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一致B:2019年半年度财务报告(英文版) 下载公告
公告日期:2019-08-24

Section X. Financial ReportI. Audit reportsWhether the semi-annual report was audited or not

□ Yes √ No

The financial report of this semi-annual report was unaudited.II. Financial StatementStatement in Financial Notes are carried in RMB/CNY

CONSOLIDATED BALANCE SHEET

As at 30 June 2019

(Expressed in Renminbi Yuan)

ASSETSNote V30 June 201931 December 2018
Current assets
Cash and bank balances18,086,328,508.498,089,781,304.56
Notes receivable2790,664,828.261,357,311,929.63
Accounts receivable311,826,440,731.599,336,861,647.92
Receivable financing4325,439,580.18-
Advances to suppliers5357,078,819.64583,484,515.95
Other receivables6654,086,387.85643,493,359.32
Incl:Interest receivable14,791,483.108,223,327.64
Inventories74,882,673,616.274,389,335,942.19
Other current assets897,317,287.6095,347,629.18
Total current assets27,020,029,759.8824,495,616,328.75
Non-current assets
Long-term equity investments92,077,811,395.301,880,393,786.10
Other equity instruments investment1013,685,760.0013,685,760.00
Other non-current financial assets11140,000,000.00140,000,000.00
Investment properties12140,319,140.00144,894,495.97
Fixed assets13593,552,480.99607,933,827.67
Construction in progress1431,980,582.2136,412,614.61
Right-of-use assets151,910,981,197.63-
Intangible assets16320,522,690.59319,207,126.15
Goodwill17847,041,800.60833,547,800.60
Long-term prepaid expenses18311,311,781.97311,328,706.46
Deferred tax assets1965,417,507.0174,914,209.95
Other non-current assets2066,944,586.7672,365,863.71
Total non-current assets6,519,568,923.064,434,684,191.22
Total assets33,539,598,682.9428,930,300,519.97

The accompanying notes form an integral part of these financial statements

CONSOLIDATED BALANCE SHEET (Continued)

As at 30 June 2019

(Expressed in Renminbi Yuan)

LIABILITIESNote V30 June 201931 December 2018
Current liabilities
Short-term borrowings213,290,877,595.232,597,652,702.43
Notes payable223,539,095,262.343,416,755,681.80
Accounts payable238,088,697,602.946,468,535,961.17
Advances from customers--
Employee benefits payable25161,719,082.78231,866,407.40
Tax payable26215,579,001.83241,980,412.72
Other payables271,474,526,698.431,539,436,971.93
Incl: Interest payable29,012,444.9321,906,660.63
Dividends payable6,389,320.966,389,320.96
Contract liabilities24239,739,020.90255,590,612.37
Non-current liabilities due within one year28558,296,784.755,861,324.37
Other current liabilities29445,493.48292,465.75
Total current liabilities17,568,976,542.6814,757,972,539.94
Non-current liabilities
Long-term borrowings30-31,600,000.00
Lease liabilities311,186,461,123.96-
Long-term payables32800,000.004,563,978.52
Long-term employee benefits payable331,915,000.002,050,000.00
Deferred income3488,722,818.1891,491,170.40
Deferred tax liabilities1966,386,258.7767,605,161.88
Other non-current liabilities3567,840,696.0969,241,176.18
Total non-current liabilities1,412,125,897.00266,551,486.98
Total liabilities18,981,102,439.6815,024,524,026.92

The accompanying notes form an integral part of these financial statements

CONSOLIDATED BALANCE SHEET (Continued)

As at 30 June 2019

(Expressed in Renminbi Yuan)

SHAREHOLDERS’ EQUITYNote V30 June 201931 December 2018
Shareholders’ equity
Share capital36428,126,983.00428,126,983.00
Capital surplus374,363,409,728.514,320,984,981.51
Surplus reserve38214,063,491.50214,063,491.50
Retained earnings397,134,839,714.476,655,257,147.27
Shareholders’ equity attributable to shareholders of the parent12,140,439,917.4811,618,432,603.28
Non-controlling interests2,418,056,325.782,287,343,889.77
Total shareholders’ equity14,558,496,243.2613,905,776,493.05
Total liabilities and shareholders’ equity33,539,598,682.9428,930,300,519.97

The accompanying notes form an integral part of these financial statements

The financial statements have been signed by:

Legal representative: Financial controller: Head of Accounting Department:

CONSOLIDATED INCOME STATEMENT

For the six months ended 30 June 2019

(Expressed in Renminbi Yuan)

Note VFor the six months ended 30 June 2019For the six months ended 30 June 2018
Operating revenue4025,228,147,377.4320,778,425,602.22
Less: Operating costs4022,415,519,952.8718,367,643,723.84
Tax and surcharge4162,139,226.4456,620,527.25
Selling expenses421,483,332,500.731,273,588,756.07
Administrative expenses43377,216,694.13351,820,063.78
Finance costs44104,095,254.2457,541,544.32
Incl: Interest cost169,529,472.3783,356,367.18
Interest income60,630,036.9123,082,233.56
Add: Other incomes4514,990,919.0211,330,310.02
Investment income46169,142,289.99162,693,771.35
Incl: Investment income from associates169,142,289.99162,662,271.35
Impairment loss on financial assets47(11,434,101.13)1,026,702.24
Impairment losses48(125,554.34)(508,849.26)
Gain on disposal of assets49(29,725.44)4,281,164.61
Operating profits958,387,577.12850,034,085.92
Add: Non-operating income503,667,170.255,498,951.11
Less: Non-operating expenses511,718,265.561,797,292.80
Total profit960,336,481.81853,735,744.23
Less: Income taxes52192,243,926.50164,486,734.32
Net profit768,092,555.31689,249,009.91
Net Profit from continuing operations768,092,555.31689,249,009.91
Net profit attributable to shareholders of the parent650,833,360.40641,727,034.93
Profit or loss of non-controlling interests117,259,194.9147,521,974.98
Total comprehensive income768,092,555.31689,249,009.91
Incl: Total comprehensive income for the year attributable to owners of the parent650,833,360.40641,727,034.93
Total comprehensive income for the year attributable to non-controlling interests117,259,194.9147,521,974.98
Earnings per share
Basic earnings per share1.521.50
Diluted earnings per share1.521.50

The accompanying notes form an integral part of these financial statements

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

For the six months ended 30 June 2019

(Expressed in Renminbi Yuan)

For the six months ended 30 June 2019Shareholders’ equity attributable to shareholders of the parentNon-controlling interestsTotal equity
Share capitalOther equity instrumentCapital surplusSurplus reserveRetained earningsSubtotal
Closing balance of the preceding year428,126,983.00-4,320,984,981.51214,063,491.506,655,257,147.2711,618,432,603.282,287,343,889.7713,905,776,493.05
others--------
Opening balance of the current year428,126,983.00-4,320,984,981.51214,063,491.506,655,257,147.2711,618,432,603.282,287,343,889.7713,905,776,493.05
Movements in the current year--42,424,747.00-479,582,567.20522,007,314.20130,712,436.01652,719,750.21
(1) Total comprehensive income----650,833,360.40650,833,360.40117,259,194.91768,092,555.31
(2) Capital paid and reduced by owners--42,424,747.00--42,424,747.0014,780,000.0057,204,747.00
1.Capital injection by owners------14,780,000.0014,780,000.00
2.Others--42,424,747.00--42,424,747.00-42,424,747.00
(3) Profit distribution----(171,250,793.20)(171,250,793.20)(1,326,758.90)(172,577,552.10)
1.Distribution to equity owners----(171,250,793.20)(171,250,793.20)(1,326,758.90)(172,577,552.10)
2.Others--------
Closing balance of the current year428,126,983.00-4,363,409,728.51214,063,491.507,134,839,714.4712,140,439,917.482,418,056,325.7814,558,496,243.26

The accompanying notes form an integral part of these financial statements

CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

For the six months ended 30 June 2019

(Expressed in Renminbi Yuan)

For the six months ended 30 June 2018Shareholders’ equity attributable to shareholders of the parentNon-controlling interestsTotal equity
Share capitalOther equity instrumentCapital surplusSurplus reserveRetained earningsSubtotal
Closing balance of the preceding year428,126,983.00-3,181,429,064.99214,063,491.505,572,952,806.399,396,572,345.88530,930,411.269,927,502,757.14
others--------
Opening balance of the current year428,126,983.00-3,181,429,064.99214,063,491.505,572,952,806.399,396,572,345.88530,930,411.269,927,502,757.14
Movements in the current year--397,342.21-513,288,940.03513,686,282.2437,434,714.46551,120,996.70
(1) Total comprehensive income----641,727,034.93641,727,034.9347,521,974.98689,249,009.91
(2) Capital paid and reduced by owners--397,342.21--397,342.2126,721,512.7627,118,854.97
1.Capital injection by owners------24,381,200.0024,381,200.00
2.Others--397,342.21--397,342.212,340,312.762,737,654.97
(3) Profit distribution----(128,438,094.90)(128,438,094.90)(36,808,773.28)(165,246,868.18)
1.Distribution to equity owners----(128,438,094.90)(128,438,094.90)(36,808,773.28)(165,246,868.18)
2.Others--------
Closing balance of the current year428,126,983.00-3,181,826,407.20214,063,491.506,086,241,746.429,910,258,628.12568,365,125.7210,478,623,753.84

The accompanying notes form an integral part of these financial statements

CONSOLIDATED CASH FLOW STATEMENT

For the six months ended 30 June 2019

(Expressed in Renminbi Yuan)

Note VFor the six months ended 30 June 2019For the six months ended 30 June 2018
1.CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from sales of good or rendering of services25,674,088,675.8222,055,082,715.59
Tax refunds2,721,287.631,593,193.21
Cash receipts related to other operating activities53295,482,211.20311,984,787.60
Sub-total of cash inflows from operating activities25,972,292,174.6522,368,660,696.40
Cash paid for goods and services22,598,237,854.6819,799,894,631.80
Cash paid to and on behalf of employees1,088,230,430.51956,322,585.28
Cash paid for all types of taxes627,174,776.80548,616,793.36
Cash payments related to other operating activities53494,891,531.31838,468,976.76
Sub-total of cash outflows from operating activities24,808,534,593.3022,143,302,987.20
Net cash flows from operating activities541,163,757,581.35225,357,709.20
2.CASH FLOWS FROM INVESTING ACTIVITIES
Cash received from returns on investments20,129,463.7878,825,446.85
Net cash received from disposal of fixed assets, intangible assets and other long-term assets801,205.526,064,099.87
Cash receipts related to other investing activities53-48,766,145.15
Sub-total of cash inflows from investing activities20,930,669.30133,655,691.87

The accompanying notes form an integral part of these financial statements

CONSOLIDATED CASH FLOW STATEMENT (Continued)

For the six months ended 30 June 2019

(Expressed in Renminbi Yuan)

Note VFor the six months ended 30 June 2019For the six months ended 30 June 2018
2.CASH FLOWS FROM INVESTING ACTIVITIES(Continued)
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets111,399,813.5197,867,494.61
Cash paid for acquisition of investments43,674,685.3010,000,000.00
Cash payments related to other investing activities531,093,125.0043,999,800.00
Sub-total of cash outflows from investing activities156,167,623.81151,867,294.61
Net cash flows from investing activities(135,236,954.51)(18,211,602.74)
3.CASH FLOWS FROM FINANCING ACTIVITIES
Cash proceeds from investments by others14,780,000.0011,781,200.00
Incl: Cash received from capital contributions from non-controlling shareholders of subsidiaries14,780,000.0011,781,200.00
Cash received from borrowings16,700,000.0040,775,440.04
Cash receipts related to other financing activities533,512,659.7183,745,164.60
Sub-total of cash inflows from financing activities34,992,659.71136,301,804.64
Cash repayments for debts73,261,634.5379,670,200.30
Cash payments for distribution of dividends or profit and interest expenses343,055,058.89226,149,759.15
Incl: Profit and dividends paid to non-controlling shareholders of subsidiaries1,326,758.9040,392,215.98
Cash payments related to other financing activities53510,162,167.74118,725,719.23
Sub-total of cash outflows from financing activities926,478,861.16424,545,678.68
Net cash flows from financing activities(891,486,201.45)(288,243,874.04)

The accompanying notes form an integral part of these financial statements

CONSOLIDATED CASH FLOW STATEMENT (Continued)

For the six months ended 30 June 2019

(Expressed in Renminbi Yuan)

Note VFor the six months ended 30 June 2019For the six months ended 30 June 2018
4.EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS(176,567.25)314,863.47
5.NET INCREASE IN CASH AND CASH EQUIVALENTS54136,857,858.14(80,782,904.11)
Add: Cash and cash equivalents at beginning of the year7,632,117,020.773,673,498,691.48
6.CASH AND CASH EQUIVALENTS AT END OF YEAR547,768,974,878.913,592,715,787.37

The accompanying notes form an integral part of these financial statements

COMPANY BALANCE SHEET

As at 30 June 2019

(Expressed in Renminbi Yuan)

ASSETSNote XIV30 June 201931 December 2018
Current assets
Cash and bank balances2,210,653,256.991,817,654,598.01
Notes receivable70,539,252.9463,870,980.39
Accounts receivable1610,075,622.91631,236,593.94
Advances to suppliers3,875,346.874,760,182.00
Other receivables21,858,484,572.601,541,980,883.50
Incl:Interest receivable14,926,690.767,550,877.07
Dividends receivable106,074,898.00-
Inventories225,040,528.88158,166,185.65
Other current assets39,482.3839,482.38
Total current assets4,978,708,063.574,217,708,905.87
Non-current assets
Long-term equity investments37,639,715,544.557,432,906,692.24
Other non-current financial assets140,000,000.00140,000,000.00
Investment properties1,635,946.121,955,854.46
Fixed assets19,952,922.0521,362,422.03
Right-of-use assets6,316,333.03-
Intangible assets2,997,883.632,452,222.51
Long-term deferred expenses6,990,428.047,481,809.53
Other non-current assets7,000,000.007,000,000.00
Total non-current assets7,824,609,057.427,613,159,000.77
Total assets12,803,317,120.9911,830,867,906.64

The accompanying notes form an integral part of these financial statements

COMPANY BALANCE SHEET (Continued)

As at 30 June 2019

(Expressed in Renminbi Yuan)

LIABILITIES30 June 201931 December 2018
Current liabilities
Short-term borrowings570,000,000.00539,000,000.00
Notes payable321,344,616.65252,317,800.78
Accounts payable547,918,074.90442,049,241.22
Contract liabilities9,058,538.514,182,083.40
Employee benefits payable34,702,315.8236,233,563.12
Tax payables11,430,926.2013,426,601.90
Other payables1,729,610,132.841,481,817,856.56
Incl:Interest payable5,588,978.101,354,592.35
Non-current liabilities due within one year32,452,757.27-
Other current liabilities208,701.01226,427.99
Total current liabilities3,256,726,063.202,769,253,574.97
Non-current liabilities
Long-term borrowings-31,600,000.00
Lease liabilities5,584,622.27-
Long-term payables800,000.00800,000.00
Long-term employee benefits payable102,000.00118,000.00
Deferred income1,508,786.841,687,899.50
Deferred tax liabilities1,635,298.632,298,426.39
Total non-current liabilities9,630,707.7436,504,325.89
Total liabilities3,266,356,770.942,805,757,900.86

The accompanying notes form an integral part of these financial statements

COMPANY BALANCE SHEET (Continued)

As at 30 June 2019

(Expressed in Renminbi Yuan)

SHAREHOLDERS’ EQUITY30 June 201931 December 2018
Shareholders’ equity
Share capital428,126,983.00428,126,983.00
Capital surplus4,468,787,524.264,426,362,777.26
Surplus reserves214,063,491.50214,063,491.50
Retained earnings4,425,982,351.293,956,556,754.02
Total shareholders’ equity9,536,960,350.059,025,110,005.78
Total liabilities and shareholders’ equity12,803,317,120.9911,830,867,906.64

The accompanying notes form an integral part of these financial statements

COMPANY INCOME STATEMENT

For the six months ended 30 June 2019

(Expressed in Renminbi Yuan)

Note XIVFor the six months ended 30 June 2019For the six months ended 30 June 2018
Operating revenue42,008,004,563.301,687,621,355.83
Less: Operating costs41,921,272,394.761,614,717,473.91
Tax and surcharge2,519,247.992,016,368.93
Selling expenses31,052,044.8125,894,795.45
Administrative expenses38,056,806.3133,679,106.75
Finance costs(28,398,244.00)(19,369,880.08)
Incl: Interest cost23,271,307.7220,770,113.43
Interest income52,479,722.4240,925,200.74
Add: Other incomes332,764.131,299,345.14
Investment income5608,288,420.47534,840,744.46
Incl: Investment income from associates181,280,533.11173,326,290.14
Impairment loss on financial assets(2,365,765.08)7,411.02
Impairment losses(102,112.84)(630,953.33)
Gain on disposal of assets(26,074.52)-
Operating profits649,629,545.59566,200,038.16
Add: Non-operating income46,069.4033.08
Less: Non-operating expenses-127,688.63
Total profit649,675,614.99566,072,382.61
Less: Income taxes8,999,224.526,292,873.84
Net profit640,676,390.47559,779,508.77
Net Profit from continuing operations640,676,390.47559,779,508.77
Total comprehensive income640,676,390.47559,779,508.77

The accompanying notes form an integral part of these financial statements

COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY

For the six months ended 30 June 2019

(Expressed in Renminbi Yuan)

For the six months ended 30 June 2019Share capitalOther equity instrumentsCapital surplusSurplus reserveRetained earningsTotal equity
Closing balance of the preceding year428,126,983.00-4,426,362,777.26214,063,491.503,956,556,754.029,025,110,005.78
Others------
Opening balance of the current year428,126,983.00-4,426,362,777.26214,063,491.503,956,556,754.029,025,110,005.78
Movements in the current year--42,424,747.00-469,425,597.27511,850,344.27
(1) Total comprehensive income----640,676,390.47640,676,390.47
(2) Capital paid and reduced by owners--42,424,747.00--42,424,747.00
1. Capital injection by owners------
2. Others--42,424,747.00--42,424,747.00
(3) Profit distribution----(171,250,793.20)(171,250,793.20)
1. Distribution to owners----(171,250,793.20)(171,250,793.20)
Closing balance of the current year428,126,983.00-4,468,787,524.26214,063,491.504,425,982,351.299,536,960,350.05

The accompanying notes form an integral part of these financial statements

COMPANY STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY (Continued)

For the six months ended 30 June 2019

(Expressed in Renminbi Yuan)

For the six months ended 30 June 2018Share capitalOther equity instrumentsCapital surplusSurplus reserveRetained earningsTotal equity
Closing balance of the preceding year428,126,983.00-4,407,091,484.13214,063,491.503,329,412,821.488,378,694,780.11
Others------
Opening balance of the current year428,126,983.00-4,407,091,484.13214,063,491.503,329,412,821.488,378,694,780.11
Movements in the current year--397,342.21-431,341,413.87431,738,756.08
(1) Total comprehensive income----559,779,508.77559,779,508.77
(2) Capital paid and reduced by owners--397,342.21--397,342.21
1. Capital injection by owners------
2. Others--397,342.21--397,342.21
(3) Profit distribution----(128,438,094.90)(128,438,094.90)
1. Distribution to owners----(128,438,094.90)(128,438,094.90)
Closing balance of the current year428,126,983.00-4,407,488,826.34214,063,491.503,760,754,235.358,810,433,536.19

The accompanying notes form an integral part of these financial statements

COMPANY CASH FLOW STATEMENT

For the six months ended 30 June 2019

(Expressed in Renminbi Yuan)

For the six months ended 30 June 2019For the six months ended 30 June 2018
1.CASH FLOWS FROM OPERATING ACTIVITIES
Cash received from sales of good or rendering of services2,136,424,520.771,787,065,555.60
Cash receipts related to other operating activities18,658,823.8243,943,301.92
Sub-total of cash inflows from operating activities2,155,083,344.591,831,008,857.52
Cash paid for goods and services1,905,147,658.611,655,107,446.18
Cash paid to and on behalf of employees48,424,818.8744,855,325.83
Cash paid for all types of taxes27,913,893.1318,706,775.51
Cash payments related to other operating activities17,265,038.1236,183,479.25
Sub-total of cash outflows from operating activities1,998,751,408.731,754,853,026.77
Net cash flows from operating activities156,331,935.8676,155,830.75
2. CASH FLOWS FROM INVESTING ACTIVITIES
Cash received from returns of investments55,106,832.79187,137,437.23
Net cash received from disposal of fixed assets, intangible assets and other long-term assets119,000.00-
Cash receipts related to other investing activities996,340,000.00857,940,000.00
Sub-total of cash inflows from investing activities1,051,565,832.791,045,077,437.23
Cash paid for acquisition of fixed assets, intangible assets and other long-term assets5,983,680.116,044,462.78
Cash paid for investments-10,000,000.00
Cash payments related to other investing activities1,200,340,000.001,051,642,980.00
Sub-total of cash outflows from investing activities1,206,323,680.111,067,687,442.78
Net cash flows from investing activities(154,757,847.32)(22,610,005.55)

The accompanying notes form an integral part of these financial statements

COMPANY CASH FLOW STATEMENT (Continued)

For the six months ended 30 June 2019

(Expressed in Renminbi Yuan)

For the six months ended 30 June 2019For the six months ended 30 June 2018
3. CASH FLOWS FROM FINANCING ACTIVITIES
Cash received from borrowings10,000,000.0010,000,000.00
Cash receipts related to other financing activities11,037,461,719.138,065,884,436.80
Sub-total of cash inflows from financing activities11,047,461,719.138,075,884,436.80
Cash repayments for debts10,000,000.0010,000,000.00
Cash payments for distribution of dividends or profit and interest expenses182,679,899.11144,898,008.66
Cash payments related to other financing activities10,463,180,682.338,230,488,300.78
Sub-total cash outflows from financing activities10,655,860,581.448,385,386,309.44
Net cash flows from financing activities391,601,137.69(309,501,872.64)
4.EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS(176,567.25)314,863.47
5. NET INCREASE IN CASH AND CASH EQUIVALENTS392,998,658.98(255,641,183.97)
Add: Cash and cash equivalents at beginning of the year1,817,654,598.011,776,696,342.87
6. CASH AND CASH EQUIVALENTS AT END OF YEAR2,210,653,256.991,521,055,158.90

The accompanying notes form an integral part of these financial statements

Notes to financial statementsFor the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

I Profile of the Company

(1) Historical development and basic information

As approved by the People’s Government of Shenzhen (SFBF (1993) No.356), China National AccordMedicines Corporation Ltd. (hereinafter referred to as the “the Company”), formerly known as ShenzhenHealth Mineral Water Corp., Ltd., was registered as a joint stock liability limited company on 1 February1993 through stock transformation. In March 1993, with the approval from the Shenzhen Branch of thePeople’s Bank of China, the Company issued 30 million A shares (including 16.5 million public shares,

3.5 million employee shares and 10 million corporation shares) and 20 million B shares. After thisissuance, the Company’s share capital was RMB105 million. Through convert capital surplus into sharecapital, bonus issues and issuance of shares for years, the share capital of the Company increased toRMB428,126,983 as at 30 June 2019.

In November 2000, the Company entered into an Assets Exchange Agreement with ShenzhenInvestment Management Company, the original major shareholder of the Company, to exchange all theassets and liabilities of the Company as of 31 August 2000 for Shenzhen Investment ManagementCompany’s 100% equity interests in 11 pharmaceutical companies and certain properties as well as 51%equity interests in Shenzhen Tefa Modern Computer Co., Ltd. The above assets exchange proposal wasapproved by shareholders in the Second Extraordinary General Meeting on December 29, 2000. Thetransaction was completed on 8 January 2001.

On 18 February 2004, the Company’s original major shareholder, Shenzhen Investment ManagementCompany, entered into a Stock Transfer Agreement with Sinopharm Group Co., Ltd. (hereinafter referredto as “Sinopharm Group”) to transfer its 43.33% shares in the Company to Sinopharm Group. The legalprocedures of the above equity transfer were completed on 9 December 2004. At the same time, asapproved by the State-owned Assets Supervision and Administration Commission of the State Council(GZCQ (2004) No.525) and the China Securities Regulatory Commission (ZJGSZ (2004) No.94), thenature of these shares was changed from state-owned stock to state-owned legal entity stock andSinopharm Group became the largest shareholder of the Company.

On 14 April 2006, the Company’s proposal on reformation of segregated stocks was approved. To gainliquidity for the restricted stocks of the Company, the holders of the restricted stocks of the Companyagreed to pay the following consideration: based on the stock registration as of 27 April 2006, theCompany issued bonus shares on 28 April 2006 at the ratio of 3 shares to every 10 A shares toliquidated A-shareholders which went public on the same day. After this bonus issue, the total number ofshares of the Company remained unchanged with corresponding changes in the composition ofshareholdings.

On March 14 2014, the company issued 74,482,543 ordinary shares (A shares) through the non-publicoffering. Par value per share is RMB1 yuan. The shares shall not be transferred within 36 months sincethe issued day. The total number of shares of the Company was 362,631,943 since the date of issue.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

I Profile of the Company (Continued)

(1) Historical development and basic information (Continued)

As of 31 October 2016, the company issued RMB65,495,040.00 ordinary shares (A shares) through thenon-public offering. Par value per share is RMB1 yuan. Through the non-public offering, the Companyacquired the companies under common control, including Sinopharm Holding Guoda Pharmacy Co.,Ltd. (“Guoda Pharmacy”), Foshan Nanhai Medicine Group Co., Ltd.(“Foshan Nanhai”),GuangdongSouth Pharmaceutical Foreign Trade Co., Ltd. (“South Pharma & Trade), Guangdong Dong FangUptodate & Special Medicines Co., Ltd. (“ Guangdong Uptodate & Special Medicines”) by issuingshares and raised supporting funds by issuing shares to Ping An Asset Management Co., Ltd.(“Ping AnAsset Management”) to acquire non-controlling interest of South Pharma & Trade. The relevant shareswere successfully issued and listed on 5 January 2017.

As of 30 June 2019, the total share capital was RMB428,126,983.

The Company is registered with Shenzhen Administration for Industry & Commerce. Its Uniform SocialCredit Code is 91440300192186267U. The operation period of the Company is from 2 August 1986 tothe long term. The registered capital of the Company is RMB428,126,983. The legal representative ofthe Company is Lin Zhaoxiong.

The approved scope of business of the Company and its subsidiaries (together “the Group”) includes:

the wholesale of traditional Chinese medicine preparations, bulk pharmaceutical drugs, chemicalpreparations, bulk antibiotic drugs, antibiotic preparations, biochemical drugs, biological products(including vaccines and in vitro diagnostic reagents psychotropic drugs and preparations, narcotic drugs,toxic drugs for medical use, protein assimilation preparation and peptide hormones; trade of dietarysupplement; research, development and consultation services of pharmaceutical packaging materialsand pharmaceutical industry products; industrial investment holding; domestic trade; material supplyand marketing industry (other than special licensing); sale of ambulances; trade of second-class andthird- class medical equipment; project investment; property management and lease of self-ownedproperties; pharmacovigilance and medical information consulting; parking operation; logistics andrelated services; package agency business; logistic design; import and export services (excludingprojects that are prohibited by the country; limited projects has to be approved before operating).

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

I Profile of the Company (Continued)

(2) The Group’s parent and ultimate parent company is Sinopharm Group and China National

Pharmaceutical Group Corporation respectively.

(3) These financial statements were authorized for issue by the board of directors of the Company

on 22 August 2019.

(4) Subsidiaries consolidated in the financial statements for the current period and change in theconsolidation scope are shown in Note VI.

II Basis of preparation

The financial statements were prepared in accordance with the Basic Standard and specific standardsof the Accounting Standards for Business Enterprises issued by the Ministry of Finance on 15 February2006 and the specific accounting standards and the relevant regulations issued thereafter (hereaftercollectively referred to as the “Accounting Standards for Business Enterprises” or “CAS”), and thedisclosure requirements in the Preparation Convention of Information Disclosure by CompaniesOffering Securities to the Public No.15 – General Rules on Financial Reporting issued by the ChinaSecurities Regulatory Commission.

