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China National Accord Medicines Corporation Ltd.

Annual Report 2015

March 2016

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Section I. Important Notice, Contents and Paraphrase

Board of Directors, Supervisory Committee, all directors, supervisors and senior

executives of China National Accord Medicines Corporation Ltd. (hereinafter

referred to as the Company) hereby confirm that there are no any fictitious statements,

misleading statements, or important omissions carried in this report, and shall take all

responsibilities, individual and/or joint, for the reality, accuracy and completion of

the whole contents.

Lin Zhaoxiong, Principal of the Company, Wei Pingxiao, person in charger of

accounting works and Zhou Feifei, person in charge of accounting organ (accounting

principal) hereby confirm that the Financial Report of 2015 Annual Report is

authentic, accurate and complete.

All directors are attended the Board Meeting for report deliberation.

It is likely to existing risks in aspect of industrial competition, operation&

management, market and national policy, and majority investors are advised to

exercise caution of investment risks.

The profit distribution plan that deliberated and approved by the Board is: based on

total stock issued 362, 631, 943 shares, distributed 3.00 Yuan (tax included) bonus in

cash for every 10-share hold by all shareholders, 0shares bonus issued (tax included)

and no capitalizing of common reserves carried out.

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Contents

Section I Important Notice, Contents and Paraphrase ................................................................. 2

Section II Company Profile and Main Finnaical Indexes ............................................................. 5

Section III Summary of Company Business ................................................................................... 9

Section IV Discussion and Analysis by the Management Team ................................................. 13

Section V Important Events ........................................................................................................... 34

Section VI Changes in shares and particular about shareholders .............................................. 50

Section VII Preferred Stock¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­¡­..¡­¡­¡­..57

Section VIII Particulars about Directors, Supervisors,Senior Executives and Employees ...... 58

Section IX Corporate Governance ................................................................................................. 71

Section X Financial Report ............................................................................................................. 78

Section XI Documents available for reference ................................................................ ¡­¡­¡­194

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Paraphrase

Items Refers to Contents

Listed Company, Company, the Company,

Refers to China National Accord Medicines Corporation Ltd.

Sinopharm Accord, the Group

Sinopharm Group Co., Ltd.; Controlling shareholder of the

Sinopharm Holding Refers to

Company

¡°Twelfth Five-Year¡± Refers to Year of 2011 to 2015

Company Law Refers to Company Law of the People¡¯s Republic of China

Securities Law Refers to Securities Law of the People¡¯s Republic of China

Yuan, 10 thousand Yuan, 100 million

Refers to RMB, RMB 10 thousand, RMB 100 million

Yuan

Terminology:

Direct selling Refers to A sales method of selling drug to the hospital directly

GMP certificate Refers to Good Manufacture Practice of Drugs certificate

GSP certificate Refers to Good Supply Practice certificate

That is CMS, and information system processing workflow &

Supply Chain Management Refers to

procurement, inventory & sales documents

Abbreviation

Sinopharm Refers to China National Pharmaceutical Group Corporation

Sinopharm (CNCM LTD) Refers to China National Medicines Corporation Ltd.

Sinopharm Holding Guangzhou Refers to Sinopharm Holding Guangzhou Co., Ltd.

Sinopharm Holding Guangxi Refers to Sinopharm Holding Guangxi Co., Ltd.

Sinopharm Holding Liuzhou Refers to Sinopharm Holding Liuzhou Co., Ltd.

Zhijun Pharmaceutical Refers to Shenzhen Zhijun Pharmaceutical Co., Ltd.

China National Zhijun (Suzhou) Refers to China National Zhijun (Suzhou) Pharmaceutical Co., Ltd.

Zhijun Pharmacy Trade Refers to Shenzhen Zhijun Pharmacy Trade Co., Ltd.

China National Zhijun (Shenzhen) China National Zhijun (Shenzhen) Pingshan Pharmaceutical

Refers to

Pingshan Co., Ltd.

Main Luck Pharmaceutical Refers to Shenzhen Main Luck Pharmaceuticals Inc.

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Section II Company Profile and Main Finnaical Indexes

I. Company information

Short form of the stock Sinopharm Accord ; Accord B Stock code 000028¡¢200028

Stock exchange for listing Shenzhen Stock Exchange

Name of the Company (in

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾

Chinese)

Short form of the Company

¹úÒ©Ò»ÖÂ

(in Chinese)

Foreign name of the

CHINA NATIONAL ACCORD MEDICINES CORPORATION LTD.

Company(if applicable)

Short form of foreign name

of the Company(if SINOPHARM ACCORD

applicable)

Legal representative Lin Zhaoxiong

Accord Pharm. Bldg., No. 15, Ba Gua Si Road, Futian District, Shenzhen, Guangdong

Registrations add.

Province

Code for registrations add 518029

Accord Pharm. Bldg., No. 15, Ba Gua Si Road, Futian District, Shenzhen, Guangdong

Offices add.

Province

Codes for office add. 518029

Company¡¯s Internet Web

HTTP://WWW.SZACCORD.COM.CN

Site

E-mail INVESTOR@SZACCORD.COM.CN

II. Person/Way to contact

Secretary of the Board Rep. of security affairs

Name Chen Changbing

Accord Pharm. Bldg., No. 15, Ba Gua

Contact add. Si Road, Futian District, Shenzhen,

Guangdong Province

Tel. +(86)755 25875195

Fax. +(86)755 25195435

0028@SZACCORD.COM.CN£»

E-mail

GYYZ0028@SINOPHARM.COM

III. Information disclosure and preparation place

Securities Times; China Securities Journal; Hong Kong Commercial

Newspaper appointed for information disclosure

Daily

Website for annual report publish appointed by

HTTP://WWW.SZSE.CN £» HTTP://WWW.CNINFO.COM.CN

CSRC

Preparation place for annual report Secretariat of the Board of Directors

IV. Registration changes of the Company

Organization code 19218626-7

Changes of main business since listing

No change.

(if applicable)

Previous changes for controlling No change.

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shareholders (if applicable)

V. Other relevant information

CPA engaged by the Company

Name of CPA Pricewaterhouse Zhongtian Certified Public Accountants Co., Ltd. (LLP)

11/Floor,PWC Center, Building 2#, Corporate Avenue, No.202 Hubin Rd., Luwan

Offices add. for CPA

District, Shanghai, P.R.C

Signing Accountants Chen Yuntao, Tang Pianpian

Sponsor engaged by the Company for performing continuous supervision duties in reporting period

¡ÌApplicable ¡õNot applicable

Name of sponsor Continuous supervision

Name of the sponsor Offices add. for the sponsor

representative period

27/F-28/F, Building 2,

China International Capital International Trade

Chen Jie, Zhang Lei 2014 -2016

Corporation Limited Mansion, No.1 Jianguomen

Outer Street, Beijing

Financial consultant engaged by the Company for performing continuous supervision duties in reporting period

¡õ Applicable ¡Ì Not applicable

VI. Main accounting data and financial indexes

Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and

accounting error correction or not

¡õ Yes ¡Ì No

Changes over last

2015 2014 2013

year

Operating income (RMB) 25,993,139,277.84 23,954,331,028.05 8.51% 21,199,466,399.21

Net profit attributable to

shareholders of the listed 761,312,261.06 652,497,176.03 16.68% 520,488,198.80

company(RMB)

Net profit attributable to

shareholders of the listed

company after deducting non- 715,212,681.54 611,245,652.69 17.01% 505,828,794.23

recurring gains and

losses(RMB)

Net cash flow arising from

1,047,979,102.98 -796,697,032.43 231.54% 465,028,099.83

operating activities(RMB)

Basic earnings per share

2.10 1.90 10.53% 1.81

(RMB/Share)

Diluted earnings per share

2.10 1.90 10.53% 1.81

(RMB/Share)

Return on Equity 14.94% 16.41% -1.47% 26.00%

Changes over end of

End of 2015 End of 2014 End of 2013

last year

Total assets (RMB) 13,218,349,735.31 12,828,941,540.90 3.04% 11,057,896,941.31

Net assets attributable to

shareholder of listed company 5,453,393,694.55 4,764,607,822.09 14.46% 2,244,757,658.03

(RMB)

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VII. Difference of the accounting data under accounting rules in and out of China

1. Difference of the net profit and net assets disclosed in financial report, under both IAS (International

Accounting Standards) and Chinese GAAP (Generally Accepted Accounting Principles)

¡õ Applicable ¡Ì Not applicable

The Company had no difference of the net profit or net assets disclosed in financial report, under either IAS

(International Accounting Standards) or Chinese GAAP (Generally Accepted Accounting Principles) in the period.

2. Difference of the net profit and net assets disclosed in financial report, under both foreign accounting

rules and Chinese GAAP (Generally Accepted Accounting Principles)

¡õ Applicable ¡Ì Not applicable

The Company had no difference of the net profit or net assets disclosed in financial report, under either foreign

accounting rules or Chinese GAAP (Generally Accepted Accounting Principles) in the period.

VIII. Quarterly main financial index

In RMB

First quarter Second quarter Third quarter Fourth quarter

Operating income 6,261,714,700.23 6,552,088,466.54 6,866,003,376.77 6,313,332,734.30

Net profit attributable to

shareholders of the listed 197,026,237.82 190,293,014.51 186,753,078.44 187,239,930.29

company

Net profit attributable to

shareholders of the listed

192,315,542.07 181,343,611.72 183,019,662.66 158,533,865.09

company after deducting non-

recurring gains and losses

Net cash flow arising from

182,179,606.70 266,059,972.13 -40,080,428.91 639,819,953.06

operating activities

Whether there are significant differences between the above-mentioned financial index or its total number and the

relevant financial index disclosed in the company¡¯s quarterly report and semi-annual report

¡õYes ¡Ì No

IX. Items and amounts of extraordinary profit (gains)/loss

¡ÌApplicable ¡õ Not applicable

In RMB

Item 2015 2014 2013 Note

Mainly for the

acquisition

compensation

Gains/losses from the disposal of non- income of the

current asset (including the write-off 5,863,107.27 2,262,989.96 3,029,150.67 subsidiary

that accrued for impairment of assets) Sinopharm Liuzhou

disposal of

investment real

estate.

Governmental subsidy reckoned into Mainly for

34,025,749.62 31,534,869.05 23,465,438.42

current gains/losses (not including the receiving of all

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subsidy enjoyed in quota or ration kinds of special

according to national standards, which subsidies and fiscal

are closely relevant to enterprise¡¯s interest discount in

business) the period.

Mainly for in the

period the recovery

Switch back of provision for separate provision

depreciation of account receivable 7,421,904.86 3,518,118.71 1,672,973.37 of Tibet Naqu

which was singly taken depreciation test Company accounts

receivable bad debt

of last year

Mainly for

Sinopharm Holding

and China National

Consigning fee received for consigned

750,000.00 750,000.00 333,333.33 Pharmaceutical

operation

Foreign Trade

Company to provide

hosting services.

Mainly because the

subsidiary

Sinopharm Liuzhou

Other non-operating income and obtained the

expenditure except for the 19,155,803.67 16,116,561.38 -9,876,088.28 relocation award

aforementioned items and business

placement

compensation for

the demolition

Less: Impact on income tax 11,848,624.93 11,767,755.13 3,851,467.99

Impact on minority shareholders¡¯

9,268,360.97 1,163,260.63 113,934.95

equity (post-tax)

Total 46,099,579.52 41,251,523.34 14,659,404.57 --

Concerning the extraordinary profit (gain)/loss defined by Q&A Announcement No.1 on Information Disclosure for

Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, and the items defined as recurring

profit (gain)/loss according to the lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information

Disclosure for Companies Offering Their Securities to the Public --- Extraordinary Profit/loss, explain reasons

¡õ Applicable ¡Ì Not applicable

In reporting period, the Company has no particular about items defined as recurring profit (gain)/loss according to the

lists of extraordinary profit (gain)/loss in Q&A Announcement No.1 on Information Disclosure for Companies Offering

Their Securities to the Public --- Extraordinary Profit/loss

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Section III Summary of Company Business

I. Main businesses of the company in the reporting period

The main business of China National Accord Medicines includes pharmaceutical

distribution and pharmaceutical industry; the company adheres to the joint

development of technical research and development, industrial manufacturing

and marketing and trade, and commits to become a provider for pharmaceutical

and healthcare products and services with international competitiveness.

(I) In the pharmaceutical distribution field, the company continues to integrate

the distribution and logistics business, deeply penetrates into the end markets,

improves the multistep distribution network, creates intelligent supply chain,

and devotes to become a provider for pharmaceutical and healthcare products

and services with the strongest influence, the highest share, the most complete

variety, the best service, and the fastest delivery in south district of China.

1. The Company¡¯s pharmaceutical distribution business is established in

Guangdong and Guangxi, the company has completed the network construction

of Guangdong and Guangxi in 2013, and the business has extended to the

county-level regions, and accelerated the integration of three-level companies in

2014, and realized the entire network operations in 2015.

2. The Company¡¯s pharmaceutical distribution business has achieved the first

scale in Guangdong and Guangxi and the leading position in market segment of

Guangdong and Guangxi, and has obtained the relatively leading position in

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vaccine, instrument, and e-commerce industries based on the full integration of

resources.

(II) In the pharmaceutical industry field, the company continues to integrate the

research & development and marketing and take the technological innovation as

a guide so as to become a provider for pharmaceutical and healthcare products

and services with quality leadership, core competitiveness, transverse

diversification, complete lengthways industry chain and brand influence in the

domestic and international markets

1. The company has obtained the international certification in pharmaceutical

industry, integrated export and product resources, explored the mainstream

markets in Europe and America, and realized internationalization in technical

cooperation, intellectual property protection, talent introduction, and joint

venture and cooperation and so on.

2. The Company has continued to develop cephalosporin series products and

upgrade products of bulk pharmaceutical chemicals, gradually introduced

cardiovascular, digestive, and respiratory system series products, taken bulk

pharmaceutical chemicals and chemical agents as core business and strategic

business, and traditional Chinese medicine and massive health as emerging

business.

II. Major changes in main assets

1. Major changes in main assets

Major assets Note of major changes

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Equity assets No major changes.

Increasing RMB 333,854,600 than the beginning of balance, with growth rate of

Fixed assets

44.78%, mainly because Construction in progress transferred in the fixed assets.

Intangible assets No major changes.

Decreasing RMB 154,121,900 than the beginning of balance, with growth rate

Construction in progress of 46.67%, mainly because Construction in progress transferred in the fixed

assets.

2. Main overseas assets

¡õ Applicable ¡Ì Not applicable

III. Core Competitiveness Analysis

1. Perfect distribution network

The Company owns an integrated distribution networks for pharmaceutical in Guangdong and Guangxi province,

and completely covers second grade class-A or above medical institutions and major chain drugstores in the above

two provinces. Furthermore, the Company offering medicine delivery services for the third terminal, represented

by many monomer drugstores, community health service network, clinic and new rural cooperative medical

system. Sinopharm Accord fully explore advantages of distribution network, provides customers with value-added

services and creating client value.

2. Leading edge intelligent supply chain

Distribution of the Company core with an intelligent supply chain, by means of promoting the jointly managed

inventory and intellectualized inventory management in hospital pharmacy, supply chain services extends

effectively with resources sharing and effective coordination in upstream-and-downstream achieved

3. High-efficiency management & control integration

The Company continues to promoted an integrated operation system in Guangdong and Guangxi province in

aspect of medicine distribution, focus on promoting integration both in procurement and foundation operation in

Guangdong and Guangxi province; accelerate the move towards collaboration in business of apparatus,

consumables, vaccine etc. within Guangdong and Guangxi, realized a synchronous of management in areas of

Guangdong and Guangxi. Firmly committed to the guidelines of delivering, specialization and integration in

aspect of pharmaceutical industry, optimize the platform structure of ¡°three centers and three bases¡±, the

integrated operational standards for industry improved constantly.

4. Rich product resources

In aspect of pharmaceutical distribution, the Company building an extensive cooperation with thousands of

venders and commercial enterprise in China, establishing a stable business relationship with hundreds of

importers and joint venture companies, owns variety resources of products. In aspect of pharmaceutical industry,

the Company take more eyes on pharmacy of anti-infection, respiratory system, digestive system and angiocarpy

as well as massive health, and possess an international-standards-qualify modern pharmaceutical R&D

manufacturing base, established many production lines (E.U.-certified) for powder-injection and oral solid dosage

forms and the production line of active ingredient. By means of building a strictly mechanism for quality

management and controlling, the Company has created multiple brands that takes top place in market shares.

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5. Unique-influence Sinopharm brand

Brand of the Company and distribution, industry child-brand and controlling shareholder and actual controller¡¯s

brand come down in one continuous line, depending on powerful force of central enterprises, the Company¡¯s

popularity and influence are prominent day by day in the industry.

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Section IV Discussion and Analysis by the Management Team

1. Introduction

2015 is the last year of "the 12th Five-Year Plan". In the past year, the company

has always faced the challenges beyond imagination and changeable

environment, the pressure of macro economy downturn was increasing, the

financial field was unordered and turbulent, and the changes of various policies

including clinical drug verification, new versions of GMP / pharmacopeia,

unannounced inspection, electronic supervision code, and decrease of bid price

make us have no time for them.

In face of the harsh environment and unfavorable situation, the company has

ensured the performance growth, the managers at all levels and staff have

assumed responsibilities and responded actively, the company¡¯s annual sales has

exceeded 30 billion yuan in the joint efforts of all staff, the net profit has

continued a steady and rapid growth, and the cash flow has got the best level. At

the same time, in the company¡¯s published major asset restructuring programs,

the company has been determined to engage in the distribution business in

Guangdong and Guangxi, create the unique national retail platform of China

National Pharmaceutical Group, and participate in pharmaceutical industry. All

these depend on the support of shareholders, the endeavor of team, and the hard

work of all staff; our market position has established the company's scale, and

our efforts have supported our values.

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In 2015, the Company realized operating income of RMB 25.993 billion,

representing a year-on-year increase of 8.51%; net profit attributable to shareholders

of listed company of RMB 761 million, representing a year-on-year increase of

16.68%. The Company has continued to keep growth.

As for distribution segment, operating income was RMB 24.325 billion, representing

a year-on-year increase of 9.10%; net profit of RMB 439 million, representing a year-

on-year increase of 24.16%.

As for pharmaceutical segment, operating income was RMB 1.677 billion,

representing a year-on-year decrease of 0.30%; net profit of RMB 254 million,

representing a year-on-year increase of 12.51%.

The major works done throughout the year:

1. Innovate management ideas, promote quality and efficiency

Based on the firstly determined company - business division two-stage

management and control mode, the company has continued to carry out the

projects for management improvement and benchmarking management,

promoted the innovative practice and leadership promotion projects,

implemented the management innovation to business development for boosting

the advance of quality and efficiency.

Distribution segment: from the initial integration strategy to the pioneering

intelligent supply chain mode, the overall expense ratio of distribution in 2015

has decline 0.4% percent compared with the same period of last year;

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Industry segment: continue to practice the lean manufacturing management

philosophy. In 2015, Zhijun Pharmaceutical has completed the upgrading and

reconstruction for rear-end automation of 3 production lines for powder

injection, and entirely realized the rear-end automation.

2. Optimize industry structure, and product mix becomes more reasonable

Distribution segment: in 2015, the direct selling accounted for 74%, the sales of

domestic products reached 52.2%, the market shares of distribution hospitals

surpassed competitors and established a leading position; in 2015, total 27

regions ranked top three in Guangdong and Guangxi;

Industry segment: the sales of oral solid dosage forms in 2015 accounted for

58%, and the product structure has been further optimized.

3. Speed up the distribution network sink to form complete network coverage

Up to 2015, the company has established a four-layer logistics center of

hierarchical distribution system, including 5 large logistics centers, and 17 small

and medium sized distribution centers; combined the strategic logistics

outsourcing, the distribution covered the commercial and medical institutions,

retail outlets, Guangdong and Guangxi business, , retail outlets, essential

drugs, narcotics, cold chain, and apparatus.

4. New distribution business has significantly enhanced and formed new scale

contributions

New distribution business has continued to innovate in business development,

channel extension, medicine e-commerce, and professional services. Up to 2015,

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the company has signed the contracts for 21 medical cooperation projects,

opened 14 DTC pharmacies in Guangdong and Guangxi (6 in Guangdong and 8

in Guangxi); the customer on website reached 634 in 2015 and achieved the

annual sales of 4 billion, meanwhile, the company has established the chain

management system to explore the comprehensive O2O development mode of

retail business.

5. Promote the construction of industrial base and expand the space for

industrial development

In 2015, Zhijun Pingshan has got the new GMP certificate and formally put into

operation, Zhijun Guanlan cephalosporin powder injection workshop ¢ò¢ó lines

have been prequalified by WHO.

6. Establish an international brand, and strengthen the competitive advantages

of domestic species

The company has a rapid growth in industry internationalization and has

actively explored the mainstream market business, the sales of independent

products has exceeded a hundred million in 2015.

International biddings:

UK: Consecutively won the bidding of the British National Health Service

Bureau from 2011 to2015, and became the first Chinese supplier of powder

injection;

Sweden: Won the bidding of the public hospitals in Sweden during 2014--2015;

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Germany: Won the bidding of the public hospitals of German government

during 2014--2015;

Hong Kong: Zhijun Guanlan has been winning the bidding for 8 years since

2007;

Spain: Cefuroxime axetil tablets have been successfully exported to Spain in

2015.

International registrations:

From 2011 to 2015, the company has obtained 13 self-owned brand products in

20 countries and regions, a total of 101 registered approvals.

7. Focus on the strategy of large variety, and drive the industrial transformation

The company has carried out the strategy of large variety for pharmacy,

successfully cultivated Cefixime Granules (DaLiFen) and Cefuroxime Axetil

Tablets (DaLiXin) by increasing the production and sales of oral solid dosage

forms, and 7 varieties have exceeded a hundred million at the end of 2015.

II. Main business analysis

1. Introduction

See the ¡°I-Introduction¡± in ¡°Discussion and Analysis by the Management Team¡±

2. Revenue and cost

(1) Constitute of operation revenue

In RMB

2015 2014

Increase/decrease

Ratio in operation Ratio in operation

Amount Amount y-o-y

revenue revenue

Total of operation

25,993,139,277.84 100% 23,954,331,028.05 100% 8.51%

revenue

According to industries

Pharmaceutical

24,230,858,388.18 93.22% 22,195,808,452.75 92.66% 9.17%

manufacturing

Medicine 1,628,474,289.30 6.27% 1,641,881,896.69 6.86% -0.82%

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commerce

Logistic & storage

29,492,120.37 0.11% 32,110,291.44 0.13% -8.15%

service

Income from

leasing& training 104,314,479.99 0.40% 84,530,387.17 0.35% 23.40%

service

According to products

Drug 25,326,566,581.31 97.44% 23,402,900,115.08 97.70% 8.22%

Instrument 538,085,402.20 2.07% 438,686,557.85 1.83% 22.66%

Other 128,487,294.33 0.49% 112,744,355.12 0.47% 13.96%

According to region

Domestic revenue 25,917,340,319.29 99.71% 23,868,171,044.87 99.64% 8.59%

Foreign revenue 75,798,958.55 0.29% 86,159,983.18 0.36% -12.03%

(2) About the industries, products, or regions accounting for over 10% of the company¡¯s operating income

or operating profit

¡ÌApplicable ¡õ Not applicable

In RMB

Increase/decrea

Increase/decrea Increase/decrea

Operating Gross profit se of gross

Operating cost se of operating se of operating

revenue ratio profit ratio y-o-

revenue y-o-y cost y-o-y

y

According to industries

Pharmaceutical 24,230,858,388. 22,964,838,971.

5.22% 9.17% 9.32% -0.13%

business 18 38

According to products

25,326,566,581. 23,419,531,346.

Drug 7.53% 8.22% 8.63% -0.35%

31 43

According to region

Domestic 25,917,340,319. 23,912,429,054.

7.74% 8.59% 9.01% -0.36%

revenue 29 88

Under circumstances of adjustment in reporting period for statistic scope of main business data, adjusted main business

based on latest one year¡¯s scope of period-end

¡õ Applicable ¡Ì Not applicable

(3) Income from physical sales larger than income from labors

¡Ì Yes ¡õ No

Increase/decrease

Industries Item Unit 2015 2014

y-o-y

10 thousand

Sales volume 42,914 39,714 8.06%

branches/box

Chemical agent

10 thousand

(Zhijun + Zhijun Output 44,324 44,389 -0.15%

branches/box

Suzhou)

10 thousand

Storage 9,543 9,109 4.76%

branches/box

Sales volume KG 132,211 212,233 -37.70%

Chemical Raw

Output KG 163,622 248,726 -24.61%

Medicine

Storage KG 45,981 42,046 9.36%

10 thousand

Sales volume 1,208 1,207 0.05%

branches/box

Chinese patent 10 thousand

Output 1,378 1,247 10.47%

drugs branches/box

10 thousand

Storage 318.44 175.98 80.95%

branches/box

Massive health Sales volume 10 thousand 8.36 4.57 83.02%

18

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

branches/box

10 thousand

Output 8.84 13.63 -35.13%

branches/box

10 thousand

Storage 3.88 4.19 -7.50%

branches/box

10 thousand

Sales volume 2,207 2,632 -16.16%

branches/box

10 thousand

International trade Output 2,161 2,854 -24.28%

branches/box

10 thousand

Storage 241 290 -16.75%

branches/box

Reasons for y-o-y relevant data with over 30% changes

¡ÌApplicable ¡õ Not applicable

Sales of Chemical Raw Medicine: affected by the EIA, the partial products have shut down.

Inventory of Chinese patent drugs: relocation of Begualing factory, some products need to stock up.

Sales of Massive health: the new business module is small base and growing rapidly.

Production of Massive health: affected by sales structure adjustment, focusing on coenzyme Q10 and mask

products, other products production decreased.

(4) Fulfillment of the company¡¯s signed significant sales contracts up to this reporting period

¡õ Applicable ¡Ì Not applicable

(5) Constitute of operation cost

Industry classification

In RMB

2015 2014

Increase/decrea

Industries Item Ratio in Ratio in

Amount Amount se y-o-y

operation cost operation cost

Wholesale and

22,964,838,971.

retail of Sales cost 95.80% 21,007,553,553. 95.48% 9.32%

38

Pharmaceutical 67

Pharmaceutical

Sales cost 951,255,881.90 3.97% 4.33% -0.13%

manufacturing 952,511,232.92

Logistic & Transportation

21,625,831.36 0.09% 0.11% -13.50%

storage service & storage cost 24,999,668.41

Leasing & other

Service cost 34,321,923.28 0.14% 0.08% 95.41%

income 17,564,314.91

Explanation

(6) Whether the changes in the scope of consolidation in Reporting Period

¡õ Yes ¡Ì No

(7)Major changes or adjustment in business, product or service of the Company in Reporting Period

¡õ Applicable ¡Ì Not applicable

(8) Major sales and main suppliers

19

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

Major sales client of the Company

Total top five clients in sales (RMB) 1,280,553,288.75

Proportion in total annual sales volume for top five

4.95%

clients

Information of top five clients of the Company

Serial Name Sales (RMB) Proportion in total annual sales

1 First 398,923,994.35 1.54%

2 Second 227,803,217.03 0.88%

3 Third 227,064,631.77 0.88%

4 Fourth 216,462,019.65 0.84%

5 Fifth 210,299,425.95 0.81%

Total -- 1,280,553,288.75 4.95%

Other situation of main clients

¡õ Applicable ¡Ì Not applicable

Main suppliers of the Company

Total purchase amount from top five suppliers

4,176,504,599.53

(RMB)

Proportion in total annual purchase amount for top

13.19%

five suppliers

Information of top five suppliers of the Company

Serial Name Sales (RMB) Proportion in total annual sales

1 First 972,629,193.33 3.07%

2 Second 911,707,279.26 2.88%

3 Third 881,824,147.48 2.78%

4 Fourth 723,802,343.51 2.29%

5 Fifth 686,541,635.95 2.17%

Total -- 4,176,504,599.53 13.19%

Other notes of main suppliers of the Company

¡õ Applicable ¡Ì Not applicable

3. Expenses

In RMB

Increase/decreas

2015 2014 Note of major changes

e y-o-y

Sales expense 533,791,055.46 522,383,083.15 2.18% No major change.

Management expense 459,218,208.55 474,317,573.25 -3.18% No major change.

Financial expense 91,282,085.47 123,129,102.91 -25.86% No major change.

4. R&D expenses

¡ÌApplicable ¡õ Not applicable

1. Purpose: carry out new product development, and improve the enterprise¡¯s capacity for sustainable

development; start the consistency evaluation for generic drug, strengthen the technical supports for products on

the market, and improve the market competitiveness; strengthen the management of intellectual property rights,

and improve the core technology content of products.

2. The progress of the project and the objectives to be achieved:

(1) In 2015, 8 projects have been declared and registered (of which 7 for production and 1 for clinic); 6 projects

have obtained the approved documents (of which 1 for production and 5 for clinic).

20

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

(2) Four industrial projects: the research and development of cefoxitin sodium, cefixime, nizatidine, and raw

materials of cefuroxime sodium has achieved stage results, thereinto, which cefoxitin sodium, cefixime, and

nizatidine have achieved the goal of industrialization.

(3) The consistency evaluation for generic drug has been launched and being implemented.

(4) Applied for 5 patents for invention this year, and 4 patents for invention have been authorized.

3. The impact on the future development of the company:

(1) Provide new profit growth points for enterprise development through new product development so as to

increase the enterprise¡¯s capacity for sustainable development.

(2) Improve the market competitiveness of existing varieties by giving technical innovation and supports to the

current products, as well as the consistency evaluation, so as to improve enterprise profitability.

(3) Enhance the core technical content of products through the management of intellectual property rights, and

facilitate the product bidding at the same time.

R&D investment of the Company

2015 2014 Change ratio

Number of R&D (people) 94 95 -1.05%

Ratio of number of R&D 2.02% 2.14% -0.12%

R&D investment (Yuan) 73,150,395.26 81,216,093.52 -9.93%

R&D investment accounted

0.28% 0.34% -0.06%

for R&D income

R&D investment

0.00 0.00 0.00%

capitalization (Yuan)

Capitalization R&D

investment accounted for 0.00% 0.00% 0.00%

R&D investment

The reason of great changes in the proportion of total R&D investment accounted for operation income than last year

¡õ Applicable ¡Ì Not applicable

Reason for the great change in R&D investment capitalization rate and rational description

¡õ Applicable ¡Ì Not applicable

5. Cash flow

In RMB

Item 2015 2014 Y-o-y changes

Subtotal of cash in-flow

29,260,366,119.30 24,692,507,689.55 18.50%

from operation activity

Subtotal of cash out-flow

28,212,387,016.32 25,489,204,721.98 10.68%

from operation activity

Net cash flow from

1,047,979,102.98 -796,697,032.43 231.54%

operation activity

Subtotal of cash in-flow

64,676,605.21 29,525,701.57 119.05%

from investment activity

Subtotal of cash out-flow

199,814,031.68 344,881,221.02 -42.06%

from investment activity

Net cash flow from

-135,137,426.47 -315,355,519.45 57.15%

investment activity

Subtotal of cash in-flow

210,787,436.91 2,495,098,201.62 -91.55%

from financing activity

Subtotal of cash out-flow

408,614,815.90 1,626,787,835.56 -74.88%

from financing activity

Net cash flow from

-197,827,378.99 868,310,366.06 -122.78%

financing activity

Net increased amount of 715,014,297.52 -243,736,347.61 393.36%

21

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

cash and cash equivalent

Main reasons for y-o-y major changes in aspect of relevant data

¡ÌApplicable ¡õ Not applicable

(1) Net cash flow generated by operating activities: a year-on-year growth of 231.54%, mainly because the sales

volume of current period has increased and the accounts receivables have been taken back in time, so that the

operational cash inflow has increased on a year-on-year basis;

(2) Subtotal of cash inflow generated by investing activities: a year-on-year growth of 119.05%, mainly because

the earnest money for selling the shares of subsidiaries has been received in the current period, which made the

investment cash inflows increase on a year-on-year basis;

(3) Subtotal of cash outflow generated by investing activities: a year-on-year decline of 42.06%, mainly because

the investment to Pingshan base project in the current period has been decreased compared with the previous

period, which made investment cash outflows decline on a year-on-year basis;

(4) Net cash flow generated by investing activities: a year-on-year growth of 57.15%, mainly because the

investment to Pingshan base project in the current period has been decreased compared with the previous period,

which made investment cash outflows decline on a year-on-year basis;

(5) Subtotal of cash inflow from financial activities: a year-on-year decline of 91.55%, mainly because funds for

private placement have been received in the previous period, while there is no such business in the current

period;

(6) Subtotal of cash outflows from financial activities: a year-on-year decline of 74.88%, mainly because funds

for private placement have been received in the previous period, so the company has enough funds used for

structural deposits, while there is no such business in the current period;

(7) Net cash flow generated by financial activities: a year-on-year decline of 122.78%, mainly because funds for

private placement have been received in the previous period, while there is no such business in the current

period;

(8) Net increase in cash and cash equivalents: a year-on-year growth of 393.36%, mainly because the net cash

flow provided by operating activities has increased by 231.54% on a year-on-year basis and the net cash flow

from financial activities has decreased by 122.78% on a year-on-year basis.

Reasons of major difference between the cash flow of operation activity in report period and net profit of the Company

¡ÌApplicable ¡õ Not applicable

During the reporting period, the company generated net cash flow from operating activities RMB 1,047,979,102.98, net

profit RMB787,347,909.22, there was big difference mainly because return of accounts receivable proceeded faster

and made the y-o-y increase of operating cash inflow.

III. Analysis of the non-main business

¡õ Applicable ¡Ì Not applicable

IV. Assets and liability

1. Major changes of assets composition

In RMB

End of 2015 End of 2014 Ratio

Notes of major changes

Amount Ratio in Amount Ratio in changes

22

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

total assets total assets

1,570,706,97 867,562,115.

Monetary fund 11.88% 6.76% 5.12% No major change.

0.51 54

Account 6,153,830,88 7,018,312,67

46.56% 54.71% -8.15% No major change.

receivable 2.75 3.19

2,533,160,75 2,322,333,26

Inventory 19.16% 18.10% 1.06% No major change.

8.28 2.87

Investment 145,102,318. 73,836,850.5

1.10% 0.58% 0.52% No major change.

property 77 1

Long-term

180,831,714. 157,604,846.

equity 1.37% 1.23% 0.14% No major change.

55 85

investment

1,079,412,43 745,557,829.

Fix assets 8.17% 5.81% 2.36% No major change.

7.53 35

Construction in 176,096,786. 330,218,696.

1.33% 2.57% -1.24% No major change.

process 58 56

Short-term 1,212,959,26 1,517,954,52

9.18% 11.83% -2.65% No major change.

loans 7.74 8.88

Long-term 72,495,172.3 39,695,448.0

0.55% 0.31% 0.24% No major change.

loans 0 0

2. Assets and liability measured by fair value

¡õ Applicable ¡Ì Not applicable

V. Investment

1. Overall situation

¡ÌApplicable ¡õ Not applicable

Investment in the same period of last

Investment in the reporting (RMB) Changes

year ( RMB)

1,002,980.00 7,490,000.00 -86.61%

2. The major equity investment obtained in the reporting period

¡õ Applicable ¡Ì Not applicable

3. The major non-equity investment doing in the reporting period

¡õ Applicable ¡Ì Not applicable

4. Financial assets investment

(1) Securities investment

¡õ Applicable ¡Ì Not applicable

The company had no securities investment in the reporting period.

23

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

(2) Derivative investment

¡õ Applicable ¡Ì Not applicable

The Company has no derivatives investment in the Period

5. Application of raised proceeds

¡ÌApplicable ¡õNot applicable

(1)Overall application of raised proceeds

¡ÌApplicable ¡õNot applicable

In 10 thousand Yuan

Usage of

the

retained

Total Cumulati Ratio of

raised

Total raised ve raised cumulativ Total

Total capitals Raised

accumula capital capitals e raised accumula

Total raised and what capitals

tive has has capitals tive

Year Way raised capital is idle for

raised purpose purpose has raised

capitals used expected more than

capitals of uses of uses purpose capitals

in Period to two years

used changed changed of uses unused

invested

in Period in total changed

with

those

capitals

Private Not

194,175.9 194,175.9

2014 placemen 14.27 0 0 0.00% 0 applicabl 0

9 9

t e

194,175.9 194,175.9

Total -- 14.27 0 0 0.00% 0 -- 0

9 9

Explanation on General usage of raised capital

More details of the use of raised capitals can be seen in ¡°Special report on the storage and the actual use of raised

capitals of the Company¡± disclosed on 21 March 2015. (Index of disclosure Juchao Website and No.: 2015-05)

(2) Situation of committed project of raised proceeds

¡ÌApplicable ¡õNot applicable

In 10 thousand Yuan

Projects

Amount ofInvestmen

Committed changed Project

Total Total accumulatt program

investment projects or not Amount Predicted Realized Reach thefeasibility

committednvestmen ed till the

and capital invested (includin invested useable interests predicted was

nvestment after investmen period-

in areas with fund g in report date of in interest or changed

of raised adjustmen t till the end

raising out of the changed period project Period not hugely or

capitals (1) period-end(3)=(2)/(1

plan partially not

(2) )

)

Committed investment projects

Loans payment to 143,405.9 143,405.9 143,405.9 100.00%

No 0·ñ ·ñ

Bank 2 2 0.00 2

Current capital

No 100.00% 0·ñ ·ñ

supplementation 49,500.62 49,500.62 6.83 49,500.62

Issue expense

No 100.00% 0·ñ ·ñ

payment 1,269.45 1,269.45 7.45 1,269.45

24

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

Subtotal of

committed -- 194,175.9 194,175.9 194,175.9 -- -- 0 -- --

investment projects 9 9 14.28 9

Capital invested in areas with fund raising out of the plan

Not applicable

194,175.9 194,175.9 194,175.9

Total -- 9 9 14.28 9

-- -- 0 -- --

Situation about not

coming up to

schemed progress or Fund raised are invested on scheme

expected revenue

and the reason(In

specific project)

Explanation on

major changes on Not applicable

project feasibility

Not applicable

Amount, usage and

progress of using for

fund raising out of

the plan

Not applicable

Change of

implementation

place of investment

project of raised

capitals

Not applicable

Regulation of

implementation

ways of investment

project of raised

capitals

Applicable

Till end of 20th March 2014, the pre-invested self-owned fund have been replaced by the fund

raised for returning the bank loans RMB 1,109,059,245.49 for the Company and its subsidiaries

(¡°the Group¡±), which was deliberated and approved by the ¡°proposal of pre-invested self-owned

fund replaced by the fund raised¡± in 2nd extraordinary meeting of 6th session of the Board

Meeting 2014. The above mentioned self-owned fund invested in advance for purpose of fund

raised has been verified by Pricewaterhouse Zhongtian Certified Public Accountants Co., Ltd.

Preliminary (LLP) with verification report Pricewaterhouse Zhongtian Te Shen Zi (2014) No. 855 verified.

investment and From 21 March 2014 to 31 December 2014, the Company used the fund raised for returning the

replacement of bank loans, supplying circulating fund s and paying the cost of issuance etc. of RMB

investment project of 832,557,917.77. As of 31 December 2014, the Company used the fund raised in 2014 of RMB

raised capitals 1,941,617,163.26, the cumulative use of funds raised a total of RMB 1,941,617,163.26, raise

funds balance has not yet been used to of RMB 142,732.75 (including raise funds balance can

be used to supply circulating fund of RMB 68,250.21 and issue reimbursed expenses has not

settled of RMB 74,482.54); The difference in the balance of the special account with the unused

funds raised of RMB 1,091,068.12 was bank interest received.The above mentioned the storage

and actual usage of fund raised has been verified by Pricewaterhouse Zhongtian Certified Public

Accountants Co., Ltd. (LLP) with verification report Pricewaterhouse Zhongtian Te Shen Zi

(2015) No. 568 verified.

Not applicable

Temporarily

supplement for the

25

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

current capitals with

idle raised capitals

Not applicable

Amount and reason

for surplus of raised

capitals when

implementing

projects

Usage of the retained

raised fund and

what is expected to Not applicable

invested with those

fund

Issues or other

conditions found in Use of the fund raised are strictly execute in line with the ¡°tri-party supervision agreement for

use of fund raised fund raised¡±, and no related issues or other conditions been found

and disclosure

(3)The changed project of raised proceeds

¡õ Applicable ¡Ì Not applicable

The Company has no project of raised proceeds changed in the Period

VI. Sales of major assets and equity

1. Sales of major assets

¡õ Applicable ¡Ì Not applicable

The Company had no sales of major assets in the reporting period.

2. Sales of major equity

¡õ Applicable ¡Ì Not applicable

VII. Analysis of main holding company and stock-jointly companies

¡ÌApplicable ¡õ Not applicable

Particular about main subsidiaries and stock-jointly companies net profit over 10%

In RMB

Company Main Register Operating Operating

Type Total assets Net Assets Net profit

name business capital revenue profit

China Production

National for raw

Zhijun medicine of 200,000,00 1,219,558,9 571,726,28 1,390,510,6 290,687,13 263,706,54

Subsidiary

(Shenzhen) chemical 0.00 65.65 5.52 24.23 9.93 7.77

Pharmaceut products,

ical Co., processing

26

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

Ltd. for Chinese

traditional

patent

medicine,

production

of chemical

material of

medicine;

Import and

export trade

are treated

by

authorized

certificates.

Chinese

traditional

patent

medicine,

chemical

preparations

, antibiotics,

bio-

chemical

medicine,

biological

medicine,

diagnosis

medicine,

biological

medicine

with

features of

Sinopharm

treatment

Holding and 1,000,000,0 5,311,312,3 1,245,966,6 14,405,931, 201,324,36 151,420,13

Subsidiary diagnosis, 00.00

Guangzhou 18.90 74.59 091.17 0.19 5.45

Co., Ltd. shaped

packing

food,

chemical

products,

and

various

commodit

y and

technique

hold by

self-

support

and

agency as

well as

import &

export of

technology

Sinopharm The drugs,

500,000,00 1,787,906,1 642,847,53 3,465,239,7 100,801,52 100,494,43

Holding Subsidiary medical

0.00 21.35 0.84 41.22 7.92 8.25

Guangxi equipment,

27

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

Co., Ltd. goods

transportati

on,

warehousin

g, loading

and

unloading,

glass

apparatus,

cosmetics,

daily

general

merchandis

e sales,

other

business

services,

other

professional

consulting,

self-support

and agent

all kinds of

goods and

technology

import and

export,

rental

housing

Particular about subsidiaries obtained or disposed in report period

¡ÌApplicable ¡õ Not applicable

The method of obtaining and handling The influence to the whole production

Company Name

subsidiaries during the report period and performance

Sinopharm Holding Guangzhou No significant impact on the

New established

Medical Management Co., Ltd. performance of the Company

Notes of holding and shareholding companies

No special condition need to explain

VIII. Structured vehicle controlled by the Company

¡õ Applicable ¡Ì Not applicable

IX. Future Development Prospects

Priorities of the company¡¯s distribution division in 2016

In 2016, the distribution division will accelerate the transformation from

traditional service thinking to service industry thinking, continue to innovate the

series products and services, face the patients instead of the hospital terminal,

and provide direct services for patients.

(I) Supply chain integration

28

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

Further promote the construction of the supply chain integration, build a whole

visual and information networking operating system, and support the efficient

development of business with strong management services. In 2016, the

company shall focus on improving the integrated management system of

distribution and enhancing the integrated management efficiency.

(II) Three business brands

1. Strengthen OTC terminal marketing brands: give play to the advantages of

whole network operation, and improve the OTC terminal platform operations in

the whole province based on Hengxing Company.

2. Create medical service brands: change the service marketing of traditional

services from focusing on sales orders to focusing on inventory management and

logistics, and innovation services focus on services of undertaking

pharmaceutical affairs.

3. Establish DTC retail brands: improve DTC network layout, promote self-

paying pharmacies in hospital and 5 + X pharmacy mode, introduce the network

hospital mode, promote drug delivery service, and comprehensively promote

retail O2O strategy.

(III) Improve quality and efficiency

1. Enhance the sales proportion of high-quality customers, strengthen the

product development of variety with high gross margin, strengthen the variety

and quality analysis, establish exit accountability mechanisms, and enhance

profitability by optimizing structure.

29

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

2. Adhere to the profit orientation, build a more steady and sustainable

operating system, give full play to operational financial management and control

function, save resources and funds and resource utilization, strengthen the

capital ratio, and improve economies of scale.

3. Establish a management system to optimize the equipment sales and purchase,

develop new products, complete product mix of equipments, improve production

quality management system for prepared herbal medicine in small pieces ready

for decoction, improve the management qualifications of all regions, and

vigorously promote the development of prepared herbal medicine in small pieces

ready for decoction; accelerate to develop new business of vaccines, improve the

variety management structure, develop the cold chain distribution, temperature

control systems and other innovative models and products, and enhance the

CDC mode supply capacity.

(IV) Management service backstage

1. Fast market reaction speed: from background to foreground, contact with

first line and the customers;

2. Strong decision-making management ability: To forward planning, based on

the establishment of various formats to adapt to the development of an

integrated platform for managed services model.

3. One platform (integrated platform), two systems (intelligent supply chain

system, internet marketing system), three big brands (terminal marketing,

30

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

medical services, DTC chain), four major elements (platform, human power,

information, logistics)

Priorities of pharmaceutical division in 2016

In 2016, the pharmaceutical division shall focus on the establishment of actual

and efficient management background system: foreground- focus on building a

product marketing system suitable for market changes; background - focus on

establishing strict and efficient management service background.

(I) Optimize system

Optimize the management and control system of business division, dig the

internal growth potential, increase the investment attraction, take full advantage

of spare production capacity of Zhijun Pingshan, strive to complete the annual

budget targets, and achieve the expected profits.

(II) Marketing

Continue to promote marketing compliance management, subdivide the

tendering and non-tendering markets for non-essential drugs and essential

drugs, focus on oral solid preparation, pay attention to women and children and

low-cost medicine specialist hanging varieties, use big data to comprehensively

promote the refined marketing management, and enhance the product market

share.

(III) Research and development

1. Research and develop the follow-up promotion work of varieties withdrawn

investigation, transfer the focus of work to production and management of

31

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

current period, strengthen management efforts in the ongoing projects and

current technical support projects, and promote the consistency evaluation to

large varieties such as cefuroxime axetil tablets, cefixime granules, etc.

2. Provide supports for the variety bidding by digging variety technology and

patent advantages.

