoffinancialassetsmeasuredatamortisedcost(47,404,044.48)(76,142,835.36)
Creditimpairmentlosses51(42,790,399.76)(25,975,320.08)
Impairmentlosses52(242,904,866.51)(5,179,285.75)
Gainondisposalofassets534,245,372.776,791,962.50

Operatingprofits

Operatingprofits1,952,411,256.322,163,841,140.04
Add:Non-operatingincome5436,364,721.3617,660,920.58
Less:Non-operatingexpenses5513,923,128.1424,265,611.84

Totalprofit

Totalprofit1,974,852,849.542,157,236,448.78
Less:Incometaxexpenses58447,210,654.67435,940,050.06

Netprofit

Netprofit1,527,642,194.871,721,296,398.72

Netprofitclassifiedbycontinuingoperations

Netprofitclassifiedbycontinuingoperations
Profitorlossfromcontinuingoperations1,527,642,194.871,721,296,398.72

Netprofitclassifiedbyattributionofownership

Netprofitclassifiedbyattributionofownership
Netprofitattributabletoownersoftheparent1,336,427,752.221,401,892,593.23
Non-controllinginterests191,214,442.65319,403,805.49

Othercomprehensiveincome,netoftax

Othercomprehensiveincome,netoftax(27,708,827.55)(12,394,161.92)

Othercomprehensiveincome,netoftax,attributabletoownersofthe

parent,

Othercomprehensiveincome,netoftax,attributabletoownersoftheparent,41(16,608,819.36)(7,434,325.05)

Othercomprehensiveincomethatwillnotbereclassifiedtoprofitor

loss

Othercomprehensiveincomethatwillnotbereclassifiedtoprofitorloss
Changeinthefairvalueofotherequityinvestments(16,650,012.28)(7,439,657.92)

Othercomprehensiveincomethatmaybereclassifiedtoprofitorloss

Othercomprehensiveincomethatmaybereclassifiedtoprofitorloss
Othercomprehensiveincomeusingtheequitymethodthatmaybereclassifiedtoprofitorloss41,192.925,332.87

Othercomprehensiveincome,netoftax,attributabletonon-

controllinginterests

Othercomprehensiveincome,netoftax,attributabletonon-controllinginterests41(11,100,008.19)(4,959,836.87)

Theaccompanyingnotesformanintegralpartofthesefinancialstatements.

CHINANATIONALACCORDMEDICINESCORPORATIONLTD.CONSOLIDATEDINCOMESTATEMENT(CONTINUED)Yearended31December2021ExpressedinRenminbiYuan

NoteV

NoteV20212020

Totalcomprehensiveincome

Totalcomprehensiveincome1,499,933,367.321,708,902,236.80
Including:
Totalcomprehensiveincomeattributabletoownersoftheparent1,319,818,932.861,394,458,268.18
Totalcomprehensiveincomeattributabletonon-controllinginterests180,114,434.46314,443,968.62

Earningspershare

Earningspershare59
Basicearningspershare3.123.27
Dilutedearningspershare3.123.27

Theaccompanyingnotesformanintegralpartofthesefinancialstatements.

CHINANATIONALACCORDMEDICINESCORPORATIONLTD.CONSOLIDATEDSTATEMENTOFCHANGESINEQUITYYearended31December2021ExpressedinRenminbiYuan

2021Attributabletoownersoftheparent
SharecapitalCapitalsurplusOthercomprehensiveincomeSurplusreservesRetainedearningsSubtotalNon-controllinginterestsTotalequity

I.Balanceatendofprioryear

I.Balanceatendofprioryear428,126,983.004,372,504,053.7238,483,017.72214,063,491.508,895,145,106.3913,948,322,652.332,940,304,667.1916,888,627,319.52

II.Changesfortheyear

II.Changesfortheyear-(701,946.29)(16,608,819.36)-993,926,165.82976,615,400.17156,969,978.811,133,585,378.98
(1)Totalcomprehensiveincome--(16,608,819.36)-1,336,427,752.221,319,818,932.86180,114,434.461,499,933,367.32
(2)Owners’contributionsandreductionincapital-(701,946.29)---(701,946.29)66,531,116.9365,829,170.64
1.Capitalcontributionsbyowners------26,306,656.3026,306,656.30
2.Businesscombinationinvolvingentitiesnotundercommoncontrol------40,224,460.6340,224,460.63
3.Others-(701,946.29)---(701,946.29)-(701,946.29)
(3)Profitdistribution----(342,501,586.40)(342,501,586.40)(89,675,572.58)(432,177,158.98)
1.Distributiontoequityowners----(342,501,586.40)(342,501,586.40)(89,675,572.58)(432,177,158.98)

III..Balanceatendofyear

III..Balanceatendofyear428,126,983.004,371,802,107.4321,874,198.36214,063,491.509,889,071,272.2114,924,938,052.503,097,274,646.0018,022,212,698.50

Theaccompanyingnotesformanintegralpartofthesefinancialstatements.

CHINANATIONALACCORDMEDICINESCORPORATIONLTD.CONSOLIDATEDSTATEMENTOFCHANGESINEQUITY(CONTINUED)Yearended31December2021ExpressedinRenminbiYuan

2020Attributabletoownersoftheparent
SharecapitalCapitalsurplusOthercomprehensiveincomeSurplusreservesRetainedearningsSubtotalNon-controllinginterestsTotalequity

I.Balanceatendofprioryear

I.Balanceatendofprioryear428,126,983.004,363,007,511.5745,917,342.77214,063,491.507,755,295,537.0812,806,410,865.922,553,426,974.3115,359,837,840.23
Add:Businesscombinationinvolvingentitiesundercommoncontrol-107,759,447.87--(3,029,877.91)104,729,569.96109,412,866.52214,142,436.48

II.Balanceatbeginningofyear

II.Balanceatbeginningofyear428,126,983.004,470,766,959.4445,917,342.77214,063,491.507,752,265,659.1712,911,140,435.882,662,839,840.8315,573,980,276.71

III.Changesfortheyear

III.Changesfortheyear-(98,262,905.72)(7,434,325.05)-1,142,879,447.221,037,182,216.45277,464,826.361,314,647,042.81
(1)Totalcomprehensiveincome--(7,434,325.05)-1,401,892,593.231,394,458,268.18314,443,968.621,708,902,236.80
(2)Owners’contributionsandreductionincapital-(98,262,905.72)--(2,136,956.21)(100,399,861.93)28,361,747.23(72,038,114.70)
1.Capitalcontributionsbyowners------5,700,000.005,700,000.00
2.Businesscombinationinvolvingentitiesundercommoncontrol(97,869,029.99)(97,869,029.99)(65,246,019.99)(163,115,049.98)
3.Businesscombinationinvolvingentitiesnotundercommoncontrol87,907,767.2287,907,767.22
4.Others-(393,875.73)--(2,136,956.21)(2,530,831.94)(2,530,831.94)
(3)Profitdistribution----(256,876,189.80)(256,876,189.80)(65,340,889.49)(322,217,079.29)
1.Distributiontoequityowners----(256,876,189.80)(256,876,189.80)(65,340,889.49)(322,217,079.29)

IV.Balanceatendofyear

IV.Balanceatendofyear428,126,983.004,372,504,053.7238,483,017.72214,063,491.508,895,145,106.3913,948,322,652.332,940,304,667.1916,888,627,319.52

Theaccompanyingnotesformanintegralpartofthesefinancialstatements.

CHINANATIONALACCORDMEDICINESCORPORATIONLTD.CONSOLIDATEDSTATEMENTOFCASHFLOWSYearended31December2021ExpressedinRenminbiYuan

NoteV

NoteV20212020

1.CASHFLOWSFROMOPERATINGACTIVITIES

1.CASHFLOWSFROMOPERATINGACTIVITIESCashreceiptsfromthesaleofgoodsandthe

renderingofservices

Cashreceiptsfromthesaleofgoodsandtherenderingofservices71,597,279,035.4861,701,348,065.17
Receiptsoftaxesandsurchargesrefunds13,542,582.5713,720,143.80
Othercashreceiptsrelatingtooperatingactivities60724,985,756.211,697,383,795.18

Totalcashinflowsfromoperatingactivities

Totalcashinflowsfromoperatingactivities72,335,807,374.2663,412,452,004.15

Cashpaymentsforgoodsandservices

Cashpaymentsforgoodsandservices63,898,617,747.5156,018,201,099.73
Cashpaymentstoandonbehalfofemployees3,369,629,673.472,708,413,782.73
Paymentsofalltypesoftaxesandsurcharges1,577,115,837.201,512,079,139.15
Othercashpaymentsrelatingtooperatingactivities601,835,263,139.211,671,011,384.07

Totalcashoutflowsfromoperatingactivities

Totalcashoutflowsfromoperatingactivities70,680,626,397.3961,909,705,405.68

Netcashflowsfromoperatingactivities

Netcashflowsfromoperatingactivities611,655,180,976.871,502,746,598.47

2.CASHFLOWSFROMINVESTINGACTIVITIES

2.CASHFLOWSFROMINVESTINGACTIVITIESCashreceiptsfromreturnsofinvestments

Cashreceiptsfromreturnsofinvestments2,997,441.7319,027,649.76
Cashreceivedfrominvestmentincome169,110,875.76160,164,584.49
Netcashreceiptsfromdisposaloffixedassets,intangibleassetsandotherlong-termassets1,016,257.658,570,072.79
Othercashreceiptsrelatingtoinvestingactivities6054,984.6024,051,674.67

Totalcashinflowsfrominvestingactivities

Totalcashinflowsfrominvestingactivities173,179,559.74211,813,981.71

Theaccompanyingnotesformanintegralpartofthesefinancialstatements.

CHINANATIONALACCORDMEDICINESCORPORATIONLTD.CONSOLIDATEDSTATEMENTOFCASHFLOWS(CONTINUED)Yearended31December2021ExpressedinRenminbiYuan

NoteV

NoteV20212020

2.CASHFLOWSFROMINVESTINGACTIVITIES(Continued)

2.CASHFLOWSFROMINVESTINGACTIVITIES(Continued)Cashpaymentstoacquirefixedassets,intangibleassets

andotherlong-termassets

Cashpaymentstoacquirefixedassets,intangibleassetsandotherlong-termassets370,430,625.89293,826,061.63
Cashpaymentsforinvestments147,024,601.4450,117,666.41
Netcashpaymentsforacquisitionofsubsidiariesandotherbusinessunits61109,950,637.412,646,097,210.38
Othercashpaymentsrelatingtoinvestingactivities601,305,765.005,002,197.26

Totalcashoutflowsfrominvestingactivities

Totalcashoutflowsfrominvestingactivities628,711,629.742,995,043,135.68

Netcashflowsfrominvestingactivities

Netcashflowsfrominvestingactivities(455,532,070.00)(2,783,229,153.97)

3.CASHFLOWSFROMFINANCINGACTIVITIES

3.CASHFLOWSFROMFINANCINGACTIVITIESCashproceedsfrominvestmentsbyothers

Cashproceedsfrominvestmentsbyothers21,206,123.005,700,000.00
Including:Cashreceiptsfromcapitalcontributionsfromnon-controllinginterestsofsubsidiaries21,206,123.005,700,000.00
Cashreceiptsfromborrowings932,684,894.52801,520,037.57
Othercashreceiptsrelatingtofinancingactivities60101,880,912.41359,332,475.63

Totalcashinflowsfromfinancingactivities

Totalcashinflowsfromfinancingactivities1,055,771,929.931,166,552,513.20

Cashrepaymentsfordebts

Cashrepaymentsfordebts1,007,061,372.10427,347,200.00
Cashpaymentsfordistributionofdividendsorprofitandinterestexpenses672,562,452.24613,704,450.41
Including:Dividendsorprofitpaidtonon-controllingshareholdersofsubsidiaries62,024,277.2163,799,218.94
Othercashpaymentsrelatingtofinancingactivities601,247,788,628.711,865,923,680.60

Totalcashoutflowsfromfinancingactivities

Totalcashoutflowsfromfinancingactivities2,927,412,453.052,906,975,331.01

Netcashflowsfromfinancingactivities

Netcashflowsfromfinancingactivities(1,871,640,523.12)(1,740,422,817.81)

4.EFFECTOFFOREIGNEXCHANGERATECHANGESON

CASHANDCASHEQUIVALENTS

4.EFFECTOFFOREIGNEXCHANGERATECHANGESONCASHANDCASHEQUIVALENTS390,580.61(52,538.86)

5.NETDECREASEINCASHANDCASH

EQUIVALENTS

5.NETDECREASEINCASHANDCASHEQUIVALENTS(671,601,035.64)(3,020,957,912.17)
Add:Cashandcashequivalentsatbeginningoftheyear5,405,113,257.998,426,071,170.16

6.CASHANDCASHEQUIVALENTSATENDOFYEAR

6.CASHANDCASHEQUIVALENTSATENDOFYEAR614,733,512,222.355,405,113,257.99

Theaccompanyingnotesformanintegralpartofthesefinancialstatements.

CHINANATIONALACCORDMEDICINESCORPORATIONLTD.COMPANYBALANCESHEET31December2021ExpressedinRenminbiYuan

ASSETS

ASSETSNoteXIV31December202131December2020

Currentassets

Currentassets
Cashandbankbalances3,098,512,437.043,020,909,473.71
Notesreceivable112,015,516.7530,984,449.44
Accountsreceivable2592,400,308.87609,575,301.13
Receivablesfinancing3-30,248,631.32
Advancestosuppliers11,762,344.406,722,204.59
Otherreceivables45,003,805,208.013,562,309,346.07
Inventories226,490,178.26172,275,777.63
Contractassets139,021.45139,154.54
Othercurrentassets39,482.3839,482.38

Totalcurrentassets

Totalcurrentassets8,945,164,497.167,433,203,820.81

Non-currentassets

Non-currentassets
Long-termequityinvestments58,044,896,142.867,873,668,245.16
Othernon-currentfinancialassets135,974,908.51120,972,350.24
Investmentproperties951,035.321,452,132.04
Fixedassets12,824,750.5113,279,902.76
Right-of-useassets4,010,087.195,142,755.88
Intangibleassets5,682,864.944,622,268.00
Long-termprepaidexpenses6,438,007.854,335,802.92
Deferredtaxassets10,017,097.439,025,057.52
Othernon-currentassets26,652,335.1012,967,715.50

Totalnon-currentassets

Totalnon-currentassets8,247,447,229.718,045,466,230.02

Totalassets

Totalassets17,192,611,726.8715,478,670,050.83

Theaccompanyingnotesformanintegralpartofthesefinancialstatements.

CHINANATIONALACCORDMEDICINESCORPORATIONLTD.COMPANYBALANCESHEET(CONTINUED)31December2021ExpressedinRenminbiYuan

Theaccompanyingnotesformanintegralpartofthesefinancialstatements.

LIABILITIESANDSHAREHOLDERS’EQUITY

LIABILITIESANDSHAREHOLDERS’EQUITYNoteXIV31December202131December2020

Currentliabilities

Currentliabilities
Short-termborrowings555,138,734.59157,892,942.24
Notespayable596,268,853.45756,364,719.49
Accountspayable480,059,192.74407,275,713.49
Contractliabilities3,231,968.161,807,562.61
Employeebenefitspayable36,339,296.2036,672,344.48
Taxpayables14,768,716.4513,975,905.04
Otherpayables3,832,642,249.253,167,152,583.28
Non-currentliabilitiesduewithinoneyear1,112,137.321,056,120.58
Othercurrentliabilities837,570.27636,200.63

Totalcurrentliabilities

Totalcurrentliabilities5,520,398,718.434,542,834,091.84

Non-currentliabilities

Non-currentliabilities
Long-termborrowings31,637,173.8931,637,173.89
Leaseliabilities3,343,830.664,455,967.97
Long-termpayables800,000.00800,000.00
Deferredincome392,720.10827,658.18
Othernon-currentliabilities26,986,064.7611,042.52

Totalnon-currentliabilities

Totalnon-currentliabilities63,159,789.4137,731,842.56

Totalliabilities

Totalliabilities5,583,558,507.844,580,565,934.40

CHINANATIONALACCORDMEDICINESCORPORATIONLTD.COMPANYBALANCESHEET(CONTINUED)31December2021ExpressedinRenminbiYuan

Theaccompanyingnotesformanintegralpartofthesefinancialstatements.

LIABILITIESANDSHAREHOLDERS’EQUITY

LIABILITIESANDSHAREHOLDERS’EQUITYNoteXIV31December202131December2020

Shareholders’equity

Shareholders’equity
Sharecapital428,126,983.00428,126,983.00
Capitalsurplus4,467,289,485.304,467,991,431.59
Othercomprehensiveincome(86,840.40)(128,033.32)
Surplusreserves214,063,491.50214,063,491.50
Retainedearnings6,499,660,099.635,788,050,243.66

Totalshareholders’equity

Totalshareholders’equity11,609,053,219.0310,898,104,116.43

Totalliabilitiesandshareholders’equity

Totalliabilitiesandshareholders’equity17,192,611,726.8715,478,670,050.83

CHINANATIONALACCORDMEDICINESCORPORATIONLTD.COMPANYINCOMESTATEMENTYearended31December2021ExpressedinRenminbiYuan

NoteXIV

NoteXIV20212020

Operatingrevenue

Operatingrevenue64,229,561,647.313,853,659,001.12
Less:Operatingcosts64,064,320,850.063,674,872,961.34
Taxesandsurcharges5,552,059.256,565,048.14
Sellingexpenses55,048,780.4667,202,266.56
Administrativeexpenses85,083,535.1190,803,215.82
Financecosts(114,327,284.10)(89,275,535.72)
Including:Interestexpense54,994,093.6445,645,501.85
Including:Interestincome171,740,832.27137,302,390.98
Add:Otherincome3,731,248.014,977,883.40
Investmentincome7955,848,072.40969,166,523.86
Including:Investmentincomefromassociates333,164,462.64353,352,207.87
Incomefromthederecognitionoffinancialassetsmeasuredatamortisedcost(206,333.75)(1,796,917.66)
Creditimpairmentlosses(3,427,601.84)(965,769.74)
Impairmentlosses(1,274,168.04)(500,485.27)
Gainondisposalofassets119,379.12(165.97)

Operatingprofits

Operatingprofits1,088,880,636.181,076,169,031.26
Add:Non-operatingincome649,755.231,925.53
Less:Non-operatingexpenses3,043,885.49388,863.31

Totalprofit

Totalprofit1,086,486,505.921,075,782,093.48
Less:Incometaxexpenses32,375,063.5527,039,917.36

Netprofit

Netprofit1,054,111,442.371,048,742,176.12
Including:Profitorlossfromcontinuingoperations1,054,111,442.371,048,742,176.12

Othercomprehensiveincome,netoftax

Othercomprehensiveincome,netoftax41,192.925,332.87

Othercomprehensiveincomethatmaybe

reclassifiedtoprofitorloss

Othercomprehensiveincomethatmaybereclassifiedtoprofitorloss
Othercomprehensiveincomeusingtheequitymethodthatmaybereclassifiedtoprofitorloss41,192.925,332.87

Totalcomprehensiveincome

Totalcomprehensiveincome1,054,152,635.291,048,747,508.99

Theaccompanyingnotesformanintegralpartofthesefinancialstatements.

CHINANATIONALACCORDMEDICINESCORPORATIONLTD.COMPANYSTATEMENTOFCHANGESINEQUITYYearended31December2021ExpressedinRenminbiYuan

2021

2021SharecapitalCapitalsurplusOthercomprehensiveincomeSurplusreservesRetainedearningsTotalequity

I.Balanceatendofprioryear

I.Balanceatendofprioryear428,126,983.004,467,991,431.59(128,033.32)214,063,491.505,788,050,243.6610,898,104,116.43

II.Changesfortheyear

II.Changesfortheyear-(701,946.29)41,192.92-711,609,855.97710,949,102.60
(1)Totalcomprehensiveincome--41,192.92-1,054,111,442.371,054,152,635.29
(2)Owners’contributionsandreductionincapital-(701,946.29)---(701,946.29)
1.Others-(701,946.29)---(701,946.29)
(3)Profitdistribution----(342,501,586.40)(342,501,586.40)
1.Distributiontoowners----(342,501,586.40)(342,501,586.40)

III.Balanceatendofyear

III.Balanceatendofyear428,126,983.004,467,289,485.30(86,840.40)214,063,491.506,499,660,099.6311,609,053,219.03

Theaccompanyingnotesformanintegralpartofthesefinancialstatements.

CHINANATIONALACCORDMEDICINESCORPORATIONLTD.COMPANYSTATEMENTOFCHANGESINEQUITY(CONTINUED)Yearended31December2021ExpressedinRenminbiYuan

2020

2020SharecapitalCapitalsurplusOthercomprehensiveincomeSurplusreservesRetainedearningsTotalequity

I.Balanceatendofprioryear

I.Balanceatendofprioryear428,126,983.004,468,385,307.32(133,366.19)214,063,491.504,996,184,257.3410,106,626,672.97

II.Changesfortheyear

II.Changesfortheyear-(393,875.73)5,332.87-791,865,986.32791,477,443.46
(1)Totalcomprehensiveincome--5,332.87-1,048,742,176.121,048,747,508.99
(2)Owners’contributionsandreductionincapital-(393,875.73)---(393,875.73)
1.Others-(393,875.73)---(393,875.73)
(3)Profitdistribution----(256,876,189.80)(256,876,189.80)
1.Distributiontoowners----(256,876,189.80)(256,876,189.80)

III.Balanceatendofyear

III.Balanceatendofyear428,126,983.004,467,991,431.59(128,033.32)214,063,491.505,788,050,243.6610,898,104,116.43

Theaccompanyingnotesformanintegralpartofthesefinancialstatements.

CHINANATIONALACCORDMEDICINESCORPORATIONLTD.COMPANYSTATEMENTOFCASHFLOWSYearended31December2021ExpressedinRenminbiYuan

Theaccompanyingnotesformanintegralpartofthesefinancialstatements.

NoteXIV

NoteXIV20212020

1.CASHFLOWSFROMOPERATINGACTIVITIES

1.CASHFLOWSFROMOPERATINGACTIVITIES

Cashreceiptsfromthesaleofgoodsandthe

renderingofservices

Cashreceiptsfromthesaleofgoodsandtherenderingofservices4,482,924,175.094,009,125,652.17
Othercashreceiptsrelatingtooperatingactivities64,151,272.51152,617,741.86

Totalcashinflowsfromoperatingactivities

Totalcashinflowsfromoperatingactivities4,547,075,447.604,161,743,394.03

Cashpaymentsforgoodsandservices

Cashpaymentsforgoodsandservices4,246,556,694.013,813,436,197.34
Cashpaymentstoandonbehalfofemployees95,803,718.5694,005,053.76
Paymentsofalltypesoftaxesandsurcharges76,032,450.1287,642,227.22
Othercashpaymentsrelatingtooperatingactivities28,369,766.7369,706,005.74

Totalcashoutflowsfromoperatingactivities

Totalcashoutflowsfromoperatingactivities4,446,762,629.424,064,789,484.06

Netcashflowsfromoperatingactivities

Netcashflowsfromoperatingactivities100,312,818.1896,953,909.97

2.CASHFLOWSFROMINVESTINGACTIVITIES

2.CASHFLOWSFROMINVESTINGACTIVITIESCashreceiptsfromreturnsofinvestments

Cashreceiptsfromreturnsofinvestments2,997,441.7332,664,096.76
Cashreceiptsfrominvestmentincome781,665,378.58753,109,725.64
Netcashreceiptsfromdisposaloffixedassets,intangibleassetsandotherlong-termassets423,563.0020,210.00
Othercashreceiptsrelatingtoinvestingactivities5,195,613,459.252,774,679,815.57

Totalcashinflowsfrominvestingactivities

Totalcashinflowsfrominvestingactivities5,980,699,842.563,560,473,847.97

Cashpaidforacquisitionoffixedassets,

intangibleassetsandotherlong-termassets

Cashpaidforacquisitionoffixedassets,intangibleassetsandotherlong-termassets7,415,164.0613,691,557.76
Cashpaymentsforinvestments18,000,000.00-
Othercashpaymentsrelatingtoinvestingactivities6,509,461,277.004,372,908,047.02

Totalcashoutflowsfrominvestingactivities

Totalcashoutflowsfrominvestingactivities6,534,876,441.064,386,599,604.78

Netcashflowsfrominvestingactivities

Netcashflowsfrominvestingactivities(554,176,598.50)(826,125,756.81)

CHINANATIONALACCORDMEDICINESCORPORATIONLTD.COMPANYSTATEMENTOFCASHFLOWS(CONTINUED)Yearended31December2021ExpressedinRenminbiYuan

Theaccompanyingnotesformanintegralpartofthesefinancialstatements.

NoteXIV

NoteXIV20212020

3.CASHFLOWSFROMFINANCINGACTIVITIES

3.CASHFLOWSFROMFINANCINGACTIVITIESCashreceiptsfromborrowings

Cashreceiptsfromborrowings280,000,000.0063,864,821.52
Othercashreceiptsrelatingtofinancingactivities44,512,657,890.3435,223,164,337.16

Totalcashinflowsfromfinancingactivities

Totalcashinflowsfromfinancingactivities44,792,657,890.3435,287,029,158.68

Cashrepaymentsfordebts

Cashrepaymentsfordebts30,164,821.5243,700,000.00
Cashpaymentsfordistributionofdividends,profitorinterestexpenses394,368,619.63308,496,896.99
Othercashpaymentsrelatingtofinancingactivities43,837,048,286.1534,079,032,358.66

Totalcashoutflowsfromfinancingactivities

Totalcashoutflowsfromfinancingactivities44,261,581,727.3034,431,229,255.65

Netcashflowsfromfinancingactivities

Netcashflowsfromfinancingactivities531,076,163.04855,799,903.03

4.EFFECTOFFOREIGNEXCHANGERATE

CHANGESONCASHANDCASHEQUIVALENTS

4.EFFECTOFFOREIGNEXCHANGERATECHANGESONCASHANDCASHEQUIVALENTS390,580.61(52,538.86)

5.NETINCREASEINCASHANDCASH

EQUIVALENTS

5.NETINCREASEINCASHANDCASHEQUIVALENTS77,602,963.33126,575,517.33
Add:Cashandcashequivalentsatbeginningoftheyear3,020,909,473.712,894,333,956.38

6.CASHANDCASHEQUIVALENTSATENDOF

YEAR

6.CASHANDCASHEQUIVALENTSATENDOFYEAR3,098,512,437.043,020,909,473.71

CHINANATIONALACCORDMEDICINESCORPORATIONLTD.NOTESTOFINANCIALSTATEMENTSYearended31December2021ExpressedinRenminbiYuan

IProfileoftheCompany

AsapprovedbythePeople’sGovernmentofShenzhen(SFBF(1993)No.356),ChinaNationalAccordMedicinesCorporationLtd.(hereinafterreferredtoasthe“theCompany”),formerlyknownasShenzhenHealthMineralWaterCorp.,Ltd.,wasregisteredasajointstockliabilitylimitedcompanyon1February1993throughstocktransformation.InMarch1993,withtheapprovalfromtheShenzhenBranchofthePeople’sBankofChina,theCompanyissued30millionAshares(including16.5millionpublicshares,3.5millionemployeesharesand10millioncorporationshares)and20millionBshares.Afterthisissuance,theCompany’ssharecapitalwasRMB105.00million.Throughconvertingcapitalsurplusintosharecapital,bonusissuesandissuanceofsharesforyears,thesharecapitaloftheCompanyincreasedto428.13millionasat31December2021.InNovember2000,theCompanyenteredintoanAssetExchangeAgreementwithShenzhenInvestmentManagementCompany,theoriginalmajorshareholderoftheCompany,toexchangealltheassetsandliabilitiesoftheCompanyasof31August2000forShenzhenInvestmentManagementCompany’s100%equityinterestsin11pharmaceuticalcompaniesandcertainpropertiesaswellas51%equityinterestsinShenzhenTefaModernComputerCo.,Ltd.TheaboveassetexchangeproposalwasapprovedbyshareholdersintheSecondExtraordinaryGeneralMeetingon29December2000.Thetransactionwascompletedon8January2001.On18February2004,theCompany’soriginalmajorshareholder,ShenzhenInvestmentManagementCompany,enteredintoastocktransferagreementwithSinopharmGroupCo.,Ltd.(hereinafterreferredtoas“SinopharmGroup”)totransferits43.33%sharesintheCompanytoSinopharmGroup.Thelegalproceduresoftheaboveequitytransferwerecompletedon9December2004.Atthesametime,asapprovedbytheState-ownedAssetsSupervisionandAdministrationCommissionoftheStateCouncil(GZCQ(2004)No.525)andtheChinaSecuritiesRegulatoryCommission(ZJGSZ(2004)No.94),thenatureoftheseshareschangedfromstate-ownedstocktostate-ownedlegalentitystockandSinopharmGroupbecamethelargestshareholderoftheCompany.On14April2006,theCompany’sproposalonreformationofsegregatedstockswasapproved.TogainliquidityfortherestrictedstocksoftheCompany,theholdersoftherestrictedstocksoftheCompanyagreedtopaythefollowingconsideration:basedonthestockregistrationasof27April2006,theCompanyissuedbonusshareson28April2006attheratioof3sharestoevery10AsharestoliquidatedA-shareholderswhichwentpubliconthesameday.Afterthisbonusissue,thetotalnumberofsharesoftheCompanyremainedunchangedwithcorrespondingchangesinthecompositionofshareholdings.On14March2014,theCompanyissued74,482,543ordinaryshares(Ashares)throughthenon-publicoffering.TheparvaluepershareisRMB1.00yuan.Thesharesshallnotbetransferredwithin36monthssincetheissuedate.ThetotalnumberofsharesoftheCompanywas362,631,943sincethedateofissue.TheCompanyacquiredthecompaniesundercommoncontrol,includingSinopharmHoldingGuodaDrugstoreCo.,Ltd.(“GuodaDrugstore”),FoshanNanhaiMedicineGroupCo.,Ltd.(“FoshanNanhai”),GuangdongSouthPharmaceuticalForeignTradeCo.,Ltd.(“SouthPharma&Trade”)andSinopharmHoldingGuangdongDongFangUptodate&SpecialMedicinesCo.,Ltd.(“GuangdongUptodate&SpecialMedicines”)byissuingsharesandraisedsupportingfundsbyissuingsharestoPingAnAssetManagementCo.,Ltd.toacquirethenon-controllinginterestofSouthPharma&Trade.Theabovetransactionswerecompletedon31December2016,andtherelevantsharesweresuccessfullyissuedandlistedon5January2017.Afterwards,thetotalnumberofsharesoftheCompanyincreasedto428,126,983.

IProfileoftheCompany(Continued)

Asof31December2021,thetotalsharecapitalwas428,126,983.TheCompanyisregisteredwithShenzhenAdministrationforIndustry&Commerce.ItsUniformSocialCreditCodeis91440300192186267U.TheoperationperiodoftheCompanyisfrom2August1986tothelongterm.TheregisteredcapitaloftheCompanyisRMB428.13million.ThelegalrepresentativeoftheCompanyisLinZhaoxiong.TheapprovedscopeofbusinessoftheCompanyanditssubsidiaries(together“theGroup”)includes:thewholesaleofChineseherbalslices,traditionalChinesemedicinepreparations,bulkpharmaceuticaldrugs,chemicalpreparations,bulkantibioticdrugs,antibioticpreparations,biochemicaldrugs,biologicalproducts(includingvaccinesandinvitrodiagnosticreagentspsychotropicdrugsandpreparations,narcoticdrugs,toxicdrugsformedicaluse,proteinassimilationpreparationandpeptidehormones;thetradingofdietarysupplements;industrialinvestmentholding;domestictrade;materialsupplyandthemarketingindustry(otherthanspeciallicensing);thesaleofambulances;thetradingofsecond-classandthird-classmedicalequipment;projectinvestment;propertymanagementandtheleasingofself-ownedproperties;pharmacovigilanceandmedicalinformationconsulting;parkingoperation;logisticsandrelatedservices;thepackageagencybusiness;logisticdesign;importandexportservices(excludingprojectsthatareprohibitedbythecountry;andrestrictiveprojectshavetobeapprovedbeforeoperating).SubsidiariesconsolidatedinthefinancialstatementsforthecurrentyearandchangeintheconsolidationscopeareshowninNoteVI.TheGroup’sparentandultimateparentcompaniesareSinopharmGroupandChinaNationalPharmaceuticalGroupCorporation(“CNPGC”),respectively.ThesefinancialstatementswereauthorisedforissuebytheboardofdirectorsoftheCompanyon28March2022.IIBasisofpreparation

ThefinancialstatementswerepreparedinaccordancewiththeBasicStandardandspecificstandardsofAccountingStandardsforBusinessEnterprisesissuedbytheMinistryofFinanceandthespecificaccountingstandards,applicationguidance,interpretationandotherrelevantregulationsissuedoramendedthereafter(hereaftercollectivelyreferredtoas“AccountingStandardsforBusinessEnterprises”or“CAS”).Thesefinancialstatementsarepreparedonagoingconcernbasis.Exceptforcertainfinancialinstruments,thefinancialstatementshavebeenpreparedusingthehistoricalcostastheprincipleofmeasurement.Whereassetsareimpaired,provisionsforassetimpairmentaremadeinaccordancewiththerelevantrequirements.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates

TheGroupdeterminesthespecificaccountingpoliciesandestimatesbasedonitsfeaturesofproductionandoperation,primarilycomprisingthemethodsofprovisionforexpectedcreditlossesonreceivables,valuationofinventories,depreciationoffixedassetsandamortisationofintangibleassets,themeasurementmodelofinvestmentproperties,recognitionandmeasurementofrevenue.

1.StatementofcompliancewithAccountingStandardsforBusinessEnterprises

ThefinancialstatementspresenttrulyandcompletelythefinancialpositionsoftheGroupandtheCompanyasat31December2021,andthefinancialperformanceandthecashflowsfortheyearthenendedinaccordancewithAccountingStandardsforBusinessEnterprises.

2.Accountingyear

TheGroup’saccountingyearbeginson1Januaryandendson31December.

3.Functionalcurrency

ThefunctionalcurrencyisRenminbi.TheCompany’sfunctionalandpresentationcurrencyisRenminbi(RMB).ThecurrencyunitisRMBYuanunlessotherwisestated.