These financial statements are prepared on a going concern basis.

Except for certain financial instruments, the financial statements have been prepared using historicalcost as the principle of measurement. Where assets are impaired, provisions for asset impairment aremade in accordance with the relevant requirements.

The Group has made accounting policies and accounting estimates according to its own operation andproduction characteristics, which are mainly reflected in the bad debt provision for accounts receivable(NoteⅢ(10)), inventory costing methods (NoteⅢ(13)), depreciation methods for fixed assets andamortization method for intangible assets (NoteⅢ(18),NoteⅢ(22)), judgement basis for capitalization ofdevelopment costs (NoteⅢ(22)) , impairment of long-term assets (NoteⅢ(23)), revenue recognition(NoteⅢ(30)).

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates

(1) Statement of compliance with the Accounting Standards for Business Enterprises

The financial statements of the Company for the year ended 30 June 2019 are in compliance withAccounting Standards for Business Enterprises, and truly and completely present the financial positionof the Group and the Company as of 30 June 2019 and the operating results, cash flows and otherinformation for the six months ended 30 June 2019 of the Group and the Company.

(2) Accounting year

The Company’s accounting year starts on 1 January and ends on 31 December.

(3) Functional currency

The functional currency is Renminbi (RMB).

(4) Business combinations

(a) Business combinations involving entities under common control

Assets and liabilities (including goodwill arising from the ultimate controlling shareholder’s acquisition ofthe party being absorbed) that are obtained by the absorbing party in a business combination shall bemeasured at their carrying amounts at the combination date as recorded by the party being absorbed.The difference between the carrying amount of the net assets obtained and the carrying amount of theconsideration paid for the combination (or the aggregate face value of shares issued as consideration)shall be adjusted to share premium under capital surplus. If the capital surplus is not sufficient to absorbthe difference, any excess shall be adjusted against retained earnings. The transaction costs of issuingequity securities or debt securities for a business combination are recognized at the initial recognitionamount of equity securities or debt securities.

(b) Business combinations involving enterprises not under common control

The cost of combination and identifiable net assets obtained by the acquirer in a business combinationare measured at fair value at the acquisition date. Where the cost of the combination exceeds theacquirer’s interest in the fair value of the acquirer’s identifiable net assets, the difference is recognizedas goodwill; where the cost of combination is lower than the acquirer’s interest in the fair value of theacquirer’s identifiable net assets, the difference is recognized in profit or loss for the current period.Costs directly attributable to the combination are included in profit or loss in the period in which they areincurred. Transaction costs associated with the issue of equity or debt securities for the businesscombination are included in the initially recognized amounts of the equity or debt securities.Where thebusiness combination not involving enterprises under common control which is achieved in stages, theacquirer’s previously held equity interests in the acquiree are remeasured at the fair value on theacquisition date, with the difference between the fair value and carrying amount recognized asinvestment income for the current period.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(4) Business combinations (Continued)

(b) Business combinations involving enterprises not under common control (Continued)

If the acquirer’s previously held equity interests of the acquiree involve other comprehensive income(“OCI”) under the equity method, the accounting treatment is conducted on the same basis as wouldhave been required if the investee had directly disposed of the related assets or liabilities, and thechanges in shareholders’ equity other than net profit or loss, OCI and profit distributions are charged toprofit or loss for the current period on the acquisition date. For financial assets at fair value through OCIheld before the acquisition date, changes in fair value that was accumulated through OCI will transfer toretained earnings.

(5) Preparation of consolidated financial statements

The consolidated financial statements comprise the financial statements of the Company and all of itssubsidiaries.

Subsidiaries are consolidated from the date on which the Group obtains control and are de-consolidated from the date that such control ceases. For a subsidiary that is acquired in a businesscombination involving enterprises under common control, it is included in the consolidated financialstatements from the date when it, together with the Company, comes under common control of theultimate controlling party. The portion of the net profits realized before the combination date ispresented separately in the consolidated income statement.

In preparing the consolidated financial statements, where the accounting policies and the accountingperiods of the Company and subsidiaries are inconsistent, the financial statements of the subsidiariesare adjusted in accordance with the accounting policies and the accounting period of the Company. Forsubsidiaries acquired from business combinations involving enterprises not under common control, theindividual financial statements of the subsidiaries are adjusted based on the fair value of the identifiablenet assets at the acquisition date.

All significant intra-group balances, transactions and unrealized profits are eliminated in theconsolidated financial statements. The portion of a subsidiary’s equity and the portion of a subsidiary’snet profits, losses and comprehensive income for the period not attributable to the Company arerecognized as non-controlling interests and presented separately in the consolidated financialstatements within equity, net profits and total comprehensive income, respectively. The unrealized gainor loss from selling assets to subsidiaries fully offsets the net income attributable to equity holders of theCompany. The unrealized gain or loss from purchasing assets from subsidiaries offsets the net incomeattributable to equity holders of the Company and attributable to the non-controlling interest by thedistribution proportion regarding the Company and the subsidiary. The unrealized gain or loss from atransaction between subsidiaries offsets the net income attributable to equity holders of the Companyand attributable to the non-controlling interest by the distribution proportion regarding the Company andthe selling side of the subsidiaries. If different recognition perspectives for the same transaction arisewithin different accounting identities which are set up, there is an adjustment for the transaction fromthe Group’s perspective.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(5) Preparation of consolidated financial statements (Continued)

When the Group loses control of a subsidiary in multiple transactions in which it disposes of its long-term equity investment in the subsidiary in stages, if each of the multiple transactions does not form partof a bundled transaction, the transactions conducted before the loss of control of the subsidiary areaccounted for in accordance with the accounting policy for partial disposal of the equity investment insubsidiaries where control is retained. If each of the multiple transactions forms part of a bundledtransaction which eventually results in the loss of control in the subsidiary, these multiple transactionsare accounted for as a single transaction. In the consolidated financial statements, the differencebetween the consideration received and the corresponding proportion of the subsidiary’s net assets(calculated continuously from the acquisition date) in each transaction prior to the loss of control shallbe recognized in other comprehensive income and transferred to profit or loss when the parenteventually loses control of the subsidiary.

(6) Cash and cash equivalents

Cash and cash equivalents comprise cash on hand, deposits that can be readily drawn on demand, andshort-term and highly liquid investments that are readily convertible to known amounts of cash and aresubject to an insignificant risk of changes in value.

(7) Foreign currency translation

Foreign currency transactions are translated into RMB using the exchange rates prevailing at the datesof the transactions.

At the balance sheet date, monetary items denominated in foreign currencies are translated into RMBusing the spot exchange rates on the balance sheet date. Exchange differences arising from thesetranslations are recognized in profit or loss for the current period, except for those attributable to foreigncurrency borrowings that have been taken out specifically for the acquisition or construction ofqualifying assets, which are capitalized as part of the cost of those assets. Non-monetary itemsdenominated in foreign currencies that are measured at historical cost are translated at the balancesheet date using the spot exchange rates at the dates of the transactions. The effect of exchange ratechanges on cash is presented separately in the cash flow statement.

(8) Financial instruments

Financial instruments are the contracts that formed the financial assets of one entity, and at the sametime formed the financial liabilities or equity instruments of other entities.

Recognition and derecognition of financial instruments

Financial assets and financial liabilities are recognised when the Group becomes a party to thecontractual provisions of the instrument.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(8) Financial instruments (Continued)

Recognition and derecognition of financial instruments (Continued)

The Group derecognises a financial asset, part of a financial asset or group of financial assets, i.e.,offset from the accounts and statement of financial position, if either of the following conditions issatisfied:

(i) The contractual rights to the cash flows from the financial asset expire; or

(ii) The contractual rights to the cash flows from the financial asset are transferred out, or obligated

to transfer out all generated cash flows on receipt; and (a) substantially all the risks andrewards of ownership of the financial asset are transferred to the transferee; or (b) the Groupneither transfers nor retains substantially all the risks and rewards of ownership of the financialasset, but has not retained control of the financial asset.

The Group derecognises a financial liability only when the underlying present obligation is settled,discharged or expired. An agreement to replace the original financial liability with a new financial liabilitywith substantially different terms, or to modify the original financial liability’s terms substantially, isaccounted for as an extinguishment of the original financial liability and the recognition of a newfinancial liability. The difference between the carrying amount of the financial liability Derecognized andthe new financial liability should be recognised in profit or loss for the current period.

All regular means of purchases or sales of financial assets are recognised and Derecognized on a tradedate basis. Regular means of purchases or sales are purchases or sales of financial assets that requiredelivery of assets within the period generally established by regulation or convention in the marketplace.Trade date is the date that the Group commits to purchase or sell the financial asset.

Classification and measurement of financial assets

At initial recognition, the Group classifies its financial assets into: financial assets at fair value throughprofit or loss, financial assets at amortised cost, or financial assets at fair value through othercomprehensive income, according to the Group’s business model for managing financial assets and thecontract cash flow characteristics of the financial assets. Financial assets are measured at fair value atinitial recognition, provided that trade receivables or bills receivable not containing significant financingcomponents or for which financing components of not more than 1 year are not taken into considerationshall be measured at their transaction prices at initial recognition.

For financial assets at fair value through profit or loss, the relevant transaction costs are directlyrecognised in profit or loss; for other financial assets, the relevant transaction costs are recognised intheir initial recognition amount.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(8) Financial instruments (Continued)

Classification and measurement of financial assets (Continued)

Subsequent measurement depends on the classification of the financial assets:

Financial assets measured at amortised cost (debt instruments)The Group measures financial assets at amortized cost if both of the following conditions are met: Thefinancial asset is held within a business model with the objective to hold financial assets in order tocollect contractual cash flows; The contractual terms of the financial asset give rise on specified datesto cash flows that are solely payments of principal and interest on the principal amount outstanding.Interest income of this kind of financial assets is recognized using the effective interest method. Gainsand losses are recognized in the income statement when the asset is derecognized, modified orimpaired. These financial assets mainly include cash and cash equivalents, bills receivable and tradereceivables, other receivables, debt investment and long-term receivables. Debt investments and long-term receivables due within one year from the balance sheet date are reported by the Group as currentportion of non-current assets, and debt investments due within one year from the original maturity dateare reported as other current assets.

Financial assets at fair value through other comprehensive income (debt instruments)The Group measures debt investments at fair value through other comprehensive income if both of thefollowing conditions are met: The financial asset is held within a business model with the objective ofboth holding to collect contractual cash flows and selling; The contractual terms of the financial assetgive rise on specified dates to cash flows that are solely payments of principal and interest on theprincipal amount outstanding. Changes in fair values are recognized in other comprehensive incomeexcept that interest income, impairment losses and exchange differences are recognized in currentprofit or loss. Upon derecognition, the cumulative fair value change recognised in other comprehensiveincome is transferred to profit or loss. Such financial assets are reported as other debt investment.Other debt investment due within one year from the balance sheet date is reported as a current portionof non-current assets and other debt investment due within one year from the original maturity date isreported as an item of other current assets.

Financial assets designated at fair value through other comprehensive income (equity investments)The Group irrevocably chooses to designate some non-tradable equity instrument investments asfinancial assets at fair value through other comprehensive income. Only relevant dividend income(excluding dividend income explicitly recovered as part of investment cost) is recognized in profit or loss,and subsequent changes in fair value are included in other comprehensive income without provision forimpairment. When financial assets are derecognized, the accumulated gains or losses previouslyrecognized in other comprehensive gains are transferred from other comprehensive income andrecognized in retained earnings. Such financial assets are reported as other equity investment.

If one of the following conditions is met, it is a held-for-trading financial asset: the acquisition of therelevant financial asset is intended primarily for sale or repurchase in the near future; it is a part of theportfolio of identifiable financial instruments under centralized management, and there is objectiveevidence that the short-term profit model is adopted in the near future; it is a derivative, except for aderivative that is designated as a valid hedging instrument, other than a derivative that complies with afinancial guarantee contract.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(8) Financial instruments (Continued)

Classification and measurement of financial assets (Continued)

Financial assets at fair value through profit or lossFinancial assets other than the above-mentioned financial assets at amortised cost and financial assetsat fair value through other comprehensive income are classified as financial assets at fair value throughprofit or loss. For such financial assets, fair value is used for subsequent measurement, and all changesin fair value are recognised in profit or loss. Such financial assets are presented as held-for-tradingfinancial assets and are presented as other non-current financial assets if they expire after more thanone year from the balance sheet date or expected to be held more than one year from the balancesheet date.

Only when an accounting mismatch is eliminated or significantly decreased, financial assets aredesignated as financial assets at fair value through profit or loss at initial recognition.

When an enterprise initially designates a financial asset as a financial asset at fair value through profitor loss, it cannot be reclassified to other financial assets; other financial assets cannot be re-designatedafter initial recognition as financial assets measured at fair value through profit or loss.

When and only when the Group changes its business model of managing financial assets, it reclassifiesall relevant financial assets affected.

Classification and measurement of financial liabilities

On initial recognition of financial liabilities of the Group are classified as financial liabilities at fair valuethrough profit or loss, other financial liabilities and derivatives designated as effective hedginginstruments. For financial liabilities at fair value through profit or loss, the relevant transaction costs aredirectly recognized in profit or loss, and the related transaction costs of other financial liabilities arerecognized in their initial amount.

Subsequent measurement of financial liabilities is determined by its classification:

Financial liabilities at fair value through profit or lossFinancial liabilities at fair value through profit or loss consist of held for trading financial liabilities(including derivatives belonging to financial liabilities) and financial liabilities designated on initialrecognition as financial liabilities at fair value through profit or loss.

Financial liabilities are held-for-trading financial liabilities if one of the following conditions are met: thepurpose of assuming related financial liabilities is mainly to sell or repurchase in the near future; theyare part of a centrally managed identifiable portfolio of financial instruments, and there is objectiveevidence that enterprises have adopted a short-term profitability model in the near future; they arederivatives, excluding derivatives that are designated as effective hedging instruments and derivativesthat meet the financial guarantee contract. Held-for-trading financial liabilities (including derivativesbelonging to financial liabilities) are subsequently measured at fair value. Except for hedging accounting,all changes in fair value are recognized in profit or loss.

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(8) Financial instruments (Continued)

Classification and measurement of financial liabilities (Continued)

Only if one of the following conditions is met can financial liabilities be designated as financial liabilitiesat fair value through profit or loss on initial recognition: (1) It can eliminate or significantly reduce theaccounting mismatch. (2) The formal written document of risk management or investment strategy hasstated that the portfolio of financial instruments is managed, evaluated and reported to key managerson the basis of fair value. (3) The financial liability is a hybrid instrument that contains one or moreembedded derivatives, unless the embedded derivatives have no significant change in the cash flows ofthe hybrid instrument, or the embedded derivatives should obviously not be separated from the relatedhybrid instruments. (4) Mixed instruments contain embedded derivatives that need to be split but cannotbe measured separately at the time of acquisition or on subsequent balance sheet days.

For such financial liabilities, subsequent measurements are made at fair value. Changes in fair valuecaused by changes in the Group’s own credit risk are recognized in other comprehensive income, whileother changes in fair value are recognized in profit or loss. Unless changes in fair value caused bychanges in the Group's own credit risk recognized in other comprehensive income may result in orexpand accounting mismatches in profit or loss, the Group shall recognize all changes in fair value(including the amount of impact of changes in its own credit risk) in profit or loss.When an enterprisedesignates a financial liability as a financial liability at fair value through profit or loss, it cannot bereclassified as other financial liabilities; nor can other financial liabilities be re-designated as financialliabilities at fair value through profit or loss after initial recognition.

Other financial liabilitiesFor such financial liabilities, subsequent measurement is made at amortized cost using the effectiveinterest rate method.

Impairment of financial assets

Based on expected credit losses, the Group undertakes impairment treatment and confirms lossprovisions of financial assets at amortized cost, debt instrument investments at fair value through othercomprehensive income and financial guarantee contracts.

Credit loss refers to the difference between the cash flows of all contracts discounted at the originaleffective interest rate and the expected cash flows of all contracts receivable, i.e. the present value ofall cash shortages. Among them, the financial assets purchased by or originated from the Group towhich credit impairment has occurred shall be discounted at the effective interest rate adjusted by thecredit of the financial assets.

For trade receivables and contractual assets that do not contain significant financing components, theGroup uses a simplified measurement method to measure loss provisions in accordance with theamount of expected credit losses equivalent to the entire life cycle.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(8) Financial instruments (Continued)

Impairment of financial assets (Continued)

For trade receivables and contractual assets with significant financing components, the Group uses asimplified measurement method to measure loss provisions in accordance with the amount of theexpected credit loss equivalent to the entire lifetime.

For financial assets other than those measured with simplified valuation methods, the Group evaluatesat each balance sheet date whether its credit risk has significantly increased since initial recognition.The period during which credit risk has not significantly increased since initial recognition is consideredthe first stage, at which the Group shall measure the loss provision based on the amount of theexpected credit loss for the next 12 months and shall compute interest income according to the bookbalance and effective interest rate; the period during which credit risk has significantly increased sinceinitial recognition although no credit impairment has occurred is considered the second stage, at whichthe Group shall measure the loss provision based on the amount of the expected credit loss for theentire valid period and shall compute interest income according to the book balance and effectiveinterest rate; The period during which credit impairment has occurred after initial recognition isconsidered the third stage, at which the Group shall measure the loss provision based on the amount ofthe expected credit loss for the entire period and shall compute interest income according to theamortised cost and effective interest rate. For financial instruments with relatively low credit risk at thebalance sheet date, the Group assumes that its credit risk has not significantly increases since initialrecognition.

The Group evaluates the expected credit losses of financial instruments on a single and combinedbasis. Taking into account the credit risk characteristics of different customers, the Group evaluates theexpected credit losses of trade receivables based on the aging portfolio.

In assessing expected credit losses, the Group takes into account reasonable and valid information onpast events, current conditions and future economic forecasts.

Refer to Notes VIII.3 for the disclosure of the Group's criteria for judging the significant increase incredit risk, the definition of assets with impaired credit losses, and the assumption of measuringexpected credit losses.

When the Group no longer reasonably expects to be able to recover all or part of the contract cashflows of the financial assets, the Group will write off the book value of the financial assets directly.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the statement offinancial position if there is a currently enforceable legal right to offset the recognised amounts andthere is an intention to settle on a net basis, or to realize the financial assets and settle the financialliabilities simultaneously.

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(8) Financial instruments (Continued)

Modification of financial assets

Where the Group modifies or renegotiates the contract with its counterparty and does not result in thederecognition of financial assets, but results in a change in the cash flow of the contract, the Grouprecalculates the book value of the financial asset on the basis of the renegotiated or modified contractcash flows at the discounted value of the original effective interest rate (or credit-adjusted effective rateof interest) of the financial asset, and the related gains or losses are recognized in profit or loss. Therevised cost or expense of the financial assets adjust the book value of the financial assets and areamortized within the remaining period of the modified financial assets.

Transfer of financial assets

The Group derecognises a financial asset when it has transferred substantially all the risks and rewardsof ownership of the financial asset to the transferee; the Group does not derecognize those financialassets when it retains substantially all the risks and rewards of the ownership.

If the Group neither transfers nor retains substantially all the risks and rewards of ownership of financialassets, the related accounting treatments of such financial assets are as follows: the Groupderecognises financial assets when it retains no control on them, and associated assets and liabilitiesare recognised at the same time. If the Group retains control of the financial asset, it recognizes thefinancial asset to the extent of its continuing involvement in the transferred financial asset andrecognizes an associated liability.

Continuing involvement that takes the form of a financial guarantee over the transferred asset ismeasured at the lower of the original carrying amount of the asset and the financial guarantee. Theamount of the financial guarantee is the maximum amount of consideration that the Group could berequired to repay.

(9) Notes receivables

For details of the method for determining the expected credit loss of notes receivable, please refer to“III.8 Financial instruments - Impairment of financial instruments.”

(10) Accounts Receivable

For details of the method for determining the expected credit loss of accounts receivable, please referto “III.8 Financial instruments - Impairment of financial instruments.”

(11) Accounts Receivable Financing

It includes notes receivable and accounts receivable that are measured at fair value on the balancesheet date and whose changes are included in other comprehensive income.For details of the method for determining the expected credit loss of receivables financing, please refer“III.8 Financial instruments - Impairment of financial instruments.”

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(12) Other receivables

For details of the method for determining the expected credit losses of other receivables, please refer to“III.8 Financial instruments - Impairment of financial instruments.”

(13) Inventories

Inventories include raw materials, work in progress, finished goods, delegate processing supplies andturnover materials, and are measured at the lower of cost and net realizable value.

Cost is determined on the weighted average method. The cost of finished goods and work in progresscomprises raw materials, direct labor and an allocation of systematically allocated overheadexpenditures incurred based on the normal operating capacity.

Basis for determining the net realizable values of inventories and method for making provisions fordecline in the value of inventories

Provisions for decline in the value of inventories are determined at the excess amount of the carryingvalue of the inventories over their net realizable value. Net realizable value is determined based on theestimated selling price in the ordinary course of business, less the estimated costs to completion andestimated costs necessary to make the sale and related taxes.

The Group adopts the perpetual inventory system.

(14) Contract assets

The unconditional (namely, dependent only on the passage of time) right to receive consideration fromcustomers owned by the Group shall be presented as amounts receivable. The right to receiveconsideration following the transfer of products to customers which is dependent on factors other thanthe passage of time is presented as contract assets.

(15) Assets relating to contract cost

The Group’s assets relating to contract costs include the contract acquisition costs and contractperformance costs, presented respectively under inventories, other current assets and other non-current assets.

Where the Group expects the incremental costs for acquiring a contract to be recoverable, suchcontract acquisition costs are recognised as an asset (unless the amortisation period of the asset is notmore than 1 year).

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(15) Assets relating to contract cost (Continued)

Costs incurred by the Group for the performance of a contract are recognised as an asset as contractperformance costs if they do not fall under the scope of the relevant standards for inventories, fixedassets or intangible assets but meet all the following conditions:

(1) They are directly related to a current or anticipated contract, including direct labour, direct

materials, manufacturing expenses (or similar expenses), to be borne by customers asspecifically stipulated, and otherwise incurred solely in connection with the contract;

(2) they will increase the resources to be utilised in the Company’s future performance of its

contractual obligations; and

(3) they are expected to be recoverable.

The Group amortises assets relating contract costs on the same basis as that for the recognition ofrevenue relating to such assets and recognises the amortised assets in current profit or loss.

For assets relating to contract costs whose carrying value is higher than the difference between thefollowing two items, the Group makes provision for impairment for the excess to be recognised as assetimpairment losses:

(1) The remaining consideration expected to be obtained as a result of the transfer of goods

relating to such assets;

(2) Estimated costs to be incurred in connection with the transfer of relevant goods

In the event that the difference between (1) and (2) becomes higher than the carrying value of suchassets as a result of changes in the factors of impairment for previous periods, previous provisions forasset impairment losses should be written back and included in current profit or loss, provided that thecarrying asset value following the write-back shall not exceed the carrying value that such assets wouldhave on the date of write-back were there no provision for impairment.

(16) Long-term equity investments

Long-term equity investments comprise the Company’s long-term equity investments in its subsidiaries,joint ventures and associates.

Long-term equity investments are accounted for using the coast method at the time it was acquired. Forlong-term equity investments acquired through a business combination involving enterprises undercommon control, the investment cost shall be the absorbing party’s share of the carrying amount ofshareholders’ equity of the party being absorbed at the combination date.

Subsidiaries are the investees over which the Company is able to exercise control. Associates are theinvestees that the Group has significant influence on their financial and operating policies.

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(16) Long-term equity investments (Continued)

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. For long-term equity investmentsacquired by way of the swap of non-monetary assets, the initial investment cost shall be determined inaccordance with “ASBE No. 7 — Swap of Non-monetary Assets.” For long-term equity investmentsacquired by way of debt restructuring, the initial investment cost shall be determined in accordance with“ASBE No. 12 — Debt Restructuring.”

(a) Determination of investment cost

For long-term equity investments acquired through a business combination: for long-term equityinvestments acquired through a business combination involving enterprises under common control, theinvestment cost shall be the absorbing party’s share of the carrying amount of shareholders’ equity ofthe party being absorbed at the combination date; for long-term equity investments acquired through abusiness combination involving enterprises not under common control, the investment cost shall be thecombination cost.

(b) Subsequent measurement and recognition of related profit or loss

For long-term equity investments accounted for using the cost method, they are measured at the initialInvestment costs, and cash dividends or profit distribution declared by the investees are recognized asinvestment income in profit or loss.

For long-term equity investments accounted for using the equity method, where the initial investmentcost of a long-term equity investment exceeds the Group’s share of the fair value of the investee’sidentifiable net assets at the acquisition date, the long-term equity investment is measured at the initialinvestment cost; where the initial investment cost is less than the Group’s share of the fair value of theinvestee’s identifiable net assets at the acquisition date, the difference is included in profit or loss andthe 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 theinvestment income according to its share of net profit or loss of the investee. The Group discontinues torecognize its share of net losses of an investee after the carrying amount of the long-term equityinvestment together with any long-term interests that, in substance, form part of the investor’s netinvestment in the investee are reduced to zero. However, if the Group has obligations for additionallosses and the criteria with respect to the recognition of provisions under the accounting standards oncontingencies are satisfied, the Group continues to recognize the investment losses and the provisions.For changes in shareholders’ equity of the investee other than those arising from its net profit or loss,other comprehensive income, and profit distribution, the Group adjusts the book value of the investmentand records a capital surplus accordingly. The carrying amount of the investment is reduced by theGroup’s share of the profit distribution or cash dividends declared by an investee.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(16) Long-term equity investments (Continued)

(b) Subsequent measurement and recognition of related profit or loss (Continued)

The unrealized profits or losses arising from the intra-group transactions amongst the Group and itsinvestees are eliminated in proportion to the Group’s equity interests in the investees, and then basedon which the investment gains or losses are recognized. For the loss on intra-group transactionsamongst the Group and its investees attributable to asset impairment, any unrealized loss is noteliminated.

(c) Basis for determining existence of control, joint control or significant influence over investees

Control is the power to govern the financial and operating policies of the investee so as to obtainbenefits from its operating activities. In determining whether the Company is able to exercise controlover the investee, the effect of potential voting rights over the investee is considered, such asconvertible debts and warrants currently exercisable.

Significant influence is the power to participate in the financial and operating policy decisions of theinvestee, but is not control or joint control over those policies.

(d) Impairment of long-term equity investments

The carrying amount of long-term equity investments in subsidiaries and associates is reduced to therecoverable amount when the recoverable amount is less than the carrying amount.

(17) Investment properties

Investment properties, including land use rights that have already been leased out, buildings that areheld for the purpose of leasing, and buildings that are being constructed or developed for the purpose ofleasing in future, are measured initially at cost. Subsequent expenditures incurred in relation toinvestment properties are included in the cost of investment properties when it is probable that theassociated economic benefits will flow to the Group and their costs can be reliably measured;otherwise, the expenditures are recognized in profit or loss in the period in which they are incurred.

Estimated useful livesEstimated residual valueAnnual depreciation (amortization) rates
Buildings12-35 years0-5%2.71-7.92%
Land use rights30-50 years-2.00-3.33%

When an investment property is transferred to owner-occupied property, it is reclassified as a fixedasset or intangible asset at the date of transfer. When an owner-occupied property is transferred out forearning rentals or for capital appreciation, the fixed asset or intangible asset is reclassified as aninvestment property at its carrying amount at the date of transfer.

The investment properties’ useful life, net residual value and depreciation (amortization) method appliedare reviewed and adjusted as appropriate at the end of each year.