(IV) Internationalization

1. Promote citalopram international certification program of Zhijun Pingshan

as planned;

2. Zhijun Guanlan completes the EU authentication for solid workshop II, line

2/line 3 of powder workshop I;

3. Complete export orders for independent products of over a hundred million

yuan in the whole year.

(V) Production

Production centers arrange and deploy resources, deepen lean production, and

build production platforms of quality and efficiency.

1, Zhijun Pingshan: complete the overall relocation of Shenzhen Traditional

Chinese Medicine, and new GMP certification of the second phase. Focus on the

improvement of production efficiency and the overall cost decreasing and

benefit increasing;

2, Zhijun Guanlan: deepen lean management, TPM project management, and

promote team building.

X. Reception of research, communication and interview

1. In the report period, reception of research, communication and interview

32

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

¡ÌApplicable ¡õ Not applicable

Time Way Type Basic situation index of investigation

Knew the influence of medical

2015-04-24 Field research Institute reform policy to the development of

the industry. No material provided.

Reception (times) 1

Number of hospitality 5

Number of individual reception 6

Number of other reception 82

Disclosed, released or let out major

No disclosed, released or let out major undisclosed information

undisclosed information

2. from the end of reporting period to the disclosure date, reception of research, communication and

interview

¡ÌApplicable ¡õ Not applicable

Time Way Type Basic situation index of investigation

Knew the progress of major assets

restructuring and continue

2016-01-13 Field research Institute

suspension reason of the Company.

No material provided.

Reception (times) 1

Number of hospitality 46

Number of individual reception 72

Number of other reception 25

Disclosed, released or let out major

No

undisclosed information

33

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

Section V. Iimportant Events

I. Profit distribution plan of common stock and capitalizing of common reserves plan

Formulation, Implementation and Adjustment of common stock Profit Distribution Policy Especially Cash Dividend

policy during the Reporting Period

¡ÌApplicable ¡õ Not applicable

On 25 April 2015, the profit distribution plan for year of 2014 was deliberated and approved by annual general

meeting of 2014, that is taking total 362,631,943 shares as the radix, distributed RMB 2.00 (tax included) for each

10 shares in cash. The announcement of 2014 interest distribution implementation was released on 16 May 2015

by the Board (published in Securities Times, China Securities Journal, Hong Kong Commercial Daily and Juchao

Website http://www.cninfo.com.cn), the profit distribution plan for year of 2014 was completed, and dividend for

public shares was distributed to the account of shareholders dated 22 May 2015 (A-share) and 26 May 2015 (B-

share) respectively.

Special explanation on cash dividend policy

Satisfy regulations of General Meeting or requirement of

Y

Article of Association (Y/N):

Well-defined and clearly dividend standards and

Y

proportion (Y/N):

Completed relevant decision-making process and

Y

mechanism (Y/N):

Independent directors perform duties completely and play

Y

a proper role (Y/N):

Minority shareholders have opportunity to express

opinions and demands totally and their legal rights are Y

fully protected (Y/N):

Condition and procedures are compliance and transparent

Not applicable

while the cash bonus policy adjusted or changed (Y/N):

Profit distribution plan (pre-plan) of common stock and capitalizing of common reserves plan (pre-plan) in latest three

years (including the reporting period)

(1) Profit distribution plan for year of 2013

Taking total 362,631,943 shares as of 31 December 2013 as the radix, cash bonus of RMB 1.8

(before tax) each 10 shares will be distributed to whole shareholders. This profit distribution did not

convert capital reserve into share capital.

(2) Profit distribution plan for year of 2014

Taking the total 362,631,943 shares as of 31 December 2014 as the radix, cash bonus of RMB 2.00

(before tax) each 10 shares will be distributed to the whole shareholders. This profit distribution did

not convert capital reserve into share capital.

(3) Profit distribution plan for year of 2015

Taking the total 362,631,943 shares as of 31 December 2015 as the radix, cash bonus of RMB 3.00

(before tax) each 10 shares will be distributed to the whole shareholders. This profit distribution did

not convert capital reserve into share capital.

Cash dividend of common stock in latest three years (including the reporting period)

In RMB

Year for bonus Amount for cash Net profit Ratio in net profit Amount for cash Proportion for

shares bonus (tax attributable to attributable to bonus by other cash bonus by

34

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

included) common stock common stock ways other ways

shareholders of shareholders of

listed company in listed company

consolidation contained in

statement for consolidation

bonus year statement

2015 108,789,582.90 761,312,261.06 14.29% 0.00 0.00%

2014 72,526,388.60 652,497,176.03 11.12% 0.00 0.00%

2013 65,273,749.74 520,488,198.80 12.54% 0.00 0.00%

The Company gains profits in reporting period and the retained profit of common stock shareholders provided by parent

company is positive but no plan of cash dividend proposed of common stock

¡õ Applicable ¡Ì Not applicable

II. Profit distribution plan and capitalizing of common reserves plan for the Period

¡ÌApplicable ¡õ Not applicable

Bonus shares for every 10-share (Share) 0

Dividends for every 10-share (RMB) (Tax

3.00

included)

Shares transferred from every 10 shares

0

(Share)

Equity base of distribution plan (Share) 362,631,943

Total cash dividend(RMB) (Tax included) 108,789,582.90

Distributable profits (RMB) 2,160,557,903.68

Ratio of cash dividend in total profit

100.00%

distribution

Cash dividend policy:

If the company¡¯s development is at the growth stage with significant capital expenditures, the minimum proportion of

cash dividend in the profit distribution should reach 40%.

Detail explanation on profit distribution or capitalization from capital public reserve

III. Implementation of commitment

1. Commitments that the company, shareholders, actual controller, offeror, directors, supervisors, senior

management or other related parties have fulfilled during the reporting period and have not yet fulfilled by

the end of reporting period

¡ÌApplicable ¡õ Not applicable

Type of Commitme Commitme Implemen

Commitments Promise Content of commitments

commitments nt date nt term tation

Commitments

for

Share Merger

Reform

As a large pharmaceutical

commercial enterprise whose

business involves pharmaceutical

wholesale and retail, Sinopharm

Commitments in Holding may overlap with the

Commitment Normally

report of Sinopharm Company in geographical Long-term

of 2005-06-21 implement

acquisition or Holding segmentation during its future effective

shareholders

equity change business development. To avoid

the potential peer competition

brought by such geographical

overlap, Sinopharm Holding

undertakes that, upon the transfer

35

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

of shares of Sinopharm Holding

Guangzhou it held to Accord

Pharma, ¡°1. it will not newly-

establish or broaden within

Guangdong any business

operation that actually compete

with that of Accord Pharma, or set

up any new subsidiaries or

subordinate enterprises who

engage in such business. 2. It will

enter into business delineation

with Accord Pharma and

Sinopharm Holding Guangzhou,

thereby giving the three parties

clear geographical areas to carry

out pharmaceutical wholesale and

retail businesses, so as to avoid

potential peer competition. Apart

from above, Sinopharm Holding

will no longer newly-establish any

enterprise that may compete with

Accord Pharma in the production

and R&D of pharmaceutical

products.¡±

Commitments in

assets

reorganization

Sinopharm Holding has

undertaken in the Letter of

Undertaking from Sinopharm

Group Co. Ltd. on Avoiding Peer

Competition that, ¡°I. the Company

and the enterprises it wholly-

owns, controls or has de facto Controllin

control over (excluding g

Sinopharm Accord and its sharehold

controlled enterprises, similarly er is

hereinafter) do not exist any implement

business or operation that would in real

constitute substantive peer earnest,

competition with Sinopharm Sinophar

Accord and its controlled m Accord

Commitments

Commitment enterprises. II. the Company and will

make in initial Sinopharm Long-term

of the enterprises it wholly-owns, 2013-09-05 actively

public offering Holding effective

shareholders controls or has de facto control urged the

or re-financing

over will not engage in, controllin

participate in or carry out in g

Guangdong and Guangxi any sharehold

business or activities that would er and

constitute substantive competition actual

with the pharmaceutical controller

commercial businesses of to fulfill

Sinopharm Accord. III. The commitme

Company and the enterprises it nts

wholly-owns, controls or has de

facto control over will not engage

in, participate in or carry out any

business or activities that would

constitute substantive competition

with the pharmaceutical industrial

36

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

businesses of Sinopharm Accord.

IV. The Company will not make

use of its control over Sinopharm

Accord to damage the legal

interests of Sinopharm Accord

and other shareholders (especially

minority shareholders). The Letter

of Undertaking takes effect since

the date of issue and will remain

effective during the entire period

when the Company has been the

controlling shareholder or

connected party of Sinopharm

Accord. During the validity of the

Undertaking, the Company will

indemnify in time Sinopharm

Accord from any loss which may

arise out of the Company¡¯s

violation of the Undertaking.¡±

Sinopharm Holding has

undertaken in the Letter of

Undertaking from Sinopharm

Group Co. Ltd. on Standardization

of the Connected Transactions

with China National Accord

Medicines Corporation Ltd. that,

¡°I. during the period when the

Company takes control over

Sinopharm Accord, the Company

and the companies or enterprises Controllin

it directly or indirectly controls g

(hereinafter referred to as sharehold

¡°Connected Party¡±) will strictly er is

standardize the connected implement

transactions with Sinopharm in real

Accord and its controlled earnest,

enterprises. II. for those connected Sinophar

transactions beyond avoidance or m Accord

Commitment out of reasonable causes, the will

Sinopharm Long-term

of Company and Connected Party 2013-09-05 actively

Holding effective

shareholders will enter into standardized urged the

connected transaction agreement controllin

with Sinopharm Accord g

according to law. Sinopharm sharehold

Accord will perform approval er and

procedure according to relevant actual

laws, rules and regulations, other controller

standardization documents and its to fulfill

constitutional documents, and commitme

fulfill its obligation to disclose nts

information on connected

transactions. III. For those

connected transactions beyond

avoidance or out of reasonable

causes, the Company and

Connected Party will determine

the prices of connected

transactions based on the prices of

same or similar transactions

entered into by independent third

37

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

parties of no connection while

following the principles of open,

fair and just to ensure the fairness.

IV. when the board or

shareholders¡¯ meeting of

Sinopharm Accord votes on the

relevant connected transactions

involving the Company and other

enterprises it controls, the

Company will perform obligations

including that necessary interested

directors and shareholders shall be

abstained from voting according

to relevant regulations, and follow

the legal procedures for approval

of connected transactions and

fulfill its information disclosure

obligation. V. the Company

guarantees to attend shareholders¡¯

meeting according to the

constitutional documents of

Sinopharm Accord, exercise its

corresponding rights and assumed

its corresponding obligations in an

equitable manner, not to take

advantage of its standing as

controlling shareholder to seek

unjust interests, or to use

connected transactions to illegally

transfer capital or profit out of

Sinopharm Accord, or to

prejudice the legal interests of

Sinopharm Accord and other

shareholders (especially minority

shareholders). VI. The Letter of

Undertaking takes effect since the

date of issue and will remain

effective during the entire period

when the Company has been the

controlling shareholder or

connected party of Sinopharm

Accord. During the validity of the

Undertaking, the Company will

indemnify in time Sinopharm

Accord from any loss that may

arise out of the Company¡¯s

violation of the Undertaking.¡±

¡±Sinopharm Group has Controllin

undertaken in the Letter of g

Undertaking from China National sharehold

Pharmaceutical Group er is

Corporation on Avoiding the Peer implement

Commitment

Sinopharm Competition with China National Long-term in real

of actual 2013-10-16

Group Accord Medicines Corporation effective earnest,

controller

Ltd. that, ¡°I. in the coming five Sinophar

years, Sinopharm Group intends m Accord

to take appropriate measures will

including replacement or actively

acquisition of assets or equity urged the

38

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

reorganization to solve the controllin

problem of peer competition g

between Weiqida and Sinopharm sharehold

Accord. II. apart from the matters er and

disclosed in the past and in the actual

Letter of Undertaking, the controller

Company and the enterprises it to fulfill

wholly-owns, controls or has de commitme

facto control over (excluding nts

Sinopharm Accord and its

controlled enterprises, similarly

hereinafter) do not directly engage

in, participate in or carry out

within the PRC any business or

activities that would constitute

substantive competition with the

production and operation of

Sinopharm Accord. The relative

undertakings in respect of

avoiding peer competition given

by the Company in the past

remain valid. III. The Company

will not take advantage of its

control over Sinopharm Accord to

damage the legal interests of

Sinopharm Accord and other

shareholders (especially minority

shareholders). IV. The Letter of

Undertaking takes effect since the

date of issue and will remain

effective during the entire period

when the Company has been the

de facto controller or connected

party of Sinopharm Accord.¡±

Sinopharm Group has undertaken

in the Letter of Undertaking from

China National Pharmaceutical

Controllin

Group Corporation on

g

Standardization of the Connected

sharehold

Transactions with China National

er is

Accord Medicines Corporation

implement

Ltd that, ¡°I. during the period

in real

when the Company takes control

earnest,

over Sinopharm Accord, the

Sinophar

Company and the companies or

m Accord

enterprises it directly or indirectly

Commitment will

Sinopharm controls (hereinafter referred to as Long-term

of actual 2013-09-22 actively

Group ¡°Connected Party¡±) will strictly effective

controller urged the

standardize the connected

controllin

transactions with Sinopharm

g

Accord and its controlled

sharehold

enterprises. II. for those connected

er and

transactions beyond avoidance or

actual

out of reasonable causes, the

controller

Company and Connected Party

to fulfill

will enter into standardized

commitme

connected transaction agreement

nts

with Sinopharm Accord

according to law. Sinopharm

Accord will perform approval

39

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

procedure according to relevant

laws, rules and regulations, other

standardization documents and its

constitutional documents, and

fulfill its obligation to disclose

information on connected

transactions. III. For those

connected transactions beyond

avoidance or out of reasonable

causes, the Company and

Connected Party will determine

the prices of connected

transactions based on the prices of

same or similar transactions

entered into by independent third

parties of no connection while

following the principles of open,

fair and just to ensure the fairness.

IV. when the board or

shareholders¡¯ meeting of

Sinopharm Accord votes on the

relevant connected transactions

involving the Company and other

enterprises it controls, the

Company will perform obligations

including that necessary interested

directors and shareholders shall be

abstained from voting according

to relevant regulations, and follow

the legal procedures for approval

of connected transactions and

fulfill its information disclosure

obligation. V. the Company

guarantees not to take advantage

of its standing as actual controller

to seek unjust interests, or to use

connected transactions to illegally

transfer capital or profit out of

Sinopharm Accord, or to

prejudice the legal interests of

Sinopharm Accord and other

shareholders (especially minority

shareholders).¡±VI. The Letter of

Undertaking takes effect since the

date of issue and will remain

effective during the entire period

when the Company has been the

actual controller or connected

party of Sinopharm Accord.

Equity incentive

commitment

Other

commitments

for medium and

small

shareholders

Completed on

Y

time(Y/N)

40

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

2. Concerning assts or project of the Company, which has profit forecast, and reporting period still in

forecasting period, explain reasons of reaching the original profit forecast

¡õ Applicable ¡Ì Not applicable

IV. Non-operational fund occupation from controlling shareholders and its related party

¡õ Applicable ¡Ì Not applicable

No non-operational fund occupation from controlling shareholders and its related party in period.

V. Explanation from Board of Directors, Supervisory Committee and Independent Directors

(if applicable) for ¡°Qualified Opinion¡± that issued by CPA

¡õ Applicable ¡Ì Not applicable

VI. Particulars about the changes in aspect of accounting policy, estimates and calculation

method compared with the financial report of last year

¡õ Applicable ¡Ì Not applicable

No particulars about the changes in aspect of accounting policy, estimates or calculation method in Period.

VII. Major accounting errors within reporting period that needs retrospective restatement

¡õ Applicable ¡Ì Not applicable

No major accounting errors within reporting period that needs retrospective restatement for the Company in the period.

VIII. Compare with last year¡¯s financial report; explain changes in consolidation statement¡¯s

scope

¡ÌApplicable ¡õ Not applicable

New established subsidiary: Sinopharm Holding Guangzhou Medical Management Co., Ltd.

IX. Appointment and non-reappointment (dismissal) of CPA

Accounting firm appointed

Pricewaterhouse Zhongtian Certified Public Accountants Co., Ltd.

Name of domestic accounting firm

(LLP)

Remuneration for domestic accounting firm (in

225(Without internal control audit costs)

10 thousand Yuan)

Continuous life of auditing service for

6

domestic accounting firm

Name of domestic CPA Tang Zhenfeng, Tang Pianpian

Name of foreign accounting firm (if applicable) N/A

Remuneration for foreign accounting firm (10

0

thousand Yuan) (if applicable)

Continuous life of auditing service for foreign

0

accounting firm (if applicable)

Name of foreign CPA (if applicable) N/A

Re-appointed accounting firms in this period

¡õYes ¡ÌNo

Appointment of internal control auditing accounting firm, financial consultant or sponsor

¡ÌApplicable ¡õ Not applicable

41

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

The Company engaged Pricewaterhouse Coopers Zhongtian LLP as the audit body for internal control, and auditing

charge for internal control amounting as RMB 0.35 million.

X. Particular about suspended and delisting after annual report disclosed

¡õ Applicable ¡Ì Not applicable

XI. Bankruptcy reorganization

¡õ Applicable ¡Ì Not applicable

No bankruptcy reorganization for the Company in reporting period

XII. Significant lawsuits and arbitrations of the Company

¡õApplicable ¡ÌNot applicable

No significant lawsuits and arbitrations occurred in the reporting period

XIII. Penalty and rectification

¡õ Applicable ¡Ì Not applicable

No penalty and rectification for the Company in reporting period.

XIV. Integrity of the company and its controlling shareholders and actual controllers

¡õ Applicable ¡Ì Not applicable

XV. Implementation of the company¡¯s stock incentive plan, employee stock ownership plan or

other employee incentives

¡õ Applicable ¡Ì Not applicable

During the reporting period, the company has no stock incentive plan, employee stock ownership plan or other

employee incentives that have not been implemented.

XVI. Major related transaction

1. Related transaction with routine operation concerned

(1) The related transaction with routine operations concerned found more in the ¡°XII. Related parties and related

transaction¡± in ¡°Section X. Financial Report¡±;

(2) The related transactions are settled by cash and notes, disclosed on 22 March 2015, and disclosure on Juchao

Website with Notice No.: 2015-09;

(3) According with the Notice of Routine Related Transactions of the Company and subordinate enterprise for year of

2015, deliberated and approved by the Board dated 20 March 2015, during the reporting period, the affiliated company

sales representing 88.16% of the total predicted amount, affiliated company procurement representing 88.86% of the

total predicted amount, the interest expenditure of affiliated company loans representing 10.12% of the predicted

amount, the interest expenditure of buyer discount for affiliated company notes representing 17.53% of the predicted

42

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

amount, the income of house leasing from affiliated company representing 99.84% of the predicted amount, expenditure

of the house equipment leasing by affiliated company representing 96.32% of the predicted amount, the income of

service providing from affiliated company representing 92.10% of the predicted amount and expenditure of the service

received by affiliated company representing 112.31% of the predicted amount.

2. Related transactions by assets acquisition and sold

¡õ Applicable ¡Ì Not applicable

No related transactions by assets acquisition and sold for the Company in reporting period

3. Main related transactions of mutual investment outside

¡õ Applicable ¡Ì Not applicable

No main related transactions of mutual investment outside for the Company in reporting period

4. Contact of related credit and debt

¡ÌApplicable ¡õNot applicable

Whether the Company had non-operating contact of related credit and debt

¡õ Yes ¡Ì No

The Company had no non-operating contact of related credit and debt in the reporting period.

5. Other related transactions

¡õ Applicable ¡Ì Not applicable

The company had no other significant related transactions in reporting period.

XVII. Significant contract and implementations

1. Trusteeship, contract and leasing

(1) Trusteeship

¡ÌApplicable ¡õNot applicable

Explanation on trust

1. As subordinate companies of majority shareholder, Foshan Nanhai Medicine Co., Ltd. and Guangdong Dong

Fang Uptodate & Special Medicines Co., Ltd. both operate pharmaceutical distribution business within

Guangdong, which partially overlaps with the pharmaceutical distribution business and geographical location of

the Company and constitutes peer competition. In July 2013, to solve the problem of peer competition, majority

shareholder entrusted Sinopharm Accord and Sinopharm Accord agreed to take over the management of the above

two companies.

2. As a subordinate enterprise of the de facto controller, Guangdong South Pharmaceutical Foreign Trade Co., ltd.

operates pharmaceutical distribution business within Guangdong, which partially overlaps with the

pharmaceutical distribution business and geographical location of the Company and constitutes peer competition.

In September 2013, to solve the problem of peer competition, the actual controller Sinopharm Group entrusted

Sinopharm Accord and Sinopharm Accord agreed to take over the management of the above company.

Items generated over 10% gains/losses in total profit in reporting period for the Company

¡õ Applicable ¡Ì Not applicable

The Company had no trust items generated over 10% gains/losses in total profit in reporting period

(2) Contract

43

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

¡õ Applicable ¡Ì Not applicable

No contract for the Company in reporting period

(3) Leasing

¡õ Applicable ¡Ì Not applicable

No leasing for the Company in reporting period

2. Major guarantees

¡ÌApplicable ¡õ Not applicable

(1) Guarantees

In 10 thousand Yuan

Particulars about the external guarantee of the Company (Barring the guarantee for subsidiaries)

Related Actual date of Guarant

Name of the Announce happening Actual Impleme ee for

Guarantee Guarantee Guarantee

Company ment (Date of guarantee nted related

limit type term

guaranteed disclosure signing limit (Y/N) party

date agreement) (Y/N)

China National

2013-08- General 2014.4.4-

Accord Medicines 20,000.00 2014-04-04 4,089.52 No Yes

20 assurance 2022.4.3

Corporation Ltd.

China National

2015-03- General 2015.5.28-

Accord Medicines 20,000.00 2015-05-28 6,630.00 No Yes

21 assurance 2016.2.15

Corporation Ltd.

China National

2014-03- General 2014.7.17-

Accord Medicines 40,000.00 2014-07-17 348.78 No Yes

22 assurance 2020.7.17

Corporation Ltd.

China National

2015-03- General 2015.5.15-

Accord Medicines 30,000.00 2015-05-15 2,000.00 No Yes

21 assurance 2016.5.14

Corporation Ltd.

China National

2015-03- General 2015.6.18-

Accord Medicines 25,000.00 2015-06-18 13,363.68 No Yes

21 assurance 2016.6.15

Corporation Ltd.

Total actual occurred

Total approving external

75,000.00 external guarantee in 86,184.29

guarantee in report period (A1)

report period (A2)

Total actual balance of

Total approved external

external guarantee at the

guarantee at the end of report 135,000.00 26,431.97

end of report period

period ( A3)

(A4)

Guarantee of the Company for the subsidiaries

Related Actual date of Guarant

Name of the Announce happening Actual Impleme ee for

Guarantee Guarantee Guarantee

Company ment (Date of guarantee nted related

limit type term

guaranteed disclosure signing limit (Y/N) party

date agreement) (Y/N)

Sinopharm Holding 2015-03- General 2015.10.23-

5,000.00 2015-10-23 2,005.90 No Yes

Guangxi Co., Ltd. 21 assurance 2016.10.23

Sinopharm Holding 2015-03- General 2015.7.30-

20,000.00 2015-07-30 13,120.71 No Yes

Guangxi Co., Ltd. 21 assurance 2016.7.30

Sinopharm Holding 2015-03- General 2015.9.8-

25,000.00 2015-09-08 16,010.25 No Yes

Guangxi Co., Ltd. 21 assurance 2016.9.7

Sinopharm Holding 2015-03- General 2015.9.23-

20,000.00 2015-09-23 813.70 No Yes

Guangxi Co., Ltd. 21 assurance 2016.9.23

Sinopharm Holding 2015-03- General 2015.8.21-

10,000.00 2015-08-21 0 No Yes

Guangxi Co., Ltd. 21 assurance 2016.8.20

Sinopharm Holding 2015-03- General 2015.5.29-

10,000.00 2015-05-29 0 No Yes

Guangxi Co., Ltd. 21 assurance 2016.5.29

Sinopharm Holding 2015-08- General 2015.9.25-

15,000.00 2015-09-25 6,573.66 No Yes

Guangxi Co., Ltd. 20 assurance 2016.8.6

44

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

Sinopharm Holding

2015-03- General 2015.5.20-

Guangzhou Co., 35,000.00 2015-05-20 6,839.50 No Yes

21 assurance 2016.5.20

Ltd.

Sinopharm Holding

2015-03- General 2015.8.21-

Guangzhou Co., 10,000.00 2015-08-21 4,160.03 No Yes

21 assurance 2016.8.20

Ltd.

Sinopharm Holding

2015-03- General 2015.12.25-

Guangzhou Co., 5,000.00 2015-12-25 1,606.75 No Yes

21 assurance 2016.10.30

Ltd.

Sinopharm Holding

2015-08- General 2015.12.21-

Guangzhou Co., 20,000.00 2015-12-21 2,168.52 No Yes

20 assurance 2016.12.20

Ltd.

Sinopharm Holding

2015-03- General 2015.9.17-

Guangzhou Co., 40,000.00 2015-09-17 28,031.67 No Yes

21 assurance 2016.6.29

Ltd.

Sinopharm Holding

2015-03- General 2015.9.20-

Guangzhou Co., 40,000.00 2015-09-20 17,592.06 No Yes

21 assurance 2016.9.19

Ltd.

Sinopharm Holding

2015-03- General 2015.9.8-

Guangzhou Co., 35,000.00 2015-09-08 31,820.36 No Yes

21 assurance 2016.9.7

Ltd.

Sinopharm Holding

2015-03- General 2015.6.23-

Guangzhou Co., 30,000.00 2015-06-23 18,262.20 No Yes

21 assurance 2016.4.30

Ltd.

Sinopharm Holding

2015-03- General 2015.5.6-

Guangzhou Co., 35,000.00 2015-05-06 27,946.03 No Yes

21 assurance 2016.5.6

Ltd.

Sinopharm Holding

2015-03- General 2015.10.23-

Guangzhou Co., 10,000.00 2015-10-23 2,682.52 No Yes

21 assurance 2016.7.31

Ltd.

Sinopharm Holding

2015-04- 121,600.0 General 2015.5.15-

Guangzhou Co., 2015-05-15 27,276.01 No Yes

24 0 assurance 2016.5.14

Ltd.

Sinopharm Holding

2015-03- General 2015.5.20-

Guangdong 3,500.00 2015-05-20 3,133.13 No Yes

21 assurance 2016.5.20

Yuexing Co., Ltd.

Sinopharm Holding

2015-03- General 2015.5.15-

Guangdong 3,000.00 2015-05-15 0 No Yes

21 assurance 2016.5.14

Yuexing Co., Ltd.

Sinopharm Holding

2015-03- General 2015.9.8-

Guangdong 5,000.00 2015-09-08 1,758.57 No Yes

21 assurance 2016.9.7

Yuexing Co., Ltd.

Sinopharm Holding 2015-03- General 2015.9.8-

9,000.00 2015-09-08 8,999.09 No Yes

Liuzhou Co., Ltd. 21 assurance 2016.9.7

Sinopharm Holding 2014-08- General 2015.3.20-

5,000.00 2015-03-20 2,894.98 No Yes

Liuzhou Co., Ltd. 16 assurance 2016.3.19

Sinopharm Holding 2015-08- General 2015.11.24-

6,000.00 2015-11-24 2,047.76 No Yes

Liuzhou Co., Ltd. 20 assurance 2016.11.23

Sinopharm Holding 2015-03- General 2015.9.8-

1,000.00 2015-09-08 999.71 No Yes

Shaoguang Co., Ltd. 21 assurance 2016.9.7

Sinopharm Holding

2015-03- General 2015.12.17-

Shenzhen Yanfeng 2,000.00 2015-12-17 1,935.38 No Yes

21 assurance 2016.12.16

Co., Ltd.

Sinopharm Holding

2015-03- General 2015.9.8-

Shenzhen Yanfeng 7,000.00 2015-09-08 4,513.88 No Yes

21 assurance 2016.9.7

Co., Ltd.

Sinopharm Holding

2015-03- General 2015.5.28-

Shenzhen Yanfeng 2,000.00 2015-05-28 1,700.00 No Yes

21 assurance 2016.2.15

Co., Ltd.

45

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

Sinopharm Holding

2015-03- General 2015.5.15-

Shenzhen Yanfeng 3,000.00 2015-05-15 2,245.35 No Yes

21 assurance 2016.5.14

Co., Ltd.

China National

Zhijun (Shenzhen) 2015-03- General 2015.9.10-

20,000.00 2015-09-10 6,892.73 No Yes

Pharmaceutical Co., 21 assurance 2016.9.10

Ltd.

China National

Zhijun (Shenzhen) 2015-03- General 2015.9.8-

5,000.00 2015-09-08 4,563.26 No Yes

Pharmaceutical Co., 21 assurance 2016.9.7

Ltd.

China National

Zhijun (Shenzhen) 2014-08- General 2015.4.10-

4,000.00 2015-04-10 500.00 No Yes

Pharmaceutical Co., 16 assurance 2018.4.9

Ltd.

China National

Zhijun (Suzhou) 2015-03- General 2015.8.21-

4,000.00 2015-10-20 1,929.17 No Yes

Pharmaceutical Co., 21 assurance 2016.8.20

Ltd.

China National

Zhijun (Suzhou) 2014-03- General 2015.1.4-

3,000.00 2015-01-04 979.88 No Yes

Pharmaceutical Co., 22 assurance 2015.10.24

Ltd.

China National

Zhijun (Suzhou) 2015-03- General 2015.9.8-

3,000.00 2015-09-08 0 No Yes

Pharmaceutical Co., 21 assurance 2016.9.7

Ltd.

Sinopharm Holding

2015-03- General 2015.9.8-

Jiangmen Renren 3,000.00 2015-09-08 986.46 No Yes

21 assurance 2016.9.7

Co., Ltd.

Sinopharm Holding

2015-03- General 2015.9.8-

Shenzhen Medicine 1,000.00 2015-09-08 456.95 No Yes

21 assurance 2016.9.7

Co., Ltd.

Total amount of actual

Total amount of approving

occurred guarantee for

guarantee for subsidiaries in 564,100.00 923,626.71

subsidiaries in report

report period (B1)

period (B2)

Total balance of actual

Total amount of approved

guarantee for

guarantee for subsidiaries at the 576,100.00 253,446.17

subsidiaries at the end of

end of reporting period (B3)

reporting period (B4)

Guarantee of the Company for the subsidiaries

Related Actual date of Guarante

Name of the Announce happening Actual Impleme e for

Guarantee Guarantee Guarantee

Company ment (Date of guarantee nted related

limit type term

guaranteed disclosure signing limit (Y/N) party

date agreement) (Y/N)

Total amount of guarantee of the Company( total of three abovementioned guarantee)

Total amount of actual

Total amount of approving

occurred guarantee in

guarantee in report period 639,100.00 1,009,811.00

report period

(A1+B1+C1)

(A2+B2+C2)

Total balance of actual

Total amount of approved

guarantee at the end of

guarantee at the end of report 711,100.00 279,878.14

report period

period (A3+B3+C3)

(A4+B4+C4)

The proportion of the total amount of actually guarantee in

51.32%

the net assets of the Company (that is A4+ B4+C4)

Including:

46

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

Amount of guarantee for shareholders, actual controller and

0

its related parties(d)

The debts guarantee amount provided for the guaranteed

parties whose assets-liability ratio exceed 70% directly or 202,509.01

indirectly(e)

Proportion of total amount of guarantee in net assets of the

7,208.46

Company exceed 50%(f)

Total amount of the aforesaid three guarantees(D+E+F) 209,717.47

Explanations on possibly bearing joint and several

liquidating responsibilities for undue guarantees (if N/A

applicable)

Explanations on external guarantee against regulated

N/A

procedures (if applicable)

Explanation on guarantee with composite way

(2)Guarantee outside against the regulation

¡õApplicable ¡ÌNot applicable

No guarantee outside against the regulation in Period.

3. Entrust others to cash asset management

(1) Trust financing

¡õ Applicable ¡Ì Not applicable

The Company had no trust financing in the reporting period.

(2) Entrusted loans

¡õ Applicable ¡Ì Not applicable

The company had no entrusted loans in the reporting period.

4. Other material contracts

¡õ Applicable ¡Ì Not applicable

No other material contracts for the Company in reporting period

XVIII. Explanation on other significant events

¡ÌApplicable ¡õNot applicable

The Company¡¯s actual controllers, China National Pharmaceutical Group

Corporation and the controlling shareholder - Sinopharm Group Co. Ltd., are

planning and preparing the major event related to the Company's operations

which constitutes the major asset restructuring of the Company, followed by the

company's application, the company¡¯s stock (securities for short: Sinopharm

47

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

Accord, Accord B, stock codes: 000028, 200028) has been suspended on October

21, 2015 after opening. Up to now¡­¡­

In the reporing period, according to the unified arrangements of actual control

Sinopharm Accord, the Company issued ¡°Notice of Major asset restructuring

suspension¡± on 28 October 2015, and issued¡±Related transactions perplan and sales

of assets, issue of shares, payment of cash to purchase assets and rasing matching

funds of China National Accord Medicines Corporation Ltd.¡± on 10 March 2016, as

of the date of the report issued, the major asset restructuring matters are steadily

advancing.

XIX. Significant event of subsidiary of the Company

¡õ Applicable ¡Ì Not applicable

XX. Social responsibility

¡ÌApplicable ¡õ Not applicable

¡°Social Responsibility Report of Sinopharm Accord in 2015¡± can be seen in Juchao website dated

26 March 2016£¨HTTP://WWW.CNINFO.COM.CN£©.

The listed company and subsidiaries is in the range of heavy pollution industry that regulated by State environment

protection departments

¡õYes ¡Ì No ¡õNot applicable

Whether the social responsibility report released

¡Ì Yes ¡õ No

CSR report

Whether Disclosure standards

Whether Whether

contained the

Nature of the contained the contained the

corporate

corporate environment social Domestic standards Foreign standards

governance

information information

information

State-owned

Yes Yes Yes Yes

enterprise

Note

1. Whether the company has the Environment

Yes

Management System Certification (ISO14001)

2. Amount the company annually invested and paid for

1,430

environmental protection (Yuan)

3. The company¡¯s emission reduction performance of Zhijun Guanlan: technical innovation has generated

waste gas, waste water, and waste residue economic benefits of 1.5 million yuan. Zhijun Suzhou

48

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

has generated economic benefits of 1.36 million yuan.

Zhijun Pingshan: signed an agreement with Shenzhen

Hazardous Waste Treatment Station Co., Ltd. to

handle the spent liquor inspection, sewage and sludge

treatment.

4. Investment the company made for enhancing the

employees¡¯ individual knowledge and skills so as to 307.06

improve employees¡¯ career development ability (Yuan)

5. Amount of the company¡¯s social charitable donations

(funds, goods and materials, free professional services) 5.64

(Yuan)

XXI. Issuance of corporate bonds

Whether the company has corporate bonds that have been publicly issued and listed on the stock exchange, and not yet

due or due but not fully cashed on the approval date of annual report

No

49

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

Section VI. Changes in Shares and Particulars about Shareholders

I. Changes in Share Capital

1. Changes in Share Capital

In Share

Before the Change Increase/Decrease in the Change (+, -) After the Change

Capitaliz

New

Proportio Bonus ation of Proporti

Amount shares Others Subtotal Amount

n shares public on

issued

reserve

74,484,5 74,484,5

I. Restricted shares 20.54% 20.54%

31 31

2. State-owned legal 74,482,5 74,482,5

20.54% 20.54%

person¡¯s shares 43 43

3. Other domestic

1,988 0.00% 1,988 0.00%

shareholding

Including: Domestic

1,988 0.00% 1,988 0.00%

nature person shares

288,147, 288,147,

II. Unrestricted shares 79.46% 79.46%

412 412

233,261, 233,261,

1. RMB Ordinary shares 64.32% 64.32%

812 812

2. Domestically listed 54,885,6 54,885,6

15.14% 15.14%

foreign shares 00 00

362,631, 362,631,

III. Total shares 100.00% 100.00%

943 943

Reasons for share changed

¡õ Applicable ¡Ì Not applicable

Approval of share changed

¡õ Applicable ¡Ì Not applicable

Ownership transfer of share changes

¡õ Applicable ¡Ì Not applicable

Influence on the basic EPS and diluted EPS as well as other financial indexes of net assets per share attributable to

common shareholders of Company in latest year and period

¡õ Applicable ¡Ì Not applicable

Other information necessary to disclose or need to disclosed under requirement from security regulators

¡õ Applicable ¡Ì Not applicable

2. Changes of restricted shares

¡õ Applicable ¡Ì Not applicable

II. Securities issuance and listing

1. Security offering (without preferred stock) in Reporting Period

¡õ Applicable ¡Ì Not applicable

50

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

2. Changes of total shares and shareholders structure as well as explanation on changes of assets and

liability structure

¡õ Applicable ¡Ì Not applicable

3. Existing internal staff shares

¡õ Applicable ¡Ì Not applicable

III. Particulars about shareholder and actual controller of the Company

1. Amount of shareholders of the Company and particulars about shares holding

In Share

Total

preference

shareholders

Total preference

Total common with voting

Total shareholders

stock rights

common with voting

shareholders at recovered at

stock rights recovered

14,861 end of last 14,861 0 end of last 0

shareholders at end of

month before month before

in reporting reporting period

annual report annual report

period-end (if applicable)

disclosed disclosed (if

(found in note8)

applicable)

(found in

note8)

Particulars about shares held above 5% by shareholders or top ten shareholders

Total Number of share pledged/frozen

Amount Amount

Proporti sharehol

Changes of of un-

Full name of Nature of on of ders at

in report restricte restricted

Shareholders shareholder shares the end State of share Amount

period d shares shares

held of report

held held

period

Sinopharm

State-owned 184,942, 74,482,5 110,459,

Holding Co., 51.00%

Corporation 291 43 748

Ltd.

National Council

Domestic non

for Social 8,300,00

state-owned 2.29%

Security Fund- 0

Corporation

116

Domestic non

China Securities 7,704,97

state-owned 2.12%

Finance Co., Ltd. 2

Corporation

National Council

Domestic non

for Social 7,298,55

state-owned 2.01%

Security Fund- 5

Corporation

106

HTHK/CMG

FSGUFP-CMG

Foreign 7,032,72

FIRST STATE 1.94%

Corporation 0

CHINA

GROWTH FD

VALUE

PARTNERS Foreign 5,737,08

1.58%

CLASSIC Corporation 8

FUND

CITIC Securities Domestic non 5,009,03

1.38%

Co., Ltd. state-owned 7

51

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

Corporation

New China Life

Insurance Co.,

Domestic non

Ltd. ¨C Bonus ¨C 4,199,77

state-owned 1.16%

Individual 2

Corporation

bonuses - -018L-

FH002 Shen

Central Huijin State-owned 3,804,40

1.05%

Investment Ltd. Corporation 0

China Life

Insurance Co.,

Domestic non

Ltd. ¨C tradition ¨C 3,750,09

state-owned 1.03%

general insurance 0

Corporation

products -005L-

CT001 Shen

It is unknown that there exists no associated relationship or belongs to the

Explanation on associated

consistent actionist among the other tradable shareholders regulated by the

relationship among the aforesaid

Management Measure of Information Disclosure on Change of Shareholding for

shareholders

Listed Companies.

Particular about top ten shareholders with un-restrict shares held

Type of shares

Shareholders¡¯ name Amount of un-restrict shares held at Period-end

Type Amount

RMB common

Sinopharm Holding Co., Ltd. 110,459,748 110,459,748

shares

National Council for Social RMB common

8,300,000 8,300,000

Security Fund-116 shares

RMB common

China Securities Finance Co., Ltd. 7,704,972 7,704,972

shares

National Council for Social RMB common

7,298,555 7,298,555

Security Fund-106 shares

HTHK/CMG FSGUFP-CMG Domestically

FIRST STATE CHINA 7,032,720 listed foreign 7,032,720

GROWTH FD shares

Domestically

VALUE PARTNERS CLASSIC

5,737,088 listed foreign 5,737,088

FUND

shares

RMB common

CITIC Securities Co., Ltd. 5,009,037 5,009,037

shares

New China Life Insurance Co.,

RMB common

Ltd. ¨C Bonus ¨C Individual bonuses 4,199,772 4,199,772

shares

- -018L-FH002 Shen

RMB common

Central Huijin Investment Ltd. 3,804,400 3,804,400

shares

China Life Insurance Co., Ltd. ¨C

RMB common

tradition ¨Cgeneral insurance 3,750,090 3,750,090

shares

products -005L-CT001 Shen

Expiation on associated

relationship or consistent actors It is unknown that there exists no associated relationship or belongs to the

within the top 10 un-restrict consistent actionist among the other tradable shareholders regulated by the

shareholders and between top 10 Management Measure of Information Disclosure on Change of Shareholding for

un-restrict shareholders and top 10 Listed Companies.

shareholders

Whether top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held have a

buy-back agreement dealing in reporting period

¡õ Yes ¡Ì No

The top ten common stock shareholders or top ten common stock shareholders with un-restrict shares held of the

Company have no buy-back agreement dealing in reporting period.

52

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

2. Controlling shareholder of the Company

Nature of controlling shareholders: central state-owned holding

Type of controlling shareholders: legal person

Legal

Controlling shareholders person/person in Date of foundation Organization code Main operation business

charge of the unit

Industrial investment

holding; management

and assets reorganization

entrusted by

pharmaceutical

enterprise; Chinese

medicine, Chinese

medicine tablets,

chemical medicine

preparations, chemical

raw materials,

antibiotics, biochemical

drugs, biological

products, narcotic drugs,

psychotropic substances,

toxic drugs for medical

use (compatible with the

business scope),

medicine IVD Reagents,

vaccine, anabolic agents,

Peptide hormone and

medical equipment. III:

injection puncture

instruments, hygienic

materials & dressings,

Sinopharm Holding Co.,

Wei Yulin 2003-01-08 74618434-4 medical polymer

Ltd.

materials and products,

categories II: medical X-

ray ancillary equipment

and components; food

marketing management

(non-physical way), and

domestic trade (other

than special licensing),

logistics and other

consulting services,

cosmetics, stationeries

and related consulting

services, operating

various types of goods

and import and export of

technology (not attached

directory of import and

export commodities), but

excluded the import and

export of goods and

technology the State

limits or prohibit the

company. [In right of

exequatur to run if refers

to permission operation]

Equity of other Sinopharm Group Co., Ltd. hold 44.01 percent equity of China National Medicines

53

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

domestic/oversea listed Corporation Ltd (Stock code: 600511) up to the end of Period

company control by

controlling shareholder as

well as stock-joint in report

period

Changes of controlling shareholders in reporting period

¡õ Applicable ¡Ì Not applicable

The Company had no changes of controlling shareholders in reporting period

3. Actual controller of the Company

Nature of actual controller: central state-owned assets management

Type of actual controller: legal person

Legal

Actual controlling person/person Date of

Organization code Main operation business

shareholders in charge of the foundation

unit

Entrusted management and

assets reorganization of

pharmaceutical enterprises,

consultant service of

medicine industry investment

project, holding exhibition

and fair of surgical

China National

appliance, the wholesale of

Pharmaceutical Group She Lulin 1987-03-26 10000588-8

Chinese medicine, Chinese

Corporation

patent medicines, Chinese

medicine herb in pieces,

chemical material medicine,

a chemical agent, antibiotics,

biochemical,

biological(operation period

runs in right of exequatur).

Name Name of listed company Total shareholders Ratio

with shares held (10 thousand shares)

China National Pharmaceutical Group

132.35 0.86%

Jianmin Group

Corporation

China National Pharmaceutical Group

272.84 0.10%

Sinopharm Holding

Corporation

Equity of domestic/oversea

listed company control by

actual controller in report Sinopharm Holding Industrial Investment

157,155.60 56.79%

period Sinopharm Holding

Co., Ltd.

21,070.15 44.01%

Sinopharm Holding Sinopharm

18,494.23 51%

Sinopharm Holding Sinopharm Accord

321.93 2.12%

Sinopharm JLPC

Shanghai Institute of Pharmaceutical Modern Pharmaceutical

11,975.63 41.62%

Industry

54

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

Chinese Medicine Industry Co., Ltd. Hengrui Medicine 9,454.90 4.83%

Chinese Medicine Industry Co., Ltd. Tianrun Holding

306.50 2.59%

Sinopharm TCM Jianmin Group

0 0

Sinopharm TCM UGC

686.24 3.07%

27,472.50 53.30%

Biosino Tiantan Biological

Sinopharm Group H.K. Co., Ltd. China TCM

161,431.36 36.01%

Changes of actual controller in reporting period

¡õ Applicable ¡Ì Not applicable

No changes of actual controllers for the Company in reporting period.

Property right and controlling relationship between the actual controller and the Company is as follow:

The State-owned Assets Supervision & Administration Commission of the State Council

100%

National Council for Social

China National Pharmaceutical Security Fund &public

Shanghai Fosun Pharmaceutical

Group Corporation shareholder

(Group) Co., Ltd.

49% 51% 43.11%

Sinopharm Industry

Investment Co., Ltd. 0.10%

56.79%

Sinopharm Holding Co., Ltd.

51%

China National Accord Medicines Corporation Ltd.

55

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

Actual controller controlling the Company by entrust or other assets management

¡õ Applicable ¡Ì Not applicable

4. Particulars about other legal person shareholders with over 10% shares held

¡õ Applicable ¡Ì Not applicable

5. Limitation and reducing the holdings of shares of controlling shareholders, actual controllers,

restructuring side and other commitment subjects

¡õ Applicable ¡Ì Not applicable

56

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

Section VII. Preferred Stock

¡õ Applicable ¡Ì Not applicable

The Company had no preferred stock in the Period.

57

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

Section VIII. Particulars about Directors, Supervisors, Senior

Executives and Employees

I. Changes of shares held by directors, supervisors and senior executives

Amount Amount

Shares Shares

Start of shares of shares

End date held at Other held at

Working dated of increase decrease

Title Sex Age of office period- changes period-

Name status office d in this d in this

term begin (share) end

term period period

(Share) (Share)

(Share) (Share)

Chen Secretar Currentl

2015-01-

Changbi y of the y in M 48 2,651 0 0 2,651

13

ng Board office

Total -- -- -- -- -- -- 2,651 0 0 2,651

II. Changes of directors, supervisors and senior executives

Name Title Type Date Reasons

He resigned the position from the board of directors

and special committee; in accordance with the work

Appointment arrangements by the board of directors, Mr. Yan

Yan Zhigang Director, GM 2016-03-09

and dismissal Zhigang no longer served as GM of the Company,

and appointed Mr. Yan Zhigang as Deputy GM of

the Company.