4.Businesscombinations

Businesscombinationsareclassifiedintobusinesscombinationsinvolvingentitiesundercommoncontrolandbusinesscombinationsnotinvolvingentitiesundercommoncontrol.(a)Businesscombinationsinvolvingentitiesundercommoncontrol

Abusinesscombinationinvolvingentitiesundercommoncontrolisabusinesscombinationinwhichallofthecombiningentitiesareultimatelycontrolledbythesamepartyorpartiesbothbeforeandafterthecombination,andthatcontrolisnottransitory.Inabusinesscombinationinvolvingentitiesundercommoncontrol,theentitythat,atthecombinationdate,obtainscontrolofanothercombiningentityistheabsorbingentity,whilethatothercombiningentityistheentitybeingabsorbed.Thecombinationdateisthedateonwhichtheabsorbingentityeffectivelyobtainscontrolontheentitybeingabsorbed.Assetsandliabilities(includinggoodwillarisingfromtheultimatecontrollingshareholder’sacquisitionofthepartybeingabsorbed)thatareobtainedbytheabsorbingpartyinabusinesscombinationshallbemeasuredattheircarryingamountsatthecombinationdateasrecordedbythepartybeingabsorbed.Thedifferencebetweenthecarryingamountofthenetassetsobtainedandthecarryingamountoftheconsiderationpaidforthecombination(ortheaggregatefacevalueofsharesissuedasconsideration)shallbeadjustedtosharepremiumundercapitalsurplus.Ifthecapitalsurplusisnotsufficienttoabsorbthedifference,anyexcessshallbeadjustedagainstretainedearnings.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

4.Businesscombinations(Continued)(b)Businesscombinationsinvolvingenterprisesnotundercommoncontrol

Abusinesscombinationnotinvolvingentitiesundercommoncontrolisabusinesscombinationinwhichallofthecombiningentitiesarenotultimatelycontrolledbythesamepartyorpartiesbothbeforeandafterthecombination.Inabusinesscombinationnotinvolvingentitiesundercommoncontrol,theentitythat,ontheacquisitiondate,obtainscontrolofanothercombiningentityistheacquirer,whilethatothercombiningentityistheacquiree.Theacquisitiondateisthedateonwhichtheacquirereffectivelyobtainscontroloftheacquiree.Theacquirershallmeasuretheacquiree’sidentifiableassets,liabilitiesandcontingentliabilitiesacquiredinthebusinesscombinationattheirfairvaluesontheacquisitiondate.Goodwillisinitiallyrecognisedandmeasuredatcost,beingtheexcessoftheaggregateofthefairvalueoftheconsiderationtransferred(orthefairvalueoftheequitysecuritiesissued)andanyfairvalueoftheGroup’spreviouslyheldequityinterestintheacquireeovertheGroup’sinterestinthefairvalueoftheacquiree’snetidentifiableassets.Afterinitialrecognition,goodwillismeasuredatcostlessanyaccumulatedimpairmentlosses.Wheretheaggregateofthefairvalueoftheconsiderationtransferred(orthefairvalueoftheequitysecuritiesissued)andanyfairvalueoftheGroup’spreviouslyheldequityinterestintheacquireeislowerthantheGroup’sinterestinthefairvalueoftheacquiree’snetidentifiableassets,theGroupreassessesthemeasurementofthefairvalueoftheacquiree’sidentifiableassets,liabilitiesandcontingentliabilitiesandthefairvalueoftheconsiderationtransferred(orthefairvalueoftheequitysecuritiesissued),togetherwiththefairvalueoftheGroup’spreviouslyheldequityinterestintheacquiree.Ifafterthatreassessment,theaggregateofthefairvalueoftheconsiderationtransferred(orthefairvalueoftheequitysecuritiesissued)andtheGroup’spreviouslyheldequityinterestintheacquireeisstilllowerthantheGroup’sinterestinthefairvalueoftheacquiree’snetidentifiableassets,theGrouprecognisestheremainingdifferenceinprofitorloss.Wherethebusinesscombinationnotinvolvingenterprisesundercommoncontrolisachievedinstages,theacquirer’spreviouslyheldequityinterestsintheacquireeareremeasuredatthefairvalueontheacquisitiondate,withthedifferencebetweenthefairvalueandcarryingamountrecognisedasinvestmentincomeforthecurrentperiod.Iftheacquirer’spreviouslyheldequityinterestsoftheacquireeinvolveothercomprehensiveincome(“OCI”)undertheequitymethod,theaccountingtreatmentisconductedonthesamebasisaswouldhavebeenrequirediftheinvesteehaddirectlydisposedoftherelatedassetsorliabilities,andthechangesinshareholders’equityotherthannetprofitorloss,OCIandprofitdistributionsarechargedtoprofitorlossforthecurrentperiodontheacquisitiondate.ForfinancialassetsatfairvaluethroughOCIheldbeforetheacquisitiondate,changesinfairvaluethatwereaccumulatedthroughOCIwilltransfertoretainedearnings.

5.Consolidatedfinancialstatements

Thescopeoftheconsolidatedfinancialstatements,whichincludethefinancialstatementsoftheCompanyandallofitssubsidiaries,isdeterminedonthebasisofcontrol.AsubsidiaryisanentitythatiscontrolledbytheCompany(suchasanenterprise,adeemedseparateentity,orastructuredentitycontrolledbytheCompany).

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

5.Consolidatedfinancialstatements(Continued)

Inthepreparationoftheconsolidatedfinancialstatements,thefinancialstatementsofsubsidiariesarepreparedforthesameaccountingyearastheCompany,usingconsistentaccountingpolicies.Allintra-groupassetsandliabilities,equity,income,expensesandcashflowsrelatingtotransactionsbetweenmembersoftheGroupareeliminatedinfullonconsolidation.Wherethelossforthecurrentperiodattributabletonon-controllinginterestsofasubsidiaryexceedsthenon-controllinginterestsoftheopeningbalanceofequityofthesubsidiary,theexcessshallstillbeallocatedagainstthenon-controllinginterests.Forsubsidiariesacquiredthroughbusinesscombinationsnotinvolvingentitiesundercommoncontrol,thefinancialperformanceandcashflowsoftheacquireeshallbeconsolidatedfromthedateonwhichtheGroupobtainscontrol,andcontinuetobeconsolidateduntilthedatesuchcontrolceases.Whilepreparingtheconsolidatedfinancialstatements,theGroupshalladjustthesubsidiary’sfinancialstatements,onthebasisofthefairvaluesoftheidentifiableassets,liabilitiesandcontingentliabilitiesrecognisedontheacquisitiondate.Forsubsidiariesacquiredthroughbusinesscombinationsinvolvingentitiesundercommoncontrol,thefinancialperformanceandcashflowsoftheentitybeingabsorbedshallbeconsolidatedfromthebeginningoftheperiodinwhichthecombinationoccurs.Whilepreparingthecomparativefinancialstatements,adjustmentsaremadetorelateditemsinthefinancialstatementsforthepriorperiodasifthereportingentityafterthecombinationhasbeeninexistencesincethedatetheultimatecontrollingpartyfirstobtainedthecontrol.TheGroupreassesseswhetherornotitcontrolsaninvesteeifanychangeinfactsandcircumstancesindicatesthattherearechangestooneormoreofthethreeelementsofcontrol.WhentheGrouplosescontrolofasubsidiaryinmultipletransactionsinwhichitdisposesofitslong-termequityinvestmentinthesubsidiaryinstages,ifeachofthemultipletransactionsdoesnotformpartofabundledtransaction,thetransactionsconductedbeforethelossofcontrolofthesubsidiaryareaccountedforinaccordancewiththeaccountingpolicyforpartialdisposaloftheequityinvestmentinsubsidiarieswherecontrolisretained.Ifeachofthemultipletransactionsformspartofabundledtransactionwhicheventuallyresultsinthelossofcontrolinthesubsidiary,thesemultipletransactionsareaccountedforasasingletransaction.Intheconsolidatedfinancialstatements,thedifferencebetweentheconsiderationreceivedandthecorrespondingproportionofthesubsidiary’snetassets(calculatedcontinuouslyfromtheacquisitiondate)ineachtransactionpriortothelossofcontrolshallberecognisedinothercomprehensiveincomeandtransferredtoprofitorlosswhentheparenteventuallylosescontrolofthesubsidiary.

6.Cashandcashequivalents

CashcomprisestheGroup’scashonhandandbankdepositsthatcanbereadilywithdrawnondemand.Cashequivalentsareshort-term,highlyliquidinvestmentsthatarereadilyconvertibleintoknownamountsofcash,andaresubjecttoaninsignificantriskofchangesinvalue.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

7.Foreigncurrencytranslation

ForeigncurrencytransactionsaretranslatedintoRMBusingtheexchangeratesprevailingatthedatesofthetransactions.Atthebalancesheetdate,monetaryitemsdenominatedinforeigncurrenciesaretranslatedintoRMBusingthespotexchangeratesonthebalancesheetdate.Exchangedifferencesarisingfromthesetranslationsarerecognisedinprofitorlossforthecurrentperiod,exceptforthoseattributabletoforeigncurrencyborrowingsthathavebeentakenoutspecificallyfortheacquisitionorconstructionofqualifyingassets,whicharecapitalisedaspartofthecostofthoseassets.Non-monetaryitemsdenominatedinforeigncurrenciesthataremeasuredathistoricalcostaretranslatedatthebalancesheetdateusingthespotexchangeratesatthedatesofthetransactions.Foreigncurrencycashflowsaretranslatedusingthespotexchangeratesprevailingonthedatesofcashflows.Theeffectofexchangeratechangesoncashispresentedseparatelyinthecashflowstatement.

8.Financialinstruments

Financialinstrumentsarethecontractsthatformedthefinancialassetsofoneentity,andatthesametimeformedthefinancialliabilitiesorequityinstrumentsofotherentities.RecognitionandderecognitionoffinancialinstrumentsFinancialassetsandfinancialliabilitiesarerecognisedwhentheGroupbecomesapartytothecontractualprovisionsoftheinstrument.TheGroupderecognisesafinancialasset,partofafinancialassetorgroupoffinancialassets,i.e.,offsetfromtheaccountsandstatementoffinancialposition,ifeitherofthefollowingconditionsissatisfied:

(1)Thecontractualrightstothecashflowsfromthefinancialassetexpire;or

(2)Thecontractualrightstothecashflowsfromthefinancialassetaretransferredout,orobligatedtotransferoutallgeneratedcashflowsonreceipt;and(a)substantiallyalltherisksandrewardsofownershipofthefinancialassetaretransferredtothetransferee;or(b)theGroupneithertransfersnorretainssubstantiallyalltherisksandrewardsofownershipofthefinancialasset,buthasnotretainedcontrolofthefinancialasset.Afinancialliabilityisderecognisedwhentheobligationundertheliabilityisdischargedorcancelled,orexpires.Whenanexistingfinancialliabilityisreplacedbyanotherfromthesamelenderonsubstantiallydifferentterms,orthetermsofanexistingliabilityaresubstantiallymodified,suchanexchangeormodificationistreatedasaderecognitionoftheoriginalliabilityandarecognitionofanewliability,andthedifferencebetweentherespectivecarryingamountsisrecognisedinprofitorloss.Regularwaypurchasesandsalesoffinancialassetsarerecognisedandderecognisedusingtradedateaccounting.Regularwaypurchasesorsalesarepurchasesorsalesoffinancialassetsthatrequiredeliverywithintheperiodgenerallyestablishedbyregulationorconventioninthemarketplace.ThetradedateisthedatethattheGroupcommittedtopurchaseorsellafinancialasset.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

8.Financialinstruments(Continued)

ClassificationandmeasurementoffinancialassetsTheclassificationoffinancialassetsatinitialrecognitiondependsonthefinancialasset’scontractualcashflowcharacteristicsandtheGroup’sbusinessmodelformanagingthem:

financialassetsatfairvaluethroughprofitorloss,financialassetsatamortisedcost,orfinancialassetsatfairvaluethroughothercomprehensiveincome,accordingtotheGroup’sbusinessmodelformanagingfinancialassetsandthecontractcashflowcharacteristicsofthefinancialassets.Financialassetsaremeasuredatfairvalueatinitialrecognition,providedthataccountsreceivableorbillsreceivablenotcontainingsignificantfinancingcomponentsorforwhichfinancingcomponentsofnotmorethan1yeararenottakenintoconsiderationshallbemeasuredattheirtransactionpricesatinitialrecognition.Forfinancialassetsatfairvaluethroughprofitorloss,therelevanttransactioncostsaredirectlyrecognisedinprofitorloss;whileforotherfinancialassets,therelevanttransactioncostsarerecognisedintheirinitialrecognitionamount.Thesubsequentmeasurementoffinancialassetsdependsontheirclassificationasfollows:

DebtinvestmentsmeasuredatamortisedcostTheGroupmeasuresfinancialassetsatamortisedcostifbothofthefollowingconditionsaremet:Thefinancialassetisheldwithinabusinessmodelwiththeobjectivetoholdfinancialassetsinordertocollectcontractualcashflows;Thecontractualtermsofthefinancialassetgiveriseonspecifieddatestocashflowsthataresolelypaymentsofprincipalandinterestontheprincipalamountoutstanding.Interestincomeofthiskindoffinancialassetsisrecognisedusingtheeffectiveinterestmethod.Gainsandlossesarerecognisedintheincomestatementwhentheassetisderecognised,modifiedorimpaired.DebtinvestmentsatfairvaluethroughothercomprehensiveincomeTheGroupmeasuresdebtinvestmentsatfairvaluethroughothercomprehensiveincomeifbothofthefollowingconditionsaremet:thefinancialassetisheldwithinabusinessmodelwiththeobjectiveofbothholdingtocollectcontractualcashflowsandselling;thecontractualtermsofthefinancialassetgiveriseonspecifieddatestocashflowsthataresolelypaymentsofprincipalandinterestontheprincipalamountoutstanding.Changesinfairvaluesarerecognisedinothercomprehensiveincomeexceptthatinterestincome,impairmentlossesandexchangedifferencesarerecognisedincurrentprofitorloss.Uponderecognition,thecumulativefairvaluechangerecognisedinothercomprehensiveincomeistransferredtoprofitorloss.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

8.Financialinstruments(Continued)

Classificationandmeasurementoffinancialassets(Continued)EquityinvestmentsatfairvaluethroughothercomprehensiveincomeTheGroupirrevocablychoosestodesignatesomenon-tradableequityinstrumentinvestmentsasfinancialassetsatfairvaluethroughothercomprehensiveincome.Onlytherelevantdividendincome(excludingdividendincomeexplicitlyrecoveredaspartofinvestmentcost)isrecognisedinprofitorloss,andsubsequentchangesinfairvalueareincludedinothercomprehensiveincomewithoutprovisionforimpairment.Whenfinancialassetsarederecognised,theaccumulatedgainsorlossespreviouslyrecognisedinothercomprehensivegainsaretransferredfromothercomprehensiveincomeandrecognisedinretainedearnings.FinancialassetsatfairvaluethroughprofitorlossThefinancialassetsotherthantheabovefinancialassetsmeasuredatamortisedcostandfinancialassetsatfairvaluethroughothercomprehensiveincomeareclassifiedasfinancialassetsatfairvaluethroughprofitorloss.Suchfinancialassetsaresubsequentlymeasuredatfairvaluewithnetchangesinfairvaluerecognisedinprofitorlossexceptforthederivativesdesignatedashedginginstrumentsinaneffectivehedge.Onlywhenanaccountingmismatchiseliminatedorsignificantlydecreased,financialassetsaredesignatedasfinancialassetsatfairvaluethroughprofitorlossatinitialrecognition.Whenanenterpriseinitiallydesignatesafinancialassetasafinancialassetatfairvaluethroughprofitorloss,itcannotbereclassifiedtootherfinancialassets;andotherfinancialassetscannotbere-designatedafterinitialrecognitionasfinancialassetsmeasuredatfairvaluethroughprofitorloss.ClassificationandmeasurementoffinancialliabilitiesTheGroup’sfinancialliabilitiesare,oninitialrecognition,classifiedintofinancialliabilitiesatfairvaluethroughprofitorloss,otherfinancialliabilities.Forfinancialliabilitiesatfairvaluethroughprofitorloss,therelevanttransactioncostsaredirectlyrecognisedinprofitorloss,andtherelatedtransactioncostsofotherfinancialliabilitiesarerecognisedintheirinitialamount.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

8.Financialinstruments(Continued)

Classificationandmeasurementoffinancialliabilities(Continued)Subsequentmeasurementoffinancialliabilitiesisdeterminedbyitsclassification:

FinancialliabilitiesatfairvaluethroughprofitorlossFinancialliabilitiesatfairvaluethroughprofitorlossincludefinancialliabilitiesheldfortrading(includingderivativeinstrumentsattributabletofinancialliabilities)andfinancialliabilitiesdesignateduponinitialrecognitionasatfairvaluethroughprofitorloss.Financialliabilitiesheldfortrading(includingderivativeinstrumentsattributabletofinancialliabilities)aresubsequentlymeasuredatfairvalue.Allchangesinfairvalueofsuchfinancialliabilitiesarerecognisedinprofitorloss.Financialliabilitiesdesignatedatfairvaluethroughprofitorlossaresubsequentlymeasuredatfairvalueandgainsorlossesarerecognisedinprofitorloss,exceptforthegainsorlossesarisingfromtheGroup’sowncreditriskwhicharepresentedinothercomprehensiveincome.IfgainsorlossesarisingfromtheGroup’sowncreditriskwhicharepresentedinothercomprehensiveincomewillleadtoorexpandaccountingmismatchinprofitorloss,theGroupwillincludeallthechangesinfairvalue(includingtheamountaffectedbychangesintheGroup’sowncreditrisk)ofsuchfinancialliabilitiesinprofitorloss.Onlyifoneofthefollowingconditionsismetcanfinancialliabilitiesbedesignatedasfinancialliabilitiesatfairvaluethroughprofitorlossoninitialrecognition:

(1)Itcaneliminateorsignificantlyreducetheaccountingmismatch.

(2)Theformalwrittendocumentoftheriskmanagementorinvestmentstrategyhasstatedthattheportfoliooffinancialinstrumentsismanaged,evaluatedandreportedtokeymanagersonthebasisoffairvalue.

(3)Thefinancialliabilityisahybridinstrumentthatcontainsoneormoreembeddedderivatives,unlesstheembeddedderivativeshavenosignificantchangeinthecashflowsofthehybridinstrument,ortheembeddedderivativesshouldobviouslynotbeseparatedfromtherelatedhybridinstruments.

(4)Mixedinstrumentscontainembeddedderivativesthatneedtobesplitbutcannotbemeasuredseparatelyatthetimeofacquisitionoronsubsequentbalancesheetdays.Whenanenterprisedesignatesafinancialliabilityasafinancialliabilityatfairvaluethroughprofitorloss,itcannotbereclassifiedasotherfinancialliabilities;norcanotherfinancialliabilitiesbere-designatedasfinancialliabilitiesatfairvaluethroughprofitorlossafterinitialrecognition.OtherfinancialliabilitiesForsuchfinancialliabilities,subsequentmeasurementismadeatamortisedcostusingtheeffectiveinterestratemethod.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

8.Financialinstruments(Continued)

ImpairmentoffinancialassetsBasedontheexpectedcreditlosses(“ECLs”),theGrouprecognisesanallowanceforECLsforthefinancialassetsmeasuredatamortisedcost,debtinvestmentsatfairvaluethroughothercomprehensiveincomeandcontractassets.Foraccountsreceivableandcontractassetsthatdonotcontainsignificantfinancingcomponents,theGroupusesasimplifiedmeasurementmethodtomeasurelossprovisionsinaccordancewiththeamountofexpectedcreditlossesequivalenttotheentirelifecycle.Foraccountsreceivableandcontractassetswithsignificantfinancingcomponents,theGroupusesasimplifiedmeasurementmethodtomeasurelossprovisionsinaccordancewiththeamountoftheexpectedcreditlossequivalenttotheentirelifetime.Forfinancialassetsotherthanthosemeasuredwithsimplifiedvaluationmethods,theGroupevaluatesateachbalancesheetdatewhetheritscreditriskhassignificantlyincreasedsinceinitialrecognition.Theperiodduringwhichcreditriskhasnotsignificantlyincreasedsinceinitialrecognitionisconsideredthefirststage,atwhichtheGroupshallmeasurethelossprovisionbasedontheamountoftheexpectedcreditlossforthenext12monthsandshallcomputeinterestincomeaccordingtothebookbalanceandeffectiveinterestrate;theperiodduringwhichcreditriskhassignificantlyincreasedsinceinitialrecognitionalthoughnocreditimpairmenthasoccurredisconsideredthesecondstage,atwhichtheGroupshallmeasurethelossprovisionbasedontheamountoftheexpectedcreditlossfortheentirevalidperiodandshallcomputeinterestincomeaccordingtothebookbalanceandeffectiveinterestrate;andtheperiodduringwhichcreditimpairmenthasoccurredafterinitialrecognitionisconsideredthethirdstage,atwhichtheGroupshallmeasurethelossprovisionbasedontheamountoftheexpectedcreditlossfortheentireperiodandshallcomputeinterestincomeaccordingtotheamortisedcostandeffectiveinterestrate.Forfinancialinstrumentswithrelativelylowcreditriskatthebalancesheetdate,theGroupassumesthatitscreditriskhasnotsignificantlyincreasessinceinitialrecognition.TheGroupevaluatestheexpectedcreditlossesonfinancialinstrumentsonasingleandcombinedbasis.Takingintoaccountthecreditriskcharacteristicsofdifferentcustomers,theGroupevaluatestheexpectedcreditlossesonaccountsreceivablebasedontheagingportfolio.RefertoNoteVIII(3)forthedisclosureoftheGroup'scriteriaforjudgingthesignificantincreaseincreditrisk,thedefinitionofassetswithimpairedcreditlosses,andtheassumptionofmeasuringexpectedcreditlosses.WhentheGroupnolongerreasonablyexpectstobeabletorecoverallorpartofthecontractcashflowsofthefinancialassets,theGroupdirectlywritesdownthecarryingamountofthefinancialasset.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

8.Financialinstruments(Continued)

OffsettingoffinancialinstrumentsFinancialassetsandfinancialliabilitiesareoffsetandthenetamountisreportedinthebalancesheetifthereisacurrentlyenforceablelegalrighttooffsettherecognisedamountsandthereisanintentiontosettleonanetbasis,ortorealisethefinancialassetsandsettlethefinancialliabilitiessimultaneously.TransferoffinancialassetsAfinancialassetisderecognisedwhentheGrouphastransferredsubstantiallyalltherisksandrewardsoftheassettothetransferee.AfinancialassetisnotderecognisedwhentheGroupretainssubstantiallyalltherisksandrewardsofthefinancialasset.IftheGroupneithertransfersnorretainssubstantiallyalltherisksandrewardsofownershipoffinancialassets,therelatedaccountingtreatmentsofsuchfinancialassetsareasfollows:theGroupderecognisesfinancialassetswhenitretainsnocontrolonthem,andassociatedassetsandliabilitiesarerecognisedatthesametime.IftheGroupretainscontrolofthefinancialasset,itrecognisesthefinancialassettotheextentofitscontinuinginvolvementinthetransferredfinancialassetandrecognisesanassociatedliability.Continuinginvolvementthattakestheformofafinancialguaranteeoverthetransferredassetismeasuredattheloweroftheoriginalcarryingamountoftheassetandthefinancialguarantee.TheamountofthefinancialguaranteeisthemaximumamountofconsiderationthattheGroupcouldberequiredtorepay.

9.Inventories

Inventoriesincluderawmaterials,workinprogress,finishedgoodsandturnovermaterials,andaremeasuredatthelowerofcostandnetrealizablevalue.Inventoriesareinitiallycarriedatcost.Costofinventoriescomprisesallcostsofpurchase,costsofconversionandothercosts.Costisdeterminedontheweightedaveragebasis.Turnovermaterialsincludelow-valueconsumablesandpackingmaterials,whichareontheimmediatewrite-offbasis.TheGroupadoptstheperpetualinventorysystem.Atthebalancesheetdate,inventoriesarestatedatthelowerofcostandnetrealizablevalue.Theinventoriesarewrittendownbelowcosttonetrealizablevalueandthewrite-downisrecognisedinprofitorlossifthecostishigherthanthenetrealizablevalue.Whenthecircumstancesthatpreviouslycausedtheinventoriestobewrittendownbelowcostnolongerexist,inwhichcasethenetrealizablevalueofinventoriesbecomeshigherthanthecarryingamount,theamountofthewrite-downisreversed.Thereversalislimitedtotheamountoftheoriginalwrite-down,andisrecognisedinprofitorloss.Netrealizablevalueisdeterminedbasedontheestimatedsellingpriceintheordinarycourseofbusiness,lesstheestimatedcoststocompletionandestimatedcostsnecessarytomakethesaleandrelatedtaxes.Finishedgoodsarewrittendowncategorybycategory.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

10.Long-termequityinvestments

Long-termequityinvestmentsincludeequityinvestmentsinsubsidiaries,jointventuresandassociates.Along-termequityinvestmentisinitiallymeasuredatitsinitialinvestmentcostonacquisition.Forlong-termequityinvestmentsarisingfrombusinesscombinationinvolvingenterprisesundercommoncontrol,theinitialinvestmentcostshallbetheshareofthecarryingamountofequityoftheacquireeintheconsolidatedfinancialstatementsoftheultimatecontrollingpartyasatthecombinationdate.Thedifferencebetweentheinitialinvestmentcostandbookvalueofconsiderationofcombinationisadjustedtocapitalreserves,andtoretainedearningsifcapitalreservesisinsufficient.Othercomprehensiveincomerecognisedbeforethecombinationdateisaccountedforonthesamebasisaswouldhavebeenrequirediftheinvesteehaddirectlydisposedoftherelatedassetsorliabilities.Equitypreviouslyrecognisedresultingfromtheinvestee’sequitychangesotherthanprofitorloss,othercomprehensiveincomeandprofitdistributionisreclassifiedtoprofitorloss.Equitywhichstillinvolvesalong-terminvestmentafterdisposalisreclassifiedtoprofitorlossonapro-ratabasisandequitywhichswitchestoafinancialinstrumentafterdisposalisfullyreclassifiedtoprofitorloss.Forlong-termequityinvestmentsarisingfrombusinesscombinationinvolvingenterprisesnotundercommoncontrol,theinvestmentcostshallbethecombinationcost.(Forabusinesscombinationachievedinstages,theinitialinvestmentcostisdeterminedasthesumofthecarryingamountofequityoftheacquireeandtheadditionalinvestmentcostsonthecombinationdate.)Thecombinationcostinvolvestheassetspaidbytheacquirer,liabilitiesincurredandthefairvalueofequitysecurities.Othercomprehensiveincomesrecognisedusingtheequitymethodbeforethecombinationdateisaccountedforonthesamebasisaswouldhavebeenrequirediftheinvesteehaddirectlydisposedoftherelatedassetsorliabilities.Equitypreviouslyrecognisedresultingfromtheinvestee’sequitychangesotherthanprofitorloss,othercomprehensiveincomeandprofitdistributionisreclassifiedtoprofitorloss.Equitywhichstillinvolvesalong-terminvestmentafterdisposalisreclassifiedtoprofitorlossonapro-ratabasisandequitywhichswitchestoafinancialinstrumentafterdisposalisfullyreclassifiedtoprofitorloss.Theaccumulatedchangesinthefairvalueoffinancialassetsatfairvaluethroughothercomprehensiveincomeisreclassifiedtoretainedearningswhenadoptingthecostmethod.Dependingonthewayofacquisitionoflong-termequityinvestments,theinitialinvestmentcostisdeterminedasfollows:Forlong-termequityinvestmentsacquiredbywayofcashpayment,theinitialinvestmentcostincludesalldirectlyassociatedexpenses,applicabletaxesandfees,andothernecessaryexpenses.Forlong-termequityinvestmentsacquiredbywayofissuingequitysecurities,theinitialinvestmentcostincludesthefairvalueofequitysecurities.Forlong-termequityinvestmentsacquiredbywayoftheswapofnon-monetaryassets,theinitialinvestmentcostshallbedeterminedinaccordancewith“ASBENo.7—SwapofNon-monetaryAssets.”Forlong-termequityinvestmentsacquiredbywayofdebtrestructuring,theinitialinvestmentcostshallbedeterminedinaccordancewith“ASBENo.12—DebtRestructuring.”TheCompany'sfinancialstatementsusingthecostmethodofaccountingforlong-termequitycanexercisecontrolovertheinvestee.Controlisthepowertogovernthefinancialandoperatingpoliciesoftheinvesteesoastoobtainbenefitsfromitsoperatingactivities.IndeterminingwhethertheCompanyisabletoexercisecontrolovertheinvestee,theeffectofpotentialvotingrightsovertheinvesteeisconsidered,suchasconvertibledebtsandwarrantscurrentlyexercisable.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

10.Long-termequityinvestments(Continued)

Forlong-termequityinvestmentsaccountedforusingthecostmethod,theyaremeasuredattheinitialInvestmentcosts.Thecostoflong-termequityinvestmentsisadjustedwithadditionalinvestmentordivestment.Cashdividendsorprofitdistributiondeclaredbytheinvesteesarerecognisedasinvestmentincomeinprofitorloss.TheequitymethodisadoptedwhentheGrouphasjointcontrol,orexercisessignificantinfluenceovertheinvestee.Jointcontrolisthecontractuallyagreedsharingofcontrolofanarrangement,whichexistsonlywhendecisionsabouttherelevantactivitiesrequiretheunanimousconsentofthepartiessharingcontrol.Significantinfluenceisthepowertoparticipateinthefinancialandoperatingpolicydecisionsoftheinvestee,butisnotcontrolorjointcontrolwithotherpartiesoverthosepolicies.Undertheequitymethod,wheretheinitialinvestmentcostofalong-termequityinvestmentexceedstheGroup’sinterestinthefairvalueoftheinvestee’sidentifiablenetassetsattheacquisitiondate,noadjustmentismadetotheinitialinvestmentcost.WheretheinitialinvestmentcostislessthantheGroup’sinterestinthefairvaluesoftheinvestee’sidentifiablenetassetsattheacquisitiondate,thedifferenceischargedtoprofitorloss,andthecostofthelong-termequityinvestmentisadjustedaccordingly.Undertheequitymethod,aftertheGrouphasacquiredalong-termequityinvestment,theGrouprecognisesitsshareoftheinvestee’sprofitorloss,aswellasitsshareoftheinvestee’sothercomprehensiveincome,asinvestmentincomeorlossandothercomprehensiveincome,andadjuststhecarryingamountoftheinvestmentaccordingly.TheGrouprecognisesitsshareoftheinvestee’sprofitorlossaftermakingappropriateadjustmentstotheinvestee’sprofitorlossbasedonthefairvalueoftheinvestee’sidentifiableassetsattheacquisitiondate,usingtheGroup’saccountingpoliciesandperiods.UnrealisedprofitsandlossesfromtransactionswithitsjointventuresandassociatesareeliminatedtotheextentoftheGroup’sinvestmentsintheassociatesorjointventures(exceptforassetsthatconstituteabusiness).ThecarryingamountoftheinvestmentisreducedbasedontheGroup’sshareofanyprofitdistributionsorcashdividendsdeclaredbytheinvestee.TheGroup’sshareofnetlossesoftheinvesteeisrecognisedtotheextentthatthecarryingamountoftheinvestmenttogetherwithanylong-termintereststhatinsubstanceformpartofitsnetinvestmentintheinvesteeisreducedtozero,exceptthattheGrouphastheobligationstoassumefurtherlosses.TheGroup’sshareoftheinvestee’sequitychanges,otherthanthosearisingfromtheinvestee’sprofitorloss,othercomprehensiveincomeorprofitdistribution,isrecognisedintheGroup’sequity,andthecarryingamountofthelong-termequityinvestmentisadjustedaccordingly.Upondisposalofalong-termequityinvestment,thedifferencebetweentheproceedsactuallyreceivedandthecarryingamountisrecognisedinprofitorloss.Foralong-termequityinvestmentaccountedforusingtheequitymethod,whentheGroupdiscontinuesusingtheequitymethodduetodisposal,allamountspreviouslyrecognisedinothercomprehensiveincomeareaccountedforonthesamebasisaswouldhavebeenrequirediftheinvesteehaddirectlydisposedoftherelatedassetsorliabilities.Equitypreviouslyrecognisedresultingfromtheinvestee’sequitychangesotherthanprofitorloss,othercomprehensiveincomeandprofitdistributionisreclassifiedtoprofitorlossinitsentirety.WhentheGroupcontinuestousetheequitymethod,theamountspreviouslyrecognisedinothercomprehensiveincomeareaccountedforonthesamebasisaswouldhavebeenrequirediftheinvesteehaddirectlydisposedoftherelatedassetsorliabilitiesandreclassifiedtoprofitorlossonapro-ratabasis.Equitypreviouslyrecognisedresultingfromtheinvestee’sequitychangesotherthanprofitor

loss,othercomprehensiveincomeandprofitdistributionisreclassifiedtoprofitorlossonapro-ratabasis.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

11.Investmentproperties

Investmentpropertiesarepropertiesheldtoearnrentalincomeand/orforcapitalappreciation.Investmentpropertiesincludelanduserightsleasedout,landuserightsheldfortransferuponcapitalappreciation,andbuildingsleasedout.Investmentpropertiesaremeasuredinitiallyatcost.SubsequentexpendituresincurredinrelationtoinvestmentpropertiesareincludedinthecostofinvestmentpropertieswhenitisprobablethattheassociatedeconomicbenefitswillflowtotheGroupandtheircostscanbereliablymeasured;otherwise,theexpendituresarerecognisedinprofitorlossintheperiodinwhichtheyareincurred.TheGroupadoptsthecostmodelforsubsequentmeasurementofinvestmentproperties.Buildingsandlanduserightsaredepreciatedoramortisedtotheirestimatednetresidualvaluesovertheirestimatedusefullives.Theestimatedusefullives,theestimatednetresidualvaluesthatareexpressedasapercentageofcostandtheannualdepreciation(amortisation)ratesofinvestmentpropertiesareasfollows:

Estimatedusefullives

EstimatedusefullivesEstimatedresidualvalueAnnualdepreciation(amortisation)rates

Buildingsandconstructions

Buildingsandconstructions5-35years0-5%2.71-19.00%
Landuserights40-50yearsornofixedusefullife0%2.00-2.50%

Whenaninvestmentpropertyistransferredtoowner-occupiedproperty,itisreclassifiedasafixedassetorintangibleassetatthedateoftransfer.Whenanowner-occupiedpropertyistransferredoutforearningrentalsorforcapitalappreciation,thefixedassetorintangibleassetisreclassifiedasaninvestmentpropertyatitscarryingamountatthedateoftransfer.Theinvestmentproperties’usefullife,netresidualvalueanddepreciation(amortisation)methodappliedarereviewedandadjustedasappropriateattheendofeachyear.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

12.Fixedassets

FixedassetsarerecognisedonlywhentheeconomicbenefitsassociatedwiththeassetwillprobablyflowintotheGroupandthecostoftheassetcanbemeasuredreliably.Subsequentexpendituresincurredforafixedassetthatmeetstherecognitioncriteriashallbeincludedinthecostofthefixedasset,andthecarryingamountofthecomponentofthefixedassetthatisreplacedshallbederecognised.Otherwise,suchexpendituresarerecognisedinprofitorlossasincurred.Fixedassetsareinitiallymeasuredatcost,bytakingintoaccounttheeffectofanyassetretirementobligations.Thecostofapurchasedfixedassetcomprisesthepurchaseprice,relevanttaxesandanydirectlyattributableexpenditureforbringingtheassettoworkingconditionforitsintendeduse.Depreciationiscalculatedusingthestraight-linemethod.Theusefullives,estimatedresidualvalueratesandannualdepreciationratesofeachcategoryofthefixedassetsareasfollows:

EstimatedusefullivesEstimatedresidualvaluesAnnualdepreciationratesBuildingsand

constructions20-35years3-5%2.71-4.85%Machinery5-14years3-5%6.79-19.40%Motorvehicles3-10years5%9.50-31.67%Officeequipment3-10years5%9.50-31.67%Electronicequipment3-10years0-5%9.50-33.33%TheGroupreviewstheusefullifeandestimatednetresidualvalueofafixedassetandthedepreciationmethodappliedatleastateachyearend,andmakeadjustmentsifnecessary.