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(17) Investment properties (Continued)

An investment property is Derecognized on disposal or when the investment property is permanentlywithdrawn from use and no future economic benefits are expected from its disposal. The net amount ofproceeds from sale, transfer, retirement or damage of an investment property after its carrying amountand related taxes and expenses is recognized in profit or loss for the current period.

(18) Fixed assets

Fixed assets are recognized when it is probable that the related economic benefits will flow to theGroup and the costs can be reliably measured. Subsequent expenditures incurred for a fixed asset areincluded in the cost of the fixed asset when it is probable that the associated economic benefits will flowto the Group and the related cost can be reliably measured. The carrying amount of the replaced part isderecognized. All the other subsequent expenditures are recognized in profit or loss in the period inwhich they are incurred.

Fixed assets are initially measured at cost and the effect of any expected costs of abandoning the assetat the end of its use is considered. The cost of a fixed asset is the aggregate cost of purchase price,related taxes and any directly attributable expenditure for bringing the asset to its working condition forits intended use.

Fixed assets are depreciated using the straight-line method to allocate the cost of the assets to theirestimated residual values over their estimated useful lives. For the fixed assets that have been providedfor impairment loss, the related depreciation charge is prospectively determined based upon theadjusted carrying amounts over their remaining useful lives.

Estimated useful lives Estimated residual value Annual depreciationrates

Buildings 20-35 years 0-5% 2.71-5.00%Machinery and equipment 5-14 years 3-6% 6.79-19.40%Motor vehicles 3-10 years 0-5% 9.50-33.33%Other equipment 3-10 years 0-5% 9.50-33.33%Leasehold improvements within 5 years 0% 20% andabove

Fixed assets held under finance leases are depreciated under the same depreciation method as otherfixed assets. The assets are depreciated over their estimated useful lives where ownership of theassets can be reasonably estimated to be gained when lease periods end; otherwise, the leased assetsare depreciated over the shorter of the lease terms and the estimated useful lives of the assets.

The Group reviews the useful life, estimated net residual value of a fixed asset and the depreciationmethod applied at least once at each financial year end, and adjusts for any change when necessary.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(18) Fixed assets (Continued)

A fixed asset is Derecognized on disposal or when no future economic benefits are expected from itsuse or disposal. The amount of proceeds from disposal on sale, transfer, retirement or damage of afixed asset net of its carrying amount and related taxes and expenses is recognized in profit or loss forthe current period.

(19) Construction in progress

Construction in progress is measured at its actual cost. The actual cost includes various necessaryconstruction expenditures during the construction period, borrowing costs capitalised before it is readyfor intended use and other relevant costs.

(20) Borrowing costs

Borrowing costs refer to the interest and other relevant cost incurred from borrowing, which include loaninterest, discount or amortization of premiums, auxiliary expenses and exchange differences due toforeign currency loans, etc.

Where the borrowing costs incurred to the Company can be directly attributable to the acquisition andconstruction or production of assets eligible for capitalization, it shall be capitalized and recorded intothe costs of relevant assets. Other borrowing costs shall be recognized as expenses on the basis of theactual amount incurred, and shall be recorded into the current profits and losses. The term “assetseligible for capitalization” shall refer to the fixed assets, investment real estate, inventories and otherassets, of which the acquisition and construction or production may take quite a long time to get readyfor its intended use or for sale.

The borrowing costs shall not be capitalized unless they simultaneously meet the followingrequirements:

(1) The asset disbursements have already incurred;

(2) The borrowing costs have already incurred; and

(3) The acquisition and construction or production activities which are necessary to prepare the

asset for its intended use or sale have already started.

When the qualified asset under acquisition and construction or production is ready for the intended useor sale, the capitalization of the borrowing costs shall be ceased. Borrowing costs incurred after theintended use or sale shall be recorded in the current profits and losses.

During the period of capitalization, the capitalized amount of interest in each accounting period shall becalculated and determined in the ways below:

The enterprise shall calculate and determine the interest of a specific loan by deducting interest incomeof the loan capital deposit in the bank or investment income obtained from a temporary investment.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(20) Borrowing costs (Continued)

The enterprise shall calculate and determine the to-be-capitalized amount of interests on the generalborrowing by multiplying the weighted average asset disbursement of the part of the accumulative assetdisbursements minus the general borrowing by the capitalization rate of the general borrowing used.

Where the acquisition and construction or production of a qualified asset is interrupted abnormally andthe interruption period lasts for more than 3 months, the capitalization of the borrowing costs shall besuspended. The borrowing costs incurred during such period shall be recognized as expenses, andshall be recorded into the profits and losses of the current period, till the acquisition and construction orproduction of the asset restarts.

(21) Right-of-use assets

On the commencement date of the lease term, the lessee recognizes the right-of-use asset for thelease (except for short-term leases and low-value asset leases). The right to use asset costs includes:

the initial measurement amount of the leas liability; the lease payment amount paid on or before thestart date of the lease period (if there is a lease incentive, deducting the relevant amount of the leaseincentive); The initial direct cost incurred by the lessee.

Where the lessee can reasonably determine the ownership of the leased asset at the expiration of thelease term, the depreciation is provided within the remaining useful life of the leased asset; If it is notreasonable to determine that the leasehold asset can be acquired at the expiration of the lease term,the depreciation is provided during the period between the lease term and the remaining useful life ofthe leased asset. The lessee is required to determine whether the right-of-use asset is impaired at thesame time and accounting for identified impairment losses.

(22) Intangible assets

Intangible assets are recognised and measured on initial recognition at cost only if the related economicbenefits will probably flow into the Group and their costs can be measured reliably. However, theintangible assets acquired through a business combination not involving enterprises under commoncontrol should be measured at fair value separately as intangible assets when their fair values can bereliably measured.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(22) Intangible assets (Continued)

The useful life of the intangible assets shall be assessed according to the estimated beneficial periodexpected to generate economic benefits for the Group. An intangible asset shall be regarded as havingan indefinite useful life when there is no foreseeable limit to the period over which the asset is expectedto generate economic benefits for the Group.

CategoriesUseful lives
Land use rightsBetween the approved useful period and the Company’s operating period
Software3-5 years
Trademarks5-10 years
Technology patents5 years
Distribution network20 years
Franchising rights10 years
Favorable leases17-20 years

Land use rights obtained by the Group are usually accounted for as intangible assets. As for theconstruction of plants, factories and other buildings of the Group, the related land use rights and otherbuildings were accounted for as intangible assets and fixed assets, respectively. Purchase costs of landuse rights and buildings were allocated to intangible assets and fixed assets separately. Purchase costswere recognised as cost of fixed assets, only if the separation was impracticable.

Intangible assets with a finite useful life are amortised over their estimated useful lives using thestraight-line method or other reasonable systematic methods. For an intangible asset with a finite usefullife, the Group reviews the useful life and amortization method at least once at each financial year end,and makes adjustments when necessary.A land use right granted by the government with an infiniteuseful life would not be amortized. Other land use rights are amortized on the straight-line basis overtheir approved useful period. If the acquisition costs of land use rights and the buildings located thereoncannot be reliably allocated between the land use rights and the buildings, all of the acquisition costsare recognized as fixed assets.

The expenditure on an internal research and development project is classified into expenditure on theresearch phase and expenditure on the development phase based on its nature and whether there ismaterial uncertainty that the research and development activities can form an intangible asset at theend of the project.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(22) Intangible assets (Continued)

Expenditure for investigation, evaluation and selection of production process and new drug researchesis recognized in profit or loss in the period in which it is incurred. Expenditure on the designation,measurement of the final utilization of the production process and new drugs before mass production iscapitalized only if all of the following conditions are satisfied:

?development of the production process and new drugs has been fully demonstrated by thetechnical team;?management has approved the budget of drug production development and new drugs;?market research analysis suggests that the products produced by the new productiontechnology are able to be promoted;?adequate technical, financial and other resources to complete the development and the abilityto use or sell the intangible asset;?the expenditure attributable to the intangible asset during its development phase can be reliablymeasured.

Other development costs that do not meet the conditions above are recognized in profit or loss in theperiod in which they are incurred. Development costs previously recognized as expenses are notrecognized as an asset in a subsequent period. Capitalized expenditure on the development phase ispresented as development costs in the balance sheet and transferred to intangible assets at the datethat the asset is ready for its intended use.

The Group classifies the expenses for internal research and development as research costs anddevelopment costs. All research costs are charged to the current profit or loss as incurred. Expenditureincurred on projects to develop new products is capitalised and deferred only when the Group candemonstrate the technical feasibility of completing the intangible asset so that it will be available for useor sale, its intention to complete and its ability to use or sell the asset, how the asset will generate futureeconomic benefits (including demonstration that the product derived from the intangible asset or theintangible asset itself will be marketable or, in the case of internal use, the usefulness of the intangibleasset as such), the availability of technical and financial resources to complete the project and procurethe use or sale of the intangible asset, and the ability to measure reliably the expenditure during thedevelopment. Product development expenditure which does not meet these criteria is expensed whenincurred.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(23) Impairment of long-term assets

Fixed assets, construction in progress, intangible assets with finite useful lives, long-term prepaidexpenses and investment properties measured using the cost model and long-term equity investmentsin subsidiaries and associates are tested for impairment if there is any indication that an asset may beimpaired at the balance sheet date. If the result of the impairment test indicates that the recoverableamount of the asset is less than its carrying amount, a provision for impairment and an impairment lossare recognized for the amount by which the asset’s carrying amount exceeds its recoverable amount.The recoverable amount is the higher of an asset’s fair value less costs to sell and the present value ofthe future cash flows expected to be derived from the asset. Provision for asset impairment isdetermined and recognized on the individual asset basis. If it is not possible to estimate the recoverableamount of an individual asset, the recoverable amount of a group of assets to which the asset belongsis determined. A group of assets is the smallest group of assets that is able to generate independentcash inflows.

Goodwill that is separately presented in the financial statements, intangible assets with infinite usefullives and capitalized development costs are tested at least annually for impairment, irrespective ofwhether there is any indication that it may be impaired. In conducting the test, the carrying value ofgoodwill is allocated to the related asset groups or groups of asset groups which are expected to benefitfrom the synergies of the business combination. If the result of the test indicates that the recoverableamount of an asset group or a group of asset groups, including the goodwill allocated, is lower than itscarrying amount, the corresponding impairment loss is recognized. The impairment loss is firstdeducted from the carrying amount of goodwill that is allocated to the asset group or group of assetgroups, and then deducted from the carrying amount of other assets within the asset groups or groupsof asset groups in proportion to the carrying amount of other assets.

Once the above impairment loss is recognized, it will not be reversed for the value recovered in thesubsequent periods.

(24) Long-term prepaid expenses

Long-term prepaid expenses include the expenditure for improvements to fixed assets under operatingleases, and other expenditures that have been made but should be recognized as expenses over morethan one year in the current and subsequent periods. Long-term prepaid expenses are amortized on thestraight-line basis over the expected beneficial period and are presented at actual expenditure net ofaccumulated amortization.

(25) Contract liabilities

The obligation to pass products to customers in connection with customer consideration received orreceivable is presented as contract liabilities, for example, amounts received prior to the transfer of thepromised products.Contract assets and contract liabilities under the same contract are presented on a net basis after set-off.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(26) Employee benefits

Short-term employee benefits

The actual occurred short-term employee benefits are recognizes as liabilities during the accountingperiod in which the service has been rendered by the employees and as costs of assets or expenses towhichever the employee service is attributable.

Post-employment benefits (defined contribution plans)

The employees in the Group participate in social insurance and unemployment insurance schemesadministrated by the local governments, and the related expenditures are recorded in cost of relatedassets or profit or loss in the period when they incurred.

Post-employment benefits (defined benefit plans)

The Group operates a defined benefit pension scheme. No funds have been injected into the scheme.The cost of benefits provided under the defined benefit scheme is calculated using the expected benefitaccrual unit approach.

Remeasurement arising from defined benefit pension schemes, including actuarial gains or losses,changes in the asset cap effect (deducting amounts included in net interest) and returns on schemeassets (deducting amounts included in net interest) are instantly recognised in the balance sheet andcharged to shareholders’ equity through other comprehensive income for the period during which it isincurred. It will not be reversed to profit and loss in subsequent periods.

Previous service costs are recognised as current expenses when: the defined benefit scheme isrevised, or relevant restructuring costs or termination benefits are recognised by the Group, whicheverearlier.

Net interest is arrived at by multiplying net liabilities or net assets of defined benefits with a discountrate. Changes in net obligations of defined benefits are recognised as operating costs andadministration expenses in the income statement. Service costs included current services costs, pastservice costs and settlement of profit or loss. Net interest included interest income from scheme assets,interest expenses for scheme obligations and interest of the asset cap effect.

Termination benefits

The Group recognizes a liability for termination benefits and charges to profit or loss at the earlier of thefollowing dates: a) when the Group can no longer withdraw from the termination plan or the redundancyoffer; and b) when the Group recognizes costs or expense for a restructuring plan which involves thepayment of termination benefits.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(26) Employee benefits (Continued)

Other long term employee benefits

Other long-term employees’ benefits provided to employees shall be recognised and measured as netliabilities or net assets where provisions regarding post-employment benefits are applicable, providedthat changes shall be included in current profit and loss or related capital costs.

(27) Lease liability

On the commencement date of the lease term, the lessee recognizes the lease liability for the lease(except for short-term leases and low-value asset leases). The lease liability is initially measured usingthe incremental borrowing rate as the present value of the discount rate based on the lease paymentsthat have not been paid on the start date of the lease term. At the same time, the lessee calculates theinterest expense of the lease liability for each period of the lease term based on the effective interestmethod and recognizes it in profit or loss for the current period.

(28) Provisions

An obligation related to a contingency shall be recognized by the Group as a provision when all of thefollowing conditions are satisfied, except contingent considerations and contingent liabilities assumed ina business combination not involving enterprises under common control:

(1) The obligation is a present obligation of the Group;

(2) It is probable that an outflow of economic benefits from the Group will be required to settletheobligation; and

(3) The amount of the obligation can be measured reliably.

The provisions are initially measured at the best estimate of the expenditure required to settle therelated present obligation, taking into account factors pertaining to a contingency such as the risks,uncertainties and time value of money as a whole. The carrying amount of provisions is reviewed at thebalance sheet date. Where there is clear evidence that the carrying amount of a provision does notreflect the current best estimate, the carrying amount is adjusted to the current best estimate.

For business combinations not under common control, contingent liabilities of the acquiree obtained in abusiness combination shall be measured at fair value in initial recognition. After initial recognition,subsequent measurement is conducted using the higher of the amount recognized by provisions andthe amount of initial recognition deducting the accumulated amortization amount determined by theprinciples of revenue recognition.

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(29) Share-based payments

The share-based payments shall consist of equity-settled share-based payments and cash-settledshare-based payments. The term "equity-settled share-based payment" refers to a transaction in whichthe group grants shares or other equity instruments as a consideration in return for services.

The equity-settled share-based payment in return for employee services shall be measured at the fairvalue of the equity instruments granted to the employees. As to an equity-settled share-based paymentin return for services of employees, if the right may be exercised immediately after the grant, the fairvalue of the equity instruments shall, on the date of the grant, be included in the relevant cost orexpense and the capital reserves shall be increased accordingly. As to an equity-settled share-basedpayment in return for employee services, if the right cannot be exercised until the vesting period comesto an end or until the prescribed performance conditions are met, then on each balance sheet datewithin the vesting period, the Group shall make the best estimate of the number of vested equityinstruments based on the latest movement of the granted employee, the content of prescribedperformance and other conditions. Based on the best estimate, the services obtained in the currentperiod shall be included in the relevant costs or expenses and the capital reserves at the fair value ofthe equity instruments on the date of the grant.

For awards that do not ultimately vest because non-market performance and service conditions havenot been met, no expense is recognised. Where awards include a market or non-vesting condition, thetransactions are treated as vesting irrespective of whether the market or non-vesting condition issatisfied, provided that all other performance and service conditions are satisfied.

Where the terms of an equity-settled award are modified, as a minimum an expense is recognised as ifthe terms had not been modified, if the original terms of the award are met. In addition, an expense isrecognised for any modification that increases the total fair value of the share-based payments, or isotherwise beneficial to the employee as measured at the date of modification.

Where an equity-settled award is cancelled, it is treated as if it had vested on the date of cancellation,and any expense not yet recognised for the award is recognised immediately. This includes any awardwhere non-vesting conditions within the control of either the Group or the employee are not met.However, if a new award is substituted for the cancelled award, and is designated as a replacementaward on the date that it is granted, the cancelled and new awards are treated as if they were amodification of the original award, as described in the previous paragraph.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(29) Share-based payments (Continued)

A cash-settled share-based payment shall be measured in accordance with the fair value of liabilitycalculated and confirmed based on the shares or other equity instruments undertaken by an enterprise.As to a cash-settled share-based payment instruments, if the right may be exercised immediately afterthe grant, the fair value of the liability undertaken by the enterprise shall, on the date of the grant, beincluded in the relevant costs or expenses, and the liabilities shall be increased accordingly. As to acash-settled share-based payment, if the right may not be exercised until the vesting period comes toan end or until the specified performance conditions are met, on each balance sheet date within thevesting period, the services obtained in the current period shall, based on the best estimate of theinformation about the exercisable right, be included in the relevant costs or expenses and thecorresponding liabilities at the fair value of the liability undertaken by the group. The group shall, oneach balance sheet date and on each account date prior to the settlement of the relevant liabilities, re-measure the fair values of the liabilities and include the changes in the current profits and losses.

(30) Revenue recognition

The group recognizes revenue when it has fulfilled its obligations under the contract, i, e. when thecustomer acquires control relevant goods or services. Acquiring control over the goods or servicesrefers to the ability to dominate the use of the goods or the portion of services and to derive almost allthe economic benefits therefrom.

Contracts for sale of goods

The contracts for the sale of goods between the Group and its customer usually only contain theperformance obligations for the transfer of goods. The Group generally recognizes revenue at the pointof transferring the control of goods on the basis of a combination of the following factors: the currentright to collect the goods, the transfer of major risks and benefits in the ownership of the goods, and thetransfer of the legal ownership of the goods, the transfer of physical assets of the goods and that thecustomers have accepted the goods.

Service Contracts

The service contracts between the Group and its customers usually consist of performance obligationssuch as engineering construction management, engineering design consulting and so on. As theGroup's performance of contracts is at the same time when the customer obtains and consumes theeconomic benefits of the performance of the Group, and the Group has the right to collect receivablesfrom the performance of contacts that has been completed to date, the Group regards it as a contactobligation over a period of time, except that the progress of performance cannot be reasonablydetermined. The Group determines the progress of the performance of contracts in accordance with theinput method. If the progress of performance of contracts cannot be reasonably determined and thecost incurred by the Group are expected to be compensated, the revenue is recognized on the basis ofthe incurred costs until the progress of performance of contacts can be reasonably measured.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(30) Revenue recognition (Continued)

Variable consideration

Certain contracts between the Group and its customers contain cash discounts and price guaranteeclauses which will give rise to variable consideration. Where a contract contains variable consideration,the Group determines the best estimates on the variable consideration based on expected values or themost probable amount, provided that transaction prices including variable consideration shall notexceed the cumulative amount of recognised revenue upon the removal of relevant uncertainties inconnection with which a significant reversal is highly unlikely.

Consideration payable to customers

Where consideration is payable by the Group to a customer, such consideration payable shall bededucted against the transaction price, and against current revenue upon the recognition of revenue orthe payment of (or the commitment to pay) the consideration to the customer (whichever is later), savefor consideration payable to the customer for the purpose of acquiring from the customer other clearlyseparable products.

Return clauses

In connection with sales with a return clause, revenue is recognised according to the amount ofconsideration it expects to be entitled to for the transfer to a customer when the customer acquirescontrol of the relevant. Amounts expected to be refunded for the return of sales are recognised asliabilities. At the same time, the balance of the carrying value of the product expected to be returnedupon transfer less expected costs for the recall of such product (including an impairment loss of therecalled product) shall be recognised as an asset (i.e. cost of return receivables), and the net amount ofthe carrying value of the transferred product upon the transfer less the aforesaid asset cost shall betransferred to cost. At each balance sheet date, the Group reassesses the future return of sales andremeasures the above assets and liabilities.

Significant financing component

Where a contract contains a significant financing component, the Group determines transaction pricesbased on amounts payable assumed to be settled in cash by customers immediately upon theacquisition of control over the products. The difference between such transaction price and contractconsideration is amortised over the contract period using the effective interest rate method based on aratio that discounts the nominal contractual consideration to the current selling price of the products.

The Group shall not give consideration to any significant financing component in a contract if the gapbetween the customer’s acquisition of control over the products and payment of consideration isexpected to be less than 1 year.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(30) Revenue recognition (Continued)

Warranty clauses

The Group provides quality assurance for products sold and assets built in accordance withcontract terms and laws and regulations. The accounting treatment of quality assurance in theform of warranty assuring customers products sold are in compliance with required standards isset out in Note III.28. Where the Group provides a service warranty for a standalone service inaddition to the assurance of compliance of products with required standards, such warranty istreated as a standalone contractual performance obligation, and a portion of the transactionprice shall be allocated to the service warranty based on a percentage of the standalone pricefor the provision of product and service warranty. When assessing whether a warranty isrendering a standalone service in addition to providing guarantee to customers that all soldgoods are in compliance with required standards, the Group will consider whether or not suchwarranty is a statutory requirement, the term of the warranty and the nature of the Group’sundertaking to perform its obligations.

Reward points program

The Group grants reward points to customers when selling goods. Customers can use rewardpoints to redeem free or discounted goods provided by the Group. This reward points programprovides significant rights to customers, the Group consider it as an individual performanceobligation, and an apportion part of the transaction price to reward points based on pricing ofgoods or services with warranty clauses. Revenue is recognised when customers obtain goodsredeemed or when reward points expire.

Principal responsible person/proxy

For goods or other assets obtained from a third party which were transferred later to customers,the Group has the right to decide independently, pricing of goods. This means that the Grouphas obtained control over related goods before transferring to customers. Therefore, the Groupis the principal responsible person, and revenue is recognised based on total amount ofconsideration received or receivable. Otherwise, the Group is proxy, and revenue is recognisedbased on expected commission. This amount should be the total amount of considerationreceived or receivable net of the amount payable to other parties, or based on the fixed amountor percentage.

(31) Government grants

A government grant is recognized when the conditions attached to it can be complied with andthe government grant can be received. For a government grant in the form of transfer ofmonetary assets, the grant is measured at the amount received or receivable. For agovernment grant in the form of transfer of non-monetary assets, it is measured at fair value; ifthe fair value is not reliably determinable, the grant is measured at nominal amount.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(31) Government grants (Continued)

Government grants related to assets refer to government assets which are granted to enterprises forthe long-term assets formed by acquisition, construction or in other manners. Government grantsrelated to income refer to government grants other than those related to assets.

Government grants related to income to be used as compensation for future expenses or losses shallbe recognized as deferred income and shall be charged to the current profit or loss or be used to writedown the relevant loss, during the recognition of the relevant cost expenses or losses; or used ascompensation for relevant expenses or losses already incurred by enterprises shall be directly chargedto the profit or loss account in the current period or used to write down the relevant cost.

The government grants related to assets shall be used to write down the book value of the relevantassets or be recognized as deferred income. The government grants related to assets, recognized asdeferred income, shall be charged to the profit and loss reasonably and systematically in stages overthe useful lives of the relevant assets. The government grants measured at a nominal amount shall bedirectly charged to the current profit or loss.

If any related asset is sold, transferred, written off or destroyed before the end of its useful life, thebalance of the undistributed deferred income shall be transferred to the current gain or loss on disposalof the asset.

(32) Income tax

Income tax comprises current and deferred tax. Income tax is recognized as income or an expense inprofit or loss of the current period, or recognized directly in shareholders’ equity if it arises from abusiness combination or relates to a transaction or event which is recognized directly in shareholders’equity.

The Group measures a current tax asset or liability arising from the current and prior periods based onthe amount of income tax expected to be paid by the Group or returned by tax authorites calculatedaccording to related tax laws.

Deferred tax assets and deferred tax liabilities are calculated and recognized based on the differencesarising between the tax bases of assets and liabilities and their carrying amounts (temporarydifferences). A deferred tax asset is recognized for the deductible losses that can be carried forward tosubsequent years for deduction of the taxable profit in accordance with the tax laws. No deferred taxliability is recognized for a temporary difference arising from the initial recognition of goodwill. Nodeferred tax asset or deferred tax liability is recognized for the temporary differences resulting from theinitial recognition of assets or liabilities due to a transaction other than a business combination, whichaffects neither accounting profit nor taxable profit (or deductible loss). At the balance sheet date,deferred tax assets and deferred tax liabilities are measured at the tax rates that are expected to applyto the period when the asset is realized or the liability is settled.

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(32) Income tax (Continued)

Deferred tax assets are only recognized for deductible temporary differences, deductible losses and taxcredits to the extent that it is probable that taxable profit will be available in the future against which thedeductible temporary differences, deductible losses and tax credits can be utilized.

Deferred tax assets and liabilities are offset when:

? the deferred taxes are related to the same tax payer within the Group and the same taxation

authority; and? that tax payer has a legally enforceable right to offset current tax assets against current tax

liabilities.

Deferred tax liabilities are recognized for temporary differences arising from investments in subsidiariesand associates, except where the Group is able to control the timing of the reversal of the temporarydifference, and it is probable that the temporary difference will not reverse in the foreseeable future.When it is probable that the temporary differences arising from investments in subsidiaries, andassociates will be reversed in the foreseeable future and that the taxable profit will be available in thefuture against which the temporary differences can be utilized, the corresponding deferred tax assetsare recognized.

(33) Changes in accounting policies and accounting estimates

Changes in accounting policies

Details and reasons for changes in accounting estimatesProcedures for approvalNotes
On 7 December 2018, the Ministry of Finance revised “Accounting Standard for Enterprises No. 21 - Lease” (the “New Lease Standard”). It is also required that enterprises listed both domestically and abroad and enterprises listed abroad and preparing financial statements in accordance with International Financial Reporting Standards or the Accounting Standards for Business Enterprises adopt the New Lease Standard from 1 January 2019.Approval by The eleventh meeting of the eighth board of directors that held on August 22, 2019.The Group implement the New Lease Standard from 1 January 2019. According to the convergence rules of the New Lease Standard, it is optional to adjust the amount of the retained earnings and other relevant accounts at the beginning of the year when the New Lease Standard is initially implemented based on the cumulative impact of the initial implement of the New Lease Standard without adjusting the information for the comparable period. This change in accounting policy will increase the company's total assets and total liabilities, but it is not expected to have a significant impact on the owner's equity and net profit.