In accordance with the work arrangements, the

Appointment

Lin Zhaoxiong Vice GM board of directors appointed Mr. Lin Zhaoxiong as

and dismissal

GM of the Company (legal representative) .

III. Post-holding

Professional background, major working experience and present main responsibilities in Company of directors,

supervisors and senior executive at the present in latest five years

1. Members of the Board

Chairman ¨C Mr. Li Zhiming, college graduation, a senior economist, and he served as the follow

post in latest 5 years: chairman, GM and party secretary of Sinopharm Group Xinjiang

Pharmaceutical Co., Ltd. from February 2009 to May 2013; deputy president of Sinopharm Group

Co., Ltd. from May 2020 to November 2013; he hold a concurrent post of General Counsel of

Sinopharm Group Co., Ltd. from October 2012 to January 2014; a deputy party secretary, discipline

inspection commission secretary and labor union chairman of Sinopharm Group Co., Ltd. from

November 2012 to November 2013; president of Sinopharm Group Co., Ltd. since November 2013;

meanwhile, served as Chairman of China National Medicines Corporation Ltd from August 2010 to

October 2011; chairman of Sinopharm Holding Tianjin Co., Ltd. from August 2010 to December

2013; chairman of Sinopharm Holding Heilongjiang Co., Ltd. from November 2010 to April 2013;

58

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

chairman of Sinopharm Holding Shenyang Co., Ltd. from October 2011 to April 2013; chairman of

Sinopharm Holding Jilin Co., Ltd. from October 2011 to April 2013; chairman of Sinopharm

Holding Inner Mongolia Co., Ltd. from March 2011 to December 2013; serves as chairman of

Sinopharm Holding Ningxia Co., Ltd. since June 2011; chairman of Sinopharm Holding Shaanxi

Co., Ltd. since October 2011; chairman of Sinopharm Holding Gansu Co., Ltd. since October 2011;

he had a concurrent post of chairman of Sinopharm Holding Shanxi Co., Ltd. from October 2011 to

December 2013; serves as chairman of Sinopharm Holding Qinghai Co., Ltd. since October 2011;

he took post of chairman of Sinopharm Holding Mudan River Co., Ltd. from October 2011 to April

2013; serves as chairman of Sinopharm Group Shanxi Co., Ltd. since March 2012; chairman and

party secretary of Sinopharm Group Xinjiang Pharmaceutical Co., Ltd. since May 2013; president

of Sinopharm Group Co., Ltd. since November 2013; Director of Sinopharm Group Hong Kong Co.,

Ltd. since January 2014 and chairman of China National Medicines Corporation Ltd since February

2014; he serves as executive director of Sinopharm Holding Sub Marketing Center Co., Ltd. since

January 2014 and serves as chairman of 6th and 7th session of the Board for the Company since

February 2014.

Deputy Chairman--- Ms. Cui Dieling, MBA, an engineer. She served as the follow post in latest 5

years: GM of Business Division of Shanghai Parma Group Antibiotic, GM of Shanghai Asia

Pioneer pharmacy Co., Ltd. and Chairman of Shanghai Xinya Pharmacy Co., Ltd. from December

2008 to December 2010; Chairman of HSDRUG from December 2010 to March 2011; Chief of

Industrial Development and Management Center of Sinopharm Group Co., Ltd. from March 2011

to December 2013; assistant president of Sinopharm Group Co., Ltd. since December 2012;

Chairman of Sinopharm A-THINK Pharmaceutical Co., Ltd. since October 2011; Chairman of

Xingsha Pharmaceuticals (Xiamen) Co., Ltd. since December 2011; she served as Chairman of 6th

Session of Supervisory Committee for the Company from October 2011 to August 2012; Director

of 6th session of the Board since August 2012, Chairman of Sinopharm Group Sanyi Pharmaceutical

(Wuhu) Co., Ltd. since July 2012; had current post of chairman of Sinopharm Group Chemical

Reagent Co., Ltd. since December 2013 and deputy chairman of 6th and 7th session of the Board for

the Company since February 2014.

Chairman¡ªMr. WeiYulin, MBA, a senior economist, Licensed Pharmacist, pharmacist-in-charge

and CCOM; he served as the follow post in latest 5 years: he serves as President and Party Secretary

of Sinopharm Group Co., Ltd. since December 2009; Chairman of Beijing Tianxing Puxin

Biological Medical Co., Ltd from April 2010 to November 2011; Chairman of Yujia Medical

59

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Consultancy Co., Ltd. from September 2010 to November 2011; serves as Chairman of Sinopharm

Holding H.K. Co., Ltd since January 2011; Chairman of Sinopharm Le-Ren-Tang Medicine Co.,

Ltd. from April 2011 to June 2013 and deputy chairman of Sinopharm Le-Ren-Tang Medicine Co.,

Ltd. since June 2013; Chairman of Sinopharm Group Chemical Reagent Co., Ltd. from December

2011 to December 2013 and Chairman of the 6th Session of the Board of the Company from

October 2011 to February 2014; He Serves as Director of Sinopharm Holding Guoda Pharmacy Co.,

Ltd since August 2012; Chairman and Party Secretary of Sinopharm Group Co., Ltd. since

November 2013 and Director of 6th and 7th session of the Board for the Company since February

2014.

Director¡ª¡ªMr. Ma Wanjun, EMBA. He served as the follow post in latest 5 years: deputy GM of

Operation Center of Sinopharm Group Co., Ltd. from December 2009 to September 2010; Director

of Sinopharm Holding Shenyang Co., Ltd from January 2010 to November 2011; he serves as

Chairman of Guangdong Dong Fang Uptodate & Special Medicines Co., Ltd. since March 2010;

Director of Sinopharm Holding Suzhou Co., Ltd from May 2010 to November 2011; Chairman of

Sinopharm Holding Jiangsu Co., Ltd from May 2010 to November 2011; Director of Wenzhou

Biomedicine-Appliances Supplies Co., Ltd. from July 2010 to November 2011; deputy President of

Sinopharm Group Co., Ltd. since September 2010; Chairman of Sinopharm Holding Henan Co.,

Ltd from October 2010 to January 2013; Director of Sinopharm Holding Changzhou Co., Ltd from

December 2010 to November 2011; Director of Shanghai Bionuo Enterprise Management Co., Ltd.

from December 2010 to November 2011; general counsel of Sinopharm Group Co., Ltd. from May

2011 to October 2012; he serves as Director of Sinopharm Le-Ren-Tang Medicine Co., Ltd. since

April 2011; Director of Sinopharm Group Shaanxi Co., Ltd. from April 2011 to September 2011;

Director of China National Medicines Corporation Ltd since October 2011; Director of Yujia

Medicine Service Co., Ltd. since November 2011; Chairman of Sinopharm Health Industry

(Shanghai) Co., Ltd. since November 2011; Director of 6th and 7th Session of the Board for the

Company since March 2011; Chairman of Sinopharm Holding Health Development (Shanghai ) Co.,

ltd since May 2012; Chairman of Sinopharm Holding Fujian Co., Ltd and Sinopharm Holding

Fuzhou Co., Ltd since August 2012; he serves as executive Director of Sinopharm Holding Henan

Co., Ltd. since January 2013 and executive Director of Shanghai Tongyu Information Technology

Co., Ltd. since April 2013.

Director ¨C Mr. Jiang Xiuchang, a university background, senior economists and senior accountant.

He served as the follow post in latest 5 years: CFO of Sinopharm Group Co., Ltd. since May 2010;

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he acts as deputy President of Sinopharm Group Co., Ltd. since July 2013 and hold concurrent post

of Supervisor of Sinopharm Holding Guoda Pharmacy Co., Ltd since June 2010; Supervisor of

Yujia Medicine Co., Ltd. since September 2010; Director of China National Medicines Corporation

Ltd since February 2011; Director of Sinopharm Le-Ren-Tang Medicine Co., Ltd since April 2011;

Director of Sinopharm Holding H.K. Co., Ltd since November 2011; Director of Sinopharm Group

Financial Co., Ltd since November 2011; Director of Sinopharm Group Shaanxi Co., Ltd. from

April 2011 to September 2011; Supervisor of Sinopharm Sub Marketing Center Co., Ltd. since

April 2011; Supervisor of Sinopharm Holding Beijing Co., Ltd. and Director of Sinopharm Group

Financial Co., Ltd since November 2011; he serves as Director of 6th and 7th session of the Board

for the Company since March 2011, Chairman of Sinopharm Holding Jiangxi Co., Ltd. since June

2013; Chairman of Sinopharm Holding Shanxi Co., Ltd., deputy Chairman of Sinopharm Group

Shanxi Co., Ltd., Chairman of Sinopharm Holding Tianjin Co., Ltd. and Chairman of Sinopharm

Holding Inner Mongolia Co., Ltd. since December 2013.

Director¡ªMr.Yan Zhigang, MBA, senior engineers and Licensed Pharmacist. He served as the

follow post in latest 5 years: Deputy GM of the Company from January 2005 to December 2008;

GM of the Company since December 2008; Director of the 5th, 6th and 7th session of the Board since

February 2009; he acts Director of Sinopharm A-THINK Pharmaceutical Co., Ltd. since June 2010;

and took executive director of Sinopharm Holding Guangzhou Co., Ltd. since February 2014.

Mr.Yan Zhigang, MBA, senior engineers and Licensed Pharmacist. He served as the follow post in

latest 5 years: Deputy GM of the Company from January 2005 to December 2008; GM of the

Company since December 2008; Director of the 5th, 6th and 7th session of the Board since February

2009; he acts Director of Sinopharm A-THINK Pharmaceutical Co., Ltd. since June 2010; took

executive director of Sinopharm Holding Guangzhou Co., Ltd. since February 2014, and took vice

GM of the Company since 9 March 2016.

Independent Director --- Mr. He Zhiyi, Doctor Degree of Fudan University, Post doctorate of

Beijing University, Professor and PH.D adviser. Currently, he works as the vice Dean of New

Huadu Business School. He acted as vice Dean of Antai College of Economics& Business

Administration of SJTU; the professor, PH.D adviser and Dean Assistant of Guanghua

Administration College of Beijing University and Office Director of Administration Case Research

of Beijing University; He use to took advance study and visiting scholar in Sweden IMD, GM

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school of Management and Kellogg school of Management, Northwestern University of USA. He

also worked as the deputy dean of Development& Research of Poverty-zone of Beijing University,

executive director of Chinese Enterprise Research Center of Beijing University, executive editor of

Business Comments of Beijing University magazine, vice-chairman and secretary of the Chinese

Federation for Corporate Social Responsibility, vice-chairman and secretary of CNEMA and

Director of IFSAM etc. Mr. He Zhiyi owes rich experience, and also served as position in

government, GM in State-owned enterprises, Chairman of joint-stock enterprises, President of

Beijing University Xiaochang Business Co., Ltd and Director of Office of Industrial Management,

funded by school. He serves as Independent Director of the Board for the Company since June 2010.

Independent Director --- Mr.Xiong Chuxiong, a doctor degree, professor and a CPA. He graduated

from Accounting Dept. of Southwestern University of Finance & Economics and Accounting Dept.

of Xiamen University successively. After obtained the PhD. Economics in Xiamen University in

1992, he was assigned to teach in accounting majors of Shenzhen University. He used to be a

visiting scholar in University of Manchester, U.K. currently; he works as professor in Shenzhen

University. He serves as Independent Director of the 6th and 7th Session of the Board for the

Company since April 2011.

Independent Director - Mr. Xiao Shengfang, civil and commercial law graduate in Renmin

University of China, MBA of Jinan University, and lawyer. He acts as director of Sino-Win

Law Firm, whose social functions include vice director of Labor and Social Security Law

Committee of All China Lawyers Association, vice president of Guangdong Lawyers

Association, vice president of Social Law Institute of Guangdong Province Law Society, vice

president of Labor Relations Research Institute of Guangdong Province Law Society, vice

president of Guangzhou Lawyer Organization, legal consultant of the People`s Government of

Guangzhou Municipality, counselor of CPPCC Guangzhou Committee, legal consultant of the

People`s Government of Guangzhou Baiyun District, adjunct professor at Lawyer College of

Renmin University of China, adjunct professor at School of Law of South China Normal

University, executive vice president of MBA sodality in Ji'nan University, arbitrator at South

China International Economic and Trade Arbitration Commission, arbitrator at Guangzhou

Arbitration Commission, and mediation expert at South China International Economic and

Trade Arbitration Commission. He has acted as the independent director for the Company¡¯s

sixth and seventh board of director since April 2011.

2. Members of supervisors:

Chairman of Supervisory Committee--- Mr. Feng Yifeng, University background, a CPA and

ACCA. He served as a senior manager of PWC Zhongtian CPA from July 2002 to June 2010; and

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he serves as director of financial manage dept. of Sinopharm Holding Co., Ltd. since June 2010,

and during the period, serves as Director of Sinopharm Holding Fujian Co., Ltd., subordinate of

Sinopharm Holding, Sinopharm A-THINK Pharmaceutical Co., Ltd. and Sinopharm Holding

Hainan Co., Ltd.; serves as supervisor of Sinopharm Group Chemical Reagent Co., Ltd. ,

Sinopharm Holding Henan Co., Ltd., Sinopharm Holding Changzhou Co., Ltd., Sinopharm Holding

Wuxi Co., Ltd., Sinopharm Holding Gansu Co., Ltd. and Sinopharm Group Sanyi Pharmaceutical

(Wuhu) Co., Ltd. He serves as chairman of the 6th and 7th session of supervisory committee of the

Company since August 2012.

Supervisor¡ª¡ªMs. Guan Xiaohui, Master of Accounting, Certified Public Accountant and

Economist. She serves as vice CFO of Shanghai Fosun Pharmaceutical (Group) Co., Ltd. since

November 2004; she now serves as vice president and chief accountant of Shanghai Fosun

Pharmaceutical (Group) Co., Ltd. and serves as supervisor of 5th, 6th and 7th Session of Supervisory

Committee of the Company since September 2007.

Employee Supervisor¡ª¡ªMr. Wang Huaiqin, 3-years regular college graduate, political commissar,

assistant accountant. He served as the Chairman of First Union since September 2005 to March

2009; member of Party Committee, deputy secretary of discipline & inspection committee and

chairman of Union of the Company since September 2008; serves as employee supervisor of 5th, 6th

and 7th Session of Supervisory Committee of the Company since September 2007.

3. Senior executives:

General Manger¡ª¡ªMr. Lin Zhaoxiong, senior MBA, Pharmacist-in-charge. He worked in

Sinopharm Holding Guangzhou Co., Ltd. with successively taking the posts of deputy general

manger and manager of Pharmacy Department, and manger of Pharmaceutical Company and

majordomo of Operation Management Department from Jan. 1999 to Dec. 2003; deputy general

manager of Sinopharm Holding Guangzhou Co., Ltd from Jan. 2004 to Dec. 2006; he serves as GM

of Sinopharm Holding Guangzhou Co., Ltd. since December 2006 and deputy GM of the Company

since from December 2008 to 9 March 2016, and serves as GM of the Company since 9 March

2016.

Deputy General Manager-- Mr. Yan Zhigang, referring to the aforesaid introduction of members of

directors for details

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Deputy General Manger¡ª¡ªMr. Lin Min, senior MBA, Pharmaceutical Engineer, Licensed

Pharmacist, worked in China National Pharmaceutical Group Guangzhou Corporation with

successively taking the posts of assistant to manager, deputy general manger of Pharmacy

Department and deputy general manger of purchasing in Pharmaceutical Company from Jan. 2001

to Nov. 2003; supervisor of Guangzhou pharmacy sales of Sinopharm Holding Guangzhou Co., Ltd

from Nov. 2003 to Jan. 2005; general manager of Sinopharm Holding Liuzhou Co., Ltd from March

2006 to Nov. 2007; took deputy general manager of Sinopharm Holding Guangzhou Co., Ltd from

Jan. 2005 to Dec. 2008; serves as deputy GM of the Company since December 2008.

Deputy General Manger¡ª¡ªMr. Lin Xinyang, MBA, Licensed Pharmacist, he took the turns of

deputy GM of Nanfang Pharm. Co., deputy GM of China Medicine Group (Guangzhou) Company

Yuexing Company, general supervisor of PD of Sinopharm Holding Guangzhou Company

successively since January 1996; took the post of deputy GM of Sinopharm Holding Guangzhou

Company from Jan. to Dec. 2004; serves as deputy GM of the Company since January 2005.

Deputy General Manger¡ª¡ªMr. Deng Baojun, an MBA, senior engineer and Licensed Pharmacist,

he took the position of deputy general manager of Shenzhen Zhijun Pharmaceutical Co., Ltd. from

August 2003 to December 2008; took the position as General Manager of Shenzhen Zhijun

Pharmaceutical Co., Ltd. since December 2008; serves as general manager of pharmaceutical

business department of China National Accord Medicines Corporation Ltd. since December 2010

and took deputy GM of the Company.

Deputy General Manger¡ª¡ª Mr. Pan Rangren, a postgraduate, IFM and assistant accountant. He

serves as vice secretary of the Party general branch, deputy GM, standing deputy GM and labor

union chairman of Shenzhen Zhijun Pharmaceutical Co., Ltd. from November 2005 to April 2011;

he serves as deputy GM of pharmaceutical division under the name of China National Accord

Medicines Corporation Ltd. since December 2010; took Party secretary and standing deputy GM of

Shenzhen Zhijun Pharmaceutical Co., Ltd. from April 2011 to December 2013; he serves as GM of

China National Zhijun (Suzhou) Pharmaceutical Co., Ltd. since August 2013; serves as Party

secretary of Shenzhen Zhijun Pharmaceutical Co., Ltd. since January 2014, serves as GM of

Shenzhen Zhijun Pharmaceutical Co., Ltd. since January 2014 and deputy GM of the Company

since December 2014.

64

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Chief Financial Officer¡ª¡ªMr. Wei Pingxiao, MBA, an accountant, took the turns of Financial

department of State-owned Beijing Electronic Tube Plant, Modern Electronic Shenzhen Industrial

Company, China Electronic Industrial Headquarter since August 1985; and took the turns of deputy

section chief of financial department of China Electronic Information Industry Group, financial

director of AMOI, section chief of planning financial department of China Electronic Finance

Leasing Company, Deputy GM of AMOI Beijing branch, financial charger of AMOI and director of

its subsidiary since April 1993; and he hold the post of CFO of the Company since December 2004.

Secretary of the Board¡ª¡ªMr. Chen Changbing, Master Degree. He served as secretary of the

Board of 3rd and 4th Session of the Board for the Company since December 2000; and serves as

Chief of Planning Investment Management Dept. and Secretary of the Board of 5th, 6th and 7th

Session of the Board for the Company since September 2007.

Post-holding in shareholder¡¯s unit

¡ÌApplicable ¡õ Not applicable

Received

Position in remuneration

Start dated of End date of

Name Name of shareholder¡¯s unit shareholder¡¯ from

office term office term

s unit n shareholder¡¯s

unit (Y/N)

President

Executive

Wei Yulin Sinopharm Group Co., Ltd. director 2013-11-01 2016-11-01 Y

CPC

secretary

Li Zhiming Sinopharm Group Co., Ltd. President 2013-11-01 2016-11-01 Y

Deputy

president

General

Ma Wanjun Sinopharm Group Co., Ltd. 2011-05-01 Y

counsel

Secretary of

the Board

Jiang

Sinopharm Group Co., Ltd. CFO 2010-06-01 Y

Xiuchang

Assistant

president

director of

Industry

Cui Dieling Sinopharm Group Co., Ltd. 2011-03-01 Y

developmen

t&

managemen

t center

Financial

Feng Yifeng Sinopharm Group Co., Ltd. managemen 2010-06-01 Y

t dept.

Post-holding in other unit

¡ÌApplicable ¡õ Not applicable

Received

Position in Start dated of End date of

Name Name of other units remuneration

other unit n office term office term

from other unit

65

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

(Y/N)

Wei Yulin Sinopharm Holding H.K. Co., Ltd Chairman 2011-01-01 N

Sinopharm Group Chemical Reagent

Wei Yulin Chairman 2011-12-01 N

Co., Ltd.

Sinopharm Le-Ren-Tang Medicine Co.,

Wei Yulin Chairman 2011-04-01 N

Ltd.

Sinopharm Holding Guoda Pharmacy

Wei Yulin Director 2012-08-01 N

Co., Ltd

Sinopharm Group Xinjiang

Li Zhiming Chairman 2013-05-01 N

Pharmaceutical Co., Ltd.

Li Zhiming Sinopharm Holding Ningxia Co., Ltd Chairman 2011-06-01 N

Li Zhiming Sinopharm Holding Shaanxi Co., Ltd. Chairman 2011-10-01 N

Li Zhiming Sinopharm Holding Gansu Co., Ltd. Chairman 2011-10-01 N

Li Zhiming Sinopharm Holding Qinghai Co., Ltd. Chairman 2011-10-01 N

China National Medicines Corporation

Li Zhiming Chairman 2011-10-01 N

Ltd

Li Zhiming Sinopharm Holding H.K. Co., Ltd Director 2014-01-01 N

Sinopharm Holding Sub Marketing Executive

Li Zhiming 2014-01-01 N

Center Co., Ltd. Director

Guangdong Dong Fang Uptodate &

Ma Wanjun Chairman 2010-03-01 N

Special Medicines Co., Ltd.

Ma Wanjun Sinopharm Holding Henan Co., Ltd Chairman 2010-10-01 N

Executive

Ma Wanjun Sinopharm Holding Henan Co., Ltd 2013-01-01 N

Director

Sinopharm Holding Changzhou Co.,

Ma Wanjun Director 2010-12-01 N

Ltd

Shanghai Bionuo Enterprise

Ma Wanjun Director 2010-12-01 N

Management Co., Ltd.

Sinopharm Le-Ren-Tang Medicine Co.,

Ma Wanjun Director 2011-04-01 N

Ltd.

Ma Wanjun Sinopharm Group Shanxi Co., Ltd. Director 2011-04-01 N

China National Medicines Corporation

Ma Wanjun Director 2011-10-01 N

Ltd

Ma Wanjun Yujia Medicine Service Co., Ltd. Director 2011-11-01 N

Sinopharm Health Industry (Shanghai)

Ma Wanjun Chairman 2011-11-01 N

Co., Ltd.

Sinopharm Holding Health

Ma Wanjun Chairman 2012-05-01 N

Development (Shanghai) Co., ltd.

Ma Wanjun Sinopharm Holding Fujian Co., Ltd Chairman 2012-08-01 N

Ma Wanjun Sinopharm Holding Fuzhou Co., Ltd Chairman 2012-08-01 N

Jiang Sinopharm Holding Guoda Pharmacy

Supervisor 2010-06-01 N

Xiuchang Co., Ltd

Jiang

Yujia Medicine Service Co., Ltd. Supervisor 2010-09-01 N

Xiuchang

Jiang China National Medicines Corporation

Director 2011-02-01 N

Xiuchang Ltd

Jiang Sinopharm Le-Ren-Tang Medicine Co.,

Director 2011-04-01 N

Xiuchang Ltd.

Jiang

Sinopharm Holding H.K. Co., Ltd Director 2011-11-01 N

Xiuchang

Jiang

Sinopharm Group Financial Co., Ltd Director 2011-11-01 N

Xiuchang

Jiang

Sinopharm Group Shanxi Co., Ltd. Director 2011-04-01 N

Xiuchang

Jiang Sinopharm Holding Sub Marketing

Supervisor 2011-04-01 N

Xiuchang Center Co., Ltd.

Jiang

Sinopharm Holding Beijing Co., Ltd Supervisor 2011-11-01 N

Xiuchang

Cui Dieling Sinopharm A-THINK Pharmaceutical Chairman 2011-10-01 N

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Co., Ltd.

Sinopharm Xingsha Pharmaceuticals

Cui Dieling Chairman 2011-12-01 N

(Xiamen) Co., Ltd.

Sinopharm Group Sanyi

Cui Dieling Chairman 2012-07-01 N

Pharmaceutical (Wuhu) Co., Ltd.

Chairman of

China National Medicines Corporation

Cui Dieling Supervisory 2011-12-01 N

Ltd

Committee

Feng Yifeng Sinopharm Holding Fujian Co., Ltd Director 2012-04-01 N

Sinopharm A-THINK Pharmaceutical

Feng Yifeng Director 2012-05-01 N

Co., Ltd.

Feng Yifeng Sinopharm Holding Hainan Co., Ltd Director 2012-05-01 N

Sinopharm Group Chemical Reagent

Feng Yifeng Supervisor 2012-05-01 N

Co., Ltd.

Feng Yifeng Sinopharm Holding Henan Co., Ltd Supervisor 2012-06-01 N

Sinopharm Holding Changzhou Co.,

Feng Yifeng Supervisor 2010-12-01 N

Ltd

Feng Yifeng Sinopharm Holding Wuxi Co., Ltd Supervisor 2012-12-01 N

Feng Yifeng Sinopharm Holding Gansu Co., Ltd. Supervisor 2012-05-01 N

Sinopharm Holding Health

Feng Yifeng Supervisor 2012-05-01 N

Development (Shanghai) Co., ltd.

Sinopharm Group Sanyi

Feng Yifeng Supervisor 2012-07-01 N

Pharmaceutical (Wuhu) Co., Ltd.

Shenzhen Main Luck Pharmaceuticals

Yan Zhigang Chairman 2010-05-01 N

Inc.

Sinopharm A-THINK Pharmaceutical

Yan Zhigang Director 2010-06-01 N

Co., Ltd.

He Zhiyi Newhuadu Business School Vice dean 2009-01-01 Y

Xiong

Shenzhen University Professor Y

Chuxiong

Xiong Shenzhen Zhongjin Lingnan Independent

2011-04-01 Y

Chuxiong Nonferrous Co., Ltd. Director

Xiong Shenzhen International Enterprise Co., Independent

2010-07-01 Y

Chuxiong Ltd. Director

Xiong Independent

Hytera Communications Co., Ltd. 2010-01-01 Y

Chuxiong Director

Xiao

Guangdong Shenglun Law Firms Director Y

Shengfang

Punishment of securities regulatory authority in recent three years to the company¡¯s current and outgoing directors,

supervisors and senior management during the reporting period

¡õ Applicable ¡Ì Not applicable

IV. Remuneration for directors, supervisors and senior executives

Decision-making procedures, recognition basis and payment for directors, supervisors and senior executives

(I) Remuneration decision procedure of directors, supervisors, senior management:

The Company implemented the annual salary system for senior executives based on the 2015 annual performance

appraisal (scheme) on management staff, paid annual salary remuneration according to the appraisal results.

Remuneration and appraisal committee of the company's board of directors is responsible for the formulation and

examination of salary plan and program as well as formulation and examination of salary plan and assessment

standards of directors (not including the independent directors), supervisors and senior executives. They also

evaluate the performance assessment of directors, supervisors and senior officers in accordance with the

assessment criteria, compensation scheme.

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(II) Remuneration determining basis

The main principles of making standard of compensation are: (1) the company's overall business and the profit

level; (2) the overall salary level and dynamic index over past years; (3) difference in position and duty; (4)

relative importance and risks of position; (5) related post salary level in the same industry; (6) individual

professional ability.

(III) Actual payment

Executives get monthly basic salary and annual salary after the issuance of annual examination.

Remuneration for directors, supervisors and senior executives in reporting period

In 10 thousand Yuan

Total Whether

remuneration remuneration

Post-holding

Name Title Sex Age before tax obtained from

status

obtained from related party of

the Company the Company

Currently in

Li Zhiming Chairman M 52 0 Y

office

Deputy Currently in

Cui Dieling F 50 0 Y

Chairman office

Currently in

Wei Yulin Director M 58 0 Y

office

Currently in

Ma Wanjun Director M 46 0 Y

office

Currently in

Jiang Xiuchang Director M 52 0 Y

office

Yan Zhigang Director, GM M 56 Appointed 190 N

Independent Currently in

He Zhiyi M 60 8 N

Director office

Xiong Independent Currently in

M 60 8 N

Chuxiong Director office

Independent Currently in

Xiao Shengfang M 46 8 N

Director office

Chairman of

Currently in

Feng Yifeng Supervisory M 37 0 Y

office

Committee

Currently in

Guan Xiaohui Supervisor F 45 0 Y

office

Currently in

Wang Huiqin Supervisor M 58 59.6 N

office

Currently in

Lin Zhaoxiong Deputy GM M 48 152 N

office

Currently in

Lin Min Deputy GM M 51 133 N

office

Currently in

Lin Xinyang Deputy GM M 51 133 N

office

Currently in

Deng Baojun Deputy GM M 54 152 N

office

Currently in

Pan Rangren Deputy GM M 51 133 N

office

Currently in

Wei Pingxiao CFO M 52 133 N

office

Chen Secretary of the M 48 Currently in 80 N

68

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

Changbing Board office

Total -- -- -- -- 1189.6 --

Delegated equity incentive for directors, supervisors and senior executives in reporting period

¡õ Applicable ¡Ì Not applicable

V. Particulars of workforce

1. Number of staff, professional composition and education background

The number of current employees of parent company

(people) 95

The number of current employees of main subsidiaries

(people) 4,215

Total number of current employees (people) 4,310

The total number of current employees to receive pay

(people) 4,310

The total number of retired staff and workers that the

parent company and main subsidiaries need to bear the 746

costs (people)

Professional composition

Category of professional composition Number of professional composition£¨people£©

Production staff 893

Salesman 1,320

Technical staff 94

Financial staff 203

Administrative staff 1,096

Logistics Staff 704

Total 4,310

Education background

Category of education Number (people)

Above graduate 178

Undergraduate 1,447

Junior college 1,123

Secondary technical school and below 1,562

Total 4,310

2. Remuneration policy

Sinopharm Accord and subordinate enterprises provided perfect salary and benefits, salary level and organization (artificial total,

compensation strategy, and position value), staff (development ability, performance results), and market (market level, the

competition for talent) closely combined for employees. Every year through the sort of responsibilities, job evaluation, target

compensation interval mapping, and annual employee job performance and ability evaluation, the ability staff with contribution

raised the salary, at the same time, performance bonuses and performance are closely linked, achieved win-win interests of the

company and employee.

3. Training programs

For more efficient training for employees, and gradually build and improve the company's training management system. First, the

construction of the training system, the implementation of staff training management system, staff continuing education management

system, the intern management system , internal trainer management system and etc. Second, the organization of the training,

arranged by the leadership of the company, set up professional positions in the human resources department, and assisted managers at

all levels to carry out the training of staff. Third, classes and courses of the training, according to different training object features

and training needs of the management, core business backbone and frontline employees, established various targeted training in

different levels, categories and region; curriculum including management courses, general quality courses and vocational skills

course, also vigorously promote internal course development and Instructor Certification. Fourth, the examination of the training, that

set different levels of assessment methods to ensure the staff training effect.

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4. Labor outsourcing

¡ÌApplicable ¡õNot applicable

Total nuber of working hours of labor outsourcing (HR) 119,799

Total remuneration paid of labor outsourcing (RMB) 32,781,469.30

70

Section IX. Corporate Governance

I. Corporate governance of the Company

Articles of Association are formulated at governance level. In compliance with

requirements of Articles, rules of procedures for shareholders¡¯ meeting, board and board

of supervisors, working system of strategy committee, nomination committee, internal risk

control and audit committee, remuneration and evaluation committee, general manager

and secretary to board, corporate governance system regarding information disclosure,

connected transactions, fund raising, performance of social responsibilities, inside

information and informant management, investor relation management, engagement of

accounting firm and prevention of occupation by major shareholders and connected parties

of capital of listing companies are also established.

During the Reporting Period, the Article of Association and Rules of Procedure of

Shareholders Meeting have been revised according to regulatory requirements and

governance needs. The effective implementation of corporate governance system ensures

the effective performance of duties and responsibilities of respective committees, thereby

facilitating the board of supervisors to play a supervisory role and offering help for the

board to make scientific decisions.

Is there any difference between the actual condition of corporate governance and relevant regulations about

corporate governance for listed company from CSRC?

¡õYes ¡Ì No

There are no differences between the actual condition of corporate governance and relevant regulations

about corporate governance for listed company from CSRC.

II. Independency of the Company relative to controlling shareholders¡¯ in aspect of

businesses, personnel, assets, organization and finance

The Company totally separates from the controlling shareholders in business, personnel,

assets, institutions, financial and other aspects, with independent and complete self-

management ability.

1. The business: the Company was independent from controlling shareholders, having a

complete business system and self-managing ability; the company has independent

procurement and sales system thus all procurement and sales of drugs and raw materials is

in charge of the purchasing department and subordinate subsidiary, branch and production

enterprises; production, supply, marketing and R & D separate from each other; the

Company is a legal market person with independent operation.

2. Personnel: procedures of the controlling shareholder nominating directors and general

and deputy general manager are legal; no intervene on the appointment and removal of

personnel made by the board of directors and shareholders¡¯ meeting happened; the

Company set up independent human resource department, responsible for assessment,

training and salary review on staff, making rules and regulations and handbook the

employees should abide by. Labor, personnel, wages and pension, medical insurance and

other insurance are independently managed.

3. Institution: production and operation mechanism and administrative management is

completely independent from the controlling shareholder or actual controller; offices and

sites of business operation separate from the controlling shareholder; the Company

established corporate governance structure where the board of directors, board of

supervisors and managers carry out their duties and exercise their respective duties in

accordance with relevant provisions of the articles of association.

4. Asset: property and rights relationship between the Company and the controlling

shareholder is clear, with independent operations; the company has independent

production system, auxiliary production system and supporting system; industrial property

rights, trademarks, non-patented technology and other intangible assets owned by the

Company and its subsidiary.

5. Financial aspects: the Company established independent financial departments and

independent financial accounting system; the Company opened a bank account

71

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

independently; the financial staff is independent without taking part-time and receiving

remuneration in the controlling shareholder; the Company pays tax independently.

III. Horizontal competition

¡ÌApplicable ¡õNot applicable

Name of Nature of Work schedule

Type controlling controlling Reason Solution measure and follow-up

shareholder shareholder plan

As subordinate

companies of

majority

In July 2013, to

shareholder,

Foshan Nanhai solve the problem

Medicine Co., Ltd.

of peer

and Guangdong

Dong Fang competition,

Uptodate &

majority

Special Medicines

Co., Ltd. both shareholder

operate

entrusted

Horizontal Sinopharm pharmaceutical Normally

SASAC

competition Holding distribution Sinopharm Accord performing

business within

and Sinopharm

Guangdong, which

partially overlaps Accord agreed to

with the

take over the

pharmaceutical

distribution management of the

business and

above two

geographical

location of the companies.

Company and

constitutes peer

competition.

As a subordinate

enterprise of the

actual controller,

Guangdong South In September

Pharmaceutical 2013, to solve the

Foreign Trade Co., problem of peer

ltd. operates competition, the

pharmaceutical actual controller

distribution

entrusted

business within

Horizontal Sinopharm Sinopharm Normally

SASAC Guangdong, which

competition Group Accord and performing

partially overlaps

with the Sinopharm

pharmaceutical Accord agreed to

distribution take over the

business and management of

geographical the above

location of the company.

Company and

constitutes peer

competition.

As a subordinate To solve the peer

pharmaceutical competition,

enterprise of the Sinopharm Group

Horizontal Sinopharm Normally

SASAC actual controller, issued in October

competition Group the primary 2013 the Letter of performing

business of Undertaking from

Sinopharm Group China National

72

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

Weiqida Pharmaceutical

Pharmaceutical Group Corporation

Co., Ltd. is similar on Avoiding the

to the Peer Competition

pharmaceutical with China

industrial products National Accord

of the Company, Medicines

which constitutes Corporation Ltd.

peer competition. and undertook

that, in the coming

five years,

Sinopharm Group

intends to take

appropriate

measures

(including the

disposal of assets,

equity injection

and stoppage of

production etc.) to

solve the problem

of peer

competition

between Weiqida

and Sinopharm

Accord.

IV. In the report period, the Company held annual shareholders¡¯ general meeting

and extraordinary shareholders¡¯ general meeting

1. Annual Shareholders¡¯ General Meeting in the report period

Ratio of investor

Session of meeting Type Date Date of disclosure Index of disclosure

participation

Juchao Website¡ª

(http://www.cninf

o.com.cn)

Annual general Annual general ¡°Resolution

63.05% 2015-04-24 2015-04-25

meeting 2014 meeting Notice of Annual

General Meeting

2014¡± No.: 2015-

19

Juchao Website¡ª

(http://www.cninf

o.com.cn)

First extraordinary ¡°Resolution

First extraordinary

general meeting of 57.39% 2015-05-15 2015-05-16 Notice of First

general meeting

2015 extraordinary

general meeting of

2015¡± No.: 2015-

22

Juchao Website¡ª

(http://www.cninf

o.com.cn)

Second

¡°Resolution

extraordinary First extraordinary

54.16% 2015-09-11 2015-09-11 Notice of Second

general meeting of general meeting

extraordinary

2015

general meeting of

2015¡± No.: 2015-

36

Institutional investor

Times of participant in the general

Name Number of directors

meeting

73

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

2. Request for extraordinary general meeting by preferred stockholders whose voting rights

restore

¡õ Applicable ¡Ì Not applicable

V. Responsibility performance of independent directors

1. The attending of independent directors to Board meetings and general meeting

The attending of independent directors to Board Meeting

Times of Board

Times of Absent the

Name of meeting Times of

Times of Times of Meeting for the

independent supposed to attending by entrusted second time in

director attend in the

Presence Absence

communication presence a row (Y/N)

report period

He Zhiyi 10 1 9 0 0N

Xiong Chuxiong 10 1 9 0 0N

Xiao Shengfang 10 1 9 0 0N

Times for attending general

1

meeting from independent directors

Explanation of absent the Board Meeting for the second time in a row

2. Objection for relevant events from independent directors

Independent directors come up with objection about Company¡¯s relevant matters

¡õYes ¡ÌNo

Independent directors has no objections for relevant events in reporting period

3. Other explanation about responsibility performance of independent directors

The opinions from independent directors have been adopted

¡Ì Yes ¡õ No

Explanation on advice that accepted/not accepted from independent directors

During the reporting period, the independent directors performed their duties in a careful,

diligent, dedicated attitude in accordance with requirements of the "Working System of

Independent Director", offered some useful suggestions and opinions on business

decision-making, legal affairs, financial management and other aspects; carefully

examined important matters those needed opinions of independent directors, made

independent judgments and issued a written independent opinion on major related

transactions, daily related transactions, accountancy hiring and other matters, playing a

positive role in safeguarding the legitimate rights and interests of small shareholders.

Besides, independent directors played an important role in operation of special committee.

At the same time, the Company can guarantee independent directors and other directors of

the same right to know. During the reporting period, the independent directors have no

objection on the related issues of the Company.

VI. Duty performance of the special committees under the board during the

reporting period

(I) Duties fulfillment of the board of directors and audit committee on internal control over

risk

Internal control on risk and Audit Committee of the board of directors of the company

comprises 3 independent non-executive directors and 3 directors, including the convener

(professional accountant) is an independent director. In accordance with relevant

provisions of China Securities Regulatory Commission and Shenzhen Stock Exchange and

working system, Internal control on risk and Audit Committee of the board of directors

74

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

seriously performed duties in a dedicated attitude. In the annual financial report audit, they

acted as supervisors, maintained individuality of audit and issued a series of notices such

as the Written Opinion on Financial Accounting Statements Issued by the Company before

CPA of Annual Examination Entered, the Written Opinion on Financial Accounting

Statements after Preliminary Audit Issued by CPA of Annual Examination, the Summary

Report of Internal Risk Control and Audit Committee on the Annual Audit Work of CPA

as well as the Resolution on Rehire the Audit Institution. Its main duties comprise the

following:

1. Risk internal control and audit committee is responsible for determining the audit work

schedule, negotiating with CPA who engages in audit;

2. Before CPA enters, audit committee should review the financial statements prepared by

the Company and issue written opinions;

3. Strengthen communication with the CPA, and urge them to submit audit report within

stipulated time with urgency letter;

4. Review again the financial statements after the CPA issues preliminary opinion, and

issue written opinions;

5. The Committee held annual work conference 2015, approved proposal of financial

accounting report, summary report of annual audit work of CPA and rehiring PWC

Zhongtian CPA as the audit institution, and then formed a resolution to submit to board of

directors for approval.

(II) Duties fulfillment of Remuneration and Appraisal Committee

As special working mechanism of the board of directors, the remuneration and appraisal

committee is responsible for approving the assessment standard of directors and senior

executives, formulating and reviewing compensation policies and programs of directors

and executive. And they take charge in examining according to the standard and policies.

The remuneration and appraisal committee is composed of 3 directors, including 2

independent directors; convener is He Zhiyi, an independent director.

During the reporting period, remuneration and assessment committee actively performed

duty; clearly defined their responsibilities; did serious research and appraisal on the

remuneration and appraisal system, especially salary, assessment system and program over

directors, supervisors and senior executive. According to working rules of the

remuneration and appraisal committee, they have rights to check regular reports, meetings

records, business planning and other materials by telephone, interviews and other methods

to learn the performance of directors, executives. And they¡¯re required to submit problems

75

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

existing in implementation of system to the Board of Directors and raise up suggestion on

them. Their contents are as follows:

1. In 2015, the remuneration and appraisal committee carried out the performance

evaluation of executives according to the 2014 Annual operation standard and

performance.

2. It proposed the "2016 Evaluation Scheme of Operating Performance", and submitted it

to the board of directors for approval.

3. The remuneration and appraisal committee approved salary of directors, supervisors and

senior executives disclosed in 2015 annual report. And it issued the following opinions:

Compensation decision procedures of directors, supervisors and senior management

personnel was in accordance with the provisions; the standard was in accordance with the

remuneration system; the disclosure of 2015 annual report about personnel salary of the

directors, supervisors and senior management is real and accurate.

VII. Works from Supervisory Committee

The Company has risks in reporting period that found in supervisory activity from supervisory committee

¡õ Yes ¡Ì No

Supervisory committee has no objection about supervision events in reporting period

VIII. Examination and incentives of senior management

Senior executives of the Company took responsibility for the board of directors, in the

reporting period, the board of directors implemented the performance checking

mechanism that the remuneration of senior executives related with their performance

checking, with achievement as direction, and made relevant reward and punishment

according to target completion. The Company¡¯s relevant incentive and restriction

mechanism gradually in order to further exert the enthusiasm and creativity of senior

executives, urge the senior executives to perform the obligations of being honest and

diligent. The Company had no incentive mechanism for senior executives such as stock

option, purchase of management team and equity held by owner.

IX. Internal Control

1. Details of major defects in IC appraisal report that found in reporting period

¡õYes ¡Ì No

2. Appraisal Report of Internal Control

Disclosure date of full internal control

2016-03-26

evaluation report

Juchao Website: (http://www.cninfo.com.cn); ¡±Self-evaluation Report of

Disclosure index of full internal

Internal Control of China National Accord Medicines Corporation Ltd for year

control evaluation report

of 2015¡±

The ratio of the total assets of units

included in the scope of evaluation

accounting for the total assets on the 100.00%

company's consolidated financial

statements

76

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

The ratio of the operating income of

units included in the scope of

evaluation accounting for the 100.00%

operating income on the company's

consolidated financial statements

Defects Evaluation Standards

Category Financial Reports Non-financial Reports

Financial report deficiencies are Non-financial report deficiencies

mainly judged by the impact and the are mainly judged by the impact of

likelihood of occurrence of financial deficiencies to the validity of

reporting misstatements caused by business process and the likelihood

deficiencies. (1) Major deficiencies: A of occurrence. (1) Major

combination of one or multiple internal deficiencies: A combination of one

control deficiencies that exists in or multiple internal control

internal control and may cause the deficiencies that may cause the

material misstatements in financial enterprise¡¯s serious deviation to

statements cannot be prevented, internal control objectives; (2)

Qualitative criteria found or corrected in time; (2) Significant deficiencies: A

Significant deficiencies: A combination combination of one or multiple

of one or multiple internal control internal control deficiencies whose

deficiencies that exists in internal severity level and economic

control and has severity level lower consequences are lower than major

than major deficiencies but still should deficiencies but still may cause the

be concerned by the superintendents of enterprise¡¯s deviation to internal

enterprise financial report; (3) Common control objectives; (3) Common

deficiencies: Other deficiencies except deficiencies: Other deficiencies

for major and significant deficiencies. except for major and significant

deficiencies.

Quantitative criteria: A quantitative

criterion determines the degree of

importance of a company¡¯s

deficiencies based on the amount of

direct loss and the degree of

significant impact to the company.

(1) Major deficiencies: the amount of

direct property loss is or more than

Quantitative criteria: A quantitative 10 million yuan, or has been

criterion determines the degree of officially disclosed and caused

importance of misstatements (including negative effects to periodic report

missing reports) in the consolidated disclosure of the joint-stock

statements of listed companies based on companies; (2) Significant

the consolidated statement data. (1) deficiencies: the amount of direct

Quantitative standard Major deficiencies: equal to or greater property loss is between 5 million

than 5% of profit before tax (2) and 10 million yuan, or has been

Significant deficiencies: between 1% punished by the national government

and 5% of profit before tax; (3) departments but has not caused

Common deficiencies: less than or equal negative effects to periodic report

to 1% of profit before tax. disclosure of the joint-stock

companies;(3) Common

deficiencies: the amount of direct

property loss is between 0.1 million

and 5 million yuan, or has been

punished by the provincial or sub-

provincial government departments

but has not caused negative effects to

periodic report disclosure of the

joint-stock companies.

Amount of significant defects in

0

financial reports

Amount of significant defects in non-

0

financial reports

Amount of important defects in

0

financial reports

Amount of important defects in non-

0

financial reports

77

¹úÒ©¼¯ÍÅÒ»ÖÂÒ©Òµ¹É·ÝÓÐÏÞ¹«Ë¾ 2015 ÄêÄê¶È±¨¸æÈ«ÎÄ

X. Auditing report of internal control

¡ÌApplicable ¡õ Not applicable

Deliberations in Internal Control Audit Report

Sinopharm Accord, in line with Basic Norms of Enterprises Internal Control and relevant regulations, shows an

effectiveness internal control of financial report in all major aspects dated 31 December 2015.