13.Borrowingcosts

BorrowingcostsareinterestandothercostsincurredbytheGroupinconnectionwiththeborrowingofthefunds.Borrowingcostsincludeinterest,amortisationofdiscountsorpremiumsrelatedtoborrowings,ancillarycostsincurredinconnectionwiththearrangementofborrowings,andexchangedifferencesarisingfromforeigncurrencyborrowings.Theborrowingcoststhataredirectlyattributabletotheacquisition,constructionorproductionofaqualifyingassetarecapitalised.Theamountsofotherborrowingcostsincurredarerecognisedasanexpenseintheperiodinwhichtheyareincurred.Qualifyingassetsareassets(fixedassets,investmentproperties,inventories,etc.)thatnecessarilytakeasubstantialperiodoftimeofacquisition,constructionorproductiontogetreadyfortheirintendeduseorsale.Theborrowingcostsshallnotbecapitalisedunlesstheysimultaneouslymeetthefollowingrequirements:

(1)Theassetdisbursementshavealreadyincurred;

(2)Theborrowingcostshavealreadyincurred;and

(3)Theacquisitionandconstructionorproductionactivitieswhicharenecessarytopreparethe

assetforitsintendeduseorsalehavealreadystarted.

Whenthequalifiedassetunderacquisitionandconstructionorproductionisreadyfortheintendeduseorsale,thecapitalizationoftheborrowingcostsshallbeceased.Borrowingcostsincurredaftertheintendeduseorsaleshallberecordedinthecurrentprofitsandlosses.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

13.Borrowingcosts(Continued)

Duringtheperiodofcapitalization,thecapitalisedamountofinterestineachaccountingperiodshallbecalculatedanddeterminedinthewaysbelow:

(1)Theenterpriseshallcalculateanddeterminetheinterestofaspecificloanbydeducting

interestincomeoftheloancapitaldepositinthebankorinvestmentincomeobtainedfromatemporaryinvestment.

(2)Theenterpriseshallcalculateanddeterminetheto-be-capitalisedamountofinterestonthegeneralborrowingbymultiplyingtheweightedaverageassetdisbursementofthepartoftheaccumulativeassetdisbursementsminusthegeneralborrowingbythecapitalizationrateofthegeneralborrowingused.Capitalisationofborrowingcostsissuspendedduringperiodsinwhichtheacquisition,constructionorproductionofaqualifyingassetissuspendedabnormallybyactivitiesotherthanthosenecessarytogettheassetreadyforitsintendeduseorsale,whenthesuspensionisforacontinuousperiodofmorethan3months.Borrowingcostsincurredduringtheseperiodsarerecognisedasanexpenseinprofitorlossuntiltheacquisition,constructionorproductionisresumed.

14.Right-of-useassets

Theright-of-useassetsoftheGroupmainlyincludebuildingsandconstructions,machinery,vehicles,officeequipmentandotherassetssuchaslanduserights.Atthecommencementdateofthelease,theGrouprecognisesaright-of-useasset.Thecostoftheright-of-useassetcomprises:(i)theamountoftheinitialmeasurementoftheleaseliability;(ii)anyleasepaymentsmadeatorbeforethecommencementdateoftheleaselessanyleaseincentivesreceived;(iii)anyinitialdirectcostincurred;and(iv)anestimateofcostsincurredbythelesseeindismantlingandremovingtheunderlyingasset,restoringthesiteonwhichitislocatedorrestoringtheunderlyingassettotheconditionrequiredbythetermsandconditionsofthelease.Theright-of-useassetsaredepreciatedonastraight-linebasissubsequentlybytheGroup.IftheGroupisreasonablycertainthattheownershipoftheunderlyingassetwillbetransferredtotheGroupattheendoftheleaseterm,theGroupdepreciatestheassetfromthecommencementdatetotheendoftheusefullifeoftheasset.Otherwise,theGroupdepreciatestheassetsfromthecommencementdatetotheearlieroftheendoftheusefullifeoftheassetortheendoftheleaseterm.TheGroupremeasurestheleaseliabilityatthepresentvalueofthechangedleasepaymentsandadjuststhecarryingamountoftheright-of-useassetsaccordingly,whenthecarryingamountoftheright-of-useassetisreducedtozero,andthereisafurtherreductioninthemeasurementoftheleaseliability,theGrouprecognisestheremainingamountoftheremeasurementinprofitorloss.

15.Constructioninprogress

Thecostofconstructioninprogressisdeterminedaccordingtotheactualexpendituresincurredfortheconstruction,includingallnecessaryconstructionexpendituresincurredduringtheconstructionperiod,borrowingcoststhatshallbecapitalisedbeforetheconstructionisreadyforitsintendeduse,andotherrelevantexpenditures.Anitemofconstructioninprogressistransferredtofixedassetswhentheassetisreadyforitsintendeduse.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

16.Intangibleassets

IntangibleassetsarerecognisedandmeasuredoninitialrecognitionatcostonlyiftherelatedeconomicbenefitswillprobablyflowintotheGroupandtheircostscanbemeasuredreliably.However,theintangibleassetsacquiredthroughabusinesscombinationnotinvolvingenterprisesundercommoncontrolshouldbemeasuredatfairvalueseparatelyasintangibleassetswhentheirfairvaluescanbereliablymeasured.TheusefullifeoftheintangibleassetsshallbeassessedaccordingtotheestimatedbeneficialperiodexpectedtogenerateeconomicbenefitsfortheGroup.AnintangibleassetshallberegardedashavinganindefiniteusefullifewhenthereisnoforeseeablelimittotheperiodoverwhichtheassetisexpectedtogenerateeconomicbenefitsfortheGroup.Theusefullivesoftheintangibleassetsareasfollows:

Categories

CategoriesUsefullives

Landuserights

LanduserightsBetweentheapprovedusefulperiodandtheCompany’soperatingperiod
Software3-10years
Trademarksandbranduserights10yearsornofixedusefullife
Distributionnetwork10-20years
Franchise10years
Favourableleases16-20years

LanduserightsobtainedbytheGroupareusuallyaccountedforasintangibleassets.Asfortheconstructionofplants,factoriesandotherbuildingsoftheGroup,therelatedlanduserightsandotherbuildingswereaccountedforasintangibleassetsandfixedassets,respectively.Purchasecostsoflanduserightsandbuildingswereallocatedtointangibleassetsandfixedassetsseparately.Purchasecostswererecognisedascostoffixedassets,onlyiftheseparationwasimpracticable.Intangibleassetswithafiniteusefullifeareamortisedovertheirestimatedusefullivesusingthestraight-linemethod.Foranintangibleassetwithafiniteusefullife,theGroupreviewstheusefullifeandamortisationmethodatleastonceateachfinancialyearend,andmakesadjustmentswhennecessary.LanduserightsallocatedbytheStateareregardedasanintangibleassetwithanindefiniteusefullifeduetoanuncertainusefullife.Theimpairmenttestshouldbeconductedfortheintangibleassetswiththeindefiniteservicelifeeveryyeartodeterminewhethertheimpairmentexists.Theintangibleassetswiththeindefiniteservicelifeshallnotbeamortised,andtheCompanyshallmakethereviewoftheservicelifeoftheintangibleassetsduringeveryaccountingperiod.Ifevidenceprovethatusefullivesarefinite,theGroupaccountsfortheintangibleassetsinaccordancewithintangibleassetswithafiniteusefullife.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

16.Intangibleassets(Continued)

InternalresearchanddevelopmentprojectTheGroupclassifiestheexpensesforinternalresearchanddevelopmentasresearchcostsanddevelopmentcosts.Allresearchcostsarechargedtothecurrentprofitorlossasincurred.ExpenditureincurredonprojectstodevelopnewproductsiscapitalisedanddeferredonlywhentheGroupcandemonstratethetechnicalfeasibilityofcompletingtheintangibleassetsothatitwillbeavailableforuseorsale,itsintentiontocompleteanditsabilitytouseorselltheasset,howtheassetwillgeneratefutureeconomicbenefits(includingdemonstrationthattheproductderivedfromtheintangibleassetortheintangibleassetitselfwillbemarketableor,inthecaseofinternaluse,theusefulnessoftheintangibleassetassuch),theavailabilityoftechnicalandfinancialresourcestocompletetheprojectandprocuretheuseorsaleoftheintangibleasset,andtheabilitytomeasurereliablytheexpenditureduringthedevelopment.Productdevelopmentexpenditurewhichdoesnotmeetthesecriteriaisexpensedwhenincurred.Expenditureforinvestigation,evaluationandselectionofproductionprocessandnewdrugresearchesisrecognisedinprofitorlossintheperiodinwhichitisincurred.Expenditureonthedesignation,measurementofthefinalutilizationoftheproductionprocessandnewdrugsbeforemassproductioniscapitalisedonlyifallofthefollowingconditionsaresatisfied:

(1)developmentoftheproductionprocessandnewdrugshasbeenfullydemonstratedbythetechnicalteam;

(2)managementhasapprovedthebudgetofdrugproductiondevelopmentandnewdrugs;

(3)marketresearchanalysissuggeststhattheproductsproducedbythenewproductiontechnologyareabletobepromoted;

(4)adequatetechnical,financialandotherresourcestocompletethedevelopmentandtheabilitytouseorselltheintangibleasset;

(5)theexpenditureattributabletotheintangibleassetduringitsdevelopmentphasecanbe

reliablymeasured.Otherdevelopmentcoststhatdonotmeettheconditionsabovearerecognisedinprofitorlossintheperiodinwhichtheyareincurred.Developmentcostspreviouslyrecognisedasexpensesarenotrecognisedasanassetinasubsequentperiod.Capitalisedexpenditureonthedevelopmentphaseispresentedasdevelopmentcostsinthebalancesheetandtransferredtointangibleassetsatthedatethattheassetisreadyforitsintendeduse.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

17.Impairmentofassets

TheGroupdeterminestheimpairmentofassets,otherthantheimpairmentofinventories,investmentpropertiesmeasuredusingthefairvaluemodel,deferredtaxassets,financialassetsandassetsclassifiedasheldforsale,usingthefollowingmethods:

TheGroupassessesatthebalancesheetdatewhetherthereisanyindicationthatanassetmaybeimpaired.Ifanyindicationexiststhatanassetmaybeimpaired,theGroupestimatestherecoverableamountoftheassetandperformsimpairmenttesting.Goodwillarisingfromabusinesscombinationandanintangibleassetwithanindefiniteusefullifearetestedforimpairmentatleastateachyearend,irrespectiveofwhetherthereisanyindicationthattheassetmaybeimpaired.Intangibleassetsthathavenotbeenreadyfortheirintendedusearetestedforimpairmenteachyear.Therecoverableamountofanassetisthehigherofitsfairvaluelesscoststosellandthepresentvalueofthefuturecashflowsexpectedtobederivedfromtheasset.TheGroupestimatestherecoverableamountonanindividualbasisunlessitisnotpossibletoestimatetherecoverableamountoftheindividualasset,inwhichcasetherecoverableamountisdeterminedfortheassetgrouptowhichtheassetbelongs.Identificationofanassetgroupisbasedonwhethermajorcashinflowsgeneratedbytheassetgrouparelargelyindependentofthecashinflowsfromotherassetsorassetgroups.Whentherecoverableamountofanassetorassetgroupislessthanitscarryingamount,thecarryingamountisreducedtotherecoverableamountbytheGroup.Thereductioninthecarryingamountistreatedasanimpairmentlossandrecognisedinprofitorloss.Aprovisionforimpairmentlossoftheassetisrecognisedaccordingly.Forthepurposeofimpairmenttesting,thecarryingamountofgoodwillacquiredinabusinesscombinationisallocatedfromtheacquisitiondateonareasonablebasis,toeachoftherelatedassetgroupsunlessitisimpossibletoallocatetotherelatedassetgroups,inwhichcaseitisallocatedtoeachoftherelatedsetsofassetgroups.EachoftherelatedassetgroupsorsetsofassetgroupsisanassetgrouporasetofassetgroupsthatisexpectedtobenefitfromthesynergiesofthebusinesscombinationandshallnotbelargerthanareportablesegmentdeterminedbytheGroup.Whentestinganassetgroup(asetofassetgroups)towhichgoodwillhasbeenallocatedforimpairment,ifthereisanyindicationofimpairment,theGroupfirstlyteststheassetgroup(setofassetgroups),excludingtheamountofgoodwillallocated,forimpairment,i.e.,theGroupdeterminesandcomparestherecoverableamountwiththerelatedcarryingamountandrecognisesanyimpairmentloss.Afterthat,theGroupteststheassetgroup(setofassetgroups),includinggoodwill,forimpairment,thecarryingamountoftherelatedassetgroup(setofassetgroups)iscomparedtoitsrecoverableamount.Ifthecarryingamountoftheassetgroup(setofassetgroups)ishigherthanitsrecoverableamount,theamountoftheimpairmentlossisfirstlyusedtoreducethecarryingamountofthegoodwillallocatedtotheassetgroup(setofassetgroups),andthenusedtoreducethecarryingamountofotherassets(otherthanthegoodwill)withintheassetgroup(setofassetgroups),onapro-ratabasisofthecarryingamountofeachasset.Oncetheaboveimpairmentlossisrecognised,itwillnotbereversedforthevaluerecoveredinthesubsequentperiods.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

18.Long-termprepaidexpenses

Long-termprepaidexpensesincludetheexpenditureforimprovementstofixedassetsunderoperatingleases,andotherexpendituresthathavebeenmadebutshouldberecognisedasexpensesovermorethanoneyearinthecurrentandsubsequentperiods.Long-termprepaidexpensesareamortisedonthestraight-linebasisovertheexpectedbeneficialperiodandarepresentedatactualexpenditurenetofaccumulatedamortisation.

19.Medicalreservefundsandspeciallyapprovedreservingmaterials

MedicalreservefundsrefertothefundsappropriatedbytheStateforthereserveofmaterialsforspecifiedpurposestocopewithmajordisasters,epidemicsituations,firstaidandotheremergencies,etc.Speciallyapprovedreservingmaterialsrefertothemedicalcommoditiesrequiredbythegovernmenttodealwithemergenciessuchasepidemicsituations,firstaidandlocalcommondiseases.AccordingtotheregulationsofCNPGC,theGroup,asanenterpriseundertakingthetaskofspeciallyapprovedreservingmaterialsreserve,obtainsthemedicalreservefundsprovidedbythePRCgovernment,whichappropriatedtothelocalgovernmentandCNPGC.Themedicalreservefundsreceivedviathosepartiesarerecognisedasothernon-currentliabilities.Inthemeantime,theGovernmentofGuangdongProvinceandGuangxiProvincedesignatedSinopharmHoldingGuangzhouCo.,Ltd.(“SinopharmGuangzhou”)anditssubsidiaries,SinopharmHoldingGuangxiCo.,Ltd.(“SinopharmGuangxi”)anditssubsidiariestoundertakethestorage,allocationandsupplyofpharmaceuticalcommoditiesrequiredbymajordisasters,epidemicsituations,firstaidandotheremergenciesaswellaslocalcommondiseasesinGuangdongandGuangxiZhuangAutonomousRegion.Accordingtothereserveplan(varietyandquantity)ofthelocalgovernmentandCNPGC,theGroupreservesthecorrespondingspeciallyapprovedreservingmaterials,implementsdynamicmanagementandrecognisesthemasothernon-currentassets.

20.Employeebenefits

Employeebenefitsmainlyincludeshort-termemployeebenefits,post-employmentbenefits,terminationbenefitsandotherlong-termemployeebenefitsincurredinexchangeforservicerenderedbyemployeesorvariousformsofrewardsorcompensationduetoseveranceoflabourrelation.Short-termemployeebenefitsTheactualoccurredshort-termemployeebenefitsarerecognisedasliabilitiesduringtheaccountingperiodinwhichtheservicehasbeenrenderedbytheemployeesandascostsofassetsorexpensestowhichevertheemployeeserviceisattributable.Post-employmentbenefits(definedcontributionplans)TheemployeesintheGroupparticipateinsocialinsuranceandunemploymentinsuranceschemesadministratedbythelocalgovernments,andtherelatedexpendituresarerecordedincostofrelatedassetsorprofitorlossintheperiodwhentheyincurred.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

20.Employeebenefits(Continued)

Post-employmentbenefits(definedbenefitplans)TheGroupoperatesadefinedbenefitpensionscheme.Nofundshavebeeninjectedintothescheme.Thecostofbenefitsprovidedunderthedefinedbenefitschemeiscalculatedusingtheexpectedbenefitaccrualunitapproach.Remeasurementarisingfromdefinedbenefitpensionschemes,includingactuarialgainsorlosses,changesintheassetcapeffect(deductingamountsincludedinnetinterest)andreturnsonschemeassets(deductingamountsincludedinnetinterest),isinstantlyrecognisedinthebalancesheetandchargedtoshareholders’equitythroughothercomprehensiveincomefortheperiodduringwhichitisincurred.Itwillnotbereversedtoprofitandlossinsubsequentperiods.Previousservicecostsarerecognisedascurrentexpenseswhen:thedefinedbenefitschemeisrevised,ortherelevantrestructuringcostsorterminationbenefitsarerecognisedbytheGroup,whicheverearlier.Netinterestisarrivedatbymultiplyingnetliabilitiesornetassetsofdefinedbenefitswithadiscountrate.Changesinnetobligationsofdefinedbenefitsarerecognisedasoperatingcostsandadministrationexpensesintheincomestatement.Servicecostsincludecurrentservicescosts,pastservicecostsandsettlementofprofitorloss.Netinterestincludeinterestincomefromschemeassets,interestexpensesforschemeobligationsandinterestoftheassetcapeffect.TerminationbenefitsTheGrouprecognisesaliabilityforterminationbenefitsandchargestoprofitorlossattheearlierofthefollowingdates:a)whentheGroupcannolongerwithdrawfromtheterminationplanortheredundancyoffer;andb)whentheGrouprecognisescostsorexpenseforarestructuringplanwhichinvolvesthepaymentofterminationbenefits.TheGroupoffersterminationbenefitstotheemployeeswhoacceptinternalretirementarrangements.Terminationbenefitsreferstosalariesandsocialbenefitspaidtotheemployeeswhovoluntarilyretireandapprovedbythemanagementbeforethelegalretirementage.TheGrouppaysterminationbenefitsfromthedateofthestartingofinternalretirementarrangementstolegalretirementage.Whenmeetingtherecognitioncriteria,terminationbenefitsarerecognisedasliabilitiesfromthedateonwhichtheemployeesstopofferingservicestothelegalretirementdateandrecognisedinprofitorlossasincurred.Thechangeofterminationbenefits’actuarialassumptionsanddifferenceincurredbytheadjustmentofwelfarestandardsarerecognisedinprofitorlossasincurred.Theterminationbenefitsexpectedtobesettledwithinoneyearsincethebalancesheetdateareclassifiedascurrentliabilities.Otherlong-termemployeebenefitsOtherlong-termemployee’benefitsprovidedtoemployeesshallberecognisedandmeasuredasnetliabilitiesornetassetswhereprovisionsregardingpost-employmentbenefitsareapplicable,providedthatchangesshallbeincludedinthecurrentprofitandlossorrelatedassetcosts.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

21.Leaseliabilities

Atthecommencementdateofthelease,theGroupmeasurestheleaseliabilityatthepresentvalueoftheleasepaymentsthatarenotpaidatthatdate,exceptforshort-termleasesandleasesoflow-valueassets.Incalculatingthepresentvalueoftheleasepayments,theGroupusestheinterestrateimplicitintheleaseasthediscountrate.Ifthatratecannotbereadilydetermined,theGroupusesthelessee’sincrementalborrowingrate.TheGroupcalculatestheinterestexpensesoftheleaseliabilityineachperiodduringtheleasetermusingtheconstantperiodicrateofinterest,andrecognisessuchinterestexpensesinprofitorloss,exceptthoseinthecostsoftherelatedassetasrequired.Variableleasepaymentsthatarenotincludedinthemeasurementoftheleaseliabilitiesarerecognisedinprofitorlossasincurred,exceptthoseinthecostsoftherelatedassetasrequired.Afterthecommencementdateofthelease,theGroupremeasuresleaseliabilitieswithchangedpresentvalueoftheleasepaymentswhenfixedpayment,expectedunguaranteedresidualvaluepayable,theinterestrateimplicitintheleaseasthediscountrate,purchaseoptions,optionstoextendtheleaseordeterminationoftheleasetermchange.

22.Provisions

AnobligationrelatedtoacontingencyshallberecognisedbytheGroupasaprovisionwhenallofthefollowingconditionsaresatisfied,exceptforcontingentconsiderationsandcontingentliabilitiesassumedinabusinesscombinationnotinvolvingenterprisesundercommoncontrol:

(1)TheobligationisapresentobligationoftheGroup;

(2)ItisprobablethatanoutflowofeconomicbenefitsfromtheGroupwillberequiredtosettletheobligation;and

(3)Theamountoftheobligationcanbemeasuredreliably.Theprovisionsareinitiallymeasuredatthebestestimateoftheexpenditurerequiredtosettletherelatedpresentobligation,takingintoaccountfactorspertainingtoacontingencysuchastherisks,uncertaintiesandtimevalueofmoneyasawhole.Thecarryingamountofprovisionsisreviewedatthebalancesheetdate.Wherethereisclearevidencethatthecarryingamountofaprovisiondoesnotreflectthecurrentbestestimate,thecarryingamountisadjustedtothecurrentbestestimate.Acontingentliabilityrecognisedinabusinesscombinationnotinvolvingentitiesundercommoncontrolisinitiallymeasuredatfairvalue.Subsequently,itismeasuredatthehigherof:(i)theamountthatwouldberecognisedinaccordancewiththegeneralpolicyforprovisionsabove;and(ii)theamountinitiallyrecognisedlesscumulativeamortisationrecognisedinaccordancewiththepolicyforrevenuerecognition.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

23.Share-basedpayments

Ashare-basedpaymentisclassifiedaseitheranequity-settledshare-basedpaymentoracash-settledshare-basedpayment.Anequity-settledshare-basedpaymentisatransactioninwhichtheGroupreceivesservicesandusessharesorotherequityinstrumentsasconsiderationforsettlement.Anequity-settledshare-basedpaymentinexchangeforservicesreceivedfromemployeesismeasuredatthefairvalueoftheequityinstrumentsgrantedtotheemployees.Ifsuchequity-settledshare-basedpaymentcouldvestimmediately,relatedcostsorexpensesatanamountequaltothefairvalueonthegrantdatearerecognised,withacorrespondingincreaseincapitalreserves;ifsuchequity-settledshare-basedpaymentcouldnotvestuntilthecompletionofservicesforavestingperiod,oruntiltheachievementofaspecifiedperformancecondition,theGroupateachbalancesheetdateduringthevestingperiodrecognisestheservicesreceivedforthecurrentperiodasrelatedcostsandexpenses,withacorrespondingincreaseincapitalreserves,atanamountequaltothefairvalueoftheequityinstrumentsatthegrantdate.Thefairvalueisdeterminedusingthebinomialmodel.Forawardsthatdonotultimatelyvestbecausenon-marketperformanceandserviceconditionshavenotbeenmet,noexpenseisrecognised.Whereawardsincludeamarketornon-vestingcondition,thetransactionsaretreatedasvestingirrespectiveofwhetherthemarketornon-vestingconditionissatisfied,providedthatallotherperformanceandserviceconditionsaresatisfied.Wherethetermsofanequity-settledawardaremodified,asaminimumanexpenseisrecognisedasifthetermshadnotbeenmodified,iftheoriginaltermsoftheawardaremet.Inaddition,anexpenseisrecognisedforanymodificationthatincreasesthetotalfairvalueoftheshare-basedpayments,orisotherwisebeneficialtotheemployeeasmeasuredatthedateofmodification.Whereanequity-settledshare-basedawardiscancelled,itistreatedasifithadvestedonthedateofcancellation,andanyexpensenotyetrecognisedfortheawardisrecognisedimmediately.Thisincludesanyawardwherenon-vestingconditionswithinthecontrolofeithertheGrouportheemployeearenotmet.However,ifanewawardissubstitutedforthecancelledaward,andisdesignatedasareplacementonthedatethatitisgranted,thecancelledandnewawardsaretreatedasiftheywereamodificationoftheoriginalaward.Thecostofcash-settledtransactionsismeasuredatthefairvalueoftheliabilitywhichisdeterminedonthebasisofsharesorotherequityinstrumentsoftheGroup.Itisinitiallyrecognisedatthefairvalueonthegrantdateusingbinomialmodeltogetherwiththeconsiderationoftermsandconditionsonwhichtheequityinstrumentsaregranted.Iftherightsunderacash-settledshare-basedpaymentcouldvestimmediately,relatedcostsorexpensesatanamountequaltothefairvalueonthegrantdatearerecognised,withacorrespondingincreaseinliability.Iftherightsunderacash-settledshare-basedpaymentcouldnotvestuntilthecompletionofservicesforavestingperiod,oruntilachievementofaspecifiedperformancecondition,theGroupateachbalancesheetdateduringthevestingperiodrecognisestheservicesreceivedforthecurrentperiodasrelatedcostsandexpenses,withacorrespondingincreaseinliability,atanamountequaltothefairvalueoftheliabilitybasedonthebestestimateoftheoutcomeofvesting.Theliabilityismeasuredateachbalancesheetdateuptoandincludingthesettlementdate,withchangesinfairvaluerecognisedinprofitorloss.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

24.Revenuefromcontractswithcustomers

RevenuefromcontractswithcustomersisrecognisedwhentheGrouphasfulfilleditsperformanceobligationsinthecontracts,thatis,whenthecustomerobtainscontrolofrelevantgoodsorservices.Controlofrelevantgoodsorservicesreferstotheabilitytodirecttheuseofthegoods,ortheprovisionoftheservices,andobtainsubstantiallyalloftheremainingbenefitsfromthegoodsorservices.ContractsforthesaleofgoodsAcontractforthesaleofgoodsbetweentheGroupandthecustomerusuallyonlyincludestheperformanceobligationtotransferthegoods.Therevenueisrecognisedatthepointoftransferringthecontrolofgoodsintimebasedonthefollowingindicators,whichinclude:apresentrighttopaymentforgoods,thetransferofsignificantrisksandrewardsofownershipofgoods,thetransferoflegaltitletogoods,thetransferofphysicalpossessionofgoods,thecustomer'sacceptanceofgoods.ServicecontractsAcontractfortherenderingofservicesbetweentheGroupandthecustomerusuallyincludesperformanceobligationssuchasstorageandlogistics,Consultingandothermedicalservices.BecausethecustomersimultaneouslyreceivesandconsumesthebenefitsprovidedbytheGroup'sperformanceastheGroupperforms,andtheGrouphasanenforceablerighttopaymentforperformancecompletedtodate,therevenueisrecognisedovertimeonlyiftheGroupcanreasonablymeasureitsprogresstowardsthecompletesatisfactionoftheperformanceobligation.TheGroupdeterminestheprogressoftheperformanceofcontractsinaccordancewiththeinputmethod.Iftheprogresstowardsthecompletesatisfactionoftheperformanceobligationcannotbereasonablymeasured,buttheGroupexpectstorecoverthecostsincurredinsatisfyingtheperformanceobligation,therevenueisrecognisedonlytotheextentofthecostsincurreduntilsuchtimethattheGroupcanreasonablymeasuretheprogresstowardsthecompletesatisfactionoftheperformanceobligation.VariableconsiderationSomeoftheGroup'scontractswithcustomersincludingarrangementsofsalesrebatesresultinvariableconsideration.TheGroupdeterminesthebestestimateofvariableconsiderationbyusingtheexpectedvaluemethodorthemostlikelyamountmethod.However,thetransactionpriceincludingvariableconsiderationisonlytotheextentthatitishighlyprobablethatasignificantreversalintheamountofcumulativerevenuerecognisedwillnotoccurwhentheuncertaintyassociatedwiththevariableconsiderationissubsequentlyresolved.ConsiderationpayabletocustomersWhereconsiderationispayablebytheGrouptoacustomer,suchconsiderationpayableshallbedeductedagainstthetransactionprice,andagainstcurrentrevenueupontherecognitionofrevenueorthepaymentof(orthecommitmenttopay)theconsiderationtothecustomer(whicheverislater),saveforconsiderationpayabletothecustomerforthepurposeofacquiringfromthecustomerotherclearlyseparableproducts.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

24.Revenuefromcontractswithcustomers(Continued)

ReturnclausesInconnectionwithsaleswithareturnclause,revenueisrecognisedaccordingtotheamountofconsiderationitexpectstobeentitledtoforthetransfertoacustomerwhenthecustomeracquirescontroloftherelevantproducts.Amountsexpectedtoberefundedforthereturnofsalesarerecognisedasliabilities.Atthesametime,thebalanceofthecarryingvalueoftheproductexpectedtobereturnedupontransferlessexpectedcostsfortherecallofsuchproduct(includinganimpairmentlossoftherecalledproduct)shallberecognisedasanasset(i.e.costofreturnreceivables),andthenetamountofthecarryingvalueofthetransferredproductuponthetransferlesstheaforesaidassetcostshallbetransferredtocost.Ateachbalancesheetdate,theGroupreassessesthefuturereturnofsalesandremeasurestheaboveassetsandliabilities.SignificantfinancingcomponentWhenthecontractcontainsasignificantfinancingcomponent,theGroupdeterminesthetransactionpricebasedonanamountthatreflectsthepricethatacustomerwouldhavepaidforthegoodsorservicesincashatthetimeofobtainingthecontrolofthegoodsorservices,andamortisesthedifferencebetweenthetransactionpriceandtheconsiderationpromisedinthecontractundertheeffectiveinterestmethodwithinthecontractperiodusingthediscountratethatdiscountsthenominalamountofthecontractconsiderationtothecurrentsellingpriceofthegoodsorservices.TheGroupdoesnotconsidertheeffectsofasignificantfinancingcomponentinthecontractifitisexpectedthattheperiodbetweenwhenthecustomerobtainscontrolofthegoodsorservicesandwhenthecustomerpaysforsuchgoodsorserviceswillbeoneyearorless.WarrantiesTheGroupprovidesawarrantyinconnectionwiththesaleofagoodinaccordancewiththecontractandtherelevantlawsandregulations,etc.Foranassurance-typewarrantythatprovidesthecustomertheassurancethatthegoodcomplieswithagreed-uponspecifications,theGroupaccountsforthewarrantyinaccordancewithNoteIII(22).Foraservice-typewarrantythatprovidesacustomerwithaserviceinadditiontotheassurancethattheproductcomplieswithagreed-uponspecifications,theGroupaccountsforitasaseparateperformanceobligation.Onthebasisoftherelativeproportionbetweenthestand-alonesellingpriceofthegoodandtheservice-typewarranty,aportionofthetransactionpriceisallocatedtotheservice-typewarrantyandrevenueisrecognisedwhenacustomerobtainedcontrolofthegood.Whenassessingwhetheraservice-typewarrantyprovidesacustomerwithaseparateserviceinadditiontotheassurancethatthegoodcomplieswithagreed-uponspecifications,theGroupconsiderswhetherthewarrantyisrequiredbylaw,thelengthofthewarrantycoverageperiodandthenatureofthetasksthattheGrouppromisestoperform,etc.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

24.Revenuefromcontractswithcustomers(Continued)

LoyaltypointsprogrammeTheGroupgrantsacustomerwithloyaltypointsuponthesaleofthegoodsorrenderingofservices,whichcanberedeemedbythecustomersforfreeordiscountedgoodsorservices.Theloyaltypointsprogrammegivesrisetoaseparateperformanceobligationastheyprovideamaterialrighttothecustomer.Aportionofthetransactionpriceisallocatedtotheloyaltypointsawardedtothecustomerbasedontherelativeproportionbetweenthestand-alonesellingpriceofthegoodsorservicesandtheloyaltypoints.Revenueisrecognisedwhenthecustomerobtainscontrolofthegoodsorservicesredeemedwiththeloyaltypointsortheloyaltypointsexpire.Principal/agentWhentheGroupobtainscontrolofgoodsoranotherassetfromathirdpartyandthentransfersittothecustomer,theGroupisentitledtodeterminethetransactionpriceofthegoodsorservicesonitsown,i.e.,theGroupcontrolsthegoodsorservicesbeforetransferringtothecustomer.Thus,theGroupisaprincipalandrecognisesrevenueinthegrossamountofconsiderationreceivedorreceivable.Otherwise,theGroupisanagentandrecognisesrevenueintheamountofanyfeeorcommissiontowhichitexpectstobeentitledfromthecustomer.Theamountisthenetamountofthegrossconsiderationreceivedorreceivableafterpayingtheotherpartytheconsiderationreceivedinexchangeforthegoodsorservicestobeprovidedbythatpartyordeterminedbytheagreed-uponamountorproportionofcommissions,etc.

25.Contractassetsandcontractliabilities

TheGrouppresentscontractassetsorcontractliabilitiesdependingontherelationshipbetweenthesatisfactionofitsperformanceobligationsandthecustomer’spaymentinthebalancesheet.TheGroupoffsetsthecontractassetsandcontractliabilitiesunderthesamecontractandpresentsthenetamount.ContractassetsAcontractassetistherighttoconsiderationinexchangeforgoodsorservicesthattheGrouphastransferredtoacustomer,andthatrightisconditionedonsomethingotherthanthepassageoftime.FordetailsofhowtheGroupmeasuresandaccountsfortheECLsofacontractasset,refertoNoteIII(8).ContractliabilitiesAcontractliabilityistheobligationtotransfergoodsorservicestoacustomerforwhichtheGrouphasreceivedconsiderationoranamountofconsiderationisduefromthecustomer,suchasanamountofconsiderationthatanentityhasreceivedbeforethetransferofthepromisedgoodsorservices.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

26.Assetsrelatingtocontractcost

TheGroup’scontractcostassetsincludethecoststoobtainandfulfilacontractandareclassifiedasinventories,othercurrentassetsandothernon-currentassetsbyliquidity.TheGrouprecognisesasanassettheincrementalcostsofobtainingacontractwithacustomeriftheGroupexpectstorecoverthosecosts,unlesstheamortisationperiodoftheassetisoneyearorless.Otherthanthecostswhicharecapitalisedasinventories,fixedassetsandintangibleassets,etc.,costsincurredtofulfilacontractwithacustomerarecapitalisedasanassetifallofthefollowingcriteriaaremet:

(1)thecostsrelatedirectlytoacontractortoananticipatedcontract,includingdirectlabour,directmaterials,overheads(orsimilarexpenses),coststhatareexplicitlychargeabletothecustomerandothercoststhatareincurredonlybecauseanentityenteredintothecontract;

(2)thecostsgenerateorenhanceresourcesoftheGroupthatwillbeusedinsatisfying

performanceobligationsinthefuture;and

(3)thecostsareexpectedtoberecovered.Thecontractcostassetisamortisedandchargedtoprofitorlossonasystematicbasisthatisconsistentwiththepatternoftherevenuetowhichtheassetrelatedisrecognised.TheGroupaccruesprovisionsforimpairmentandrecognisesimpairmentlossestotheextentthatthecarryingamountofacontractcostassetexceeds:

(1)theremainingamountofconsiderationthattheentityexpectstoreceiveinexchangefor

thegoodsorservicestowhichtheassetrelates;less

(2)thecoststhatareexpectedtobeincurredtotransferthoserelatedgoodsorservices.TheGrouprecognisesinprofitorlossareversaloftheimpairmentlosspreviouslyrecognisedtotheextentthatthedifferencebetween(1)and(2)exceedsthecarryingamountoftheassetduetothesubsequentchangesofthefactorscausingassetimpairmentinpreviousperiods,butthecarryingamountafterthereversaldoesnotexceedthecarryingamountoftheassetatthereversaldateifnoimpairmentlossisotherwiserecognised.