The main impact of the retroactive adjustments resulting from the above changes in accounting policies on thefinancial statements are as follows:

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(33) Changes in accounting policies and accounting estimates (Continued)

Consolidated balance sheet:

ASSETS31 December 20181 January 2019Adjustment
Current assets
Cash and bank balances8,089,781,304.568,089,781,304.56
Notes receivable1,357,311,929.63789,536,654.23(567,775,275.40)
Accounts receivable9,336,861,647.929,336,861,647.92
Receivable financing-567,775,275.40567,775,275.40
Advances to suppliers583,484,515.95419,443,944.83(164,040,571.12)
Other receivables643,493,359.32643,493,359.32
Incl:Interest receivable8,223,327.648,223,327.64
Inventories4,389,335,942.194,389,335,942.19
Other current assets95,347,629.1895,347,629.18
Total current assets24,495,616,328.7524,331,575,757.63(164,040,571.12)
Non-current assets
Long-term equity investments1,880,393,786.101,880,393,786.10
Other equity instruments investment13,685,760.0013,685,760.00
Other non-current financial assets140,000,000.00140,000,000.00
Investment properties144,894,495.97144,894,495.97
Fixed assets607,933,827.67594,067,973.91(13,865,853.76)
Construction in progress36,412,614.6136,412,614.61
Right-of-use assets-1,782,725,159.781,782,725,159.78
Intangible assets319,207,126.15318,693,082.72(514,043.43)
Goodwill833,547,800.60833,547,800.60
Long-term prepaid expenses311,328,706.46311,328,706.46
Deferred tax assets74,914,209.9574,914,209.95
Other non-current assets72,365,863.7158,168,919.11(14,196,944.60)
Total non-current assets4,434,684,191.226,188,832,509.211,754,148,317.99

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

Total assets28,930,300,519.9730,520,408,266.841,590,107,746.87

III Summary of significant accounting policies and accounting estimates (Continued)

(33) Changes in accounting policies and accounting estimates (Continued)

LIABILITIES31 December 20181 January 2019Adjustment
Current liabilities
Short-term borrowings2,597,652,702.432,597,652,702.43
Notes payable3,416,755,681.803,416,755,681.80
Accounts payable6,468,535,961.176,468,535,961.17
Advances from customers--
Employee benefits payable231,866,407.40231,866,407.40
Tax payable241,980,412.72241,980,412.72
Other payables1,539,436,971.931,539,436,971.93
Incl: Interest payable21,906,660.6321,906,660.63
Dividends payable6,389,320.966,389,320.96
Contract liabilities255,590,612.37255,590,612.37
Non-current liabilities due within one year5,861,324.37495,132,751.96489,271,427.59
Other current liabilities292,465.75292,465.75
Total current liabilities14,757,972,539.9415,247,243,967.53489,271,427.59
Non-current liabilities
Long-term borrowings31,600,000.0031,600,000.00
Lease liabilities-1,104,600,297.801,104,600,297.80
Long-term payables4,563,978.52800,000.00(3,763,978.52)
Long-term employee benefits payable2,050,000.002,050,000.00
Deferred income91,491,170.4091,491,170.40
Deferred tax liabilities67,605,161.8867,605,161.88
Other non-current liabilities69,241,176.1869,241,176.18
Total non-current liabilities266,551,486.981,367,387,806.261,100,836,319.28
Total liabilities15,024,524,026.9216,614,631,773.791,590,107,746.87

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(33) Changes in accounting policies and accounting estimates (Continued)

SHAREHOLDERS’ EQUITY31 December 20181 January 2019Adjustment
Shareholders’ equity
Share capital428,126,983.00428,126,983.00
Capital surplus4,320,984,981.514,320,984,981.51
Surplus reserve214,063,491.50214,063,491.50
Retained earnings6,655,257,147.276,655,257,147.27
Shareholders’ equity attributable to shareholders of the parent11,618,432,603.2811,618,432,603.28
Non-controlling interests2,287,343,889.772,287,343,889.77
Total shareholders’ equity13,905,776,493.0513,905,776,493.05
Total liabilities and shareholders’ equity28,930,300,519.9730,520,408,266.841,590,107,746.87

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(33) Changes in accounting policies and accounting estimates (Continued)

Company’s balance sheet:

ASSETS31 December 20181 January 2019Adjustment
Current assets
Cash and bank balances1,817,654,598.011,817,654,598.01
Notes receivable63,870,980.3934,154,774.75(29,716,205.64)
Accounts receivable631,236,593.94631,236,593.94
Receivable financing29,716,205.6429,716,205.64
Advances to suppliers4,760,182.004,757,318.66(2,863.34)
Other receivables1,541,980,883.501,541,980,883.50
Incl:Interest receivable7,550,877.077,550,877.07
Dividends receivable--
Inventories158,166,185.65158,166,185.65
Other current assets39,482.3839,482.38
Total current assets4,217,708,905.874,217,706,042.53(2,863.34)
Non-current assets
Long-term equity investments7,432,906,692.247,432,906,692.24
Other non-current financial assets140,000,000.00140,000,000.00
Investment properties1,955,854.461,955,854.46
Fixed assets21,362,422.0321,362,422.03
Right-of-use assets-6,827,171.386,827,171.38
Intangible assets2,452,222.512,452,222.51
Long-term deferred expenses7,481,809.537,481,809.53
Other non-current assets7,000,000.007,000,000.00
Total non-current assets7,613,159,000.777,619,986,172.156,827,171.38
Total assets11,830,867,906.6411,837,692,214.686,824,308.04

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(33) Changes in accounting policies and accounting estimates (Continued)

LIABILITIES31 December 20181 January 2019Adjustment
Current liabilities
Short-term borrowings539,000,000.00539,000,000.00
Notes payable252,317,800.78252,317,800.78
Accounts payable442,049,241.22442,049,241.22
Contract liabilities4,182,083.404,182,083.40
Employee benefits payable36,233,563.1236,233,563.12
Tax payables13,426,601.9013,426,601.90
Other payables1,481,817,856.561,481,817,856.56
Incl:Interest payable1,354,592.351,354,592.35
Non-current liabilities due within one year-786,068.44786,068.44
Other current liabilities226,427.99226,427.99
Total current liabilities2,769,253,574.972,770,039,643.41786,068.44
Non-current liabilities
Long-term borrowings31,600,000.0031,600,000.00
Lease liabilities-6,038,239.606,038,239.60
Long-term payables800,000.00800,000.00
Long-term employee benefits payable118,000.00118,000.00
Deferred income1,687,899.501,687,899.50
Deferred tax liabilities2,298,426.392,298,426.39
Total non-current liabilities36,504,325.8942,542,565.496,038,239.60
Total liabilities2,805,757,900.862,812,582,208.906,824,308.04

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

III Summary of significant accounting policies and accounting estimates (Continued)

(33) Changes in accounting policies and accounting estimates (Continued)

SHAREHOLDERS’ EQUITY31 December 20181 January 2019Adjustment
Shareholders’ equity
Share capital428,126,983.00428,126,983.00
Capital surplus4,426,362,777.264,426,362,777.26
Surplus reserves214,063,491.50214,063,491.50
Retained earnings3,956,556,754.023,956,556,754.02
Total shareholders’ equity9,025,110,005.789,025,110,005.78
Total liabilities and shareholders’ equity11,830,867,906.6411,837,692,214.686,824,308.04

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

IV Taxation

1. Main categories and rates of taxes:

CategoriesTax baseTax rate
Corporate income tax (“CIT”)Taxable income15%,20% or 25%
Value added tax (“VAT”)Taxable value added amount (Tax payable is calculated by using the taxable sales amount multiplied by the effective tax rate less deductible VAT input of the current period)0%,3%,5%,6%,9%, 10%,13%,16%
City maintenance and construction taxAmount of VAT5% or 7%
Educational surchargeAmount of VAT3%
Local educational surchargeAmount of VAT2%

2. Tax preferences

(a) In 2011, the Urumqi Head Office, Changji Branch and Karamay Branch of Sinopharm HoldingXinjiang New & Special Medicines Chain Store Co., Ltd. (“Xinjiang New & Special Medicines”),subsidiaries of the group, shall pay tax at a rate of 15% by jurisdictions. According to the Circularof the Ministry of Finance, the State Administration of Taxation, the General Administration ofCustoms on Issues Concerning Tax Policies for the Further Development of the Western Regions(Cai shui [2011] No.58), enterprises from encouraged industries in the Western Regions, couldenjoy a reduced CIT rate of 15% from 1 January 2011 to 31 December 2020.

In 2014, the Group’s subsidiary Sinopharm Holding Guangxi Logistics Co., Ltd. (“SinopharmGuangxi Logistics”) was approved by the Guangxi Local Tax Bureau to enjoy a tax discountapplicable to corporations in the region of Western Development to pay income tax at a tax rate of15%.

Eight subsidiaries in Guangxi Province of the Group, including Sinopharm Guangxi, SinopharmHolding Liuzhou Co., Ltd. (“Sinopharm Liuzhou”) , Sinopharm Holding Beihai Co., Ltd (“SinopharmBeihai”), Sinopharm Holding Guilin Co., Ltd. (“Sinopharm Guilin”), Sinopharm Holding GuigangCo., 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 taxconcession of Western Development at a preferential CIT rate of 15%. The applicable period forSinopharm Guangxi, Sinopharm Liuzhou and Sinopharm Beihai is 1 January 2014 to 31 December2020, and that for the other 5 subsidiaries is 1 January 2015 to 31 December 2020.

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

IV Taxation (Continued)

2. Tax preferences (Continued)

The Group's subsidiary Sinopharm Holding National Pharmacy Inner Mongolia Co., Ltd.(hereinafter referred to as "National University of Inner Mongolia"), Sinopharm Holding NationalPharmacy Hulunbeier Co., Ltd., Sinopharm Holding National Pharmacy Wulanchabu Co., Ltd.,National University Pharmacy Manzhouli Co., Ltd., Sinopharm Holding National PharmacyBayannaoer Co., Ltd. and Inner Mongolia NUS Pharmaceutical Co., Ltd., in accordance with theprovisions of Caishui [2011] No. 58 Document, meet the conditions for the enjoyment of corporateincome tax benefits in the Western Development, and obtain the Notice of Approval for Reductionand Exemption of Taxes. In 2019, the enterprise income tax was paid at a preferential tax rate of15%. According to Caishui [2011] No. 58 Document, Sinopharm Holding National PharmacyGuangxi Chain Co., Ltd. and Ningxia Guoda Pharmacy Chain Co., Ltd. reduced the corporateincome tax of 2019 at a reduced rate of 15%.

In the half year of 2019, according to the "Notice on Implementing the Inclusive Tax DeductionPolicy for Small and Micro Enterprises" (Cai Shui [2019] No. 13): the Group's subsidiarySinopharm Medical Supply Chain Service (Guangxi) Co., Ltd., Shanghai Guoda DongshengPharmacy Co., Ltd., Sinopharm Holding National Pharmacy Guangzhou Chain Co., Ltd., TaishanCity Guokong Guoda Group Kangda Pharmacy Chain Co., Ltd., Guangxi Guoda PharmaceuticalConsulting Chain Co., Ltd., Changzhi City Guoda Wanmin Pharmacy Co., Ltd., Shanghai FumeiXuhui Pharmacy Co., Ltd., Sanhe Liyang Jinxiang Pharmacy Co., Ltd., Sinopharm HoldingNational Pharmacy Hulunbeier Co., Ltd. The company, NUS Pharmacy Manzhouli Co., Ltd. paystaxable income less than RMB 3 million, and meets the requirements of small and meager profitenterprises, so it pays corporate income tax at a rate of 20%.

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements

1. Cash and bank balances

30 June 20191 January 2019
Cash on hand3,415,085.255,587,191.18
Cash at banks7,765,559,793.667,626,529,829.59
Other cash balances317,353,629.58457,664,283.79
8,086,328,508.498,089,781,304.56

At 30 June 2019, other cash balances were consisted of letter credit deposits amounting to RMB305,806.00 (31 December 2018: RMB 4,191,246.00), bank acceptance notes deposits amounting toRMB317,047,823.58 (31 December 2018: RMB453,473,037.79).

2. Notes receivable

30 June 20191 January 2019
Trade acceptance notes790,664,828.26789,536,654.23
Bank acceptance notes--
790,664,828.26789,536,654.23

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

2.Notes receivable (Continued)

Notes receivable endorsed or discounted by the Group to other parties which were not yet due at 30 June 2019 and 31 December 2018 are as follows:
30 June 2019
DerecognizedNot derecognized
Trade acceptance notes216,316,836.99
Bank acceptance notes-
216,316,836.99
As at 30 June 2019 and 31 December 2018, notes that were converted into accounts receivable due to the drawer’s inability to settle the note on maturity date are as follows:
30 June 2019
Bank acceptance notes-
Trade acceptance notes20,010,459.85
20,010,459.85

3. Accounts receivable

The accounts receivable by category are analyzed below:
30 June 20191 January 2019
Gross carrying amountProvision for bad debtGross carrying amountProvision for bad debt
AmountProportionAmountProportionAmountProportionAmountProportion
Items for which provision for bad debt is recognised separately613,529,239.365.17%19,044,116.833.10%595,919,487.296.36%16,766,679.232.81%
Items for which provision for bad debt is recognized by group (credit risk characteristics)11,262,211,636.1294.83%30,256,027.060.27%8,780,463,595.3793.64%22,754,755.510.26%
11,875,740,875.48100.00%49,300,143.890.42%9,376,383,082.66100.00%39,521,434.740.42%

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

3. Accounts receivable (Continued)

At 30 June 2019, accounts receivable that are individually significant and individually assessed for provisions are as follows:
Accounts receivable(by company)Carrying amountBad debt provisionRateAssessment for impairment
Receivable of medical insurance352,956,757.11588,948.800.17%Part of the medical insurance receivable takes longer to collect, and has risk of default
Receivable of E-Business other suppliers110,676,893.446,739,296.666.09%Receivable of E-Business with low risk of recoverability
Receivable of card settlement, e-commerce and third-party payment platform55,508,719.88- -0.00%Receivable of Franchises with no risk of recoverability
Receivable of related party47,567,694.11- -0.00%Receivable due from a related party with low risk of recoverability
Daton Xin Jian Kang Hospital21,439,257.44-0.00%Receivable due from a fixed cooperative hospital with no risk of recoverability
Liuzhou Railway Central Hospital13,820,739.09156,693.081.13%Both parties to the transaction have differences in the amount of purchase and sales and has risk of default
Hubei xianning Pharmaceutical Co., Ltd.,11,559,178.2911,559,178.29100.00%A lawsuit has been filed against the customer and has high risk of default
Total613,529,239.3619,044,116.83--
Provision for bad debts of accounts receivable according to the general model of expected credit loss:
30 June 2019
Estimated default amountExpected credit loss in entire lifetimeExpected credit loss rate
Within 1 year11,186,234,127.3325,495,025.530.23%
1 to 2 years71,069,101.893,646,494.405.13%
2 to 3 years1,616,063.02194,281.6812.02%
Over 3 years3,292,343.88920,225.4527.95%
11,262,211,636.1230,256,027.06

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

3. Accounts receivable (Continued)

The aging analysis of accounts receivables was as follows:

30 June 2019
Within 1 year11,753,416,277.07
1 to 2 years80,575,034.81
2 to 3 years3,374,443.53
3 to 4 years24,801,268.92
4 to 5 years12,775,655.02
Over 5 years798,196.13
Total11,875,740,875.48

Bad debt provision for the current period as follows:

Opening balanceReversal of write-off in previous yearsIncreases in the yearReversal in the yearWritten off in the yearClosing balance
Bad debts39,521,434.7411,040.0016,376,925.13(6,609,255.98)-49,300,143.89
total39,521,434.7411,040.0016,376,925.13(6,609,255.98)-49,300,143.89
On 30 June 2019, the top five accounts receivable by customer are summarised below:
AmountBad debt provision amount% of the total accounts receivable
The top five accounts receivable total861,862,590.71363,240.297.25%
On 30 June 2019, the Group's accounts receivable that were terminated due to the cooperation on accounts receivable factoring with financial institutions without recourse were RMB 2,707,165,636.40.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

4. Accounts receivable financing

30 June 20191 January 2019
Bank acceptance notes325,439,580.18567,775,275.40
325,439,580.18567,775,275.40

5. Advances to suppliers

(a)The aging of advances to suppliers is analyzed below:
30 June 20191 January 2019
Amount% of total balanceAmount% of total balance
Within 1 year355,664,414.2799.60%416,103,769.0899.20%
1 to 2 years1,215,326.290.34%873,351.850.21%
2 to 3 years109,088.480.03%2,466,823.900.59%
Above 3 years89,990.600.03%--
357,078,819.64-419,443,944.83-
The prepayment aged for more than a year is mainly the advance equipment amounting to RMB1,414,405.37 (31 December 2018: RMB3,340,175.75) as the hospital equipment procurement is a large project which takes a long time to complete.
(b)On 30 June 2019, the top five advances to suppliers by customer are summarized below:
AmountProportion of total balance
Total amount of top five advances to suppliers128,740,740.3736.05%

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

6. Other receivables

30 June 20191 January 2019
Interest receivable14,791,483.108,223,327.64
Other receivables639,294,904.75635,270,031.68
654,086,387.85643,493,359.32

)Interest receivable

30 June 20191 January 2019
Fixed deposits13,306,641.886,376,708.68
Entrusted Loans1,484,841.221,846,618.96
14,791,483.108,223,327.64

)Other receivables

Category of other receivables by nature is as follows:
Nature30 June 20191 January 2019
Deposits257,903,552.46278,455,623.30
Receivable due from related parties10,414,842.498,119,399.79
Entrusted borrowings44,000,000.0044,000,000.00
Petty cash advance to employees17,538,148.1312,439,613.27
Receivable of equity transactions8,980,000.008,980,000.00
Others321,989,366.05303,197,349.04
Total660,825,909.13655,191,985.40

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

6. Other receivables (Continued)

The changes in bad debt provision for other receivables based on the entire lifetime expectedcredit losses are as follows:

Stage 1Stage 2Stage 3
Bad debtExpected credit losses over the next 12 monthsEntire lifetime expected credit losses(No credit impairment occurred)Entire lifetime expected credit losses(Credit impairment occurred)Total
Balance at 1 January 2019-19,921,953.72-19,921,953.72
Balance at 1 January 2019 during the period
Provisions during the period-3,108,281.87-3,108,281.87
Reversal during the period-(1,441,849.89)-(1,441,849.89)
Write-back during the period----
Write-off during the period-(57,381.32)-(57,381.32)
Other Changes----
Balance at 30 June 2019-21,531,004.38-21,531,004.38

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

6. Other receivables (Continued)

The aging analysis of other receivables was as follows:

30 June 2019
Within 1 year526,279,992.21
1 to 2 years98,441,809.40
2 to 3 years15,955,086.40
Over 3 years20,149,021.12
Total660,825,909.13
Bad debt provision of other receivables in 2019 was RMB3,108,281.87, with the recovered or reversed amount of RMB1,441,849.89, and the written off amount of RMB 57,381.32.
As at 30 June 2019,the top 5 parties that owed the largest amounts of other receivable balances are analyzed below:
NatureAmountAge% of total amountProvision of bad debt
Guangdong Pharmaceutical electronic trading platformPharmaceutical trading platform repayment not yet cleared111,024,446.08Within 1 year16.80%
Sinopharm Group Zhijun (Suzhou) Pharmaceutical Co., Ltd.Entrusted borrowings44,000,000.00Within 2 year6.66%
TCM-Integrated Cancer Center of Southern Medical UniversityDeposit of logistics extension services project30,082,900.00Within 2 year4.55%
Shenyang Medical Insurance Management Service CenterAmount due from government27,635,423.96Within 1 year4.18%
Shenzhen Social Insurance Fund AdministrationAmount due from government18,714,610.23Within 1 year2.83%
231,457,380.2735.03%-

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

7. Inventories

(a)Inventories by category are analyzed below:
30 June 20191 January 2019
Book valueProvisionNet book valueBook valueProvisionNet book value
Raw materials362,562.93-362,562.931,410,012.28-1,410,012.28
Work in progress5,344.32-5,344.321,011,007.23-1,011,007.23
Finished goods4,883,623,033.697,772,292.624,875,850,741.074,392,144,746.888,313,195.294,383,831,551.59
Low cost consumables6,454,967.95-6,454,967.953,083,371.09-3,083,371.09
4,890,445,908.897,772,292.624,882,673,616.274,397,649,137.488,313,195.294,389,335,942.19
(b)Provision for declines in value of inventories is analysed below:
1 January 2019IncreasesDecreases30 June 2019
chargeOtherReversal or Written offOther
Finished goods8,313,195.291,567,262.18-2,108,164.85-7,772,292.62
8,313,195.291,567,262.18-2,108,164.85-7,772,292.62

8. Other current assets

30 June 20191 January 2019
Input VAT to be credited95,048,826.5194,312,573.34
Corporate income tax to be deducted2,041,094.25723,000.46
Others227,366.84312,055.38
97,317,287.6095,347,629.18

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

9. Long-term equity investments

Associates in 2019

Investee1 January 2019Changes in the year30 June 2019Provision for impairment
Additional InvestmentProfit of loss under equity methodOther changes in equityCash dividend declared by investeeImpairment provision
Associates
Shenzhen Main Luck Pharmaceutical Inc. (“Main Luck Pharmaceutical”).265,316,653.68-33,592,995.70---298,909,649.38-
Zhijun Medicine355,353,196.15-58,536,101.74---413,889,297.89-
Zhijun Trade8,730,994.87-1,467,031.77---10,198,026.64-
Zhijun Suzhou23,379,018.92-(11,390,538.03)---11,988,480.89-
Pingshan Medicine86,292,927.33-22,425,900.45---108,718,827.78-
Shyndec Pharmaceutical1,098,566,852.51-65,258,503.4542,424,747.00(16,896,427.80)-1,189,353,675.16-
Shanghai Beiyi Guoda Pharmaceutical Co. Ltd.11,029,918.10-247,588.49-(1,052,999.99)-10,224,506.60-
Shanghai Liyi Pharmacy Co., Ltd.955,428.23-----955,428.23-
Shanghai Renbei Pharmacy Co., Ltd-1,800,000.00-1,800,000.00
Guangdong Jianhui Construction Investment Management Co., Ltd.-2,000,000.00-2,000,000.00
Sinopharm Jienuo Medical Treatment Service Guangdong Co., Ltd. (“Guangdong Jie nuo”)6,802,156.19-(995,293.58)---5,806,862.61-
Shanghai Dingqun Management & Consulting Co. , Ltd23,966,640.12-----23,966,640.12-
Dongyuan Accord Pharmaceutical Chain Co., Ltd.396,638.32-----396,638.32396,638.32
1,880,790,424.423,800,000.00169,142,289.9942,424,747.00(17,949,427.79)-2,078,208,033.62396,638.32

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

10. Other equity instrument investment

30 June 20191 January 2019
Sinopharm Health Online Co., Ltd.12,000,000.0012,000,000.00
Sinopharm Guoda Hubei Co., Ltd.1,000,000.001,000,000.00
Hunan Zhongbai Pharmaceutical Investment Co., Ltd.315,000.00315,000.00
Shanghai Guoda Shuguang Pharmacy Co., Ltd270,760.00270,760.00
Shanghai Guoren Pharmacy Co., Ltd.100,000.00100,000.00
13,685,760.0013,685,760.00

11. Other non-current financial assets

30 June 20191 January 2019
Financial asset measured at fair value through current profit or loss140,000,000.00140,000,000.00
140,000,000.00140,000,000.00

On June 30, 2019, the balance of other non-current financial assets was the fair value of the share of theSinopharm CICC Medical Industry Fund (referred to as “the Industrial Fund”) subscribed by the Company. TheGroup's 21st meeting of the 7th Board of Directors held on January 6, 2017 reviewed and approved the proposalof the Company to subscribe for the industry fund and related party transactions. As a limited partner of theindustry fund, the company plans to invest RMB 200 million to subscribe for the share of the industrial fund, whichwill be paid in three phases. The company paid the initial investment of RMB 60 million in 2017. As of December31, 2017, the fund did not complete the relevant licenses and approvals and did not start operations. Therefore,the company's initial investment amounted to RMB 60 million. Included in other non-current assets. In 2018, thecompany paid the second phase of the capital contribution of RMB 80 million. As of June 30, 2019, the companyhad paid a total of RMB 140 million. The industry fund has obtained relevant approvals in 2018 and has startedoperations. Since the cash flow obtained by the Company from the investment of the fund includes both thecontractual cash flow generated by the underlying assets during the investment period and the cash flow of thedisposal of the underlying assets, the contractual cash flow that does not satisfy the financial assets generated ona specific date is only The payment of interest on the basis of the outstanding principal amount, therefore, theCompany classifies the investment of the industrial fund into financial assets measured at fair value through profitor loss and presented as other non-current financial assets. .

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

12. Investment properties

Subsequent measurement under the cost model:

2019Buildings and constructionsLand use rightConstruction in progressTotal
Original cost
Opening balance242,555,189.9122,719,102.03265,274,291.94
Purchase---
Transfer to fixed assets assets1,634,951.97-1,634,951.97
Closing balance240,920,237.9422,719,102.03263,639,339.97
Accumulated depreciation and amortization
Opening balance111,131,166.217,948,629.76119,079,795.97
Provision3,376,058.1351,879.463,427,937.59
Transfer to fixed assets487,533.59-487,533.59
Closing balance114,019,690.758,000,509.22122,020,199.97
Provision for impairment
Opening balance1,300,000.00-1,300,000.00
Closing balance1,300,000.00-1,300,000.00
Carrying amount
At end of the period125,600,547.1914,718,592.81140,319,140.00
At beginning of the period130,124,023.7014,770,472.27144,894,495.97

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

13. Fixed assets

2019
BuildingsMachineryVehiclesOther equipmentFixed asset improvementsTotal
Original cost
Opening balance489,661,268.82185,444,104.0989,613,300.13294,575,902.8954,661,564.431,113,956,140.36
Purchase714,456.8316,956,031.535,069,073.2115,843,713.4617,383,853.3755,967,128.40
Transfer from construction in progress-2,113,175.66-816,880.96-2,930,056.62
Business combination not involving enterprises under common control------
Transfer from Investment properties1,634,951.97----1,634,951.97
Disposal or retirement-1,487,621.645,499,822.637,281,743.7710,306,628.7024,575,816.74
Closing balance492,010,677.62203,025,689.6489,182,550.71303,954,753.5461,738,789.101,149,912,460.61
Accumulated depreciation
Opening balance164,477,441.1285,085,741.3159,523,264.14172,436,749.0538,364,970.83519,888,166.45
Provision7,866,027.6014,213,255.593,843,870.0612,354,113.5210,639,915.0748,917,181.84
Transfer from Investment properties487,533.59----487,533.59
Disposal or retirement-1,107,179.833,813,515.964,549,800.503,462,405.9712,932,902.26
Closing balance172,831,002.3198,191,817.0759,553,618.24180,241,062.0745,542,479.93556,359,979.62

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

13. Fixed assets (Continued)

2019(Continued)
BuildingsMachineryVehiclesOther equipmentFixed asset improvementsTotal
Provision for impairment
Opening balance------
Disposal of subsidiaries------
Closing balance------
Carrying amount
At end of period319,179,675.31104,833,872.5729,628,932.47123,713,691.4716,196,309.17593,552,480.99
At beginning of the period325,183,827.70100,358,362.7830,090,035.99122,139,153.8416,296,593.60594,067,973.91

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

13. Fixed assets (Continued)

Fixed assets without official property right certificates

ItemsCarrying amountReason for outstanding property right certificates
Buildings27,259,503.70In the process

14. Construction in progress

30 June 20191 January 2019
Construction in progress31,980,582.2136,412,614.61
30 June 20191 January 2019
Carrying balanceImpairmentCarrying amountCarrying balanceImpairmentCarrying amount
Warehouse improvement project862,479.40-862,479.40806,272.40-806,272.40
New office building project627,903.09-627,903.09188,251.26-188,251.26
Supply chain extension project15,025,013.15-15,025,013.1512,617,953.89-12,617,953.89
Software project5,544,210.47-5,544,210.4712,930,498.53-12,930,498.53
Other projects9,920,976.10-9,920,976.109,869,638.53-9,869,638.53
31,980,582.21-31,980,582.2136,412,614.61-36,412,614.61

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

14. Construction in progress (Continued)

(a)Changes of significant construction in progress

Changes of significant construction in progress in 2019 are presented as follows:

Project nameBudgetAt beginning of the yearIncreaseDecreaseAt end of yearProportion of investment to budget (%)project progressSource of funds
Transferred to fixed assetsTransferred to intangible assetsOthers
Warehouse improvement project2,981,387.76806,272.401,309,197.95278,461.63-974,529.32862,479.4060.65%60.65%Own funds
New office building Project627,903.08188,251.26439,651.83---627,903.09100.00%100.00%Own funds
Supply chain extension project33,412,417.2412,617,953.895,137,275.292,606,162.49-124,053.5415,025,013.1553.80%53.80%Own funds
Software project12,949,580.1912,930,498.535,563,292.1345,432.50-12,904,147.695,544,210.4743.20%43.20%Own funds
Other construction projects206,249,966.069,869,638.5383,546.40-32,208.839,920,976.104.84%4.84%Own funds
256,221,254.3336,412,614.6112,532,963.602,930,056.6214,034,939.3831,980,582.21--