Disclosure details of audit

Disclosed

report of internal control

Disclosure date of audit report

2016-03-26

of internal control (full-text)

Index of audit report of internal Juchao Website: (http://www.cninfo.com.cn); ¡±Audit Report of Internal Control of

control (full-text) China National Accord Medicines Corporation Ltd.¡±

Opinion type of auditing report

Standard unqualified

of IC

whether the non-financial report

No

had major defects

Carried out modified opinion for internal control audit report from CPA

¡õYes ¡Ì No

The internal control audit report, issued by CPA, has concerted opinion with self-evaluation report, issued

from the Board

¡Ì Yes ¡õ No

Section X Financial Report

78

[English Translation for Reference Only]

Report of the Auditors

PwC ZT Shen Zi (2016) No. 10007

(Page 1 of 2)

To the Shareholders of China National Accord Medicines Co., Ltd.

We have audited the accompanying financial statements of China National Accord Medicines

Co., Ltd. (hereinafter the ¡°Company¡±), which comprise the consolidated and company balance

sheets as at 31 December 2015, and the consolidated and company income statements, the

consolidated and company statements of changes in shareholder¡¯s equity and the consolidated

and company cash flow statements for the year then ended, and the notes to the financial

statements.

Management¡¯s Responsibility for the Financial Statements

Management of National Accord is responsible for the preparation and fair presentation of

these financial statements in accordance with the requirements of Accounting Standards for

Business Enterprises, and for such internal control as management determines is necessary to

enable the preparation of financial statements that are free from material misstatement,

whether due to fraud or error.

Auditor¡¯s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with China Standards on Auditing. Those standards

require that we comply with ethical requirements and plan and perform the audit to obtain

reasonable assurance about whether the financial statements are free from material

misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and

disclosures in the financial statements. The procedures selected depend on the auditor¡¯s

judgment, including the assessment of the risks of material misstatement of the financial

statements, whether due to fraud or error. In making those risk assessments, the auditor

considers internal control relevant to the entity¡¯s preparation and fair presentation of the

financial statements in order to design audit procedures that are appropriate in the

circumstances. An audit also includes evaluating the appropriateness of accounting policies

used and the reasonableness of accounting estimates made by management, as well as

evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a

basis for our audit opinion.

79

PwC ZT Shen Zi (2016) No. 10007

(Page 2 of 2)

Opinion

In our opinion, the accompanying financial statements present fairly, in all material respects, the

financial position of the Company and of the Company and its subsidiaries(the ¡°Group¡±) as at 31

December 2015, and their financial performance and cash flows of the Company and the Group

for the year then ended in accordance with the requirements of Accounting Standards for

Business Enterprises.

PricewaterhouseCoopers Zhong Tian LLP

Shanghai, the People¡¯s Republic of China

24 March2016

80

CHINA NATIONAL ACCORD MEDICINESCO., LTD.

Consolidated and companybalance sheets

For the year ended 31 December 2015

(All amounts in Renminbi ¡°RMB¡± unless otherwise stated)

ASSETS Note 31 December 2015 31 December 2014 31 December 2015 31 December 2014

Consolidated Consolidated Company Company

Current assets

Cash at bank and on

hand IV(1) 1,570,706,970.51 867,562,115.54 429,437,078.35 257,173,314.81

Notes receivable IV(2) 820,125,807.67 618,995,440.09 43,896,287.87 47,389,669.59

Accounts receivable IV(3)¡¢XV(1) 6,153,830,882.75 7,018,312,673.19 381,093,808.53 513,791,982.48

Advances to suppliers IV(4) 72,041,261.84 96,043,154.40 5,452,046.55 5,047,755.80

Other receivables IV(5)¡¢XV(2) 38,175,884.46 28,574,927.90 1,613,862,656.17 1,111,423,809.76

interest receivable - - 2,053,659.27 1,890,165.10

Inventories IV(6) 2,533,160,758.28 2,322,333,262.87 182,659,794.51 184,880,147.05

Other current assets IV(7) 19,456,915.58 40,308,591.47 39,482.38 2,560,096.51

Divided into holding

assets for sale IV(8) 2,456,876.83 - - -

Total current assets 11,209,955,357.92 10,992,130,165.46 2,658,494,813.63 2,124,156,941.10

Non-current assets

Long-term equity

investments IV(9)¡¢XV(3) 180,831,714.55 157,604,846.85 2,795,231,208.93 2,772,004,341.23

Investment properties IV(10) 145,102,318.77 73,836,850.51 4,379,786.84 5,272,980.96

Fixed assets IV(11) 1,079,412,437.53 745,557,829.35 391,937,393.50 17,175,509.65

Construction in progress IV(12) 176,096,786.58 330,218,696.56 129,851,067.29 299,290,846.13

Intangible assets IV(13) 137,720,156.55 144,383,753.87 35,678,610.77 36,923,545.12

Development costs IV(13) 5,619,315.47 5,619,315.47 - -

Goodwill IV(14) 79,378,833.15 79,378,833.15 - -

Long-term prepaid

expenses IV(15) 40,464,563.93 39,154,232.03 7,417,691.74 5,681,186.10

Deferred income tax

assets IV(16) 88,210,062.44 85,146,479.50 2,906,189.80 2,800,803.02

Other non-current assets IV(18) 75,558,188.42 175,910,538.15 34,856,698.50 68,103,087.93

Total non-current assets 2,008,394,377.39 1,836,811,375.44 3,402,258,647.37 3,207,252,300.14

TOTAL ASSETS 13,218,349,735.31 12,828,941,540.90 6,060,753,461.00 5,331,409,241.24

81

CHINA NATIONAL ACCORD MEDICINESCO., LTD.

Consolidated and companybalance sheets (continued)

For the year ended 31 December 2015

(All amounts in Renminbi ¡°RMB¡± unless otherwise stated)

LIABILITIES AND OWNER¡¯S Note 31 December 2015 31 December 2014 31 December 2015 31 December 2014

EQUITY Consolidated Consolidated Company Company

Current liabilities

Short-term borrowings IV(19) 1,212,959,267.74 1,517,954,528.88 106,000,000.00 202,000,000.00

Notes payable IV(20) 1,301,594,416.81 1,468,166,640.64 285,394,838.22 274,584,574.89

Accounts payable IV(21) 4,036,910,159.14 3,988,878,234.03 292,794,309.39 314,477,971.19

Advances from customers IV(22) 56,943,167.40 40,339,905.63 5,841,769.74 322,008.81

Employee benefits

payable IV(23) 164,315,934.17 171,958,142.88 22,441,125.24 20,339,767.52

Taxes payable IV(24) 72,863,480.20 77,445,669.46 10,770,924.28 13,695,533.72

Interests payable IV(25) 6,544,067.19 6,666,712.19 354,492.17 86,831.07

Other payables IV(26) 468,450,153.85 412,347,201.51 680,741,770.79 447,928,781.45

Current portion of long-

term Borrowings IV(27) 5,444,858.84 4,000,000.00 - -

Total current liabilities 7,326,025,505.34 7,687,757,035.22 1,404,339,229.83 1,273,435,468.65

Non-current liabilities

Long-term borrowings IV(28) 72,495,172.30 39,695,448.00 72,495,172.30 39,695,448.00

Long-term payables IV(29) 8,394,559.05 - - -

Payables for specific

projects IV(30) 1,287,000.00 1,287,000.00 800,000.00 800,000.00

Deferred Income IV(31) 173,099,023.98 176,366,201.15 5,074,999.99 5,000,000.00

Long-term employee

benefits payable IV(32) 2,499,100.00 2,896,000.00 72,000.00 226,000.00

Deferred income tax

liabilities IV(16) 22,647,074.06 24,297,076.57 3,773,319.00 3,773,319.00

Other non-current

liabilities IV(33) 45,427,343.31 45,427,343.31 - -

Total non-current liabilities 325,849,272.70 289,969,069.03 82,215,491.29 49,494,767.00

Total liabilities 7,651,874,778.04 7,977,726,104.25 1,486,554,721.12 1,322,930,235.65

OWNERS¡¯ EQUITY

Share capital IV(34) 362,631,943.00 362,631,943.00 362,631,943.00 362,631,943.00

Capital surplus IV(35) 1,863,894,533.34 1,863,894,533.34 1,869,692,921.70 1,869,692,921.70

Surplus reserve IV(36) 181,315,971.50 181,315,971.50 181,315,971.50 181,315,971.50

Undistributed profits IV(37) 3,045,551,246.71 2,356,765,374.25 2,160,557,903.68 1,594,838,169.39

Total equity attributable to

equity holders of the

Company 5,453,393,694.55 4,764,607,822.09 4,574,198,739.88 4,008,479,005.59

Minority interest IV(38) 113,081,262.72 86,607,614.56 - -

Total owners' equity 5,566,474,957.27 4,851,215,436.65 4,574,198,739.88 4,008,479,005.59

TOTAL LIABILITIES AND

OWNERS¡¯ EQUITY 13,218,349,735.31 12,828,941,540.90 6,060,753,461.00 5,331,409,241.24

The accompanying notes form an integral part of these financial statements.

Legal Principal in charge Head of accounting

representative: of accounting : department:

- 82 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Consolidated and company income statements

For the year ended 31 December 2015

(All amounts in Renminbi ¡°RMB¡± unless otherwise stated)

2015 2014 2015 2014

Item Note

Consolidated Consolidated Company Company

I Sales IV(39) ¡¢XV(4) 25,993,139,277.84 23,954,331,028.05 2,863,660,401.47 2,778,958,470.32

IV(39)¡¢IV(44)¡¢

Less: Cost of sales XV(4) (23,972,042,607.92) (22,002,628,769.91) (2,737,910,097.84) (2,661,191,051.06)

Taxes and surcharges IV(40) (50,508,357.41) (46,741,611.03) (6,075,183.19) (7,884,152.19)

Selling and distribution

expenses IV(41)¡¢IV(44) (533,791,055.46) (522,383,083.15) (46,270,636.71) (50,541,074.90)

Administration expenses IV(42)¡¢IV(44) (459,218,208.55) (474,317,573.25) (55,216,452.28) (56,548,260.89)

Financial expenses/(income) (123,129,102.91)

¨C net IV(43) (91,282,085.47) 66,168,235.86 86,040,210.41

Asset impairment losses IV(45) (37,117,607.82) (54,059,556.00) (487,293.37) (121,866,804.17)

Add: Investment income IV(46)¡¢XV(5) 57,413,887.70 50,415,836.33 571,927,007.23 527,284,955.64

Including: Share of profits of

associates 57,413,887.70 50,415,836.33 57,413,887.70 50,415,836.33

II Operating profit 906,593,242.91 781,487,168.13 655,795,981.17 494,252,293.16

Add: Non-operating income IV(47) 55,403,408.06 49,881,058.60 6,114,684.26 3,720,411.34

Less: Non-operating expenses IV(48) (688,795.85) (2,084,788.43) - (73,227.94)

Including: Loss on disposal

non-current assets (452,401.24) (541,470.69) - (23,227.86)

III Total profit 961,307,855.12 829,283,438.30 661,910,665.43 497,899,476.56

Less: Income taxes expenses IV(49) (173,959,945.90) (159,442,270.43) (23,664,542.54) (690,557.22)

IV Net profit 787,347,909.22 669,841,167.87 638,246,122.89 474,226,166.14

Attributable to equity holders

of the Company 761,312,261.06 652,497,176.03 638,246,122.89 474,226,166.14

Minority interest 26,035,648.16 17,343,991.84 - -

V Other comprehensive

income - - - -

VI Total comprehensive

income 787,347,909.22 669,841,167.87 638,246,122.89 474,226,166.14

Attributable to equity holders

of the Company 761,312,261.06 652,497,176.03 638,246,122.89 474,226,166.14

Minority interest 26,035,648.16 17,343,991.84 - -

VII Earnings per share IV(50)

Basic earnings per share 2.10 1.90 N/A N/A

Diluted earnings per share 2.10 1.90 N/A N/A

The accompanying notes form an integral part of these financial statements.

Legal Principal in charge Head of accounting

representative: of accounting : department:

- 83 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Consolidated and company cash flows statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

2015 2014 2015 2014

Item Note

Consolidated Consolidated Company Company

I. Cash flows from operating

activities:

Cash received from sales of

goods or rendering of

services 29,149,610,033.67 24,589,100,077.05 3,285,822,755.42 2,920,233,286.18

Refund of taxes and

surcharges 8,448,126.90 7,684,100.85 - -

Cash received relating to

other operating activities IV(51)(a) 102,307,958.73 95,723,511.65 22,129,617.81 23,134,788.02

Sub-total of cash inflows 29,260,366,119.30 24,692,507,689.55 3,307,952,373.23 2,943,368,074.20

Cash paid for goods and

services (26,653,647,201.64) (24,004,157,438.02) (3,192,267,206.67) (2,890,702,190.08)

Cash paid to and on behalf

of employees (615,094,469.83) (561,974,921.45) (54,576,026.24) (51,493,616.14)

Payments of taxes and

surcharges (595,199,714.55) (532,911,240.08) (47,163,193.25) (34,440,144.29)

Cash paid relating to other

operating activities IV(51)(b) (348,445,630.30) (390,161,122.43) (26,759,541.81) (27,519,021.28)

Sub-total of cash outflows (28,212,387,016.32) (25,489,204,721.98 ) (3,320,765,967.97) (3,004,154,971.79)

Net cash flows from

operating activities IV(52)(a) 1,047,979,102.98 (796,697,032.43) (12,813,594.74) (60,786,897.59)

II. Cash flows from investing

activities

Cash received from returns

on investments 35,190,000.00 28,152,000.00 616,517,083.38 590,255,378.22

Net cash received from

disposal of fixed assets,

intangible assets and

other long-term assets 9,486,605.21 1,373,701.57 - 8,220.00

Cash received from disposal

of subsidiaries and other

business units IV(51)(c) 20,000,000.00 - 2,604,319,315.47 4,665,051,089.73

Sub-total of cash inflows 64,676,605.21 29,525,701.57 3,220,836,398.85 5,255,314,687.95

Cash paid to acquire fixed

assets, intangible assets

and other long-term

assets (190,362,031.68) (342,669,442.11) (145,095,042.98) (255,285,127.72)

Cash paid to acquire

Investments - - - (1,264,910,000.00)

Net cash paid to acquire

subsidiaries and other

business units IV(52)(b) (9,452,000.00) (2,211,778.91) (9,452,000.00) (6,761,000.00)

Cash paid relating to other

investing activities - - (3,081,753,248.70) (4,619,057,191.29)

Sub-total of cash outflows (199,814,031.68) (344,881,221.02) (3,236,300,291.68) (6,146,013,319.01)

Net cash flows from

investing activities (135,137,426.47) (315,355,519.45) (15,463,892.83) (890,698,631.06)

- 84 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Consolidated and company cash flows statements(continued)

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

2015 2014 2015 2014

Item Note

Consolidated Consolidated Company Company

III. Cash flows from financing

activities

Cash received from

investments 1,470,000.00 1,929,626,737.77 - 1,929,626,737.77

- Cash received by subsidiary

from investment of minority

shareholders 1,470,000.00 - - -

Cash received from borrowings 203,077,436.91 533,871,463.85 112,799,724.30 238,095,448.00

Cash received relating to other

financing Activities IV(51)(d) 6,240,000.00 31,600,000.00 220,661,123.28 186,549,748.34

Sub-total of cash inflows 210,787,436.91 2,495,098,201.62 333,460,847.58 2,354,271,934.11

Cash repayments of

borrowings (223,745,105.38) (914,343,511.67) (10,000,000.00) (725,000,000.00)

Cash payments for interest

expenses and distribution

of dividends or profits (179,532,502.29) (216,492,634.80) (85,759,595.29) (92,901,347.13)

Including: Cash payments for

dividends or profit to

minority shareholders of

subsidiaries (1,032,000.00) (5,825,783.82) - -

Cash payments relating to

other financing activities IV(51)(e) (5,337,208.23) (495,951,689.09) (37,160,001.18) (546,054,690.55)

Sub-total of cash outflows (408,614,815.90) (1,626,787,835.56) (132,919,596.47) (1,363,956,037.68)

Net cash flows from

financing activities (197,827,378.99) 868,310,366.06 200,541,251.11 990,315,896.43

IV. Effect of foreign exchange rate

changes on cash - 5,838.21 - -

V. Net (decrease)/increase in cash 715,014,297.52 (243,736,347.61) 172,263,763.54 38,830,367.78

Add: Cash at beginning of year 854,212,006.84 1,097,948,354.45 257,173,314.81 218,342,947.03

VI. Cash at end of year IV(52)(c) 1,569,226,304.36 854,212,006.84 429,437,078.35 257,173,314.81

The accompanying notes form an integral part of these financial statements.

Legal Principal in charge Head of accounting

representative: of accounting : department:

- 85 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Consolidated statement of changes in owners¡¯ equity

For the year ended 31 December 2015

(All amounts Renminbi (RMB) unless otherwise stated)

Attributable to the shareholders of the Company Minority interest Total owners¡¯ equity

Items Notes

Paid-in capital Capital surplus Surplus reserves Undistributed profits

Balance at 1 January 2014 288,149,400.00 5,750,338.57 144,855,634.40 1,806,002,285.06 71,879,406.54 2,316,637,064.57

Movements for the year ended 31

December 2014

Comprehensive income - - - 652,497,176.03 17,343,991.84 669,841,167.87

- Net profit - - - 652,497,176.03 17,343,991.84 669,841,167.87

- Other comprehensive income - - - - - -

Capital contribution and withdrawals

by owners

- Capital contribution by owners 74,482,543.00 1,855,144,194.77 - - - 1,929,626,737.77

- Increase due to acquisition of a

subsidiry - - - - 3,210,000.00 3,210,000.00

- Others - 3,000,000.00 - - - 3,000,000.00

Profit distribution

- Appropriation to surplus reserves IV(36) - - 36,460,337.10 (36,460,337.10) - -

- Profit distribution to equity owners IV(37) - - - (65,273,749.74) (5,825,783.82) (71,099,533.56)

Balance at 31 December 2014 362,631,943.00 1,863,894,533.34 181,315,971.50 2,356,765,374.25 86,607,614.56 4,851,215,436.65

The accompanying notes form an integral part of these financial statements.

- 86 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Consolidated statement of changes in owners¡¯ equity(continued)

For the year ended 31 December 2015

(All amounts Renminbi (RMB) unless otherwise stated)

Attributable to the shareholders of the Company Minority interest Totalowners¡¯ equity

Items Notes

Paid-in capital Capital surplus Surplus reserves Undistributed profits

Balance at 1 January 2015 362,631,943.00 1,863,894,533.34 181,315,971.50 2,356,765,374.25 86,607,614.56 4,851,215,436.65

Movements for the year ended 31

December 2015

Comprehensive income - - - 761,312,261.06 26,035,648.16 787,347,909.22

- Net profit - - - 761,312,261.06 26,035,648.16 787,347,909.22

- Other comprehensive income - - - - - -

Capital contribution and withdrawals

by owners

- Capital contribution by owners IV(34) - - - - 1,470,000.00 1,470,000.00

Profit distribution

- Profit distribution to equity owners IV(37) - - - (72,526,388.60) (1,032,000.00) (73,558,388.60)

Balance at 31 December 2015 362,631,943.00 1,863,894,533.34 181,315,971.50 3,045,551,246.71 113,081,262.72 5,566,474,957.27

The accompanying notes form an integral part of these financial statements.

Legal Principal in charge Head of accounting

representative: of accounting : department:

- 87 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Company statement of changes in owners¡¯ equity

For the year ended 31 December 2015

(All amounts Renminbi (RMB) unless otherwise stated)

Items Notes Paid-in capital Capital surplus Surplus reserves Undistributed profits Total owners¡¯ equity

Balance at 1 January 2014 288,149,400.00 14,548,726.93 144,855,634.40 1,222,346,090.09 1,669,899,851.42

Movements for the year ended 31

December 2014

Comprehensive income - - - 474,226,166.14 474,226,166.14

- Net profit - - - 474,226,166.14 474,226,166.14

- Other comprehensive income - - - - -

Capital contribution and

withdrawals by owners

- Contribution of Paid-in capital 74,482,543.00 1,855,144,194.77 - - 1,929,626,737.77

Profit distribution

- Appropriation to surplus

reserves IV(36) - - 36,460,337.10 (36,460,337.10) -

- Profit distribution to equity

owners IV(37) - - - (65,273,749.74) (65,273,749.74)

Balance at 31 December 2014 362,631,943.00 1,869,692,921.70 181,315,971.50 1,594,838,169.39 4,008,479,005.59

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CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Company statement of changes in owners¡¯ equity(continued)

For the year ended 31 December 2015

(All amounts Renminbi (RMB) unless otherwise stated)

Items Notes Paid-in capital Capital surplus Surplus reserves Undistributed profits Total owners¡¯ equity

Balance at 1 January 2015 362,631,943.00 1,869,692,921.70 181,315,971.50 1,594,838,169.39 4,008,479,005.59

Movements for the year ended 31

December 2015

Comprehensive income - - - 638,246,122.89 638,246,122.89

- Net profit - - - 638,246,122.89 638,246,122.89

- Other comprehensive income - - - - -

Profit distribution

- Profit distribution to equity

owners IV(37) - - - (72,526,388.60) (72,526,388.60)

Balance at 31 December 2015 362,631,943.00 1,869,692,921.70 181,315,971.50 2,160,557,903.68 4,574,198,739.88

The accompanying notes form an integral part of these financial statements.

Legal Principal in charge Head of accounting

representative: of accounting : department:

- 89 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

I Profile of company

(1) Historical development and basic information

China National Accord Medicines Co., Ltd. (hereinafter referred to asthe ¡°the Company¡±), formerly

known as Shenzhen Health Mineral Water Co., Ltd., was approved by the People¡¯s Government of

Shenzhen with SFBF (1993) No.356 document to establish on 1 February 1993 through stock

restructure as a company limited by shares. In March 1993, with the approval from the Shenzhen

Branch of the People¡¯s Bank of China, the Company issued 30 million A-shares (including 16.5

million public shares, 3.5 million employee shares and 10 million corporation shares) and 20

million B-shares. After this issuance, the Company¡¯s share capital was RMB105 million. Through

transfer of capital surplus to share capital and bonus issues for years, the share capital of the

Company increased toRMB362,631,900. up to 31 December 2015.

In November 2000, the Company entered into an Assets Exchange Agreement with Shenzhen

Investment Management Company, the original main shareholder of the Company, to exchange all

the assets and liabilities of the Company as of 31 August 2000 for Shenzhen Investment

Management Company¡¯s 100% equity interests in 11 pharmaceutical companies and certain

properties as well as 51% equity interests in Shenzhen Tefa Modern Computer Co., Ltd. On

December 29, 2000, the above assets exchange proposal was approved by shareholder¡¯s voting

in the second extraordinary general meeting in 2000. The transaction was completed on 8 January

2001.

On 18 February 2004, the Company¡¯s original main shareholder, Shenzhen Investment

Management Company, entered into a Stock Transfer Agreement with Sinopharm Group Co., Ltd.

(hereinafter referred to as ¡°Sinopharm Group¡±) to transfer its 43.33% shares in the Company to

Sinopharm Group. The legal procedures of the above equity transfer were completed on 9

December 2004. At the same time, as approved by GZCQ (2004) No.525 document from the

State-owned Assets Supervision and Administration Commission of the State Council and ZJGSZ

(2004) No.94 document from the China Securities Regulatory Commission, the nature of these

shares was transferred from state-owned stock to state-owned legal entity stock and Sinopharm

Group became the top shareholder of the Company.

On 14 April 2006, the Company¡¯s proposal on reformation of segregated stocks was approved. To

gain liquidity for the restricted stocks of the Company, the holders of the restricted stocks of the

Company agreed to pay the following consideration: based on the stock registration as of 27 April

2006, the Company issued bonus shares on 28 April 2006 at the ratio of 3 shares to every 10 A-

shares to liquidated A-share holders which went public on the same day. After this bonus issue,

the total number of shares of the Company remained unchanged with corresponding changes in

the composition of shareholdings.

OnMarch 14, 2014, the company issued 74,482,543ordinary shares (A shares) through the non

public offering.Par value per share is RMB 1 yuan.The shares shall not be transferred within 36

months since the issued day. Total shares of the Company was 362,631,943 since the issuance

date.

As of 31 December, 2015, the total share capital was 362,631,943.

The Company is registered with Shenzhen Administration for Industry & Commerce. Its business

license number is 440301103040048 and the serial number of the license is N24657. The

operation period of the Company is from 2 August 1986 to the long term. The registered capital of

the Company is RMB362,631,900. The legal representative of the Company is Lin Zhaoxiong.

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CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

I Profile of company(continued)

(1) Historical development and basic information(continued)

The approved scope of business of the Company and its subsidiaries (together ¡°the Group¡±)

includes wholesale of traditional Chinese medicine preparations, bulk pharmaceutical drugs,

chemical preparations, bulk antibiotic drugs, antibiotic preparations, biochemical drugs, biological

products (including vaccines and in vitro diagnostic reagents), psychotropic drugs and

preparations, narcotic drugs, toxic drugs for medical use, protein assimilation preparation and

peptide hormones; trade of dietary supplement; research, development and consultation services

of pharmaceutical packaging materials and pharmaceutical industry products; industrial investment

holding; domestic trade (other than special licensing), sale of ambulances; trade of second-class

and third- class medical equipments; project investment; property management and lease of self-

owned properties; pharmacovigilance and medical information consulting; parking operation;

logistics and related services; package agency business; logistic design; operating various types of

goods and import and export of technology (not attached directory of import and export

commodities), but excluded the import and export of goods and technology the State limits or

prohibit the company.

(2) Change in consolidation scope and the significant reorganization plan in progress for the

current year

Subsidiaries consolidated in the statement this year are listed in Note V. New subsidiary scoped in

for the year 2015 was Sinopharm Holding Guangzhou Medical Management Co., Ltd(¡°Guangzhou

Medical¡±).

On 31 December 2015, with the approval of the Board, the Company publicly list for sale of the

holding 67% of the total equity of Zhijun(Suzhou), with base price of RMB155.3 million. Up to the

report date, the Company reached agreement with an independent third party, and the price is

a bit higher than the base price. The relevant procedures are in progress.

On 9March 2016, the Board of the Company approved the reorganization plan regarding the

commercial and manufacturing business with related parties, including:

1) The company purchases 100% of the equity of Sinopharm Holding Guoda Drugstore Co.,

Ltd(¡°Guoda Drugstore¡±), Foshan Nanhai Medicine Group Co., Ltd.(¡°Foshan Nanhai¡±), Guangdong

Dongfang Uptodate & Special Medicines Co., Ltd(¡°Guangdong Dongfang¡±) and 51% of the equity

of Guangdong Nanfang Foreign Trade Co., Ltd(¡°Nanfang Trade¡±) from the Parent company

Sinopharm Holding and the related party China National Pharmaceutical Foreign Trade Co.,

Ltd(¡°Sinopharm Trade¡±) respectively, with consideration of non-public issuance of A-share.

Meanwhile, the Company purchases 49% of the equity Nanfang Trade from 11 natural person

minority shareholders with cash.

2) The company sells Pingshan Pharmaceutical Research & Development Manufacturing Base

and 51% of the equity 3 subsidiaries including Sinopharm Group Zhijun(Shenzhen)

Pharmaceutical Co., Ltd.(¡°Zhijun Medicine¡±), Zhijun Pharmaceutical Trade Co., Ltd.(¡°Zhijun

Trade¡±), and Sinopharm Group Zhijun(Shenzhen) Pingshan Pharmaceutical Co., Ltd.(¡°Pingshan

Medicine¡±) and subscribe the new shares of Shanghai Shyndec Pharmaceutical Co.,Ltd..

(3) These financial statements were authorised for issue by the board of directors of the Company on

24 March 2016.

91

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

II Summary of significant accounting policies and accounting estimates

(1) Basis of preparation

The group determines the specific accounting policies and accounting estimates according to the

production management characteristics, shown mainly on the bad debt provision withdrawing

method for account receivable(Note II(11)), measurement of inventory(Note II(12)), depreciation

for PP&E and amortization for intangible asset(Note II(16), (19)), judgement basis for capitalization

of development expenditure(Note II(19)),impairment of long-term assets(Note II(22)), recognition

timing of revenue(Note II(25)).

The financial statements were prepared in accordance with the Basic Standard and specific

standards of the Accounting Standards for Business Enterprises issued by the Ministry of Finance

on 15 February 2006 and those updated afterwards, and other relevant regulations issued

thereafter (hereafter collectively referred to as the ¡°Accounting Standards for Business

Enterprises¡± or ¡°CAS¡±), and the disclosure requirements in the Preparation Convention of

Information Disclosure by Companies Offering Securities to the Public No.15 ¨C General Rules on

Financial Reporting issued by the China Securities Regulatory Commission.

This financial statement is prepared on the basis of going concern.

(2) Statement of compliance with the Accounting Standards for Business Enterprises

The financial statements of the Company for the year ended 31 December 2015 are in compliance

with the Accounting Standards for Business Enterprises, and truly and completely present the

financial position of the Group and the Company as of 31 December 2015 and the operating

results, cash flows and other information of the Group and the Company for the year then ended.

(3) Accounting year

The Company¡¯s accounting year starts on 1 January and ends on 31 December.

(4) Functional currency

The functional currency is Renminbi (RMB).

(5) Business combinations

(a) Business combinations involving enterprises under common control

The consideration paid and net assets obtained by the absorbing party in a business combination

are measured at the carrying amount. The difference between the carrying amount of the net assets

obtained from the combination and the carrying amount of the consideration paid for the combination

is treated as an adjustment to capital surplus (share premium). If the capital surplus (share premium)

is not sufficient to absorb the difference, the remaining balance is adjusted against retained

earnings. Costs directly attributable to the combination are included in profit or loss in the period in

which they are incurred. Transaction costs associated with the issue of equity or debt securities for

the business combination are included in the initially recognized amounts of the equity or debt

securities.

92

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

II Summary of significant accounting policies and accounting estimates(continued)

(5) Business combinations(continued)

(b) Business combinations involving enterprises not under common control

The cost of combination and identifiable net assets obtained by the acquirer in a business

combination are measured at fair value at the acquisition date. Where the cost of the combination

exceeds the acquirer¡¯s interest in the fair value of the acquirer¡¯s identifiable net assets, the difference

is recognized as goodwill; where the cost of combination is lower than the acquirer¡¯s interest in the

fair value of the acquirer¡¯s identifiable net assets, the difference is recognized in profit or loss for the

current period. Costs directly attributable to the combination are included in profit or loss in the

period in which they are incurred. Transaction costs associated with the issue of equity or debt

securities for the business combination are included in the initially recognized amounts of the equity

or debt securities.

(6) Preparation of consolidated financial statements

The consolidated financial statements comprise the financial statements of the Company and all of

its subsidiaries.

Subsidiaries are consolidated from the date on which the Group obtains control and are de-

consolidated from the date that such control ceases. For a subsidiary that is acquired in a

business combination involving enterprises under common control, it is included in the

consolidated financial statements from the date when it, together with the Company, comes under

common control of the ultimate controlling party. The portion of the net profits realized before the

combination date is presented separately in the consolidated income statement.

In preparing the consolidated financial statements, where the accounting policies and the

accounting periods of the Company and subsidiaries are inconsistent, the financial statements of

the subsidiaries are adjusted in accordance with the accounting policies and the accounting period

of the Company. For subsidiaries acquired from business combinations involving enterprises not

under common control, the individual financial statements of the subsidiaries are adjusted based

on the fair value of the identifiable net assets at the acquisition date.

All significant intra-group balances, transactions and unrealized profits are eliminated in the

consolidated financial statements. The portion of a subsidiary¡¯s equity and the portion of a

subsidiary¡¯s net profits, losses and comprehensive income for the period not attributable to the

Company are recognized as minority interests and presented separately in the consolidated

financial statements within equity, net profits and total comprehensive income respectively.

Unrealized gain or loss from selling assets to subsidiaries fully offsets the net incomeattributable

to equity holders of the company. Unrealized gain or loss from purchasing assets from

subsidiaries offsets the net income attributable to equity holders of the company and attributable

to the minority interest by the distribution proportionregarding the company and the subsidiary

Unrealized gain or loss from transaction between subsidiaries offsets the net income attributable

to equity holders of the company and attributable to the minority interest by the distribution

proportion regarding the company and the selling side of the subsidiaries. If different recognition

perspectives for the same transaction arise within different accounting identities setup, there is

adjustment for the transaction from the Group¡¯s perspective.

(7) Acquisition of minority interest in controlled subsidiaries

The Company acquires equity from the minority shareholders after taking control of the subsidiary,

in the consolidated financial statement, the subsidiary¡¯s assets, liabilities should be measured from

combination or acquisition date. The difference between the carrying amount of acquisition of

minority interest and the net assets proportion calculated by original share percentage since the

acquisition date should be recognized in capital surplus. If the capital surplus is insufficient to

dilute, the retained earnings shall be adjusted.

93

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

II Summary of significant accounting policies and accounting estimates(continued)

(8) Cash and cash equivalent

Cash and cash equivalent comprise cash on hand, deposits that can be readily drawn on demand,

and short-term and highly liquid investments that are readily convertible to known amounts of cash

and are subject to an insignificant risk of changes in value.

(9) Foreign currency translation

Foreign currency transactions are translated into RMB using the exchange rates prevailing at the

dates of the transactions.

At the balance sheet date, monetary items denominated in foreign currencies are translated into

RMB using the spot exchange rates on the balance sheet date. Exchange differences arising from

these translations are recognized in profit or loss for the current period, except for those

attributable to foreign currency borrowings that have been taken out specifically for the acquisition

or construction of qualifying assets, which are capitalised as part of the cost of those assets. Non-

monetary items denominated in foreign currencies that are measured at historical costs are

translated at the balance sheet date using the spot exchange rates at the date of the transactions.

The effect of exchange rate changes on cash is presented separately in the cash flow statement.

(10) Financial Instruments

(a) Financial assets

(i) Classification of financial assets

Financial assets are classified into the following categories at initial recognition: financial assets at

fair value through profit or loss, receivables, available-for-sale financial assets and held-to-maturity

investments. The classification of financial assets depends on the Group¡¯s intention and ability to

hold the financial assets. The Group currently holds the financial assets including receivables.

Receivables, including notes receivables, accounts receivable and other receivables, are non-

derivative financial assets with fixed or determinable payments that are not quoted in an active

market.

(ii) Recognition and measurement

Financial assets are recognized at fair value on the balance sheet when the Group becomes a

party to the contractual provisions of the financial instrument. The transaction expenses are

included in receivables¡¯ original book value, which is measured at amortized cost using the

effective interest method.

94

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

II Summary of significant accounting policies and accounting estimates (continued)

(10) Financial Instruments(continued)

(a) Financial assets(continued)

(iii) Impairment of financial assets

The Group assesses the carrying amounts of receivables other than those at fair value through

profit or loss at each balance sheet date. If there is objective evidence that a financial asset is

impaired, an impairment loss is provided for. The objective evidence are matters occur after the

financial assets been recognised, affect its estimated future cash flow and could be measured

accurately by the Group. When an impairment loss on a financial asset carried at amortised cost

has occurred, the amount of loss is provided for at the difference between the asset¡¯s carrying

amount and the present value of its estimated future cash flows (excluding future credit losses that

have not been incurred). If there is objective evidence that the value of the financial asset

recovered and the recovery is related objectively to an event occurring after the impairment was

recognised, the previously recognised impairment loss is reversed and the amount of reversal is

recognised in profit or loss.

(iv) Derecognition of financial assets

A financial asset is derecognised when any of the below criteria is met: (i) the contractual rights to

receive the cash flows from the financial asset expire; (ii) the financial asset has been transferred

and the Group transfers substantially all the risks and rewards of ownership of the financial asset

to the transferee; or (iii) the financial asset has been transferred and the Group has not retained

control of the financial asset, although the Group neither transfers nor retains substantially all the

risks and rewards of ownership of the financial asset.

On derecognition of a financial asset, the difference between the carrying amount and the sum of

the consideration received and the cumulative changes in fair value that had been recognised

directly in equity, is recognised in profit or loss.

(b) Financial liabilities

Financial liabilities are classified into the following categories at initial recognition: financial

liabilities at fair value through profit or loss and other financial liabilities. The financial liabilities of

the Group mainly comprise other financial liabilities, including payables and borrowings

Payables, including notes payable, accounts payable and other payables, are recognised initially

at fair value and subsequently measured at amortised cost using the effective interest method.

Borrowings are recognised initially at fair value, net of transaction costs incurred, and

subsequently carried at amortised costs using the effective interest method.

Other financial liabilities with maturities no more than one year are classified as current liabilities.

Other financial liabilities with maturities over one year but are due within one year at the balance

sheet date are classified as the current portion of non-current liabilities. Others are classified as

non-current liabilities.

A financial liability is derecognised or partly derecognised when the current obligation is

discharged or partly discharged. The difference between the carrying amount of the financial

liability or the derecognised part of the financial liability and the consideration paid is recognised in

profit or loss.

95

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

II Summary of significant accounting policies and accounting estimates (continued)

(11) Receivables

Receivables comprise notes receivable, accounts receivable and other receivables. Accounts

receivable arising from sale of goods or rendering of services are initially recognized at fair value

of the contractual payments from the buyers or service recipients.

(a) Receivables with amounts that are individually significant and subject to separate assessment for

provision for bad debts

Receivables with amounts that are individually significant are subject to assessment for

impairment on the individual basis. If there exists objective evidence that the Group will not be

able to collect the amount under the original terms, a provision for impairment of that receivable is

made.

The criterion for determining individually significant amounts is that any individual amount is more

than RMB5 million.

The method of providing for bad debts for those individually significant amounts is as follows: the

amount of the present value of the future cash flows expected to be derived from the receivable

below its carrying amount.

(b) Receivables that are subject to provision for bad debts on the grouping basis

Receivables with amounts that are not individually significant and those receivables that have

been individually assessed for impairment and have not been found impaired are classified into

certain groupings based on their credit risk characteristics.The provision for bad debts is

determined based on the historical loss experience for the groupings of receivables with similar

credit risk characteristics, taking into consideration of the current circumstances.

A provision for impairment of the receivables is made based on the ageing of receivables at the

following percentage:

Provision ratios used for Provision ratios used for

accounts receivables other receivables

Within 1 year - -

1 to 2 years 5% 5%

2 to 3 years 10% 10%

More than 3 years 20% 20%

(c) Receivables with amounts that are not individually significant but subject to separate assessment

for provision for bad debts

The reason for making separate assessment for provision for bad debts is that there exists

objective evidence that the Group will not be able to collect the amount under the original terms of

the receivable.

The provision for bad debts is determined based on the amount of the present value of the future

cash flows expected to be derived from the receivable below its carrying amount.

(d) When the Group transfers the accounts receivable to the financial institutions without recourse,

the difference between the proceeds received from the transaction and their carrying amounts and

the related taxes is recognized in profit or loss for the current period.

96

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

II Summary of significant accounting policies and accounting estimates (continued)

(12) Inventories

(a) Classification

Inventories include raw materials, work in progress, finished goods, delegate processing supplies

and turnover materials, and are measured at the lower of cost and net realizable value.

(b) Costing of inventories

Cost is determined on the weighted average method. The cost of finished goods and work in

progress comprises raw materials, direct labour and an allocation of systematically allocated

overhead expenditures incurred based on normal operating capacity.

(c) Basis for determining net realizable values of inventories and method for making provision for

decline in the value of inventories

Provisions for declines in the value of inventories are determined at the excess amount of the

carrying value of the inventories over their net realizable value. Net realizable value is determined

based on the estimated selling price in the ordinary course of business, less the estimated costs to

completion and estimated costs necessary to make the sale and related taxes.

(d) The Group adopts the perpetual inventory system.

(e) Amortization methods of low value consumables and packaging materials

Turnover materials include low value consumables and packaging materials, which are expensed

when issued.

(13) Assets classified as held for sale

Non-current assets or disposal group satisfying the following conditions will be classified as assets

held for sale: (i)The non-current assets or disposal group are instantly ready for sale under the

custom terms. (ii)The resolution regarding the disposal of non-current assets or disposal group

has been appropriately approved. (iii)The company has signed an irrevocable agreement. (iv)The

disposal will be accomplished within 1 year.

Non current assets which meet the conditions of Assets classified as held for sale, excluding

financial assets, investment properties measured by fair value method, and deferred income tax

assets, could be appraised as the lower number between book value and fair value minus

disposal cost. The difference between the fair value minus disposal cost and the book value,

should be recognized as asset impairment loss.

Asset and liability among the non-current assets or disposal group that are classified as Assets

classified as held for sale, should be classified as current asset and current liability respectively,

and should be individually presented on the balance sheet.

97

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

II Summary of significant accounting policies and accounting estimates (continued)

(14) Long-term equity investments

Long-term equity investments comprise the Company¡¯s long-term equity investments in its

subsidiaries and the Group¡¯s long-term equity investments in its associates.

Subsidiaries are the investees over which the Company is able to exercise control. Associates are

the investees that the Group has significant influence on their financial and operating policies.

Investments in subsidiaries are measured using the cost method in the Company¡¯s financial

statements, and adjusted by using the equity method when preparing the consolidated financial

statements. Interests in associates are accounted for using the equity method.

(a) Determination of investment cost

For long-term equity investments acquired through a business combination: for long-term equity

investments acquired through a business combination involving enterprises under common

control, the investment cost shall be the absorbing party¡¯s share of the carrying amount of owners¡¯

equity of the party being absorbed at the combination date; for long-term equity investment

acquired through a business combination involving enterprises not under common control, the

investment cost shall be the combination cost.

(b) Subsequent measurement and recognition of related profit and loss

For long-term equity investments accounted for using the cost method, they are measured at the

initial investment costs, and cash dividends or profit distribution declared by the investees are

recognized as investment income in profit or loss.

For long-term equity investments accounted for using the equity method, where the initial

investment cost of a long-term equity investment exceeds the Group¡¯s share of the fair value of

the investee¡¯s identifiable net assets at the acquisition date, the long-term equity investment is

measured at the initial investment cost; where the initial investment cost is less than the Group¡¯s

share of the fair value of the investee¡¯s identifiable net assets at the acquisition date, the

difference is included in profit or loss and the cost of the long-term equity investment is adjusted

upwards accordingly.

For long-term equity investments accounted for using the equity method, the Group recognizes

the investment income according to its share of net profit or loss of the investee. The Group

discontinues recognizing its share of net losses of an investee after the carrying amount of the

long-term equity investment together with any long-term interests that, in substance, form part of

the investor¡¯s net investment in the investee are reduced to zero. However, if the Group has

obligations for additional losses and the criteria with respect to recognition of provisions under the

accounting standards on contingencies are satisfied, the Group continues recognizing the

investment losses and the provisions. For changes in owners¡¯ equity of the investee other than

those arising from its net profit or loss, other comprehensive income, and profit distribution, the

Group adjusts the book value of the investment and records capital surplus accordingly. The

carrying amount of the investment is reduced by the Group¡¯s share of the profit distribution or cash

dividends declared by an investee. The unrealized profits or losses arising from the intra-group

transactions amongst the Group and its investees are eliminated in proportion to the Group¡¯s

equity interest in the investees, and then based on which the investment gains or losses are

recognized. For the loss on the intra-group transaction amongst the Group and its investees

attributable to asset impairment, any unrealized loss is not eliminated.

98

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

II Summary of significant accounting policies and accounting estimates (continued)

(14) Long-term equity investments(continued)

(c) Basis for determining existence of control, jointly control or significant influence over investees

Control is the power to govern the financial and operating policies of the investee so as to obtain

benefits from its operating activities. In determining whether the Company is able to exercise

control over the investee, the effect of potential voting rights over the investee is considered, such

as convertible debts and warrants currently exercisable, etc.

Significant influence is the power to participate in the financial and operating policy decisions of

the investee, but is not control or joint control over those policies.

(d) Impairment of long-term equity investments

The carrying amount of long-term equity investments in subsidiaries and associates is reduced to

the recoverable amount when the recoverable amount is less than the carrying amount (Note II

(22)).

(15) Investment properties

Investment properties, including land use rights that have already been leased out, buildings that

are held for the purpose of leasing, and buildings that are being constructed or developed for the

purpose of leasing in future, are measured initially at cost. Subsequent expenditures incurred in

relation to an investment property are included in the cost of the investment property when it is

probable that the associated economic benefits will flow to the Group and their costs can be

reliably measured; otherwise, the expenditures are recognized in profit or loss in the period in

which they are incurred.

The Group adopts the cost model for subsequent measurement of investment properties.

Buildings and land use rights are depreciated or amortized to their estimated net residual values

over their estimated useful lives. The estimated useful lives, the estimated net residual values that

are expressed as a percentage of cost and the annual depreciation (amortization) rates of

investment properties are as follows:

Estimated useful Estimated Annualdepreciation (amortization)

lives residual value rates

Buildings 20-35 years 5% 2.71% to 4.75%

Land use rights 30-50 years - 2.00% to 3.33%

When an investment property is transferred to owner-occupied properties, it is reclassified as fixed

asset or intangible asset at the date of the transfer. When an owner-occupied property is

transferred out for earning rentals or for capital appreciation, the fixed asset or intangible asset is

reclassified as investment properties at its carrying amount at the date of the transfer.

The investment property¡¯s estimated useful life, net residual value and depreciation (amortization)

method applied are reviewed and adjusted as appropriate at each year-end.

An investment property is derecognized on disposal or when the investment property is

permanently withdrawn from use and no future economic benefits are expected from its disposal.

The net amount of proceeds from sale, transfer, retirement or damage of an investment property

after its carrying amount and related taxes and expenses is recognized in profit or loss for the

current period.

The carrying amount of an investment property is reduced to the recoverable amount if the

recoverable amount is below the carrying amount (Note II (22)).

99

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

II Summary of significant accounting policies and accounting estimates (continued)

(16) Fixed assets

(a) Recognition and initial measurement of fixed assets

Fixed assets comprise buildings, machinery and equipment, motor vehicles, other equipment and

leasehold improvements.

Fixed assets are recognized when it is probable that the related economic benefits will flow to the

Group and the costs can be reliably measured. Fixed assets purchased or constructed by the

Group are initially measured at cost at the acquisition date. The fixed assets contributed by the

State shareholders at the reorganization of the Company into a corporation entity are recognized

based on the revaluated amounts approved by the state-owned assets administration department.

Subsequent expenditures incurred for a fixed asset are included in the cost of the fixed asset

when it is probable that the associated economic benefits will flow to the Group and the related

cost can be reliably measured. The carrying amount of the replaced part is derecognized. All the

other subsequent expenditures are recognized in profit or loss in the period in which they are

incurred.