27.Governmentgrants

Governmentgrantsarerecognisedwhenallattachingconditionswillbecompliedwithandthegrantswillbereceived.Ifagovernmentgrantisintheformofatransferofamonetaryasset,itismeasuredattheamountreceivedorreceivable.Ifagovernmentgrantisintheformofatransferofanon-monetaryasset,itismeasuredatfairvalue;iffairvalueisnotreliablydeterminable,itismeasuredatanominalamount.Governmentgrantsrelatedtoassetsrefertothelong-termassetsformedbyacquisition,construction,orothermannersasstipulatedingovernmentdocuments.Ifthegovernmentdocumentsarenotclear,thegovernmentgrantsrelatedtoassetsarejudgedbasedonthebasicconditionsthatmustbemettoobtainthegrants.Whenthelong-termassetsareformattedthroughacquisition,construction,orothermanners,thegrants'amountshallberegardedasthegovernmentgrantsrelatedtoassets.Otherwise,thegrants'amountshallberegardedasthegovernmentgrantsrelatedtoincome.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

27.Governmentgrants(Continued)

Agovernmentgrantrelatedtoincomeisaccountedforasfollows:(i)ifthegrantisacompensationforrelatedexpensesorlossestobeincurredinsubsequentperiods,thegrantisrecognisedasdeferredincome,andreleasedinprofitorlossoroffsetagainstrelatedexpensesovertheperiodsinwhichtherelatedcostsarerecognised;or(ii)ifthegrantisacompensationforrelatedexpensesorlossesalreadyincurred,itisrecognisedimmediatelyinprofitorlossoroffsetagainstrelevantexpenses.Agovernmentgrantrelatingtoanassetshallbeoffsetagainstthecarryingamountsofrelevantassets,orrecognisedasdeferredincomeandamortisedinprofitorlossovertheusefullifeoftherelatedassetbyannualinstalmentsinasystematicandrationalway(however,agovernmentgrantmeasuredatanominalamountisrecogniseddirectlyinprofitorloss).Wheretheassetsaresold,transferred,retiredordamagedbeforetheendoftheirusefullives,theremainingdeferredincomeisreleasedtoprofitorlossfortheperiodinwhichtherelevantassetsaredisposedof.

28.Incometax

Incometaxcomprisescurrentanddeferredtax.Incometaxisrecognisedasincomeorexpenseinprofitorloss,orrecogniseddirectlyinequityifitarisesfromabusinesscombinationorrelatestoatransactionoreventwhichisrecogniseddirectlyinequity.CurrenttaxliabilitiesorassetsarisingfromthecurrentandpriorperiodsattheamountexpectedtobepaidbytheGrouporreturnedbythetaxauthorityarecalculatedaccordingtorelatedtaxlaws.Deferredtaxisprovidedusingthebalancesheetliabilitymethod,onalltemporarydifferencesatthebalancesheetdatebetweenthetaxbasesofassetsandliabilitiesandtheircarryingamounts,andtemporarydifferencesbetweenthetaxbasesandthecarryingamountsoftheitems,whichhaveataxbaseaccordingtorelatedtaxlawsbutarenotrecognisedasassetsandliabilities.Deferredtaxliabilitiesarerecognisedforalltaxabletemporarydifferences,except:

(1)whenthetaxabletemporarydifferencearisesfromtheinitialrecognitionofgoodwill,oranassetorliabilityinatransactionthatisnotabusinesscombinationand,atthetimeoftransaction,affectsneitheraccountingprofitnortaxableprofitorloss;and

(2)inrespectoftaxabletemporarydifferencesassociatedwithinvestmentsinsubsidiaries,

associatesandjointventures,whenthetimingofthereversalofthetemporarydifferencescanbecontrolledanditisprobablethatthetemporarydifferenceswillnotbereversedintheforeseeablefuture.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

28.Incometax(Continued)

Deferredtaxassetsarerecognisedforalldeductibletemporarydifferences,andthecarryforwardofunusedtaxlossesandanyunusedtaxcredits.Deferredtaxassetsarerecognisedtotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthedeductibletemporarydifferences,thecarryforwardofunusedtaxlossesandunusedtaxcreditscanbeutilised,except:

(1)whenthedeductibletemporarydifferencearisesfromtheinitialrecognitionofanassetor

liabilityinatransactionthatisnotabusinesscombinationand,atthetimeofthetransaction,affectsneithertheaccountingprofitnortaxableprofitorloss;and

(2)inrespectofthedeductibletemporarydifferencesassociatedwithinvestmentsinsubsidiaries,associatesandjointventures,deferredtaxassetsareonlyrecognisedtotheextentthatitisprobablethatthetemporarydifferenceswillbereversedintheforeseeablefutureandtaxableprofitwillbeavailableagainstwhichthetemporarydifferencescanbeutilisedinthefuture.Atthebalancesheetdate,deferredtaxassetsandliabilitiesaremeasuredatthetaxratesthatareexpectedtoapplytotheperiodwhentheassetisrealisedortheliabilityissettled,inaccordancewiththerequirementsoftaxlaws.ThemeasurementofdeferredtaxassetsanddeferredtaxliabilitiesreflectsthetaxconsequencesthatwouldfollowfromthemannerinwhichtheGroupexpects,atthebalancesheetdate,torecovertheassetsorsettletheliabilities.Thecarryingamountofdeferredtaxassetsisreviewedatthebalancesheetdateandreducedtotheextentthatitisnolongerprobablethatsufficienttaxableprofitwillbeavailableinfutureperiodstoallowthedeferredtaxassetstobeutilised.Unrecogniseddeferredtaxassetsarereassessedatthebalancesheetdateandarerecognisedtotheextentthatithasbecomeprobablethatsufficienttaxableprofitwillbeavailabletoallowallorpartofthedeferredtaxassettoberecovered.DeferredtaxassetsanddeferredtaxliabilitiesareoffsetifandonlyiftheGrouphasalegallyenforceablerighttosetoffcurrenttaxassetsandcurrenttaxliabilities,andthedeferredtaxassetsanddeferredtaxliabilitiesrelatetoincometaxesleviedbythesametaxationauthorityoneitherthesametaxableentityordifferenttaxableentitieswhichintendeithertosettlecurrenttaxliabilitiesandassetsonanetbasis,ortorealisetheassetsandsettletheliabilitiessimultaneously,ineachfutureperiodinwhichsignificantamountsofdeferredtaxliabilitiesorassetsareexpectedtobesettledorrecovered.

29.Leases

IdentificationofleasesAtinceptionofacontract,theGroupassesseswhetherthecontractis,orcontains,alease.Acontractis,orcontains,aleaseifthecontractconveystherighttocontroltheuseofanidentifiedassetforaperiodoftimeinexchangeforconsideration.Toassesswhetheracontractconveystherighttocontroltheuseofanidentifiedassetforaperiodoftime,theGroupassesseswhether,throughouttheperiodofuse,thecustomerhasbothoftherighttoobtainsubstantiallyalloftheeconomicbenefitsfromuseoftheidentifiedassetandtherighttodirecttheuseoftheidentifiedasset.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

29.Leases(Continued)

IdentificationofseparateleasecomponentsForacontractthatcontainsmultipleseparateleasecomponents,theGroupseparatesthecomponentsofthecontractandaccountsforeachseparateleasecomponent.Therighttouseanunderlyingassetisaseparateleasecomponentifboth:

(1)thelesseecanbenefitfromuseoftheunderlyingasseteitheronitsownortogetherwith

otherresourcesthatarereadilyavailabletothelessee;and

(2)theunderlyingassetisneitherhighlydependenton,norhighlyinterrelatedwith,theother

underlyingassetsinthecontract.Separatingleasecomponentsandnon-leasecomponentsForacontractthatcontainsleasecomponentsandnon-leasecomponents,theGroupaccountsforleasecomponentsandnon-leasecomponentsseparatelyasalessororalessee.AssessmentoftheleasetermTheleasetermisthenon-cancellableperiodofaleaseforwhichtheGrouphastherighttouseanunderlyingasset.IftheGrouphasanoptiontoextendthelease,thatis,theGrouphastherighttoextendthelease,andisreasonablycertaintoexercisethatoption,theleasetermalsoincludesperiodscoveredbyanoptiontoextendthelease.IftheGrouphasanoptiontoterminatethelease,thatis,theGrouphastherighttoterminatethelease,butisreasonablycertainnottoexercisethatoption,theleasetermincludesperiodscoveredbyanoptiontoterminatethelease.TheGroupreassesseswhetheritisreasonablycertaintoexerciseanextensionoption,purchaseoption,ornottoexerciseaterminationoption,upontheoccurrenceofeitherasignificanteventorasignificantchangeinthecircumstancesthatiswithinthecontroloftheGroupandaffectswhethertheGroupisreasonablycertaintoexerciseanoptionnotpreviouslyincludedinitsdeterminationoftheleaseterm.AslesseeTheGroupaccountsasalesseeseeNoteIII(14)andNoteIII(21).LeasemodificationsLeasemodificationisachangeinthescopeofalease,ortheconsiderationforalease,thatwasnotpartoftheoriginaltermsandconditionsofthelease,forexample,addingorterminatingtherighttouseoneormoreunderlyingassets,orextendingorshorteningthecontractualleaseterm.TheGroupaccountsforaleasemodificationasaseparateleaseifboth:

(1)themodificationincreasesthescopeoftheleasebyaddingtherighttouseoneormore

underlyingassets;and

(2)theconsiderationfortheleaseincreasesbyanamountcommensuratewiththestand-

alonepricefortheincreaseinscopeandanyappropriateadjustmentstothatstand-alone

pricetoreflectthecircumstancesoftheparticularcontract.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

29.Leases(Continued)

Aslessee(Continued)Leasemodifications(Continued)Foraleasemodificationthatisnotaccountedforasaseparatelease,attheeffectivedateoftheleasemodificationtheGroupremeasurestheleaseliabilitybydiscountingtherevisedleasepaymentsusingareviseddiscountrate.Thereviseddiscountrateisdeterminedastheinterestrateimplicitintheleasefortheremainderoftheleaseterm,orthelessee’sincrementalborrowingrateattheeffectivedateofthemodification,iftheinterestrateimplicitintheleasecannotbereadilydetermined.Foraleasemodificationthatisnotaccountedforasaseparatelease,theGroupaccountsfortheremeasurementoftheleaseliabilityby:

(1)decreasingthecarryingamountoftheright-of-useassettoreflectthepartialorfull

terminationoftheleaseforleasemodificationsthatdecreasethescopeofthelease,andrecognisingthegainorlossrelatingtothepartialorfullterminationoftheleaseinprofitorloss;or

(2)makingacorrespondingadjustmenttotheright-of-useassetforallotherlease

modifications.Short-termleasesandleasesoflow-valueassetsTheGroupconsidersaleasethat,atthecommencementdateofthelease,hasaleasetermof12monthsorless,anddoesnotcontainanypurchaseoptionasashort-termlease;andaleaseforwhichthevalueoftheindividualunderlyingassetisnotmorethanRMB40,000whenitisnewasaleaseoflow-valueassets.IftheGroupsubleasesanasset,orexpectstosubleaseanasset,theheadleasedoesnotqualifyasaleaseofalow-valueasset.TheGroupdoesnotrecognisetheright-of-useassetsandleaseliabilitiesforshort-termleasesandlow-valueassets.TheGrouprecognisesleasepaymentsonshort-termleasesandleasesoflow-valueassetsinthecostsoftherelatedassetorprofitorlossonastraight-linebasisovertheleaseterm.COVID-19relatedrentconcessionsForrentconcessionssuchasrentremissionordeferredpaymentreachedbetweentheGroupandthelessorontheexistingleasecontractdirectlycausedbytheCOVID-19epidemic,andifthefollowingconditionsaremetatthesametime,theGroupadoptsasimplifiedmethodforleasing:

(1)comparedbeforetheconcession,therentalconsiderationafterconcessionisreducedor

basicallyunchanged;

(2)theconcessionisonlyforleasepaymentspayablebefore30June2022;

(3)aftercomprehensiveconsiderationofqualitativeandquantitativefactors,nosignificant

changeinothertermsandconditionsoftheleaseisconcluded.TheGroupdoesnotevaluatewhethertheleasehasbeenchanged.Itwillcontinuetocalculatetheinterestexpenseoftheleaseliabilitiesatthesamediscountratebeforetheconcessionandrecorditintothecurrentprofitandloss.Itwillcontinuetocalculatethedepreciationoftheright-of-useassetsinthesamewayasbeforetheconcession.Forrentremissionsincurred,theGrouptakestheremittedrentasthevariableleasepayment,whentheoriginalrentpaymentobligationisrelievedbytheagreementonconcession,thecostorexpenseoftherelevantassetsshallbeoffsetaccordingtotheundiscountedamount,andtheleaseliabilitiesshallbe

adjustedaccordinglyintheconcessionagreement,etc.Forrentextensionpaymentincurred,theGroupwilloffsettheleaseliabilityrecognisedintheearlierperiodwhenitisactuallypaid.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

29.Leases(Continued)

AslessorAleaseisclassifiedasafinanceleaseifittransferssubstantiallyalltherisksandrewardsincidentaltoownershipofanunderlyingasset,exceptthataleaseisclassifiedasanoperatingleaseattheinceptiondate.TheGroup,asanintermediatelessor,classifiesthesubleasebyreferencetotheright-of-useassetarisingfromtheheadlease.AslessorofanoperatingleaseRentincomeunderanoperatingleaseisrecognisedonastraight-linebasisovertheleaseterm,throughprofitorloss.Variableleasepaymentsthatarenotincludedinthemeasurementofleasereceivablesarechargedtoprofitorlossasincurred.TheGroupaccountsforamodificationtoanoperatingleaseasanewleasefromtheeffectivedateofthemodification,consideringanyprepaidoraccruedleasepaymentsrelatingtotheoriginalleaseaspartoftheleasepaymentsforthenewlease.

30.Dividenddistribution

Cashdividenddistributionisrecognisedasaliabilityintheperiodinwhichitisapprovedbyshareholdersattheannualshareholders’meeting.

31.Fairvaluemeasurement

TheGroupmeasuresitsequityinvestmentsatfairvalueateachbalancesheetdate.Fairvalueisthepricethatwouldbereceivedtosellanassetorpaidtotransferaliabilityinanorderlytransactionbetweenmarketparticipantsatthemeasurementdate.Thefairvaluemeasurementisbasedonthepresumptionthattheorderlytransactiontoselltheassetortransfertheliabilitytakesplaceeitherintheprincipalmarketfortheassetorliability,orintheabsenceofaprincipalmarket,inthemostadvantageousmarketfortheassetorliability.TheprincipalorthemostadvantageousmarketmustbeaccessiblebytheGroupatthemeasurementdate.Thefairvalueofanassetoraliabilityismeasuredusingtheassumptionsthatmarketparticipantswouldusewhenpricingtheassetorliability,assumingthatmarketparticipantsactintheirbesteconomicinterest.Afairvaluemeasurementofanon-financialassettakesintoaccountamarketparticipant’sabilitytogenerateeconomicbenefitsbyusingtheassetinitshighestandbestuseorbysellingittoanothermarketparticipantthatwouldusetheassetinitshighestandbestuse.TheGroupusesvaluationtechniquesthatareappropriateinthecircumstancesandforwhichsufficientdataandotherinformationareavailabletomeasurefairvalue,maximisingtheuseofrelevantobservableinputsandminimisingtheuseofunobservableinputs.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

31.Fairvaluemeasurement(Continued)

Allassetsandliabilitiesforwhichfairvalueismeasuredordisclosedinthefinancialstatementsarecategorisedwithinthefairvaluehierarchybasedonthelowestlevelinputthatissignificanttothefairvaluemeasurementasawhole:

Level1–basedonquotedprices(unadjusted)inactivemarketsforidenticalassetsorliabilities;Level2–basedonvaluationtechniquesforwhichthelowestlevelinputthatissignificanttothefairvaluemeasurementisobservable,eitherdirectlyorindirectly;Level3–basedonvaluationtechniquesforwhichthelowestlevelinputthatissignificanttothefairvaluemeasurementisunobservable.Forassetsandliabilitiesthataremeasuredatfairvalueinthefinancialstatementsonarecurringbasis,theGroupdetermineswhethertransfershaveoccurredbetweenlevelsinthehierarchybyreassessingcategorisationateachbalancesheetdate.

32.Segmentinformation

TheGroupidentifiesoperatingsegmentsbasedontheinternalorganizationstructure,managementrequirementsandinternalreportingsystem,anddisclosessegmentinformationofreportablesegmentswhichisdeterminedonthebasisofoperatingsegments.AnoperatingsegmentisacomponentoftheGroupthatsatisfiesallofthefollowingconditions:

(1)thecomponentisabletoearnrevenuesandincurexpensesfromitsordinaryactivities;(2)thecomponent’soperatingresultsareregularlyreviewedbytheGroup’smanagementtomakedecisionsaboutresourcestobeallocatedtothesegmentandtoassessitsperformance,and

(3)forwhichtheinformationonfinancialposition,operatingresultsandcashflowsisavailabletotheGroup.Iftwoormoreoperatingsegmentshavesimilareconomiccharacteristicsandsatisfycertainconditions,theyareaggregatedintoonesingleoperatingsegment.

33.Significantaccountingjudgementsandestimates

Thepreparationofthefinancialstatementsrequiresmanagementtomakejudgements,estimatesandassumptionsthataffectthereportedamountsofrevenue,expenses,assetsandliabilities,andtheiraccompanyingdisclosures,andthedisclosureofcontingentliabilitiesatthebalancesheetdate.Uncertaintyabouttheseassumptionsandestimatescouldresultinoutcomesthatcouldrequireamaterialadjustmenttothecarryingamountsoftheassetsorliabilitiesaffectedinthefuture.JudgementsIntheprocessofapplyingtheGroup’saccountingpolicies,managementhasmadethefollowingjudgements,whichhavethemostsignificanteffectontheamountsrecognisedinthefinancialstatements:

Operatingleases–aslessorTheGrouphasenteredintoleaseagreementsonitsinvestmentpropertyportfolio.TheGrouphasdeterminedtheseleasestobeoperatingleases,basedonanevaluationofthetermsandconditionsoftheagreements,thatitretainssubstantiallyallthesignificantrisksandrewardsofownershipoftheseproperties.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

33.Significantaccountingjudgementsandestimates(Continued)

Judgements(Continued)BusinessmodelsTheclassificationoffinancialassetsatinitialrecognitiondependsontheGroup'sbusinessmodelformanagingfinancialassets.Whendeterminingthebusinessmodel,theGroupconsidersthemethodstoincludeevaluationandreportfinancialassetperformancetokeymanagement,therisksaffectingtheperformanceoffinancialassetsandtheriskmanagement,andthemannerinwhichtherelevantmanagementreceivesremuneration.Whenassessingwhethertheobjectiveistocollectcontractualcashflows,theGroupneedstoanalyseandjudgethereason,timing,frequencyandvalueofthesalebeforethematuritydateofthefinancialassets.ContractualcashflowcharacteristicsTheclassificationoffinancialassetsatinitialrecognitiondependsonthefinancialasset’scontractualcashflowcharacteristics,andthejudgementsonwhetherthecontractualcashflowsaresolelypaymentsofprincipalandinterestontheprincipalamountoutstanding,includingwhenassessingthemodificationofthetimevalueofmoney,thejudgementonwhetherthereisanysignificantdifferencefromthebenchmarkcashflowandwhetherthefairvalueoftheprepaymentfeaturesisinsignificantforfinancialassetswithprepaymentfeatures,etc.EstimationuncertaintyThekeyassumptionsconcerningthefutureandotherkeysourcesofestimationuncertaintyatthebalancesheetdate,thathaveasignificantriskofcausingamaterialadjustmenttothecarryingamountsofassetsandliabilitieswithinthefutureaccountingperiods,aredescribedbelow.ImpairmentoffinancialinstrumentsTheGroupusestheexpectedcreditlossmodeltoassesstheimpairmentoffinancialinstruments.TheGroupisrequiredtoperformsignificantjudgementandestimationandtakeintoaccountallreasonableandsupportableinformation,includingforward-lookinginformation.Whenmakingsuchjudgementsandestimates,theGroupinferstheexpectedchangesinthedebtor'screditriskbasedonhistoricalrepaymentdatacombinedwitheconomicpolicies,macroeconomicindicators,industryrisksandotherfactors.Thedifferentestimatesmayimpacttheimpairmentassessment,andtheprovisionforimpairmentmayalsonotberepresentativeoftheactualimpairmentlossinthefuture.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

33.Significantaccountingjudgementsandestimates(Continued)

Estimationuncertainty(Continued)Impairmentofnon-currentassetsotherthanfinancialassets(otherthangoodwill)TheGroupassesseswhetherthereareanyindicationsofimpairmentforallnon-currentassetsotherthanfinancialassetsatthebalancesheetdate.Intangibleassetswithindefiniteusefullivesaretestedforimpairmentannuallyandatothertimeswhensuchanindicationexists.Othernon-currentassetsotherthanfinancialassetsaretestedforimpairmentwhenthereareindicationsthatthecarryingamountsmaynotberecoverable.Animpairmentexistswhenthecarryingamountofanassetorassetgroupexceedsitsrecoverableamount,whichisthehigherofitsfairvaluelesscostsofdisposalandthepresentvalueofthefuturecashflowsexpectedtobederivedfromit.Thecalculationofthefairvaluelesscostsofdisposalbasedonavailabledatafrombindingsalestransactionsinanarm’slengthtransactionofsimilarassetsorobservablemarketpriceslessincrementalcostsfordisposingoftheassets.Whenthecalculationsofthepresentvalueofthefuturecashflowsexpectedtobederivedfromanassetorassetgroupareundertaken,managementmustestimatetheexpectedfuturecashflowsfromtheassetorassetgroupandchooseasuitablediscountrateinordertocalculatethepresentvalueofthosecashflows.FurtherdetailsareincludedinNotesV(13),(14),(15),(16)and(17).ImpairmentofgoodwillTheGroupdetermineswhethergoodwillisimpairedatleastonanannualbasis.Thisrequiresanestimationofthepresentvalueofthefuturecashflowsexpectedtobederivedfromtheassetgroups(setsofassetgroups)towhichthegoodwillisallocated.EstimatingthepresentvaluerequirestheGrouptomakeanestimateoftheexpectedfuturecashflowsfromtheassetgroups(setsofassetgroups)andalsotochooseasuitablediscountrateinordertocalculatethepresentvalueofthosecashflows.FurtherdetailsareincludedinNoteV(18).DeferredtaxassetsDeferredtaxassetsarerecognisedforallunusedtaxlossestotheextentthatitisprobablethattaxableprofitwillbeavailableagainstwhichthelossescanbeutilised.Significantmanagementjudgementisrequiredtodeterminetheamountofdeferredtaxassetsthatcanberecognised,baseduponthelikelytimingandleveloffuturetaxableprofitstogetherwithfuturetaxplanningstrategies.Fairvalueofnon-listedequityinvestmentsTheunlistedequityinvestmentshavebeenvaluedbasedontheexpectedcashflowsdiscountedatcurrentratesapplicableforitemswithsimilartermsandriskcharacteristics.ThisvaluationrequirestheGrouptomakeestimatesaboutexpectedfuturecashflows,creditrisk,volatilityanddiscountrates,andhencetheyaresubjecttouncertainty.LoyaltypointsTheGroupmakesreasonableestimateofthestand-alonesellingpriceoftheloyaltypointsbytakingintoaccountallrelevantinformation,suchasthestand-alonesellingpricesforthecustomertoacquireadditionalfreegoodsorservicesorthediscountsenjoyedbythecustomerusingtheloyaltypointsandthepossibilityforthecustomertoexercisetheredemptionright.TheGroupconsidersthelikelihoodforthecustomertoexercisetheredemptionrightbasedonthehistoricaldataofpointredemption,thecurrentpointredemptionandthefuturechangesforthecustomer,thefuturetrendofthemarketandotherfactors.TheGroupre-evaluatesthestand-alonesellingpriceofloyaltypointsatleastoneachbalancesheetdateanddetermines

thetransactionpricetobeallocatedtotheloyaltypointsbasedonthestand-alonesellingpriceofthere-evaluatedloyaltypoints.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

33.Significantaccountingjudgementsandestimates(Continued)

Estimationuncertainty(Continued)SaleswitharightofreturnTheGroupmakesreasonableestimateofagroupofcontractswithsimilarcharacteristicsaccordingtothesalesreturnhistoricaldata,thecurrentsalesreturnsituation,aswellascustomerchanges,marketchangesandotherrelevantinformation.Estimatesoftheexpectedreturnratemaynotberepresentativeoftheactualreturnsinthefuture.TheGroupre-evaluatesthereturnrateatleastoneachbalancesheetdateandupdatesthemeasurementoftherefundliabilitiesandtheright-of-returnassetsbasedonthere-evaluatedreturnrate.WarrantiesTheGroupmakesreasonableestimateofthewarrantyrateofagroupofcontractswithsimilarcharacteristicsbasedonhistoricalwarrantydata,currentwarranty,aswellasallrelevantinformationsuchasproductimprovements,marketchanges.Estimatesoftheexpectedwarrantyratemaynotberepresentativeoftheactualwarrantyrateinthefuture.TheGroupre-evaluatesthewarrantyrateatleastoneachbalancesheetdateandupdatesthemeasurementoftheprovisionsbasedonthere-evaluatedwarrantyrate.AssessmentofconstrainsonvariableconsiderationTheGroupestimates,withinareasonablequantity,theamountofvariableconsiderationthatmayoccurandthelikelihoodbytakingintoaccountallreasonablyavailableinformation,includinghistoricalinformation,currentinformation,andpredictiveinformation.TheGroupincludesinthetransactionpricesomeorallofanamountofvariableconsiderationestimatedonlytotheextentthatitishighlyprobablethatasignificantreversalintheamountofcumulativerevenuerecognisedwillnotoccurwhentheuncertaintyassociatedwiththevariableconsiderationissubsequentlyresolved.Inassessingwhetheritishighlyprobablethatasignificantreversalintheamountofcumulativerevenuerecognisedwillnotoccuroncetheuncertaintyrelatedtothevariableconsiderationissubsequentlyresolved,theGroupconsidersboththelikelihoodandthemagnitudeoftherevenuereversal.Oneachbalancesheetdate,theGroupupdatestheestimatedtransactionprice(includingupdatingitsassessmentofwhetheranestimateofvariableconsiderationisconstrained)toreflectthecircumstancespresentattheendofthereportingperiodandthechangesincircumstancesduringthereportingperiod.Lessee’sincrementalborrowingrateIftheinterestrateimplicitintheleasecannotbereadilydetermined,theGroupmeasurestheleaseliabilityatthepresentvalueoftheleasepaymentsdiscountedusingthelessee’sincrementalborrowingrate.Accordingtotheeconomicenvironment,theGrouptakestheobservableinterestrateasthereferencebasisfordeterminingtheincrementalborrowingrate,thenadjuststheobservableinterestratebasedonitsowncircumstances,underlyingassets,leasetermsandamountsofleaseliabilitiestodeterminetheapplicableincrementalborrowingrate.

IIISummaryofsignificantaccountingpoliciesandaccountingestimates(Continued)

34.Changesinaccountingpoliciesandaccountingestimates

ChangesinaccountingpoliciesChangesinadoptionofCOVID-19relatedrentconcessionsAccordingtotheaccountingprocessregulationsonrentconcessionsrelatedtoCOVID-19(“theprocessregulations”),thesimplifiedmethodcouldbeselectedforrentconcessionsrelatedtoCOVID-19onthebasisoftheprocessregulations.Asalessee,theGrouphasadoptedthesimplifiedmethodintheprocessregulationsin2020.AccordingtothechangesinappliancescopeoftheaccountingprocessregulationsonrentconcessionsrelatedtoCOVID-19,therentconcessionperiodapplicabletothesimplifiedmethodisadjustedto"theconcessionisonlyfortheleasepaymentspayableincurredbeforeJune30,2022".Asalessee,theadoptionofthesimplifiedmethodaftertheadjustmentofthechangesoftheappliancescopeisconsistentwithitbeforethechangeforthereleventleases.TheamountofrentconcessionsincludedintheprofitfortheyearisRMB2,617,562.37.

IVTaxation

1.Maincategoriesandratesoftaxes:

Categories

CategoriesTaxbaseTaxrate

Corporateincometax(“CIT”)

Corporateincometax(“CIT”)Taxableincome15%,20%,25%

Value-addedtax(“VAT”)

Value-addedtax(“VAT”)Taxablevalue-addedamount(TaxpayableiscalculatedusingthetaxablesalesamountmultipliedbytheeffectivetaxratelessdeductibleVATinputofthecurrentperiod)0%,3%,5%,6%,9%,10%,13%

Citymaintenanceandconstructiontax

CitymaintenanceandconstructiontaxAmountofVATpaid5%,7%

Educationalsurcharge

EducationalsurchargeAmountofVATpaid3%

Localeducationalsurcharge

LocaleducationalsurchargeAmountofVATpaid2%

2.Taxpreferences

IVTaxation(Continued)

2.Taxpreferences(Continued)

In2015,subsidiariesoftheCompany,includingSinopharmHoldingGuilinCo.,Ltd.(“SinopharmGuilin”),SinopharmHoldingGuigangCo.,Ltd.(“SinopharmGuigang”),SinopharmHoldingYulinCo.,Ltd.(“SinopharmYulin”),SinopharmHoldingBaiseCo.,Ltd.(“SinopharmBaise”)andSinopharmHoldingWuzhouCo.,Ltd.(“SinopharmWuzhou”),wereapprovedtoenjoyataxconcessionforWesternDevelopmentatareducedCITrateof15%.AccordingtotheCircularoftheMinistryofFinance,theStateAdministrationofTaxation,theGeneralAdministrationofCustomsonIssuesConcerningTaxPoliciesfortheFurtherDevelopmentoftheWesternRegions(Caishui[2011]No.58)andtheAnnouncementontheContinuationoftheIncomeTaxPolicyfortheEnterpriseinWesternRegionDevelopment(CaiZhengBu[2020]No.23),theapplicableperiodisfrom1January2015to31December2030.In2017,accordingtoCaiShui[2011]No.58andtheAnnouncementontheContinuationoftheIncomeTaxPolicyfortheEnterpriseinWesternRegionDevelopment(CaiZhengBu[2020]No.23),SinopharmHoldingGuodaInnerMongoliaPharmacyChainStoreCo.,Ltd.(“GuodaInnerMongolia”)andInnerMongoliaGuodaMedicineCo.,Ltd.(“InnerMongoliaMedicine”)couldenjoyareducedCITrateof15%from1January2017to31December2030.In2019,accordingtoCaiShui[2011]No.58andtheAnnouncementontheContinuationoftheIncomeTaxPolicyfortheEnterpriseinWesternRegionDevelopment(CaiZhengBu[2020]No.23),SinopharmHoldingQinzhouCo.,Ltd.(“SinopharmQinzhou”),SinopharmHoldingHezhouCo.,Ltd.(“SinopharmHezhou”),SinopharmHoldingHechiCo.,Ltd.(“SinopharmHechi”),GuodaPharmacy(Pu’er)SongmaoCo.,Ltd.(“GuodaPu’er”)couldenjoyareducedCITrateof15%from1January2019to31December2030.In2021,accordingtoCaiShui[2011]No.58andtheAnnouncementontheContinuationoftheIncomeTaxPolicyfortheEnterpriseinWesternRegionDevelopment(CaiZhengBu[2020]No.23),YunnanGuodaDishengPharmacyChainCo.,Ltd.(“DishengPharmacyChain”),YunnanGuodaDishengMedicineCo.,Ltd.("DishengMedicine"),SinopharmHoldingMedicalSupplyChainService(Guangxi)Co.,Ltd.couldenjoyareducedCITrateof15%from1January2021to31December2030.In2021,accordingtotheNoticeontheImplementationofInclusiveTaxReductionandExemptionPoliciesforSmallandMicroEnterprises(CaiShui[2019]No.13)andAnnouncementoftheMinistryofFinanceandtheStateAdministrationofTaxationontheImplementationofPreferentialIncomeTaxPoliciesforSmallandMicroEnterprisesandIndividualIndustrialandCommercialHouseholds([2021]No.12),subsidiariesoftheCompanylistedbelowqualifiedfortheconditionsofsmalllow-profitenterprises,whichthetaxableincomeofthesesubsidiariesdoesnotexceedRMB3million.Hence,fortheportionofannualtaxableincomenotexceedingRMB1million,itshallbeincludedinthetaxableincomeof12.5%,andenterpriseincometaxshallbepaidattherateof20%;fortheportionofannualtaxableincomeexceedingRMB1millionbutnotexceedingRMB3million,itshallbeincludedinthetaxableincomeof50%,andenterpriseincometaxshallbepaidattherateof20%.

IVTaxation(Continued)

3.Taxpreferences(Continued)

TheCompany’ssubsidiarieswhichqualifiedfortheconditionsofsmalllow-profitenterprisesincludingSinopharmHoldingGuigangPharmacyCo.,Ltd.(“SinopharmGuigangPharmacy”),ShanghaiGuodaDongshengPharmacyCo.,Ltd.(“ShanghaiDongsheng”),ShanghaiGuodaRuijingPharmacyCo.,Ltd.(“ShanghaiRuijing”),SinopharmHoldingGuodaPharmacyUlanqabCo.,Ltd.(“GuodaUlanqab”),ShanghaiGuodaDongxinPharmacyCo.,Ltd.(“ShanghaiDongxin”),ShanghaiGuodaShanghongQibaoPharmacyCo.,Ltd.(“ShanghaiShanghong”),ShanghaiGuodongTraditionalChineseMedicineClinicCo.,Ltd.(“ShanghaiGuodong”),SinopharmGuodaYongshengPharmacy(Shanghai)Co.,Ltd.(“GuodaYongsheng”),GuodaPharmacyManchuriaCo.,Ltd.(“GuodaManchuria”),ZhejiangSinopharmPharmacyDongshanPharmacyCo.,Ltd.(“ZhejiangDongshan”),SinopharmHoldingGuodaPharmacyGuangzhouChainCo.,Ltd.(“GuodaGuangzhou”),TaishanSinopharmHoldingGuodaQunkangPharmacyChainStoreCo.,Ltd.(“GuodaTaishan”),GuodaPharmacy(Rizhao)Co.,Ltd.(“GuodaRizhao”),SinopharmHoldingGuodaPharmacyHulunBuirCo.,Ltd.(“GuodaHulunBuir”),SinopharmHoldingGuodaPharmacyBayannurCo.,Ltd.(“GuodaBayannur”),SinopharmHoldingBaiyiPharmacyGuangxiCo.,Ltd.(“BaiyiPharmacy”),SinopharmAccord(Guangzhou)MedicineCo.,Ltd.(“GuangzhouMedicine”),GuangxiGuodaPharmaceuticalConsultingChainCo.,Ltd.(“GuangxiConsulting”),LiaoningGuodaHealthPharmacyCo.,Ltd.(“LiaoningHealthPharmacy”),LiaoningHuludaoGuodaPharmacyCo.,Ltd.(“LiaoningHuludao”),ChangzhiWanminDrugStoreCo.,Ltd.(“ChangzhiWanmin”),ShanxiGuodaWanminChainClinicManagementCo.,Ltd.(“WanminChain”),GuodaWanminHuiminKangweiPharmacyLvliangCo.,Ltd.(“HuiminLvliang”),ShanghaiFumeiXuhuiPharmacyCo.,Ltd.(“FumeiXuhui”),JilinDonglongPharmaceuticalLogisticsCo.,Ltd.(“JilinDonglong”),ShanghaiPudongYanghetangTraditionalChineseMedicineClinicCo.,Ltd.(“PudongYanghetang”),YanjiXiangheMedicineCo.,Ltd.(“YanjiXianghe”),HebeiChengdaFangyuanMedicineChainCo.,Ltd.(“HebeiChengdaFangyuan”),ShandongChengdaFangyuanMedicineChainCo.,Ltd.(“ShandongChengdaFangyuan”),LiaoningChengdaFangyuanTechnicalTrainingSchool,andDalianZhengdaPharmaceuticalCo.,Ltd.(“DalianZhengda”),etc.