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

15、 Right-of-use assets

ItemsStoresOffice buildingWarehouseOthersTotal
Original cost
Opening balance1,471,295,979.5148,588,435.58239,171,388.6623,669,356.031,782,725,159.78
Increase364,813,035.1325,970,953.2133,172,962.78423,956,951.12
Closing balance1,836,109,014.6474,559,388.79272,344,351.4423,669,356.032,206,682,110.90
Accumulated depreciation
Opening balance-----
Depreciation261,325,528.918,926,444.7422,855,535.442,593,404.18295,700,913.27
Closing balance261,325,528.918,926,444.7422,855,535.442,593,404.18295,700,913.27
Carrying amount
At end of the period1,574,783,485.7365,632,944.05249,488,816.0021,075,951.851,910,981,197.63
At beginning of the period1,471,295,979.5148,588,435.58239,171,388.6623,669,356.031,782,725,159.78

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

16. Intangible assets

2019Land use rightSoftwareTrademarksFavorable leaseSales networkFranchiseTotal
Original cost
Opening balance62,083,143.97142,108,155.4265,977,850.0093,242,000.00112,117,142.86710,000.00476,238,292.25
Purchase-3,733,823.60----3,733,823.60
Transfer from construction in progress-12,904,147.69----12,904,147.69
Disposal or retirement-------
Closing balance62,083,143.97158,746,126.7165,977,850.0093,242,000.00112,117,142.86710,000.00492,876,263.54
Accumulated amortization
Opening balance27,889,638.9668,273,563.72196,850.1619,782,823.3640,692,333.33710,000.00157,545,209.53
Provision474,270.369,058,311.54-2,472,852.942,802,928.58-14,808,363.42
Closing balance28,363,909.3277,331,875.26196,850.1622,255,676.3043,495,261.91710,000.00172,353,572.95
Provision for impairment-------
Opening balance-------
Provision-------
Closing balance-------
Carrying amount
At end of the period33,719,234.6581,414,251.4565,780,999.8470,986,323.7068,621,880.95-320,522,690.59
At beginning of the period34,193,505.0173,834,591.7065,780,999.8473,459,176.6471,424,809.53-318,693,082.72

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

17. Goodwill

(1) Goodwill cost

30 June 2019Opening balanceIncreaseDecreaseClosing balance
Sinopharm Holding(Jiangmen) Medical Co., Ltd. (“Sinopharm Jiangmen”)27,392,317.73--27,392,317.73
Sinopharm Holding Shenzhen Yanfeng Co., Ltd. (“Sinopharm Yanfeng”)16,868,644.87--16,868,644.87
Sinopharm Holding Zhaoqing Co., Ltd. (“Sinopharm Zhaoqing”)2,594,341.53--2,594,341.53
Sinopharm Holding Shaoguan Co., Ltd. (“Sinopharm Shaoguan”)1,686,496.80--1,686,496.80
Sinopharm Holding Meizhou Co., Ltd. (“Sinopharm Meizhou”)1,610,819.66--1,610,819.66
Sinopharm Holding Huizhou Co., Ltd. (“Sinopharm Huizhou”)923,184.67--923,184.67
Sinopharm Holding Zhanjiang Co., Ltd. (“Sinopharm Zhanjiang”)282,135.55--282,135.55
Sinopharm Holding Dongguan Co., Ltd. (“Sinopharm Dongguan”)1,499.02--1,499.02
South Pharma & Trade2,755,680.62--2,755,680.62
Foshan Nanhai88,877,850.51--88,877,850.51
Sinopharm Holding Zhuhai Co.,Ltd.(Sinopharm Zhuhai)6,772,561.47--6,772,561.47
Sinopharm Holding Maoming Co., Ltd. (“Sinopharm Maoming”)66,417.07--66,417.07
Sinopharm Holding Guoda ForMe Medicines (Shanghai) Co., Ltd. ( “ForMe Medicines”)3,033,547.53--3,033,547.53
Sinopharm Holding Guoda Henan Pharmacy Chain Store Co., Ltd22,666,179.77--22,666,179.77
Sinopharm Holding Guoda Inner Mongolia Co., Ltd.70,485,777.00--70,485,777.00
Sinopharm Hebei Lerentang Pharmaceutical Chain Co., Ltd.29,482,149.57--29,482,149.57
Sinopharm Guoda Pharmacy Jiangmen Chain Co., Ltd..77,350,000.00--77,350,000.00
Sinopharm Holding Guoda Shanxi Yiyuan Chain Co., Ltd.9,080,100.00--9,080,100.00
Taiyuan Tongxinli Guoda Pharmacy Co., Ltd.2,818,647.85--2,818,647.85
Sinopharm Holding Guoda Shanghai Pharmacy Chain Store Co., Ltd.5,028,638.00--5,028,638.00
Sinopharm Holding Guoda Yangzhou Dadesheng Pharmacy Chain Store Co., Ltd..7,979,000.00--7,979,000.00
Zhejiang Guoda Pharmacy Co., Ltd.3,045,183.85--3,045,183.85
Shenzhen Guanganli Pharmacy Chain Store Co., Ltd. store acquisition.13,420,000.00--13,420,000.00
Taishan Sinopharm Holding Guoda Qunkang Pharmacy Chain Co., Ltd.26,826,120.55--26,826,120.55
Fujian Guoda Pharmacy Chain Store Co., Ltd.1,567,250.76--1,567,250.76

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

17. Goodwill (Continued)

(1)Goodwill cost (Continued)

30 June 2019 (Continued)Opening balanceIncreaselDecreaseClosing balance
Sinopharm Holding Guoda Shenyang Pharmacy Chain Store Co., Ltd.41,047,958.08--41,047,958.08
Sinopharm Holding Guoda Nanjing Pharmacy Chain Store Co., Ltd.11,598,341.12--11,598,341.12
Sinopharm Holding Guoda Shandong Pharmacy Chain Store Co., Ltd.29,110,409.46--29,110,409.46
Quanzhou Guoda Pharmacy Chain Store Co., Ltd.41,298,622.59--41,298,622.59
Sinopharm Holding Hunan Guoda Minshengtang Pharmacy Chain Co., Ltd.41,165,574.64--41,165,574.64
Shanxi Guoda Wanmin Pharmacy Chain Store Co., Ltd.65,025,000.00--65,025,000.00
Xiaoyi Guoda Wanmin Baicaotang Pharmacy Chain Store Co., Ltd.15,866,680.00--15,866,680.00
Liyang Guoda People Pharmacy Chain Store Co., Ltd.107,275,095.74--107,275,095.74
Sinopharm Holding Guoda ForMe Pharmacy Chain Store Co., Ltd.19,405,450.23--19,405,450.23
Beijing Golden Elephant Pharmacy Medicine Chain Company Limited64,140,124.36--64,140,124.36
Sinopharm Holding Guoda Bayannaoer Co., Ltd.-13,494,000.00-13,494,000.00
858,547,800.6013,494,000.00-872,041,800.60

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

17. Goodwill (Continued)

(2)Provision of impairment loss

Changes in provision for impairment of goodwill are presented as follows:

2019Opening balanceIncreaseDecreaseClosing balance
Quanzhou Guoda Pharmacy Chain Store Co., Ltd.25,000,000.00--25,000,000.00

The method of goodwill impairment testing process, parameter and recognition of impairment loss:

The recoverable amount of an asset group or a group of asset groups is determined on a financialbudget approved by management covering a five-year period. The cash flows beyond the five-yearperiod are extrapolated using the inflation rate.

The recoverable amount of the asset group and asset group combination is calculated using the cashflow forecasting method based on the five-year budget approved by the management. Managementdetermines the budgetary gross margin based on historical experience and forecasts of marketdevelopment, and uses a pre-tax rate that reflects the specific risk of the relevant asset group and assetgroup combination as the discount rate. The above assumptions are used to analyze the recoverableamount of each asset group and asset group combination within the business segment.

18. Long-term prepaid expenses

2019Opening balanceAdditionsAmortizationOther decreaseClosing balance
Fixed asset improvement expenditure249,458,261.8747,060,353.5542,594,066.571,166,437.43252,758,111.42
Acquisition expenditure to obtain the right to operate57,617,166.633,971,737.957,010,668.66-54,578,235.92
Others4,253,277.96760,218.611,002,537.3935,524.553,975,434.63
311,328,706.4651,792,310.1150,607,272.621,201,961.98311,311,781.97

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

19. Deferred tax assets/liabilities

(a)Deferred tax assets before offseting
30 June 20191 January 2019
Deductible temporary differencesDeferred tax assetsDeductible temporary differencesDeferred tax assets
Provision for impairment of assets79,547,128.0418,378,950.0168,153,222.0715,676,020.10
Deductible tax loss34,968,710.288,677,091.1477,791,621.2019,311,837.06
Deferred Income25,565,030.926,387,445.1730,188,142.137,547,758.26
Accrued payroll13,435,720.262,963,493.0564,598,625.7415,656,015.32
Accrued expenses132,416,395.9432,742,594.3494,108,769.3322,301,617.95
Others30,339,847.947,164,541.666,238,492.181,467,765.00
316,272,833.3876,314,115.37341,078,872.6581,961,013.69
(b)Deferred tax liabilities before offseting
30 June 20191 January 2019
Taxable temporary differencesDeferred tax liabilitiesTaxable temporary differencesDeferred tax liabilities
Fair value adjustment for business combination not involving enterprises under common control221,963,869.6655,490,967.41227,900,345.3956,975,086.34
Changes in fair value87,167,599.5321,791,899.7275,366,942.9917,676,879.28
309,131,469.1977,282,867.13303,267,288.3874,651,965.62
(c)Deferred tax assets and liabilities are presented after being offset against each other:
30 June 20191 January 2019
Deferred tax assets/liabilities -NetTemporary differences after set-offDeferred tax assets/liabilities - NetTemporary differences after set-off
Deferred tax assets10,896,608.3665,417,507.017,046,803.7474,914,209.95
Deferred tax liabilities10,896,608.3666,386,258.777,046,803.7467,605,161.88

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

19. Deferred tax assets/liabilities (Continued)

(d)The deductible temporary differences and deductible losses that were not recognized as deferred tax assets are presented as follows:
30 June 20191 January 2019
Deductible temporary differences932,951.171,480,000.00
Deductible loss (Note)30,894,876.4229,391,422.33
31,827,827.5930,871,422.33
The aforesaid unrecognized deductible losses will due:
30 June 20191 January 2019
20196,106,580.002,864,062.85
20201,636,825.764,725,707.87
20218,256,680.692,563,056.08
20228,358,197.507,261,117.97
20236,536,592.4711,977,477.56
30,894,876.4229,391,422.33

(Note) As some subsidiaries are still at a loss and it’s uncertain that those subsidiaries can obtainenough taxable income to offset against the loss in the future. So the Group do not recognisedeferred tax assets which came from the deductible loss of RMB 30,894,876.42 .

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

20. Other non-current assets

30 June 20191 January 2019
Carrying balanceImpairmentCarrying amountCarrying balanceImpairmentCarrying amount
Physical assets reserve specifically authorized44,621,093.48-44,621,093.4847,576,273.75-47,576,273.75
Prepayment for project and equipment22,323,493.28-22,323,493.2810,592,645.36-10,592,645.36
66,944,586.76-66,944,586.7658,168,919.11-58,168,919.11

21. Short-term borrowings

30 June 20191 January 2019
Credit borrowings3,079,560,758.242,427,639,275.32
Discounted notes211,316,836.99170,013,427.11
3,290,877,595.232,597,652,702.43
As at 30 June 2019, the annual interest rate for the above borrowings was 4.55% (31 December 2018: 4.65%). On June 30, 2019 and December 31 2018, the Group had no short-term loan that were due but not yet repaid.

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

22. Notes payable

30 June 20191 January 2019
Commercial acceptance notes23,896,465.3013,843,479.73
Bank acceptance notes3,515,198,797.043,402,912,202.07
3,539,095,262.343,416,755,681.80

At 30 June 2019,balance of notes payable at maturity was RMB0.00. (31 December 2018:RMB

0.00).

23. Accounts payable

30 June 20191 January 2019
Trade payables8,088,697,602.946,468,535,961.17

At 30 June 2019, the total amount of accounts payable aged over one year wasRMB496,134,298.59(31 December 2018: RMB467,525,486.03 ).

24. Contract liabilities

30 June 20191 January 2019
Advances from customers--
Contract liabilities239,739,020.90255,590,612.37
239,739,020.90255,590,612.37

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

25. Employee benefits payable

2019At beginning of the yearIncreaseDecreaseAt end of the year
Short-term employee benefits (a)226,152,409.27927,118,638.711,001,730,616.89151,540,431.09
Post-employment benefits (defined contribution plan)(b)5,248,146.9993,025,372.3688,529,751.619,743,767.74
Termination benefits (c)465,851.14841,185.81872,153.00434,883.95
231,866,407.401,020,985,196.881,091,132,521.50161,719,082.78
(a)Short-term employee benefits
2019At beginning of yearIncreaseDecreaseAt end of year
Salaries, bonuses, allowances and grants210,723,820.21810,503,119.74884,415,868.48136,811,071.47
Staff welfare1,750,750.8923,556,598.4724,295,552.241,011,797.12
Social security contribution1,622,271.1247,247,265.7346,045,452.792,824,084.06
Incl: Medical insurance1,362,150.5942,318,821.5541,333,544.102,347,428.04
Work injury insurance30,755.691,427,211.061,394,836.5663,130.19
Maternity insurance229,364.843,501,233.123,317,072.13413,525.83
Housing funds1,063,993.0230,889,248.2830,946,436.951,006,804.35
Labor union funds and employee education funds9,956,772.1213,593,217.1615,024,466.508,525,522.78
Other short-term benefits1,034,801.911,329,189.331,002,839.931,361,151.31
Total226,152,409.27927,118,638.711,001,730,616.89151,540,431.09
(b)Defined contribution plan
2019At beginning of yearIncreaseDecreaseAt end of year
Basic pension insurance1,755,160.1688,463,119.3386,167,938.134,050,341.36
Unemployment insurance122,350.652,587,235.092,359,308.38350,277.36
Contribution to pension fund3,370,636.181,975,017.942,505.105,343,149.02
5,248,146.9993,025,372.3688,529,751.619,743,767.74

Note:For the half year of 2019, the Group provided other termination benefits for severing laborrelations of RMB153,286.50. For the half year of 2018, the Group provided other termination benefitsfor severing labor relations of RMB69,075.00.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

26. Tax payable

30 June 20191 January 2019
Value-added tax61,484,212.4090,356,534.09
Corporate Income taxes121,174,058.74115,226,820.39
Individual income tax payable4,518,825.003,954,139.24
City maintenance and construction surtax4,994,194.586,854,426.95
Educational surcharge payable3,593,664.024,937,147.17
Water conservancy fund payable5,523,161.325,421,280.43
Stamp duty4,098,721.215,854,355.91
Property tax1,407,180.811,123,276.37
Land use tax payable241,952.24209,179.29
Others8,543,031.518,043,252.88
215,579,001.83241,980,412.72

27. Other payables

30 June 20191 January 2019
Interest payable29,012,444.9321,906,660.63
Dividend payable6,389,320.966,389,320.96
Other payables1,439,124,932.541,511,140,990.34
1,474,526,698.431,539,436,971.93

)Interest payable

30 June 20191 January 2019
Long-term loans’ (With periodic payments of principal and interest charges) interest35,440.2138,984.25
Interest on short-term borrowings10,692,042.5110,973,397.39
Trade receivables’ factoring interest18,284,962.2110,894,278.99
29,012,444.9321,906,660.63

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

27. Other payables (Continued)

(2)Dividend payable

30 June 20191 January 2019
Shanghai Fosun Pharmaceutical (Group) Co., Ltd.4,835,511.584,835,511.58
Zhenfang Zhang1,389,639.311,389,639.31
Meiluo Pharmaceutical Co., Ltd.164,170.07164,170.07
6,389,320.966,389,320.96

As at 30 June 2019, the Group had no significant dividend aged more than one year and not yet paid(31 December 2018: nil).

(3)Other payables

30 June 20191 January 2019
Payables for factoring programs550,002,940.12724,272,060.30
Deposit389,299,163.12334,821,325.72
Accrued selling and distribution expenses174,163,680.40131,493,977.43
Payables arising from acquisition of subsidiaries77,082,980.0078,702,980.00
Payables for construction in progress and equipment58,230,154.8879,380,923.99
Payables for rentals40,290,060.9429,298,835.46
Payables to individuals28,207,673.3822,730,210.22
Temparary loan15,800,000.0015,800,000.00
Payables to related parties15,581,702.815,436,532.76
Payables for land transfer payments12,597,500.0018,071,000.00
Equity subscription10,000,000.0010,000,000.00
Collection of others9,067,830.667,525,379.59
Others58,801,246.2353,607,764.87
1,439,124,932.541,511,140,990.34

At 30 June 2019, significant other payables over 1 year are:

Amount payableReason for outstanding
Non-controlling interests in South Pharmaceutial Foreign Trade Fu Yuequn and other 11 natural persons54,722,980.00Payment conditions not met
Shenzhen No.1 Construction Engineering Co., Ltd.8,605,625.20Payment conditions not met
Liuzhou Shengli Pharmacy5,986,288.12Payment conditions not met
69,314,893.32

V Notes to the consolidated financial statements (Continued)

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

27. Other payables (Continued)

The amount arising from the acquisition of subsidiaries is mainly for the shares acquisition of minoritiesof South Pharmaceutial Foreign Trade .At 30 June 2019, other payables due within 1 year amounting to RMB 137,518,449.47(31 December2018: RMB 136,286,760.04 ) are mainly consisted of construction cost payable, company borrowingspayable, deposits and etc.

28. Non-current liabilities due within 1 year

30 June 20191 January 2019
Long-term borrowings due within 1 year31,600,000.00-
Lease liabilities due within 1 year526,696,784.75495,132,751.96
558,296,784.75495,132,751.96

29. Other current liabilities

30 June 20191 January 2019
Output VAT to be recognized445,493.48292,465.75

30. Long-term borrowings

30 June 20191 January 2019
Credit borrowings(a)-31,600,000.00
-31,600,000.00
(a)At 30 June 2019, the Group has no entrusted borrowings(31 December 2018: RMB31,600,000.00). The Group's long-term borrowings are loans lent by the China National Pharmaceutical Group Corporation. The borrowings due within one year have been reclassified to non-current liabilities due within one year.
At 30 June 2019, the annual interest rate of above-mentioned borrowings was 4.04% (31 December 2018: 4.04%).

.Lease liabilities

30 June 20191 January 2019
lease payables1,713,157,908.711,599,733,049.76
Less::lease payables due within 1 year(526,696,784.75)(495,132,751.96)
1,186,461,123.961,104,600,297.80

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

32. Long-term payables

30 June 20191 January 2019
Payable for specific projects800,000.00800,000.00

Payable for specific projects

At beginning of yearIncreaseDecreaseAt end of yearReasons of derred income
Special funds granted by government800,000.00--800,000.00Granted by the government

33. Long-term employee benefits payable

30 June 20191 January 2019
Early retirement benefits payable1,915,000.002,050,000.00

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

34. Deferred income

2019Opening balanceIncreaseDecreaseClosing balanceReasons of derred income
Government grants91,491,170.4079,184.442,847,536.6688,722,818.18Government grants
91,491,170.4079,184.442,847,536.6688,722,818.18
As at 30 June 2019, deferred income from government grants are as follow:
Government grants programOpening balanceAddition in the yearAmount included in non-operating income in the yearAmount included in other income in the yearClosing balanceAsset related/ income related
Resettlement Compensation (i)75,555,441.17-1,349,204.28-74,206,236.89Asset related
Guangxi Logistics Project6,453,426.58--230,346.066,223,080.52Asset related
Guangzhou Logistics standardization project2,815,012.55--273,123.422,541,889.13Asset related
A comprehensive experimental modern service industry subsidies1,500,000.00--150,000.001,350,000.00Asset related
Shared Logistics Center252,058.35--9,400.20242,658.15Asset related
Other projects4,915,231.7579,184.44835,462.704,158,953.49Asset/Income related
91,491,170.4079,184.441,349,204.281498332.3888,722,818.18

Due to the implementation of urban planning for old town reconstruction in Nanning, the operating center ofGuangxi Logistics which was located in Longteng Road District, Nanning City, was to be reconstructed inanother 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 RMB50,000,000.00and property in constructing equaling a value of RMB70,250,000.00. Cash compensation of RMB50,000,000.00 was received in May 2012. In year 2015, construction properties with a value ofRMB70,250,000.00 were built and delivered, and had been recognized as investment properties (Note V (12)).The compensation relating the capital expenditure in the reconstruction of the new logistic center inanother place, amounting to RMB93.32 million was recognized as deferred revenue,and would beamortized and recognized in the income statement within the expected useful lives using the straightline method (Note V(50)), and the other cash compensation.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

35. Other non-current liabilities

30 June 20191 January 2019
Contract liabilities53,375.33-
Governmental medical reserve funds45,427,343.3145,427,343.31
Product promotion accumulative points programme22,359,977.4523,813,832.87
67,840,696.0969,241,176.18
Certain medical reserves funds were received by the Group from the PRC government and local government for purchasing medical products (including medicines) required to respond to serious disasters, epidemics and other emergencies.

36. Share capital

Movement during the current year
2019At beginning of yearIssue of new shareOthersTotalAt end of year
Shares428,126,983.00428,126,983.00

37. Capital surplus

2019At beginning of yearIncreaseDecreaseAt end of year
Share premium2,118,174,787.27--2,118,174,787.27
Significant reorganization1,173,907,763.19--1,173,907,763.19
Other changes in equity of invested units under equity method(94,032,514.34)42,424,747.00-(51,607,767.34)
Transfer of capital surplus recognized under the previous accounting system2,650,322.00--2,650,322.00
Business combination involving enterprises under common control----
Others1,120,284,623.39--1,120,284,623.39
4,320,984,981.5142,424,747.00-4,363,409,728.51

Capital surplus-others increased by RMB 42,424,747.00 when other changes in equity of ModernPharmaceutical resulted in adjustment of long-term equity investment and an increase of capitalsurplus by RMB 42,424,747.00 .

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

38. Surplus reserve

At beginning of yearIncreaseDecreaseAt end of year
Surplus reserve214,063,491.50--214,063,491.50
214,063,491.50--214,063,491.50

39. Retained earnings

30 June 20191 January 2019
Retained earnings at the end of the prior year6,655,257,147.275,572,952,806.39
Retained earnings at beginning of year after retrospective adjustment and restatement6,655,257,147.275,572,952,806.39
Add: Net profit attributable to the parent650,833,360.401,210,742,435.78
Cash dividends payable for ordinary shares171,250,793.20128,438,094.90
Others -Business combination involving enterprises under common control--
Retained earnings at end of year7,134,839,714.476,655,257,147.27

40. Operating revenue and cost

For the six months ended 30 June 2019For the six months ended 30 June 2018
RevenueCostRevenueCost
Principal operations25,040,619,938.9822,398,327,532.4320,606,027,974.5718,355,002,752.42
Other operations187,527,438.4517,192,420.44172,397,627.6512,640,971.42
25,228,147,377.4322,415,519,952.8720,778,425,602.2218,367,643,723.84

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

40. Operating revenue and cost (Continued)

ClassificationHeadquartersDistributionRetailInter-segment offsetsTotal
By product
Include:
Medicines-17,951,760,565.225,957,083,892.95(361,359,523.83)23,547,484,934.34
Medical appliance-1,345,459,501.68--1,345,459,501.68
Other4,747,314.83179,640,288.21150,815,338.37-335,202,941.41
By area
Include:
Domestic sales4,747,314.8319,476,860,355.116,107,899,231.32(361,359,523.83)25,228,147,377.43
Overseas sales-----
By contract duration
Include:
Confirm revenue at a certain point in time-19,297,220,066.905,957,083,892.95(361,359,523.83)24,892,944,436.02
Confirm revenue at a certain time period4,747,314.83179,640,288.21150,815,338.37-335,202,941.41
Total4,747,314.8319,476,860,355.116,107,899,231.32(361,359,523.83)25,228,147,377.43

Information about the Group’s obligations is as follows:

The Group recognises revenue when goods are delivered, and will receive payment within 30-210 days.The Group recognises revenue after providing services, and will receive payment within 30-210 days.The expected revenue recognition time for the Group’s contract obligations above is in year 2019.Information related to the sales price allocated to the remaining obligations:

The amount of income corresponding to the obligation that has been signed but has not been fulfilled or hasnot yet fulfilled is 239,739,020.90 yuan, of which 239,739,020.90 yuan is expected to be recognized in 2019.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

41. Tax and surcharges

For the six month ended 30 June 2019For the six month ended 30 June 2018
City maintenance and construction tax24,015,771.7022,352,680.77
Educational surcharge17,051,137.4016,112,625.97
Property tax3,182,784.833,075,856.41
Land tax310,374.16245,070.74
Vehicle and vessel use tax71,880.9598,966.20
Stamp duty17,406,047.5914,200,426.96
Others101,229.81534,900.20
62,139,226.4456,620,527.25

42. Selling expenses

For the six month ended 30 June 2019For the six month ended 30 June 2018
Employees payroll and welfare benefits751,390,265.97659,176,548.69
Rental expenses85,603,520.94322,805,173.33
Transportation charges42,481,965.6633,086,676.72
Depreciation expenses313,982,576.0326,125,384.59
Promotion and marketing expenses21,130,375.6318,454,328.54
Office allowances19,914,617.6216,283,197.98
Entertainment expenses11,670,679.4611,357,532.12
Storage expenses15,216,365.9714,866,861.14
Travel allowances3,017,736.943,415,890.36
Market development fees3,713,897.193,255,084.76
Conference expenses1,196,924.881,654,991.62
Others214,013,574.44163,107,086.22
1,483,332,500.731,273,588,756.07

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

43. Administrative expenses

For the six month ended 30 June 2019For the six month ended 30 June 2018
Employees payroll and welfare benefits265,705,706.25248,803,724.84
Rental expenses9,155,207.1418,347,245.83
Depreciation expenses16,813,385.9012,732,380.45
Office allowances11,183,599.3111,877,499.56
Amortization of intangible assets9,779,109.118,272,613.85
Entertainment expenses5,822,240.836,428,775.38
Amortization of long-term deferred expenses5,532,926.204,518,905.10
Vehicle management expenses3,630,572.814,435,451.82
Travel allowances3,801,532.994,323,679.13
Utilities3,094,494.342,713,666.76
Taxations1,847,691.622,241,415.79
Conference expenses2,586,044.562,059,875.35
Repairing fees2,507,057.401,624,550.73
Others35,757,125.6723,440,279.19
377,216,694.13351,820,063.78

44. Finance costs

For the six month ended 30 June 2019For the six month ended 30 June 2018
Interest expenses169,529,472.3783,356,367.18
Less: Interest income(60,630,036.91)(23,082,233.56)
Cash discount(23,190,566.63)(21,542,580.44)
Exchanges loss/(gain)(389,882.62)329,665.40
Others18,776,268.0318,480,325.74
104,095,254.2457,541,544.32

45.

Other incomes

For the six month ended 30 June 2019For the six month ended 30 June 2018
Government grants related to daily operating activities14,974,471.8710,589,212.57
Taxation service charge refund16,447.15741,097.45
14,990,919.0211,330,310.02

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

46. Investment income

For the six month ended 30 June 2019For the six month ended 30 June 2018
Investment income from long-term equity investments under the equity method169,142,289.99162,662,271.35
Dividend income from other equity instruments invested during the holding period-31,500.00
169,142,289.99162,693,771.35

47. Impairment loss on financial assets

For the six month ended 30 June 2019For the six month ended 30 June 2018
Impairment loss of trade receivables(1,666,431.98)(1,172,127.53)
Impairment loss of other receivables(9,767,669.15)2,198,829.77
(11,434,101.13)1,026,702.24

48.