(b) Depreciation methods of fixed assets

Fixed assets are depreciated using the straight-line method to allocate the cost of the assets to

their estimated residual values over their estimated useful lives. For the fixed assets that have

been provided for impairment loss, the related depreciation charge is prospectively determined

based upon the adjusted carrying amounts over their remaining useful lives.

The estimated useful lives, the estimated residual values expressed as a percentage of cost and

the annual depreciation rates are as follows:

Estimated useful Estimated Annual

lives residual value depreciation rates

Buildings 20-35 years 5% 2.71% to 4.75%

Machinery and equipment 10-14 years 5% 6.79% to 19.00%

Motor vehicles 5-10 years 5% 9.50% to 19.00%

Other equipment 5-10 years 5% 9.50% to 31.67%

Leasehold improvements Within 5 years - Above 20.00%

The estimated useful life, the estimated net residual value of a fixed asset and the depreciation

method applied to the asset are reviewed, and adjusted as appropriate at least at each year-end.

(c) The carrying amount of fixed assets is reduced to the recoverable amount when the recoverable

amount is less than the carrying amount (Note II (22)).

(d) Recognition basis and measurement method for financing leased fixed assets

Financing leases are leases with the whole risks and rewards related to the asset substantially

transferred. Financing leased fixed assets are recognized with the smaller value among the fair

value and minimum lease payments. Difference between the booking value and the minimum

lease payments should be recognized as unrecognized financing charges(Note II (28(b))).

Financing leased fixed assets adopt depreciation policies aligned with those fixed assets owned

by the company. For those leased assets that can ascertain the ownership of the assets by the

expiration date, the assets should be depreciated within estimated useful lives. Otherwise, the

assets should be depreciated within the shorter period among the leasing period and estimated

useful lives.

100

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

II Summary of significant accounting policies and accounting estimates (continued)

(16) Fixed assets(continued)

(e) Disposal of fixed assets

A fixed asset is derecognised on disposal or when no future economic benefits are expected from

its use or disposal. The amount of proceeds from disposal on sale, transfer, retirement or damage

of a fixed asset net of its carrying amount and related taxes and expenses is recognized in profit

or loss for the current period.

(17) Construction in progress

Construction in progress is measured at actual cost. Actual cost comprises construction costs,

installation costs, borrowing costs that are eligible for capitalisation and other costs necessary to

bring the fixed assets ready for their intended use. Construction in progress is transferred to fixed

assets when the assets are ready for their intended use, and depreciation begins from the

following month. The carrying amount of construction in progress is reduced to the recoverable

amount when the recoverable amount is less than the carrying amount (Note II (22)).

(18) Borrowing costs

The borrowing costs that are directly attributable to the acquisition and construction of a fixed

asset that needs a substantially long period of time for its intended use commence to be

capitalised and recorded as part of the cost of the asset when expenditures for the asset and

borrowing costs have been incurred, and the activities relating to the acquisition and construction

that are necessary to prepare the asset for its intended use have commenced. The capitalisation

of borrowing costs ceases when the asset under acquisition or construction becomes ready for its

intended use and the borrowing costs incurred thereafter are recognised in profit or loss for the

current period. Capitalisation of borrowing costs is suspended during periods in which the

acquisition or construction of a fixed asset is interrupted abnormally and the interruption lasts for

more than 3 months, until the acquisition or construction is resumed.

For the specific borrowings obtained for the acquisition or construction of a fixed asset qualifying

for capitalisation, the amount of borrowing costs eligible for capitalisation is determined by

deducting any interest income earned from depositing the unused specific borrowings in the banks

or any investment income arising on the temporary investment of those borrowings during the

capitalisation period.

For the general borrowings obtained for the acquisition or construction of a fixed asset qualifying

for capitalisation, the amount of borrowing costs eligible for capitalization is determined by

applying the weighted average effective interest rate of general borrowings, to the weighted

average of the excess amount of cumulative expenditures on the asset over the amount of specific

borrowings. The effective interest rate is the rate at which the estimated future cash flows during

the period of expected duration of the borrowings or applicable shorter period are discounted to

the initial amount of the borrowings.

(19) Intangible assets

Intangible assets include land use rights, computer softwares, technology patents,trademarks and

distribution network, which initially recognized at cost. Intangible assets contributed by state-

owned shareholders during the company reorganization were recorded based on the valuation

amount approved by the state-owned assets supervision and management department.

101

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

II Summary of significant accounting policies and accounting estimates (continued)

(19) Intangible assets(continued)

(a) Land use rights

A land use right granted by government with an infinite useful life would not be amortized. Other

land use rights are amortized on the straight-line basis over their approved useful period. If the

acquisition costs of land use rights and the buildings located thereon cannot be reliably allocated

between the land use rights and the buildings, all of the acquisition costs are recognized as fixed

assets.

(b) Computer softwares

Computer softwares purchased by the Group are initially measured at cost, which are amortized

on the straight-line basis over their approved useful period of 3 to 5 years.

(c) Trademarks and Technology Patents

Trademarks are amortized on the straight-line basis over their effective periods as stipulated by

law of 5 to 10 years. Technology Patents are amortized on the straight-line basis over their

effective useful period of 5 years.

(d) Distribution network

Distribution network includes customer relationships and distribution channels, which is amortized

on the straight-line basis over its approved useful lives of 20 years.

(e) Periodical review of useful life and amortization method

For an intangible asset with a finite useful life, review of its useful life and amortization method is

performed at each year-end, with adjustment made as appropriate.

For an intangible asset without a definite useful life, review of its useful life are performed at each

year-end.

(f) Research and development

The expenditure on an internal research and development project is classified into expenditure on

the research phase and expenditure on the development phase based on its nature and whether

there is material uncertainty that the research and development activities can form an intangible

asset at end of the project.

Expenditure for investigation, evaluation and selection of production process and new drugs

researches is recognized in profit or loss in the period in which it is incurred. Expenditure on the

designation, measurement of the final utilization of the production process and new drugs before

mass production, is capitalized only if all of the following conditions are satisfied:

development of the production process and new drugs has been fully demonstrated by the

technical team;

management has approved the budget of drug production development and new drugs;

market research analysis suggests thatthe products produced by the new production

technology are able to be promoted;

adequate technical, financial and other resources to complete the development and the ability

to use or sell the intangible asset; and

the expenditure attributable to the intangible asset during its development phase can be

reliably measured.

102

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

II Summary of significant accounting policies and accounting estimates (continued)

(19) Intangible assets(continued)

(f) Research and development(continued)

Other development expenditures that do not meet the conditions above are recognized in profit or

loss in the period in which they are incurred. Development costs previously recognized as

expenses are not recognized as an asset in a subsequent period. Capitalized expenditure on the

development phase is presented as development costs in the balance sheet and transferred to

intangible assets at the date that the asset is ready for its intended use.

(g) Impairment of intangible assets

The carrying amount of intangible assets is reduced to the recoverable amount when the

recoverable amount is less than the carrying amount (Note II (22)).

(20) Long-term prepaid expenses

Long-term prepaid expenses include the expenditure for improvements to fixed assets under

operating leases, and other expenditures that have been made but should be recognized as

expenses over more than one year in the current and subsequent periods. Long-term prepaid

expenses are amortized on the straight-line basis over the expected beneficial period and are

presented at actual expenditure net of accumulated amortization.

(21) Governmental medical reserve funds and specially approved reserving materials

Appointed by the PRC Government, China National Pharmaceutical Group Corporation

(¡°CNPGC") is responsible for purchasing, allocating and providing the governmental medical

reserves, which include the medical products, traditional Chinese medicine and medical

appliances for nation-wide emergency rescue and disaster relief. Appointed by the Government of

Guangxi Province, Sinopharm Medicine Holding Guangxi Co., Ltd. (¡°Sinopharm Guangxi¡±), a

subsidiary of the Company, is responsible for purchasing, allocating and providing the medical

reserves, which include the medical products needed for common disease and emergencies

triggered by major disasters, epidemics and other situations in Guangxi Province. In accordance

with the regulation of CNPGC, as being the enterprise who bears the obligation for specially

approved medical reserving materials, the medical reserve funds received from the PRC

Government or local government are recognised in other Non-current liabilities. The Group

reserves the specially approved medical reserving materials according to the reserve program (by

category and by quantity), applies dynamic management and recognises in other non-current

assets.

103

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

II Summary of significant accounting policies and accounting estimates (continued)

(22) Impairment of long-term assets

Fixed assets, construction in progress, intangible assets with finite useful lives, long-term prepaid

expenses and investment properties measured using the cost model and long-term equity

investments in subsidiaries, joint ventures and associates are tested for impairment if there is any

indication that an asset may be impaired at the balance date. If the result of the impairment test

indicates that the recoverable amount of the asset is less than its carrying amount, a provision for

impairment and an impairment loss are recognised for the amount by which the asset¡¯s carrying

amount exceeds its recoverable amount. The recoverable amount is the higher of an asset¡¯s fair

value less costs to sell and the present value of the future cash flows expected to be derived from

the asset. Provision for asset impairment is determined and recognised on the individual asset

basis. If it is not possible to estimate the recoverable amount of an individual asset, the

recoverable amount of a group of assets to which the asset belongs is determined. A group of

assets is the smallest group of assets that is able to generate independent cash inflows.

Goodwill that is separately presented in the financial statements£¬intangible assets with infinite

useful lives and capitalized development expenditures are tested at least annually for impairment,

irrespective of whether there is any indication that it may be impaired. In conducting the test, the

carrying value of goodwill is allocated to the related asset groups or groups of asset groups which

are expected to benefit from the synergies of the business combination. If the result of the test

indicates that the recoverable amount of an asset group or group of asset groups, including the

goodwill allocated, is lower than its carrying amount, the corresponding impairment loss is

recognised. The impairment loss is first deducted from the carrying amount of goodwill that is

allocated to the asset group or group of asset groups, and then deducted from the carrying

amounts of other assets within the asset groups or groups of asset groups in proportion to the

carrying amounts of other assets.

Once the above asset impairment loss is recognized, it will not be reversed for the value

recovered in the subsequent periods.

104

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

II Summary of significant accounting policies and accounting estimates (continued)

(23) Employee benefits

Employee benefits mainly include short-term employee benefits, post-employment benefits,

termination benefits and other long-term employee benefits incurred in exchange for service

rendered by employees or various forms of rewards or compensation due to severance of labour

relation.

(a) Short-term employee benefits

Short-term employee benefits include wages or salaries, bonus, allowances and subsidies, staff

welfare, medical insurance, work injury insurance, maternity insurance, housing funds, and union

running costs and employee education costs. The employee benefits are recognised in the

accounting period in which the service has been rendered by the employees, and as costs of

assets or expenses to whichever the employee service is attributable.

(b) Post-employment benefits

The Company classifies post-employment benefit plans intoeither defined contribution plans

anddefined benefit plans. Defined contribution plans are post-employment benefit plans under

which the Company pays fixed contributions into a separate fund and will have no obligation to

pay further contributions; and defined benefit plans are post-employment benefit plans other than

defined contribution plans. During the reporting period, the Company's post-employment benefits

mainly include basic pensions, unemployment insurance and enterprise annuity, both of which

belong to the defined contribution plans.

Basic pensions

The Company¡¯s employees participate in the defined basic pension insurance plan set up and

administered by local labour and social protection authorities. Basic pensions are provided

monthly according to stipulated bases and proportions to local labour and social security

institutions. When employees retire, local labour and social security institutions have a duty to pay

the basic pension insurance to them. The amounts payable are recognised as liabilities based on

the above provisions in the accounting period in which the service has been rendered by the

employees, and as costs of assets or expenses to whichever the employee service is attributable.

(c) Termination benefits

The group recognizes the debt and the gain or loss, when offering compensation for terminating

the labour contract before the due date, or encouraging the staff to resign voluntarily, at the earlier

date when the group cannot unilaterally withdraw the labour relation plan or recognize the cost

relating to recombinant involving the payment of termination benefits.

105

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

II Summary of significant accounting policies and accounting estimates (continued)

(23) Employee benefits(continued)

(c) Termination benefits(continued)

Retirement benefits

The group provides retirement benefits to employees who accept the internal retirement

arrangements. Retirement benefits refer to the salary and social security contributions provided to

those staff who voluntarily quit the job with approval from the management team, before the

retirement age. The group offers retirement benefits from the date when the arrangement begins,

to the date when the staff reaches the retirement age. The group accounts the retirement benefits

referring to the accounting treatment for the termination benefits. Liability including salary and

social security contributions is recognized when conditions of termination benefits recognition

meet, regarding to the period from the staff leaves the position to the normal retirement date.

Difference arising from the changes in actuarial assumptions for retirement benefits and

adjustments in welfare standard, will be accounted in the current profits and losses.

Retirement benefits that are expected to be paid within one year from the balance sheet date is

disclosed as current liability.

(24) Dividend distribution

Cash dividends distribution is recognized as a liability in the period in which it is approved by the

annual shareholders¡¯ meeting.

(25) Revenue recognition

The amount of revenue is determined in accordance with the fair value of the consideration

received or receivable for the sale of goods and services in the ordinary course of the Group¡¯s

activities. Revenue is shown net of discounts and returns.

Revenue can be recognized on condition that the transaction-related economic interest is

expected to be satisfied, the amount is able to reliably measured, and the following recognition

conditions are met:

(a) Sale of goods

Revenue from the sale of goods is recognized when significant risks and rewards of ownership of

the goods are transferred to the buyer, the Company retains neither continuing managerial

involvement to the degree usually associated with ownership nor effective control over the goods

sold, and it is probable that the economic benefit associated with the transaction will flow to the

Company and the relevant revenue and costs can be measured reliably.

(b) Rendering of services

The Group provides freight £¬ storage and other service to external parties. The freights are

recognized as revenue right after the goods are transported to the place of delivery according to

contracts or agreements, received and confirmed by the purchasers. Other revenue is determined

in accordance with the amount provided in the service period stipulated in the contract.

106

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

II Summary of significant accounting policies and accounting estimates (continued)

(25) Revenue recognition(continued)

(c) Customer Loyalty Programme

The group, offers loyalty points programmes where points earned through the purchase of goods

can only be redeemed for goods provided by Sinopharm Group Zhijun(Shenzhen) Pharmaceutical

Co., Ltd. or other free goods. The fair value of the consideration received or receivable in respect

of the initial sale is allocated between the award credits and the other components of the sale. Fair

value of award points is measured on the basis of the value of the awards (that is, goods or

services) for which they could be redeemed, the fair value of the award credits should take

account of expected forfeitures as well as the discounts or incentives that would otherwise be

offered to customers who have not earned award credits from an initial sale.

(26) Government grants

Government grants are transfers of monetary or non-monetary assets from the government to the

Group at nil consideration, including refund of taxes and financial subsidies, etc.

A government grant is recognized when the conditions attached to it can be complied with and the

government grant can be received. For a government grant in the form of transfer of monetary

assets, the grant is measured at the amount received or receivable. For a government grant in the

form of transfer of non-monetary assets, it is measured at fair value; if the fair value is not reliably

determinable, the grant is measured at nominal amount.

A government grant related to an asset is grant received aimed to create long-term asset by

contracting or other methods. And government grant related to income is any grant other than

government grant related to an asset.

A government grant related to an asset is recognized as deferred income, and evenly amortized to

profit or loss over the useful life of the related asset. Government grants measured at nominal

amounts are recognized immediately in profit or loss for the current period.

For government grants related to income, where the grant is a compensation for related expenses

or losses to be incurred by the Group in the subsequent periods, the grant is recognized as

deferred income, and included in profit or loss over the periods in which the related costs are

recognized; where the grant is a compensation for related expenses or losses already incurred by

the Group, the grant is recognized immediately in profit or loss for the current period.

(27) Deferred tax assets and deferred tax liabilities

Deferred tax assets and deferred tax liabilities are calculated and recognised based on the

differences arising between the tax bases of assets and liabilities and their carrying amounts

(temporary differences). Deferred tax asset is recognised for the deductible losses that can be

carried forward to subsequent years for deduction of the taxable profit in accordance with the tax

laws. No deferred tax liability is recognised for a temporary difference arising from the initial

recognition of goodwill. No deferred tax asset or deferred tax liability is recognised for the

temporary differences resulting from the initial recognition of assets or liabilities due to a

transaction other than a business combination, which affects neither accounting profit nor taxable

profit (or deductible loss). At the balance sheet date, deferred tax assets and deferred tax liabilities

are measured at the tax rates that are expected to apply to the period when the asset is realised

or the liability is settled.

107

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

II Summary of significant accounting policies and accounting estimates (continued)

(27) Deferred tax assets and deferred tax liabilities(continued)

Deferred tax assets are only recognised for deductible temporary differences, deductible losses

and tax credits to the extent that it is probable that taxable profit will be available in the future

against which the deductible temporary differences, deductible losses and tax credits can be

utilised.

Deferred tax assets and liabilities are offset when:

the deferred taxes are related to the same tax payer within the Group and the same taxation

authority; and,

that tax payer has a legally enforceable right to offset current tax assets against current tax

liabilities.

Deferred tax liabilities are recognized for temporary differences arising from investments in

subsidiaries and associates, except where the Group is able to control the timing of the reversal of

the temporary difference, and it is probable that the temporary difference will not reverse in the

foreseeable future. When it is probable that the temporary differences arising from investments in

subsidiaries and associates will be reversed in the foreseeable future and that the taxable profit

will be available in the future against which the temporary differences can be utilized, the

corresponding deferred tax assets are recognized.

(28) Leases

Financing leases are leases with the whole risks and rewards related to the asset substantially transferred.

The other kinds of leases are nominated operating leases.

Lease income under an operating lease are recognized on a straight-line basis over the period of

the lease.

(a) Operating leases

Lease payments under an operating lease are recognized on a straight-line basis over the period

of the lease, and are either capitalized as part of the cost of related assets or charged as an

expense for the current period.

(b) Financing leases

Financing leased fixed assets are recognized with the smaller value among the fair value and

present value of the minimum lease payments. Difference between the booking value and the

minimum lease payments should be recognized as unrecognized financing charges, to be

amortized within the leasing period. The minimum lease payments net off the unrecognized

financing charges should be classified as long-term payables.

(29) Segment information

The Group identifies operating segments based on the internal organization structure,

management requirements and internal reporting system, and discloses segment information of

reportable segments which is determined on the basis of operating segments.

An operating segment is a component of the Group that satisfies all of the following conditions: (1)

the component is able to earn revenues and incur expenses from its ordinary activities; (2) whose

operating results are regularly reviewed by the Group¡¯s management to make decisions about

resources to be allocated to the segment and to assess its performance, and (3) for which the

information on financial position, operating results and cash flows is available to the Group. If two

or more operating segments have similar economic characteristics and satisfy certain conditions,

they are aggregated into one single operating segment.

II Summary of significant accounting policies and accounting estimates (continued)

108

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

(30) Critical accounting estimates

The Group continually evaluates the critical accounting estimates and key judgments applied based

on historical experience and other factors, including expectations of future events that are believed to

be reasonable.

(a) Critical accounting estimates and key assumptions

The critical accounting estimates and key assumptions that have a significant risk of causing a

material adjustment to the carrying amounts of assets and liabilities within the next accounting year

are outlined below:

(i) Accounting estimates on impairment of goodwill

The Group tests annually whether goodwill has suffered any impairment. The recoverable amount of

asset groups and groups of asset groups is the present value of the future cash flows expected to be

derived from them. These calculations require use of estimates (Note IV (14)).

If management revises the gross margin that is used in the calculation of the future cash flows of

asset groups and groups of asset groups, and the revised gross margin is lower than the one

currently used, the Group would need to recognize further impairment against goodwill and fixed

assets.

If management revises the pre-tax discount rate applied to the discounted cash flows, and the revised

pre-tax discount rate is higher than the one currently applied, the Group would need to recognize

further impairment against goodwill and fixed assets.

If the actual gross margin/pre-tax discount rate is higher/lower than management¡¯s estimates, the

impairment loss of goodwill previously provided for is not allowed to be reversed by the Group.

(ii) Accounting estimates on impairment of accounts receivable

In accordance with the Group¡¯s accounting policy (Note II (11)), the Group¡¯s management tests

annually whether receivables have suffered any impairment, Impairment of receivables has been

assessed by taking into account the customers¡¯ credit history and financial position together with the

current market conditions. Even if the Group¡¯s management has made bad debt provision for the

expected loss at its best estimate, there is a possibility that changes in customers¡¯ financial position

or market conditions will alter the result.

(iii) Accounting estimates on impairment of inventories

In accordance with the Group¡¯s accounting policy (Note II (12) (c)), the Group¡¯s management

estimates the net realizable value of the inventory. Net realizable value is determined based on the

estimated selling price in the ordinary course of business, less the estimated costs to completion and

estimated costs necessary to make the sale and related taxes. Even if the Group¡¯s management has

made stock provision for the expected impairment at its best estimate, there is a possibility that

changes in market conditions will alter the result.

109

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

III Taxation

(1) The types and rates of taxes applicable to the Group are set out below:

Type Taxable base Tax rate

Enterprise income Taxable income

tax(¡°EIT¡±) 15%¡¢20% or 25%

Value added tax Taxable value added amount (Tax payable is 0%¡¢3%¡¢6%¡¢11%¡¢13% or

(¡°VAT¡±)(a) calculated using the taxable sales amount 17%

multiplied by the effective tax rate less

deductible VAT input of current period)

Business tax Rental income, interest income and etc. 5%

City maintenance and VAT and business tax

construction tax 7%

Extra charges of VAT and business tax

education funds 3%

Local extra charges of VAT and business tax

education funds 2%

(2) Tax preferences

(a) In 2014, Zhijun Medicine got the Certificate of High-Tech Corporation issued by Shenzhen Bureau of

Technology & Information, Bureau of Finance, National Tax Bureau and Local Tax Bureau. The Certificate is

valid from 2014 to 2016.

According to the 28th rule of the Corporation Income Tax Law of People¡¯s Republic of China, corporations

which get the Certificate of High-Tech Corporation can get a tax deduction and pay tax at a 15% tax rate. The

tax rate that is applicable to Zhijun Medicine is 15% (2014: 15%).

(b) In 2014, Sinopharm Holding Guangxi Logistics Co., Ltd (¡°Sinopharm Guangxi Logistics¡±) was approved by

the Guangxi Local Tax Bureau to enjoy a tax discount applicable to corporations in the region of Western

Development to pay income tax at a 15% rate.

From May to December of 2015, subsidiaries in Guangxi Province, including Sinopharm Holding Guangxi

Co., Ltd((¡°Sinopharm Guangxi¡±), Sinopharm Holding Liuzhou Co., Ltd (¡°Sinopharm Liuzhou¡±) , Sinopharm

Holding Beihai Co., Ltd (¡°Sinopharm Beihai¡±), Sinopharm Holding Guilin Co., Ltd (¡°Sinopharm Guilin¡±),

Sinopharm Holding Guigang Co., Ltd (¡°Sinopharm Guigang¡±), Sinopharm Holding Yulin Co., Ltd (¡°Sinopharm

Yulin¡±), Sinopharm Holding Baise Co., Ltd (¡°Sinopharm Baise¡±)and Sinopharm Holding Wuzhou Co., Ltd

(¡°Sinopharm Wuzhou¡±)were all approved by the Guangxi Local Tax Bureau to enjoy a tax discount applicable

to corporations in the region of Western Development. Applicable period for Sinopharm Guangxi, Sinopharm

Liuzhou and Sinopharm Beihai is 1 January 2014 to 31 December 2020, and the other 5 subsidiaries is 1

January 2015 to 31 December 2020.

(c) Pingshan Medicine got the Certificate of High-Tech Corporation issued by Shenzhen Bureau of Technology &

Information, Bureau of Finance, National Tax Bureau and Local Tax Bureau in 2012, which is valid for 3

years. Since the company didn¡¯t get the Certificate in 2015, it paid tax at a 25% rate, compared with the tax

rate of 15% in 2014.

(d) Guangzhou Medical is regarded as Small Enterprise. The company enjoys a 50% tax discount and pays tax

at a 20% rate.

110

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements

(1) Cash at bank and on hand

31 December 2015 31 December 2014

Cash on hand 109,096.17 41,627.16

Cash at bank 1,569,117,208.19 854,170,379.68

Other cash balances 1,480,666.15 13,350,108.70

- deposits for bank acceptance notes 500,000.00 10,177,108.70

- deposits for letter of credit 980,666.15 3,173,000.00

1,570,706,970.51 867,562,115.54

As at 31 December 2015, there is no foreign cash at bank (31 December 2014: there is no foreign cash at bank)

(2) Notes receivable

31 December 2015 31 December 2014

Trade acceptance notes 341,720,929.72 358,010,908.78

Bank acceptance notes 478,404,877.95 260,984,531.31

820,125,807.67 618,995,440.09

(a) As at 31 December 2015, pledged notes receivable of the group are as below:

31 December 2015

Bank acceptance notes 5,490,279.00

The pledged notes receivables are used as guarantee for issuance of bank acceptance notes.

(b) As at 31 December 2015, the endorsed or the discounted undue notes receivables of the group are analyzed as

below:

Recognition terminated Recognition not terminated

Trade acceptance notes - 88,924,715.00

Bank acceptance notes 951,708,187.92 -

951,708,187.92 88,924,715.00

111

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(3) Accounts receivable

31 December 2015 31 December 2014

Accounts receivable 6,193,832,382.24 7,043,152,204.29

Less: provision for bad debts (40,001,499.49) (24,839,531.10)

6,153,830,882.75 7,018,312,673.19

(a) The aging of accounts receivable and related provision for bad debts are analyzed below:

31 December 2015 31 December 2014

Amount Provision for bad Amount Provision for bad

debts debts

Within 1 year 6,142,465,488.92 (2,469,091.87) 7,015,198,063.08 (4,613,627.07)

1 to 2 years 31,247,931.93 (18,695,123.79) 7,309,007.23 (2,184,567.35)

2 to 3 years 1,704,989.18 (1,663,743.69) 4,971,803.29 (2,666,614.67)

Over 3 years 18,413,972.21 (17,173,540.14) 15,673,330.69 (15,374,722.01)

6,193,832,382.24 (40,001,499.49) 7,043,152,204.29 (24,839,531.10)

(b) The accounts receivable and related provision for bad debts by category are analyzed below:

31 December 2015 31 December 2014

Carrying amount Bad debt provision Carrying amount Bad debt provision

amount % of amount rate amount % of total amount rate

total balance

balance

individually

significant are

subject to

separate

impairment

assessment 26,080,873.29 0.42% (26,080,873.29) 100.00% 27,306,785.00 0.39% (17,714,727.50) 64.87%

receivable

accounts

within similar

credit risk

group 6,143,707,981.16 99.19% (634,109.87) 0.01% 7,001,130,510.38 99.40% (368,802.84) 0.01%

individually not

significant but

individually

evaluated for

impairment 24,043,527.79 0.39% (13,286,516.33) 55.26% 14,714,908.91 0.21% (6,756,000.76) 45.91%

6,193,832,382.24 100.00% (40,001,499.49) 0.65% 7,043,152,204.29 100.00% (24,839,531.10) 0.35%

(c) As at 31 December 2015, impairment provision for accounts receivable individually significant are analysed as

below:

Bad debt

Carrying amount provision Rate Assessment for impairment

Disputed receivable with higher

Guangdong Liyuan risk of recoverability which has

Pharmaceutical Co., Ltd. 14,517,375.00 (14,517,375.00) 100.00% filed a lawsuit

Disputed receivable with higher

Hubei Xianning risk of recoverability which has

Pharmaceutical Co., Ltd. 11,563,498.29 (11,563,498.29) 100.00% filed a lawsuit

26,080,873.29 (26,080,873.29)

112

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(3) Accounts receivable (continued)

(d) Provisions for impairment of the receivables which have a similar risk level are analyzed below:

31 December 2015 31 December 2014

Carrying amount Bad debt provision Carrying amount Bad debt provision

amount amount rate amount amount rate

Within 1 year 6,131,033,106.96 - - 6,994,884,844.28 - -

1 to 2 years 12,667,551.00 (633,377.55) 5.00% 5,345,460.81 (267,276.09) 5.00%

2 to 3 years 7,323.20 (732.32) 10.00% 785,143.09 (78,514.31) 10.00%

Over 3 years - - - 115,062.20 (23,012.44) 20.00%

6,143,707,981.16 (634,109.87) 0.01% 7,001,130,510.38 (368,802.84) 0.01%

(e) Bad debt provision in this year is RMB22,300,209.93. Recovered or reversed bad debt amount adds up to

RMB7,129,437.78. Important recovered or reversed bad debt items are listed below:

Reason for Original assessment for Recovered or Way of recovery

recoverability or providing impairment reversed

reversal amount

Tibet naqu Kang Hui pharmaceutical

Co., Ltd Amount received Uncertainty in recovery 3,197,352.50 Amount received

Beihai Hepu Psychiatric Hospital Amount received Uncertainty in recovery 857,874.76 Amount received

Qinzhou Secondary People¡¯s

Hospital Amount received Uncertainty in recovery 500,000.00 Amount received

Ruikang Hospital of Guangxi

University of Chinese Medicine Amount received Uncertainty in recovery 350,000.00 Amount received

Chinese Medical Hospital of Hechi

City Amount received Uncertainty in recovery 300,000.00 Amount received

Xinhua Hospital of Guangzhou City

Huadu District Amount received Uncertainty in recovery 191,597.75 Amount received

Health Centre of Guangzhou City

Huadu District Tanbu Town Amount received Uncertainty in recovery 172,722.58 Amount received

Affiliated Hospital of Youjiang

Medical College Amount received Uncertainty in recovery 160,000.00 Amount received

Health Centre of Guangzhou City

Zengcheng District Yongning

Street Uncertainty in recovery 147,088.08 Amount received

Zhongxin Hospital of Guangzhou Partial amount

City Zengcheng District received Uncertainty in recovery 128,327.74 Amount received

Mental Hospital of Yuancheng

District Amount received Uncertainty in recovery 103,938.40 Amount received

Others Amount received Uncertainty in recovery 686,535.77 Amount received

6,795,437.58

113

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(3) Accounts receivable (continued)

(f) Accounts receivable written off in current year are analysed as below:

Nature of the Related party

receivable Amount Reason transaction or not

Beijing Huayuan Renji Account Disputes won but client has

pharmaceutical Co., Ltd(i) receivable 31,691.36 no property to implement No

Account Recoverability in significant

Others(i) receivable 5,490.00 doubt due to long age No

37,181.36

(i)The above account receivables were assessedby relevant business department and legal department that the

recovery possibility would be quite low. They were written off in this year after being reviewed by the financial

department and approved by the board of directors.

(g) As at 31 December 2015, the top five accounts receivable by customer are summarised as below:

Bad debt provision % of the total accounts

Amount amount receivable

Total amount of the top five

accounts receivables 467,591,195.08 - 7.55%

(h) Analysis of account receivables that are terminated recognition due to financial asset transfer is as below:

In 2015, accounts receivable of RMB605,173,250.60 has been factored to financial institute(2014:

RMB1,285,503,122.45).

(4) Advances to suppliers

(a) The aging of advances to suppliers is analyzed below:

31 December 2015 31 December 2014

amount % of total balance amount % of total balance

Within 1 year 71,740,255.84 99.58% 95,744,012.90 99.69%

1 to 2 years 285,290.00 0.40% 66,286.50 0.07%

2 to 3 years 6,001.48 0.01% 213,144.00 0.22%

Above 3 years 9,714.52 0.01% 19,711.00 0.02%

72,041,261.84 100.00% 96,043,154.40 100.00%

(b) As at 31 December 2015, the top five advances to suppliers by customer are summarized as below:

Amount Proportion of total balance

Total amount of top five advances to suppliers 26,998,335.52 37.48%

114

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(5) Other receivables

31 December 2015 31 December 2014

Deposit 20,157,099.69 11,871,118.11

Receivable of equity transaction(Note (c)) 8,980,000.00 8,980,000.00

Petty cash advance to employees 7,254,354.65 6,131,979.57

Receivable due from related party 1,715,000.00 1,899,766.89

Others 10,881,252.59 11,504,228.47

48,987,706.93 40,387,093.04

Less: provision for bad debts (10,811,822.47) (11,812,165.14)

38,175,884.46 28,574,927.90

(a) The ageing of other receivables and related provision for bad debts are analyzed below:

31 December 2015 31 December 2014

Within 1 year 32,337,679.75 24,857,054.91

1 to 2 years 2,262,872.92 1,183,560.15

2 to 3 years 297,736.15 463,325.73

Over 3 years 14,089,418.11 13,883,152.25

48,987,706.93 40,387,093.04

(b) Other receivables and related provision for bad debts by category are analyzed below:

31 December 2015 31 December 2014

Carrying amount Bad debt provision Carrying amount Bad debt provision

% of total % of total

amount amount amount rate amount amount amount rate

Individually

significant are

subject to

separate

impairment

assessment 8,980,000.00 18.33% (8,980,000.00) 100.00% 8,980,000.00 22.23% (8,980,000.00) 100.00%

Receivable

accounts within

similar credit risk

group 34,544,946.39 70.52% (268,381.89) 0.78% 25,447,187.91 63.01% (219,614.23) 0.86%

Individually not

significant but

individually

evaluated for

impairment 5,462,760.54 11.15% (1,563,440.58) 28.62% 5,959,905.13 14.76% (2,612,550.91) 43.84%

48,987,706.93 100.00% (10,811,822.47) 22.07% 40,387,093.04 100.00% (11,812,165.14) 29.25%

115

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(5) Other receivables(continued)

(c) As at 31 December 2015, impairment provision for other receivables individually significant are analyzed as

below:

Bad debt Assessment for

Amount provision Rate impairment

Shenzhen Yinghai Technology Uncertainty in

Investment Co., Ltd. 8,980,000.00 (8,980,000.00) 100.00% recoverability

(d) Provisions for impairment of the receivables which have a similar risk group are analyzed below:

31 December 2015 31 December 2014

Carrying amount Bad debt provision Carrying amount Bad debt provision

amount amount rate amount amount rate

Within 1 year 32,062,651.19 - - 23,496,588.96 - -

1 to 2 years 1,365,607.80 (68,280.39) 5.00% 926,047.22 (46,302.36) 5.00%

2 to 3 years 232,359.80 (23,235.98) 10.00% 315,984.73 (31,598.47) 10.00%

Over 3 years 884,327.60 (176,865.52) 20.00% 708,567.00 (141,713.40) 20.00%

34,544,946.39 (268,381.89) 0.78% 25,447,187.91 (219,614.23) 0.86%

(e) Bad debt provision of Other receivables this year is RMB176,868.12,with the recovered or reversed amount to be

RMB646,562.07. Important recovered or reversed items are listed below:

Recovered or

Reason for Assessment for reversed bad Way of

recoverability impairment debt provisions recovery

Guangxi Donglong Century Uncertainty in Amount

Pharmaceutical Co., Ltd Amount received recoverability 244,191.88 received

Hebei kingdoms Pharmaceutical Uncertainty in Amount

Co., Ltd Amount received recoverability 75,997.10 received

Shanghai Pharmaceutical Uncertainty in Amount

Distribution Holding Co., Ltd Amount received recoverability 35,085.39 received

Uncertainty in Amount

Others Amount received recoverability 271,192.91 received

626,467.28

(f) Other receivables written off in current year are RMB550,648.72¡£

116

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(5) Other Receivables(Continued)

(g) As at 31 December of 2015£¬the top 5 parties that owe the largest amounts of other receivable balances are

analyst as below:

% of total Provision of bad

Nature Balance Aging amount debt

Shenzhen Yinghai Technology Receivable of equity

Investment Co., Ltd. transaction 8,980,000.00 Over 5 years 18.33% (8,980,000.00)

People's Court of Guangzhou Retention fee for lawsuit

Yuexiu District filed as plaintiff 5,388,080.00 Within 1 year 11.00% -

People's Court of Guangzhou Retention fee for lawsuit

Tianhe District filed as plaintiff 2,473,179.00 Within 1 year 5.05% -

Guangxi Autonomous Region

Housing Reformed System Collective housing repair

Finance Department funds 1,943,997.04 Over 5 years 3.97% -

Shanghai Maikang Warehousing service

Biotechnology Co., Ltd. charge 1,787,740.00 Within 1 year 3.65% -

20,572,996.04 42.00% (8,980,000.00)

(6) Inventories

(a) Inventories by category are analyzed as below:

31 December 2015 31 December 2014

Book value Provision Net book value Book value Provision Net book value

Raw materials 119,787,461.99 (2,825,858.08) 116,961,603.91 144,596,922.64 (3,596,085.79) 141,000,836.85

Consigned

processing

materials 1,959,239.89 - 1,959,239.89 1,288,334.79 - 1,288,334.79

Finished goods 2,416,024,602.74 (23,469,246.48) 2,392,555,356.26 2,174,537,205.97 (14,519,470.94) 2,160,017,735.03

Work in progress 23,461,516.85 (6,773,872.30) 16,687,644.55 25,031,852.48 (6,537,971.20) 18,493,881.28

Low cost

consumables 5,019,915.55 (23,001.88) 4,996,913.67 1,551,729.58 (19,254.66) 1,532,474.92

2,566,252,737.02 (33,091,978.74) 2,533,160,758.28 2,347,006,045.46 (24,672,782.59) 2,322,333,262.87

(b) Provision for declines in value of inventories is analysed as below:

31 December Decreases

Increases

2014 Reversal Written Off 31 December 2015

Raw materials 3,596,085.79 648,943.01 (57,403.07) (1,361,767.65) 2,825,858.08

Finished goods 14,519,470.94 24,024,635.77 (3,992,584.23) (11,082,276.00) 23,469,246.48

Work in progress 6,537,971.20 654,047.39 (418,146.29) - 6,773,872.30

Low cost

consumables 19,254.66 21,919.76 (5,770.71) (12,401.83) 23,001.88

24,672,782.59 25,349,545.93 (4,473,904.30) (12,456,445.48) 33,091,978.74

(c) Provision of inventories is determined according to the gapbetween the net realizable value and the

inventory book value.

117

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(7) Other Current Asset

31 December of 2015 31 December of 2014

VAT to be deducted 16,623,377.34 39,475,078.08

Corporate income tax to be deducted 2,540,076.52 808,216.55

Other 293,461.72 25,296.84

19,456,915.58 40,308,591.47

(8) Assets classified as held for sale

31 December of 2015

book value fair value

Investment property 2,426,744.64 7,667,470.67

Fixed assets 30,132.19 304,200.51

2,456,876.83 7,971,671.18

As at 6 November of 2015, Guangxi Logistics signed an agreement with the government sector, which in charge of

the dismantlement. The agreement indicated that the company was honored with compensation of

RMB9,040,935.51 based on the valuation of the land and above ground structures owned by the company initially

but transferred to the government. As at 31th December of 2015, the land and above ground structures, which were

transferred to the government as mentioned above, met the definition of the assets classified as held for sale and

presented independently as current asset in the Balance Sheet. Meanwhile, the company has already received the

prepaid compensation of RMB 7,334,926.94, which shown as advance from customers in the Balance Sheet.

The company has completed the transference and delivery process of the assets in January 2016.

(9) Long-term equity investments

31 December of 2015 31 December of 2014

Associates - Without quoted price (a) 180,831,714.55 157,604,846.85

The Group has no liquidity restriction on its long-term equity investments.

(a) Associates

Increases/(Decreases)

Explanation for the

Adjusted net profit or Equity Voting inconsistence between

loss based on Cash dividends interest held rights held equity interest held

31 December 2014 Investment equity method declared by associate 31 December 2015 (%) (%) and voting rights held

NoteIV(46)

Board of the directors

is the highest decision

making organization,

which is formed by 3

ShenzhenWanl shareholders of

e Medical Wanle Medical evenly,

Co., each shareholder

Ltd.(¡°Wanle appoints 2 directors

Medical¡±) 157,604,846.85 - 57,152,672.28 (35,190,000.00) 179,567,519.13 35.19% 33.33% set up the borad

Sinopharm

Holding

Zhuhai Co.,

Ltd.(Sinopha

rm Zhuhai)(i) - 1,002,980.00 261,215.42 - 1,264,195.42 10.00% 10.00% N/A

157,604,846.85 1,002,980.00 57,413,887.70 (35,190,000.00) 180,831,714.55

(i) The highest authority of Sinopharm Zhuhai is the shareholders' committee, and the shareholders exercise their voting

rights according to their investment proportion. Meanwhile, Sinopharm Zhuhai set up the board of directors and be

responsible for the shareholders, with 3 members in total, and the Company delegates 1 member. One member has 1

voting right, and all of the revolutions should be passed by half of the directors.

118

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(10) Investment Properties

31 December Increase in Decrease in 31 December 2015

2014 Current year Current year

Cost 169,863,406.19 82,662,736.11 (10,574,714.04) 241,951,428.26

Buildings 148,033,589.95 81,528,872.75 (7,728,617.91) 221,833,844.79

Land use rights 21,829,816.24 1,133,863.36 (2,846,096.13) 20,117,583.47

Accumulated

depreciation/

amortization (94,726,555.68) (5,956,442.53) 5,133,888.72 (95,549,109.49)

Buildings (91,404,525.86) (5,619,701.75) 4,984,995.43 (92,039,232.18)

Land use rights (3,322,029.82) (336,740.78) 148,893.29 (3,509,877.31)

Net book value 75,136,850.51 146,402,318.77

Buildings 56,629,064.09 129,794,612.61

Land use rights 18,507,786.42 16,607,706.16

Provision for

impairment loss (1,300,000.00) - - (1,300,000.00)

Buildings (1,300,000.00) - - (1,300,000.00)

Land use rights - - - -

Carrying amount 73,836,850.51 145,102,318.77

Buildings 55,329,064.09 128,494,612.61

Land use rights 18,507,786.42 16,607,706.16

In 2015, the amount of depreciation and amortization were RMB5,211,378.79 (2014£ºRMB5,396,642.17).

In 2015, the Group changed the use of buildings with a carrying amount of RMB10,826,513.57(Cost:

RMB11,443,052.75, accumulated depreciation:RMB616,539.18) and the use of land use right with a carrying

amount of RMB1,005,338.80 (Cost:1,133,863.36, accumulated depreciation:RMB128,524.56) into leasing. The

relative fixed assets and intangible assets were respectively transferred into investment properties at the date of

change in use.

The properties of Guangxi Logistics (the subsidiary) that held for built and valuated as RMB 70,250,000.00 has

been initially validated as other non-current assets in the balance sheet(Note IV(18)). In December 2015, the

properties have been constructed completely and delivered. Guangxi Logistics planned to rent it out, so since the

date of reception, RMB 70,085,820.00 was added to the original value of investment property. Area difference of

between the contracted and actual was compensated by RMB164,180.00 cash. As of 31 December 2015, the

property ownership certificate of the properties were in the progress.

In 2015. The group transferred a rented property with book value RMB2,068,077.85(Cost: RMB 3,959,294.92,

accumulated depreciation: RMB1,891,217.07) and a rented land use right with book value RMB

946,002.84(Original cost: 1,094,896.13, accumulated depreciation: 148,893.29) into private use. Since the date

of transference, the group has respectively transferred the value into fixed asset and intangible asset.

In 2015, one of the investment properties, of which the net value is RMB2,426,744.64(original cost:

RMB5,520,523.00, accumulated depreciation: RMB 3,093,778.36) and is about to be taken over by government

due to the renovation of aged town, has been transferred and presented as the assets classified as held for sale

by the Group.(Notes IV(8)).

119

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(11) Fixed Assets

31 December Transfer from Transfer from Current year Transfer to Current year 31 December

2014 Construction in investment other additions investment disposals 2015

Progress properties properties

Cost 1,326,619,561.63 410,669,898.55 3,959,294.92 29,276,008.13 (11,443,052.75) (43,396,349.62) 1,715,685,360.86

Buildings 542,206,947.63 306,488,589.42 3,959,294.92 9,064,450.98 (11,443,052.75) (350,509.54) 849,925,720.66

Machinery and

equipment 490,373,556.86 87,318,472.81 - 9,446,799.20 - (30,091,100.25) 557,047,728.62

Motor vehicles 56,105,467.78 - - 3,694,259.89 - (5,713,769.16) 54,085,958.51

Other 207,135,443.61 8,376,267.94 - 6,051,275.27 - (4,339,845.56) 217,223,141.26

Leasehold

improvements 30,798,145.75 8,486,568.38 - 1,019,222.79 - (2,901,125.11) 37,402,811.81

Accumulated

depreciation (557,745,245.38) - (1,891,217.07) (93,079,772.83) 616,539.18 31,242,779.72 (620,856,916.38)

Buildings (142,633,804.31) - (1,891,217.07) (22,715,210.02) 616,539.18 233,484.39 (166,390,207.83)

Machinery and

equipment (235,009,650.93) - - (39,881,033.49) - 19,299,236.47 (255,591,447.95)

Motor vehicles (33,060,080.55) - - (5,153,455.53) - 4,784,230.14 (33,429,305.94)

Other (128,375,890.50) - - (20,603,109.49) - 4,113,117.07 (144,865,882.92)

Leasehold

improvements (18,665,819.09) - - (4,726,964.30) - 2,812,711.65 (20,580,071.74)

Net book value 768,874,316.25 1,094,828,444.48

Buildings 399,573,143.32 683,535,512.83

Machinery and

equipment 255,363,905.93 301,456,280.67

Motor vehicles 23,045,387.23 20,656,652.57

Other 78,759,553.11 72,357,258.34

Leasehold

improvements 12,132,326.66 16,822,740.07

Provision for

diminution in

value (23,316,486.90) - - (1,540,887.99) - 9,441,367.94 (15,416,006.95)

Buildings (2,449,969.17) - - (81,588.55) - 82,058.96 (2,449,498.76)

Machinery and

equipment (20,855,885.66) - - (994,108.56) - 9,356,435.55 (12,493,558.67)

Motor vehicles - - - - - - -

Other (2,873.43) - - (106,511.27) - 2,873.43 (106,511.27)

Leasehold

improvements (7,758.64) - - (358,679.61) - - (366,438.25)

Carrying amount 745,557,829.35 1,079,412,437.53

Buildings 397,123,174.15 681,086,014.07

Machinery and

equipment 234,508,020.27 288,962,722.00

Motor vehicles 23,045,387.23 20,656,652.57

Other 78,756,679.68 72,250,747.07

Leasehold

improvements 12,124,568.02 16,456,301.82

120

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(11) Fixed Assets(Continued)

In 2015, details of the depreciation are charged as below:

31 December 2015 31 December 2014

Cost of goods sold 45,641,657.05 48,414,103.15

Selling expenses 6,167,719.99 5,308,133.70

General and administrative expenses 33,865,273.26 32,653,670.24

Research and development expenses 7,405,122.53 5,386,581.56

93,079,772.83 91,762,488.65

As of 31 December 2015, machinery and equipments with a cost of RMB39,567,661.85,accumulated

depreciation of RMB23,158,149.16were left temporarily idle and expectedly no longer in use due to the

strategic adjustments of productions. The management assumed a provision of impairment of RMB

15,416,006.95 for the machinery and equipments.