VNotestotheconsolidatedfinancialstatements

1.Cashandbankbalances

31December2021

31December202131December2020

Cashonhand

Cashonhand4,642,730.626,707,125.90
Cashatbanks4,728,869,491.735,398,406,132.09
Othercashbalances(1)392,646,858.59593,091,037.88

5,126,159,080.94

5,126,159,080.945,998,204,295.87
Including:Totalamountrestrictedforuseduetomortgage,pledgeorfreezing,etc.-66,956,993.60

(1)Asat31December2021,theGroup'sothercashbalanceincludes:RMB351,801,571.62(31December2020:RMB492,734,978.75)isdepositsforbankacceptancebills,whichisacertainamountofdepositpaidwhendrawingbankacceptancebills;RMB11,456,766.10(31December,2020:RMB27,465,331.50)ismedicalreservefundsforemergencymedicalsupplies,whichissupervisedbythebank;RMB29,388,520.87(31December,2020:RMB72,890,727.63.RMB66,956,993.60isfreezingbankdepositsduetolitigation,whichwasunfrozenin2021)istheotherrestrictedcashbalances.

(1)Asat31December2021,theGroup'sothercashbalanceincludes:RMB351,801,571.62(31December2020:RMB492,734,978.75)isdepositsforbankacceptancebills,whichisacertainamountofdepositpaidwhendrawingbankacceptancebills;RMB11,456,766.10(31December,2020:RMB27,465,331.50)ismedicalreservefundsforemergencymedicalsupplies,whichissupervisedbythebank;RMB29,388,520.87(31December,2020:RMB72,890,727.63.RMB66,956,993.60isfreezingbankdepositsduetolitigation,whichwasunfrozenin2021)istheotherrestrictedcashbalances.Asat31December2021and31December2020,theGrouphasnocashandbankbalancesdepositedabroad.

Asat31December2021and31December2020,theGrouphasnocashandbankbalancesdepositedabroad.Currentdepositsearninterestattheratebasedoncurrentdepositinterestrates.Maturitiesofshort-termtimedepositsrangefrom1monthto6monthsdependingonthefundarrangementsoftheGroup,andthedepositsearninterestattherespectivedepositrates.

2.Notesreceivable

Currentdepositsearninterestattheratebasedoncurrentdepositinterestrates.Maturitiesofshort-termtimedepositsrangefrom1monthto6monthsdependingonthefundarrangementsoftheGroup,andthedepositsearninterestattherespectivedepositrates.31December2021

31December202131December2020

Bankacceptancebills

Bankacceptancebills32,490,612.49-
Commercialacceptancebills647,705,768.08623,594,997.36
680,196,380.57623,594,997.36

Less:Baddebtprovisionfornotes

receivable

Less:Baddebtprovisionfornotesreceivable-1,479,520.32

680,196,380.57

680,196,380.57622,115,477.04

VNotestotheconsolidatedfinancialstatements(Continued)

2.Notesreceivable(Continued)

Thecarryingamountofnotesreceivablethataffectedthechangesinprovisionthisyearisasfollows:

Thecarryingamountofnotesreceivablethataffectedthechangesinprovisionthisyearisasfollows:

31December2021

31December2021
CarryingamountBaddebtprovisionsBookValue
AmountProportionAmountProportion

Itemsforwhichprovisionforbaddebtsisrecognisedbygroup(creditriskcharacteristics)

Itemsforwhichprovisionforbaddebtsisrecognisedbygroup(creditriskcharacteristics)680,196,380.57100%--680,196,380.57

680,196,380.57

680,196,380.57100%--680,196,380.57

31December2020

31December2020
CarryingamountBaddebtprovisionsBookValue
AmountProportionAmountProportion

Itemsforwhichprovisionforbaddebtsisrecognisedindividually

Itemsforwhichprovisionforbaddebtsisrecognisedindividually27,634,855.484.43%(1,479,520.32)5.35%26,155,335.16
Itemsforwhichprovisionforbaddebtsisrecognisedbygroup(creditriskcharacteristics)595,960,141.8895.57%--595,960,141.88

623,594,997.36

623,594,997.36100.00%(1,479,520.32)0.24%622,115,477.04

VNotestotheconsolidatedfinancialstatements(Continued)

2.Notesreceivable(Continued)

At31December2021,theGrouphadnoindividualprovisionforbaddebtsonnotesreceivable.

At31December2021,theGrouphadnoindividualprovisionforbaddebtsonnotesreceivable.At31December2020,notesreceivablethatareindividuallyassessedforprovisionsareasfollows:

At31December2020,notesreceivablethatareindividuallyassessedforprovisionsareasfollows:

Carryingamount

CarryingamountBaddebtprovisionExpectedcreditlossrateAssessmentforimpairment

ClientA

ClientA25,673,156.00(1,471,457.31)5.73%Thedrawerhashistoricalcreditdefaults;thenotesreceivableareexpectedtobeatriskofreclaim.

ClientB

ClientB1,961,699.48(8,063.01)0.41%Thedrawerhashistoricalcreditdefaults;thenotesreceivableareexpectedtobeatriskofreclaim.

27,634,855.48

27,634,855.48(1,479,520.32)

Changesinprovisionforbaddebtsonnotesreceivablearepresentedasfollows:

Changesinprovisionforbaddebtsonnotesreceivablearepresentedasfollows:

Openingbalance

OpeningbalanceIncreaseintheyearReversalintheyearClosingbalance

2021

20211,479,520.32-(1,479,520.32)-

2020

2020-1,479,520.32-1,479,520.32

Asat31December2021and31December2020,theGrouphadnopledgednotesreceivable.

Asat31December2021and31December2020,theGrouphadnopledgednotesreceivable.NotesreceivableendorsedordiscountedbytheGrouptootherpartieswhichwerenotyetdueat31December2021and31December2020areasfollows:

NotesreceivableendorsedordiscountedbytheGrouptootherpartieswhichwerenotyetdueat31December2021and31December2020areasfollows:

31December2021

31December202131December2020
DerecognisedNotderecognisedDerecognisedNotderecognised

Bankacceptance

bills

Bankacceptancebills-31,886,681.19--
Commercialacceptancebills---4,095,283.92

31,886,681.19

31,886,681.194,095,283.92

VNotestotheconsolidatedfinancialstatements(Continued)

2.Notesreceivable(Continued)

Asat31December2021and31December2020,notesreceivablethatwereconvertedintoaccountsreceivableduetothedrawer’sinabilitytosettlethenotesonthematuritydateareasfollows:

Asat31December2021and31December2020,notesreceivablethatwereconvertedintoaccountsreceivableduetothedrawer’sinabilitytosettlethenotesonthematuritydateareasfollows:

31December2021

31December202131December2020

Commercialacceptancebills

Commercialacceptancebills8,647,245.812,276,824.52

3.Accountsreceivable

Thecreditperiodforaccountsreceivablenormallyis3months.Accountsreceivableareinterest-free.Anaginganalysisofaccountsreceivableisasfollows:

31December202131December2020

Within1year

Within1year15,860,578,973.0213,575,070,031.31
1to2years181,098,453.86263,187,281.70
2to3years26,520,111.6231,013,755.63
Over3years27,828,171.6423,213,398.71
16,096,025,710.1413,892,484,467.35

Less:Baddebtprovisionforaccountsreceivable

Less:Baddebtprovisionforaccountsreceivable131,422,364.2392,513,453.13

15,964,603,345.91

15,964,603,345.9113,799,971,014.22

VNotestotheconsolidatedfinancialstatements(Continued)

3.Accountsreceivable(Continued)

Thecarryingamountofaccountsreceivablethataffectedthechangesinprovisionthisyearisasfollows:

Thecarryingamountofaccountsreceivablethataffectedthechangesinprovisionthisyearisasfollows:

31December2021

31December2021
CarryingamountBaddebtprovisionsBookvalue
AmountProportionAmountProportion

Itemsforwhichprovisionforbaddebtsisrecognisedindividually

Itemsforwhichprovisionforbaddebtsisrecognisedindividually1,154,059,084.627.17%(78,449,701.36)6.80%1,075,609,383.26
Itemsforwhichprovisionforbaddebtsisrecognisedbygroup(creditriskcharacteristics)14,941,966,625.5292.83%(52,972,662.87)0.35%14,888,993,962.65

16,096,025,710.14

16,096,025,710.14100.00%(131,422,364.23)0.82%15,964,603,345.91

31December2020

31December2020
CarryingamountBaddebtprovisionsBookvalue
AmountProportionAmountProportion

Itemsforwhichprovisionforbaddebtsisrecognisedindividually

Itemsforwhichprovisionforbaddebtsisrecognisedindividually674,370,776.754.85%(29,223,931.45)4.33%645,146,845.30
Itemsforwhichprovisionforbaddebtsisrecognisedbygroup(creditriskcharacteristics)13,218,113,690.6095.15%(63,289,521.68)0.48%13,154,824,168.92

13,892,484,467.35

13,892,484,467.35100.00%(92,513,453.13)0.67%13,799,971,014.22

VNotestotheconsolidatedfinancialstatements(Continued)

3.Accountsreceivable(Continued)

At31December2021,accountsreceivablethatareindividuallysignificantandindividuallyassessedforprovisionsareasfollows:

At31December2021,accountsreceivablethatareindividuallysignificantandindividuallyassessedforprovisionsareasfollows:

Carryingamount

CarryingamountBaddebtprovisionExpectedcreditlossrateAssessmentforimpairment

Receivableofmedicalinsurance

Receivableofmedicalinsurance831,256,560.02(8,047,617.79)0.97%Thereceivableofmedicalinsurancehaslower-tierdefaultrisk.

ClientA

ClientA50,201,932.55(50,201,932.55)100.00%Thedebtorhadirregularoperationssubjecttoseverefinancialdifficulties,andisrelatedtomultiplelawsuits,withlower-tierrecoverability.
ClientB11,559,178.29(11,559,178.29)100.00%Thedebtorhadirregularoperationssubjecttoseverefinancialdifficulties,andisrelatedtomultiplelawsuits,withlower-tierrecoverability.
ClientC2,447,976.74(2,447,976.74)100.00%Thedebtorhadirregularoperationssubjecttoseverefinancialdifficulties,andisinbankruptcyliquidation.
Others258,593,437.02(6,192,995.99)2.39%Partofthereceivablestakeslongerthanusualtorecover,andhasriskofrecoverability.

1,154,059,084.62

1,154,059,084.62(78,449,701.36)

VNotestotheconsolidatedfinancialstatements(Continued)

3.Accountsreceivable(Continued)

At31December2020,accountsreceivablethatwereindividuallysignificantandindividuallyassessedforprovisionsareasfollows:

At31December2020,accountsreceivablethatwereindividuallysignificantandindividuallyassessedforprovisionsareasfollows:

Carryingamount

CarryingamountBaddebtprovisionExpectedcreditlossrateAssessmentforimpairment

Receivableofmedicalinsurance

Receivableofmedicalinsurance488,783,757.67(6,626,589.08)1.36%Thereceivableofmedicalinsurancehaslower-tierdefaultrisk.
ClientA11,559,178.29(11,559,178.29)100.00%Thedebtorhadirregularoperationssubjecttoseverefinancialdifficulties,andrelatedtomultiplelawsuits,withlower-tierrecoverability.
ClientB2,447,976.74(2,447,976.74)100.00%Thedebtorhadirregularoperationssubjecttoseverefinancialdifficulties,andhasbeenplacedonanationallistofdefaulters,withahighriskofbankruptcyorfinancialrestructuring.
ClientC2,365,253.03(2,365,253.03)100.00%Thedebtorhadirregularoperationssubjecttoseverefinancialdifficulties,andhasbeenplacedonanationallistofdefaulters,withahighriskofgoingbankruptcyorfinancialrestructuring.
Others169,214,611.02(6,224,934.31)3.68%Partofthereceivablestakeslongerthanusualtorecover,andhasriskofrecoverability

674,370,776.75

674,370,776.75(29,223,931.45)

TheaccountsreceivableforwhichtheGrouprecognisedprovisionforbaddebtsbycreditriskcharacteristicsarepresentedasfollows:

TheaccountsreceivableforwhichtheGrouprecognisedprovisionforbaddebtsbycreditriskcharacteristicsarepresentedasfollows:

31December2021

31December202131December2020
EstimatedgrosscarryingamountatdefaultExpectedcreditlossratioLifetimeexpectedcreditlossEstimatedgrosscarryingamountatdefaultExpectedcreditlossratioLifetimeexpectedcreditloss

Within1year

Within1year14,735,394,393.030.24%(36,032,738.61)12,930,648,987.230.20%(26,043,994.99)
1to2years180,285,029.675.46%(9,848,846.12)257,905,763.2011.04%(28,463,763.63)
2to3years20,156,291.2922.24%(4,482,412.04)21,112,155.4717.39%(3,671,293.61)
Over3years6,130,911.5342.55%(2,608,666.10)8,446,784.7060.50%(5,110,469.45)

14,941,966,625.52

14,941,966,625.52(52,972,662.87)13,218,113,690.60(63,289,521.68)

VNotestotheconsolidatedfinancialstatements(Continued)

3.Accountsreceivable(Continued)

Changesinprovisionforbaddebtsarepresentedasfollows:

Openingbalance

OpeningbalanceReversalofwrite-offinpreviousyearsIncreasesintheyearIncreasesinmergerReversalintheyearWrite-offintheyearClosingbalance

2021

202192,513,453.13-58,049,541.91183,384.10(14,558,622.63)(4,765,392.28)131,422,364.23

2020

202045,916,730.47167,797.8729,942,655.0825,219,814.78(8,733,545.07)-92,513,453.13

Accountsreceivablewrittenoffin2020areanalysedbelow:

Accountsreceivablewrittenoffin2020areanalysedbelow:

Natureofthe

receivable

NatureofthereceivableAmountReasonWrite-offproceduresRelatedpartytransactionornot

ClientA

ClientAPaymentforgoods2,161,120.00Non-recoverableThewrite-offprocedureshavebeencompletedinaccordancewiththeinternalrulesandregulations.No
ClientBPaymentforgoods1,137,547.24Non-recoverableThewrite-offprocedureshavebeencompletedinaccordancewiththeinternalrulesandregulations.No
ClientCPaymentforgoods862,818.55Non-recoverableThewrite-offprocedureshavebeencompletedinaccordancewiththeinternalrulesandregulations.No
ClientDPaymentforgoods356,510.26Non-recoverableThewrite-offprocedureshavebeencompletedinaccordancewiththeinternalrulesandregulations.No
OthersPaymentforgoods247,396.23Non-recoverableThewrite-offprocedureshavebeencompletedinaccordancewiththeinternalrulesandregulations.No

4,765,392.28

4,765,392.28Accountsreceivablewrittenoffin2020werenil.

Accountsreceivablewrittenoffin2020werenil.Asat31December2021,thefivelargestaccountsreceivableanalysedbycustomeraresummarisedbelow:

Asat31December2021,thefivelargestaccountsreceivableanalysedbycustomeraresummarisedbelow:

Amount

AmountBaddebtprovisionamount%ofthetotalaccountsreceivable

Top1accountreceivable

Top1accountreceivable222,417,747.86(1,369,997.89)1.38%
Top2accountreceivable221,550,040.23(2,513,061.33)1.38%
Top3accountreceivable170,639,289.87(131,398.98)1.06%
Top4accountreceivable162,489,077.59(2,071,467.64)1.01%
Top5accountreceivable121,263,417.42(986,163.48)0.75%

898,359,572.97

898,359,572.97(7,072,089.32)5.58%

VNotestotheconsolidatedfinancialstatements(Continued)

3.Accountsreceivable(Continued)

Asat31December2020,thefivelargestaccountsreceivableanalysedbycustomeraresummarisedbelow:

Asat31December2020,thefivelargestaccountsreceivableanalysedbycustomeraresummarisedbelow:

Amount

AmountBaddebtprovisionamount%ofthetotalaccountsreceivable

Top1accountreceivable

Top1accountreceivable204,532,139.94(895,128.97)1.47%
Top2accountreceivable197,835,785.38(1,600,707.66)1.42%
Top3accountreceivable169,474,358.70(10,782.57)1.22%
Top4accountreceivable161,218,733.31(529,704.61)1.16%
Top5accountreceivable153,017,656.79(558,855.24)1.10%

886,078,674.12

886,078,674.12(3,595,179.05)6.37%

In2021,theGroupfactoredaportionofaccountsreceivableatamortisedcosttofinancialinstitutions.TheamountofaccountsreceivablederecognisedwasRMB3,529,795,916.53(2020:

RMB5,131,305,168.48),andtheamountoflossrecognisedthroughinvestmentincomewasRMB47,404,044.48(2020:RMB76,142,835.36).

4.Receivablesfinancing

In2021,theGroupfactoredaportionofaccountsreceivableatamortisedcosttofinancialinstitutions.TheamountofaccountsreceivablederecognisedwasRMB3,529,795,916.53(2020:

RMB5,131,305,168.48),andtheamountoflossrecognisedthroughinvestmentincomewasRMB47,404,044.48(2020:RMB76,142,835.36).31December2021

31December202131December2020

Bankacceptancebills

Bankacceptancebills1,027,226,940.211,404,987,700.38

Thepledgedreceivablesfinancingsareasfollows:

Thepledgedreceivablesfinancingsareasfollows:

31December2021

31December202131December2020

Bankacceptancebills

Bankacceptancebills-2,620,000.00

ReceivablesfinancingendorsedordiscountedbytheGrouptootherpartieswhichwerenotyetdueat31December2021and31December2020areasfollows:

ReceivablesfinancingendorsedordiscountedbytheGrouptootherpartieswhichwerenotyetdueat31December2021and31December2020areasfollows:

31December2021

31December202131December2020
DerecognisedNotderecognisedDerecognisedNotderecognised

Bankacceptancebills

Bankacceptancebills2,206,355,117.26-1,613,842,670.80-

Asat31December2021and31December2020,noreceivablesfinancingwereconvertedintoaccountsreceivableduetotheticketissuer’sinabilitytosettlethenotesonthematuritydate.

VNotestotheconsolidatedfinancialstatements(Continued)

5.Advancestosuppliers

Theageofadvancestosuppliersisanalysedbelow:

Theageofadvancestosuppliersisanalysedbelow:

31December2021

31December202131December2020
Amount%oftotalbalanceAmount%oftotalbalance

Within1year

Within1year519,225,204.0999.67%480,215,111.4299.98%
1to2years1,705,341.220.33%42,225.290.01%
2to3years--56,238.000.01%
Over3years----

520,930,545.31

520,930,545.31100.00%480,313,574.71100.00%

Asat31December2021,thefivelargestadvancestosuppliersanalysedbycustomeraresummarisedbelow:

Asat31December2021,thefivelargestadvancestosuppliersanalysedbycustomeraresummarisedbelow:

Amount

AmountProportionoftotalbalance

Totalamountofthefivelargestadvancestosuppliers

Totalamountofthefivelargestadvancestosuppliers105,978,569.7120.34%

Asat31December2020,thefivelargestadvancestosuppliersanalysedbycustomeraresummarisedbelow:

Asat31December2020,thefivelargestadvancestosuppliersanalysedbycustomeraresummarisedbelow:

Amount

AmountProportionoftotalbalance

Totalamountofthefivelargestadvancestosuppliers

Totalamountofthefivelargestadvancestosuppliers41,313,738.828.60%

VNotestotheconsolidatedfinancialstatements(Continued)

6.Otherreceivables

31December2021

31December202131December2020

Otherreceivables

Otherreceivables718,089,129.10535,228,747.69

Theageofotherreceivablesisanalysedbelow:

Theageofotherreceivablesisanalysedbelow:

31December2021

31December202131December2020

Within1year

Within1year641,647,280.72480,713,606.60
1to2years35,719,505.9841,156,242.37
2to3years30,667,461.8357,236,236.46
Over3years78,599,676.6425,311,879.53
786,633,925.17604,417,964.96

Less:Baddebtprovisionforotherreceivables

Less:Baddebtprovisionforotherreceivables68,544,796.0769,189,217.27

718,089,129.10

718,089,129.10535,228,747.69

VNotestotheconsolidatedfinancialstatements(Continued)

6.Otherreceivables(Continued)

Categoriesofotherreceivablesbynatureareasfollows:

Categoriesofotherreceivablesbynatureareasfollows:

31December2021

31December202131December2020

Deposits

Deposits294,949,777.43287,130,364.44
Pendingrefunds129,688,000.00-
Receivableofpricereductioncompensationandpurchasingrebates77,286,467.7185,263,225.16
Receivableofthepharmaceuticalelectronictradingandotherplatforms67,123,290.0960,267,511.03
Entrustedborrowings46,334,222.2446,334,222.24
Pettycashadvancetoemployees20,107,746.3622,994,684.93
Receivableofequitytransactions8,980,000.008,980,000.00
Receivableduefromrelatedparties2,412,959.702,867,594.20
Others139,751,461.6490,580,362.96
786,633,925.17604,417,964.96

Less:Baddebtprovisionforotherreceivables

Less:Baddebtprovisionforotherreceivables68,544,796.0769,189,217.27

718,089,129.10

718,089,129.10535,228,747.69

VNotestotheconsolidatedfinancialstatements(Continued)

6.Otherreceivables(Continued)

Changesinbaddebtprovisionforthe12-monthexpectedcreditlossesandlifetimeexpectedcreditlossesonotherreceivablesareasfollows:

2021

Stage112-monthexpectedcreditlosses

Stage112-monthexpectedcreditlossesStage2LifetimeexpectedcreditlossesStage3Credit-impairedfinancialassets(Lifetimeexpectedcreditlosses)Total

Balanceat1January2021

Balanceat1January2021-7,305,149.9061,884,067.3769,189,217.27
Balanceat1January2021duringtheperiod----
--TransfertophaseII----
--TransfertophaseIII----
--TransfertophaseIII----
--BacktophaseII----
--BacktophaseI----
Provisionsduringtheperiod-3,402,082.286,248,210.579,650,292.85
Reversalduringtheperiod-(7,815,244.23)(1,288,514.82)(9,103,759.05)
Transferoutduringtheperiod----
Write-offduringtheperiod--(1,190,955.00)(1,190,955.00)
Additionduetocombination--
Reversalofwrite-offinpreviousyears----

Balanceat31December2021

Balanceat31December2021-2,891,987.9565,652,808.1268,544,796.07

VNotestotheconsolidatedfinancialstatements(Continued)

6.Otherreceivables(Continued)

Changesinbaddebtprovisionforthe12-monthexpectedcreditlossesandlifetimeexpectedcreditlossesonotherreceivablesareasfollows:(continued)2020

Stage1

12-monthexpectedcreditlosses

Stage112-monthexpectedcreditlossesStage2LifetimeexpectedcreditlossesStage3Credit-impairedfinancialassets(Lifetimeexpectedcreditlosses)Total

Balanceat1January2020

Balanceat1January2020-7,107,131.4157,083,427.3164,190,558.72
Balanceat1January2020duringtheperiod----
--TransfertophaseII----
--TransfertophaseIII----
--TransfertophaseIII----
--BacktophaseI----
Provisionsduringtheperiod-2,577,812.483,656,500.596,234,313.07
Reversalduringtheperiod-(2,904,835.82)(42,787.50)(2,947,623.32)
Write-backduringtheperiod----
Write-offduringtheperiod-(124,000.00)(4,028.03)(128,028.03)
Additionduetocombination-649,041.831,190,955.001,839,996.83
Reversalofwrite-offinpreviousyears----

Balanceat31December2020

Balanceat31December2020-7,305,149.9061,884,067.3769,189,217.27

Thebaddebtprovisionamountofotherreceivablesin2021wasRMB9,650,292.85(2020:

RMB6,234,313.07),withtherecoveredorreversedamountofRMB9,103,759.05(2020:

RMB2,947,623.32).Thewrite-offamountofotherreceivablesin2021wasRMB1,190,955.00(2020:RMB128,028.03).

VNotestotheconsolidatedfinancialstatements(Continued)

6.Otherreceivables(Continued)

Asat31December2021,the5partiesthatowedthelargestamountsofotherreceivablebalancesareanalysedbelow:

Asat31December2021,the5partiesthatowedthelargestamountsofotherreceivablebalancesareanalysedbelow:

Amount

Amount%oftotalamountNatureAgeProvisionofbaddebts

OctapharmaAG(1)

OctapharmaAG(1)129,688,000.0016.49%AmounttobereturnedWithin1year-
GuangdongPharmaceuticalelectronictradingplatform57,211,999.387.27%RepaymentnotyetclearedfromthepharmaceuticaltradingplatformWithin1year-
SinopharmGroupZhijun(Suzhou)PharmaceuticalCo.,Ltd.(“ZhijunSuzhou”)(1)46,334,222.245.89%EntrustedborrowingsOver3years46,334,222.24
ShenzhenCenterforDiseaseControlandPrevention44,509,322.635.66%VaccinedistributionWithin1year-
TCM-IntegratedHospitalofSouthernMedicalUniversity20,000,000.002.54%DepositfromalogisticsextensionserviceprojectOver3years-

297,743,544.25

297,743,544.2537.85%46,334,222.24

Asat31December2020,the5partiesthatowedthelargestamountsofotherreceivablebalancesareanalysedbelow:

Asat31December2020,the5partiesthatowedthelargestamountsofotherreceivablebalancesareanalysedbelow:

Amount

Amount%oftotalamountNatureAgeProvisionofbaddebts

GuangdongPharmaceuticalelectronictradingplatform

GuangdongPharmaceuticalelectronictradingplatform46,564,683.737.70%RepaymentnotyetclearedfromthepharmaceuticaltradingplatformWithin1year-
ZhijunSuzhou46,334,222.247.67%Entrustedborrowings2to3years46,334,222.24
AstraZeneca(Wuxi)TradingCo.,Ltd.22,486,430.153.72%ReceivableofpricereductioncompensationandpurchasingrebatesWithin1year-
TCM-IntegratedHospitalofSouthernMedicalUniversity20,000,000.003.31%DepositfromalogisticsextensionserviceprojectOver3years-
ChangchunSocietyMedicalInsuranceManagementBureau15,552,920.922.57%MedicalinsurancedepositWithin1year-

150,938,257.04

150,938,257.0424.97%46,334,222.24

(1)ThepaymentwasmadeinadvancetoOctapharmaAGofSwitzerlandforthepurchaseofhuman

albumin.Duetotheshortageofsupply,bothagreedtoterminatetheoriginalcontractandreturntheamount.TheamountwasrefundedinJanuary2022.

(2)DuetothepooroperationofZhijunSuzhou,thesolvencyoftheloandecreasedandthecreditrisk

increased,theCompanymadeafullprovisionforbaddebtsonthisentrustedloanoutofprudence.

VNotestotheconsolidatedfinancialstatements(Continued)

6.Otherreceivables(Continued)

Asat31December2020,theamountofgovernmentgrantsreceivableisanalysedbelow:

Asat31December2020,theamountofgovernmentgrantsreceivableisanalysedbelow:

Grantsprogram

GrantsprogramAmountAgeEstimatedcollectiontime,amountandbasis

ShanghaiPudong

FinanceBureau

ShanghaiPudongFinanceBureauFinancialsubsidy1,260,000.00Within1yearTheamountofgovernmentgrantsreceivablehasbeenapprovedandexpectedtobefullyreceivedin2022.

Therewerenogovernmentgrantsreceivablein2020.

7.Inventories

Therewerenogovernmentgrantsreceivablein2020.Inventoriesbycategoryareanalysedbelow:

Inventoriesbycategoryareanalysedbelow:

31December2021

31December202131December2020
BookvalueProvisionNetbookvalueBookvalueProvisionNetbookvalue

Rawmaterials

Rawmaterials3,771,510.04-3,771,510.041,959,948.73-1,959,948.73
Finishedgoods7,623,665,381.94(11,100,942.38)7,612,564,439.566,292,866,195.61(12,997,334.35)6,279,868,861.26
Workinprogress268,702.16-268,702.16244,341.19-244,341.19
Lowcostconsumables4,936,943.32-4,936,943.322,937,523.28-2,937,523.28

7,632,642,537.46

7,632,642,537.46(11,100,942.38)7,621,541,595.086,298,008,008.81(12,997,334.35)6,285,010,674.46

Provisionforinventoriesisanalysedbelow:

31December20211January2021IncreasesDecreases31December2021
CurrentAdditionduetocombinationResaleWrite-offOthers

Finishedgoods

Finishedgoods12,997,334.359,558,490.52314,857.50(5,569,754.67)(2,217,220.21)(3,982,765.11)11,100,942.38

31December2020

31December20201January2020IncreasesDecreases31December2020
CurrentAdditionduetocombinationResaleOthers

Finishedgoods

Finishedgoods8,902,200.407,054,810.15474,033.43(1,458,197.19)(1,975,512.44)12,997,334.35

In2021,duetothesalesofgoodsinstock,provisionforinventorieswasresoldbyRMB5,569,754.67(2020:RMB1,458,197.19).

VNotestotheconsolidatedfinancialstatements(Continued)

8.Contractassets

31December2021

31December202131December2020
BookvalueProvisionNetbookvalueBookvalueProvisionNetbookvalue

Medicaldevicesandequipment’swarranty

Medicaldevicesandequipment’swarranty29,571,543.27(510,383.75)29,061,159.5215,195,530.95(17,799.31)15,177,731.64

TheGroupsellsmedicaldevicesandequipmenttocustomersandprovidesrelevantinstallationservices,whichconstitutesasingleperformanceobligation.AfterthedeliveryofmedicaldevicesandequipmentbytheGroupandacceptancebycustomers,thecontrolrightsofgoodsaretransferred.TheGrouprecognisestherelevantincomeandtransferspartofthecontractconsiderationtoreceivables,andtheotherpartsareformedascontractassets.Aftertheequipmentisinstalledandtheagreedwarrantyperiodends,thecontractassetswillformanunconditionalrightofcollectionandbetransferredintoreceivables.

TheGroupsellsmedicaldevicesandequipmenttocustomersandprovidesrelevantinstallationservices,whichconstitutesasingleperformanceobligation.AfterthedeliveryofmedicaldevicesandequipmentbytheGroupandacceptancebycustomers,thecontrolrightsofgoodsaretransferred.TheGrouprecognisestherelevantincomeandtransferspartofthecontractconsiderationtoreceivables,andtheotherpartsareformedascontractassets.Aftertheequipmentisinstalledandtheagreedwarrantyperiodends,thecontractassetswillformanunconditionalrightofcollectionandbetransferredintoreceivables.
Changesinprovisionforcontractassetsarepresentedasfollows:

Openingbalance

OpeningbalanceIncreaseintheyearReversalintheyearClosingbalance

2021

202117,799.31501,422.56(8,838.12)510,383.75

2020

2020-17,799.31-17,799.31

Anageanalysisofcontractassetswithprovisionforimpairmentareasfollows:

Anageanalysisofcontractassetswithprovisionforimpairmentareasfollows:
31December202131December2020
EstimateddefaultamountExpectedcreditlossrateExpectedcreditlossinentirelifetimeEstimateddefaultamountExpectedcreditlossrateExpectedcreditlossinentirelifetime

Within1year

Within1year24,362,618.020.76%185,529.2915,195,530.950.12%17,799.31
1to2years5,208,925.256.24%324,854.46---

29,571,543.27

29,571,543.271.73%510,383.7515,195,530.950.12%17,799.31

9.Othercurrentassets

31December202131December2020

VATtaxcredit

VATtaxcredit155,985,552.00114,251,111.76
CITtobededucted3,817,409.165,981,268.15
Others804,394.50850,483.54

160,607,355.66

160,607,355.66121,082,863.45

VNotestotheconsolidatedfinancialstatements(Continued)

10.Long-termequityinvestments

2021

Investee

Investee1January2021Changesintheyear31December2021Amountofprovisionforimpairment
Additional/reducedInvestmentProfitorlossundertheequitymethodChangesinothercomprehensiveincomeOtherchangesinequityCashdividendsorprofitsdeclaredfordistribution

ShenzhenMainLuckPharmaceuticalInc.(“MainLuckPharmaceutical”)(a)

ShenzhenMainLuckPharmaceuticalInc.(“MainLuckPharmaceutical”)(a)322,696,745.87-88,173,434.93--(70,380,000.00)340,490,180.80-
ShanghaiBeiyiGuodaPharmaceuticalCo.Ltd.(“ShanghaiBeiyi”)(b)11,190,188.07-1,249,450.80--(1,154,400.00)11,285,238.87-
ShanghaiLiyiPharmacyCo.,Ltd.(“ShanghaiLiyi”)(c)1,147,948.30-226,367.96--(293,232.69)1,081,083.57-
ShanghaiRenbeiPharmacyCo.,Ltd.(“ShanghaiRenbei”)(d)2,465,103.9238,421.50---2,503,525.42-
DongyuanAccordPharmaceuticalChainCo.,Ltd.(“DongyuanAccord”)(e)396,638.32-----396,638.32(396,638.32)
SinopharmJienuoMedicalTreatmentServiceGuangdongCo.,Ltd.(“GuangdongJienuo”)(f)5,225,570.12(871,691.80)---4,353,878.32-
GuangdongJianhuiConstructionInvestmentManagementCo.,Ltd.(“GuangdongJianhui”)(g)8,000,000.00-----8,000,000.00-
ZhijunSuzhou(h)1,857,279.52-----1,857,279.52(1,857,279.52)
SinopharmGroupZhijun(Shenzhen)PharmaceuticalCo.,Ltd.(“ZhijunMedicine”)(i)425,557,825.11-110,083,777.09--(39,098,661.04)496,542,941.16-
ShenzhenZhijunPharmaceuticalTradeCo.,Ltd.(“ZhijunTrade”)(i)10,408,675.18-498,196.67--(529,453.96)10,377,417.89-
SinopharmGroupZhijun(Shenzhen)PingShanPharmaceuticalCo.,Ltd.(“ZhijunPingshan”)(i)176,566,795.90-41,892,944.28--(34,553,476.37)183,906,263.81-
ShanghaiShyndecPharmaceuticalCo.,Ltd.(“ShyndecPharma”)(i)1,323,760,775.52-92,516,109.6741,192.92(701,946.29)(16,714,220.20)1,398,901,911.62-
Jialong(Hainan)HealthManagementGroupCo.,Ltd(“JialongHainan”)(j)2,800,000.00(409,894.72)---2,390,105.28-

2,289,273,545.83

2,289,273,545.832,800,000.00333,397,116.3841,192.92(701,946.29)(162,723,444.26)2,462,086,464.58(2,253,917.84)

VNotestotheconsolidatedfinancialstatements(Continued)

9.Long-termequityinvestments(Continued)

2020

Investee

Investee1January2020Changesintheyear31December2020Amountofprovisionforimpairment
Additional/reducedInvestmentProfitorlossundertheequitymethodChangesinothercomprehensiveincomeOtherchangesinequityCashdividendsorprofitsdeclaredfordistribution

MainLuckPharmaceutical(a)

MainLuckPharmaceutical(a)294,469,367.27-91,569,378.60--(63,342,000.00)322,696,745.87-
ShanghaiBeiyi(b)9,887,944.98-1,302,243.09---11,190,188.07-
ShanghaiLiyi(c)1,039,039.88-108,908.42---1,147,948.30-
ShanghaiRenbei(d)1,800,000.00665,103.92---2,465,103.92-
DongyuanAccord(e)396,638.32-----396,638.32(396,638.32)
GuangdongJienuo(f)6,453,679.96(1,228,109.84)---5,225,570.12-
GuangdongJianhui(g)1,854,647.816,000,000.00145,352.19---8,000,000.00-
ZhijunSuzhou(h)1,857,279.52-----1,857,279.52(1,857,279.52)
ZhijunMedicine(i)400,578,574.68-78,197,322.08--(53,218,071.65)425,557,825.11-
ZhijunTrade(i)10,275,257.61-1,176,564.36--(1,043,146.79)10,408,675.18-
ZhijunPingshan(i)120,878,018.74-76,785,503.04--(21,096,725.88)176,566,795.90-
ShyndecPharma(i)1,235,240,098.79-105,623,439.795,332.87(393,875.73)(16,714,220.20)1,323,760,775.52-
ShanghaidingqunEnterpriseManagementConsultingCo.,Ltd.(“ShanghaiDingqun”)(j)22,637,781.16(22,637,781.16)------

2,107,368,328.72

2,107,368,328.72(16,637,781.16)354,345,705.655,332.87(393,875.73)(155,414,164.52)2,289,273,545.83(2,253,917.84)

VNotestotheconsolidatedfinancialstatements(Continued)

9.Long-termequityinvestments(Continued)

Provisionforimpairmentoflong-termequityinvestments:

2021

1January2021

1January2021IncreaseDecrease31December2021

ZhijunSuzhou(h)

ZhijunSuzhou(h)1,857,279.52--1,857,279.52
DongyuanAccord(e)396,638.32--396,638.32

2,253,917.84

2,253,917.84--2,253,917.84

2020

1January2020IncreaseDecrease31December2020

ZhijunSuzhou(h)

ZhijunSuzhou(h)1,857,279.52--1,857,279.52
DongyuanAccord(e)396,638.32--396,638.32

2,253,917.84

2,253,917.84--2,253,917.84

(a)On4July1990,theGroup,MercianKabushikiKaishaandMainLifeCo.,Ltd.jointlyestablished

MainLuckPharmaceutical,subscribing35.19%,34.15%and30.66%ofshareholdings,respectively.Accordingtothearticlesofassociation,theboardofdirectorsofMainLuckPharmaceuticalconsistedofsixdirectors,ofwhichtwowereappointedbytheGroup.TheGroupowns33.33%ofvotingrights.Thevotingrightoftheresolutionsoftheboardofdirectorsisonepersonandonevote.Exceptfortheamendmentandsupplementofthearticlesofassociation,thesuspensionanddissolutionoftheenterprise,theincrease,transferoradjustmentoftheregisteredcapitaloftheenterprise,theassetmortgageoftheenterprise,themergeranddivisionoftheenterprisewithothereconomicorganizationsandthechangeoforganizationalform,otherresolutionsoftheboardofdirectorsmustbeadoptedbymorethantwo-thirdsofthedirectorsormorethanhalfofthedirectors.Therefore,theGrouphadsignificantinfluenceoverMainLuckPharmaceutical,andwasconsideredasanassociateoftheGroup.(b)On26July1994,theGroupjointlyestablishedShanghaiBeiyiwithShanghaiBeiyi(Group)Co.,

Ltd.andeightnaturalpersonsincludingFuchunZhu,withtheirsharepercentagesbeing26.00%,

26.00%and48.00%.Accordingtothearticlesofassociation,theboardofdirectorsofShanghaiBeiyiconsistedoffivedirectors,ofwhichtwowereappointedbytheGroup.TheGroupowns

40.00%ofvotingrights.Thevotingrightofresolutionsoftheboardofdirectorsisonevoteforoneperson,andallresolutionsoftheboardofdirectorsarepassedbymorethanhalfofalldirectors.Therefore,theGrouphadsignificantinfluenceoverShanghaiBeiyi,andwasconsideredasanassociateoftheGroup.