Impairment losses

For the six month ended 30 June 2019For the six month ended 30 June 2018
Inventory provision(125,554.34)(508,849.26)
(125,554.34)(508,849.26)

49. Gain on disposal of assets

For the six month ended 30 June 2019For the six month ended 30 June 2018
Gain on disposal of fixed assets(29,725.44)389,144.70
Gain on disposal of intangible assets-3,892,019.91
(29,725.44)4,281,164.61

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

50. Non-operating income

For the six month ended 30 June 2019For the six month ended 30 June 2018Amount classified as non-recurring profit or loss
Government grants1,349,204.281,349,204.281,349,204.28
Gain from writing off the unnecessary payment306,191.872,898,512.62306,191.87
Gain on disposal of non-current assets195,336.002,303.00195,336.00
Others1,816,438.101,248,931.211,816,438.10
3,667,170.255,498,951.113,667,170.25

Government grants included in current period profit or loss:

Project NameGovernment DepartmentReasons for Government grantsTypeAffects the profit or loss of this yearSpecial subsidyFor the six months ended 30 June 2019For the six months ended 30 June 2018Related to asset/income
Resettlement Compensation of No. 7 Zhongyao RoadNanning Economic & Technological Development Area Management CommitteeSubsidySubsidies from local government for support policies such as attracting investmentYesNo1,349,204.281,349,204.28Asset related

All non-operating income was wholly classified as non-recurring profit or loss for the six month ended

51. Non-operating expenses

For the six month ended 30 June 2019For the six month ended 30 June 2018Amount classified as non-recurring profit or loss
Donation expenses-60,000.00-
Penalty expenses273,498.601,194,388.28273,498.60
Loss on disposal of a non-current asset161,292.3428,525.01161,292.34
Others1,283,474.62514,379.511,283,474.62
1,718,265.561,797,292.801,718,265.56

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

52. Income taxes

For the six month ended 30 June 2019For the six month ended 30 June 2018
Current income tax183,966,126.67163,102,979.73
Deferred income tax8,277,799.831,383,754.59
192,243,926.50164,486,734.32
The reconciliation from income tax calculated based on applicable tax rates and total profit presented in the consolidated financial statements to the income taxes is listed below:
For the six month ended 30 June 2019
Total profit960,336,481.81
Income taxes calculated at applicable tax rates240,084,120.45
Lower tax rates enacted by local authorities(13,265,455.52)
Adjustment of income tax expense of previous years(4,574,884.17)
Income not subject to tax(47,995,671.32)
Expenses not deductible for tax17,747,992.12
Deductible loss on unconfirmed deferred tax assets at end of the period493,231.44
Impact of the temporary discrepancy on unconfirmed deductible deferred tax assets at end of the period(255,667.65)
Impact of the temporary discrepancy on unconfirmed deductible deferred tax assets of the pervious year10,261.15
Income tax192,243,926.50

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

53. Notes to items in the cash flow statement

(a)Cash receipts related to other operating activities
For the six months ended 30 June 2019For the six months ended 30 June 2018
Government grants except tax return16,340,011.4910,345,223.64
Rent income37,910,253.8137,793,728.50
Received operational restricted bank deposits123,321,063.7088,156,799.79
Interest income60,227,651.1522,642,258.30
Others57,683,231.05153,046,777.37
295,482,211.20311,984,787.60
(b)Cash paid relating to other operating activities
For the six months ended 30 June 2019For the six months ended 30 June 2018
Rental expenses94,758,728.08341,152,419.16
Entertainment expenses17,492,920.2917,786,307.50
Transportation charges42,481,965.6633,086,676.72
Travel expenses6,819,269.937,739,569.49
Storage expenses15,216,365.9714,866,861.14
Office expenses31,098,216.9328,160,697.54
Advertising expenses21,130,375.6318,454,328.54
Others265,893,688.82377,222,116.67
494,891,531.31838,468,976.76
(c)Cash received relating to other investing activities
For the six months ended 30 June 2019For the six months ended 30 June 2018
Received entrusted loan payments44,000,000.00
Received funds of acquiring Sinopharm Huadu4,680,000.00
Others86,145.15
-48,766,145.15

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

53. Notes to items in cash flow statement (Continued)

(d)Cash paid relating to other investing activities
For the six months ended 30 June 2019For the six months ended 30 June 2018
Entrusted borrowings paid to Zhijun Suzhou-43,999,800.00
Others1,093,125.00-
1,093,125.0043,999,800.00
(e)Cash received relating to other financing activities
For the six months ended 30 June 2019For the six months ended 30 June 2018
Financing restricted monetary funds received3,512,659.7179,825,164.60
Others-3,920,000.00
3,512,659.7183,745,164.60
(f)Cash payments relating to other financing activities
For the six months ended 30 June 2019For the six months ended 30 June 2018
Bank factoring payable174,269,120.1864,002,739.23
Lease payment299,173,550.25-
Purchase of equity of minority shareholders-54,722,980.00
Others36,719,497.31-
510,162,167.74118,725,719.23

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

54. Supplementary information of cash flow statement

(a)Reconciliation of net profit to cash flows from operating activities
For the six month ended 30 June 2019For the six month ended 30 June 2018
Net profit768,092,555.31689,249,009.91
Adjustments: Provision for asset impairment11,559,655.47(506,814.18)
Depreciation of fixed assets and investment properties48,917,181.7238,366,126.42
Amortization of intangible assets14,808,363.4311,832,914.62
Amortization of long-term prepaid expenses50,607,272.6241,638,297.62
Gains on disposal of fixed assets, and other non-current assets131,566.90(4,254,942.60)
Finance costs159,266,607.8682,449,854.36
Investment income(169,142,289.99)(162,693,771.35)
Increase in deferred tax assets5,674,224.553,402,744.73
(Increase)/decrease in deferred tax liabilities2,603,575.28(2,018,990.14)
(Increase)/decrease in inventories(492,796,771.41)(463,324,117.97)
Increase in operating receivables items(1,983,255,213.04)(1,298,602,834.11)
(Decrease)/increase in operating payable items2,463,112,034.511,170,553,090.12
Others284,178,818.14119,267,141.77
Net cash generated from operating activities1,163,757,581.35225,357,709.20

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

54. Supplementary information of cashflow statement (Continued)

(b)Movement of cash
For the six months ended 30 June 2019For the six months ended 30 June 2018
Cash at the end of the period7,768,974,878.913,592,715,787.37
Less: Cash at the beginning of the period7,632,117,020.773,673,498,691.48
Net increase in cash136,857,858.14(80,782,904.11)
(c)Cash
30 June 201931 December 2018
Cash7,768,974,878.917,632,117,020.77
Incl: Cash on hand3,415,085.255,587,191.18
Bank deposits on demand7,765,559,793.667,626,529,829.59
Ending banlance cash and cash equivalent7,768,974,878.917,632,117,020.77

55. Notes to changes in shareholders’ equity

The current capital reserve -“Other” increased by RMB 42,424,747.00 when other changes in equity ofShyndec Pharma resulted in adjustment of long-term equity investment and an increase of capital surplusamounting to RMB 42,424,747.00.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

56. Assets under restricted ownership or right of use

Book valueReasons
Cash and cash equivalents317,353,629.58Deposits of bank acceptance notes, depostis for letter of credit and others.
Notes receivables211,316,836.99notes receivable discounted but not due
528,670,466.57

Note 1: At 30 June 2019, the Group had deposits of bank acceptance notes and letter of credit depositamounting to RMB317,353,629.58 (31 December 2018: RMB457,664,283.79) (Note V(1)); the deposit ofbank acceptance bill is RMB317,047,823.58, the letter of credit deposit is RMB305,806.00.

Note 2: At 30 June 2019, the Group had notes receivable of RMB211,316,836.99, discounted but not due (31December 2018: RMB170,013,427.11) (Note V (2)).

Note 3: At 30 June 2019, the Group had notes receivable of RMB 0, endorsed but not due (31 December2018: 301,416.00) (Note V (2)).

57. Government grants

TypeAmountAccount titleIncluded in current period profit or loss:
2017 Key enterprise development award funds of Liwan District, Guangzhou3,166,380.00Other incomes3,166,380.00
2018 Hundreds of enterprises reward funds of Chancheng District, Foshan City310,824.00Other incomes310,824.00
Third party drug modern logistics public information platform9,400.20Other incomes9,400.20
2013 Guangzhou subsidies for headquarters264,841.74Other incomes264,841.74
Guangzhou special subsidy for the construction of research and development institutions44,705.94Other incomes44,705.94
Guangzhou special subsidy for commerce and trade circulation industry241,440.44Other incomes241,440.44

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

57. Government grants (Continued)

Liwan District Sinopharm Supply Chain Engineering Technology Research and Development Center11,598.84Other incomes11,598.84
Medical Smart Supply Chain E-commerce Service Platform Technology Project21,884.52Other incomes21,884.52
Input tax 10% deduction406,083.20Other incomes/ Deferred income369,265.69
Office rent subsidy102,415.76Other incomes102,415.76
Centralized financial subsidy fund for comprehensive pilot work of modern service industry150,000.00Other incomes150,000.00
Guangdong Provincial Science and Technology Bureau's grant for the "Smart Supply Chain Project"17,011.65Other incomes17,011.65
Guangzhou Logistics Standardization Pilot Project273,123.42Other incomes273,123.42
Industrial application project of pharmaceutical cold chain patent incubator12,499.98Other incomes12,499.98
Key enterprises support rewards of Liwan District, Guangzhou60,800.00Other incomes60,800.00
Employment subsidy619,679.48Other incomes619,679.48
Statistical work subsidy10,000.00Other incomes10,000.00
Nanning logistics project construction support fund93,203.22Other incomes93,203.22
Business bureau award50,000.00Other incomes50,000.00
Business enterprise support reward300,000.00Other incomes300,000.00
Modern logistics cold chain integration monitoring platform project30,000.00Other incomes30,000.00
Medical warehousing center logistics information platform project71,428.56Other incomes71,428.56
Modern pharmaceutical logistics remote location construction project35,714.28Other incomes35,714.28
Industrial transformation and upgrading special funds179,112.66Other incomes179,112.66

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

V Notes to the consolidated financial statements (Continued)

57. Government grants (Continued)

Quarterly growth award for special funds for industrial development150,000.00Other incomes150,000.00
Subsidies for the employment of disabled persons18,257.35Other incomes18,257.35
Futian district modern service industry quarterly growth award300,000.00Other incomes300,000.00
Special funds for business development50,000.00Other incomes50,000.00
2018 finance bureau subsidy of Putuo district1,430,000.00Other incomes1,430,000.00
Key enterprises support funds of Putuo district483,143.05Other incomes483,143.05
Futian District Industrial Development Special Fund Award700,000.00Other incomes700,000.00
Gulou District Tax Subsidy130,000.00Other incomes130,000.00
Small-scale taxpayers are exempt from VAT2,310,639.30Other incomes2,310,639.30
Tianjin Heping District Business Committee Award5,600.00Other incomes5,600.00
Shenyang City Service Development Special Fund Subsidy2,000,000.00Other incomes2,000,000.00
tax return form Dalian682,221.79Other incomes682,221.79
Weidong District Tax Reward100,000.00Other incomes100,000.00
Yangpu District SME Development Special Fund169,000.00Other incomes169,000.00
Tax system service fee refund280.00Other incomes280.00
Subsidy of electric vehicle39,619.95Deferred income
Resettlement Compensation of No. 7 Zhongyu Road1,349,204.28Non-operating income1,349,204.28
Shenzhen Futian District Development Service Center District Industrial Development Special Fund Loan Discount133,300.00Financial expenses133,300.00

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

VI. Changes in scope of consolidation

1. Changes in scope of consolidation for other reasons

Establishment of subsidiaries:

30 June 2019For the six months ended 30 June 2019
Net assetsNet profits
Sinopharm Holding Guoda Bayannaoer Co., Ltd.(a)20,071,010.0971,010.09
Inner Mongolia Guoda Pharmaceutical Co., Ltd.(b)19,435,858.10(564,141.90)
Sinopharm Holding Guoda Yongxingtang Chain (Chaoyang) Co., Ltd.(c)21,362,985.84162,985.84

a. On 18 November 2018, the Group and Hohhot Manshengyuan Trading Co., Ltd. set up

Sinopharm Holding Guoda Bayannaoer Co., Ltd. registered capital subscribed RMB16,000,000.00 and RMB 4,000,000.00 respctively. In January 2019, the Group and minorityshareholders completed the capital contribution.The Group holds 80% of its equity after thecompletion。b. On 22 October 2018, The Group wholly-owned Inner Mongolia Guoda Pharmaceutical Co., Ltd.,

with a registered capital of RMB 20 million., and completed capital contribution in February 2019.c. On 30 April 2019, the Group and Chaoyang Bowei Consulting Service Co., Ltd. set up

Sinopharm Holding Guoda Yongxingtang Chain (Chaoyang) Co., Ltd., registered capital

subscribed RMB 19,380,000.00 and RMB 18,620,000.00 respctively. In June 2019, the Group

and the minority shareholders contributed RMB 6,528,000.00 and RMB 6,272,000.00

respectively. The Group holds 51% of its equity after the completion。

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

VII Interests in other entities

1.Interests in subsidiaries
(1)The composition of the Group:
SubsidiariesPrincipal place of businessPlace of incorporationNature of businessShareholdingWays of acquisition
DirectIndirect
Sinopharm GuilinGuilinGuilinCommercial-100%Establishment
Sinopharm BaiseBaiseBaiseCommercial-100%Establishment
Sinopharm Holding Zhongshan Co., Ltd.(hereafter refered as"Sinopharm Zhongshan")ZhongshanZhongshanCommercial-100%Establishment
Sinopharm GuigangGuigangGuigangCommercial-100%Establishment
Sinopharm BeihaiBeihaiBeihaiCommercial-100%Establishment
Sinopharm Holding Guangzhou Medical TreatmentGuangzhouGuangzhouCommercial-51%Establishment
Sinopharm Holding Shenzhen Jianmin Co., Ltd.(hereafter refered as"Sinopharm Jianmin")ShenzhenShenzhenCommercial100%-Business combinations involving entities under common control
Sinopharm Holding Shenzhen Traditional & Herbal Medicine Co., Ltd. (hereafter referd as “Sinopharm Traditional & Herbal Medicine")ShenzhenShenzhenCommercial100%-Business combinations involving entities under common control
Sinopharm Holding Shenzhen Logistics Co., Ltd. (hereafter refered as“Shenzhen Logistics")ShenzhenShenzhenServices100%-Business combinations involving entities under common control
Sinopharm Holding Guangzhou Co., Ltd. (hereafter refered as“Sinopharm Guangzhou")GuangzhouGuangzhouCommercial100%-Business combinations involving entities under common control
Sinopharm Holding Guangdong Hengxing Co., Ltd. (hereafter refered as“Sinopharm Hengxing")GuangzhouGuangzhouCommercial-100%Business combinations involving entities under common control
Sinopharm YulinYulinYulinCommercial-100%Business combinations involving entities under common control

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

VIIInterests in other entities (Continued)
1.Interests in subsidiaries (Continued)
(1)The composition of the Group (Continued):
SubsidiariesPrincipal place of businessPlace of incorporationNature of businessShareholdingWays of acquisition
DirectIndirect
Sinopharm LiuzhouLiuzhouLiuzhouCommercial-51%Business combinations involving entities under common control
Guangdong Huixin Investment Co., Ltd. (“Huixin Investment”)GuangzhouGuangzhouService100.00%Business combinations involving entities under common control
Sinopharm Holding Foshan Co., Ltd. (“Sinopharm Foshan")FoshanFoshanCommercial100.00%Business combinations involving entities under common control
Sinopharm Holding Guangdong Yuexing Co., Ltd. (“Sinopharm Yuexing”)GuangzhouGuangzhouCommercial100.00%Business combinations involving entities under common control
Sinopharm Holding Guangdong Logistics Co., Ltd. (“Guangdong Logistic”)GuangzhouGuangzhouService100.00%Business combinations involving entities under common control
Sinopharm GuangxiNanningNanningCommercial100.00%Business combinations involving entities under common control
Guangxi LogisticNanningNanningService100.00%Business combinations involving entities under common control
Sinopharm WuzhouWuzhouWuzhouCommercial99.90%Business combinations involving entities under common control
Sinopharm DongguanDongguanDongguanCommercial100.00%Business combinations involving entities under common control
Sinopharm ZhanjiangZhanjiangZhanjiangCommercial100.00%Business combinations involving entities under common control
Sinopharm YanfengShenzhenShenzhenCommercial51.00%Business combinations involving entities under common control
Sinopharm MeizhouMeizhouMeizhouCommercial100.00%Business combinations involving entities under common control
Sinopharm HuizhouHuizhouHuizhouCommercial100.00%Business combinations involving entities under common control
Sinopharm ZhaoqingZhaoqingZhaoqingCommercial-100%Business combinations involving entities not under common control
Sinopharm Jiangmen(a)JiangmenJiangmenCommercial-100%Business combinations involving entities not under common control
Sinopharm ShaoguanShaoguanShaoguanCommercial-70%Business combinations involving entities not under common control
Sinopharm Holding Shantou Co., Ltd.(hereafter refered as"Sinopharm Shantou”)ShantouShantouCommercial-100%Business combinations involving entities not under common control
Foshan Nanhai Medicine Co., Ltd.FoshanFoshanCommercial-100%Business combinations involving entities under common control
Foshan Nanhai Uptodate & Special Medicines Co., Ltd.FoshanFoshanCommercial-100%Business combinations involving entities under common control
Foshan Nanhai Medicine Co., Ltd.FoshanFoshanCommercial-100%Business combinations involving entities under common control
Guangdong Uptodate & Special MedicinesGuangzhouGuangzhouCommercial-100%Business combinations involving entities under common control
Guangdong South Pharmaceutical Foreign Trade Co., Ltd.GuangzhouGuangzhouCommercial-100%Business combinations involving entities under common control
Sinopharm Holding Zhuhai Co., Ltd. ((hereafter referd as “Sinopharm Zhuhai")ZhuhaiZhuhaiCommercial-100%Business combinations involving entities not under common control

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

VIIInterests in other entities (Continued)
1.Interests in subsidiaries (Continued)
(1)The composition of the Group (Continued):
SubsidiariesPrincipal place of businessPlace of incorporationNature of businessShareholdingWays of acquisition
DirectIndirect
Sinopharm Holding Maoming Co., Ltd. ((hereafter referd as “Sinopharm Maoming")MaomingMaomingCommercial-100%Business combinations involving entities not under common control
Sinopharm Holding GZ Medical Technology Co., Ltd.GuangzhouGuangzhouCommercial-51%Establishment
Sinopharm Holding GZ Medical Supply Chain Service Co., Ltd.GuangzhouGuangzhouCommercial-51%Establishment
Sinopharm Holding Heyuan Co., Ltd. ((hereafter referd as “Sinopharm Heyuan")HeyuanHeyuanCommercial-70%Business combinations involving entities not under common control
Sinopharm Holding Guoda Pharmacy Co., Ltd.ShanghaiShanghaiCommercial60%-Business combinations involving entities under common control
Sinopharm Holding Guoda Pharmacy Chain Store Shanghai Co., Ltd.ShanghaiShanghaiCommercial-100%Business combinations involving entities under common control
Beijing Guoda Pharmacy Chain Store Co., Ltd.BeijingBeijingCommercial-100%Business combinations involving entities under common control
Tianjin Guoda Pharmacy Chain Store Co., Ltd.TianjinTianjinCommercial-80%Business combinations involving entities under common control
Guangxi Guoda Pharmacy Consulting Chain Store Co., Ltd.NanningNanningCommercial-100%Business combinations involving entities under common control
Sinopharm Holding Guoda Pharmacy Guangdong Co., Ltd.ShenzhenShenzhenCommercial-100%Business combinations involving entities under common control
Sinopharm Guoda Pharmacy Guangxi Chain Co., Ltd.LiuzhouLiuzhouCommercial-100%Business combinations involving entities under common control
Zhejiang Guoda Pharmacy Co., Ltd.HangzhouHangzhouCommercial-100%Business combinations involving entities under common control
Sinopharm Holding Guoda Yangzhou Dadesheng Pharmacy Chain Store Co., Ltd.YangzhouYangzhouCommercial-93.68%Business combinations involving entities under common control
Ningxia Guoda Pharmacy Chain Store Co., Ltd.YinchuanYinchuanCommercial-70%Business combinations involving entities under common control
Sinopharm Holding Guoda Nanjing Pharmacy Chain Store Co., Ltd.NanjingNanjingCommercial-60%Business combinations involving entities under common control
Sinopharm Holding Guoda Shandong Pharmacy Chain Store Co., Ltd.LinyiLinyiCommercial-55%Business combinations involving entities under common control
Sinopharm Holding Guoda Shenyang Pharmacy Chain Store Co., Ltd.(b)ShenyangShenyangCommercial-51%Business combinations involving entities under common control
Fujian Guoda Pharmacy Chain Store Co., Ltd.(c)XiamenXiamenCommercial-100%Business combinations involving entities under common control
Anhui Guoda Pharmacy Chain Store Co., Ltd.HefeiHefeiCommercial-60%Business combinations involving entities under common control
Quanzhou Guoda Pharmacy Chain Store Co., Ltd.QuanzhouQuanzhouCommercial-51%Business combinations involving entities under common control
Shanxi Guoda Wanmin Pharmacy Chain Store Co., Ltd.TaiyuanTaiyuanCommercial-85%Business combinations involving entities under common control
Sinopharm Holding Hunan Guoda Minshengtang Pharmacy Chain Co., Ltd.HengyangHengyangCommercial-51%Business combinations involving entities under common control
Liyang Guoda People Pharmacy Chain Store Co., Ltd.LiyangLiyangCommercial-80%Business combinations involving entities under common control
Sinopharm Holding Guoda Henan Pharmacy Chain Store Co., Ltd.PingdingshanPingdingshanCommercial-60%Business combinations involving entities under common control

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

VIIInterests in other entities (Continued)
1.Interests in subsidiaries (Continued)
(1)The composition of the Group (Continued):
SubsidiariesPrincipal place of businessPlace of incorporationNature of businessShareholdingWays of acquisition
DirectIndirect
Sinopharm Holding Guoda Inner Mengdia Pharmacy Chain Store Co., Ltd.HohhotHohhotCommercial-96.7%Business combinations involving entities under common control
Sinopharm Hebei Lerentang Pharmacy Chain Store Co., Ltd.ShijiazhuangShijiazhuangCommercial-60%Business combinations involving entities under common control
Sinopharm Guoda Pharmacy Jiangmen Chain Co., Ltd.JiangmenJiangmenCommercial-65%Business combinations involving entities under common control
Sinopharm Holding Guoda Shanxi Yiyuan Pharmacy Chain Store Co., Ltd.TaiyuanTaiyuanCommercial-80%Business combinations involving entities under common control
Sinopharm Holding Xinjiang New & Special Medicines Chain Store Co., Ltd.UrumqiUrumqiCommercial-51%Business combinations involving entities under common control
Sinopharm Holding Guoda ForMe Medicines (Shanghai) Co., Ltd.ShanghaiShanghaiCommercial-97%Business combinations involving entities under common control
Sinopharm Holding Guoda ForMe Pharmacy Chain Store Co., Ltd. (Formerly “Shanghai ForMe YiXing Pharmacy Chain Store Co., Ltd.”)ShanghaiShanghaiCommercial-99.76%Business combinations involving entities under common control
Beijing Golden Elephant Pharmacy Medicine Chain Company LimitedBeijingBeijingCommercial-53.13%Business combinations involving entities under common control
Shanxi Tongfeng Pharmacy Logistics Co., Ltd.TaiyuanTaiyuanCommercial-100%Business combinations involving entities under common control
Changzhi Guoda Wanmin Pharmacy Chain Store Co., Ltd.ChangzhiChangzhiCommercial-51%Business combinations involving entities under common control
Shanxi Guoda Wanmin Clinic Management Chain Co., Ltd.TaiyuanTaiyuanMedical services-100%Business combinations involving entities under common control
Shanghai Guoda Shanghong Qibao Pharmacy Co., Ltd.ShanghaiShanghaiCommercial-51%Business combinations involving entities under common control
Zhejiang Intlmedicine Pharmacy Dongshan Co., Ltd.HangzhouHangzhouCommercial-51%Business combinations involving entities under common control
Shanghai Guoda Dongsheng Pharmacy Co., Ltd.ShanghaiShanghaiCommercial-100%Business combinations involving entities under common control
Sinopharm Guoda Drug Store (Shenzhen) Chain Co., Ltd.ShenzhenShenzhenCommercial-100%Business combinations involving entities under common control
Sinopharm Holding Guoda Pharmacy Guangzhou Chain Co., Ltd.GuangzhouGuangzhouCommercial-100%Business combinations involving entities under common control
Shanghai Guodong Chinese Traditional Medicine Clinic Co., Ltd.ShanghaiShanghaiMedical clinic-100%Business combinations involving entities under common control
Shanghai Guoda Dongxin Pharmacy Chain Store Co., Ltd.ShanghaiShanghaiCommercial-100%Business combinations involving entities under common control
Shanghai Yutaitang Chinese Traditional Medicine Clinic Co., Ltd.ShanghaiShanghaiCommercial-100%Business combinations involving entities under common control
Sanhe Liyang Golden Elephant Pharmacy Co., Ltd.LangfangLangfangCommercial-100%Business combinations involving entities under common control
Xiaoyi Guoda Wanmin Baicaotang Pharmacy Chain Store Co., Ltd.XiaoyiXiaoyiCommercial-70%Business combinations involving entities under common control
Sinopharm Holding Guoda Pharmacy Hulun Buir Co., Ltd.Hulun BuirHulun BuirCommercial-51%Business combinations involving entities under common control
ForMe XuhuiShanghaiShanghaiCommercial-100%Business combinations involving entities under common control
Sinopharm Holding Ulanqab Co., Ltd.UlanqabUlanqabCommercial-60%Establishment

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

VIIInterests in other entities (Continued)
1.Interests in subsidiaries (Continued)
(1)The composition of the Group (Continued):
SubsidiariesPrincipal place of businessPlace of incorporationNature of businessShareholdingWays of acquisition
DirectIndirect
Sinopharm Guoda Pharmacy Qinhuangdao Chain Co., Ltd.QinhuangdaoQinhuangdaoCommercial-51%Business combinations involving entities under common control
Taishan Sinopharm Holding Guoda Qunkang Pharmacy Chain Store Co., Ltd.TaishanTaishanCommercial-70%Business combinations involving entities under common control
Beijing Golden Elephant Fuxing Technology Co., Ltd.BeijingBeijingCommercial-80%Business combinations involving entities under common control
Sinopharm Lerentang Shijiazhuang PharmaceuticalShijiazhuangShijiazhuangCommercial-100%Business combinations involving entities under common control
Sinopharm Holding Guoda Drug Store Manchuria Co., Ltd.ManchuriaManchuriaCommercial-51%Establishment
Sinopharm Guoda Drug Store Anshan Chain Co., Ltd.AnshanAnshanCommercial-51%Establishment
Sinopharm Holding Guoda Yongsheng Drug Store (Shanghai) Co., Ltd.ShanghaiShanghaiCommercial-55%Establishment
Sanhe Lixin Golden Elephant Drugstore Co., Ltd.LangfangLangfangCommercial-100%Establishment
Sinopharm Holding Foshan Medical Consumables Supply Chain Co., Ltd.FoshanFoshanCommercial-70%Establishment
Sinopharm Holding Medical Supply Chain Service (Guangxi) Co., Ltd.NanningNanningCommercial-30.06%Establishment
Shanghai Guoda Haohai Pharmacy Co., Ltd.ShanghaiShanghaiCommercial-51%Establishment
Sinopharm Holding Baiyi Pharmacy Guangxi Co., Ltd.NanningNanningCommercial-51%Establishment
Sinopharm Holding Hezhou Co., Ltd.HezhouHezhouCommercial-100%Establishment
Sinopharm Holding National Pharmacy Zhengzhou Chain Co., Ltd.ZhengzhouZhengzhouCommercial-60%Establishment
Shanghai Guoda Ruijing Pharmacy Co., Ltd.ShanghaiShanghaiCommercial-55%Establishment
Fujian Guoda Pharmaceutical Co., Ltd.XiamenXiamenCommercial-100%Establishment
Sinopharm Holding Qinzhou Co., Ltd.QinzhouQinzhouCommercial-100%Establishment
Sinopharm Holding Hechi Co., Ltd.HechiHechiCommercial-100%Establishment
Sinopharm Holding Guangzhou Huadu Co., Ltd.GuangzhouGuangzhouCommercial-70%Business combinations involving entities not under common control
Sinopharm Holding Guoda Shanxi Pharmaceutical Co., Ltd.(d)TaiyuanTaiyuanCommercial-100%Business combinations involving entities not under common control
Taiyuan Tongxinli Guoda Pharmacy Co., Ltd.TaiyuanTaiyuanCommercial-100%Business combinations involving entities not under common control
Sinopharm Holding Guoda Bayannaoer Co., Ltd.(e)a Bayannaoera BayannaoerCommercial-80%Establishment
Inner Mongolia Guoda Pharmaceutical Co., Ltd.(f)HohhotHohhotCommercial-100%Establishment
Sinopharm Holding Guoda Yongxingtang Chain (Chaoyang) Co., Ltd.(g)ChaoyangChaoyangCommercial-51%Establishment
VIIInterests in other entities(Continued)