As of 31 December 2015, buildings with carrying amount of RMB30,132.19(Cost:RMB201,334.00, accumulated

depreciation:RMB171,201.81) is disclosed as assets classified as held for sale current assets(Note IV(8)) due

to expected impose for urban reconstruction.

(a) Financing lease of fixed assets

As of 31 December 2015, fixed assets with carrying amount of RMB7,215,410.60 was financing leased(As of

December 2014: Nil)(Note VII).

(b) Fixed assets without official property right certificates

Reason for outstanding property

Carrying amount right certificates

Buildings 443,279,922.43 Pending project final accounts

(12) Construction in progress

31December 2015 31 December 2014

Pingshan Pharmaceutical Research & Development

Manufacturing Base 129,597,181.05 298,665,439.18

Supply chain extension Project 12,620,204.41 -

Zhijun Production Workshop Technological

Transformation Project 12,468,050.72 14,214,138.81

Zhijun(Suzhou) Production Workshop Technological

Transformation Project 5,388,239.70 -

Warehouse improvement project 5,341,796.63 224,000.00

Other projects 12,181,314.07 18,615,118.57

177,596,786.58 331,718,696.56

Less£º

Provision of impairment ¨C Peinan Project (1,500,000.00) (1,500,000.00)

176,096,786.58 330,218,696.56

121

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(12) Construction in progress(continued)

(a) Significant changes of construction in progress

Name of project Budget of project 31 December 2014 Current year Transfer out during 31 December 2015 Cost up Construction Accumulated Borrowing Weighted Financed

additions current year to date in progress capitalized cost average by

out of (%) borrowing cost capitalized interest

budget (%) in 2015 rate (%)

Pingshan Pharmaceutical

Research &

Development Working capital

Manufacturing Base 881,370,000.00 298,665,439.18 209,425,992.51 (378,494,250.64) 129,597,181.05 57.65% 85.00% 19,785,547.23 11,321,691.09 5.64% and borrowings

Supply chain extension

Project 21,063,732.60 - 19,884,311.60 (7,264,107.19) 12,620,204.41 94.76% 94.76% - - - Working capital

Zhijun Production

Workshop Technological

Transformation Project 105,810,000.00 14,214,138.81 15,462,849.61 (17,208,937.70) 12,468,050.72 46.66% 59.49% - - - Working capital

Zhijun(Suzhou) Production

Workshop Technological Working capital

Transformation Project 49,938,000.00 - 6,035,537.55 (647,297.85) 5,388,239.70 12.09% 11.00% 29,774.20 29,774.20 4.42% and borrowings

Warehouse improvement Working capital

project 19,787,622.53 224,000.00 8,008,392.47 (2,890,595.84) 5,341,796.63 41.60% 41.60% - - -

Other projects - 18,615,118.57 3,551,210.71 (9,985,015.21) 12,181,314.07 - - - - - Working capital

1,077,969,355.13 331,718,696.56 262,368,294.45 (416,490,204.43) 177,596,786.58

In 2015, the amounts that construction in progress transferred into fixed asset and long term prepaid expense were RMB410,669,898.55and RMB5,820,305.88 respectively.

(b) Financing lease of Construction in progress

As of 31 December 2015, construction in progress with carrying amount of RMB4,231,000.00 was financing leased(As of December 2014: Nil)(Note VII).

- 122 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(13) Intangible asset

Current year Current year

31December 2014 additions decreases 31December 2015

Cost 255,590,952.55 2,435,961.20 (1,133,863.36) 256,893,050.39

Land use rights 143,702,078.73 1,094,896.13 (1,133,863.36) 143,663,111.50

Computer software 24,133,676.24 1,341,065.07 - 25,474,741.31

Proprietary

technology 53,901,204.72 - - 53,901,204.72

Trademarks 196,850.00 - - 196,850.00

Sales network 33,657,142.86 - - 33,657,142.86

Accumulated

amortization (107,942,246.49) (8,094,219.72) 128,524.56 (115,907,941.65)

Land use rights (36,737,160.08) (3,377,759.36) 128,524.56 (39,986,394.88)

Computer software (16,678,752.94) (2,710,145.74) - (19,388,898.68)

Proprietary

technology (49,952,578.71) (323,457.48) - (50,276,036.19)

Trademarks (196,850.00) - - (196,850.00)

Sales network (4,376,904.76) (1,682,857.14) - (6,059,761.90)

Net book value 147,648,706.06 140,985,108.74

Land use rights 106,964,918.65 103,676,716.62

Computer software 7,454,923.30 6,085,842.63

Proprietary

technology 3,948,626.01 3,625,168.53

Trademarks - -

Sales network 29,280,238.10 27,597,380.96

Provision for

impairment loss (3,264,952.19) - - (3,264,952.19)

Land use rights - - - -

Computer software (264,952.19) - - (264,952.19)

Proprietary

technology (3,000,000.00) - - (3,000,000.00)

Trademarks - - - -

Sales network - - - -

Carrying amount 144,383,753.87 137,720,156.55

Land use rights 106,964,918.65 103,676,716.62

Computer software 7,189,971.11 5,820,890.44

Proprietary

technology 948,626.01 625,168.53

Trademarks - -

Sales network 29,280,238.10 27,597,380.96

Amortization amount of intangible asset for 2015 is RMB7,945,326.43(2014: RMB7,618,134.62).

- 123 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(13) Intangible asset(Continued)

Expenditures on research and development incurred in 2015 are listed by projects as below:£º

31 December 2014 Current year Current year 31 December 2015

additions decreases

Projects of antibiotics

preparation and

powder injection

projects subtotal - 19,254,969.71 (19,254,969.71) -

Projects of

cardiovascular and

cerebrovascular

diseases treatment

subtotal - 17,994,927.58 (17,994,927.58) -

Projects of Dajiankang

related products - 6,767,534.31 (6,767,534.31) -

Projects of digestive

system diseases

treatment etc. - 3,496,648.92 (3,496,648.92) -

Projects of respiratory

system diseases

treatment subtotal 18,117.29 3,413,291.67 (3,413,291.67) 18,117.29

Projects of chinese

patent medicine - 3,182,594.31 (3,182,594.31) -

Projects of antibiotics

crude drugs etc. 5,357,691.17 1,859,965.14 (1,859,965.14) 5,357,691.17

Other projects 243,507.01 17,180,463.62 (17,180,463.62) 243,507.01

5,619,315.47 73,150,395.26 (73,150,395.26) 5,619,315.47

Expenditures on research and development incurred in 2015 amount to RMB73,150,395.26 (2014:

RMB81,216,093.52),the total amount is recognized in profit or loss for the current period, (2014:

RMB81,216,093.52 was recognized in loss and as development cost respectively). No research and development

costs are capitalized as intangible assets.

(14) Goodwill

31 December 2015 31 December 2014

Goodwill 85,228,833.15 85,228,833.15

Minus£ºProvision of impairment loss ¨C Sinopharm

Group Zhijun(Suzhou) Pharmaceutical Co.,Ltd.

(Note a) (5,850,000.00) (5,850,000.00)

79,378,833.15 79,378,833.15

- 124 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(14) Goodwill(Continued)

(a) Impairment

The goodwill allocated to the asset groups and combinations of asset groups are summarized by operating

segments as follows:

31December 2015 31 December 2014

Pharmaceutical distribution(i)-

Sinopharm Jiangmen 27,392,317.73 27,392,317.73

Sinopharm Yanfeng 16,868,644.87 16,868,644.87

Sinopharm Zhaoqing 2,594,341.53 2,594,341.53

Sinopharm Shaoguan 1,686,496.80 1,686,496.80

Sinopharm Meizhou 1,610,819.66 1,610,819.66

Sinopharm Huizhou 923,184.67 923,184.67

Sinopharm Zhanjiang 282,135.55 282,135.55

Sinopharm Dongguan 1,499.02 1,499.02

Pharmaceutical manufacturing (ii)-

Suzhou Zhijun 28,019,393.32 28,019,393.32

79,378,833.15 79,378,833.15

(i) Goodwill of Pharmaceutical distribution segment

The recoverable amount of an asset group or a collection of asset groups is based on five-year budget approval

from the management, using the cash flow forecast method. The cash flow over the five-year period is calculated

with reference to the inflation rate.

The Management expects budgeted gross margin to be 6% basing on the historical experience and the forecast

of market development, and expects the discount rate after tax to be 15%, which can reflect risk of the relevant

asset group or combination of group assets. The above assumptions are used to analyze the recoverable amount

of each asset group and the combination of group assets.

(ii)Goodwill of Pharmaceutical manufacturing segment

On 31 December 2015, with the approval of the Board, the Company publicly list for sale of the holding

67% of the total equity of Zhijun(Suzhou), with base price of RMB155.3 million. Up to the report date,

the Company has reached agreement with an independent third party, and the price is a bit higher than

the base price. The relevant procedures are in progress.

As of 31 December 2015, the company estimates the recoverable amount according to the expected selling price

of the equity held for sale, deducted by the relevant expenses. The estimation reveals no furtherimpairment of the

goodwill.

- 125 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(15) Long term prepaid expense

31 December 2014 Current year additions Current year amortization 31 December 2015

Leasehold

improvements 37,049,985.15 8,523,910.80 (8,010,714.74) 37,563,181.21

Others 2,104,246.88 1,957,661.00 (1,160,525.16) 2,901,382.72

39,154,232.03 10,481,571.80 (9,171,239.90) 40,464,563.93

(16) Deferred income tax assets and deferred income tax liabilities

(a) Deferred income tax assets

31 December 2015 31 December 2014

Deferred income Deductible Deferred income Deductible

tax assets temporary tax assets temporary

differences differences

Provision for

impairment of assets 22,863,042.74 99,537,981.41 20,930,880.12 85,594,942.59

Accrued expenses 15,675,447.65 82,861,800.83 9,771,547.36 56,704,614.52

Accrued payroll 11,505,001.96 49,498,383.60 13,595,697.03 59,051,247.05

Deferred revenue 11,391,871.99 71,716,109.84 13,634,799.37 82,178,700.44

Deductible losses 25,836,889.79 106,551,451.67 23,331,434.22 96,865,385.40

Others 1,214,415.80 5,613,633.90 3,882,121.40 15,528,485.56

88,486,669.93 415,779,361.25 85,146,479.50 395,923,375.56

Including£º

Amount that expected

to be reversed in 1

year(including 1 year) 57,826,556.57 47,112,561.57

Amount that expected

to be reversed over

1 year 30,660,113.36 38,033,917.93

88,486,669.93 85,146,479.50

- 126 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(16) Deferred income tax assets and deferred income tax liabilities(Continued)

(b) Deferred income tax liabilities

31 December 2015 31 December 2014

Deferred income Deductible temporary Deferred income Deductibletemporaryd

tax liabilities differences tax liabilities ifferences

Changes in fair value 9,733,983.44 40,156,878.68 10,821,134.82 43,284,539.27

Business combination

involving entities not

under common control 9,109,411.46 36,437,645.85 9,657,520.81 38,630,083.24

Others 4,080,286.65 16,321,146.59 3,818,420.94 15,273,683.76

22,923,681.55 92,915,671.12 24,297,076.57 97,188,306.27

Including£º

Amount that

expected to be

reversed in 1

year(including 1

year) 1,373,395.01 1,359,533.75

Amount that

expected to be

reversed over 1

year 21,550,286.54 22,937,542.82

22,923,681.55 24,297,076.57

(c) The Group has not recognized deferred tax assets in respect of deductible losses and other deductible temporary

differences are listed as below.

31 December 2015 31 December 2014

Deductible losses(Note(i)) 5,099,846.63 1,627,172.87

(i)For those loss-making subsidiaries, as the large uncertainty of being able to gain enough taxable income to

utilize the deductible losses in the future, the Group does not recognize deferred tax assets arising from

accumulated losses amounting to RMB5,099,846.63tax deductible under the tax law.

The unrecognised deferred tax assets in respect of deductible losses will be expired as following:

31 December 2015 31 December 2014

Year 2020 5,099,846.63 -

(d) Deferred income tax assets and deferred income tax liabilities set-off amount

31 December 2015 31 December 2014

Deferred income tax assets/liabilities 276,607.49 -

Net amount after deferred income tax assets and deferred income tax liabilities set-off

31 December 2015 31 December 2014

Temporary Temporary

Deferred income tax differences Deferred income tax differences

assets/liabilities-Net after set-off assets/liabilities-Net after set-off

Deferred income

tax assets 88,210,062.44 414,672,931.26 85,146,479.50 395,923,375.56

Deferred income

tax liabilities 22,647,074.06 91,809,241.16 24,297,076.57 97,188,306.27

- 127 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(17) Provision of asset impairment

Reversal of Current year decreases

written off

amount in

31 December previous Current year 31 December

2014 periods increases Reversal Written off 2015

Bad debt

provision 36,651,696.24 48,377.60 22,477,078.05 (7,775,999.85) (587,830.08) 50,813,321.96

Including:

Provision

for ccounts

receivable 24,839,531.10 28,377.60 22,300,209.93 (7,129,437.78) (37,181.36) 40,001,499.49

Provision for

other

receivables 11,812,165.14 20,000.00 176,868.12 (646,562.07) (550,648.72) 10,811,822.47

Provision for

declines in

value of

inventories 24,672,782.59 - 25,349,545.93 (4,473,904.30) (12,456,445.48) 33,091,978.74

Provision for

fixed assets 23,316,486.90 - 1,540,887.99 - (9,441,367.94) 15,416,006.95

Provision for

investment

property

impairment 1,300,000.00 - - - - 1,300,000.00

Provision for

construction

in progress

impairment 1,500,000.00 - - - - 1,500,000.00

Provision for

intangible

assets

impairment 3,264,952.19 - - - - 3,264,952.19

Provision for

goodwill

impairment 5,850,000.00 - - - - 5,850,000.00

96,555,917.92 48,377.60 49,367,511.97 (12,249,904.15) (22,485,643.50) 111,236,259.84

(18) Other non-current assets

31 December 2015 31 December 2014

Medical reserve fund 42,855,240.33 42,039,659.05

Prepayment for project and equipment 32,702,948.09 63,620,879.10

Non-monetary compensation of resettlement

(Note IV(31)) - 70,250,000.00

75,558,188.42 175,910,538.15

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CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(19) Short term borrowings

31 December 2015 31 December 2014

Unsecured borrowings (Note(a)) 837,769,852.39 966,752,021.57

Guaranteed borrowings (Note(b)) 286,264,700.35 459,757,465.32

Discounted notes (Note (c)) 88,924,715.00 91,445,041.99

1,212,959,267.74 1,517,954,528.88

(a) On 31 December 2015, unsecured borrowings of RMB767,769,852.39 are guaranteed by the Company and its

subsidiaries. (31 December 2014: unsecured borrowings of RMB966,752,021.57 are guaranteed by the

Company and its subsidiaries. RMB70,000,000.00 was borrowed from Sinopharm Group Finance Co.,

Ltd(¡°Group Financial Co.¡±).

(b) On 31 December 2015, bank borrowings of RMB286,264,700.35 (31 December 2014: RMB459,757,465.32) are

guaranteed by Sinopharm Group.

(c) As of 31 December 2015, commercial acceptance bills that had discounted but not terminated amounted to

RMB88,924,715.00(2014:RMB91,445,041.99)

(d) On 31 December 2015, the weighted average interest rate of short-term borrowings is 4.48% per annum (31

December 2014: 5.50%).

(20) Notes payable

31 December 2015 31 December 2014

Trade acceptance notes 216,141,770.19 380,502,886.42

Bank acceptance notes 1,085,452,646.62 1,087,663,754.22

1,301,594,416.81 1,468,166,640.64

(21) Accounts payable

31 December 2015 31 December 2014

Trade payable 4,036,910,159.14 3,988,878,234.03

(a) As at 31 December 2015, accounts payable of RMB125,941,754.29(31 December 2014: RMB98,102,397.18)

were aged over 1 year. Such long aged accounts payable have not been settled because the transactions were

not closed yet.

(22) Advances from customers

31 December 2015 31 December 2014

Sales received in advance 56,943,167.40 40,339,905.63

As at 31 December 2015, advances from customers of RMB1,845,243.48 (31 December 2014:

RMB1,483,286.56) were aged over 1 year. Before the financial statement is approved, no such long aged

advance has been settled.

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CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(23) Employee benefits payable

31 December 2015 31 December 2014

Shortterm employee benefits payable 160,934,496.69 168,068,439.41

Defined contribution plans payable 2,407,982.07 2,166,584.27

Termination benefits payable 973,455.41 1,723,119.20

164,315,934.17 171,958,142.88

(a) Short term employee benefits payable

31 December Current year Current year 31 December

2014 additions reductions 2015

Wages and salaries,

bonuses, allowances and

subsidies 150,384,510.97 469,461,111.75 (480,385,818.71) 139,459,804.01

Staff welfare 973,559.02 30,095,037.60 (29,076,131.18) 1,992,465.44

Social security contributions 355,247.78 22,039,815.67 (22,020,107.54) 374,955.91

Including:

Medical insurance 300,176.39 18,292,413.71 (18,260,107.01) 332,483.09

Work injury insurance 28,672.53 1,584,032.99 (1,579,744.85) 32,960.67

Maternity insurance 26,398.86 2,163,368.97 (2,180,255.68) 9,512.15

Housing funds 542,776.75 23,265,951.68 (23,316,206.93) 492,521.50

Labor union funds and

employee education funds 14,939,701.87 15,707,990.08 (12,904,763.89) 17,742,928.06

Others 872,643.02 1,556,670.64 (1,557,491.89) 871,821.77

168,068,439.41 562,126,577.42 (569,260,520.14) 160,934,496.69

(b) Defined contribution plans payable

31 December Current year Current year 31 December

2014 additions reductions 2015

Basic pensions 421,293.14 42,993,094.19 (43,048,605.08) 365,782.25

Supplementary pensions 1,700,871.21 4,549,936.03 (4,237,058.71) 2,013,748.53

Unemployment insurance 44,419.92 2,474,717.42 (2,490,686.05) 28,451.29

2,166,584.27 50,017,747.64 (49,776,349.84) 2,407,982.07

(c) Termination benefits payable

31 December 2015 31 December 2014

Retirement benefits payable ¨C within 1 year

(NoteIV(32)) 873,455.41 1,115,000.00

Other dismission benefits(Note i) 100,000.00 608,119.20

973,455.41 1,723,119.20

(i)For year 2015, the amount that the group provided other termination benefits for severing labor relations was

RMB651,382.79.(2014:Other termination benefits for severing labor relations: RMB223,425.95).

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CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(24) Tax payable

31 December 2015 31 December 2014

Enterprise income tax payable 39,167,388.57 52,868,801.89

Value-added-tax payable 19,957,187.35 10,022,374.90

Water conservancy fund payable 5,881,784.79 7,950,610.72

Individual income tax payable 1,609,121.36 1,514,928.86

City maintenance and construction tax payable 1,544,705.46 787,872.30

Stamp duty tax payable 1,290,342.40 1,198,400.07

Educational surcharge payable 1,113,244.42 571,654.75

Business tax payable 1,025,850.75 943,302.08

Real estate tax payable 834,900.64 923,420.99

Land use tax payable 211,481.61 426,390.62

Other tax payables 227,472.85 237,912.28

72,863,480.20 77,445,669.46

(25) Interest payable

31 December 2015 31 December 2014

Interest payable

- Short term borrowing interests payable 6,486,284.75 6,610,192.22

- Long term borrowing interests payable 57,782.44 56,519.97

6,544,067.19 6,666,712.19

(26) Other payable

31 December 2015 31 December 2014

Accrued selling and distribution expenses 167,570,277.31 187,784,029.00

Payables for construction in progress and equipment 108,438,287.53 70,267,980.15

Amount collected on behalf of third party 57,273,890.13 44,057,463.73

Deposit 39,558,840.49 19,495,588.90

Others 95,608,858.39 90,742,139.73

468,450,153.85 412,347,201.51

(a) As at 31 December 2015, other payables of RMB80,787,084.94(31 December 2014: RMB77,105,050.07) were

aged over 1 year, which were mainly for deposits that the project quality margin and other deposits were about to

be returned.

(27) Current portion of long-term borrowings

31 December 2015 31 December 2014

Promotion rewards program

- due within one year 3,510,000.00 4,000,000.00

Financing lease payables(Note IV(29)) 1,934,858.84 -

5,444,858.84 4,000,000.00

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CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(28) Long-term borrowings

31 December 2015 31 December 2014

Unsecured borrowings 40,895,172.30 8,095,448.00

Entrusted borrowings(Note a) 31,600,000.00 31,600,000.00

72,495,172.30 39,695,448.00

(a) As at 31 December 2015, the entrusted borrowings of RMB31,600,000.00 was lent by Sinopharm Group through

Group Financial Co.(31 December 2014: RMB31,600,000.00).

As at 31 December 2015, the weighted average interest rate of long-term borrowings is 4.82%per annum (31

December 2014: 5.62%).

(29) Long-term payables

31 December 2015 31 December 2014

Financing lease payables(Note VIII(6)) 10,329,417.89 -

Less: due within one year(Note IV(27)) (1,934,858.84) -

8,394,559.05 -

(30) Payables for specific projects

31 December 2015 31 December 2014

Special funds granted by government 852,000.00 852,000.00

Government grants for ERP system construction 435,000.00 435,000.00

1,287,000.00 1,287,000.00

(31) Deferred income

31 December 2014 Current year Current year 31 December 2015

additions reductions

Government grants

(Note a) 153,119,166.83 15,416,000.00 (12,598,725.19) 155,936,441.64

Promotion

Rewards Program 27,247,034.32 3,510,000.00 (10,084,451.98) 20,672,582.34

180,366,201.15 176,609,023.98

Less:Product promotion

points matured within

one year (Note IV(27)) (4,000,000.00) (3,510,000.00)

176,366,201.15 173,099,023.98

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CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(31) Deferred income(continued)

(a) Government grants

Amount

recognized as

31 December Current year non-operating 31 December Related to

Government grants program 2014 additions income for 2014 2015 income/assets

Related to

Resettlement Compensation(i) 86,349,075.41 (2,698,408.56) 83,650,666.85 assets

Cephalosporin Solid Preparations Related to

Development Project 13,845,923.14 - (2,103,543.89) 11,742,379.25 assets

Cardiovascular system targeted drug Related to

development programs 3,000,000.00 7,500,000.00 (107,466.67) 10,392,533.33 assets

Related to

Guangxi Logistics Project 8,084,052.18 300,000.00 (441,406.40) 7,942,645.78 assets

Stomach medicine domestic clinical Related to

research and development project 5,000,000.00 - - 5,000,000.00 assets

Pingshan pharmaceutical R & D base Related to

engineering 5,000,000.00 (125,000.01) 4,874,999.99 assets

Related to

Logistics standardization project - 4,500,000.00 (199,999.98) 4,300,000.02 assets

Cephalosporin Powder Injection Related to

Passing EU-GMP Authentication 4,505,783.82 - (689,991.48) 3,815,792.34 assets

Related to

Medical R&D Center II (in progress) 3,877,620.85 - (821,319.96) 3,056,300.89 assets

Related to

New Cephalosporin R&D Project 3,962,385.17 - (916,044.60) 3,046,340.57 assets

Enteric coated pellets industry research Related to

and development project 2,508,837.40 - (72,800.30) 2,436,037.10 assets

A comprehensive experimental Related to

modern service industry subsidies 2,700,000.00 - (300,000.00) 2,400,000.00 assets

Related to

Cefpirome Sulfate R&D Project 2,386,456.55 - (532,495.60) 1,853,960.95 assets

The laval shaaban raw materials and Related to

tablets project - 1,500,000.00 - 1,500,000.00 assets

Related to

New Cephalosporin R&D Project 1,219,393.90 - (610,493.52) 608,900.38 assets

Related to

Shared Logistics Center(completed) 1,225,468.70 - (818,035.17) 407,433.53 assets

Related to

Other Projects(in progress) 9,454,169.71 1,616,000.00 (2,161,719.05) 8,908,450.66 income/assets

153,119,166.83 15,416,000.00 (12,598,725.19) 155,936,441.64

(i) Due to implementation of urban planning for old town reconstruction in Nanning, the operating office of Guangxi

Logistics which was located in Longteng Road District, Nanning City, was to be reconstructed in another place.

According to the agreement signed between Guangxi Logistics and the real estate developer, Guangxi Logistics

would obtain a compensation of RMB120,250,000.00, including cash of RMB50,000,000.00 and value of

RMB70,250,000.00 constructing properties. In year 2015, constructing properties with value of

RMB70,250,000.00was built and delivered, and had been recognized as Investment property(Note IV(10)).

Due to the reconstruction of new operating office in another place, capital expenditure of RMB93.32 million was

recognized as differed revenue, which was to be amortized within the expected useful lives using the straight line

method(to the account Non-operating income)(Note IV(47)), and the other cash compensation was recognized in

the income statement this year.

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CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(32) Long term employee benefits

31 December 2015 31 December 2014

Early retirement benefits payable 3,372,555.41 4,011,000.00

Less: early retirement benefits payable within 1

year(Note IV(32)(c)) (873,455.41) (1,115,000.00)

2,499,100.00 2,896,000.00

Numbers of employees processed early retirement in the Group, as at the balance sheet day, the accordingly

actuarial assumptions that the Group calculate the early retirement employee benefits are shown as following:

31 December 2015 31 December 2014

Discount rate 3.00% 3.75%

The growth rate of wages 4.00%-6.00% 4.00%-6.00%

The amount that early retirement employee benefits recognized into/(Reversed into ) current profit and loss are

shown as following:

Year 2015 Year 2014

General and Administrative expense 539,516.07 215,000.00

Financial expense 133,000.00 199,000.00

672,516.07 414,000.00

(33) Other non-current liabilities

31 December 2015 31 December 2014

Medical reserve funds 45,427,343.31 45,427,343.31

Certain medical reserves funds were received by the Group from the PRC government for it to purchase medical

products (including medicines) required to respond to major disasters, epidemics and other emergencies

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CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(34) Share Capital

31 December 2015 31 December 2014

Listed shares without restriction of trading:

A shares, listed 233,261,812.00 233,261,812.00

B shares, listed 54,885,600.00 54,885,600.00

Listed shares with restriction of trading:

State owned legal person shares 74,482,543.00 74,482,543.00

Natural person shares 1,988.00 1,988.00

362,631,943.00 362,631,943.00

(35) Capital reserve

31 December 2015 31 December 2014

Capital surplus 1,855,144,194.77 1,855,144,194.77

Other Capital reserve-

Transition reserves from investment in associates

reclassified from capital surplus to other comprehensive

income 2,380,016.57 2,380,016.57

Transfer of capital surplus recognized under the previous

accounting system 2,650,322.00 2,650,322.00

Others 3,720,000.00 3,720,000.00

1,863,894,533.34 1,863,894,533.34

(36) Surplus reserve

31 December 2014 Current year addition 31 December 2015

Statutory surplus reserve 181,315,971.50 - 181,315,971.50

31 December 2013 Current year addition 31 December 2014

Statutory surplus reserve 144,855,634.40 36,460,337.10 181,315,971.50

Based on ¡°Company law of the People¡¯s Republic of China¡± and the articles of association, the Group extracted

10% of net profit as statutory surplus reserve. It is optional to extract or not when the accumulated amount was up

to 50% of registered capital. The statutory surplus reserver could be used to cover the deficit or enhance the share

capital after permission. Approved by the board of director, the Group extracted RMB0.00 in 2015(2014: extracted

10% of net profit as RMB36,460,337.10).As of 31 December 2015, the accumulated amount of statutory surplus

reserve of the Group has already reached 50% of registered capital.

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CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(37) Undistributed profits

Year 2015 Year 2014

amount amount

Undistributed profits at the beginning of year 2,356,765,374.25 1,806,002,285.06

Add:net profit attributable to the shareholders of the

company 761,312,261.06 652,497,176.03

Less: Appropriation of statutory surplus reserve (Note

IV(36)) - (36,460,337.10)

Dividend(Note a) (72,526,388.60) (65,273,749.74)

Ending balance of undistributed profits 3,045,551,246.71 2,356,765,374.25

(a) Pursuant to the resolution of General Meeting on 24April 2015, cash dividends of RMB72,526,388.60 (RMB2.0 per

10 shares) was paid based on the issued shares of 362,631,943.

(b) Pursuant to the resolution of board of directors of the company on 24 March 2016, cash dividends of

RMB108,789,582.90(RMB3.00 per 10 shares) was proposed based on the issued shares of 362,631,943 after

non-public offering. This proposed dividend is subject to the approval of General Meeting (Note XI(1)(a)).

(38) Minority Interest

Minority interests are analyzed as below:

31December 2015 31 December 2014

Sinopharm Yanfeng 31,734,359.03 24,504,402.61

Sinopharm Liuzhou 70,503,148.99 52,661,317.92

Sinopharm Shaoguan 5,872,494.43 6,231,349.17

Sinophram Shantou 3,485,886.00 3,202,338.73

Guangzhou Medical 1,475,443.73 -

Sinophram Wuzhou 9,930.54 8,206.13

113,081,262.72 86,607,614.56

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CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(39) Sales and cost of sales

Year 2015 Year 2014

Revenue of main operations 25,900,905,208.74 23,881,210,621.67

Other operating income 92,234,069.10 73,120,406.38

25,993,139,277.84 23,954,331,028.05

Year 2015 Year 2014

Cost of main operations 23,942,246,043.68 21,988,653,461.63

Other operating expenses 29,796,564.24 13,975,308.28

23,972,042,607.92 22,002,628,769.91

(a) Revenue and cost of main operations

Revenue and cost of main operations analyzed by industries are set out below:£º

Year 2015 Year 2014

Revenue of Cost of main Revenue of Cost of main

main operations operations main operations operations

Pharmaceutical

distribution 24,230,858,388.18 22,964,838,971.38 22,195,808,452.75 21,007,553,553.67

Pharmaceutical

manufacturing 1,628,474,289.30 951,255,881.90 1,641,881,896.69 952,511,232.92

Logistics and

freights 29,492,120.37 21,625,831.36 32,110,291.44 24,999,668.41

Rental and other

income 12,080,410.89 4,525,359.04 11,409,980.79 3,589,006.63

25,900,905,208.74 23,942,246,043.68 23,881,210,621.67 21,988,653,461.63

(b) Other operating income and expenses

Year 2015 Year 2014

Other operating Other operating Other operating Other operating

income cost income cost

Sales of raw materials 24,957,643.99 24,443,931.50 6,285,125.39 7,608,893.71

Rental income 21,420,573.25 1,667,748.06 20,198,026.58 1,787,750.50

Rendering of services 41,525,803.51 3,684,884.68 44,375,462.81 4,435,022.69

The income of disposal the

investment real estate 4,330,048.35 - 2,261,791.60 143,641.38

92,234,069.10 29,796,564.24 73,120,406.38 13,975,308.28

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CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(40) Tax and surcharges

Year 2015 Year 2014

City maintenance and construction tax 24,011,580.28 20,747,432.79

Educational surcharge 17,151,427.86 14,937,712.27

Business tax 6,299,406.88 7,812,532.51

Others 3,045,942.39 3,243,933.46

50,508,357.41 46,741,611.03

(41) Selling and distribution expenses

Year 2015 Year 2014

Employees payroll and welfare benefits 248,161,092.49 226,903,462.21

Transportation charges 68,011,820.90 63,762,955.95

Rental expenses 32,031,734.82 32,756,117.66

Promotion and marketing expenses 28,394,900.30 47,447,305.94

Entertainment expenses 28,037,182.72 25,351,649.94

Travel allowances 22,081,084.84 30,121,257.98

Conference expenses 12,821,913.32 14,135,165.64

Advertising expenses 9,972,310.43 10,121,312.49

Utility fees 9,425,165.22 8,011,402.48

Medical cooperation projects fees 9,239,249.51 608,742.50

Storage expenses 7,868,000.00 7,636,810.16

Office allowances 6,764,076.67 5,023,632.28

Depreciation expenses 6,167,719.99 5,308,133.70

Others 44,814,804.25 45,195,134.22

533,791,055.46 522,383,083.15

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CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(42) General and administrative expense

Year 2015 Year 2014

Employees payroll and welfare benefits 231,446,364.24 221,628,037.88

Research and development expenses 73,150,395.26 81,216,093.52

Depreciation expenses 33,865,273.26 32,653,670.24

Taxations 22,950,859.66 27,583,272.86

Entertainment expenses 9,197,343.86 10,878,456.42

Amortisation of intangible assets 7,945,326.43 7,618,134.62

Rental expenses 7,926,070.56 6,931,607.76

Utilities 5,509,697.15 5,571,319.82

Vehicle management expenses 5,466,637.10 8,144,306.69

Office allowances 5,331,601.85 5,502,356.50

Maintenance and other charges 4,109,313.29 4,159,734.88

Travel allowances 3,751,497.35 5,219,523.53

Others 48,567,828.54 57,211,058.53

459,218,208.55 474,317,573.25

(43) Financial expense- net

Year 2015 Year 2014

Interest expenses 119,430,614.48 153,286,381.82

Less: interest income (5,644,752.22) (9,118,766.24)

discount in cash (30,990,733.00) (33,986,833.30)

Gain and loss from exchanges (1,322,400.11) 115,730.39

Others 9,809,356.32 12,832,590.24

91,282,085.47 123,129,102.91

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CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(44) Expense by nature

The cost of operations, selling and distribution expenses, general and administrative expensesare classified by

nature and listed as following:

Year2015 Year2014

Inventories of finished and work-in process goods 23,012,980,576.27 21,003,079,328.16

Consumed raw materials and low value 739,232,331.96

consumables, etc 704,885,478.94

Employee benefits 613,335,223.92 588,455,999.79

Depreciation and amortization expenses 108,002,595.42 107,602,167.58

Research and development expense 73,150,395.26 81,216,093.52

Transportation charges 71,295,353.54 63,843,529.68

Utilities 46,621,397.91 47,009,899.30

Rental 43,452,738.03 39,687,725.42

Entertainment expenses 37,234,526.58 36,230,106.36

Market development expenses 28,394,900.30 47,447,305.94

Travel allowance 25,873,768.69 35,388,022.61

taxation 22,950,859.66 27,583,272.86

Conference expenses 13,412,495.76 15,692,407.95

Office expenses 12,124,566.07 10,583,292.62

Advertisement expenses 9,972,310.43 10,214,102.10

Machine material expenses 9,263,716.46 10,118,628.22

Medical cooperation projects fees 9,239,249.51 608,742.50

Vehicles management expenses 8,166,838.71 12,869,932.56

Other expense 114,694,880.47 122,466,537.18

24,965,051,871.93 22,999,329,426.31

(45) Asset impairment loss

Year 2015 Year 2014

Declines in values of inventories 20,875,641.63 21,835,944.20

Bad debt 14,701,078.20 5,463,831.88

Impairment in fixed assets 1,540,887.99 19,144,827.73

Impairment in goodwill - 5,850,000.00

Impairment in construction in progress - 1,500,000.00

Impairment in intangible assets - 264,952.19

37,117,607.82 54,059,556.00

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CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(46) Gain from investment

Year 2015 Year 2014

Share of profit of investees under equity method (Note a) 57,413,887.70 50,415,836.33

(a) The investment income from long-term investment under equity method represented the profit from Wanle

Medical and Sinopharm Zhuhai. The increase was due to improved business performance of that associate.

There is no significant restriction on the remittance of investment income to the Group.

(47) Non-operating income

Year 2015 Year 2014

Government grants (Note a) 34,025,749.62 31,534,869.05

Write off payments 8,260,141.75 3,279,992.55

Gain on disposal of fixed assets 1,985,460.16 686,310.43

Others 11,132,056.53 14,379,886.57

55,403,408.06 49,881,058.60

Non-operating income is wholly classified as non-recurring profit in 2015.

(a) Government grants

Year 2015 Year 2014 Note

- Government grants related to

assets

Resettlement compensation- Transfer from deferred

amortization of assets 2,698,408.56 2,698,408.56 amortization income

Transfer from deferred

Others 9,900,316.63 11,527,164.79 amortization income

12,598,725.19 14,225,573.35

- Government grants related to

income

Tax return 7,001,400.00 6,060,187.00 Tax return

Government grants for medicine

reserve expenses 3,000,000.00 3,000,000.00 Fiscal interest discount

Government-funded interest

discount 1,773,795.84 549,200.00 Subsidy for medical reserve

Economic contribution

Economic contribution award 2,654,400.00 - award

Subsidy for

Others 6,997,428.59 7,699,908.70 contribution, etc.

21,427,024.43 17,309,295.70

34,025,749.62 31,534,869.05

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CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(48) Non-operating expenses

Year 2015 Year 2014

Losses on disposal of fixed assets 452,401.24 541,470.69

Others 236,394.61 1,543,317.74

688,795.85 2,084,788.43

Non-operating cost is wholly classified as non-recurring and loss in 2015.

(49) Income taxes expenses

Year 2015 Year 2014

Current income tax 178,673,531.35 175,545,757.34

Deferred income tax (4,713,585.45) (16,103,486.91)

173,959,945.90 159,442,270.43

The reconciliation from income tax calculated based on applicable tax rates and total profit presented in the

consolidated financial statements to the income tax expenses is listed below:

Year 2015 Year 2014

Total profit 961,307,855.12 829,283,438.30

Income tax expenses calculated at applicable tax rates 240,326,963.78 207,320,859.57

Differences in preferential tax rates of certain companies (45,183,919.59) (30,924,519.22)

Income not subject to tax (14,758,233.20) (13,305,636.21)

Expenses not deductible for tax purposes 7,827,593.07 5,020,267.39

Deductible loses unrecognized as deferred tax assets 1,274,961.66 -

Utilization of previously unrecognized tax losses (406,793.22) -

Super deduction for development cost (5,865,441.09) (4,431,741.60)

Gain from the changes of tax rate (9,255,185.51) (4,236,959.50)

Income tax 173,959,945.90 159,442,270.43

- 142 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(50) Earnings per share

(a) Basic earnings per share

Basic earnings per share is calculated by consolidated net profit attributable to shareholders of the Company

dividing by the weighted average number of ordinary shares in issue:

Year 2015 Year 2014

Consolidated net profit attributable to shareholders of

the Company 761,312,261.06 652,497,176.03

Weighted average number of ordinary shares in issue 362,631,943.00 344,011,307.25

Basic earnings per share 2.10 1.90

Including:

Basic earnings per share on going 2.10 1.90

(b) Diluted earnings per share

Diluted earnings per share is calculated by dividing the consolidated net profit attributable to shareholders of

the Company by the weighted average number of ordinary shares in issue, which both should be adjusted for

the effects of all potential dilutive factors. In Year 2015, the Company has no potential outstanding ordinary

shares (2014: N/A), the diluted earnings per share equals the basic earnings per share.

(51) Notes to cash flow statements

(a) Cash received relating to other operating activities

Year 2015 Year 2014

Government grants except tax return 15,485,624.43 27,117,108.70

Rent income 21,420,573.25 20,198,026.58

Operational restricted bank deposits received 11,869,442.55 2,263,748.50

Interest income 5,634,187.79 9,118,766.24

Others 47,898,130.71 37,025,861.63

102,307,958.73 95,723,511.65

- 143 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(51) Notes to cash flow statements(Continued)

(b) Cash paid relating to other operating activities

Year 2015 Year 2014

Rental expenses 43,452,738.03 39,687,725.42

Entertainment expenses 37,234,526.58 36,230,106.36

Research and development expenses 28,240,236.01 38,583,648.88

Travel expenses 25,873,768.69 35,340,781.51

Conference expenses 13,412,495.76 15,692,407.95

Office expenses 12,124,566.07 10,525,988.78

Advertising expenses 9,972,310.43 10,121,312.49

Bank charges 9,683,427.14 11,412,570.41

Other 168,451,561.59 192,566,580.63

348,445,630.30 390,161,122.43

(c) Cash received relating to other investing activities

Year 2015 Year 2014

Retention 20,000,000.00 -

(d) Cash received relating to other financing activities

Year 2015 Year 2014

Entrusted borrowings borrowed from Sinopharm Group - 31,600,000.00

Others 6,240,000.00 -

6,240,000.00 31,600,000.00

(e) Cash payments relating to other financing activities

Year 2015 Year 2014

Repayment of entrusted borrowings lent by Sinopharm Group - 400,000,000.00

Others 5,337,208.23 95,951,689.09

5,337,208.23 495,951,689.09

- 144 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(52) Supplementary information of cash flow statements

(a) Supplementary information of cash flow statements

Reconciliation of net profit to cash flows from operating activities

Year 2015 Year 2014

Net profit 787,347,909.22 669,841,167.87

Add:Provision for assets impairment 37,117,607.82 54,059,556.00

Depreciation of fixed assets and investment

properties 98,291,151.62 97,159,130.82

Amortization of intangible assets 7,945,326.43 7,618,134.62

Amortization of long-term prepaid

expenses 9,171,239.90 8,211,483.70

Gains on disposal of fixed assets, and other

non-current assets (354,906.30) (2,262,989.96)

Financial expenses 120,492,558.50 156,492,141.57

Investment income (57,413,887.70) (50,415,836.33)

Increase of deferred tax assets (3,063,582.94) (16,250,541.25)

Decrease of deferred tax liabilities (1,650,002.51) (347,811.19)

Increase of inventory (232,518,718.32) (510,869,762.46)

Decrease/(Increase) in operating receivables 653,032,108.13 (1,310,290,857.24)

(Decrease)/Increase in operating payables (382,287,143.42) 98,095,402.92

Decrease in operating cash with restriction 11,869,442.55 2,263,748.50

Net cash generated from/(used in) operating activities 1,047,979,102.98 (796,697,032.43)

Significant non-cash investing activities

Year 2015 Year 2014

Properties constructed with endorsed notes receivables 16,981,204.57 40,126,168.08

Movement of cash

Year 2015 Year 2014

Cash at end of year 1,569,226,304.36 854,212,006.84

Less: cash at beginning of year (854,212,006.84) (1,097,948,354.45)

Net (decrease)/increase in cash 715,014,297.52 (243,736,347.61)

- 145 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

IV Notes to the consolidated financial statements (continued)

(52) Supplementary information of cash flow statements(Continued)

(b) Acquisition of subsidiaries and operating unit

Year 2015 Year 2014

Cash invested in associate in current year 252,000.00 -

-Sinopharm Zhuhai 252,000.00 -

The consideration of acquisition - 5,243,000.00

Including: Sinophram Shantou - 5,243,000.00

Less: Cash held by subsidiaries at the acquisition

date - (5,116,827.09)

Including: Sinophram Shantou - (5,116,827.09)

Add: Consideration of previous acquisition paid in

current period 9,200,000.00 2,085,606.00

Including£º Sinopharm Zhaoqing - 1,518,000.00

Sinopharm Wuzhou - 567,606.00

Sinopharm Jiangmen 9,200,000.00 -

-

Net cash outflow on acquisition of the subsidiaries

and business 9,452,000.00 2,211,778.91

(c) Cash

31 December 2015 31 December 2014

Cash on hand 109,096.17 41,627.16

Call deposits with banks 1,569,117,208.19 854,170,379.68

Cash 1,569,226,304.36 854,212,006.84

- 146 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

V Shares and rights in other companies

(1) Subsidiaries

(a) The composition of the Group

Company name Place of Place of Nature of

Equity interest held (%) Mode of acquisition

operation registration business

Direct Indirect

Sinopharm Guilin Guilin Guilin Commercial - 100.00% Set up

Sinopharm Baise Baise Baise Commercial - 100.00% Set up

Sinopharm Holding Zhongshan Co., Ltd. Zhongshan Zhongshan Commercial 100.00% - Set up

(¡°Sinopharm Zhongshan¡±)

Sinopharm Guigang Guigang Guigang Commercial - 100.00% Set up

Sinopharm Beihai Beihai Beihai Commercial - 100.00% Set up

Guangzhou Medical Guangzhou Guangzhou Commercial - 51.00% Set up

Zhijun Medicine Shenzhen Shenzhen Manufacturing 100.00% - Business combinations involving enterprises

under common control

Sinopharm Holding JianminCo., Ltd. Shenzhen Shenzhen Commercial 100.00% - Business combinations involving enterprises

(¡°Sinopharm Jianming¡±) under common control

Sinopharm Holding Material Co., Ltd. Shenzhen Shenzhen Commercial 100.00% - Business combinations involving enterprises

(¡°Sinopharm Material¡±) under common control

Zhijun Trade Shenzhen Shenzhen Commercial 100.00% - Business combinations involving enterprises

under common control

Sinopharm Holding Shenzhen Logistics Shenzhen Shenzhen Service 100.00% - Business combinations involving enterprises

Co., Ltd. (¡°Shenzhen Logistics¡±) under common control

Sinopharm Holding Guangzhou Co., Ltd. Guangzhou Guangzhou Commercial 100.00% - Business combinations involving enterprises

(¡°Sinopharm Guangzhou¡±) under common control

- 147 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

V Shares and rights in other companies(Continued)

(1) Subsidiaries(Continued)

(a) The composition of the Group(Continued)

Company name Place of Place of Nature of

Equity interest held (%) Mode of acquisition

operation registration business

Direct Indirect

Sinopharm Holding Guangdong Hengxing Guangzhou Guangzhou Commercial 100.00% -

Business combinations involving enterprises

Pharmaceutical Co., Ltd. (¡°Sinopharm

under common control

Hengxing ¡±)

Sinopharm Yulin Yulin Yulin Commercial - 100.00% Business combinations involving enterprises

under common control

Sinopharm Liuzhou Liuzhou Liuzhou Commercial 51.00% - Business combinations involving enterprises

under common control

Guangxi Chinese Herbal Pieces Liuzhou Liuzhou Manufacturing - 51.00% Business combinations involving enterprises

under common control

Guangdong Huixin Investment Co., Ltd. Guangzhou Guangzhou Service 100.00% - Business combinations involving enterprises

(¡°Huixin Investment¡±) under common control

Sinopharm Holding Foshan Co., Ltd. Foshan Foshan Commercial 100.00% - Business combinations involving enterprises

(¡°Sinopharm Foshan¡±) under common control

Sinopharm Holding Guangdong Yuexing Guangzhou Guangzhou Commercial 100.00% - Business combinations involving enterprises

Co., Ltd. (¡°Sinopharm Yuexing¡±) under common control

Sinopharm Holding Guangdong Logistics Guangzhou Guangzhou Service 100.00% - Business combinations involving enterprises

Co., Ltd. (¡°Guangdong Logistics¡±) under common control

Sinopharm Guangxi Nanning Nanning Commercial 100.00% - Business combinations involving enterprises

under common control

Guangxi Logistics Nanning Nanning Service - 100.00% Business combinations involving enterprises

under common control

Pingshan Medicine Shenzhen Shenzhen Manufacturing 100.00% - Business combinations involving enterprises

under common control

Sinopharm Wuzhou Wuzhou Wuzhou Commercial - 99.90% Business combinations involving enterprises

under common control

- 148 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

V Shares and rights in other companies(Continued)

(1) Subsidiaries (continued)

(a) The composition of the Group(continued)

Company name Place of Place of Nature of

Equity interest held (%) Mode of acquisition

operation registration business

Direct Indirect

Sinopharm Group Zhijun (Suzhou) Suzhou Suzhou Manufacturing 100.00% -

Business combinations involving

Pharmaceutical Co. Ltd.( ¡°Zhijun

enterprises not under common control

Suzhou¡±)

Sinopharm holding Dongguan Co., Dongguan Dongguan Commercial 100.00% - Business combinations involving

Ltd.(¡°Sinopharm Dongguan¡±) enterprises not under common control

Sinopharm Holding Zhanjiang Co., Zhanjiang Zhanjiang Commercial 100.00% - Business combinations involving

Ltd.(¡°Sinopharm Zhanjiang¡±) enterprises not under common control

Sinopharm holding Shenzhen Shenzhen Shenzhen Commercial 51.00% - Business combinations involving

Yanfeng Co.,Ltd(¡°Sinopharm enterprises not under common control

Yanfeng¡±)

Sinopharm Holding Meizhou Co., Meizhou Meizhou Commercial 100.00% - Business combinations involving

Ltd.(¡°Sinopharm Meizhou¡±) enterprises not under common control

Sinopharm Holding Huizhou Co., Huizhou Huizhou Commercial 100.00% - Business combinations involving

Ltd.(¡°Sinopharm Huizhou¡±) enterprises not under common control

Sinopharm Holding Zhaoqing Co., Zhaoqing Zhaoqing Commercial 100.00% - Business combinations involving

Ltd.(¡°Sinopharm Zhaoqing¡±) enterprises not under common control

Sinopharm Holding Jiangmen Co., Jiangmen Jiangmen Commercial 100.00% - Business combinations involving

Ltd.(¡°Sinopharm Jiangmen¡±) enterprises not under common control

Sinopharm Holding Shaoguan Co., Shaoguan Shaoguan Commercial 70.00% - Business combinations involving

Ltd. (¡°Sinopharm shaoguan¡±) enterprises not under common control

Sinopharm Holding Shantou Co., Shantou Shantou Commercial 70.00% - Business combinations involving

Ltd. (¡°Sinopharm Shantou¡±) enterprises not under common control

(b) There is no subsidiary of significant minority interest in the Group.