VNotestotheconsolidatedfinancialstatements(Continued)

9.Long-termequityinvestments(Continued)(c)On25November2003,theGroupjointlyestablishedShanghaiLiyiwithShanghaiPudongDistrict

CentralHospitalandShanghaiLiyiTechnologyCo.,Ltd.,withthesharepercentagesbeing35.00%,

35.00%and30.00%,respectively.AccordingtotheArticlesofAssociation,theboardofdirectorsofShanghaiLiyiconsistedoffivedirectors,ofwhichtwowereappointedbytheGroup,accountingfor

40.00%ofvotingrights.Thevotingrightofresolutionsoftheboardofdirectorsisonevoteforoneperson,andallresolutionsoftheboardofdirectorsarepassedbymorethanhalfofalldirectors.Therefore,theGrouphadsignificantinfluenceoverShanghaiLiyi,andthus,itwasconsideredasanassociateoftheGroup.(d)On5March2019,theGroupacquired30.00%sharesinShanghaiRenbei.Accordingtothe

ArticlesofAssociation,theboardofdirectorsofShanghaiRenbeiwascomposedofthreedirectors,oneofwhomwasappointedbytheGroup,accountingfor33.33%ofvotingrights.Thevotingrightofresolutionsoftheboardofdirectorsisonevoteforoneperson,andallresolutionsoftheboardofdirectorsarepassedbymorethanhalfofalldirectors.Theresolutiononthechangeofseniormanagersmadeatthemeetingoftheboardofdirectorsshallbeunanimouslyadoptedbyalldirectors.Therefore,theGrouphassignificantinfluenceoverShanghaiRenbei,andthus,itisconsideredasanassociateoftheGroup.(e)OnJune16,1999,theGroupacquired45.00%sharesofDongyuanCongyi.Accordingtothe

articlesofassociation,theboardofdirectorsofDongyuanconsensusiscomposedoffivedirectors,twoofwhomareappointedbythegroup,accountingfor40.00%ofthevotingrights.Thevotingrightofresolutionsoftheboardofdirectorsisonevoteforoneperson,andallresolutionsoftheboardofdirectorsarepassedbymorethanhalfofalldirectors.Therefore,thegrouphasasignificantimpactonDongyuanconsensus,whichisanassociateofthegroup.In2007,DongyuanAccord,anassociateoftheGroup,operatedinpoorconditionsanditsfutureoperationwouldbesignificantlyuncertain,sotheGroupmadeafullprovisionforimpairmentofthelong-termequityinvestmentonit.(f)On23February2016,theGroupjointlyestablishedGuangdongJienuowithSinopharmJienuoMedicalTreatmentServiceCo.,Ltd.andGuangzhouJinluoInvestmentDevelopmentCo.,Ltd.,withthesharepercentagesbeing29.00%,51.00%and20.00%,respectively.AccordingtotheArticlesofAssociation,theboardofdirectorsofGuangdongJienuowascomposedoffivedirectors,oneofwhomwasappointedbytheGroup,accountingfor20.00%ofvotingrights.Thevotingrightofresolutionsoftheboardofdirectorsisonevoteforoneperson,andallresolutionsoftheboardofdirectorsarepassedbymorethanhalfofalldirectors.Therefore,theGrouphassignificantinfluenceoverGuangdongJienuo,andthus,itisconsideredasanassociateoftheGroup.On25July2020,theGroup,togetherwiththecurrentshareholders,SinopharmJienuoMedicalTreatmentServiceCo.,Ltd.andFoshanJiejianchengfengMedicalEquipmentCo.,Ltd.,increasedthecapitalofGuangdongJienuoby29.00%,51.00%and20.00%accordingtotheshareholdingratiosrespectively,andthetotalamountoftheincreasedcapitalwasRMB6million.

VNotestotheconsolidatedfinancialstatements(Continued)

9.Long-termequityinvestments(Continued)(g)On23November2018,theGroupjointlyestablishedGuangdongJianhuiwithGuangdong

ConstructionEngineeringGroupCo.,Ltd.,SuixiPeople'sHospitalandGuangdongJiankeArchitecturalDesignInstituteCo.,Ltd.,withthesharepercentagesbeing10.00%,79.90%,10.00%and0.10%,respectively.TheregisteredcapitalofGuangdongJianhuiwasRMB20,000,000.On22March2020,theGroupcompletedtheinvestmentofRMB2,000,000.00.AccordingtotheArticlesofAssociation,theboardofdirectorsofGuangdongJianhuiwascomposedoffivedirectors,oneofwhomwasappointedbytheGroup,accountingfor20.00%ofvotingrights.Thevotingrightofresolutionsoftheboardofdirectorsisonevoteforoneperson.Exceptforsomespecialmatters,otherresolutionsoftheboardofdirectorsareapprovedbymorethantwo-thirdsofalldirectors.Therefore,theGrouphassignificantinfluenceoverGuangdongJianhui,andthus,itisconsideredasanassociateoftheGroup.On30March2021,theGroupincreasedthecapitalofGuangdongJianhuibyRMB6millionaccordingtotheshareholdingratio.(h)TheGroupdisposedofits67.00%equityinterestinZhijunSuzhouinApril2016.Afterthedisposal,

theGrouphelda33.00%equityinterestofZhijunSuzhou.AccordingtotheArticlesofAssociation,theboardofdirectorsinZhijunSuzhouwascomposedoffivedirectors,oneofwhomwasappointedbytheGroup,accountingfor20.00%ofvotingrights.Thevotingrightofresolutionsoftheboardofdirectorsisonevoteforoneperson,andallresolutionsoftheboardofdirectorsarepassedbymorethanhalfofalldirectors.Asaresult,theGrouphassignificantinfluenceoverZhijunSuzhou,andthus,itisconsideredasanassociateoftheGroup.In2020,onaccountofmismanagement,therewassignificantuncertaintyinthefutureoperationoftheGroup'saffiliatedenterprise,ZhijunSuzhou.Thus,theGroupmadefullprovisionforimpairmentofthelong-termequityinvestmentinZhijunSuzhou.(i)TheGroupsubscribed15.56%ofnewissuedsharesofShyndecPharma,arelatedparty,bytransferringtheproductiveassetsinPingshanbaseandits51.00%equityinterestinthreepharmaceuticalcompanies(ZhijunMedicines,ZhijunTrade,ZhijunPingshan)oftheGroupin2016,respectively.Afterthecompletionofthereorganization,ShyndecPharmaholdsa51.00%equityinterestofeachofthethreepharmaceuticalcompanies,andtheGroupholdsa49.00%equityinterestineachofthethreepharmaceuticalcompanies.Thethreepharmaceuticalcompanieshavesetupaboardofdirectorswithatotaloffivemembers,ofwhichtheGroupappointstwodirectors.Thevotingontheresolutionsoftheboardofdirectorsisoneperson,onevote,andtheproportionofvotingrightsis40.00%.Exceptforsomespecialmatters,allresolutionsoftheboardofdirectorshavebeenadoptedbymorethanhalfofalldirectors.Theyhavesignificantinfluenceoverthethreepharmaceuticalcompanies.Atthesametime,afterthecompletionofthereorganization,theGroupholdsa15.56%equityinterestofShyndecPharma.SinceShyndecPharmaacquiredthesharesofsubsidiarieswithshare-basedpaymentinpreviousyears,theGrouphelda16.28%equityinterestofShyndecPharmaasat31December2020.ShyndecPharmasetupaboardofdirectorsthatwasresponsiblefortheshareholders'meeting,withatotalofninemembers,amongwhich,onewasappointedbytheGroup.Eachdirectorhasonevoteontheboard,taking11.11%ofthevotingrights.Exceptforspecialresolutionsadoptedbyhalfoftheboardofdirectors.TheGrouphassignificantinfluenceoverShyndecPharma.TheabovethreepharmaceuticalcompaniesandShyndecPharmaareconsideredasassociatesoftheGroup.

VNotestotheconsolidatedfinancialstatements(Continued)

9.Long-termequityinvestments(Continued)(j)On9August2021,theGroupjointlyestablishedJialongHainanwithHainanYushanChangxing

HealthManagementCo.,Ltd.,withthesharepercentagesbeing25.00%and75.00%,respectively.AccordingtotheArticlesofAssociation,theboardofdirectorsofJialongHainanwascomposedofthreedirectors,oneofwhomwasappointedbytheGroup,accountingfor33.33%ofvotingrights.Therefore,theGrouphassignificantinfluenceoverJialongHainan,andthus,itisconsideredasanassociateoftheGroup.(k)OnMay2018,theGroupandNingboMeishanBondedPortAreaQilingEquityInvestmentCenterLPjointlyestablishedShanghaiDingqun,owning2.53%and97.47%ofshareholdings.AccordingtotheArticlesofAssociation,theboardofdirectorsofShanghaiDingqunconsistedofthreedirectorsandoneofthemwasappointedbytheCompany.Eachdirectorhasonevoteontheboard,andresolutionsoftheboardaretobepassedbyasimplemajorityofvotes.Therefore,theGrouphassignificantinfluenceoverShanghaiDingqun,andthus,itisconsideredasanassociateoftheGroup.GuodaDrugstore,asubsidiaryoftheGroup,acquired100.00%sharesofShanghaiDingqunEnterpriseManagementConsultingCo.,Ltd.fromNingboMeishanBondedPortAreaQilingEquityInvestmentCenterLPandtheCompanybyRMB934,240,000.00.Theacquisitionwascompletedon7January2021,andtheCompanycontrolledShanghaiDingqunandformedabusinesscombinationnotinvolvingenterprisesundernocommoncontrol,whichwasincludedinthescopeoftheCompany'sconsolidation.

VNotestotheconsolidatedfinancialstatements(Continued)

11.Otherequityinvestments

2021

Accumulatedfairvaluechangesrecordedinothercomprehensiveincome

AccumulatedfairvaluechangesrecordedinothercomprehensiveincomeFairvalueDividendincomeforthecurrentyearReasonsforbeingdesignatedasfairvaluethroughothercomprehensiveincome
EquityinstrumentsderecognisedinthecurrentyearEquityinstrumentsthatarestillheld

SinopharmHealthOnlineCo.,Ltd.

SinopharmHealthOnlineCo.,Ltd.18,379,638.2230,379,638.22--Non-tradingequityinstrument
SinopharmHubeiGuodaPharmacyCo.,Ltd.17,799,104.1718,799,104.17-2,280,159.50Non-tradingequityinstrument
ShanghaiGuodaShuguangDrugstoreCo.,Ltd.(a)8,048,510.228,319,270.2250,000.00
ShanghaiGuorenPharmacyCo.,Ltd.4,620,895.534,720,895.53-457,716.39Non-tradingequityinstrument
HunanZhongbaiPharmaceuticalInvestmentCo.,Ltd.(45,595.15)269,404.85--Non-tradingequityinstrument

48,802,552.99

48,802,552.9962,488,312.99-2,787,875.89

VNotestotheconsolidatedfinancialstatements(Continued)

11.Otherequityinstrumentinvestment(Continued)

2020

Accumulatedfairvaluechangesrecordedinothercomprehensive

income

AccumulatedfairvaluechangesrecordedinothercomprehensiveincomeFairvalueDividendincomeforthecurrentyearReasonsforbeingdesignatedasfairvaluethroughothercomprehensiveincome
EquityinstrumentsderecognisedinthecurrentyearEquityinstrumentsthatarestillheld

SinopharmHealthOnlineCo.,Ltd.

SinopharmHealthOnlineCo.,Ltd.55,056,227.4067,056,227.40--Non-tradingequityinstrument
SinopharmHubeiGuodaPharmacyCo.,Ltd.17,279,788.5918,279,788.59--Non-tradingequityinstrument
ShanghaiGuodaShuguangPharmacyCo.,Ltd.(a)7,971,316.028,242,076.02-50,000.00Non-tradingequityinstrument
ShanghaiGuorenPharmacyCo.,Ltd.5,393,260.455,493,260.45-590,538.07Non-tradingequityinstrument
HunanZhongbaiPharmaceuticalInvestmentCo.,Ltd.101,987.82416,987.82--Non-tradingequityinstrument

85,802,580.28

85,802,580.2899,488,340.28-640,538.07

(a)ShanghaiGuodaShuguangPharmacyCo.,Ltd.wasrenamedShanghaiChongdepharmacyCo.,Ltd.onAugust26,2021.

VNotestotheconsolidatedfinancialstatements(Continued)

12.Othernon-currentfinancialassets

31December2021

31December202131December2020

Financialassetsatfairvaluethroughprofitorloss

Financialassetsatfairvaluethroughprofitorloss135,974,908.51120,972,350.24

Asat31December2021,thebalanceofothernon-currentfinancialassetswasthefairvaluesofthesharesofphaseIandphaseIIofSinopharmCICCmedicalindustryfund(“IndustryFund”)thattheGrouphadsubscribed.Atthe21stMeetingofthe7thboardofdirectorswhichheldon6January2017,theGroupdeliberatedandpassedtheproposaloninvestmentsubscriptionoftheIndustryFund(PhaseI)andrelatedpartytransactionoftheGroup.AsalimitedpartnerofIndustryFund(PhaseI),theGroupintendstoinvestandsubscribefortheshareofIndustryFund(PhaseI)amountingtoRMB200million,whichshallbepaidin3instalments.TheIndustrialFund(phaseI)hasobtainedrelevantapprovalin2018andstartedtooperate.Asat31December2020,theGrouphasmadepaymentsofRMB140million.TheGroupreceivedthewithdrawalfundofthisproject’sprincipalofRMB19,027,649.76onJune2020andreceivedRMB2,997,441.73onJanuary2021fromNingboMeishanBondedPortAreaQiruiEquityInvestmentCenterLP.Atthe1stMeetingofthe9thboardofdirectorswhichheldon16July2021,theGroupdeliberatedandpassedtheproposaloninvestmentsubscriptionoftheIndustryFund(PhaseII).AsalimitedpartnerofIndustryFund(PhaseII),theGroupintendstoinvestandsubscribefortheshareofIndustryFund(PhaseII)amountedtoRMB60million,whichshallbepaidin3instalments.GongqingchengQixinEquityInvestmentPartnership(LimitedPartnership)(“GongqingchengQixin”)istheentityoftheIndustryFund.TheGrouphasmadefirstpaymentRMB18millionsinAugust2021.Asat31December2021,theGrouphasmadepaymentsofRMB18million.TheIndustrialFund(PhaseII)hasobtainedrelevantapprovalin2021andstartedtooperate.SincethecashflowsobtainedbytheGroupfromtheinvestmentoftheIndustryFundincludeboththecontractualcashflowsgeneratedbytheunderlyingassetsduringtheinvestmentperiodandthecashflowsofthedisposaloftheunderlyingassets,thecontractualcashflowsthatdonotsatisfythefinancialassetsgeneratedonaspecificdateareonlythepaymentofinterestonthebasisoftheoutstandingprincipalamount,andtherefore,theGroupclassifiestheinvestmentoftheIndustryFundintofinancialassetsmeasuredatfairvaluethroughprofitorlossandpresentstheinvestmentasothernon-currentfinancialassets.

VNotestotheconsolidatedfinancialstatements(Continued)

13.Investmentproperties

Subsequentmeasurementunderthecostmodel:

2021

Buildingsandconstructions

BuildingsandconstructionsLanduserightsTotal
Originalcost
Openingbalance225,645,845.7820,988,818.44246,634,664.22
Transferfromfixedassets1,137,337.42-1,137,337.42
Transfertointangibleassets-(25,090.42)(25,090.42)
Transfertofixedassets(20,570,972.44)-(20,570,972.44)

Closingbalance

Closingbalance206,212,210.7620,963,728.02227,175,938.78

Accumulateddepreciationandamortisation

Accumulateddepreciationandamortisation
Openingbalance(109,976,379.20)(7,913,905.08)(117,890,284.28)
Provision(6,189,884.57)(241,318.81)(6,431,203.38)
Transferfromfixedassets(839,607.50)-(839,607.50)
Transfertointangibleassets-3,512.493,512.49
Transfertofixedassets13,263,141.12-13,263,141.12

Closingbalance

Closingbalance(103,742,730.15)(8,151,711.40)(111,894,441.55)

Provisionforimpairment

Provisionforimpairment
Openingbalance(1,300,000.00)-(1,300,000.00)

Closingbalance

Closingbalance(1,300,000.00)-(1,300,000.00)

Carryingamount

Carryingamount
Atendofyear101,169,480.6112,812,016.62113,981,497.23

Atbeginningofyear

Atbeginningofyear114,369,466.5813,074,913.36127,444,379.94

VNotestotheconsolidatedfinancialstatements(Continued)

13.Investmentproperties(Continued)

Subsequentmeasurementunderthecostmodel(Continued)2020

Buildingsandconstructions

BuildingsandconstructionsLanduserightsTotal

Originalcost

Originalcost
Openingbalance243,610,633.0922,719,102.03266,329,735.12
Transferfromfixedassets200,000.00-200,000.00
Transfertointangibleassets-(1,730,283.59)(1,730,283.59)
Transfertofixedassets(7,407,446.67)-(7,407,446.67)
Disposalordisburse(10,757,340.64)-(10,757,340.64)

Closingbalance

Closingbalance225,645,845.7820,988,818.44246,634,664.22

Accumulateddepreciationandamortisation

Accumulateddepreciationandamortisation
Openingbalance(117,940,803.43)(8,188,573.39)(126,129,376.82)
Provision(5,838,206.47)(176,289.33)(6,014,495.80)
Transferfromfixedassets(64,379.86)-(64,379.86)
Transfertointangibleassets-450,957.64450,957.64
Transfertofixedassets4,649,383.55-4,649,383.55
Disposalordisburse9,217,627.01-9,217,627.01

Closingbalance

Closingbalance(109,976,379.20)(7,913,905.08)(117,890,284.28)

Provisionforimpairment

Provisionforimpairment
Openingbalance(1,300,000.00)-(1,300,000.00)

Closingbalance

Closingbalance(1,300,000.00)-(1,300,000.00)

Carryingamount

Carryingamount
Atendofyear114,369,466.5813,074,913.36127,444,379.94

Atbeginningofyear

Atbeginningofyear124,369,829.6614,530,528.64138,900,358.30

VNotestotheconsolidatedfinancialstatements(Continued)

13.Investmentproperties(Continued)

During2021,depreciationandamortisationofinvestmentpropertieswereRMB6,431,203.38(2020:

RMB6,014,495.80).During2021,propertieswithacarryingamountofRMB297,729.92(originalvalue:

RMB1,137,337.42,accumulateddepreciation:RMB839,607.50)wereleasedouttoathirdpartyintheformofoperatingleases.Onthedateofchangingtheuseofproperties,thefixedassetsweretransferredintoinvestmentproperties.During2021,propertieswithacarryingamountofRMB7,307,831.32(originalvalue:

RMB20,570,972.44,accumulateddepreciation:RMB13,263,141.12)weretransferredtoanowner-occupiedproperty.Onthedateofchangingtheuseofproperties,thepropertieswerereclassifiedasfixedassets.Asat31December2021,theGrouphadnoinvestmentpropertiesforwhichcertificatesoftitlehavenotbeenobtained.

VNotestotheconsolidatedfinancialstatements(Continued)

14.Fixedassets

31December2021

31December202131December2020

Fixedassets

Fixedassets868,626,258.43854,191,083.27
Disposaloffixedassets--

868,626,258.43

868,626,258.43854,191,083.27

2021

2021
BuildingsandconstructionsMachineryandequipmentMotorvehiclesOfficeequipmentElectronicequipmentTotal
Originalcost
Openingbalance704,639,396.43305,450,662.6496,751,717.47365,642,213.00121,068,984.001,593,552,973.54
Purchase1,696,893.6064,861,380.7114,649,138.2236,791,424.2544,599,211.90162,598,048.68
Transferfromconstructioninprogress336,010.235,718,395.39-3,170,559.22580,888.569,805,853.40
Transferfrominvestmentproperties20,570,972.44----20,570,972.44
Businesscombinationnotinvolvingenterprisesundercommoncontrol-175,767.001,378,743.001,828,296.822,371,967.275,754,774.09
Transfertoinvestmentproperties(1,137,337.42)----(1,137,337.42)
Disposalorretirement(244,761.96)(4,339,706.52)(10,380,183.71)(12,284,466.88)(10,846,861.86)(38,095,980.93)

Closingbalance

Closingbalance725,861,173.32371,866,499.22102,399,414.98395,148,026.41157,774,189.871,753,049,303.80

VNotestotheconsolidatedfinancialstatements(Continued)

14.Fixedassets(Continued)

2021

2021
BuildingsandconstructionsMachineryandequipmentMotorvehiclesOfficeequipmentElectronicequipmentTotal

Accumulateddepreciation

Accumulateddepreciation
Openingbalance(238,423,991.05)(148,242,155.24)(58,335,271.31)(216,568,139.60)(77,792,333.07)(739,361,890.27)
Provision(27,764,804.44)(57,298,305.05)(9,207,720.92)(33,305,733.71)(35,110,266.23)(162,686,830.35)
Transferfrominvestmentproperties(13,263,141.12)----(13,263,141.12)
Transfertoinvestmentproperties839,607.50----839,607.50
Disposalorretirement33,914.642,072,884.489,331,535.419,279,653.749,331,220.6030,049,208.87

Closingbalance

Closingbalance(278,578,414.47)(203,467,575.81)(58,211,456.82)(240,594,219.57)(103,571,378.70)(884,423,045.37)

Provisionforimpairment

Provisionforimpairment
Openingbalance------

Closingbalance

Closingbalance------

Carryingamount

Carryingamount
Atendofyear447,282,758.85168,398,923.4144,187,958.16154,553,806.8454,202,811.17868,626,258.43

Atbeginningofyear

Atbeginningofyear466,215,405.38157,208,507.4038,416,446.16149,074,073.4043,276,650.93854,191,083.27

VNotestotheconsolidatedfinancialstatements(Continued)

14.Fixedassets(Continued)

2020

2020
BuildingsandconstructionsMachineryandequipmentMotorvehiclesOfficeequipmentElectronicequipmentTotal
Originalcost
Openingbalance603,848,760.59239,741,250.3490,023,564.89322,298,724.5590,133,289.241,346,045,589.61
Purchase1,301,861.3969,349,747.4613,341,082.0639,992,959.8836,812,781.74160,798,432.53
Transferfromconstructioninprogress1,455,115.633,321,029.79-20,296.00-4,796,441.42
Transferfrominvestmentproperties7,407,446.67----7,407,446.67
Businesscombinationnotinvolvingenterprisesundercommoncontrol93,390,680.731,975,018.763,873,907.1716,236,211.9410,210,548.23125,686,366.83
Transfertoinvestmentproperties(200,000.00)----(200,000.00)
Disposalorretirement(2,564,468.58)(8,936,383.71)(10,486,836.65)(12,905,979.37)(16,087,635.21)(50,981,303.52)

Closingbalance

Closingbalance704,639,396.43305,450,662.6496,751,717.47365,642,213.00121,068,984.001,593,552,973.54

Accumulateddepreciation

Accumulateddepreciation
Openingbalance(210,725,255.48)(114,086,892.23)(58,060,958.31)(195,644,163.28)(59,528,147.68)(638,045,416.98)
Provision(24,493,901.95)(40,831,522.87)(8,724,407.96)(29,263,986.69)(30,393,164.67)(133,706,984.14)
Transferfrominvestmentproperties(4,649,383.55)----(4,649,383.55)
Transfertoinvestmentproperties64,379.86----64,379.86
Disposalorretirement1,380,170.076,676,259.868,450,094.968,340,010.3712,128,979.2836,975,514.54

Closingbalance

Closingbalance(238,423,991.05)(148,242,155.24)(58,335,271.31)(216,568,139.60)(77,792,333.07)(739,361,890.27)

VNotestotheconsolidatedfinancialstatements(Continued)

14.Fixedassets(Continued)

2020(Continued)

2020(Continued)
BuildingsandconstructionsMachineryandequipmentMotorvehiclesOfficeequipmentElectronicequipmentTotal

Provisionforimpairment

Provisionforimpairment
Openingbalance------

Closingbalance

Closingbalance------

Carryingamount

Carryingamount
Atendofyear466,215,405.38157,208,507.4038,416,446.16149,074,073.4043,276,650.93854,191,083.27

Atbeginningofyear

Atbeginningofyear393,123,505.11125,654,358.1131,962,606.58126,654,561.2730,605,141.56708,000,172.63

VNotestotheconsolidatedfinancialstatements(Continued)

14.Fixedassets(Continued)

Asat31December2021,thefixedassetswithoutcertificatesofownershiparepresentedasfollows:

Bookvalue

BookvalueReasonfornotaccomplishingcertificationofownership

Buildingsandconstructions

Buildingsandconstructions24,765,862.39Asat31December2021,theGrouphasnotyetaccpmplishedthecertificationoftitleforNo.13JingxingNorthStreet,TiexiDistrict,Shenyang.TheState-ownedAssetsSupervisionandAdministrationCommissionofTiexiDistrict,Shenyang,whichwasthetransferparty,wasstillprocessingthecaseandhadprovidedarelevantnotification.

Buildingsandconstructions

Buildingsandconstructions38,854,943.08Asat31December2021,theGrouphasnotyetobtainedthecertificationoftitleforNo.53NanshiZhongRoad,TiexiDistrict,Shenyang.TtheState-ownedAssetsSupervisionandAdministrationCommissionofTiexiDistrict,Shenyang,whichwasthetransferparty,wasstillprocessingthecaseandhadprovidedarelevantnotification.

Buildingsandconstructions

Buildingsandconstructions486,956.52Asat31December2021,theGroupfailedtoapplythepropertyrightcertificationofthetitleforNo.31YiheRoad,Kaiyuansincetheconstructionareaislargerthantheapprovedarea.However,KaiyuanCityPlanningBureauhasissuedacertificateofacceptanceofconstructionprojectcompletionplanning.

Buildingsandconstructions

Buildingsandconstructions119,844.81Asat31December2021,theGrouphadbuiltasimplewarehouselocatedatNo.2BaiyuRoad,SujiatunDistrict,Shenyangforself-storage.TheGroupfailedtoaccomplishthepropertyrightcertificationofthewarehouse.

Asat31December2021and31December2020,nofixedassetsweretemporarilyidle.

Asat31December2021and31December2020,nofixedassetswererentoutforoperatinglease.

VNotestotheconsolidatedfinancialstatements(Continued)

15.Constructioninprogress

31December2021

31December202131December2020

Constructioninprogress

Constructioninprogress49,849,506.7046,631,190.23

31December2021

31December202131December2020
CarryingbalanceImpairmentCarryingamountCarryingbalanceImpairmentCarryingamount

Softwareproject

Softwareproject24,794,281.62-24,794,281.6219,443,779.83-19,443,779.83
Supplychainextensionproject12,446,732.50-12,446,732.5012,248,729.81-12,248,729.81
Warehouseimprovementproject3,182,704.49-3,182,704.492,357,739.84-2,357,739.84
Newofficebuildingproject---2,654,403.71-2,654,403.71
Otherprojects9,425,788.09-9,425,788.099,926,537.04-9,926,537.04

49,849,506.70

49,849,506.70-49,849,506.7046,631,190.23-46,631,190.23

VNotestotheconsolidatedfinancialstatements(Continued)

15.Constructioninprogress(Continued)

Changesofsignificantitemsofconstructioninprogressin2021arepresentedasfollows:

Projectname

ProjectnameAtbeginningoftheyearIncreaseDecreaseAtendofyearSourceoffundsProportionofinvestmenttobudget(%)
TransferredtofixedassetsTransferredtointangibleassetsTransferredtolong-termprepaidexpenseOtherdecrease

Softwareproject

Softwareproject19,443,779.8324,794,281.62-(19,443,779.83)--24,794,281.62Self-raisedfunds42.00%
Supplychainextensionproject12,248,729.819,667,845.86(9,469,843.17)---12,446,732.50Self-raisedfunds48.61%
Warehouseimprovementproject2,357,739.8430,023,707.75(336,010.23)-(28,862,732.87)-3,182,704.49Self-raisedfunds/Specializedborrowings95.76%
Newofficebuildingproject2,654,403.71---(2,654,403.71)--Self-raisedfunds100.00%
Otherconstructionprojects9,926,537.041,120,773.41--(1,621,522.36)-9,425,788.09Self-raisedfunds5.50%

46,631,190.23

46,631,190.2365,606,608.64(9,805,853.40)(19,443,779.83)(33,138,658.94)-49,849,506.70

VNotestotheconsolidatedfinancialstatements(Continued)

15.Constructioninprogress(Continued)

Changesofsignificantitemsofconstructioninprogressin2021arepresentedasfollows:(Continued)

2021

2021Projectname

ProjectnameProjectbudgetProjectprogress(%)AccumulatedamountofborrowingscapitalisedIncluding:borrowingscapitalisedinthecurrentyearCapitalizationrate(%)

Softwareproject

Softwareproject105,427,000.0042.00%---
Supplychainextensionproject56,041,053.0948.61%---
Warehouseimprovementproject33,824,861.5595.76%236,775.17236,775.17-
Newofficebuildingproject3,754,800.69100.00%---
Otherconstructionprojects207,470,727.735.50%---

236,775.17

236,775.17236,775.17

VNotestotheconsolidatedfinancialstatements(Continued)

15.Constructioninprogress(Continued)

Changesofsignificantitemsofconstructioninprogressin2020arepresentedasfollows:

Projectname

ProjectnameAtbeginningoftheyearIncreaseDecreaseAtendofyearSourceoffundsProportionofinvestmenttobudget(%)
TransferredtofixedassetsTransferredtointangibleassetsTransferredtolong-termprepaidexpenseOtherdecrease

Softwareproject

Softwareproject13,197,683.5219,443,779.83-(13,197,683.52)--19,443,779.83Self-raisedfunds100.00%
Supplychainextensionproject8,081,340.806,452,163.18(2,284,774.17)---12,248,729.81Self-raisedfunds57.29%
Newofficebuildingproject110,090.532,685,041.41--(140,728.23)-2,654,403.71Self-raisedfunds66.53%
Warehouseimprovementproject1,232,957.946,287,811.88(2,511,667.25)-(2,651,362.73)-2,357,739.84Self-raisedfunds93.29%
Otherconstructionprojects8,960,503.053,391,463.10--(2,425,429.11)-9,926,537.04Self-raisedfunds5.97%

31,582,575.84

31,582,575.8438,260,259.40(4,796,441.42)(13,197,683.52)(5,217,520.07)-46,631,190.23

VNotestotheconsolidatedfinancialstatements(Continued)

15.Constructioninprogress(Continued)

Changesofsignificantitemsofconstructioninprogressin2020arepresentedasfollows:(Continued)

2020

2020Projectname

ProjectnameProjectbudgetProjectprogress(%)AccumulatedamountofborrowingscapitalisedIncluding:borrowingscapitalisedinthecurrentyearCapitalizationrate(%)

Supplychainextensionproject

Supplychainextensionproject29,065,907.0957.29%---
Softwareproject19,443,779.83100.00%---
Warehouseimprovementproject6,910,764.4593.29%---
Newofficebuildingproject4,080,919.7766.53%---
Otherconstructionprojects208,542,337.645.97%---

-

---

VNotestotheconsolidatedfinancialstatements(Continued)

16.Right-of-useassets

2021

2021

Buildingsandconstructions

BuildingsandconstructionsMachinery,transportandofficeequipmentOthersTotal

Cost

Cost
Openingbalance3,642,726,568.576,617,052.552,418,809.353,651,762,430.47
Increase1,395,603,990.081,068,121.83-1,396,672,111.91
Businesscombinationsinvolvingenterprisesnotundercommoncontrol41,047,873.29--41,047,873.29
Disposal(782,705,015.55)(2,757,280.62)-(785,462,296.17)