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

1.Interests in subsidiaries(Continued)
(1)The composition of the Group(Continued)

a. On 13 March 2019, Sinopharm Jiangmen was renamed as “Sinopharm Holding (Jiangmen) Co., Ltd.”.b. Sinopharm Holding Guoda Shenyang Pharmacy Chain Store Co., Ltd increased the registered capital byRMB32,000,000.00 with undistributed profits. After the capital increased, the registered capital of ShenyangGuoda increased from RMB18,000,000.00 to RMB 50,000,000.00, and the shareholding ratio of the originalshareholders did not change.c. On 17 April 2019, the shareholder of Fujian Guoda Pharmacy Chain Store Co., Ltd. Changed from Sinopharm

Holding Guoda Pharmacy Co., Ltd. to Fujian Guoda Pharmaceutical Co., Ltd. by internal transfer. The 100%equity of Fujian Guoda Chain held by the original shareholder Sinopharm Holding Guoda Pharmacy Co., Ltd.was transferred to Fujian Guoda Pharmaceutical Co., Ltd.d. On 1 February 2019, Shanxi Zhongao Pharmaceutical Co., Ltd. was renamed as “Sinopharm Holding GuodaShanxi Pharmaceutical Co., Ltd.”.e. On 5 November 2018, the Group and Hohhot Manshengyuan Trading Co., Ltd. set up Sinopharm Holding

Guoda Bayannaoer Co., Ltd. registered capital subscribed RMB 16,000,000.00 and RMB 4,000,000.00respctively. In January 2019, the Group and minority shareholders completed the capital contribution.TheGroup holds 80% of its equity after the completion.f. On 22 October 2018, the Group wholly-owned Inner Mongolia Guoda Pharmaceutical Co., Ltd., with a

registered capital of RMB 20 million., and completed capital contribution in February 2019.g. On 30 April 2019, the Group and Chaoyang Bowei Consulting Service Co., Ltd. set up Sinopharm Holding

Guoda Yongxingtang Chain (Chaoyang) Co., Ltd., registered capital subscribed RMB 19,380,000.00 and RMB

18,620,000.00 respctively. In June 2019, the Group and minority shareholders contributed RMB 6,528,000.00

and RMB 6,272,000.00 respectively. The Group holds 51% of its equity after the completion。

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

VII. Interests in other entities (Continued)

1. Interests in subsidiaries (Continued)

(1) Important non-wholly owned subsidiary

SubsidiariesMinority shareholding ratioProfit or loss attributable to minority shareholders in the current periodDispatch of dividends to minority shareholders in the current periodMinority shareholders' equity
Sinopharm Holding Guoda Pharmacy Co., Ltd.40.00%60,082,149.761,743,715,207.60

(2) Key financial information of important non-wholly owned subsidiaries

Subsidiaries30 June 201931 December 2018
Current assetsNon-current assetsTotal assetsCurrent liabilitiesNon-current liabilitiesTotal liabilitiesCurrent assetsNon-current assetsTotal assetsCurrent liabilitiesNon-current liabilitiesTotal liabilities
Sinopharm Holding Guoda Pharmacy Co., Ltd.7,637,323,815.743,210,489,588.5810,847,813,404.324,642,692,689.211,027,988,905.695,670,681,594.907,467,662,962.461,567,755,313.419,035,418,275.873,994,471,884.6264,729,132.204,059,201,016.82
SubsidiariesFor the six months ended 30 June 2019For the six months ended 30 June 2018
Operating revenueNet profitTotal comprehensive incomeCash flow from operating activitiesOperating revenueNet profitTotal comprehensive incomeCash flow from operating activities
Sinopharm Holding Guoda Pharmacy Co., Ltd.6,107,899,231.32186,189,865.75186,189,865.75545,455,740.775,143,601,636.87172,985,004.03172,985,004.0377,797,706.43

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

VII. Interests in other entities (Continued)

2. Interests in associates

Principal place of businessPlace of incorporationNature of businessShareholding(%)Accounting
DirectIndirect
Associates
Shenzhen Main Luck Pharmaceutical Co., Ltd. (hereafter referd as"Main Luck Pharmaceutical ")ShenzhenShenzhenManufacturing35.19%-Equity
Sinopharm Group Zhijun(Suzhou) Pharmaceutical Co., Ltd.SuzhouSuzhouManufacturing33.00%-Equity
Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd.ShenzhenShenzhenManufacturing49.00%-Equity
Shenzhen Zhijun Pharmaceutical Trade Co., Ltd.ShenzhenShenzhenCommercial49.00%-Equity
Sinopharm Group Zhijun(Shenzhen) Pingshan Pharmaceutical Co., Ltd.ShenzhenShenzhenManufacturing49.00%-Equity
Shanghai Shyndec Pharmaceutical Co., Ltd. (hereafter referd as “Shyndec Pharmaceutical”)ShanghaiShanghaiManufacturing16.28%-Equity
Shanghai Dingqun Enterprise Management Consulting Co., Ltd.(hereafter refered as “Shanghai Dingqun”)ShanghaiShanghaiBusiness service industry2.53%-Equity
Shanghai Beiyi Guoda pharmaceutical Co. Ltd.ShanghaiShanghaiCommercial-26.00%Equity
Shanghai Liyi Pharmacy Co., LtdShanghaiShanghaiCommercial-35.00%Equity
Sinopharm Jienuo Medical Treatment Service Guangdong Co., Ltd.GuangzhouGuangzhouCommercial-29.00%Equity

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

VII. Interests in other entities (Continued)

2. Interests in associates (Continued)

Principal place of businessPlace of incorporationNature of businessShareholding(%)Accounting
DirectIndirect
Associates
Dongyuan accord pharmaceutical chain Co., Ltd.HeyuanHeyuanCommercial-45.00%Equity
Guangdong Jianhui Construction Investment Management Co., Ltd.(hereafter refered as “Guangdong Jianhui”)ZhanjiangZhanjiangPublic-Private-Partnership-10.00%Equity
Shanghai Renbei Pharmacy Co., Ltd.ShanghaiShanghaiCommercial-30.00%Equity

Explication of the shareholding ratio of a joint venture differs from the proportion of voting rights:

The basis that holds less than 20% of the voting rights but has a significant impact, or holds 20% ormore of the voting rights but has no significant impact:

(1) The highest authority of Shanghai Dingqun is the shareholders' meeting, and the shareholders

exercise their voting rights according to the proportion of capital contribution. At the same time,Shanghai Dingqun has set up a board of directors which is responsible for the shareholders'meeting. The board consists of three members, of which the company has appointed onedirector. The vote on the board's resolution is one vote per person, and all the boardresolutions should be passed by more than half of all directors.

(2) The highest authority of Guangdong Jianhui is the shareholders' meeting, and the shareholders

exercise their voting rights according to the proportion of the capital contribution. At the sametime, Guangdong Jianhui set up a board of directors which is responsible for the shareholders'meeting. The board consists of five members, of which the company has appointed one director.The vote on the resolution of the board of directors is one vote per person.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

VII. Interests in other entities (Continued)

3. Summarised financial information of significant associate

30 June 2019/ For the six months ended 30 June 20191 January 2019/ For the six months ended 30 June 2018
Shanghai Shyndec Pharmaceutical Co., Ltd.Shanghai Shyndec Pharmaceutical Co., Ltd.
Current assets10,502,009,120.548,470,191,403.19
Non-current assets7,879,885,410.947,993,673,189.70
Total assets18,381,894,531.4816,463,864,592.89
Current liabilities7,111,735,949.126,568,480,863.79
Non-current liabilities2,323,172,902.371,452,099,931.65
Total liabilities9,434,908,851.498,020,580,795.44
Non-controlling interests1,616,396,132.891,637,029,480.44
Shareholders’ equity attributable to shareholders of the parent7,330,589,547.106,806,254,317.01
Portion of net assets calculated by shareholding ratio1,189,353,675.161,098,566,852.51
Carrying value of equity investment in joint ventures1,189,353,675.161,098,566,852.51
Operating revenue6,255,380,073.905,853,255,169.05
Net profit525,814,658.05575,258,204.58
Total comprehensive income525,814,658.05575,258,204.58
Dividends received from joint ventures this period16,896,427.808,641,853.20
30 June 2019/ For the six months ended 30 June 20191 January 2019/ For the six months ended 30 June 2018
Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd.Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd.
Current assets1,288,625,706.651,111,485,098.64
Non-current assets302,186,939.74298,610,691.12
Total assets1,590,812,646.391,410,095,789.76
Current liabilities725,207,812.63659,931,220.07
Non-current liabilities20,932,797.2224,953,965.28
Total liabilities746,140,609.85684,885,185.35
Non-controlling interests--
Shareholders’ equity attributable to shareholders of the parent844,672,036.54725,210,604.41
Portion of net assets calculated by shareholding ratio413,889,297.90355,353,196.15
Carrying value of equity investment in joint ventures413,889,297.90355,353,196.15
Operating revenue1,060,889,164.97979,292,309.92
Net profit119,461,432.13125,252,164.85
Total comprehensive income119,461,432.13125,252,164.85
Dividends received from joint ventures this period-58,111,254.57

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

VIIl. Risks related to financial instruments

1. Classification of financial instruments

The carrying amounts of each category of financial instruments as at the date of financial position are as follows:

30 June 2019

Financial assetsFinancial assets at fair value through profit or lossFinancial assets at amortised costFinancial assets at fair value through other comprehensive incomeTotal
Mandatorily requiredMandatorily requiredDesignation
Cash and bank balances-8,086,328,508.49--8,086,328,508.49
Notes receivable-790,664,828.26--790,664,828.26
Accounts receivable-11,826,440,731.59--11,826,440,731.59
Receivable financing--325,439,580.18-325,439,580.18
Other receivables-654,086,387.85--654,086,387.85
Other non-current financial assets140,000,000.00---140,000,000.00
Investment in other equity instrument---13,685,760.0013,685,760.00
140,000,000.0021,357,520,456.19325,439,580.1813,685,760.0021,836,645,796.37

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

VIIl. Risks related to financial instruments (Continued)

1. Classification of financial instruments (Continued)

30 June 2019

Financial liabilitiesFinancial liabilities at amortised cost
Short-term borrowings3,290,877,595.23
Notes payable3,539,095,262.34
Accounts payable8,088,697,602.94
Other payables1,474,526,698.43
Non-current liabilities due within one year558,296,784.75
16,951,493,943.69

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

VIIl. Risks related to financial instruments (Continued)

1. Classification of financial instruments (Continued)

The carrying amounts of each category of financial instruments as at the date of financial position are as follows:

1 January 2019

Financial assetsFinancial assets at fair value through profit or lossFinancial assets at amortised costFinancial assets at fair value through other comprehensive incomeTotal
Mandatorily requiredMandatorily requiredDesignation
Cash and cash equivalents-8,089,781,304.56--8,089,781,304.56
Notes receivable-789,536,654.23--789,536,654.23
Accounts receivable-9,336,861,647.92--9,336,861,647.92
Receivable financing--567,775,275.40567,775,275.40
Other receivables-643,493,359.32--643,493,359.32
Other non-current financial assets140,000,000.00---140,000,000.00
Investment in other equity instrument---13,685,760.0013,685,760.00
140,000,000.0018,859,672,966.03567,775,275.4013,685,760.0019,581,134,001.43

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

VIIl. Risks related to financial instruments (Continued)

1. Classification of financial instruments (Continued)

1 January 2019

2. Transfer of financial assets

Transferred financial assets that are not derecognized in their entirety

As at 30 June 2019, the Group had endorsed commercial bills receivable (the "Endorsed Bills") tocertain of its suppliers in order to settle trade payables due to such suppliers of RMB5,000,000.00 (31December 2018: RMB 301,416.00). During the year, the Group operated a number of discountingbusiness through several banks in China. At 30 June 2019, the carrying value thereof wasRMB211,316,836.99 (31 December 2018: RMB170,013,427.11). In the opinion of the directors, theGroup has retained the substantial risks and rewards, which include default risks relating to suchEndorsed Bills, and accordingly, it continued to recognize the full carrying amounts of the EndorsedBills and the associated trade payables settled. Subsequent to the Endorsement, the Group did notretain any rights of the use of the Endorsed Bills, including the sales, transfer or pledge of the EndorsedBills to any other third parties. As at 30 June 2019, the carrying value of trade payables settled by theGroup totalled RMB216,316,836.99 (31 December 2018: RMB170,314,843.11).

Financial liabilitiesFinancial liabilities at amortised cost
Short-term borrowings2,597,652,702.43
Notes payable3,416,755,681.80
Accounts payable6,468,535,961.17
Other payables1,539,436,971.93
Non-current liabilities due within one year5,861,324.37
Long-term borrowings31,600,000.00
Long-term payables3,763,978.52
14,063,606,620.22

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

VIIl. Risks related to financial instruments (Continued)

2. Transfer of financial assets (Continued)

Transferred financial assets that are derecognized in their entirety in which continuing involvementexists

As at 30 June 2019, the Group had endorsed commercial bills receivable (the "Endorsed Bills") tocertain of its suppliers in order to settle trade payables due to such suppliers of RMB665,479,757.50(31 December 2018: RMB568,118,674.84). During the year, the Group operated a number ofdiscounting business through several banks in China. At 30 June 2019, the carrying value thereof wasRMB879,092,916.00 (31 December 2018: RMB705,143,849.35). The derecognized bills had a maturityof 1 to 12 months at the end of the reporting period. In accordance with the Law of NegotiableInstruments, the holders of the derecognized bills have a right of recourse against the Group if theaccepting banks default (the “Continuing Involvement”). In the opinion of the directors, the Group hastransferred substantially all risks and rewards relating to the derecognized bills. Accordingly, it hasderecognized the full carrying amounts of the derecognized bills and the associated trade payables.The maximum exposure to loss from the Group's Continuing Involvement in the derecognized bills andthe undiscounted cash flows to repurchase these derecognized bills is equal to their carrying amounts.In the opinion of the directors, the fair values of the Group’s Continuing Involvement in thederecognized bills are not significant.

During the six months ended 30 June 2019, the Group has not recognized any gain or loss on the dateof transfer. No gain or loss was recognized from derecognized financial assets in which the ContinuingInvolvement exists, both during the year or cumulatively.

During the six months ended 30 June 2019, the Group has not recognized any gain or loss on the dateof transfer of the derecognized bills. No gains or losses were recognized from the ContinuingInvolvement, both during the year or cumulatively.

As part of its normal business, the Group entered into an trade receivable factoring arrangement (the“Arrangement”) without recourse and transferred certain trade receivables to a bank. In the opinion ofthe directors, the Group has transferred substantially all risks and rewards under the arrangement.Accordingly, it has derecognized the full carrying amounts of the associated trade receivables. Theoriginal carrying value of the derecognized trade receivables transferred under the Arrangement thathave not been settled as at 30 June 2019 amounted to RMB1,299,923,031.76 (31 December 2018:

RMB827,745,640.19).

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

VIIl. Risks related to financial instruments (Continued)

3. Risks of financial instruments

The Group's principal financial instruments comprise bank borrowings and cash and short term deposits.The main purpose of these financial instruments is to raise finance for the Group's operations. TheGroup has various other financial assets and liabilities such as trade receivables and trade payables,which arise directly from its operations.

The Company’s board of directors are responsible for planning and establishing the risk managementframework of the Group, formulating risk management policies and related guidelines of the Group andsupervising the implementation of risk management measures. The Group has already developed riskmanagement policies to identify and analyse the risks faced by the Group, which have clearly identifiedspecific risks, covering a lot of aspects such as market risk, credit risk and liquidity risk management.The Group regularly assesses the market environment and changes in the Group’s business activitiesto determine whether or not to update the risk management policies and systems. The riskmanagement of the Group shall be conducted by the operations and management departmentaccording to the policy approved by the Company’s management. The operations and managementdepartment identifies, evaluates and avoids related risks by means of close cooperation with otherbusiness units of the Group.

To avoid the risk concentrating on a single industry, a specific area or a specific counterparty, the Groupspreads financial instruments risk with diversified investments and business portfolio.

Credit risk

The Group only trades with recognised and creditworthy third parties. It is the Group’s policy that allcustomers who wish to trade on credit terms are subject to credit verification procedures. In addition,receivable balances are monitored on an ongoing basis and the Group’s exposure to bad debts is notsignificant. For transactions that are not denominated in the functional currency of the relevantoperating unit, the Group does not offer credit terms without the special approval of the credit controldepartment of the Group.

Since cash and bank balances, bank acceptance bills receivable and derivative financial instrumentsare placed in the well-established banks with high credit ratings, the credit risk of these financialinstruments is lower.

The other financial instruments of the Group include cash and bank and other receivables. The creditrisk of these financial assets result from default of counterparty. The maximum credit exposure equalsto the book value of these instruments.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

VIIl. Risks related to financial instruments (Continued)

3. Risks of financial instruments (Continued)

Credit risk (Continued)

The Group applies standard credit clause for sale of goods to customers, at the same time purchaseother goods from some of the major customers. Disclosures regarding maximum credit exposure ontrade receivables are as follows:

30 June 20191 January 2019
Trade receivable book value12,991,845,283.9210,733,695,012.29
Less: Bad debt provision(49,300,143.89)(39,521,434.74)
Carrying value12,942,545,140.0310,694,173,577.55
Amount payable to customer

The Group has agreement with customers stating that only in the circumstances of default in paymentfrom the customer, can the Group use the payable balance of the same customer to offset receivables.Therefore, at every balance sheet date, the maximum credit risk exposure of the Group is the totalamount of trade receivables less bad debt provision. Since payables cannot be offset within the balancesheet, the maximum credit risk exposure is without deducting the customer payable balance.

Since the Group trades only with recognised and creditworthy third parties, there is no requirement forcollateral. Credit risks are managed by customer/counterparty, by geographical region and by industrysector. There are no significant concentrations of credit risk within the Group as the customer bases ofthe Group’s trade receivables are widely dispersed in different sectors and industries. The Group doesnot hold any collateral or other credit enhancements over its trade receivable balances.

Determination of significant increase in credit risk

At each reporting date, the group determines whether the credit risk of a financial asset has increasedsignificantly since initial recognition. When determining whether the credit risk of a financial asset hasincreased significantly since initial recognition, the Group considers reasonable and supportableinformation that is relevant and available without undue cost or effort. This includes both quantitativeand qualitative information analysis, based on the Group’s historical experience and informed creditassessment and including forward-looking information. In order to determine the change of expecteddefault risk during the financial instrument’s entire lifetime, the Group compares the default risk offinancial instrument on the balance sheet date and on the initial recognition date base on a singlefinancial instrument or financial instrument portfolio with similar default risk.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

VIIl. Risks related to financial instruments (Continued)

3. Risks of financial instruments (Continued)

Credit risk (Continued)

The Group determines that the credit risk tof financial assets has significantly increased when one ormore quantitative or qualitative criteria are met:

- quantitative criteria are mainly probability of default increasing more than a given % sinceinitial recognition;- qualitative criteria are mainly significant detrimental changes in the borrower’s operating orfinancial conditions and early warning customer lists.- The upper criteria is 30 days the borrowers default.Definition of credit-impaired financial assets

In assessing whether a financial asset is credit-impaired, the Group considers both quantitative andqualitative information in line with internal credit risk management. The Group assesses whether afinancial asset is credit-impaired by considering the following factors:

- significant financial difficulty of the borrower or issuer;- a breach of contract such as a default or past due event;- the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’sfinancial difficulty, having granted to the borrower concession(s) that the lender(s) would nototherwise consider;- it is becoming probable that the borrower will enter bankruptcy or other financialreorganisation;- the disappearance of an active market for security because of financial difficulties;- financial assets purchased or sourced at large discounts indicating that credit losses have

occurred.

The impairment of financial assets may not be necessarily due to a single disparate event. Thecombined effects of multiple events may result in financial assets being credit-impaired.

Parameter of the expected credit loss model

Based on whether there is a significant increase in credit risk and whether the financial assets arecredit-impaired, the Group recognizes impairment allowance for different assets using either 12-monthexpected credit losses or lifetime expected credit losses. The measurement of the ECL model is afunction of the probability of default, the loss given default (i.e. the magnitude of the loss if there is adefault) and the exposure at default. The Group establishes the model by considering the quantitativeanalysis of historical statistics such as counterparty rating, the guarantee method, collateral category,repayment method, and also forward-looking information.

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

VIIl. Risks related to financial instruments (Continued)

3. Risks of financial instruments (Continued)

Credit risk (Continued)

Definitions:

- The probability of default is the probability that the debtor will not be able to meet its

repayment obligations within the following 12 months or throughout the remaining duration.To reflect the macro-economic environment conditions, the Group’s assessment of theprobability of default is based on the calculation of the ECL model adjusted by forward-looking information.- The loss given default (i.e. the magnitude of the loss if there is a default) refers to theGroup's expectation of the extent of the loss of default risk exposure. The loss given defaultvaries depending on the type of counterparty, the way and priority of recourse, and the typeof collateral. The loss given default is the percentage of the risk exposure loss at the time ofdefault, calculated on the basis of the next 12 months or the entire duration.- The exposure at default refers to the amount that the Group should be repaid in the event ofdefault in the next 12 months or throughout the remaining period.Forward-looking information

The assessment of a significant increase in credit risk and the calculation of the ECL both involveforward-looking information. The Group recognizes key economic ratios that influence credit risk andECL by historical data analysis.As at 30 June 2019, there was no evidence of significant increase in credit risk (31 December 2018: nil).

Currency risk

The Group’s major operational activities are carried out in Mainland China and a majority ofthetransactions are denominated in RMB. The Group is exposed to foreign exchange risk arising fromthe recognized assets and liabilities, and future transactions denominated in foreign currencies,primarily with respect to United States dollars and Hong Kong dollars. The Group’s finance departmentat its headquarters is responsible for monitoring the amounts of assets and liabilities, and transactionsdenominated in foreign currencies. The Group may consider entering into forward exchange contractsor currency swap contracts to mitigate the foreign exchange risk.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

VIIl. Risks related to financial instruments (Continued)

4. Capital management

The Company’s primary objective for managing capital is to ensure that it maintains a strong creditrating and healthy capital ratio in order to support its business, maximize shareholders’ value andbenefit related parties. Management also aims to maintain a capital structure that ensures the lowestcost of capital available to the entity.

Management adjusts the capital structure through adjusting dividend payments to shareholders,returning capital to shareholders, issuing new shares or selling assets to reduce debts.

The Group’s total capital is the total shareholders’ equity in the balance sheet. The Group does notadopt an asset ratio as a compulsory factor to govern capital investment.

The gearing ratios of the Group as at 30 June 2019 and 1 January 2019 were as follows:

30 June 20191 January 2019
Gearing ratio56.59%54.44%

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

IX. Disclosure of fair value

1. Assets and liabilities at fair value

30 June 2019:

Input applied in the measurement of fair value
Quoted prices in active marketsSignificant observable inputsSignificant unobservable inputsTotal
Level 1Level 2Level 3
Receivable financing-325,439,580.18-325,439,580.18
Investment in other equity instrument--13,685,760.00-13,685,760.00
Other non-current financial assets--140,000,000.00140,000,000.00
-339,125,340.18140,000,000.00479,125,340.18

1 January 2019:

Input applied in the measurement of fair value
Quoted prices in active marketsSignificant observable inputsSignificant unobservable inputsTotal
Level 1Level 2Level 3
Receivable financing-567,775,275.40-567,775,275.40
Investment in other equity instrument--13,685,760.00-13,685,760.00
Other non-current financial assets--140,000,000.00140,000,000.00
-581,461,035.40140,000,000.00721,461,035.40

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

IX. Disclosure of fair value

2. Assets and liabilities disclosed at fair value

1 January 2019:

Input applied in the measurement of fair value
Quoted prices in active marketsSignificant observable inputsSignificant unobservable inputsTotal
Level 1Level 2Level 3
Long-term borrowings-31,600,000.00-31,600,000.00

3. Estimation of fair value

The following are book value and fair value of financial instruments of the Group excluding those that hasimmaterial different in book value and fair value:

30 June 20191 January 201931 December 2018
Book valueFair valueBook valueFair valueBook valueFair value
Financial liabilities
Long-term borrowings--31,600,000.0031,600,000.0031,600,000.0031,600,000.00

Management has assessed that the fair values of cash and cash equivalents, notes receivable, trade receivables,other receivables, short-term borrowings, notes payable, trade payables, other payables, non-current liabilities duewithin one year and other current assets and liabilities, and current liabilities approximate to their carrying amountslargely due to the short remaining maturities of these instruments.

The financial controller of the Group takes the responsibility to formulate policies and procedures related tofinancial instrument fair value measurements and directly reports to the CFO and the audit committee. On eachbalance sheet date, the financial department analyses the variation of the fair vule of financial instruments anddetermines the inputs applicable to valuation. The valuation is required to be approved by the CFO.

The fair values of financial assets and liabilities are the amount at which the instrument could be exchanged ordebts could be settled in an arm’s length transaction between knowledgeable and willing parties, other than in aforced or liquidation sale. The following methods and assumptions were used to estimate the fair values.

The fair values of short-term and long-term borrowings, and long-term payables have been calculated bydiscounting the expected future cash flows using market rates of return currently available for other financialinstruments with similar terms, credit risk and remaining maturities. As at 30 June 2019, the Group’s own non-performance risk for short-term and long-term borrowings was assessed to be insignificant.

For an equity instrument of listed entities, the market price is used to determine fair value. For an equity instrumentof non-listed entities, the market comparable company model is used to estimate fair value. The Group believesthat estimated fair value by the valuation method is rational, and also the most sufficient value at the balance sheetdate.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

IX. Disclosure of fair value

4. Unobservable inputs

A financial instrument that is measured at fair value with measurement of level 3 is insensitive to reasonablefluctuation of the unobservable inputs.

5. Transfers between levels of fair value measurementAt 30 June 2019 and 1 January 2019, there were no transfers of fair value measurements betweenLevel 1 and Level 2.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

1. Parent

Registered addressNature of businessShare capital (RMB’0,000)Proportion of ownership interest in the CompanyProportion of voting power in the Company
Sinopharm GroupShanghaiIndustrial investment holding, trustee of a pharmaceutical enterprise, assets reorganization, distribution and retail of medicines and pharmaceutical products, etc.297,165.6256.06%56.06%

The ultimate controlling party of the Company is CNPGC.

2. Subsidiaries

Refer to Note VII (1) for details of subsidiaries.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

3. Associates

Refer to Note VII (2) for details of associates.