- 149 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VI Segment information

The reportable segments of the Group are the business units that provide different products or service.

Different businesses require different technologies and marketing strategies, the Group, therefore, separately

manages the production and operation of each reportable segment and evaluates their operating results

respectively, in order to make decisions about resources to be allocated to these segments and to assess their

performance.

The Group identified 3 reportable segments as follows:

- The Group, which is mainly engaged in investing and managing business;

- Pharmaceutical distribution, which is mainly engaged in distribution of medicine and pharmaceutical

products to customers;

- Pharmaceutical manufacturing, which is mainly engaged in the manufacture medicine.

Inter-segment transfers are measured by reference to sales to third parties.

The assets and liabilities are allocated based on the operations of the segment.

- 150 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VI Segment information (continued)

(a) Segment information as at and for the year ended 31 December 2015 is as follows:

Pharmaceutical

The Group Pharmaceutical distribution manufacturing Elimination Total

Revenue from external customers 7,243,599.26 24,324,922,164.84 1,660,973,513.74 - 25,993,139,277.84

Inter-segment revenue 5,072,971.94 137,267.26 16,343,903.48 (21,554,142.68) -

Interest income 80,709,236.38 4,365,919.34 1,866,561.42 (81,296,964.92) 5,644,752.22

Interest expense (7,814,558.58) (180,595,893.78) (12,317,127.04) 81,296,964.92 (119,430,614.48)

Share of profit of subsidiaries 514,513,119.53 - - (514,513,119.53) -

Share of profit of associates 57,413,887.70 - - - 57,413,887.70

Impairment (743.90) (29,824,897.07) (7,291,966.85) - (37,117,607.82)

Depreciation and amortizations (3,340,915.24) (40,922,104.06) (71,144,698.65) - (115,407,717.95)

Gross profit 621,786,776.69 561,227,805.87 292,806,392.09 (514,513,119.53) 961,307,855.12

Income taxes (13,299,365.55) (122,190,610.25) (38,469,970.10) - (173,959,945.90)

Net profit 608,487,411.14 439,037,195.62 254,336,421.99 (514,513,119.53) 787,347,909.22

Total assets 4,946,455,986.64 8,173,854,085.59 2,329,671,348.37 (2,231,631,685.29) 13,218,349,735.31

Total liabilities (829,482,043.08) (7,684,776,339.79) (1,188,416,365.91) 2,050,799,970.74 (7,651,874,778.04)

Long-term equity investment in

associates 180,831,714.55 - - - 180,831,714.55

Capital Expenditure 923,459.43 44,997,613.41 247,773,272.61 - 293,694,345.45

- 151 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VI Segment information (continued)

(b) Segment information as at and for the year ended 31 December 2014 is as follows:

Pharmaceutical

The Group Pharmaceutical distribution manufacturing Elimination Total

Revenue from external customers 5,364,516.62 22,294,891,231.68 1,654,075,279.75 - 23,954,331,028.05

Inter-segment revenue 2,609,400.00 469,251.11 18,259,142.62 (21,337,793.73) -

Interest income 109,586,272.11 3,131,361.49 2,128,404.26 (105,727,271.62) 9,118,766.24

Interest expense (7,523,455.19) (242,161,105.59) (9,329,092.66) 105,727,271.62 (153,286,381.82)

Share of profit of subsidiaries 476,869,119.31 - - (476,869,119.31) -

Share of profit of associates 50,415,836.33 - - - 50,415,836.33

Impairment (121,038,941.30) (8,422,995.39) (39,747,619.31) 115,150,000.00 (54,059,556.00)

Depreciation and amortizations (5,977,874.35) (36,826,711.14) (70,184,163.65) - (112,988,749.14)

Gross profit 467,781,043.87 471,246,928.35 251,974,585.39 (361,719,119.31) 829,283,438.30

Income taxes (15,881,020.71) (117,652,091.12) (25,909,158.60) - (159,442,270.43)

Net profit 451,900,023.16 353,594,837.23 226,065,426.79 (361,719,119.31) 669,841,167.87

Total assets 4,629,689,645.10 7,725,031,105.57 1,814,239,438.38 (1,340,018,648.15) 12,828,941,540.90

Total liabilities (531,149,514.89) (7,551,059,313.25) (1,077,931,077.41) 1,182,413,801.30 (7,977,726,104.25)

Long-term equity investment in

associates 157,604,846.85 - - - 157,604,846.85

Capital Expenditure 246,333,402.90 19,028,382.38 42,449,925.32 - 307,811,710.60

- 152 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VII Lease

(1) Financing lease assets

Fixed asset Construction in progress Total

Cost and Net value

31 December 2015 7,215,410.60 4,231,000.00 11,446,410.60

31 December 2014 - - -

(2) Minimum lease payments

The Group leases assets through financing lease, the future minimum lease payments are as follows:

31 December 2015 31 December 2014

Within 1 year 2,833,548.88 -

1 to 2 years 2,833,548.88 -

2 to 3 years 2,833,548.88 -

Over 3 years 4,250,579.73 -

12,751,226.37 -

As of 31 December 2015, unrecognized financing charges amounted to RMB2,421,808.48(As of 31 December

2014:Nil).

- 153 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions

(1) The parent company

(a) General information of the parent company:

Place of Legal

Enterprise Type registration representative Principal business

Industrial Investment Holding, Tr

ustee of pharmaceutical enterpri

se, Assets Reorganization, Distri

Company limited bution and retailof medicines an

Sinopharm Group by shares Shanghai Wei Yulin d pharmaceutical products, etc

The Company¡¯s ultimate controlling equity holder is CNPGC.

(b) Registered capital and changes in registered capital of the parent company

31 December 2015

and31 December 2014

(RMB¡¯0,000)

Sinopharm Group 276,709.51

(c) The proportions of equity interests and voting rights in the Company held by the parent company:

31 December 2015

% interest held % voting rights

Sinopharm Group 51.00 51.00

(2) Subsidiaries of the Company

The general background and other related information of the subsidiaries is set out in Note V.

(3) Associates

Enterprise Place of Legal Principal Register % interest % voting

Type Registration Representative business capital held rights

Wanle Foreign Medicine

Medical capital Shenzhen Yan Zhigang manufacture USD19,544,550 35.19% 33.33%

Sinopharm Company

Zhuhai limited Zhuhai Li Xianjiang Commercial RMB3,100,000 10.00% 10.00%

- 154 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(4) Other related parties

Relationship with the Company

Sino-Swed Pharmaceutical Corp.Ltd. Associate of CNPGC

China Otsuka Pharmaceutical Co., Ltd. Associate of CNPGC

Shanghai Sailun Biological Technology Co., Ltd. Associate of CNPGC

Changchun Changsheng Gene Pharmaceutical Co., Ltd. Associate of CNPGC

Shenzhen Wanwei Medicine trading Co., Ltd. Subsidiary of Wanle Medica

Sichuan Kang Daxin Pharmaceutical Co., Ltd Associate of Sinopharm Group

Shanghai Wanli Medical Beauty Clinic Limited Associate of Sinopharm Group

Yichang Humanwell Pharmaceutical Co., Ltd. Associate of Sinopharm Group

Shanghai Fosun Pharmaceutical (Group) Co., Ltd.("Fosun Shareholders have signigicant

Pharm") influence on Sinopharm Group

Foshan Chancheng Pharmaceutical Co., Ltd Subsdiary of Fosun Pharm

Chongqing Yaoyou Pharmaceutical Co., Ltd. Subsdiary of Fosun Pharm

Foshan Chancheng District Central Hospital Subsdiary of Fosun Pharm

Foshan Chanyixing Medicine Development Co Ltd Subsdiary of Fosun Pharm

NanJing Iron & Steel Co., Ltd. Subsdiary of Fosun Pharm

Nanjing Iron & Steel Group International Trade Co., Ltd Subsdiary of Fosun Pharm

Sichuan Hexin Pharmaceutical Co., Ltd. Subsdiary of Fosun Pharm

Jiangsu Wanbang Pharmacy Marketing Co., Ltd. Subsdiary of Fosun Pharm

Chongqing Haisiman Pharmaceutical Co., Ltd. Subsdiary of Fosun Pharm

Guilin South pharmaceutical Co., Ltd. Subsdiary of Fosun Pharm

Shenyang Hongqi Pharmaceutical Co., Ltd. Subsdiary of Fosun Pharm

Hunan Dongting Pharmaceutical Co., Ltd. Subsdiary of Fosun Pharm

Handan Pharmaceutical Co., Ltd Subsdiary of Fosun Pharm

Suzhou Erye Pharmaceutical Limited Company Subsdiary of Fosun Pharm

Shanghai Chaohui Pharmecurical Co., Ltd. Subsdiary of Fosun Pharm

Jiangsu Huanghe Pharmaceutical Co., Ltd Subsdiary of Fosun Pharm

China Sinopharm International Corporation Controlled by CNPGC

Sinopharm Group Guangdong Medicine Device Co., Ltd. Controlled by CNPGC

China National Scientific Instruments & Materials Imp/Exp

Shenzhen Co., Ltd Controlled by CNPGC

Qinghai Medical Pharmaceutical Material Co., Ltd. Controlled by CNPGC

Guang dong South Pharmaceutical Foreign Trade Co., Ltd. Controlled by CNPGC

Beijing Fusheng Tiandi Property Management Ltd. Controlled by CNPGC

Heilongjiang Sinopharm Medical Herbs Co., Ltd. Controlled by CNPGC

Sinopharm Fortuneway Company Controlled by CNPGC

Sinopharm (Shanghai) E-Health Co,.Ltd. Controlled by CNPGC

China National Pharmaceutical Foreign Trade Co., Ltd. Controlled by CNPGC

Sinopharm United Engineering Corporation Controlled by CNPGC

Huayi Pharmaceutical Co., Ltd Controlled by CNPGC

Sinopharm Chongqing Pharmaceutical and Medical Industry

Design Institute Controlled by CNPGC

Chinese Science Equipment Co., Ltd Controlled by CNPGC

Shanghai Institute of Pharmaceutical Industry Controlled by CNPGC

Reed Sinopharm Exhibitions Co., Ltd. Controlled by CNPGC

Shanghai Xinshengyuan Pharmaceutical Co., Ltd. Controlled by CNPGC

Wuhan Institute of Biological Products Co., Ltd. Controlled by CNPGC

Chengdu Rongsheng Pharmacy Co., Ltd. Controlled by CNPGC

Winteam Pharmaceutical Group Ltd. Controlled by CNPGC

Group Financial Co Controlled by CNPGC

Qinghai Pharmaceutical Factory Co., Ltd. Controlled by CNPGC

Beijing Huasheng Pharmaceutical Biotechnology Development

Co., Ltd. Controlled by CNPGC

Lanzhou Institute of Biological Products Co., Ltd. Controlled by CNPGC

Anhui Jingfang Pharmaceutical Co., Ltd. Controlled by CNPGC

Sinopharm Group Rongsheng Pharmaceutical Co., Ltd. Controlled by CNPGC

Guizhou Tongjitang Pharmaceutical Co., Ltd. Controlled by CNPGC

- 155 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(4) Other related parties (continued)

Relationship with the Company

Shanghai Shyndec Pharmaceutical Co., Ltd. Controlled by CNPGC

Foshan Dezhong Pharmaceutical Co., Ltd. Controlled by CNPGC

Foshan Fengliaoxing Pharmaceutical Co., Ltd. Controlled by CNPGC

Shanghai Shyndec Pharmaceutical Marketing Co., Ltd Controlled by CNPGC

Qinghai Pharmaceutical(group) Co., Ltd Controlled by CNPGC

Wuhan Zhonglian Pharmaceutical Group Co., Ltd. Controlled by CNPGC

Shandong Lu Ya Pharmaceutical Co., Ltd. Controlled by CNPGC

Sinopharm United Medical Device Co., Ltd Controlled by CNPGC

Shanghai Modern Hasen (Shangqiu) Pharmacertical Co., Ltd. Controlled by CNPGC

Guangdong Medi-World Pharmacertical Co., Ltd. Controlled by CNPGC

Sinopharm Group Shanghai Medicine Device Co., Ltd. Controlled by CNPGC

Foshan Fengliaoxing Pharmaceutical Co., Ltd. Controlled by CNPGC

The Fourth Pharmaceutical Co., Ltd. of Zhonglian Group Controlled by CNPGC

Wuhan Zhonglian Pharmaceutical Group Co., Ltd. Controlled by CNPGC

Guizhou Longlife Pharmacertical Co., Ltd. Controlled by CNPGC

Sinopharm Group Beijing Medical equipment Co., Ltd. Controlled by CNPGC

Sinopharm Group Weiqida Medicine Co., Ltd. Controlled by CNPGC

China State Institute of Pharmaceutical Industry Controlled by CNPGC

China Traditional Chinese Medicine Co. Controlled by CNPGC

China National Pharmaceutical Industry Co., Ltd. Controlled by CNPGC

Sinopharm Guangdong Medical Examination Co., Ltd. Controlled by CNPGC

Sinopharm Industrial Medicine Trading Co., Ltd. Controlled by CNPGC

Sichuan Jiangyouzhongbafuzi Technology Development Co., Ltd Controlled by Sinopharm Group

Foshan Nanhai Uptodate & Special Medicines Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Hunan Co., Ltd. Controlled by Sinopharm Group

Foshan Nanhai Medicine Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Shandong Co., Ltd. Controlled by Sinopharm Group

Sinopharm Sichuan Pharmaceutical Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Beijing Co., Ltd. Controlled by Sinopharm Group

Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co.,

Ltd. Controlled by Sinopharm Group

Sinopharm Holding Guoda Drug Store Guangdong Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Hainan Co., Ltd. Controlled by Sinopharm Group

Sinopharm Group Xinjiang Special Drugs National Pharmaceutical

Co., Ltd. Controlled by Sinopharm Group

Sinopharm Le -Ren-Tang Medicine Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Hubei Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Beijing Huahong Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Ningxia Co., Ltd. Controlled by Sinopharm Group

Guangdong Dong Fang Uptodate & Special Medicines Co., Ltd. Controlled by Sinopharm Group

Sinopharm Guoda Drug Store Guangxi Chain Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Sub Marketing Center Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Wenzhou Co., Ltd. Controlled by Sinopharm Group

Sinopharm Group Southwest Medicine Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Tianjin Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Hainan Hongyi Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Nantong Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical

Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Yunnan Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Jinzhou Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Henan Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Fuzhou Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Shenyang Co., Ltd. Controlled by Sinopharm Group

Sinopharm GroupShanxi Co., Ltd. Controlled by Sinopharm Group

- 156 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(4) Other related parties (continued)

Relationship with the Company

Sinopharm Holding Zhejiang Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Shanxi Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Guizhou Co., Ltd. Controlled by Sinopharm Group

Sinopharm Guoda Drug Store Jiangmen Chain Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Yangzhou Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Chengdu Co., Ltd Controlled by Sinopharm Group

Sinopharm Holding Heilongjiang Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Fujian Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Gansu Co., Ltd. Controlled by Sinopharm Group

China National Medicines Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Qinghai Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Jilin Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Yancheng Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Lunan Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Wuxi Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Xuzhou Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Suzhou Kangmin Pharmaceutical Co., Ltd Controlled by Sinopharm Group

Sinopharm Holding Taizhou Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Guoda Pharmacy Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Qingdao Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Dalian Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Inner Mongolia Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Quanzhou Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Chongqing Co., Ltd. Controlled by Sinopharm Group

Sinopharm Lerentang Tangshan Medicine Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Longyan Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Ningde Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Tianjin North Medicine Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Putian Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Changzhou Medical logistics center Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Sanming Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Jiangsu Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Anhui Co., Ltd. Controlled by Sinopharm Group

Sinopharm Lerentang Qinhuangdao Medicine Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Changde Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Jiangxi Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Yantai Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Hongkong International Co., Ltd Controlled by Sinopharm Group

Sinopharm Holding Suzhou Co., Ltd. Controlled by Sinopharm Group

Hetian Region Ankang Chain

Drugstore Co., Ltd. Controlled by Sinopharm Group

Shanghai Merro Pharmaceutical Co., Ltd. Controlled by Sinopharm Group

Shanghai Donghong Medicine Co., Ltd. Controlled by Sinopharm Group

Sinopharm Group Medicine Logistic Co., Ltd. Controlled by Sinopharm Group

Shanxi Guoyi Drug Store Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Wuhu Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Anqing Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Anyang Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding ChiFeng Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Zhangzhou Co., Ltd. Controlled by Sinopharm Group

- 157 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(4) Other related parties (continued)

Relationship with the Company

Sinopharm Holding Zhoukou Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding LuoyangCo., Ltd. Controlled by Sinopharm Group

Sinopharm Yixin Pharmaceutical Co., Ltd Controlled by Sinopharm Group

Sinopharm Holding Jiling Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Zunyi Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Qianxinan Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Dezhou Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Changzhou Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding (Yangzhou) Chinese Western Medicine

Branch Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Beijing Kangchen Bio-Pharmaceutical Co.,

Ltd. Controlled by Sinopharm Group

Sinopharm Holding Xinyu Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Shangqiu Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Benzhou Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Shanxi Linfen Co., Ltd Controlled by Sinopharm Group

Sinopharm Holding Xinxiang Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Puyang Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding HongKong Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Huaian Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Jinan Co., Ltd. Controlled by Sinopharm Group

Sichuan Zhongwei Pharmaceutical Co. Ltd. Controlled by Sinopharm Group

Guoda Shenyang Tianyitang

Pharmacy Chain Store Co.,

Ltd. Controlled by Sinopharm Group

Sinopharm Xinjiang Korla Pharmaceutical Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co.,

Ltd. Controlled by Sinopharm Group

Sinopharm Holding Kaifeng Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Dandong Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Nanping Co., Ltd. Controlled by Sinopharm Group

Shanghai Nutraceuticals (Shanghai) Co., Ltd. Controlled by Sinopharm Group

Shanghai Tongyu Information Technology Co., Ltd. Controlled by Sinopharm Group

Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Jingmen Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Zhejiang Biological Product Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Tongliao Co., Ltd. Controlled by Sinopharm Group

Shanghai Yunnuo Marketing Consulting Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Financing Lease Co., Ltd Controlled by Sinopharm Group

Sinopharm Holding Guoda Drug Store Guangzhou Chain Co., Ltd. Controlled by Sinopharm Group

Sinopharm Group Chemical Reagent Co., Ltd. Controlled by Sinopharm Group

Beijing Tongyu Information Technology Co., Ltd Controlled by Sinopharm Group

Sinopharm Group Chemical Reagent Suzhou Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Hunan Guoda Minshengtang Drug Store

Chain Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Tianjin Binhai Pharmaceutical Co., Ltd Controlled by Sinopharm Group

Sinopharm Holding Fuyang Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Huainan Co., Ltd. Controlled by Sinopharm Group

Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co.,

Ltd. Controlled by Sinopharm Group

Shanghai Nutraceuticals (Shanghai) Co., Ltd. Controlled by Sinopharm Group

Sinopharm Group Guorui Medicine Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Lerentang Pharmaceutical Co., Ltd Controlled by Sinopharm Group

Sinopharm Holding Liaocheng Co., Ltd. Controlled by Sinopharm Group

Sinopharm Guoda Drug Store(Shenzhen) Chain Co., Ltd. Controlled by Sinopharm Group

- 158 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(4) Other related parties (continued)

Relationship with the Company

Sinopharm Holding Macheng Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Nanping Newforce Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Jiayun Trading Co., Ltd. Controlled by Sinopharm Group

Sinopharm Holding Huaideju Pharmaceutical (Xiamen)Co.,

Ltd. Controlled by Sinopharm Group

Sinopharm Holding Sanyi Medicine(Wuhu) Co., Ltd. Controlled by Sinopharm Group

China National Pharmaceutical Group Shanghai Co., Ltd. Controlled by Sinopharm Group

Foshan Nanhai Medicine Group Co., Ltd. Controlled by Sinopharm Group

Family member of minority interest of

Wang Yang subsidiary

Jiang Meng Renren Medical instrument Co., Ltd. Controlled by subsidiary's key management

Shaoguan Wujiang District Muyang Medicine Information

Consultant Co., Ltd. Controlled by minority interest of subsidiary

- 159 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(5) Related party transactions

(a) Purchase of goods

2015 2014

Amount % of same Amount % of same

Related party Pricing policies (RMB¡¯0,000) transaction (RMB¡¯0,000) transaction

Sinopharm Holding Sub Marketing Center Co., Ltd. Market price 94,434.72 2.98% 86,483.65 4.33%

Sinopharm Group Market price 51,204.61 1.62% 52,042.45 2.60%

China National Medicines Co., Ltd. Market price 38,117.92 1.20% 31,797.67 1.59%

Sino-Swed Pharmaceutical Corp.Ltd. Market price 8,779.94 0.28% 7,987.68 0.40%

Guang dong South Pharmaceutical Foreign Trade

Co., Ltd. Market price 7,670.37 0.24% 5,517.77 0.28%

Foshan Nanhai Uptodate & Special Medicines Co.,

Ltd. Market price 6,279.89 0.20% 868.67 0.04%

Shenzhen Wanwei Medicine trading Co., Ltd. Market price 5,687.86 0.18% 6,963.97 0.35%

Jiangsu Wanbang Pharmacy Marketing Co., Ltd. Market price 4,833.08 0.15% 3,559.06 0.18%

Chongqing Yaoyou Pharmaceutical Co., Ltd. Market price 2,790.61 0.09% 1,681.69 0.08%

Lanzhou Institute of Biological Products Co., Ltd. Market price 2,476.90 0.08% 1,401.60 0.07%

Winteam Pharmaceutical Group Ltd. Market price 2,357.30 0.07% 2,946.34 0.15%

Guangdong Dong Fang Uptodate & Special

Medicines Co., Ltd. Market price 2,277.95 0.07% 555.59 0.03%

Sinopharm Holding Guizhou Co., Ltd. Market price 1,791.32 0.06% 1,549.58 0.08%

Wanle Medical Market price 1,686.05 0.05% 1,521.59 0.08%

Sinopharm Group Weiqida Medicine Co., Ltd. Market price 1,589.74 0.05% 226.19 0.01%

Chengdu Rongsheng Pharmacy Co., Ltd. Market price 1,495.16 0.05% 2,541.94 0.13%

Wuhan Institute of Biological Products Co., Ltd. Market price 964.42 0.03% 908.17 0.05%

Foshan Nanhai Medicine Co., Ltd. Market price 874.59 0.03% 76.58 0.00%

Qinghai Pharmaceutical Factory Co., Ltd. Market price 451.44 0.01% 465.61 0.02%

Chongqing Haisiman Pharmaceutical Co., Ltd. Market price 357.29 0.01% 909.82 0.05%

Sinopharm Holding Beijing Tianxing Puxin Biological

Medical Co., Ltd. Market price 312.25 0.01% - 0.00%

Guizhou Tongjitang Pharmaceutical Co., Ltd. Market price 309.47 0.01% 315.33 0.02%

Sinopharm Holding Hunan Co., Ltd. Market price 287.69 0.01% 1,008.98 0.05%

Sinopharm Holding Beijing Huahong Co., Ltd. Market price 276.20 0.01% 165.29 0.01%

Sinopharm Holding Hubei Co., Ltd. Market price 252.29 0.01% 3,245.47 0.16%

Sichuan Hexin Pharmaceutical Co., Ltd. Market price 247.82 0.01% - 0.00%

China National Scientific Instruments & Materials

Imp/Exp Shenzhen Co., Ltd Market price 216.09 0.01% - 0.00%

Sinopharm Holding Beijing Co., Ltd. Market price 212.24 0.01% 356.62 0.02%

Shanghai Shyndec Pharmaceutical Co., Ltd. Market price 133.55 0.00% 152.89 0.01%

Sinopharm Group Rongsheng Pharmaceutical Co.,

Ltd. Market price 131.08 0.00% 101.35 0.01%

China Otsuka Pharmaceutical Co., Ltd. Market price 126.48 0.00% 81.19 0.00%

Beijing Huasheng Pharmaceutical Biotechnology

Development Co., Ltd. Market price 116.59 0.00% 269.29 0.01%

Anhui Jingfang Pharmaceutical Co., Ltd. Market price 104.67 0.00% 91.19 0.00%

Sinopharm Holding Lerentang Pharmaceutical Co.,

Ltd Market price 93.61 0.00% - 0.00%

Sinopharm Holding Chengdu Co., Ltd Market price 88.82 0.00% - 0.00%

Foshan Fengliaoxing Pharmaceutical Co., Ltd. Market price 82.70 0.00% 47.90 0.00%

Shanghai Shyndec Pharmaceutical Marketing Co., Ltd Market price 80.02 0.00% - 0.00%

To next page 239,192.73 7.53% 215,841.12 10.81%

- 160 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(5) Related party transactions (continued)

(a) Purchase of goods (continued)

2015 2014

Amount % of same Amount % of same

Related party Pricing policies (RMB¡¯0,000) transaction (RMB¡¯0,000) transaction

continued 239,192.73 7.53% 215,841.12 10.81%

Shanghai Sailun Biological Technology Co., Ltd. Market price 77.00 0.00% - 0.00%

Sinopharm Group Chemical Reagent Co., Ltd. Market price 76.59 0.00% 85.02 0.00%

China Sinopharm International Corporation Market price 68.44 0.00% - 0.00%

Wuhan Zhonglian Pharmaceutical Group Co., Ltd. Market price 66.14 0.00% 38.04 0.00%

China National Pharmaceutical Foreign Trade Co.,

Ltd. Market price 63.30 0.00% 113.37 0.01%

Yichang Humanwell Pharmaceutical Co., Ltd. Market price 53.11 0.00% 3.73 0.00%

Guilin South pharmaceutical Co., Ltd. Market price 46.55 0.00% 48.34 0.00%

Sinopharm Zhuhai Market price 39.52 0.00% - 0.00%

Shenyang Hongqi Pharmaceutical Co., Ltd. Market price 31.13 0.00% 23.43 0.00%

Sinopharm Group Southwest Medicine Co., Ltd. Market price 30.51 0.00% 93.07 0.00%

Sinopharm Group Guorui Medicine Co., Ltd. Market price 23.42 0.00% 37.23 0.00%

Handan Pharmaceutical Co., Ltd Market price 19.46 0.00% 27.62 0.00%

Sinopharm Group Chemical Reagent Suzhou Co.,

Ltd. Market price 17.87 0.00% 19.46 0.00%

Sinopharm Holding Fujian Co., Ltd. Market price 14.56 0.00% 53.29 0.00%

Sinopharm Group Shanghai Medicine Device Co.,

Ltd. Market price 14.10 0.00% 5.53 0.00%

Sinopharm Xingsha Pharmaceuticals (Xiamen) Co.,

Ltd. Market price 13.81 0.00% 15.67 0.00%

Sichuan Jiang You Zhong Ba Science and

Technology Development Co., Ltd. Market price 12.74 0.00% 3.72 0.00%

Shanghai Modern Hasen (Shangqiu) Pharmacertical

Co., Ltd. Market price 10.87 0.00% 18.68 0.00%

Hunan Dongting Pharmaceutical Co., Ltd. Market price 10.86 0.00% 6.97 0.00%

Sinopharm Holding Luoyang Co., Ltd. Market price 9.71 0.00% 6.51 0.00%

Suzhou Erye Pharmaceutical Limited Company Market price 9.54 0.00% 13.29 0.00%

Sinopharm Holding Suzhou Co., Ltd. Market price 8.22 0.00% (1.16) 0.00%

Sinopharm Holding Hainan Co., Ltd. Market price 4.44 0.00% 17.82 0.00%

Sinopharm Guoda Drug Store(Shenzhen) Chain

Co., Ltd. Market price 3.99 0.00% 3.88 0.00%

Sinopharm Holding Fuzhou Co., Ltd. Market price 2.92 0.00% - 0.00%

Sinopharm Group Xinjiang Special Drugs National

Pharmaceutical Co., Ltd. Market price 2.86 0.00% - 0.00%

Sinopharm Holding Dalian Co., Ltd. Market price 1.41 0.00% - 0.00%

Sinopharm Holding Hainan Hongyi Co., Ltd. Market price 0.59 0.00% 1.65 0.00%

Sinopharm Holding Shaanxi Co., Ltd. Market price 0.52 0.00% 0.61 0.00%

Sinopharm Guangdong Medical Experiment Co.,

Ltd. Market price 0.06 0.00% - 0.00%

Sinopharm Holding Shanxi Co., Ltd. Market price - 0.00% 114.76 0.01%

Sinopharm Holding Beijing Kangchen Bio-

Pharmaceutical Co., Ltd. Market price - 0.00% 102.52 0.01%

China National Pharmaceutical Industry Co., Ltd. Market price - 0.00% 36.59 0.00%

Sinopharm Holding Heilongjiang Co., Ltd. Market price - 0.00% 13.19 0.00%

Sinopharm Holding Inner Mongolia Co., Ltd. Market price - 0.00% 6.68 0.00%

Sinopharm Yixin Medicine Co., Ltd. Market price - 0.00% 6.11 0.00%

Sinopharm Holding Henan Co., Ltd. Market price - 0.00% 2.08 0.00%

Sinopharm Holding Dezhou Co., Ltd. Market price - 0.00% 1.10 0.00%

Sinopharm Holding Shandong Co., Ltd. Market price - 0.00% 0.67 0.00%

Jiangsu Huanghe Pharmaceutical Co., Ltd Market price - 0.00% 0.49 0.00%

Sinopharm Holding Ningxia Co., Ltd. Market price - 0.00% 0.26 0.00%

Guizhou Longlife Pharmacertical Co., Ltd. Market price - 0.00% (0.77) 0.00%

Sinopharm Holding Macheng Co., Ltd. Market price (0.02) 0.00% 602.58 0.03%

Guangdong Medi-World Pharmacertical Co., Ltd. Market price (0.04) 0.00% (0.03) 0.00%

Shandong Lu Ya Pharmaceutical Co., Ltd. Market price (0.06) 0.00% 34.91 0.00%

Sinopharm Holding Sanyi Medicine(Wuhu) Co., Ltd. Market price (0.11) 0.00% - 0.00%

Sinopharm Holding Jiangsu Co., Ltd. Market price (1.94) 0.00% 3.23 0.00%

Total 239,924.80 7.53% 217,401.26 10.87%

- 161 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(5) Related party transactions (continued)

(b) Sales of goods

2015 2014

Amount % of same Amount % of same

Related party Pricing policies (RMB¡¯0,000) transaction (RMB¡¯0,000) transaction

Foshan Nanhai Uptodate & Special

Medicines Co., Ltd. Market price 14,703.37 0.57% 14,721.88 0.62%

Sinopharm Holding Hunan Co., Ltd. Market price 13,394.25 0.52% 14,592.53 0.61%

Foshan Nanhai Medicine Co., Ltd. Market price 10,821.93 0.42% 6,995.23 0.29%

Sinopharm Holding Shandong Co., Ltd. Market price 9,288.90 0.36% 6,360.19 0.27%

Sinopharm Sichuan Pharmaceutical Co.,

Ltd. Market price 8,660.33 0.33% 3,271.61 0.14%

Sinopharm Holding Beijing Co., Ltd. Market price 8,418.03 0.33% 7,288.30 0.31%

Sinopharm Group (Tianjin) Eastern

Bokang Pharmaceutical Co., Ltd. Market price 7,815.74 0.30% 5,397.07 0.23%

Sinopharm Holding Guoda Drug Store

Guangdong Co., Ltd. Market price 7,251.97 0.28% 6,559.60 0.27%

Sinopharm Holding Hainan Co., Ltd. Market price 6,937.47 0.27% 7,756.87 0.32%

Sinopharm Group Xinjiang Special Drugs

National Pharmaceutical Co., Ltd. Market price 6,222.85 0.24% 5,840.71 0.24%

Sinopharm Le -Ren-Tang Medicine Co.,

Ltd. Market price 6,009.13 0.23% 6,965.02 0.29%

Sinopharm Holding Hubei Co., Ltd. Market price 5,682.20 0.22% 9,950.42 0.42%

Sinopharm Holding Beijing Huahong Co.,

Ltd. Market price 4,848.83 0.19% 5,979.32 0.25%

Sinopharm Holding Ningxia Co., Ltd. Market price 4,409.05 0.17% 4,216.48 0.18%

Guangdong Dong Fang Uptodate &

Special Medicines Co., Ltd. Market price 3,765.71 0.15% 1,709.62 0.07%

Sinopharm Guoda Drug Store Guangxi

Chain Co., Ltd. Market price 3,120.69 0.12% 3,149.68 0.13%

Sinopharm Holding Sub Marketing Center

Co., Ltd. Market price 3,034.21 0.12% 4,514.20 0.19%

Sinopharm Holding Wenzhou Co., Ltd. Market price 2,902.64 0.11% 2,868.69 0.12%

Sinopharm Group Southwest Medicine

Co., Ltd. Market price 2,894.13 0.11% 2,875.67 0.12%

Sinopharm Holding Tianjin Co., Ltd. Market price 2,662.59 0.10% 2,483.16 0.10%

Sinopharm Holding Hainan Hongyi Co.,

Ltd. Market price 2,659.25 0.10% 2,263.41 0.09%

Sinopharm Holding Nantong Co., Ltd. Market price 2,517.77 0.10% 2,628.01 0.11%

Sinopharm Group Market price 2,321.13 0.09% 2,633.35 0.11%

Sinopharm Holding Xinjiang Special

Drugs Western Pharmaceutical Co., Ltd. Market price 2,259.65 0.09% 2,481.00 0.10%

Foshan Chancheng Pharmaceutical Co.,

Ltd Market price 2,185.30 0.08% - 0.00%

Sinopharm Holding Yunnan Co., Ltd. Market price 1,925.99 0.07% 1,430.90 0.06%

Sinopharm Holding Jinzhou Co., Ltd. Market price 1,766.68 0.07% 1,739.20 0.07%

Sinopharm Holding Henan Co., Ltd. Market price 1,629.17 0.06% 1,321.87 0.06%

Sinopharm Holding Fuzhou Co., Ltd. Market price 1,565.59 0.06% 1,634.12 0.07%

Sinopharm Holding Shenyang Co., Ltd. Market price 1,324.94 0.05% 1,415.97 0.06%

Sinopharm Holding Shanxi Co., Ltd. Market price 1,198.12 0.05% 1,022.16 0.04%

Sinopharm Holding Zhejiang Co., Ltd. Market price 1,188.61 0.05% 4,199.83 0.18%

Sinopharm Holding Shanxi Co., Ltd. Market price 997.43 0.04% 900.33 0.04%

Sinopharm Holding Guizhou Co., Ltd. Market price 947.88 0.04% 812.84 0.03%

Sinopharm Guoda Drug Store Jiangmen

Chain Co., Ltd. Market price 876.79 0.03% 818.22 0.03%

Sinopharm Holding Yangzhou Co., Ltd. Market price 761.82 0.03% 939.62 0.04%

Sinopharm Holding Chengdu Co., Ltd Market price 749.80 0.03% 6.36 0.00%

Sinopharm Holding Heilongjiang Co., Ltd. Market price 646.18 0.02% 816.18 0.03%

Sinopharm Holding Fujian Co., Ltd. Market price 529.41 0.02% 706.91 0.03%

Sinopharm Holding Gansu Co., Ltd. Market price 495.90 0.02% 348.14 0.01%

China National Medicines Co., Ltd. Market price 491.07 0.02% 514.98 0.02%

Foshan Chancheng District Central

Hospital Market price 399.81 0.02% 971.42 0.04%

Sinopharm Holding Yancheng Co., Ltd. Market price 383.77 0.01% 319.84 0.01%

Sinopharm Holding Qinghai Co., Ltd. Market price 380.15 0.01% 303.66 0.01%

Sinopharm Holding Jilin Co., Ltd. Market price 359.22 0.01% 313.31 0.01%

Sinopharm Holding Lunan Co., Ltd. Market price 308.64 0.01% 115.35 0.00%

Sinopharm Holding Wuxi Co., Ltd. Market price 294.55 0.01% 364.26 0.02%

To next page 164,008.64 6.33% 154,517.49 6.44%

- 162 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(5) Related party transactions (continued)

(b) Sales of goods (continued)

2015 2014

Amount % of same Amount % of same

Related party Pricing policies (RMB¡¯0,000) transaction (RMB¡¯0,000) transaction

continued 164,008.64 6.33% 154,517.49 6.44%

Sinopharm Holding Xuzhou Co., Ltd. Market price 261.08 0.01% 598.05 0.03%

Sinopharm Holding Taizhou Co., Ltd. Market price 224.62 0.01% 177.78 0.01%

Sinopharm Holding Suzhou Kangmin Pharmaceutical

Co., Ltd Market price 221.66 0.01% - 0.00%

Sinopharm Holding Guoda Pharmacy Co., Ltd. Market price 196.49 0.01% 204.77 0.01%

Sinopharm Holding Qingdao Co., Ltd. Market price 195.87 0.01% 388.02 0.02%

Sinopharm Holding Dalian Co., Ltd. Market price 175.86 0.01% 165.83 0.01%

Sinopharm Holding Inner Mongolia Co., Ltd. Market price 171.94 0.01% 257.60 0.01%

Sinopharm Holding Quanzhou Co., Ltd. Market price 160.75 0.01% 163.54 0.01%

Sinopharm Zhuhai Market price 143.93 0.01% - 0.00%

China Sinopharm International Corporation Market price 140.75 0.01% 520.32 0.02%

Sinopharm Holding Chongqing Co., Ltd. Market price 135.58 0.01% 858.13 0.04%

Sinopharm Lerentang Tangshan Medicine Co., Ltd. Market price 133.20 0.01% 198.90 0.01%

Sinopharm Holding Longyan Co., Ltd. Market price 126.10 0.00% 117.99 0.00%

Suzhou Erye Pharmaceutical Limited Company Market price 117.39 0.00% - 0.00%

Sinopharm Group Guangdong Medicine Device Co.,

Ltd. Market price 100.94 0.00% - 0.00%

Sinopharm Holding Shaanxi Co., Ltd. Market price 89.71 0.00% 99.23 0.00%

Chongqing Yaoyou Pharmaceutical Co., Ltd. Market price 79.49 0.00% 1,553.21 0.07%

Sinopharm Holding Ningde Co., Ltd. Market price 79.35 0.00% 98.06 0.00%

Sinopharm Holding Tianjin North Medicine Co., Ltd. Market price 78.43 0.00% 234.31 0.01%

Sinopharm Holding Putian Co., Ltd. Market price 76.29 0.00% 80.36 0.00%

Sinopharm Holding Changzhou Medical logistics

center Co., Ltd. Market price 66.29 0.00% 60.35 0.00%

Sinopharm Holding Sanming Co., Ltd. Market price 56.73 0.00% 31.69 0.00%

Sinopharm Holding Jiangsu Co., Ltd. Market price 49.78 0.00% 46.81 0.00%

Sinopharm Holding Anqing Co., Ltd. Market price 46.58 0.00% 81.18 0.00%

Sinopharm Holding Anhui Co., Ltd. Market price 35.16 0.00% 31.24 0.00%

Jiang Meng Renren Medical instrument Co., Ltd. Market price 34.95 0.00% 8.55 0.00%

Sinopharm Lerentang Qinhuangdao Medicine Co., Ltd. Market price 34.51 0.00% 27.73 0.00%

Sinopharm Holding Changde Co., Ltd. Market price 33.61 0.00% 61.24 0.00%

Sinopharm Holding Jiangxi Co., Ltd. Market price 30.87 0.00% 12.70 0.00%

Sinopharm Holding Yantai Co., Ltd. Market price 28.14 0.00% 46.53 0.00%

China National Scientific Instruments & Materials

Imp/Exp Shenzhen Co., Ltd Market price 24.37 0.00% 20.33 0.00%

Foshan Chanyixing Medicine Development Co Ltd Market price 15.86 0.00% 21.48 0.00%

Qinghai Medical Pharmaceutical Material Co., Ltd. Market price 14.33 0.00% 15.09 0.00%

Sinopharm Group Guorui Medicine Co., Ltd. Market price 13.46 0.00% - 0.00%

Sinopharm Holding Hongkong International Co., Ltd Market price 11.94 0.00% - 0.00%

Sinopharm Holding Suzhou Co., Ltd. Market price 11.40 0.00% 46.14 0.00%

Guang dong South Pharmaceutical Foreign Trade Co.,

Ltd. Market price 11.38 0.00% 510.12 0.02%

Hetian Region Ankang Chain

Drugstore Co., Ltd. Market price 9.22 0.00% - 0.00%

Shanghai Merro Pharmaceutical Co., Ltd. Market price 7.77 0.00% 68.61 0.00%

Beijing Fusheng Tiandi Property Management Ltd. Market price 6.44 0.00% 4.58 0.00%

Shanghai Donghong Medicine Co., Ltd. Market price 6.35 0.00% 116.65 0.00%

Sinopharm Group Medicine Logistic Co., Ltd. Market price 5.77 0.00% 0.00%

Shanxi Guoyi Drug Store Co., Ltd. Market price 5.42 0.00% 4.36 0.00%

Sinopharm Holding Wuhu Co., Ltd. Market price 5.13 0.00% 0.92 0.00%

Wanle Medical Market price 5.13 0.00% - 0.00%

Sichuan Kang Daxin Pharmaceutical Co., Ltd Market price 4.15 0.00% - 0.00%

Sinopharm Holding Zhangzhou Co., Ltd. Market price 3.85 0.00% 2.24 0.00%

Sinopharm Holding Anyang Co., Ltd. Market price 2.98 0.00% 2.09 0.00%

Sinopharm Holding Xinjiang Xinte Karamay

Pharmaceutical Co., Ltd. Market price 2.79 0.00% 2.16 0.00%

To next page 167,502.43 6.45% 161,456.38 6.71%

- 163 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(5) Related party transactions (continued)

(b) Sales of goods (continued)

2015 2014

Amount % of same Amount % of same

Related party Pricing policies (RMB¡¯0,000) transaction (RMB¡¯0,000) transaction

continued 167,502.43 6.45% 161,456.38 6.71%

Sinopharm Holding ChiFeng Co., Ltd. Market price 2.60 0.00% 10.39 0.00%

Sinopharm Holding Zhoukou Co., Ltd. Market price 2.01 0.00% 1.51 0.00%

Sinopharm Holding Jiling Co., Ltd. Market price 1.74 0.00% 2.15 0.00%

Sinopharm Holding Zunyi Co., Ltd. Market price 1.58 0.00% - 0.00%

Sinopharm Holding Qianxinan Co., Ltd. Market price 1.44 0.00% 0.40 0.00%

Heilongjiang Sinopharm Medical Herbs Co., Ltd. Market price 1.36 0.00% 1.77 0.00%

Sinopharm Holding Dezhou Co., Ltd. Market price 1.29 0.00% 1.44 0.00%

Sinopharm Holding Changzhou Co., Ltd. Market price 1.11 0.00% 3.94 0.00%

Sinopharm Holding Shanghai Likang Pharmaceutical

Co., Ltd. Market price 1.08 0.00% 39.16 0.00%

Sinopharm Holding (Yangzhou) Chinese Western

Medicine Branch Co., Ltd. Market price 1.07 0.00% 5.86 0.00%

Sinopharm Holding Beijing Kangchen Bio-

Pharmaceutical Co., Ltd. Market price 1.06 0.00% 106.25 0.00%

Sinopharm Holding Xinyu Co., Ltd. Market price 0.65 0.00% - 0.00%

Sinopharm Holding Shangqiu Co., Ltd. Market price 0.65 0.00% - 0.00%

Sinopharm Holding Benzhou Co., Ltd. Market price 0.37 0.00% 0.47 0.00%

Sinopharm Holding Nanping New Force Co., Ltd. Market price 0.37 0.00% - 0.00%

Sinopharm Jiayun International Trading Co., Ltd. Market price 0.32 0.00% - 0.00%

Sinopharm Holding Shanxi Linfen Co., Ltd Market price 0.19 0.00% - 0.00%

Sinopharm (Shanghai) E-Health Co,.Ltd. Market price 0.18 0.00% 0.20 0.00%

Sinopharm Holding Xinxiang Co., Ltd. Market price 0.09 0.00% 0.27 0.00%

Sinopharm Holding Puyang Co., Ltd. Market price 0.03 0.00% 5.00 0.00%

Sinopharm Holding HongKong Co., Ltd. Market price - 0.00% 18.27 0.00%

Sinopharm Holding Huaian Co., Ltd. Market price - 0.00% 8.89 0.00%

Sinopharm Holding Jinan Co., Ltd. Market price - 0.00% 7.62 0.00%

Guoda Shenyang Tianyitang

Pharmacy Chain Store Co.,

Ltd. Market price - 0.00% 5.54 0.00%

China National Pharmaceutical Foreign Trade Co.,

Ltd. Market price - 0.00% 2.56 0.00%

Sinopharm United Engineering Corporation Market price - 0.00% 2.05 0.00%

Sinopharm Xinjiang Korla Pharmaceutical Co., Ltd. Market price - 0.00% 1.43 0.00%

Sinopharm Holding Beijing Tianxing Puxin Biological

Medical Co., Ltd. Market price - 0.00% 0.96 0.00%

Huayi Pharmaceutical Co., Ltd Market price - 0.00% 0.75 0.00%

Sinopharm Holding Kaifeng Co., Ltd. Market price - 0.00% 0.64 0.00%

Group Financial Co. Market price - 0.00% 0.60 0.00%

Sinopharm Holding Dandong Co., Ltd. Market price - 0.00% 0.54 0.00%

Sinopharm Holding Nanping Co., Ltd. Market price - 0.00% 0.45 0.00%

Shanghai Wanli Medical Beauty Clinic Limited Market price - 0.00% 0.44 0.00%

Shanghai Nutraceuticals (Shanghai) Co., Ltd. Market price - 0.00% 0.33 0.00%

Shanghai Tongyu Information Technology Co., Ltd. Market price - 0.00% 0.26 0.00%

Sinopharm Xingsha Pharmaceuticals (Xiamen) Co.,

Ltd. Market price - 0.00% 0.13 0.00%

Sinopharm Holding Jingmen Co., Ltd. Market price - 0.00% 0.12 0.00%

Sinopharm Holding Zhejiang Biological Product Co.,

Ltd. Market price - 0.00% 0.04 0.00%

Sinopharm Holding Tongliao Co., Ltd. Market price (0.08) 0.00% 0.86 0.00%

Shanghai Yunnuo Marketing Consulting Co., Ltd. Market price (15.60) 0.00% 0.08 0.00%

Total 167,505.94 6.45% 161,687.75 6.71%

- 164 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(5) Related party transactions (continued)

(c) Lease

The Group as leaser:

Type of Rental income in Rental income in

assets use Year 2015 Year 2014

Lessees for (RMB¡¯0,000) (RMB¡¯0,000)

Sinopharm Guoda Drug Store Guangxi Chain Co., Ltd. Building 235.62 226.99

Sinopharm Guoda Drug Store(Shenzhen) Chain Co., Ltd. Building 53.26 72.30

Sinopharm Holding Guoda Drug Store Guangzhou Chain

Co., Ltd. Building 26.97 9.75

Sinopharm Group Guangdong Medicine Device Co., Ltd. Building 26.02 27.03

China National Medicines Co., Ltd. Building 4.32 4.32

Sinopharm Holding Sub Marketing Center Co., Ltd. Building 3.24 -

Sinopharm Group Industrial Drug Marketing Co., Ltd Building - 4.32

349.43 344.71

Rental income received from related parties is negotiated by both parties involved in the lease and by making reference to the

market price.