Closingbalance

Closingbalance4,296,673,416.394,927,893.762,418,809.354,304,020,119.50

Accumulatedamortisation

Accumulatedamortisation
Openingbalance(1,289,526,014.83)(5,092,290.96)(191,731.69)(1,294,810,037.48)
Accrual(1,033,746,635.39)(1,015,033.05)(95,734.70)(1,034,857,403.14)
Disposal598,615,919.442,271,741.68-600,887,661.12

Closingbalance

Closingbalance(1,724,656,730.78)(3,835,582.33)(287,466.39)(1,728,779,779.50)

VNotestotheconsolidatedfinancialstatements(Continued)

16.Right-of-useassets(Continued)

2021(Continued)

2021(Continued)Buildingsandconstructions

BuildingsandconstructionsMachinery,transportandofficeequipmentOthersTotal

Provisionforimpairment

Provisionforimpairment
Openingbalance----

Closingbalance

Closingbalance----

Bookvalue

Bookvalue
Theendoftheyear2,572,016,685.611,092,311.432,131,342.962,575,240,340.00

Thebeginningofyear

Thebeginningofyear2,353,200,553.741,524,761.592,227,077.662,356,952,392.99

VNotestotheconsolidatedfinancialstatements(Continued)

16.Right-of-useassets(Continued)

2020

2020

Buildingsandconstructions

BuildingsandconstructionsMachinery,transportandofficeequipmentOthersTotal

Cost

Cost
Openingbalance2,634,697,656.2314,470,094.952,418,809.352,651,586,560.53
Increase992,942,597.2298,521.31-993,041,118.53
Businesscombinationnotinvolvingenterprisesundercommoncontrol463,952,931.93--463,952,931.93
Disposal(448,866,616.81)(7,951,563.71)(456,818,180.52)

Closingbalance

Closingbalance3,642,726,568.576,617,052.552,418,809.353,651,762,430.47

Accumulatedamortisation

Accumulatedamortisation
Openingbalance(652,657,513.16)(4,075,450.60)(95,734.70)(656,828,698.46)
Accrual(863,616,827.21)(3,712,235.62)(95,996.99)(867,425,059.82)
Disposal226,748,325.542,695,395.26-229,443,720.80

Closingbalance

Closingbalance(1,289,526,014.83)(5,092,290.96)(191,731.69)(1,294,810,037.48)

VNotestotheconsolidatedfinancialstatements(Continued)

16.Right-of-useassets(Continued)

2020(Continued)

2020(Continued)Buildingsandconstructions

BuildingsandconstructionsMachinery,transportandofficeequipmentOthersTotal

Provisionforimpairment

Provisionforimpairment
Openingbalance----

Closingbalance

Closingbalance----

Bookvalue

Bookvalue
Theendoftheyear2,353,200,553.741,524,761.592,227,077.662,356,952,392.99

Thebeginningofyear

Thebeginningofyear1,982,040,143.0710,394,644.352,323,074.651,994,757,862.07

VNotestotheconsolidatedfinancialstatements(Continued)

17.Intangibleassets

31December2021

31December202131December2020

Intangibleassets

Intangibleassets669,926,562.82734,345,179.40

2021

2021LanduserightsSoftwareTrademarkandbranduserightsFavourableleasesDistributionnetworkFranchiseTotal

Originalcost

Originalcost
Openingbalance88,694,377.76198,298,230.20282,036,925.12127,486,000.00283,573,678.24710,000.00980,799,211.32
Purchase-14,559,921.40----14,559,921.40
Businesscombinationnotinvolvingenterprisesundercommoncontrol-221,415.5140,440,000.00---40,661,415.51
Transferfromconstructioninprogress-19,443,779.83----19,443,779.83
Transferfrominvestmentproperties25,090.42-----25,090.42
Disposalordiscard-(1,207,082.81)----(1,207,082.81)

Closingbalance

Closingbalance88,719,468.18231,316,264.13322,476,925.12127,486,000.00283,573,678.24710,000.001,054,282,335.67

Accumulatedamortisation

Accumulatedamortisation
Openingbalance(30,664,860.97)(111,160,831.01)(5,060,783.81)(37,878,526.79)(60,979,029.34)(710,000.00)(246,454,031.92)
Provision(1,813,760.30)(25,870,279.71)(13,459,390.62)(7,085,955.88)(15,975,813.30)-(64,205,199.81)
Transferfrominvestmentproperties(3,512.49)-----(3,512.49)
Disposalordiscard-306,971.37----306,971.37

Closingbalance

Closingbalance(32,482,133.76)(136,724,139.35)(18,520,174.43)(44,964,482.67)(76,954,842.64)(710,000.00)(310,355,772.85)

VNotestotheconsolidatedfinancialstatements(Continued)

17.Intangibleassets(Continued)

2021(Continued)

2021(Continued)LanduserightsSoftwareTrademarkandbranduserightsFavourableleasesDistributionnetworkFranchiseTotal

Provisionforimpairment

Provisionforimpairment
Openingbalance-------
Provision--(43,000,000.00)-(31,000,000.00)-(74,000,000.00)

Closingbalance

Closingbalance--(43,000,000.00)-(31,000,000.00)-(74,000,000.00)

Carryingamount

Carryingamount
Atendoftheyear56,237,334.4294,592,124.78260,956,750.6982,521,517.33175,618,835.60-669,926,562.82

Atbeginningoftheyear

Atbeginningoftheyear58,029,516.7987,137,399.19276,976,141.3189,607,473.21222,594,648.90-734,345,179.40

VNotestotheconsolidatedfinancialstatements(Continued)

17.Intangibleassets(Continued)

2020

2020LanduserightsSoftwareTrademarksandbrandsuserightsFavourableleasesDistributionnetworkFranchiseTotal

Originalcost

Originalcost
Openingbalance62,083,143.97175,625,594.4492,349,850.00127,486,000.00112,117,142.86710,000.00570,371,731.27
Purchase-7,672,816.94----7,672,816.94
Businesscombinationnotinvolvingenterprisesundercommoncontrol24,880,950.202,142,366.10189,687,075.12-171,456,535.38-388,166,926.80
Transferfromconstructioninprogress-13,197,683.52----13,197,683.52
Transferfrominvestmentproperties1,730,283.59-----1,730,283.59
Disposalordiscard-(340,230.80)----(340,230.80)

Closingbalance

Closingbalance88,694,377.76198,298,230.20282,036,925.12127,486,000.00283,573,678.24710,000.00980,799,211.32

Accumulatedamortisation

Accumulatedamortisation
Openingbalance(28,858,577.16)(88,726,743.09)(196,850.16)(30,792,570.91)(46,298,190.47)(710,000.00)(195,582,931.79)
Provision(1,355,326.17)(22,774,318.72)(4,863,933.65)(7,085,955.88)(14,680,838.87)-(50,760,373.29)
Transferfrominvestmentproperties(450,957.64)-----(450,957.64)
Disposalordiscard-340,230.80----340,230.80

Closingbalance

Closingbalance(30,664,860.97)(111,160,831.01)(5,060,783.81)(37,878,526.79)(60,979,029.34)(710,000.00)(246,454,031.92)

VNotestotheconsolidatedfinancialstatements(Continued)

17.Intangibleassets(Continued)

2020(Continued)

2020(Continued)LanduserightsSoftwareTrademarksandbrandsuserightsFavourableleasesDistributionnetworkFranchiseTotal

Provisionforimpairment

Provisionforimpairment
Openingbalance-------

Closingbalance

Closingbalance-------

Carryingamount

Carryingamount
Atendoftheyear58,029,516.7987,137,399.19276,976,141.3189,607,473.21222,594,648.90-734,345,179.40

Atbeginningoftheyear

Atbeginningoftheyear33,224,566.8186,898,851.3592,152,999.8496,693,429.0965,818,952.39-374,788,799.48

Asat31December2021,intangibleassetsformedthroughinternalresearchintheyear-endbookvalueofintangibleassetswas9.10%(31December2020:

7.32%).Asat31December2021and31December2020,therewerenointangibleassetswhosecertificatesoftitlehavenotbeenobtained..Accordingtotheresultsoftheintangibleassetimpairmenttesting,theGroup'sprovisionofintangibleassetimpairmentlossofRMB74,000,000.00fortheyearwasreviewedandapprovedbytheDirectorsoftheCompanyatitsmeetingheldonMarch8,2022.

VNotestotheconsolidatedfinancialstatements(Continued)

18.Goodwill

2021

2021OpeningbalanceIncreaseduringtheyearDecreaseduringtheyearClosingbalance
Businesscombinationsnotundercommoncontrol

Pharmaceuticaldistribution

Pharmaceuticaldistribution
SinopharmHolding(Jiangmen)Co.,Ltd.(“SinopharmJiangmen”)27,392,317.73--27,392,317.73
SinopharmHoldingShenzhenYanfengCo.,Ltd.(“SinopharmYanfeng”)16,868,644.87--16,868,644.87
SinopharmHoldingZhaoqingCo.,Ltd.(“SinopharmZhaoqing”)2,594,341.53--2,594,341.53
SinopharmHoldingShaoguanCo.,Ltd.(“SinopharmShaoguan”)1,686,496.80--1,686,496.80
SinopharmHoldingMeizhouCo.,Ltd.(“SinopharmMeizhou”)1,610,819.66--1,610,819.66
SinopharmHoldingHuizhouCo.,Ltd.(“SinopharmHuizhou”)923,184.67--923,184.67
SinopharmHoldingZhanjiangCo.,Ltd.(“SinopharmZhanjiang”)282,135.55--282,135.55
SinopharmHoldingDongguanCo.,Ltd.(“SinopharmDongguan”)1,499.02--1,499.02
SouthPharma&Trade2,755,680.62--2,755,680.62
FoshanNanhai88,877,850.51--88,877,850.51
SinopharmHoldingZhuhaiCo.,Ltd.(“SinopharmZhuhai”)6,772,561.476,772,561.47
SinopharmHoldingMaomingCo.,Ltd.(“SinopharmMaoming”)66,417.07--66,417.07
SinopharmHoldingGuodaForMeMedicines(Shanghai)Co.,Ltd.(“ForMeMedicines’’)3,033,547.53--3,033,547.53

Pharmaceuticalretail

Pharmaceuticalretail
SinopharmHebeiLerentangPharmacyChainStoreCo.,Ltd.(“HebeiLerentang”)29,482,149.57--29,482,149.57
XiaoyiGuodaWanminBaicaotangPharmacyChainStoreCo.,Ltd.(“XiaoyiWanmin”)15,866,680.00--15,866,680.00
ShanxiGuodaWanminPharmacyChainStoreCo.,Ltd.(“ShanxiWanmin”)65,025,000.00--65,025,000.00
SinopharmHoldingGuodaForMePharmacyChainStoreShanghaiCo.,Ltd.(“ForMePharmacyChainStore”)19,405,450.23--19,405,450.23
SinopharmHoldingGuodaPharmacyChainStoreShanghaiCo.,Ltd.(“ChainStoreShanghai”)5,028,638.00--5,028,638.00
SinopharmHoldingGuodaYangzhouDadeshengPharmacyChainStoreCo.,Ltd.(“YangzhouDadesheng”)7,979,000.00--7,979,000.00

VNotestotheconsolidatedfinancialstatements(Continued)

18.Goodwill(Continued)

2021(Continued)

2021(Continued)OpeningbalanceIncreaseduringtheyearsDecreaseduringtheyearClosingbalance
Businesscombinationsnotundercommoncontrol

Pharmaceuticalretail(Continued)

Pharmaceuticalretail(Continued)
ZhejiangGuodaPharmacyCo.,Ltd.(“GuodaZhejiang”)3,045,183.85--3,045,183.85
SinopharmHoldingGuodaNanjingPharmacyChainStoreCo.,Ltd.(“GuodaNanjing”)11,598,341.12--11,598,341.12
FujianGuodaPharmacyChainStoreCo.,Ltd.(“GuodaFujian”)1,567,250.76--1,567,250.76
SinopharmHoldingGuodaShandongPharmacyChainStoreCo.,Ltd.(“GuodaShandong”)29,110,409.46--29,110,409.46
SinopharmHoldingGuodaShenyangPharmacyChainStoreCo.,Ltd.(“GuodaShenyang”)41,047,958.08--41,047,958.08
LiyangGuodaPeoplePharmacyChainStoreCo.,Ltd.(“GuodaLiyang”)107,275,095.74--107,275,095.74
SinopharmHoldingHunanGuodaMinshengtangPharmacyChainCo.,Ltd.(“GuodaHunan”)41,165,574.64--41,165,574.64
QuanzhouGuodaPharmacyChainStoreCo.,Ltd.(“GuodaQuanzhou”)41,298,622.59--41,298,622.59
SinopharmHoldingGuodaHenanPharmacyChainStoreCo.,Ltd.(“GuodaHenan”)22,666,179.77--22,666,179.77
GuodaInnerMongolia70,485,777.00--70,485,777.00
SinopharmGuodaPharmacyJiangmenChainCo.,Ltd.(“GuodaJiangmen”)77,350,000.00--77,350,000.00
SinopharmHoldingGuodaShanxiYiyuanPharmacyChainStoreCo.,Ltd.(“ShanxiYiyuan”)9,080,100.00--9,080,100.00
ShenzhenGuanganliPharmacyChainStoreCo.,Ltd.storeacquisition(“ShenzhenGuanganli”)13,420,000.00--13,420,000.00
BeijingGoldenElephantPharmacyMedicineChainCompanyLimited(“BeijingGoldenElephant”)64,140,124.36--64,140,124.36
GuodaTaishan26,826,120.55--26,826,120.55
SinopharmGuodaTaiyuanTongxinliPharmacyCo.,Ltd.(“TaiyuanTongxinli”)2,818,647.85--2,818,647.85
ChaoyangYongxingtangPharmacyChainStoreCo.,Ltd.(“ChaoyangYongxingtang”)stores’acquisition25,973,399.17--25,973,399.17
InnerMongoliaTongrenPharmacyChainStoreCo.,Ltd.(“InnerMongoliaTongren”)stores’acquisition13,494,000.00--13,494,000.00
GuodaPu’er71,064,684.79--71,064,684.79
ShanghaiPudongNewAreaMedicine&MedicationCo.,Ltd.(“PudongMedicine”)65,978,042.61--65,978,042.61
ShanghaiDingqun520,836,246.17--520,836,246.17
ChengdaFangyuanPharmaceuticalGroupCo.,Ltd.(“CDFY”)1,182,443,676.11--1,182,443,676.11
LiaoningXianzhenPharmaceuticalChainCo.,Ltd.(“LiaoningXianzhen”)stores’acquisition34,037,431.66--34,037,431.66
SinopharmNantongPujipharmacychainCo.,Ltd.(“NantongPuji”)stores’acquisition-11,498,100.00-11,498,100.00

VNotestotheconsolidatedfinancialstatements(Continued)

18.Goodwill(Continued)

2021(Continued)

2021(Continued)OpeningbalanceIncreaseduringtheyearDecreaseduringtheyearClosingbalance
Businesscombinationsnotundercommoncontrol

Pharmaceuticalretail(Continued)

Pharmaceuticalretail(Continued)
ShanxiHuiminKangweipharmacychainCo.,Ltd.(“HuiminKangwei”)stores’acquisition-20,970,000.00-20,970,000.00
DishengPharmacyChain-158,492,204.21-158,492,204.21
2,772,375,281.11190,960,304.21-2,963,335,585.32

2020

2020OpeningbalanceIncreaseduringtheyearDecreaseduringtheyearClosingbalance
Businesscombinationsnotundercommoncontrol

Pharmaceuticaldistribution

Pharmaceuticaldistribution
SinopharmJiangmen27,392,317.73--27,392,317.73
SinopharmYanfeng16,868,644.87--16,868,644.87
SinopharmZhaoqing2,594,341.53--2,594,341.53
SinopharmShaoguan1,686,496.80--1,686,496.80
SinopharmMeizhou1,610,819.66--1,610,819.66
SinopharmHuizhou923,184.67--923,184.67
SinopharmZhanjiang282,135.55--282,135.55
SinopharmDongguan1,499.02--1,499.02
SouthPharma&Trade2,755,680.62--2,755,680.62
FoshanNanhai88,877,850.51--88,877,850.51
SinopharmZhuhai6,772,561.476,772,561.47
SinopharmMaoming66,417.07--66,417.07
ForMeMedicines3,033,547.53--3,033,547.53

Pharmaceuticalretail

Pharmaceuticalretail
HebeiLerentang29,482,149.57--29,482,149.57
XiaoyiWanmin15,866,680.00--15,866,680.00
ShanxiWanmin65,025,000.00--65,025,000.00
ForMePharmacyChainStore19,405,450.23--19,405,450.23
ChainStoreShanghai5,028,638.00--5,028,638.00
YangzhouDadesheng7,979,000.00--7,979,000.00
GuodaZhejiang3,045,183.85--3,045,183.85
GuodaNanjing11,598,341.12--11,598,341.12
GuodaFujian1,567,250.76--1,567,250.76
GuodaShandong29,110,409.46--29,110,409.46
GuodaShenyang41,047,958.08--41,047,958.08
GuodaLiyang107,275,095.74--107,275,095.74
GuodaHunan41,165,574.64--41,165,574.64
GuodaQuanzhou41,298,622.59--41,298,622.59
GuodaHenan22,666,179.77--22,666,179.77
GuodaInnerMongolia70,485,777.00--70,485,777.00
GuodaJiangmen77,350,000.00--77,350,000.00
ShanxiYiyuan9,080,100.00--9,080,100.00
ShenzhenGuanganlistores’acquisition13,420,000.00--13,420,000.00
BeijingGoldenElephant64,140,124.36--64,140,124.36

VNotestotheconsolidatedfinancialstatements(Continued)

18.Goodwill(Continued)

2020(Continued)

2020(Continued)OpeningbalanceIncreaseduringtheyearDecreaseduringtheyearClosingbalance
Businesscombinationsnotundercommoncontrol

Pharmaceuticalretail(Continued)

Pharmaceuticalretail(Continued)
GuodaTaishan26,826,120.55--26,826,120.55
TaiyuanTongxinli2,818,647.85--2,818,647.85
AcquisitionofstoreofChaoyangYongxingtang25,973,399.17--25,973,399.17
AcquisitionofstoreofInnerMongoliaTongren13,494,000.00--13,494,000.00
GuodaPu’er71,064,684.79--71,064,684.79
PudongMedicine65,978,042.61--65,978,042.61
ShanghaiDingqun-520,836,246.17-520,836,246.17
CDFY-1,182,443,676.11-1,182,443,676.11
AcquisitionofstoreofLiaoningXianzhen-34,037,431.66-34,037,431.66

1,035,057,927.17

1,035,057,927.171,737,317,353.94-2,772,375,281.11

Changesinprovisionforimpairmentofgoodwillarepresentedasfollows:

2021OpeningbalanceIncreaseDecreaseClosingbalance
ProvisionDisposal

Pharmaceuticalretail

Pharmaceuticalretail
GuodaQuanzhou25,000,000.00--25,000,000.00
JilinTianhe-162,690,000.00-162,690,000.00

25,000,000.00

25,000,000.00162,690,000.00-187,690,000.00

2020

2020OpeningbalanceIncreaseDecreaseClosingbalance
ProvisionDisposal

Pharmaceuticalretail

Pharmaceuticalretail
GuodaQuanzhou25,000,000.00--25,000,000.00

GuodaDrugstore,theCompany’ssubsidiary,hadacquired70%equityofYunnanGuodaDishengMedicineandDishengPharmacyChaininMarch2021,whichsavedrisetogoodwillamountingtoRMB158,492,204.21.RefertoNoteVI(1.1)formoredetails.YangzhouDadesheng,theCompany’ssubsidiary,hadacquired15storesofNantongPujiinMarch2021,whichsavedrisetogoodwillamountingtoRMB11,498,100.00.RefertoNoteVI(1.2)formoredetails.ShanxiWanmin,theCompany’ssubsidiary,hadacquired32storesofHuiminKangweiinFebruary2021,whichsavedrisetogoodwillamountingtoRMB20,970,000.00.RefertoNoteVI(1.3)formoredetails.Accordingtotheresultsofthegoodwillimpairmenttest,theproposaloftheGrouptorecordagoodwillimpairmentlossofRMB162,690,000.00fortheyearwasreviewedandapprovedbytheboardmeetingoftheCompanyheldon8March2022.

VNotestotheconsolidatedfinancialstatements(Continued)

18.Goodwill(Continued)

Thegoodwillobtainedfrombusinesscombinationhasbeenallocatedtotheoperatingassetgroupsoftheprincipleoperationsinrelevantsubsidiariesforgoodwillimpairmenttest.Theseassetgroupsareconsistentwiththeassetgroupsrecognizedonthepurchasedateandinthegoodwillimpairmenttestinpreviousyears.Therecoverableamountisdeterminedaccordingtothepresentvalueoftheexpectedfuturecashflowoftheoperatingassetgroupsoftheprincipleoperationsofeachsubsidiarywithgoodwill.Managementestimatesfuturecashflowsbasedonadetailedfive-yearforecastperiodandsubsequentforecastperiods.Theprojectedfuturecashflowsforthedetailedforecastperiodaredeterminedbasedonthebusinessplanmadebymanagement.Theestimatedfuturecashflowforthesubsequentforecastperiodisdeterminedbythecashflowofthelastyearofthedetailedforecastperiod,theGroup'sbusinessplan,developmenttrendsoftheindustryandotherfactors.Therecoverableamountofassetgroupsandassetgroupscombinationiscalculatedbythefive-yearbudgetapprovedbythemanagement,usingthecashflowforecastingmethod.Cashflowbeyondthefive-yearperiodisextrapolatedrefertotheinflationrate.ThekeyassumptionstodeterminethecashflowforecastwhentheGroupconductsgoodwillimpairmenttestareasfollows:

(1)Itisassumedthattheentitycontinuestooperate,andthereisnomajorchangefromthe

currentsituationinkeyaspectssuchasbusinessscope,salesmodelandchannels,managementandotherfactorsthataffectproductionandoperation;

(2)Itisassumedthatthesocio-economicenvironmentwheretheentityislocatedwillnotundergomajorchanges,andthattherelevantlawsandregulationsoftheregionwhereitislocatedhasnomajorchangesfromthepresent;

(3)Itisassumedthatthebusinessscope,businessmode,andmanagementmodeloftheentity

arecontinuouslyimprovedandperfectedbasedonmaintainingconsistency.Theentitycanadjustandinnovateinatimelymannerwiththedevelopmentoftheeconomy;

(4)Itisassumedthatinterestratesandtaxrateswillhavenosignificantchangeswithinthe

specifiednormalrange.Keyassumptionswereusedtocalculatetheestimatedpresentvaluesoffuturecashflowoftheassetgroups,pharmaceuticaldistributionandpharmaceuticalretailon31December2021.Keyassumptionsmadebythemanagementonprojectionsofcashflowsusedingoodwillimpairmenttestingaredescribedasfollows:

Pharmaceuticaldistribution

PharmaceuticaldistributionPharmaceuticalretail

Revenuegrowthrateinthebudgetperiod

Revenuegrowthrateinthebudgetperiod2.49%-17.00%-2.25%-14.03%
Sustainablegrowthrate3.00%3.00%
Grossmargin3.34%-6.20%12.36%-52.00%
Discountrate12.40%-15.00%12.58%-15.00%

VNotestotheconsolidatedfinancialstatements(Continued)

18.Goodwill(Continued)Themanagementdeterminedthebudgetedgrossmarginandweightaveragegrowthratebasedonthehistoricalperformanceandmarketdevelopmentexpectation.Thediscountratesareusedaspre-taxdiscountratesreflectingspecificrisksoftherelevantassetgroupsandgroupsofassetgroups.Theaboveassumptionsareusedtoanalysetherecoverableamountofeachassetgroupandgroupofassetgroupsinthebusinesssegment.ThemainoperatingentityofShanghaiDingqunisSinopharmHoldingTianheJilinPharmaceuticalCo.,Ltd.("JilinTianhe"),whichismainlyengagedinpharmaceuticalwholesaleandretailbusiness.ThegoodwillformedbytheGroup'sacquisitionofShanghaiDingqunwasallocatedtoJilinTianhein2021,whichwasconsistentwiththeassetgroupdeterminedduringtheimpairmenttestin2020.JilinTianheismainlyengagedindirectsalesofmedicalinstitutions,commercialpharmaceuticaldistribution,retailchain,logisticsanddistribution,etc.Itsbusinessisgenerallycomposedofwholesaleandretailsectors.In2021,theperformancedroppedsignificantlyduetothesuperimposedeffectsofmultiplefactorssuchastheCovid-19andindustrypolicies.Pharmaceuticalwholesale:In2021,salesfellduetotheimpactoftheCovid-19,4+7centralizedpurchasing,thegeneralreductionofhospitaldrugpricescausedbytheimplementationofnewstandardsinJilinProvince,thecompany'sreductionininventoryturnover,andtheamountofcommoditycooperationwithlowgrossprofitcontribution,etc.In2021,theepidemicsituationinJilinProvincecontinuedtorecur,thenumberofpatientsarestilllimited,thehospital'sfundswereundergreatpressure,andpaymentcollectionsloweddown;Chaincustomersareaffectedbytheepidemicsincethesalesofdrugsusingtocurefeverandcough,anti-virusandantibioticswereundercontrol,resultinginadeclineinitsturnover,andcontinuedpressureoncapitalturnover,whichsuppressedthepaymentofgoodsfromdistributors.Inthisway,thereceivablesturnoverdaysofJilinTianhe’schaincustomersextended,andJilinTianhe’sworkingcapitalaccountedforarelativelyhighproportionofrevenue.Retailsector:In2021,thesalesofdrugsusingtocurefeverandcough,anti-virusandantibioticswereberemovedfromtheshelvesduetocontrolledsales,resultinginadeclineinsales.Meanwhile,customers'consumptionhabitshavechangedduetotheimpactoftheepidemic,thatonlinedrugpurchaseshaveincreased.Therefore,thecompany'ssalesstructurehaschanged.In2021,theproportionofB2Cbusinesssalesincreased,expensesincreasedsignificantly,andprofitmarginsdecreased.TherecoverableamountoftheassetgroupsinwhichShanghaiDingqunisincludedwascalculatedbasedonthefive-yearbudgetapprovedbythecompany'smanagement,usingthecashflowforecastingmethod,andthecashflowbeyondthefive-yearperiodiscalculatedrefertotheinflationrate.ThekeyassumptionsmadebytheGroupwhenconductingthegoodwillimpairmenttestanddeterminingthecashflowforecastareasfollows:

Keyassumptions

KeyassumptionsPredictionindex
Averagerevenuegrowthrateinthebudgetperiod11.91%
Sustainablegrowthrate3.00%
Averagenetinterestrateinthebudgetperiod3.12%
Discountrate12.58%

VNotestotheconsolidatedfinancialstatements(Continued)

18.Goodwill(Continued)

AfteraprudentassessmentoftherecoverablevalueofShanghaiDingqun'srelevantassetgroups,theGroupmadeaprovisionforimpairmentofgoodwillofRMB162,690,000.00forthegoodwillformedbytheacquisitionofShanghaiDingqunduringthereportingperiod.

19.Long-termprepaidexpenses

2021

2021OpeningbalanceIncreaseAmortisationOtherdecreaseClosingbalance

Fixedassetimprovementexpenditureofoperatingleases

Fixedassetimprovementexpenditureofoperatingleases336,895,157.13244,798,669.54(128,242,371.51)(5,536,204.71)447,915,250.45
Acquisitionexpendituretoobtaintherighttooperate95,802,321.9594,688,249.44(24,476,725.85)-166,013,845.54
Others25,007,797.015,099,952.06(10,061,403.30)-20,046,345.77

457,705,276.09

457,705,276.09344,586,871.04(162,780,500.66)(5,536,204.71)633,975,441.76

2020

2020OpeningbalanceIncreaseAmortisationOtherdecreaseClosingbalance

Fixedassetimprovementexpenditureofoperatingleases

Fixedassetimprovementexpenditureofoperatingleases289,508,030.05152,559,690.26(103,648,906.24)(1,523,656.94)336,895,157.13
Acquisitionexpendituretoobtaintherighttooperate56,532,005.5161,782,068.03(22,511,751.59)-95,802,321.95
Others27,487,932.587,479,650.45(9,951,162.18)(8,623.84)25,007,797.01

373,527,968.14

373,527,968.14221,821,408.74(136,111,820.01)(1,532,280.78)457,705,276.09

20.Deferredtaxassets/liabilities

Deferredtaxassetsanddeferredtaxliabilitiesbeforeoffsettingareasfollows:

31December2021

31December202131December2020
DeductibletemporarydifferencesDeferredtaxassetsDeductibletemporarydifferencesDeferredtaxassets

Deferredtaxassets

Deferredtaxassets
Provisionforimpairmentofassets204,535,469.1249,334,631.28170,577,875.5640,697,280.41
Deductibleloss156,999,428.6539,093,138.0930,798,485.937,699,621.49
Effectoftheleasestandard126,166,577.9629,685,521.4393,685,083.0922,420,179.23
Accruedsellingexpenses109,319,247.9925,802,416.16113,445,282.3626,095,709.73
Payrollpayable59,779,846.7714,472,633.6347,280,390.0811,210,512.95
Membershipawardpoints56,953,502.7213,804,027.9659,179,220.9814,575,814.61
Others15,774,146.453,884,627.8421,096,550.784,641,850.41

729,528,219.66

729,528,219.66176,076,996.39536,062,888.78127,340,968.83

VNotestotheconsolidatedfinancialstatements(Continued)

20.Deferredtaxassets/liabilities(Continued)

31December2021

31December202131December2020
TaxabletemporarydifferencesDeferredtaxliabilitiesTaxabletemporarydifferencesDeferredtaxliabilities

Deferredtaxliabilities

Deferredtaxliabilities
Fairvalueadjustmentsforabusinesscombinationnotinvolvingenterprisesundercommoncontrol636,489,820.31159,122,455.09713,703,864.68178,425,966.17
FixedassetslessthanRMB5millionwhicharedeductedatonce168,175,688.1741,874,528.38126,722,799.3131,679,099.86
Changesinfairvalueoffinancialassetsthroughothercomprehensiveincome48,802,552.9912,200,638.2585,802,580.2821,450,645.07
Changesinassetvaluationduetochangeincompanypolicy14,911,259.123,727,814.7817,160,546.404,290,136.60
Others25,604,493.165,359,719.0525,205,927.865,297,761.98

893,983,813.75

893,983,813.75222,285,155.55968,595,718.53241,143,609.68

Deferredtaxassetsandliabilitiesarepresentedafterbeingoffsetagainsteachotherareas

follows:

Deferredtaxassetsandliabilitiesarepresentedafterbeingoffsetagainsteachotherareas

follows:

31December2021

31December202131December2020
TheamountofoffsetDeferredtaxassets/liabilities-netTheamountofoffsetDeferredtaxassets/liabilities-net

Deferredtaxassets

Deferredtaxassets46,336,826.62129,740,169.7735,222,201.0292,118,767.81

Deferredtax

liabilities

Deferredtaxliabilities46,336,826.62175,948,328.9335,222,201.02205,921,408.66

Thedeductibletemporarydifferencesanddeductiblelossesthatwerenotrecognisedasdeferredtaxassetsarepresentedasfollows:

Thedeductibletemporarydifferencesanddeductiblelossesthatwerenotrecognisedasdeferredtaxassetsarepresentedasfollows:

31December2021

31December202131December2020

Deductibletemporarydifferences

Deductibletemporarydifferences11,238,147.549,435,555.39
Deductiblelosses(1)59,698,786.4461,373,403.25

70,936,933.98

70,936,933.9870,808,958.64

(1)Forthoseloss-makingsubsidiaries,asitisnotconsideredprobablethattaxableprofitswillbeavailable

againstwhichthetaxlossescanbeutilised,theGrouphasnotrecognisedthedeferredtaxassetfortheaccumulatedlossesamountingtoRMB59,698,786.44ofthedeductibletaxableincomeofthoseloss-makingsubsidiaries.

VNotestotheconsolidatedfinancialstatements(Continued)

20.Deferredtaxassets/liabilities(Continued)

Thedeductiblelossesonunrecogniseddeferredtaxassetswillbedueinthefollowingyears:

Thedeductiblelossesonunrecogniseddeferredtaxassetswillbedueinthefollowingyears:

31December2021

31December202131December2020

2021

2021-2,563,056.08
20226,641,123.6410,708,676.12
20238,298,591.4512,443,327.47
202423,628,477.3725,745,840.71
20258,439,382.189,912,502.87
202612,691,211.80-

59,698,786.44

59,698,786.4461,373,403.25

21.Othernon-currentassets

31December202131December2020

Speciallyapprovedreservingmaterials

Speciallyapprovedreservingmaterials296,857,937.49260,590,932.98
Guarantees101,794,142.50114,186,431.57
Prepaymentforprojectsandequipment39,854,590.3024,809,091.30
Contractassets16,587,685.646,999,074.72
Others4,891,413.311,611,992.27

459,985,769.24

459,985,769.24408,197,522.84

22.Short-termborrowings

31December202131December2020

Creditborrowings

Creditborrowings1,930,467,146.381,612,187,020.12

Asat31December2021,theweightedaverageannualinterestrateoftheaboveborrowingswas

0.44%-4.50%(31December2020:0.56%-5.00%).

Asat31December2021,theweightedaverageannualinterestrateoftheaboveborrowingswas

0.44%-4.50%(31December2020:0.56%-5.00%).Asat31December2021and31December2020,noshort-termborrowingsoftheGrouphavematuredbutwerenotyetpaid.

VNotestotheconsolidatedfinancialstatements(Continued)

23.Notespayable

31December2021

31December202131December2020

Commercialacceptancebills

Commercialacceptancebills73,700,292.6956,360,197.69
Bankacceptancebills7,586,516,530.997,463,805,077.00

7,660,216,823.68

7,660,216,823.687,520,165,274.69

At31December2021and31December2020,nonotespayableoftheGrouphavematuredbutwerenotyetpaid.

24.AccountspayableAccountspayableareinterest-freeandwillbepaidnormallybetween1and6months.

31December202131December2020

Paymentforgoods

Paymentforgoods9,057,718,968.147,697,451,142.50

At31December2021,significantaccountspayableagedoveroneyearwereanalysedbelow:

AmountReason

Paymentforgoods

Paymentforgoods460,528,323.13Notyetsettled

25.Advancedreceivables

31December202131December2020

Advancedleasepayment

Advancedleasepayment19,289,567.4412,352,466.64

26.Contractliabilities

31December202131December2020

Contractliabilities

Contractliabilities431,303,231.37368,600,357.14

TheendingbalanceofcontractliabilitiesistheadvancepaymentsreceivedbytheGroup.Generally,aftertheGroupreceivestheadvancepaymentsbythecustomersforthesalesofgoods,itwillperformtheperformanceobligationsandrecognisetherevenuewithinabout6months.

VNotestotheconsolidatedfinancialstatements(Continued)

27.Employeebenefitspayable

2021

2021AtbeginningoftheyearIncreaseDecreaseAtendoftheyear

Short-termemployeebenefits

Short-termemployeebenefits347,602,975.863,022,481,722.01(3,037,343,973.01)332,740,724.86
Post-employmentbenefits(definedcontributionplan)9,216,204.49288,373,093.26(290,325,654.07)7,263,643.68
Terminationbenefits392,866.751,130,908.95(1,331,018.91)192,756.79

357,212,047.10

357,212,047.103,311,985,724.22(3,329,000,645.99)340,197,125.33

2020

2020AtbeginningoftheyearIncreaseDecreaseAtendoftheyear

Short-termemployeebenefits

Short-termemployeebenefits254,250,943.712,659,830,539.44(2,566,478,507.29)347,602,975.86
Post-employmentbenefits(definedcontributionplan)5,057,047.69122,670,266.27(118,511,109.47)9,216,204.49
Terminationbenefits332,821.701,044,714.24(984,669.19)392,866.75

259,640,813.10

259,640,813.102,783,545,519.95(2,685,974,285.95)357,212,047.10

VNotestotheconsolidatedfinancialstatements(Continued)

27.Employeebenefitspayable(Continued)

Short-termemployeebenefits:

Short-termemployeebenefits:

2021

2021AtbeginningofyearIncreaseDecreaseAtendofyear

Salaries,bonuses,allowancesandgrants

Salaries,bonuses,allowancesandgrants330,233,181.612,620,557,385.11(2,640,034,334.79)310,756,231.93
Staffwelfare1,469,381.0781,943,225.52(81,516,526.62)1,896,079.97
Socialsecuritycontribution2,194,328.52160,467,133.87(157,992,646.14)4,668,816.25
Including:Medicalinsurance1,531,693.95149,493,307.88(146,468,248.07)4,556,753.76
Workinjuryinsurance84,285.356,209,447.97(6,201,158.86)92,574.46
Maternityinsurance578,349.224,764,378.02(5,323,239.21)19,488.03
Housingfunds1,650,393.19109,436,368.55(109,112,123.03)1,974,638.71
Labourunionfundsandemployeeeducationfunds11,183,869.7047,392,989.69(46,003,723.16)12,573,136.23
Othershort-termbenefits871,821.772,684,619.27(2,684,619.27)871,821.77

347,602,975.86

347,602,975.863,022,481,722.01(3,037,343,973.01)332,740,724.86

2020

2020AtbeginningofyearIncreaseDecreaseAtendofyear

Salaries,bonuses,allowancesandgrants

Salaries,bonuses,allowancesandgrants240,039,850.542,339,888,250.22(2,249,694,919.15)330,233,181.61
Staffwelfare1,390,324.5378,183,745.16(78,104,688.62)1,469,381.07
Socialsecuritycontribution1,749,787.15106,178,873.53(105,734,332.16)2,194,328.52
Including:Medicalinsurance1,488,183.6797,295,076.61(97,251,566.33)1,531,693.95
Workinjuryinsurance34,813.392,594,296.30(2,544,824.34)84,285.35
Maternityinsurance226,790.096,289,500.62(5,937,941.49)578,349.22
Housingfunds1,461,572.8591,053,848.06(90,865,027.72)1,650,393.19
Labourunionfundsandemployeeeducationfunds8,550,047.8442,259,342.96(39,625,521.10)11,183,869.70
Othershort-termbenefits1,059,360.802,266,479.51(2,454,018.54)871,821.77

254,250,943.71

254,250,943.712,659,830,539.44(2,566,478,507.29)347,602,975.86

VNotestotheconsolidatedfinancialstatements(Continued)

27.Employeebenefitspayable(Continued)

Definedcontributionplan:

Definedcontributionplan:

2021

2021AtbeginningofyearIncreaseDecreaseAtendofyear

Basicpensioninsurance

Basicpensioninsurance3,593,380.27272,693,481.30(274,018,523.28)2,268,338.29
Unemploymentinsurance106,718.128,589,082.19(8,553,196.62)142,603.69
Contributiontoapensionfund5,516,106.107,090,529.77(7,753,934.17)4,852,701.70

9,216,204.49

9,216,204.49288,373,093.26(290,325,654.07)7,263,643.68

2020

2020AtbeginningofyearIncreaseDecreaseAtendofyear

Basicpensioninsurance

Basicpensioninsurance1,971,797.54113,012,198.11(111,390,615.38)3,593,380.27
Unemploymentinsurance107,237.573,832,752.98(3,833,272.43)106,718.12
Contributiontoapensionfund2,978,012.585,825,315.18(3,287,221.66)5,516,106.10

5,057,047.69

5,057,047.69122,670,266.27(118,511,109.47)9,216,204.49

VNotestotheconsolidatedfinancialstatements(Continued)

27.Employeebenefitspayable(Continued)

Terminationbenefits:

Terminationbenefits:

2021

2021AtbeginningofyearIncreaseDecreaseAtendofyear

Retirementbenefitspayable-within1year(NoteV(35))

Retirementbenefitspayable-within1year(NoteV(35))205,673.65166,000.00(232,605.96)139,067.69
Otherterminationbenefits(1)187,193.10964,908.95(1,098,412.95)53,689.10

392,866.75

392,866.751,130,908.95(1,331,018.91)192,756.79

Terminationbenefits:

Terminationbenefits:

2020

2020AtbeginningofyearIncreaseDecreaseAtendofyear

Retirementbenefitspayable-within1year(NoteV(35))

Retirementbenefitspayable-within1year(NoteV(35))247,866.06182,000.00(224,192.41)205,673.65
Otherterminationbenefits(1)84,955.64862,714.24(760,476.78)187,193.10

332,821.70

332,821.701,044,714.24(984,669.19)392,866.75

(1)In2021,otherterminationbenefitsforterminationlabourrelationsprovidedbytheGroupwere

RMB964,908.95andtheunpaidbalanceattheendoftheyearwasRMB53,689.10(2020:

OtherterminationbenefitsforterminationlabourrelationswereRMB862,714.24,andtheunpaidbalanceattheendoftheyearwasRMB187,193.10).

VNotestotheconsolidatedfinancialstatements(Continued)

28.Taxpayable

31December2021

31December202131December2020

CorporateIncometaxes

CorporateIncometaxes178,870,986.61173,016,908.47
Value-addedtax116,033,746.26102,586,862.95
Stampduty9,920,803.288,243,076.57
Citymaintenanceandconstructionsurtax8,285,798.936,993,947.17
Individualincometax7,421,770.176,790,402.61
Educationalsurcharge6,128,676.485,254,608.43
Waterconservancyfund1,904,421.455,586,926.64
Propertytax1,166,484.81664,697.78
Landusetax63,985.0654,028.60
Others7,367,407.147,675,689.94

337,164,080.19

337,164,080.19316,867,149.16

29.Otherpayables

31December202131December2020

Interestpayable

Interestpayable31,587,062.0335,572,620.82
Dividendpayable30,140,616.336,389,320.96
Otherpayables1,653,019,308.101,557,204,939.36

1,714,746,986.46

1,714,746,986.461,599,166,881.14

Interestpayable

31December202131December2020

Factoringinterestonaccountsreceivable

Factoringinterestonaccountsreceivable31,587,062.0335,572,620.82

Dividendpayable

31December202131December2020

JilinYiheInvestmentConsultingCo.,Ltd

JilinYiheInvestmentConsultingCo.,Ltd22,635,133.81-
ShanghaiFosunPharmaceutical(Group)Co.,Ltd.(“FosunPharm”)4,835,511.584,835,511.58
DividendpayabletoZhangZhenfang2,505,800.871,389,639.31
MeiluoPharmaceuticalCo.,Ltd.164,170.07164,170.07

30,140,616.33

30,140,616.336,389,320.96

Asat31December2021and31December2020,theGrouphadnosignificantdividendagedmorethanoneyearandnotyetpaid.

VNotestotheconsolidatedfinancialstatements(Continued)

29.Otherpayables(Continued)

Otherpayables

31December2021

31December202131December2020

Payablesforfactoringprograms

Payablesforfactoringprograms549,837,612.90576,523,284.81
Deposits449,660,261.02472,800,624.92
Accruedexpenses230,547,704.07213,950,722.34
Equitypayable125,000,000.0038,702,372.01
Payablesforrentals95,330,986.7868,417,303.16
Payablesforconstructioninprogressandequipment53,913,827.6740,898,589.59
Collectionofothers28,674,847.6619,119,286.19
Payablestoindividuals17,809,022.6425,869,320.67
Temporaryloans9,984,512.6111,017,981.51
Payablesforlandtransferpayments7,486,500.0012,597,500.00
Payablestorelatedparties596,258.195,093,263.36
Others84,177,774.5672,214,690.80

1,653,019,308.10

1,653,019,308.101,557,204,939.36

At31December2021,significantotherpayablesoutstandingforover1yearareasfollows:

AmountpayableReasonforoutstanding

Payablesfordeposits

Payablesfordeposits18,256,859.55Paymentconditionsnotmet
Temporaryloans9,800,000.00Paymentconditionsnotmet
Payablesforlandtransferpayments7,486,500.00Paymentconditionsnotmet

35,543,359.55

30.Non-currentliabilitiesduewithinoneyear

35,543,359.5531December2021

31December202131December2020

Leaseliabilitiesduewithin1year(NoteV(33))

Leaseliabilitiesduewithin1year(NoteV(33))848,328,648.14748,732,059.89

848,328,648.14

848,328,648.14748,732,059.89

VNotestotheconsolidatedfinancialstatements(Continued)

31.Othercurrentliabilities

31December2021

31December202131December2020

VATcollectedinadvance

VATcollectedinadvance27,078,191.8624,142,106.09
OutputVATtoberecognised418,081.05644,972.46
Others12,089,196.74-

39,585,469.65

39,585,469.6524,787,078.55

32.Long-termborrowings

31December202131December2020

Creditloans

Creditloans40,000,000.00-
Entrustedloans31,637,173.8931,637,173.89

71,637,173.89

71,637,173.8931,637,173.89

Asat31December2021,thebalanceofcreditloanswasRMB40,000,000.00(31December2020:

nil),theweightedaverageannualinterestrateoftheentrustedloanswas4.05%(31December2020:nil).

Asat31December2021,thebalanceofcreditloanswasRMB40,000,000.00(31December2020:

nil),theweightedaverageannualinterestrateoftheentrustedloanswas4.05%(31December2020:nil).Asat31December2021,thebalanceofentrustedloanswasRMB31,637,173.89(31December2020:RMB31,637,173.89).CNPGCentrustedSinopharmGroupFinanceCo.,Ltd.toprovidetheloans.Asat31December2021,theweightedaverageannualinterestrateoftheentrustedloanswas3.85%(31December2020:3.85%).

33.Leaseliabilities

Asat31December2021,thebalanceofentrustedloanswasRMB31,637,173.89(31December2020:RMB31,637,173.89).CNPGCentrustedSinopharmGroupFinanceCo.,Ltd.toprovidetheloans.Asat31December2021,theweightedaverageannualinterestrateoftheentrustedloanswas3.85%(31December2020:3.85%).31December2021

31December202131December2020

Leasepayment

Leasepayment2,400,604,558.672,217,275,863.33
Unrecognisedfinancingexpenses(176,848,033.25)(165,489,639.54)
Less:Leaseliabilitiesduewithin1year(NoteV(30))848,328,648.14748,732,059.89

1,375,427,877.28

1,375,427,877.281,303,054,163.90

34.Long-termpayables

31December202131December2020

Payablesforspecificprojects

Payablesforspecificprojects6,938,189.006,938,189.00

VNotestotheconsolidatedfinancialstatements(Continued)

34.Long-termpayables(Continued)

Payablesforspecificprojects

2021

2021
AtbeginningofyearIncreaseDecreaseAtendofyear

Medicalreservefunds(1)

Medicalreservefunds(1)6,138,189.00--6,138,189.00
Specialfundsgrantedbythegovernment(2)800,000.00--800,000.00

6,938,189.00

6,938,189.00--6,938,189.00

2020

2020
AtbeginningofyearIncreaseDecreaseAtendofyear

Medicalreservefunds(1)

Medicalreservefunds(1)-6,138,189.00-6,138,189.00
Specialfundsgrantedbythegovernment(2)800,000.00--800,000.00

800,000.00

800,000.006,138,189.00-6,938,189.00

(1)ThemedicalreservefundswereallocatedbytheLiaoningProvinceDepartmentofFinancetoLiaoningChengda

FangyuanPharmaceuticalChainCo.,Ltd.(“LiaoningChengdaPharmacyChains”),whichwasincorporatedintotheconsolidationfinancialstatementsin2020.

(2)Thespecificpayablesareresearchfundsallocatedbygovernmentdepartmentsandareaccountedforthespecific

payableaccountatthetimeofallocation.

35.Long-termemployeebenefitspayable

31December202131December2020

Long-termterminationbenefits

Long-termterminationbenefits965,000.001,049,000.00
Netliabilitiesofdefinedbenefitplans237,000.00270,000.00

1,202,000.00

1,202,000.001,319,000.00

31December2021

31December202131December2020

Earlyretirementbenefitspayable

Earlyretirementbenefitspayable1,341,067.691,524,673.65
Less:Retirementbenefitspayablewithin1year(NoteV(27))139,067.69205,673.65

1,202,000.00

1,202,000.001,319,000.00

VNotestotheconsolidatedfinancialstatements(Continued)

35.Long-termemployeebenefitspayable(Continued)

SomeemployeesoftheGrouphaveenrolledintoearlyretirement.Theprimaryactuarialassumptionsadoptedattheendofthereportingperiodarepresentedasfollows:

31December202131December2020

Discountrate

Discountrate3.00%3.25%
Growthrateofwages6.00%6.00%

Thetotalpost-employmentbenefitsrecognisedinprofitorlossofthecurrentyearareshownbelow:

Thetotalpost-employmentbenefitsrecognisedinprofitorlossofthecurrentyearareshownbelow:

2021

20212020

Includedinadministrativeexpenses

Includedinadministrativeexpenses2,000.0017,000.00
Includedinfinancecosts47,000.0051,000.00

49,000.00

49,000.0068,000.00

36.Accruedliabilities

AtbeginningofyearIncreaseDecreaseAtendingofyear

Pendinglitigationorarbitration(1)

Pendinglitigationorarbitration(1)68,808,166.79-(68,808,166.79)-

(1)Pendinglitigationorarbitrationmainlyincludes:fourcompanieswithZhangPengasthe

actualcontrollersignedseveralcontractswithShenyangBranchofBankofDalianCo.,Ltd.(“theBank”)inpreviousyears,whichagreedthattheabovecompanieswouldtransfertheircreditor'srightsofaccountsreceivableofLiaoningCdfyPharmCo.,Ltd.(“LiaoningCdfyPharm”)totheBank,andtheBankwouldconductfactoringbusinessfortheabovecompaniesinaccordancewiththeagreement.AsthefourcompaniesfailedtopaytherelevantamounttotheBank,theBankfiledalawsuittothePeople’sCourt,requestingLiaoningCdfyPharmanditsparentcompany,CDFY,toassumethecorrespondinglegalresponsibilities.ChengdaPharmaceuticalChainrecognisedtheaccruedliabilitiesofRMB68,663,166.79inaccordancewiththeprogressofthecase.In2021,LiaoningCdfyPharmpaidallthemoneytotheBankaccordingtothejudgment.

VNotestotheconsolidatedfinancialstatements(Continued)

37.Deferredincome

2021

2021OpeningbalanceIncreaseDecreaseClosingbalance

Governmentgrants

Governmentgrants89,559,628.657,551,767.34(10,709,176.45)86,402,219.54
Inputtaxplusandminus283,954.722,323,372.25(2,092,494.73)514,832.24

89,843,583.37

89,843,583.379,875,139.59(12,801,671.18)86,917,051.78

2020

2020OpeningbalanceIncreaseDecreaseClosingbalance

Governmentgrants

Governmentgrants88,471,539.417,736,003.12(6,647,913.88)89,559,628.65
Inputtaxplusandminus232,733.471,654,660.85(1,603,439.60)283,954.72

88,704,272.88

88,704,272.889,390,663.97(8,251,353.48)89,843,583.37

Asat31December2021,deferredincomefromgovernmentgrantsisasfollows:

Asat31December2021,deferredincomefromgovernmentgrantsisasfollows:

Governmentgrantsprogram

GovernmentgrantsprogramOpeningbalanceAdditionintheyearAmountincludedinotherincomeintheyearOtherchangesClosingbalanceAsset-related/income-related
Resettlementcompensation(1)70,158,624.05--(2,698,408.56)67,460,215.49Asset-related
LogisticsprojectofNanningEconomicDevelopmentZoneconstructionsupportfunds4,846,565.87-(186,406.44)-4,660,159.43Asset-related
Constructionfundofthemodernsupplychainsysteminthecentralcirculationfieldin20184,353,019.544,650,000.00(2,242,364.74)-6,760,654.80Asset-related
Subsidiesforpharmaceuticalsupplychainprojects-2,800,000.00(889,995.63)-1,910,004.37Asset-related
Guangzhoulogisticsstandardisationpilotproject1,722,518.87-(546,246.84)-1,176,272.03Asset-related
Fundsforthelogisticsinformationplatformprojectofthepharmaceuticalstoragecentre809,523.99-(142,857.12)-666,666.87Asset-related
Comprehensiveexperimentalmodernserviceindustrysubsidies900,000.00-(300,000.00)-600,000.00Asset-related
Specialfundsforindustrialtransformationandupgradingindualisedintegrationprojects827,658.18-(434,938.08)-392,720.10Asset-related
Otherprojects5,941,718.15101,767.34(2,809,211.08)(458,747.96)2,775,526.45Asset-related/income-related

89,559,628.65

89,559,628.657,551,767.34(7,552,019.93)(3,157,156.52)86,402,219.54

VNotestotheconsolidatedfinancialstatements(Continued)

37.Deferredincome(Continued)

Asat31December2020,deferredincomefromgovernmentgrantsisasfollows:

Asat31December2020,deferredincomefromgovernmentgrantsisasfollows:

Governmentgrantsprogram

GovernmentgrantsprogramOpeningbalanceAdditionintheyearAmountincludedinotherincomeintheyearOtherchangesClosingbalanceAsset-related/income-related
Resettlementcompensation(1)72,857,032.61--(2,698,408.56)70,158,624.05Asset-related
LogisticsprojectofNanningEconomicDevelopmentZoneconstructionsupportfunds5,032,972.31-(186,406.44)-4,846,565.87Asset-related
Constructionfundofthemodernsupplychainsysteminthecentralcirculationfieldin20182,364,075.792,651,300.00(662,356.25)-4,353,019.54Asset-related
GuangzhouLogisticsstandardisationpilotproject2,268,765.71-(546,246.84)-1,722,518.87Asset-related
Specialfundsforindustrialtransformationandupgradingindualisedintegrationprojects1,276,698.66-(449,040.48)-827,658.18Asset-related
Comprehensiveexperimentalmodernserviceindustrysubsidies1,200,000.00-(300,000.00)-900,000.00Asset-related
Fundsforthelogisticsinformationplatformprojectofthepharmaceuticalstoragecentre952,381.11-(142,857.12)-809,523.99Asset-related
Otherprojects2,519,613.225,084,703.12(1,367,821.15)(294,777.04)5,941,718.15Asset-related/income-related

88,471,539.41

88,471,539.417,736,003.12(3,654,728.28)(2,993,185.60)89,559,628.65

(1)DuetotheimplementationofurbanplanningforoldtownreconstructioninNanning,the

operatingcentreofGuangxiLogistics,whichwaslocatedinLongtengRoadDistrict,NanningCity,wastobereconstructedinanotherplace.AccordingtotheagreementsignedbetweenGuangxiLogisticsandtherealestatedeveloper,GuangxiLogisticswouldobtainacompensationofRMB120,250,000.00,includingcashofRMB50,000,000.00andapropertyinconstructionequaltoavalueofRMB70,250,000.00.CashcompensationofRMB50,000,000.00wasreceivedinMay2012.Inyear2015,constructionpropertywithavalueofRMB70,250,000.00wasbuiltanddelivered,whichhadbeenrecognisedasinvestmentproperty.Thecompensationrelatingtothecapitalexpenditureinthereconstructionofthenewlogisticscentreinanotherplace,amountingtoRMB93,320,000.00,wasrecognisedasdeferredincomeandwouldbeamortisedandrecognisedintheincomestatementwithintheexpectedusefullivesusingthestraight-linemethod,andtheothercashcompensation,withamountapproximatesofRMB26,930,000.00wasrecognisedintheincomestatementin2012.

VNotestotheconsolidatedfinancialstatements(Continued)

38.Othernon-currentliabilities

31December2021

31December202131December2020

Medicalreservefunds(1)

Medicalreservefunds(1)560,495,462.17711,029,182.37
Equitypayable71,400,000.00-
Productpromotionaccumulativepointsprogramme(2)32,479,462.9529,815,911.17
Others6,140.5317,896.05

664,381,065.65

664,381,065.65740,862,989.59

(1)ThemedicalreservefundsincludestheCentralMedicalReserveFunds,theProvincialReserve

Funds,theMunicipalReserveFunds,andtheEmergencyReserveFundsallocatedbytheCentralMinistryofFinancetoestablishthesystemofreservemedicalsuppliesforpublichealthemergencies.Inthefuture,accordingtogovernmentinstructions,purchasedesignatedreservepharmaceuticalproducts.

(2)Theproductpromotionaccumulativepointsprogrammereferstothoseproduct-originatedaccumulativepointsthatremainsurplusformorethanoneyearbeforetheexpirationdate.

39.Sharecapital

(1)ThemedicalreservefundsincludestheCentralMedicalReserveFunds,theProvincialReserve

Funds,theMunicipalReserveFunds,andtheEmergencyReserveFundsallocatedbytheCentralMinistryofFinancetoestablishthesystemofreservemedicalsuppliesforpublichealthemergencies.Inthefuture,accordingtogovernmentinstructions,purchasedesignatedreservepharmaceuticalproducts.

(2)Theproductpromotionaccumulativepointsprogrammereferstothoseproduct-originatedaccumulativepointsthatremainsurplusformorethanoneyearbeforetheexpirationdate.

2021

2021AtbeginningoftheyearIncrease/decreaseduringthecurrentyearAtendoftheyear
IssueofnewsharesOthersSubtotal
Listedshareswithoutrestrictionoftrading:
-Ashares,listed367,733,625.00---367,733,625.00
-Bshares,listed54,884,475.00---54,884,475.00
Listedshareswithrestrictionoftrading:
-State-ownedlegalpersonsshares5,505,770.00---5,505,770.00
-NaturalpersonsregisteredwithinChinashares3,113.00---3,113.00

428,126,983.00

428,126,983.00---428,126,983.00

2020

2020AtbeginningoftheyearIncrease/decreaseduringthecurrentyearAtendoftheyear
IssueofnewsharesOthersSubtotal
Listedshareswithoutrestrictionoftrading:
-Ashares,listed307,744,355.00-59,989,270.0059,989,270.00367,733,625.00
-Bshares,listed54,884,475.00---54,884,475.00
Listedshareswithrestrictionoftrading:
-State-ownedlegalpersonshares60,380,743.00-(54,874,973.00)(54,874,973.00)5,505,770.00
-LegalpersonsregisteredwithinChinashares5,114,297.00-(5,114,297.00)(5,114,297.00)-
-NaturalpersonsregisteredwithinChinashares3,113.00---3,113.00

428,126,983.00

428,126,983.00---428,126,983.00

VNotestotheconsolidatedfinancialstatements(Continued)

40.Capitalsurplus

2021

2021AtbeginningoftheyearIncreaseDecreaseAtendoftheyear

Sharepremium

Sharepremium2,118,174,787.27--2,118,174,787.27
Othercapitalsurplus-
Significantreorganisation1,173,907,763.19--1,173,907,763.19
Transferofcapitalsurplusrecognisedunderthepreviousaccountingsystem2,650,322.00--2,650,322.00
Otherchangesinequityofinvestedunitsundertheequitymethod(1)(52,403,860.01)-(701,946.29)(53,105,806.30)
Businesscombinationundercommoncontrol(2)9,890,417.88--9,890,417.88
Others1,120,284,623.39--1,120,284,623.39

4,372,504,053.72

4,372,504,053.72(701,946.29)4,371,802,107.43

2020

2020AtbeginningoftheyearIncreaseDecreaseAtendoftheyear

Sharepremium

Sharepremium2,118,174,787.27--2,118,174,787.27
Othercapitalsurplus-
Significantreorganisation1,173,907,763.19--1,173,907,763.19
Transferofcapitalsurplusrecognisedunderthepreviousaccountingsystem2,650,322.00--2,650,322.00
Otherchangesinequityofinvestedunitsundertheequitymethod(1)(52,009,984.28)-(393,875.73)(52,403,860.01)
Businesscombinationundercommoncontrol(2)107,759,447.87-(97,869,029.99)9,890,417.88
Others1,120,284,623.39--1,120,284,623.39

4,470,766,959.44

4,470,766,959.44(98,262,905.72)4,372,504,053.72

(1)AdecreaseofRMB701,946.29inotherchangesinequityoftheinvestedentityunderthe

equitymethodinthecurrentyear,whichwasduetothedecreaseofotherchangesinequityoftheGroup’sassociatecompany,ShyndecPharma,decreasedthebookvalueofalong-termequityinvestmentandwrotedownthecapitalreserveofRMB701,946.29.AdecreaseofRMB393,875.73inotherchangesinequityoftheinvestedentityundertheequitymethodin2020,whichwasduetothedecreaseofotherchangesinequityoftheGroup’sassociatecompany,ShyndecPharma,decreasedthebookvalueofalong-termequityinvestmentandincludedincapitalsurplusofRMB393,875.73.

(2)TheCompany’ssubsidiary,GuodaDrugstore,acquiredPudongMedicine,anenterpriseunder

commoncontrolon2January,2020,whichformedabusinesscombinationundercommoncontrol(NoteVI(2)).Thereportingentityformedafterthedeemedmergerhasexistedsincethefinalcontrollerbegantocontrol.Whenpreparingandcomparingtheconsolidatedfinancialstatements,theitemsofthepreviousfinancialstatementsshallbeadjusted.At2020,theCompanyrestatedandconfirmedthecapitalreserveofRMB107,759,447.87,offsettingthecapitalreserveofRMB107,759,447.87attheconsolidationdate.ThecapitalsurpluswasrecognisedatRMB9,890,417.88basedonthedifferencebetweenthebookvalueofidentifiablenetassetsandtheconsiderationpaymentsattheconsolidationdate.

VNotestotheconsolidatedfinancialstatements(Continued)

41.OthercomprehensiveincomeAccumulatedbalanceofothercomprehensiveincomeattributabletoownersoftheparentintheconsolidatedbalancesheet:

1January2021

1January2021Increase/(decrease)31December2021

Changeinthefairvalueofotherequityinvestments

Changeinthefairvalueofotherequityinvestments38,611,051.04(16,650,012.28)21,961,038.76
Othercomprehensiveincomeusingtheequitymethodthatmaybereclassifiedtoprofitorloss(128,033.32)41,192.92(86,840.40)

38,483,017.72

38,483,017.72(16,608,819.36)21,874,198.36

1January2020

1January2020Increase/(decrease)31December2020

Changeinthefairvalueofotherequityinvestments

Changeinthefairvalueofotherequityinvestments46,050,708.96(7,439,657.92)38,611,051.04
Othercomprehensiveincomeusingtheequitymethodthatmaybereclassifiedtoprofitorloss(133,366.19)5,332.87(128,033.32)

45,917,342.77

45,917,342.77(7,434,325.05)38,483,017.72

Thecurrentoccurrenceamountofothercomprehensiveincomeintheconsolidatedincomestatementisasfollows:

2021

OccurrenceamountbeforetaxLess:IncometaxAttributabletoownersoftheparentAttributabletonon-controllinginterests

Othercomprehensiveincomethatwillnotbereclassifiedtoprofitorloss

Othercomprehensiveincomethatwillnotbereclassifiedtoprofitorloss
Changeinthefairvalueofotherequityinvestments(37,000,027.29)9,250,006.82(16,650,012.28)(11,100,008.19)
Othercomprehensiveincomethatmaybereclassifiedtoprofitorloss
Othercomprehensiveincomeusingtheequitymethodthatmaybereclassifiedtoprofitorloss41,192.92-41,192.92-

(36,958,834.37)

(36,958,834.37)9,250,006.82(16,608,819.36)(11,100,008.19)

VNotestotheconsolidatedfinancialstatements(Continued)

41.Othercomprehensiveincome(Continued)

2020

Occurrenceamountbefore

tax

OccurrenceamountbeforetaxLess:IncometaxAttributabletoownersoftheparentAttributabletonon-controllinginterests

Othercomprehensiveincomethatwillnotbereclassifiedtoprofitorloss

Othercomprehensiveincomethatwillnotbereclassifiedtoprofitorloss
Changeinthefairvalueofotherequityinvestments(16,532,659.72)4,133,164.93(7,439,657.92)(4,959,836.87)
Othercomprehensiveincomethatmaybereclassifiedtoprofitorloss
Othercomprehensiveincomeusingtheequitymethodthatmaybereclassifiedtoprofitorloss5,332.87-5,332.87-

(16,527,326.85)

(16,527,326.85)4,133,164.93(7,434,325.05)(4,959,836.87)

VNotestotheconsolidatedfinancialstatements(Continued)

42.Surplusreserves

31December2021

31December202131December2020

Statutorysurplusreserves

Statutorysurplusreserves214,063,491.50214,063,491.50

AccordingtotheprovisionsoftheCompanyLawandtheCompany’sarticlesofassociation,theCompanyappropriatesstatutorysurplusreservesat10%ofthenetprofit.Wheretheaccumulatedamountofsurplusreservesreaches50%ormoreoftheCompany’sregisteredcapital,additionalappropriationisnotrequired.Whenapproved,thediscretionarysurplusreservescanbeusedtorecoveraccumulatedlossesorincreasesharecapital.TheaccumulatedamountofthestatutorysurplusreservesoftheCompanyhasalreadyreached50%oftheregisteredcapital.AccordingtotheCompany’sarticlesofassociation,theCompanyisnotrequiredtocontinuetoappropriatethesurplusreserves.

43.Retainedearnings

31December202131December2020

Retainedearningsattheendoftheprioryearbeforeadjustment

Retainedearningsattheendoftheprioryearbeforeadjustment8,895,145,106.397,755,295,537.08
Adjust:Businesscombinationundercommoncontrol(1)-(3,029,877.91)

Retainedearningsattheendoftheprioryearafteradjustment

Retainedearningsattheendoftheprioryearafteradjustment8,895,145,106.397,752,265,659.17
Add:Netprofitattributabletotheparent1,336,427,752.221,401,892,593.23
Less:Withdrawalfromthesurplusreserves--
Cashdividendspayableforordinaryshares(2)342,501,586.40256,876,189.80
Others-2,136,956.21

Retainedearningsatendofyear

Retainedearningsatendofyear9,889,071,272.218,895,145,106.39

(1)

(1)Duetothechangeinthescopeofbusinesscombinationunderthecommoncontrol,theundistributedprofitatthebeginningoftheyearwasRMB0.00(2020:decreasedbyRMB3,029,877.91).
(2)PursuanttotheresolutionoftheGeneralMeetingofshareholderson28April2021,theCompanypaidacashdividendofRMB8.00forevery10sharestoallshareholders.Thecashdividendwascalculatedonthebasisof428,126,983sharesinissue,withanaggregateamountofRMB342,501,586.40.

VNotestotheconsolidatedfinancialstatements(Continued)

44.Operatingrevenueandcost

2021

20212020
RevenueCostRevenueCost

Principaloperations

Principaloperations67,647,803,370.0060,117,131,141.6559,129,559,267.8052,474,778,734.75
Otheroperations710,006,201.99222,166,910.59519,895,744.23116,988,729.62

68,357,809,571.99

68,357,809,571.9960,339,298,052.2459,649,455,012.0352,591,767,464.37

Revenueisasfollows:

Revenueisasfollows:

2021

20212020

Revenuefromcontractswithcustomers

Revenuefromcontractswithcustomers68,263,151,536.3859,575,293,446.98
Rentals94,658,035.6174,161,565.05

68,357,809,571.99

68,357,809,571.9959,649,455,012.03

Disaggregationofrevenuefromcontractswithcustomersisasfollows:

Disaggregationofrevenuefromcontractswithcustomersisasfollows:

2021

20212020

Placeofbusiness

Placeofbusiness
China68,263,151,536.3859,575,293,446.98

Typesofmajoractivities

Typesofmajoractivities
Pharmaceuticaldistribution47,415,894,164.7941,771,721,959.60
Retailpharmacy20,546,784,164.4217,626,007,757.96
Others300,473,207.17177,563,729.42

68,263,151,536.38

68,263,151,536.3859,575,293,446.98

Typesofmajorgoods

Typesofmajorgoods
Pharmaceuticals60,694,809,091.7054,004,558,520.07
Medicaldevicesanddisposables5,831,199,233.194,010,735,060.66
Diagnosticreagents994,724,313.55947,638,322.63
Medicalequipment441,945,690.77434,797,814.20
Others300,473,207.17177,563,729.42

68,263,151,536.38

68,263,151,536.3859,575,293,446.98

VNotestotheconsolidatedfinancialstatements(Continued)

44.Operatingrevenueandcost(Continued)

Disaggregationofrevenuefromcontractswithcustomersisasfollows:(Continued)

Disaggregationofrevenuefromcontractswithcustomersisasfollows:(Continued)2021

20212020

Timingofrevenuerecognition

Timingofrevenuerecognition
Atapointintime
Saleofgoods67,962,678,329.2159,397,729,717.56
Overtime
Provisionofservices123,347,496.9968,569,069.02
Storageandlogistics177,125,710.18108,994,660.40

68,263,151,536.38

68,263,151,536.3859,575,293,446.98

Revenuerecognisedthatwasincludedincontractliabilitiesatthebeginningoftheyearisasfollows:

Revenuerecognisedthatwasincludedincontractliabilitiesatthebeginningoftheyearisasfollows:

2021

20212020

Saleofgoods

Saleofgoods368,600,357.14302,650,567.97

InformationabouttheGroup’sperformanceobligationsissummarisedbelow:

InformationabouttheGroup’sperformanceobligationsissummarisedbelow:

(1)

(1)Revenueisrecognisedwhencontrolofthegoodshastransferred,andpaymentisgenerallyduewithin30to210daysfromdelivery;
(2)Revenueisrecognisedintheservicedurationandthepaymentisgenerallyduewithin30to210daysaftertheserviceiscompleted.

VNotestotheconsolidatedfinancialstatements(Continued)

45.Taxesandsurcharges

2021

20212020

Citymaintenanceandconstructiontax

Citymaintenanceandconstructiontax61,522,088.5759,276,259.36
Stampduty46,171,015.3239,538,983.99
Educationalsurcharge44,666,008.4443,510,012.21
Propertytax9,265,222.927,664,420.10
River&embankmentmaintenancefee4,588,775.311,949,549.82
Landtax1,653,652.981,174,966.86
Vehicleandvesselusetax186,063.72194,779.35
Others1,414,741.011,322,475.51

169,467,568.27

169,467,568.27154,631,447.20

46.Sellingexpenses

20212020

Employeebenefits

Employeebenefits2,455,601,404.162,043,118,426.77
Depreciationexpensesofright-of-useassets952,094,987.01835,697,733.77
Rentalexpenses247,722,061.87158,482,491.26
Technicalservicefee217,961,408.80131,325,755.99
Amortisationoflong-termdeferredexpenses141,330,721.55115,379,262.15
Depreciationexpensesoffixedassets120,553,856.3197,651,219.31
Utilities89,553,600.7078,849,800.64
Officeexpense83,255,087.0566,308,505.21
Storageexpenses48,647,528.5736,065,016.61
Promotionandmarketingexpenses44,119,240.2649,558,552.69
Amortisationofintangibleassets38,160,273.9727,930,125.84
Propertymanagementfee37,012,324.9931,062,038.32
Entertainmentexpenses33,588,865.4533,444,574.42
Repairingfees20,378,201.1820,602,212.23
Marketdevelopmentfee14,481,534.8821,647,420.16
Conferenceexpenses9,568,265.2116,225,584.87