The Group as lessee:

Type of Rentalexpenses in Rentalexpenses in

assets use Year 2015 Year 2014

Leasers for (RMB¡¯0,000) (RMB¡¯0,000)

Sinopharm Group Medicine Logistic Co., Ltd. Equipment 750.00 750.00

Sinopharm Group Medicine Logistic Co., Ltd. Building 708.00 708.00

Shaoguan Wujiang District Muyang Medicine Information

Consultant Co., Ltd. Building 97.72 88.68

Wang Yang Building 55.20 55.20

Foshan Nanhai Medicine Group Co., Ltd. Building 26.50 22.18

1,637.42 1,624.06

Lease charges paid to related parties are negotiated by both parties involved in the lease and by making reference

to the market price.

- 165 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(5) Related party transactions (continued)

(d) Guarantees provided

Guarantee

Amount Beginning date of Maturity date of obligation

Guarantor Guarantee (RMB¡¯0,000) guarantee contract guarantee contract expired

Guarantees between the Group and the related parties-

Sinopharm Group Sinopharm Guangzhou 28,626.47 03 June 2015 03 June 2016 No

Guarantees between the Company and the subsidiaries-

The Company Sinopharm Guangzhou 31,820.36 08September 2015 07 September 2016 No

The Company Sinopharm Guangzhou 28,031.67 17 September 2015 29 June 2016 No

The Company Sinopharm Guangzhou 27,946.03 06 May 2015 06 May 2016 No

The Company Sinopharm Guangzhou 27,276.01 15 May 2015 14 May 2016 No

The Company Sinopharm Guangzhou 18,262.20 23 June 2015 30 April 2016 No

The Company Sinopharm Guangzhou 17,592.06 20 September 2015 19 September 2016 No

The Company Sinopharm Guangxi 16,010.25 8 September 2015 07 September 2016 No

Zhijun Medicine The Company 13,363.68 18 June 2015 15 June 2016 No

The Company Sinopharm Guangxi 13,120.71 30 July 2015 30 July 2016 No

The Company Sinopharm Liuzhou 8,999.09 8 September 2015 07 September 2016 No

The Company Zhijun Medicine 6,892.73 10 September 2015 10 September 2016 No

The Company Sinopharm Guangzhou 6,839.50 20 May 2015 20 May 2016 No

Zhijun Medicine The Company 6,630.00 28 May 2015 15 February 2016 No

The Company Sinopharm Guangxi 6,573.66 25 September 2015 6 August 2016 No

The Company Zhijun Medicine 4,563.26 08 September 2015 07 September 2016 No

The Company Sinopharm Yanfeng 4,513.88 08 September 2015 07 September 2016 No

The Company Sinopharm Guangzhou 4,160.03 21 August 2015 20 August 2016 No

Zhijun Medicine The Company 4,089.52 04 April 2014 03 April 2022 No

The Company Sinopharm Yuexing 3,133.13 20 May 2015 20 May 2016 No

The Company Sinopharm Liuzhou 2,894.98 20 March 2015 19 March 2016 No

The Company Sinopharm Guangzhou 2,682.52 23 October 2015 31 July 2016 No

The Company Sinopharm Yanfeng 2,245.35 15 May 2015 14 May 2016 No

The Company Sinopharm Guangzhou 2,168.52 21 December 2015 20 December 2016 No

The Company Sinopharm Liuzhou 2,047.76 24 November 2015 23 November 2016 No

The Company Sinopharm Guangxi 2,005.90 23 October 2015 23 October 2016 No

Zhijun Medicine The Company 2,000.00 15 May 2015 14 May 2016 No

The Company Sinopharm Yanfeng 1,935.38 17 December 2015 16 December 2016 No

The Company Suzhou Zhijun 1,929.17 21 August 2015 20 August 2016 No

The Company Sinopharm Yuexing 1,758.57 08 September 2015 07 September 2016 No

The Company Sinopharm Yanfeng 1,700.00 28 May 2015 15 February 2016 No

The Company Sinopharm Guangzhou 1,606.75 25 December 2015 30 October 2016 No

The Company Sinopharm Shaoguan 999.71 08 September 2015 07 September 2016 No

The Company Sinopharm Jiangmen 986.46 08 September 2015 07 September 2016 No

The Company Suzhou Zhijun 979.88 04 Janaury 2015 24 October 2015 No

The Company Sinopharm Guangxi 813.70 23 September 2015 23 September 2016 No

The Company Zhijun Medicine 500.00 10 April 2015 09 April 2018 No

Sinopharm Shenzhen No

08 September 2015 07 September 2016

The Company Medicine 456.95

Zhijun Medicine The Company 348.78 17 July 2014 17 July 2020 No

Sub total 279,878.15

Total 308,504.62

- 166 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(5) Related party transactions (continued)

(e) Financing

Category Amount Effective date Maturity date

(RMB¡¯0,000)

2015

Borrowed from-

Group Financial Co. Short-term borrowings 4,000.00 28 February 2015 28 February 2016

Group Financial Co. Short-term borrowings 3,000.00 17 August 2015 17 August 2016

Group Financial Co. Discount on commercial acceptance

notes 1,132.00 30 October 2015 09 Janaury 2016

Group Financial Co Discount on commercial acceptance 09 February 2016

notes 1,070.60 30 October 2015

Group Financial Co Discount on bank acceptance notes 50.00 15 December 2015 29 Janaury 2016

Group Financial Co Discount on bank acceptance notes 50.00 15 December 2015 29 Janaury 2016

Group Financial Co Discount on bank acceptance notes 50.00 15 December 2015 17 February 2016

Group Financial Co Discount on bank acceptance notes 50.00 15 December 2015 17 February 2016

Group Financial Co Discount on bank acceptance notes 50.00 15 December 2015 17 February 2016

Group Financial Co Discount on bank acceptance notes 50.00 15 December 2015 17 February 2016

Group Financial Co Discount on bank acceptance notes 50.00 15 December 2015 17 February 2016

Group Financial Co Discount on bank acceptance notes 50.00 15 December 2015 17 February 2016

Group Financial Co Discount on bank acceptance notes 50.00 15 December 2015 17 February 2016

Group Financial Co Discount on bank acceptance notes 67.79 15 December 2015 17 February 2016

Group Financial Co Discount on bank acceptance notes 170.00 15 December 2015 24 March 2016

Group Financial Co Discount on bank acceptance notes 100.00 15 December 2015 28 February 2016

Group Financial Co Discount on bank acceptance notes 100.00 15 December 2015 28 February 2016

Group Financial Co Discount on bank acceptance notes 100.00 15 December 2015 28 February 2016

Group Financial Co Discount on bank acceptance notes 100.00 15 December 2015 28 February 2016

Group Financial Co Discount on bank acceptance notes 100.00 15 December 2015 28 February 2016

Group Financial Co Discount on bank acceptance notes 88.46 15 December 2015 28 February 2016

Group Financial Co Discount on bank acceptance notes 210.87 15 December 2015 30 May 2016

Group Financial Co Discount on bank acceptance notes 200.00 15 December 2015 30 May 2016

Group Financial Co Discount on bank acceptance notes 200.00 15 December 2015 30 May 2016

Group Financial Co Discount on bank acceptance notes 200.00 15 December 2015 30 May 2016

Group Financial Co Discount on bank acceptance notes 200.00 15 December 2015 30 May 2016

Group Financial Co Discount on bank acceptance notes 50.00 15 December 2015 30 May 2016

Group Financial Co Discount on bank acceptance notes 50.00 15 December 2015 30 May 2016

Group Financial Co Discount on bank acceptance notes 50.00 15 December 2015 30 May 2016

Group Financial Co Discount on bank acceptance notes 50.00 15 December 2015 30 May 2016

Group Financial Co Discount on bank acceptance notes 50.00 15 December 2015 30 May 2016

Group Financial Co Discount on bank acceptance notes 50.00 15 December 2015 30 May 2016

Group Financial Co Discount on bank acceptance notes 50.00 15 December 2015 30 May 2016

Group Financial Co Discount on bank acceptance notes 50.00 15 December 2015 30 May 2016

Group Financial Co Discount on bank acceptance notes 50.00 15 December 2015 30 May 2016

Group Financial Co Discount on bank acceptance notes 50.00 15 December 2015 30 May 2016

Group Financial Co Discount on bank acceptance notes 50.00 15 December 2015 30 May 2016

Group Financial Co Discount on bank acceptance notes 50.00 15 December 2015 30 May 2016

Group Financial Co Discount on bank acceptance notes 103.24 15 December 2015 02 June 2016

Group Financial Co Discount on bank acceptance notes 300.00 17 December 2015 01 March 2016

Group Financial Co Discount on bank acceptance notes 300.00 17 December 2015 01 March 2016

Group Financial Co Discount on bank acceptance notes 200.00 17 December 2015 22 Janaury 2016

Group Financial Co Discount on bank acceptance notes 50.00 17 December 2015 30 May 2016

Group Financial Co Discount on bank acceptance notes 50.00 17 December 2015 30 May 2016

Group Financial Co Discount on bank acceptance notes 50.00 17 December 2015 30 May 2016

Group Financial Co Discount on bank acceptance notes 50.00 17 December 2015 30 May 2016

13,192.96

- 167 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(5) Related party transactions (continued)

(e) Financing(continued)

Category Amount Effective date Maturity date

(RMB¡¯0,000)

2014

Borrowed from-

Group Financial Co(i) Short-term borrowings 13,000.00 03 November 2014 03 May 2015

Group Financial Co(i) Short-term borrowings 3,000.00 03 November 2014 03 May 2015

Group Financial Co(i) Short-term borrowings 2,000.00 03 November 2014 03 May 2015

Sinopharm Group Entrust loans 3,160.00 07 May 2014 07 May 2017

Group Financial Co Short-term borrowings 2,000.00 25 February 2014 28 February 2014

Group Financial Co Discount on bank acceptance notes 200.00 24 March 2014 17 June 2014

Group Financial Co Discount on bank acceptance notes 150.00 24 March 2014 21 May 2014

Group Financial Co Discount on bank acceptance notes 78.62 24 March 2014 24 May 2014

Group Financial Co Discount on bank acceptance notes 50.00 24 March 2014 24 May 2014

Group Financial Co Discount on bank acceptance notes 50.00 24 March 2014 24 May 2014

Group Financial Co Discount on bank acceptance notes 40.00 24 March 2014 24 August 2014

Group Financial Co Discount on bank acceptance notes 37.94 24 March 2014 19 May 2014

Group Financial Co Discount on bank acceptance notes 37.91 24 March 2014 24 August 2014

Group Financial Co Discount on bank acceptance notes 30.00 24 March 2014 19 June 2014

Group Financial Co Discount on bank acceptance notes 30.00 24 March 2014 19 May 2014

Group Financial Co Discount on bank acceptance notes 30.00 24 March 2014 19 May 2014

Group Financial Co Discount on bank acceptance notes 20.00 24 March 2014 22 April 2014

Group Financial Co Discount on bank acceptance notes 20.00 24 March 2014 22 April 2014

Group Financial Co Discount on bank acceptance notes 14.59 24 March 2014 23 May 2014

Group Financial Co Discount on bank acceptance notes 14.00 24 March 2014 12 August 2014

Group Financial Co Discount on bank acceptance notes 100.00 24 March 2014 13 August 2014

Group Financial Co Discount on bank acceptance notes 20.00 24 March 2014 17 June 2014

Group Financial Co Discount on bank acceptance notes 10.00 24 March 2014 14 July 2014

Group Financial Co Discount on bank acceptance notes 40.01 24 March 2014 17 April 2014

Group Financial Co Discount on bank acceptance notes 44.99 24 March 2014 17 April 2014

Group Financial Co Discount on bank acceptance notes 61.80 24 March 2014 27 August 2014

Group Financial Co Discount on bank acceptance notes 100.00 24 March 2014 27 August 2014

Group Financial Co Discount on bank acceptance notes 43.23 24 March 2014 28 May 2014

Group Financial Co Discount on bank acceptance notes 124.58 24 March 2014 07 June 2014

Group Financial Co Discount on bank acceptance notes 50.00 29 May 2014 26 June 2014

Group Financial Co Discount on bank acceptance notes 50.00 29 May 2014 26 June 2014

Group Financial Co Discount on bank acceptance notes 50.00 29 May 2014 26 June 2014

Group Financial Co Discount on bank acceptance notes 17.71 29 May 2014 26 June 2014

Group Financial Co Discount on bank acceptance notes 10.53 29 May 2014 20 June 2014

Group Financial Co Discount on bank acceptance notes 50.00 29 May 2014 29 June 2014

Group Financial Co Discount on bank acceptance notes 34.00 29 May 2014 18 June 2014

Group Financial Co Discount on bank acceptance notes 48.54 29 May 2014 28 June 2014

Group Financial Co Discount on bank acceptance notes 20.00 29 May 2014 25 June 2014

Group Financial Co Discount on bank acceptance notes 28.48 29 May 2014 17 October 2014

Group Financial Co Discount on bank acceptance notes 20.00 29 May 2014 25 July 2014

Group Financial Co Discount on bank acceptance notes 14.70 29 May 2014 24 July 2014

Group Financial Co Discount on bank acceptance notes 11.00 29 May 2014 23 October 2014

Group Financial Co Discount on bank acceptance notes 165.00 29 May 2014 26 September 2014

Group Financial Co Discount on bank acceptance notes 20.00 29 May 2014 28 July 2014

To next page 25,097.63

- 168 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(5) Related party transactions (continued)

(e) Financing(continued)

Category Amount Effective date Maturity date

(RMB¡¯0,000)

2014

Borrowed from-

continued 25,097.63

Group Financial Co Discount on bank acceptance notes 20.00 29 May 2014 27 July2014

Group Financial Co Discount on bank acceptance notes 20.00 29 May 2014 27 July2014

Group Financial Co Discount on bank acceptance notes 12.50 29 May 2014 17 October 2014

Group Financial Co Discount on bank acceptance notes 58.85 29 May 2014 24 July 2014

Group Financial Co Discount on bank acceptance notes 48.53 29 May 2014 20 June 2014

Group Financial Co Discount on bank acceptance notes 20.00 29 May 2014 14 October 2014

Group Financial Co Discount on bank acceptance notes 30.00 29 May 2014 22 October 2014

Group Financial Co Discount on bank acceptance notes 50.00 29 May 2014 22 October 2014

Group Financial Co Discount on bank acceptance notes 50.00 29 May 2014 22 October 2014

Group Financial Co Discount on bank acceptance notes 31.68 29 May 2014 24 July 2014

Group Financial Co Discount on bank acceptance notes 20.19 29 May 2014 14 July 2014

Group Financial Co Discount on bank acceptance notes 19.00 29 May 2014 23 October 2014

Group Financial Co Discount on bank acceptance notes 20.00 29 May 2014 20 August 2014

Group Financial Co Discount on bank acceptance notes 20.00 29 May 2014 20 August 2014

Group Financial Co Discount on bank acceptance notes 20.00 29 May 2014 20 August 2014

Group Financial Co Discount on bank acceptance notes 25.22 29 May 2014 20 August 2014

Group Financial Co Discount on bank acceptance notes 10.00 30 June 2014 17 October 2014

Group Financial Co Discount on bank acceptance notes 20.43 30 June 2014 19 August 2014

Group Financial Co Discount on bank acceptance notes 20.00 30 June 2014 22 October 2014

Group Financial Co Discount on bank acceptance notes 100.00 30 June 2014 17 October 2014

Group Financial Co Discount on bank acceptance notes 42.00 30 June 2014 23 October 2014

Group Financial Co Discount on bank acceptance notes 50.00 30 June 2014 16 November 2014

Group Financial Co Discount on bank acceptance notes 20.00 30 June 2014 27 August 2014

Group Financial Co Discount on bank acceptance notes 20.00 30 June 2014 27 August 2014

Group Financial Co Discount on bank acceptance notes 20.00 30 June 2014 27 August 2014

Group Financial Co Discount on bank acceptance notes 12.08 30 June 2014 27 August 2014

Group Financial Co Discount on bank acceptance notes 20.00 30 June 2014 27 August 2014

Group Financial Co Discount on bank acceptance notes 20.00 30 June 2014 27 August 2014

Group Financial Co Discount on bank acceptance notes 10.00 30 June 2014 27 August 2014

Group Financial Co Discount on bank acceptance notes 20.00 30 June 2014 29 November 2014

Group Financial Co Discount on bank acceptance notes 27.63 30 June 2014 29 November 2014

Group Financial Co Discount on bank acceptance notes 10.00 30 June 2014 28 August 2014

Group Financial Co Discount on bank acceptance notes 10.00 30 June 2014 28 August 2014

Group Financial Co Discount on bank acceptance notes 10.00 30 June 2014 28 August 2014

Group Financial Co Discount on bank acceptance notes 30.00 30 June 2014 29 August 2014

Group Financial Co Discount on bank acceptance notes 21.76 30 June 2014 29 August 2014

Group Financial Co Discount on bank acceptance notes 47.24 30 June 2014 30 August 2014

Group Financial Co Discount on bank acceptance notes 10.06 30 June 2014 15 August 2014

26,114.80

- 169 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(5) Related party transactions (continued)

(e) Financing(continued)

Category Amount Effective date Maturity date

(RMB¡¯0,000)

2014

Borrowed from- 26,114.80

Group Financial Co. Discount on bank acceptance notes 34.18 30 June 2014 30 August 2014

Group Financial Co. Discount on bank acceptance notes 20.00 30 June 2014 15 November 2014

Group Financial Co. Discount on bank acceptance notes 10.00 30 June 2014 19 November 2014

Group Financial Co. Discount on bank acceptance notes 15.89 30 June 2014 30 July 2014

Group Financial Co. Discount on bank acceptance notes 12.00 30 June 2014 27 November 2014

Group Financial Co. Discount on bank acceptance notes 20.00 30 June 2014 10 October 2014

Group Financial Co. Discount on bank acceptance notes 20.00 30 June 2014 13 November 2014

Group Financial Co. Discount on bank acceptance notes 10.00 30 June 2014 15 October 2014

Group Financial Co. Discount on bank acceptance notes 14.00 30 June 2014 9 September 2014

Group Financial Co. Discount on bank acceptance notes 500.00 24 December 2014 26 February 2015

Group Financial Co. Discount on bank acceptance notes 500.00 24 December 2014 26 February 2015

Group Financial Co. Discount on bank acceptance notes 401.22 24 December 2014 26 February 2015

Group Financial Co. Discount on bank acceptance notes 221.16 24 December 2014 25 May 2015

Group Financial Co. Discount on bank acceptance notes 100.00 24 December 2014 27 February 2015

Group Financial Co. Discount on bank acceptance notes 100.00 24 December 2014 27 February 2015

Group Financial Co. Discount on bank acceptance notes 100.00 24 December 2014 27 February 2015

Group Financial Co. Discount on bank acceptance notes 100.00 24 December 2014 27 February 2015

Group Financial Co. Discount on bank acceptance notes 100.00 24 December 2014 27 February 2015

Group Financial Co. Discount on bank acceptance notes 100.00 24 December 2014 27 February 2015

Group Financial Co. Discount on bank acceptance notes 100.00 24 December 2014 27 February 2015

Group Financial Co. Discount on bank acceptance notes 100.00 24 December 2014 27 February 2015

Group Financial Co. Discount on bank acceptance notes 100.00 24 December 2014 27 February 2015

Group Financial Co. Discount on bank acceptance notes 100.00 24 December 2014 27 February 2015

Group Financial Co. Discount on bank acceptance notes 178.25 24 December 2014 27 February 2015

Group Financial Co. Discount on bank acceptance notes 100.00 24 December 2014 28 February 2015

Group Financial Co. Discount on bank acceptance notes 100.00 24 December 2014 28 February 2015

Group Financial Co. Discount on bank acceptance notes 100.00 24 December 2014 28 February 2015

Group Financial Co. Discount on bank acceptance notes 100.00 24 December 2014 28 February 2015

Group Financial Co. Discount on bank acceptance notes 150.00 24 December 2014 27 March 2015

Group Financial Co. Discount on bank acceptance notes 100.00 24 December 2014 28 February 2015

Group Financial Co. Discount on bank acceptance notes 100.00 24 December 2014 28 February 2015

Group Financial Co. Discount on bank acceptance notes 100.00 24 December 2014 28 February 2015

Group Financial Co. Discount on bank acceptance notes 100.00 24 December 2014 28 February 2015

Group Financial Co. Discount on bank acceptance notes 133.29 24 December 2014 09 March 2015

30,154.79

(i) The borrowing was pre-paid in 2014 in advance.

(f) Remuneration of key management

2015(RMB¡¯0,000) 2014(RMB¡¯0,000)

Remuneration of key management 1,106.00 1,215.00

- 170 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(5) Related party transactions (continued)

(g) Interest expenses

Related party Type of transaction 2015 2014

(RMB¡¯0,000) (RMB¡¯0,000)

Group Financial Co. Payment of borrowing interest 215.36 445.28

Sinopharm Group Payment of borrowing interest 161.10 113.29

Group Financial Co. Payment of notes discount interest 65.79 86.42

Sinopharm Group Payment of buyer notes discount interest 61.08 66.50

Sinopharm Holding Sub Marketing

Center Co., Ltd. Payment of buyer notes discount interest 44.11 261.70

Sinopharm Holding Financing

Lease Co., Ltd Payment of financing lease interest 29.98 -

Sinopharm Group Payment of borrowing interest - 572.44

577.42 1,545.63

(h) Interest income

2015 2014

Related party Type of transaction (RMB¡¯0,000) (RMB¡¯0,000)

Group Financial Co. Deposit interest 3.46 77.07

(i) Purchase of fixed assets and intangible assets

2015 2014

Amount % of same Amount % of same

Related party (RMB¡¯0,000) transaction (RMB¡¯0,000) transaction

Sinopharm Holding Financing Lease Co., Ltd 1,144.64 3.91% - 0.00%

Sinopharm Holding Tianjin Binhai

Pharmaceutical Co., Ltd 206.63 0.71% - 0.00%

Sinopharm Chemical Reagant Suzhou Co., Ltd 98.06 0.33% - 0.00%

Sinopharm Chongqing Pharmaceutical Design

institute 24.98 0.09% - 0.00%

1,474.31 5.04% - 0.00%

- 171 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(5) Related party transactions (continued)

(j) Rendering of service

Related party Type of transaction 2015 2014

(RMB¡¯0,000) (RMB¡¯0,000)

Transportation and warehousing

China National Medicines Co., Ltd. charges 618.84 447.89

Sinopharm Holding Guoda Drug Store Guangdong Transportation and warehousing

Co.,Ltd. charges 469.71 420.17

Transportation and warehousing

Foshan Nanhai Uptodate & Special Medicines Co., Ltd. charges 380.92 336.33

Transportation and warehousing

Sinopharm Group Medicine Logistic Co., Ltd. charges 365.55 1,065.24

Transportation and warehousing

Foshan Nanhai Medicine Co., Ltd. charges 328.94 435.37

Dispatching and transportation

China National Medicines Co., Ltd. charges 111.02 104.93

Sinopharm Group Entrusted revenue 50.00 50.00

China National Pharmaceutical Foreign Trade Co., Ltd. entrusted revenue 25.00 25.00

Shenzhen Wanwei Medicine trading Co., Ltd. Consultation revenue 18.37 31.57

Guizhou Tongjitang Pharmaceutical Co., Ltd. Consultation revenue 4.99 -

Sinopharm Holding Guoda Drug Store Guangzhou Chain

Co., Ltd. Parking fees 1.75 1.20

Anhui Jingfang Pharmaceutical Co., Ltd. Consultation revenue 1.05 -

Wanle Medical Consultation revenue - 5.22

Winteam Pharmaceutical Group Ltd. Consultation revenue - 0.63

2,376.14 2,923.55

(k) Purchase of service

Related party Type of transaction 2015 (RMB¡¯0,000) 2014 (RMB¡¯0,000)

Sinopharm Chongqing Pharmaceutical and Pinshan management fees

Medical Industry Design Institute 8,154.15 462.32

Sinopharm Group Franchise fee 372.51 29.40

Sinopharm Group Medicine Logistic Co., Ltd. Dispatching and transportation

charges 227.05 228.78

Shanghai Tongyu Information Technology Co., CMS system maintenance

Ltd. 113.33 166.12

Sinopharm Group Medicine Logistic Co., Ltd. Information system maintenance 95.66 20.19

Sinopharm Chongqing Pharmaceutical and Designing fee

Medical Industry Design Institute 81.45 398.15

Wanle Medical Research and development

expenses 66.17 -

Shanghai Institute of Pharmaceutical Industry Research and development

expenses 34.06 648.15

China National Pharmaceutical Foreign Trade

Co., Ltd. Consulting services fee 33.02 -

Chinese Science Equipment Co., Ltd Research and development fee 19.25 -

Reed Sinopharm Exhibitions Co., Ltd. Exhibition expenses 8.15 9.59

Sinopharm Group Chemical Reagent Co., Ltd. Repairment expenses 2.73 -

Sinopharm Xingsha Pharmaceuticals (Xiamen)

Co., Ltd. Research and development fee 1.41 -

Beijing Tongyu Information Technology Co., Ltd Business systems use fee 0.50 -

Sinopharm Group Chemical Reagent Suzhou Research and development

Co., Ltd. expenses 0.16 0.90

Shanghai Xinshengyuan Pharmaceutical Co., Research and development

Ltd. expenses - 226.42

Sinopharm Holding Shenyang Co., Ltd. Dispatching and

transportation charges - 73.57

9,209.76 2,263.59

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CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(6) Accounts receivable from and payables to related parties

31 December 2015 31 December 2014

(RMB¡¯0,000) (RMB¡¯0,000)

Notes receivable Sinopharm Group (Tianjin) Eastern Bokang

Pharmaceutical Co., Ltd. 1,856.71 -

Sinopharm Holding Hubei Co., Ltd. 794.13 37.80

Sinopharm Holding Shandong Co., Ltd. 675.01 20.00

Sinopharm Guoda Drug Store Guangxi Chain

Co., Ltd. 561.55 337.98

Sinopharm Holding Beijing Co., Ltd. 544.57 -

Sinopharm Le -Ren-Tang Medicine Co., Ltd. 523.37 8.45

Sinopharm Holding Hainan Co., Ltd. 481.37 332.61

Sinopharm Holding Sub Marketing Center Co.,

Ltd. 458.90 -

Sinopharm Sichuan Pharmaceutical Co., Ltd. 450.68 -

Sinopharm Holding Tianjin Co., Ltd. 375.89 23.38

Sinopharm Holding Hunan Co., Ltd. 323.57 394.05

Sinopharm Holding Nantong Co., Ltd. 283.00 -

Sinopharm Group Xinjiang Special Drugs

National Pharmaceutical Co., Ltd. 240.00 -

Guangdong Dong Fang Uptodate & Special

Medicines Co., Ltd. 237.51 -

Sinopharm Holding Guoda Drug Store

Guangdong Co., Ltd. 141.06 98.94

Sinopharm Holding Jinzhou Co., Ltd. 140.88 -

Sinopharm Holding Shenyang Co., Ltd. 131.72 53.90

Sinopharm Holding Xinjiang Special Drugs

Western Pharmaceutical Co., Ltd. 100.00 -

Sinopharm Holding Fuzhou Co., Ltd. 88.31 -

Sinopharm Holding Gansu Co., Ltd. 58.14 -

China National Medicines Co., Ltd. 47.78 -

Sinopharm Holding Chongqing Co., Ltd. 37.36 36.60

Sinopharm Holding Yancheng Co., Ltd. 34.20 18.36

Sinopharm Holding Suzhou Kangmin

Pharmaceutical Co., Ltd 20.00 -

Sinopharm Holding Beijing Huahong Co., Ltd. 16.89 -

Sinopharm Holding Wuxi Co., Ltd. 15.00 -

Sinopharm Holding Chengdu Co., Ltd 13.27 -

Sinopharm Holding Heilongjiang Co., Ltd. 10.33 -

Sinopharm Holding Qingdao Co., Ltd. 10.00 -

Sinopharm Holding Zhejiang Co., Ltd. 8.23 22.31

Sinopharm Holding Changde Co., Ltd. 6.00 -

Sinopharm Holding Changzhou Medical logistics

center Co., Ltd. 3.00 -

Sinopharm Holding Hainan Hongyi Co., Ltd. - 248.78

Chongqing Yaoyou Pharmaceutical Co., Ltd. - 166.11

NanJing Iron & Steel Co., Ltd. - 20.00

Sinopharm Holding Hunan Guoda Minshengtang

Drug Store Chain Co., Ltd. - 18.40

Sinopharm Holding Shaanxi Co., Ltd. - 14.89

Sinopharm Holding Ningde Co., Ltd. - 11.90

Sinopharm Holding Anyang Co., Ltd. - 10.00

Sinopharm Holding Fuyang Co., Ltd. - 10.00

Nanjing Iron & Steel Group International Trade

Co., Ltd. - 10.00

Sinopharm Holding Huainan Co., Ltd. - 4.22

Sinopharm Holding Lunan Co., Ltd. - 3.91

Sinopharm Holding Yantai Co., Ltd. - 3.65

China National Pharmaceutical Foreign Trade

Co., Ltd. - 3.00

Sinopharm Holding Taizhou Co., Ltd. - 1.28

8,688.43 1,910.52

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CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(6) Accounts receivable from and payables to related parties (continued)

31 December 2015 31 December 2014

(RMB¡¯0,000) (RMB¡¯0,000)

Accounts receivable Foshan Nanhai Uptodate & Special

Medicines Co., Ltd. 1,666.78 2,375.69

Sinopharm Sichuan Pharmaceutical Co.,

Ltd. 1,259.66 1,249.48

Sinopharm Holding Hunan Co., Ltd. 1,180.08 2,560.01

Foshan Chancheng Pharmaceutical Co., Ltd 1,045.65 -

Foshan Nanhai Medicine Co., Ltd. 855.54 1,197.98

Sinopharm Holding Hainan Co., Ltd. 834.08 1,591.68

Sinopharm Holding Ningxia Co., Ltd. 762.35 590.46

Sinopharm Le -Ren-Tang Medicine Co., Ltd. 727.64 1,423.48

Sinopharm Group Southwest Medicine Co.,

Ltd. 589.91 685.94

Sinopharm Group Xinjiang Special Drugs

National Pharmaceutical Co., Ltd. 490.38 1,490.16

Sinopharm Holding Beijing Co., Ltd. 488.91 1,289.21

Sinopharm Holding Hainan Hongyi Co., Ltd. 479.88 260.49

Sinopharm Holding Wenzhou Co., Ltd. 449.70 526.85

Sinopharm Holding Beijing Huahong Co.,

Ltd. 429.43 789.07

Sinopharm Holding Tianjin Co., Ltd. 418.24 622.00

Sinopharm Holding Shandong Co., Ltd. 280.62 1,021.65

Sinopharm Holding Henan Co., Ltd. 262.25 276.24

Sinopharm Holding Shanxi Co., Ltd. 223.20 182.66

China National Medicines Co., Ltd. 219.31 238.89

Sinopharm Holding Guoda Drug Store

Guangdong Co., Ltd. 213.42 970.47

Sinopharm Holding Xinjiang Special Drugs

Western Pharmaceutical Co., Ltd. 208.73 377.03

Sinopharm Holding Shenyang Co., Ltd. 207.86 135.85

Sinopharm Holding Shanxi Co., Ltd. 182.30 185.47

Sinopharm Holding Guizhou Co., Ltd. 157.89 89.68

Sinopharm Holding Yancheng Co., Ltd. 156.06 56.30

Sinopharm Holding Jinzhou Co., Ltd. 152.10 284.71

Suzhou Erye Pharmaceutical Limited

Company 137.35 -

Sinopharm Holding Hubei Co., Ltd. 136.31 2,094.77

Sinopharm Holding Xuzhou Co., Ltd. 116.76 82.54

Sinopharm Group 104.93 534.74

Sinopharm Holding Suzhou Kangmin

Pharmaceutical Co., Ltd 99.26 -

Sinopharm Guoda Drug Store Guangxi

Chain Co., Ltd. 96.23 658.91

Foshan Chancheng District Central Hospital 93.03 452.21

Sinopharm Holding Taizhou Co., Ltd. 91.59 24.14

Sinopharm Holding Lunan Co., Ltd. 85.84 -

Sinopharm Holding Sub Marketing Center

Co., Ltd. 72.44 459.21

Sinopharm Holding Fujian Co., Ltd. 71.10 86.47

Sinopharm Holding Jilin Co., Ltd. 67.36 49.44

Sinopharm Holding Yangzhou Co., Ltd. 66.19 147.67

Sinopharm Holding Wuxi Co., Ltd. 63.74 78.66

Sinopharm Holding Heilongjiang Co., Ltd. 63.52 164.27

Sinopharm Group Medicine Logistic Co., Ltd. 47.22 352.12

Sinopharm Holding Fuzhou Co., Ltd. 41.11 123.94

China Sinopharm International Corporation 37.78 -

Sinopharm Holding Guoda Pharmacy Co.,

Ltd. 33.00 59.81

Sinopharm Holding Qinghai Co., Ltd. 32.41 34.47

Sinopharm Holding Chongqing Co., Ltd. 28.54 224.90

Sinopharm Holding Chengdu Co., Ltd 23.97 3.87

To next page 15,551.65 26,103.59

- 174 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(6) Accounts receivable from and payables to related parties (continued)

31 December2015 31 December2014

(RMB¡¯0,000) (RMB¡¯0,000)

Accounts receivable continued 15,551.65 26,103.59

Sinopharm Holding Putian Co., Ltd. 23.80 -

Sinopharm Holding Nantong Co., Ltd. 22.28 292.45

Sinopharm Holding Dalian Co., Ltd. 22.01 53.63

Sinopharm Holding Longyan Co., Ltd. 20.50 23.11

Sinopharm Guoda Drug Store Jiangmen

Chain Co., Ltd. 19.58 125.19

Sinopharm Holding Zhejiang Co., Ltd. 18.23 675.65

Sinopharm Holding Changzhou Medical

logistics center Co., Ltd. 17.39 24.61

Sinopharm Holding Quanzhou Co., Ltd. 13.94 17.96

Sinopharm Holding Gansu Co., Ltd. 11.20 56.83

Sinopharm Holding Ningde Co., Ltd. 10.24 7.04

Sinopharm Holding Qingdao Co., Ltd. 9.07 56.60

Sinopharm Lerentang Tangshan Medicine

Co., Ltd. 8.74 32.85

Foshan Chanyixing Medicine Development

Co Ltd. 6.71 3.28

Sinopharm Holding Jiangsu Co., Ltd. 6.06 20.82

Sinopharm Holding Shaanxi Co., Ltd. 5.91 8.49

Sinopharm Holding Yantai Co., Ltd. 5.59 8.05

Guangdong Dong Fang Uptodate & Special

Medicines Co., Ltd. 5.10 235.01

Jiang Meng Renren Medical instrument Co.,

Ltd. 4.92 3.90

Sinopharm Holding Anhui Co., Ltd. 3.13 42.61

Sinopharm Holding Jiangxi Co., Ltd. 2.35 4.58

Sinopharm Holding Changde Co., Ltd. 1.88 16.03

Sinopharm Holding Zunyi Co., Ltd. 1.55 -

Sinopharm Holding Suzhou Co., Ltd. 1.35 17.71

Sinopharm Zhuhai 1.31 -

Sinopharm Holding Anqing Co., Ltd. 1.05 19.79

Sinopharm Group (Tianjin) Eastern Bokang

Pharmaceutical Co., Ltd. 1.01 748.43

Sinopharm Holding Tianjin North Medicine

Co., Ltd. 0.81 55.97

Sinopharm Holding Sanming Co., Ltd. 0.63 0.86

Sinopharm Holding Yunnan Co., Ltd. 0.26 150.59

Sinopharm Holding Puyang Co., Ltd. 0.04 4.58

Sinopharm Holding Inner Mongolia Co., Ltd. - 32.73

Shanghai Donghong Medicine Co., Ltd. - 22.46

Sinopharm Holding Shanghai Likang

Pharmaceutical Co., Ltd. - 12.83

Shanghai Yunnuo Marketing Consulting Co.,

Ltd. - 10.00

Sinopharm Holding HongKong Co., Ltd. - 6.30

Sinopharm Holding (Yangzhou) Chinese

Western Medicine Branch Co., Ltd. - 4.43

Guang dong South Pharmaceutical Foreign

Trade Co., Ltd. - 3.93

Sinopharm Lerentang Qinhuangdao

Medicine Co., Ltd. - 3.07

Sinopharm Holding Changzhou Co., Ltd. - 2.76

Qinghai Medical Pharmaceutical Material

Co., Ltd. - 2.55

Shanxi Guoyi Drug Store Co., Ltd. - 1.51

Sinopharm Holding Beijing Kangchen Bio-

Pharmaceutical Co., Ltd. - 0.77

Sinopharm Holding Zhoukou Co., Ltd. - 0.58

Shanghai Tongyu Information Technology

Co., Ltd. - 0.30

Shanghai Nutraceuticals (Shanghai) Co., Ltd. - 0.23

Sinopharm Holding Shangqiu Co., Ltd. - 0.22

Sinopharm Holding Beijing Tianxing Puxin

Biological Medical Co., Ltd. - 0.17

Shenzhen Wanwei Medicine trading Co., Ltd. 0.12

Total 15,798.29 28,915.17

- 175 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(6) Accounts receivable from and payables to related parties (continued)

31 December 2015 31 December 2014

(RMB¡¯0,000) (RMB¡¯0,000)

Other receivables Sinopharm Group Medicine Logistic Co., Ltd. 121.50 121.50

Sinopharm Group(a) 25.00 25.00

China National Pharmaceutical Foreign Trade 25.00

Corporation(a) 25.00

China National Medicines Co., Ltd. - 18.47

171.50 189.97

(a) Balance of other receivables is caused by hosting service from the Company to the Sinopharm Group and China

National Pharmaceutical Foreign Trade Corporation. According to the contract, total balance will be received in 2

months since the fisical year ends.

31 December 2015 31 December 2014

(RMB¡¯0,000) (RMB¡¯0,000)

Advances to

suppliers Sichuan HexinPharmaceutical Co., Ltd 346.59 -

Sinopharm Chongqing Pharmaceutical and 1,661.22

Medical Industry Design Institute 265.22

Wuhan Institute of Biological Products Co., Ltd. 49.32 31.04

Chengdu Rongsheng Pharmacy Co., Ltd. 42.43 11.86

Sinopharm Holding Guizhou Co., Ltd. 17.71 0.04

Sinopharm Group Guorui Medicine Co., Ltd. 14.00 0.10

Sinopharm Holding Sub Marketing Center Co., -

Ltd. 7.28

China National Medicines Co., Ltd. 3.63 0.86

Foshan Nanhai Uptodate & Special Medicines Co., 0.07

Ltd. 2.30

Sinopharm Group Chemical Reagent Co., Ltd. 1.58 2.73

Guang dong South Pharmaceutical Foreign Trade

Co., Ltd. 1.16 -

Winteam Pharmaceutical Group Ltd. 0.47 -

Sinopharm Holding Beijing Co., Ltd. 0.16 -

Shanghai Modern Hasen (Shangqiu)

Pharmacertical Co., Ltd. 0.01 -

Qinghai Pharmaceutical Factory Co., Ltd. - 513.87

China National Scientific Instruments & Materials 180.61

Imp/Exp Shenzhen Co., Ltd -

Wanle Medical - 4.56

Sinopharm Holding Suzhou Co., Ltd. - 1.16

Sinopharm Holding Fujian Co., Ltd. - 0.44

Sinopharm Holding Hunan Co., Ltd. - 0.15

Beijing Huasheng Pharmaceutical Biotechnology 0.04

Development Co., Ltd. -

751.86 2,408.75

Management consider that there is no recoverability risk in related to receivables due from other related party.

Therefore, no provision has been made.

- 176 -

CHINA NATIONAL ACCORD MEDICINES CO., LTD.

Notes to financial statements

For the year ended 31 December 2015

(All amounts in Renminbi (RMB) unless otherwise stated)

VIII Related party relationships and significant related partytransactions (continued)

(6) Accounts receivable from and payables to related parties (continued)

31 December 2015 31 December 2014

(RMB¡¯0,000) (RMB¡¯0,000)

Notes payable Sinopharm Group 8,645.27 7,284.35

Sinopharm Holding Sub Marketing Center Co., Ltd. 1,606.75 14,080.94

China National Medicines Co., Ltd. 830.86 1,059.12

Winteam Pharmaceutical Group Ltd. 618.02 -

Chongqing Yaoyou Pharmaceutical Co., Ltd. 289.95 91.88

Jiangsu Wanbang Pharmacy Marketing Co., Ltd. 214.32 201.32

Lanzhou Institute of Biological Products Co., Ltd. 180.00 60.00

Shenzhen Main Luck Pharmaceuticals Inc 112.79 -

Shenzhen Wanwei Medicine trading Co., Ltd. 76.13 129.19

Anhui Jingfang Pharmaceutical Co., Ltd. 66.02 47.72

Chongqing Haisiman Pharmaceutical Co., Ltd. 44.20 207.19

Guizhou Tongjitang Pharmaceutical Co., Ltd. 36.35 122.87

Shanghai Shyndec Pharmaceutical Marketing Co.,

Ltd 26.98 -

Sinopharm Group Rongsheng Pharmaceutical Co.,

Ltd. 10.20 30.84

Guilin South pharmaceutical Co., Ltd. 9.63 -

Shenyang Hongqi Pharmaceutical Co., Ltd. 9.57 -

Hunan Dongting Pharmaceutical Co., Ltd. 2.40 -

Shanghai Shyndec Pharmaceutical Co., Ltd. - 22.34

Sinopharm Holding Beijing Co., Ltd. - 21.24

Sinopharm Group Chemical Reagent Suzhou Co.,

Ltd. - 4.51

12,779.44 23,363.51

31 December 2015 31 December 2014

(RMB¡¯0,000) (RMB¡¯0,000)

Accounts payable Sinopharm Holding Sub Marketing Center Co., Ltd. 20,922.86 16,885.53

Sinopharm Group 6,759.95 6,811.41

China National Medicines Co., Ltd. 4,144.76 4,096.51

Guang dong South Pharmaceutical Foreign Trade

Co., Ltd. 2,365.95 800.01

Jiangsu Wanbang Pharmacy Marketing Co., Ltd. 876.99 551.17

Sino-Swed Pharmaceutical Corp.Ltd. 779.51 745.27

Foshan Dezhong Pharmaceutical Co., Ltd. 768.81 5.83

Chongqing Yaoyou Pharmaceutical Co., Ltd. 712.89 224.27