Company nameRelated party relationships
Shenzhen Main Luck Pharmaceutical Co., Ltd.Associate
Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd.Associate
Shenzhen Zhijun Pharmaceutical Trade Co., Ltd.Associate
Sinopharm Group Zhijun(Shenzhen) Pingshan Pharmaceutical Co., Ltd.Associate
Shyndec PharmaceuticalAssociate
Sinopharm Group Zhijun(Suzhou) Pharmaceutical Co., Ltd.Associate
Shanghai Dingqun Enterprise Management Consulting Co., Ltd.Associate
Sinopharm Jienuo Medical Treatment Sevice Guangdong Co., Ltd.Associate
Shanghai Beiyi Guoda pharmaceutical Co. Ltd.Associate
Shanghai Liyi Drug Store Co.,LtdAssociate
Dongyuan accord pharmaceutical chain Co., Ltd.Associate
Shanghai Renbei Pharmacy Co., Ltd.Associate
Guangdong Jianhui Construction Investment Management Co., Ltd.Associate

4. Other related parties

Company nameRelated party relationships
Sinopharm Holding Shanxi 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 Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Biopharmaceutical (Tianjin) Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Zhihuiminsheng (Tianjin) Pharmaceutical Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Shenyang Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Dalian Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Jinzhou Co., Ltd.Controlled by Sinopharm Group
Sinopharm Group Shanxi Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Hubei Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Shanxi Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Shanxi Jincheng Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Shanxi Mingdikang Medicine Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Shanxi Zhidekang Medicine Co., Ltd.Controlled by Sinopharm Group
Sinopharm Group Medicine Logistic Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Hunan Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Yongzhou Co., Ltd.Controlled by Sinopharm Group

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

Company nameRelated party relationships
China National Medicines Co., Ltd.Controlled by Sinopharm Group
Sinopharm Group Guorui Medicine Co., Ltd.Controlled by Sinopharm Group
Sinopharm Prospect Dentech (Beijing) Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Beijing Kangchen Bio-Pharmaceutical Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Beijing Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co., Ltd.Controlled by Sinopharm Group
Sinopharm holdings Beijing huahong co., LtdControlled by Sinopharm Group
Sinopharm Holding Zhejiang Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Sub Marketing Center Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Henan Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Pingdingshan Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Anhui Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Fuzhou Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Shandong Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Lunan Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Rizhao Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Jinan Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Dezhou Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Liaocheng Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Hainan Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Fujian Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Putian Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Quanzhou Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Xiamen Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Fuzhou Medical Devices Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Ningxia Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Xinyu Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Inner Mongolia Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Tongliao Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Ulanqab Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Bayannaoer Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Hulun Buir Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Ordos Co., Ltd.Controlled by Sinopharm Group
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Xinjiang Special Drugs Kashgar Pharmaceutical Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Jilin Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Chongqing Co., Ltd.Controlled by Sinopharm Group

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

Company nameRelated party relationships
Sinopharm Holding Jiangsu Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Yangzhou Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Yangzhou Biological Products Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Taizhou Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Yangzhou Medical Treatment Equipment Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Suzhou Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Wuxi Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Lianyungang Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Nanjing Wende Pharmaceutical Co.,Ltd.Controlled by Sinopharm Group
Sinopharm Holding Changzhou Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Changzhou Medical Logistics Center Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Yancheng Co., Ltd.Controlled by Sinopharm Group
Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Heilongjiang Co., Ltd.Controlled by Sinopharm Group
Sinopharm Le-Ren-Tang Medicine Co., Ltd.Controlled by Sinopharm Group
Sinopharm Lerentang Hebei Medical Instrument Trade Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Lerentang Pharmaceutical Co., Ltd.Controlled by Sinopharm Group
Sinopharm Lerentang Shijiazhuang Medicine Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Donghong Medical (Shanghai) Co., Ltd.Controlled by Sinopharm Group
Shanghai Merro Pharmaceutical Co., Ltd.Controlled by Sinopharm Group
Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Huaideju Pharmaceutical (Xiamen) Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Zhangzhou Pharmaceutical Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Dalian Hecheng Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Changsha Co., Ltd.Controlled by Sinopharm Group
Pudong New Area of Shanghai Pharmaceutical Medicine Ltd.Controlled by Sinopharm Group
Sinopharm Group Anhui Medical Devices Co., Ltd.Controlled by Sinopharm Group
China Medical Equipment Shandong Co., Ltd.Controlled by Sinopharm Group
Sinopharm Liaoning Medical Equipment Co., Ltd.Controlled by Sinopharm Group
Sinopharm Group Shanxi Medical Devices Co., Ltd.Controlled by Sinopharm Group
Sinopharm Group Shanghai Medicine Device Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Hunan Pharmaceutical Development Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Shanxi Instrument Branch Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Tianjin Distribution Center Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Zhangzhou Co., Ltd.Controlled by Sinopharm Group
Sinopharm Sichuan Pharmaceutical Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Gansu Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Jiangxi Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Chengdu Co., Ltd.Controlled by Sinopharm Group
Sinopharm Group Guangdong Medicine Device Co., Ltd.Controlled by Sinopharm Group

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

Company nameRelated party relationships
Sinopharm Holding Hunan Weian Pharmacy Medicine Chain Company LimitedControlled by Sinopharm Group
Sinopharm Xinxiang Chain Store Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Yunnan Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Nantong Co., Ltd.Controlled by Sinopharm Group
Sinopharm Medical Instrument Guizhou Qiannan Co., Ltd.Controlled by Sinopharm Group
Sinopharm Zhuhai Medical Instrument Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Huaian Co., Ltd.Controlled by Sinopharm Group
Sinopharm Group Shanghai Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Tianjin Binhai Pharmaceutical Co., Ltd.Controlled by Sinopharm Group
China National Pharmaceutical Logistics Co., Ltd.Controlled by Sinopharm Group
Xinjiang Baitong Property Service Co., Ltd.Controlled by Sinopharm Group
Sinopharm Group Medicine Logistic Co., Ltd. Guangzhou BranchControlled by Sinopharm Group
China National Scientific Instruments & Materials Imp/Exp Shenzhen Co., Ltd.Controlled by Sinopharm Group
Guorun Medical Supply Chain Service (Shanghai) Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding (Hubei) Base Pharmaceutical Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Shanxi Lvliang Co., Ltd.Controlled by Sinopharm Group
Guoyao Lerentang Hebei Medical Device Supply Chain Management Co., Ltd.Controlled by Sinopharm Group
Sinopharm Lerentang Qinhuangdao Medicine Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Guizhou Co., Ltd.Controlled by Sinopharm Group
Sinopharm Lerentang Tangshan Medicine Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Nanping Newforce Co., Ltd.Controlled by Sinopharm Group
Sinopharm Hebei Medical Instrument Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Jinhua Co., Ltd.Controlled by Sinopharm Group
Shanghai Tongyu Information Technology Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Tianjin North Medicine Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding (Hubei) Hankou Pharmacy Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Hubei Hongyuan Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Jiaozuo Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Wuhu Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Honghe Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Chuxiong Co., Ltd.Controlled by Sinopharm Group
Yuxi Sinopharm Medicine Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Hainan Hongyi Co., Ltd.Controlled by Sinopharm Group
Sinopharm Guanai Yuankang Pharmacy (Haikou) 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 Anshun Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Tongren Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Zunyi Co., Ltd.Controlled by Sinopharm Group

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

Company nameRelated party relationships
Sinopharm Holding Guizhou Medical Equiment Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Jilin Chain Store Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Siping Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Wenzhou Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Xuzhou Co., Ltd.Controlled by Sinopharm Group
Guoyao Lerentang Shijiazhuang Medical Management Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Qinghai Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Chongqing Taimin Pharmaceutical Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Deyang Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Hongrun Medical Business Service (Shanghai) Co., Ltd.Controlled by Sinopharm Group
Sinopharm Guangdong Medical Examination Co., Ltd.Controlled by Sinopharm Group
Sinopharm Medical Instrument Foshan Co., Ltd.Controlled by Sinopharm Group
Sinopharm Nanping Medical Instrument Co., Ltd.Controlled by Sinopharm Group
Sinopharm Group Guangxi Medical Equipment Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Anhui Pharmaceutical Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Suzhou Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Lu'an Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Nanchang Chain Store Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Xinxiang Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Huangshi Co., Ltd.Controlled by Sinopharm Group
Sinopharm Holding Jining Co., Ltd.Controlled by Sinopharm Group
Fujian Sinopharm Medical Instrument Co., Ltd.Controlled by Sinopharm Group
Sinopharm Lerentang Baoding Medicine Co., Ltd.Controlled by Sinopharm Group
Sinopharm Lerentang Hengshui Medicine Co., Ltd.Controlled by Sinopharm Group
Beijing Sinopharm Tianyuan Real Estate & Property Management Co., Ltd.Controlled by Sinopharm Group
Sinopharm Xinjiang Korla Pharmaceutical Co., Ltd.Controlled by Sinopharm Group
Sinopharm Shantou Jinshi Pharmaceutical Co., Ltd.Controlled by CNPGC
Huayi Pharmaceutical Co., Ltd.Controlled by CNPGC
Beijing Huamiao Pharmaceutical Co., Ltd.Controlled by CNPGC
Guizhou Tongjitang Pharmaceutical Co., Ltd.Controlled by CNPGC
Anhui Jingfang Pharmaceutical Co., Ltd.Controlled by CNPGC
Guangdong Medi-World Pharmaceutical Co., Ltd.Controlled by CNPGC
Sinopharm Fengliaoxing (Foshan) Medicines Co., Ltd.Controlled by CNPGC
Shandong Lu Ya Pharmaceutical Co., Ltd.Controlled by CNPGC
Foshan Fengliaoxing Pharmaceutical Co., Ltd.Controlled by CNPGC
Winteam Pharmaceutical Group Ltd.Controlled by CNPGC
Foshan Dezhong Pharmaceutical Co., Ltd.Controlled by CNPGC
Chengdu Rongsheng Pharmacy Co., Ltd.Controlled by CNPGC
Lanzhou Biotechnology Development Co., Ltd.Controlled by CNPGC
Beijing Huasheng Pharmaceutical Biotechnology Development Co., Ltd.Controlled by CNPGC

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

Company nameRelated party relationships
Shantou Jinshi Powder Injection Co., Ltd.Controlled by CNPGC
Chengdu Institute of Biological Products Co.,Ltd.Controlled by CNPGC
China National Pharmaceutical Industry Co., Ltd.Controlled by CNPGC
Sinopharm Xinjiang Pharmaceutical Co., Ltd.Controlled by CNPGC
Shanghai Modern Hasen (Shangqiu) Pharmaceutical Co., Ltd.Controlled by CNPGC
Shanghai Shyndec Pharmaceutical Marketing Co., Ltd.Controlled by CNPGC
Sinopharm Group Rongsheng Pharmaceutical Co., Ltd.Controlled by CNPGC
Wuhan Zhonglian Pharmaceutical Group Co., Ltd.Controlled by CNPGC
The Fourth Pharmaceutical Co., Ltd. of Zhonglian GroupControlled by CNPGC
Sinopharm Chuan Kang Pharmaceutical Co., Ltd.Controlled by CNPGC
China National Pharmaceutical Foreign Trade CorporationControlled by CNPGC
Sinopharm Group Yibin Pharmaceuticals Co., Ltd.Controlled by CNPGC
Sinopharm Yixin Pharmaceutical Co., Ltd.Controlled by CNPGC
Sinopharm Holding Sanyi Medicine (Wuhu) Co., Ltd.Controlled by CNPGC
Guizhou Tongjitang Pharmacy Chain Co., Ltd.Controlled by CNPGC
Sichuan Jiangyouzhongbafuzi Technology Development Co., Ltd.Controlled by CNPGC
Lanzhou Institute of Biological Products Co., Ltd.Controlled by CNPGC
Sinopharm Wuhan blood products Co., Ltd.Controlled by CNPGC
Fujian Chentian Jinling Pharmaceutical Co., Ltd.Controlled by CNPGC
Sinopharm Group Guizhou Blood Products Co., Ltd.Controlled by CNPGC
China National of Traditional&Herbal Medicine Co., Ltd.Controlled by CNPGC
Sinopharm Chongqing Pharmaceutical and Medical Industry Design InstituteControlled by CNPGC
Group Financial Co.Controlled by CNPGC
Shanghai Shangsheng Biological Products Co., Ltd.Controlled by CNPGC
Sinopharm Group Chengdu Xinlibang Biological Products Co., Ltd.Controlled by CNPGC
Sinopharm Weiqida Pharmaceutical Co., Ltd.Controlled by CNPGC
Sinopharm Fengliaoxing Medical Hospital Co., Ltd.Controlled by CNPGC
Sinopharm Group Fengliaoxing Traditional Chinese Medical Center Foshan Nanhai Co., Ltd.Controlled by CNPGC
Sinopharm Group Fengliaoxing Pharmacy (Foshan) Co., Ltd.Controlled by CNPGC
Yichang Humanwell Pharmaceutical Co., Ltd.Associate of Sinopharm Group
Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Co., Ltd.Associate of Sinopharm Group
Sinopharm Health Online Co., Ltd.Associate of Sinopharm Group
Sinopharm Holding Financing Lease Co., Ltd.Associate of Sinopharm Group
Shanghai Guoda Lingyun Pharmacy Co., Ltd.Associate of Sinopharm Group
Nanchang Sinopharm Holding Guoyaotang Pharmacy Co., Ltd.Associate of Sinopharm Group
Changchun Changsheng Gene Pharmaceutical Co., Ltd.Associate of CNPGC
China Otsuka Pharmaceutical Co., Ltd.Associate of CNPGC
Fresenius Kabi Huarui Pharmaceuticals Co., Ltd.Associate of CNPGC
Sinopharm ShanXi Ruifulai Pharmaceutical Co., Ltd.Associate of CNPGC

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

Company nameRelated party relationships
Chongqing Yaoyou Pharmaceutical Co., Ltd.Subsidiary of Fosun Pharm
Sichuan Hexin Pharmaceutical Co., Ltd.Subsidiary of Fosun Pharm
Guilin South pharmaceutical Co., Ltd.Subsidiary of Fosun Pharm
Shanghai Chaohui Pharmaceutical Co., Ltd.Subsidiary of Fosun Pharm
Tibet Yaoyou Medicines Co.,Ltd.Subsidiary of Fosun Pharm
Shenyang Hongqi Pharmaceutical Co., Ltd.Subsidiary of Fosun Pharm
Shanghai Transfusion Technology Co., Ltd.Subsidiary of Fosun Pharm
Jiangsu Wanbang Pharmacy Marketing Co., Ltd.Subsidiary of Fosun Pharm
Chongqing Haisiman Pharmaceutical Co., Ltd.Subsidiary of Fosun Pharm
Jinzhou AoHong Pharmaceuticals Co., Ltd.Subsidiary of Fosun Pharm
Hunan Dongting Pharmaceutical Co., Ltd.Subsidiary of Fosun Pharm
Jiangsu Huanghe Pharmaceutical Co., Ltd.Subsidiary of Fosun Pharm
Suzhou Erye Pharmaceutical Limited CompanySubsidiary of Fosun Pharm
Jiangsu Fuxing Pharmaceutical Trading Co., LtdSubsidiary of Fosun Pharm
Jiangxi Erye Medicine Marketing Co., Ltd.Subsidiary of Fosun Pharm
Shanghai Compound Technology Medical Devices Co., Ltd.Subsidiary of Fosun Pharm
Foshan Chancheng District Central HospitalSubsidiary of Fosun Pharm
Foshan Chanyixing Medicine Development Co Ltd.Subsidiary of Fosun Pharm
Foshan Chancheng Pharmaceutical Co., Ltd.Subsidiary of Fosun Pharm
Shenzhen Qianda Medical Beauty ClinicSubsidiary of Fosun Pharm
Shenzhen Heng Sheng HositalSubsidiary of Fosun Pharm
Shenzhen Wanwei Medicine Trading Co., Ltd.Subsidiary of Main Luck Pharmaceutical
Linyi Medical Group Co., Ltd.Non-controlling interest of a subsidiary
Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd.Non-controlling interest of a subsidiary
Henan Wanxitang Pharmacy Co., Ltd.Non-controlling interest of a subsidiary
Heyuan Mairui Trading Co., Ltd.Non-controlling interest of a subsidiary
Shenyang Pharmaceutical Co., Ltd.Non-controlling interest of a subsidiary
Zhang ZhenfangNon-controlling interest of a subsidiary
Pingdingshan Pusheng Pharmaceutical Co., Ltd.Non-controlling interest of a subsidiary
Lerentang Investment Group Co., Ltd.Non-controlling interest of a subsidiary
Shenzhen Jiufeng Investment Co., Ltd.Non-controlling interest of a subsidiary
Hunan Minshengtang Investment Co., Ltd.Non-controlling interest of a subsidiary
Taishan Qunkang Pharmacy Co., Ltd.Non-controlling interest of a subsidiary
Gu HaiqunNon-controlling interest of a subsidiary
Guangdong Jiyuantang Development Co., Ltd.Non-controlling interest of a subsidiary
Hangzhou Xihu Business Group CorporationNon-controlling interest of a subsidiary
Nanjing Yuanguang Trading Co., Ltd.Controlled by non-controlling interest of a subsidiary
Taishan Xiangranhui Trade Co., LtdControlled by non-controlling interest of a subsidiary
Shaoguan Wujiang District Muyang Medicine Information Consultant Co., Ltd.Controlled by non-controlling interest

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

Company nameRelated party relationships
of a subsidiary
Gu JinhuaFamily member of the non-controlling shareholder of a subsidiary
Wang YangController of non-controlling interest of a subsidiary

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

5. Major transactions between the Group and its related parties

(1) Related party transactions –goods and services

Purchase of goods and receiving of services from related parties

Related partyType of transactionFor the six months ended 30 June 2019For the six months ended 30 June 2018
Sinopharm Holding Sub Marketing Center Co., Ltd.Purchase of goods583,923,608.63515,167,083.81
China National Medicines Co., Ltd.Purchase of goods263,718,638.49237,636,101.58
Sinopharm Holding Shanxi Co., Ltd.Purchase of goods165,125,264.60156,466,334.83
Sinopharm Holding Shanxi Co., Ltd.Purchase of goods117,012,541.6183,517,976.15
Sinopharm GroupPurchase of goods92,577,206.9595,150,353.69
Jiangsu Wanbang Pharmacy Marketing Co., Ltd.Purchase of goods84,007,944.2433,623,739.18
Sinopharm Holding Shenyang Co., Ltd.Purchase of goods63,745,181.4763,689,297.73
Sinopharm Le-Ren-Tang Medicine Co., Ltd.Purchase of goods58,690,396.2679,259,083.01
Lanzhou Biotechnology Development Co., Ltd.Purchase of goods55,500,000.00-
Fresenius Kabi Huarui Pharmaceuticals Co., Ltd.Purchase of goods54,227,928.1890,145,795.30
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd.Purchase of goods46,674,234.4539,872,567.55
Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd.Purchase of goods45,672,377.13127,271,627.94
Sinopharm Holding Inner Mongolia Co., Ltd.Purchase of goods34,523,083.3818,984,953.29
Sinopharm Holding Lunan Co., Ltd.Purchase of goods32,561,603.4539,298,409.81
Sinopharm Holding Yangzhou Co., Ltd.Purchase of goods29,671,574.8123,005,232.97
Jinzhou AoHong Pharmaceuticals Co., Ltd.Purchase of goods28,182,818.6823,749,213.17
Chongqing Yaoyou Pharmaceutical Co., Ltd.Purchase of goods27,810,842.7421,508,305.23
Tibet Yaoyou Medicines Co.,Ltd.Purchase of goods22,100,470.842,761,512.07
Sinopharm Holding Beijing Co., Ltd.Purchase of goods20,533,829.9723,822,442.41
Shenzhen Main Luck Pharmaceutical Co., Ltd.Purchase of goods19,919,483.1914,173,934.35
Winteam Pharmaceutical Group Ltd.Purchase of goods19,827,909.2815,331,219.12
Jiangxi Erye Medicine Marketing Co., Ltd.Purchase of goods17,959,707.56-
Sinopharm Holding Fujian Co., Ltd.Purchase of goods16,041,870.469,171,420.33
Sinopharm Holding Lerentang Pharmaceutical Co., Ltd.Purchase of goods15,458,862.7816,967,826.05
Sinopharm Group Zhijun(Shenzhen) Pingshan Pharmaceutical Co., Ltd.Purchase of goods14,856,080.605,519,530.03

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions –goods and services (Continued)
Purchase of goods and receiving of services from related parties
Related partyType of ransactionFor the six months ended 30 June 2019For the six months ended 30 June 2018
Sinopharm Holding Pingdingshan Co., Ltd.Purchase of goods14,429,720.7514,446,097.55
Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd.Purchase of goods14,255,875.264,670,243.13
Chengdu Rongsheng Pharmacy Co., Ltd.Purchase of goods13,746,664.108,958,139.00
Sinopharm Holding Jiangsu Co., Ltd.Purchase of goods12,867,682.9912,276,533.11
Sinopharm Holding Henan Co., Ltd.Purchase of goods12,814,208.206,575,293.46
Shenzhen Wanwei Medicine Trading Co., Ltd.Purchase of goods10,936,219.0610,428,796.93
Sinopharm Holding Xiamen Co., Ltd.Purchase of goods10,273,616.329,246,131.91
Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical Co., Ltd.Purchase of goods10,193,725.003,614,733.64
Sinopharm Holding Hubei Co., Ltd.Purchase of goods9,071,305.78-
Sinopharm Lerentang Shijiazhuang Medicine Co., Ltd.Purchase of goods8,677,802.2610,465,965.70
Sinopharm Holding Shandong Co., Ltd.Purchase of goods7,306,060.58718,163.95
Sinopharm Holding Ningxia Co., Ltd.Purchase of goods7,213,084.956,113,483.50
Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd.Purchase of goods7,161,067.433,676,515.83
Yichang Humanwell Pharmaceutical Co., Ltd.Purchase of goods6,711,635.434,513,583.78
Sinopharm Holding Changzhou Co., Ltd.Purchase of goods6,705,005.602,900,395.11
China Otsuka Pharmaceutical Co., Ltd.Purchase of goods6,697,508.52241,236.29
Shanghai Modern Pharmaceutical Co., Ltd. (Modern Pharmaceutical)Purchase of goods6,577,712.26142,521.39
Sinopharm Yixin Pharmaceutical Co., Ltd.Purchase of goods6,463,202.79-
Sinopharm Holding Hunan Co., Ltd.Purchase of goods5,496,202.1722,435,971.65
Sichuan Hexin Pharmaceutical Co., Ltd.Purchase of goods5,339,761.191,094,458.11
Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd.Purchase of goods5,189,668.172,003,690.59
Suzhou Erye Pharmaceutical Limited CompanyPurchase of goods4,729,210.719,554,764.03
Beijing Huasheng Pharmaceutical Biotechnology Development Co., Ltd.Purchase of goods4,541,480.00-
Sinopharm Chuan Kang Pharmaceutical Co., Ltd.Purchase of goods4,521,905.905,794,907.91
Sinopharm Holding Shanxi Lvliang Co., Ltd.Purchase of goods4,369,021.12-

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions –goods and services (Continued)
Purchase of goods and receiving of services from related parties
Related partyType of ransactionFor the six months ended 30 June 2019For the six months ended 30 June 2018
Sinopharm Holding Changzhou Medical Logistics Center Co., Ltd.Purchase of goods3,824,818.274,530,675.45
Sinopharm Group Guorui Medicine Co., Ltd.Purchase of goods3,219,200.903,735,052.72
Sinopharm Group Rongsheng Pharmaceutical Co., Ltd.Purchase of goods3,158,018.271,574,958.10
Sinopharm Holding Jinan Co., Ltd.Purchase of goods3,031,490.283,621,583.69
Sinopharm Holding Tongliao Co., Ltd.Purchase of goods2,906,482.17584,726.70
Sinopharm Holding Fuzhou Co., Ltd.Purchase of goods2,676,398.894,703,935.11
Pudong New Area of Shanghai Pharmaceutical Medicine Ltd.Purchase of goods2,652,028.862,298,554.23
Sinopharm Holding Heilongjiang Co., Ltd.Purchase of goods2,603,286.79-
Shanghai Shangsheng Biological Products Co., Ltd.Purchase of goods2,478,155.34-
Sinopharm Holding Wuxi Co., Ltd.Purchase of goods2,456,981.902,453,393.36
Sinopharm Lerentang Hebei Medical Instrument Trade Co., Ltd.Purchase of goods2,326,076.001,889,376.44
Sinopharm holdings Beijing huahong co., LtdPurchase of goods2,143,025.163,550,261.18
Sinopharm Holding Jinzhou Co., Ltd.Purchase of goods2,050,823.422,249,516.98
Shanghai Chaohui Pharmaceutical Co., Ltd.Purchase of goods1,967,905.09330,363.62
Guizhou Tongjitang Pharmaceutical Co., Ltd.Purchase of goods1,947,122.981,536,282.82
Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd.Purchase of goods1,673,805.681,799,439.15
Sinopharm Holding Beijing Kangchen Bio-Pharmaceutical Co., Ltd.Purchase of goods1,672,471.402,240,460.54
Jiangsu Fuxing Pharmaceutical Trading Co., LtdPurchase of goods1,647,132.50-
Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd.Purchase of goods1,634,592.421,451,522.48
Sinopharm Holding Donghong Medical (Shanghai) Co., Ltd.Purchase of goods1,634,371.49615,989.84
Shantou Jinshi Powder Injection Co., Ltd.Purchase of goods1,575,114.81330,119.93
Sinopharm Weiqida Pharmaceutical Co., Ltd.Purchase of goods1,396,321.5831,965.52
Shenyang Hongqi Pharmaceutical Co., Ltd.Purchase of goods1,395,942.721,058,670.33
Sinopharm Holding Zhihuiminsheng (Tianjin) Pharmaceutical Co., Ltd.Purchase of goods1,374,403.2680,410.58
China National Pharmaceutical Industry Co., Ltd.Purchase of goods1,237,603.17188,275.39

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions –goods and services (Continued)
Purchase of goods and receiving of services from related parties
Related partyType of ransactionFor the six months ended 30 June 2019For the six months ended 30 June 2018
Hunan Dongting Pharmaceutical Co., Ltd.Purchase of goods1,221,714.73340,441.92
Sinopharm Holding Yancheng Co., Ltd.Purchase of goods1,174,557.521,402,672.48
Sinopharm Holding Changsha Co., Ltd.Purchase of goods1,166,442.94414,897.11
Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd.Purchase of goods1,115,619.67921,863.31
Sinopharm Fengliaoxing (Foshan) Medicines Co., Ltd.Purchase of goods1,047,564.70-
Sinopharm Group Southwest Medicine Co., Ltd.Purchase of goods942,169.90153,389.66
Sinopharm Holding Xinjiang Special Drugs Kashgar Pharmaceutical Co., Ltd.Purchase of goods904,775.75400,421.76
Shanghai Modern Hasen (Shangqiu) Pharmaceutical Co., Ltd.Purchase of goods853,055.98200,544.82
Sinopharm Group Yibin Pharmaceuticals Co., Ltd.Purchase of goods825,452.16121,618.26
Sinopharm Holding Suzhou Co., Ltd.Purchase of goods821,818.786,247,553.79
Chengdu Institute of Biological Products Co.,Ltd.Purchase of goods821,518.40-
Sinopharm Holding Lianyungang Co., Ltd.Purchase of goods815,620.38153,111.27
Sinopharm Holding Hulun Buir Co., Ltd.Purchase of goods813,318.59713,341.49
Guangdong Medi-World Pharmaceutical Co., Ltd.Purchase of goods778,815.71584,223.16
Sinopharm Holding Dalian Co., Ltd.Purchase of goods708,136.87769,041.46
Sinopharm Holding Tianjin Co., Ltd.Purchase of goods706,163.711,598,345.37
Sinopharm Holding Biopharmaceutical (Tianjin) Co., Ltd.Purchase of goods627,257.6463,648.72
Sinopharm Holding Putian Co., Ltd.Purchase of goods602,182.39895,532.89
Sinopharm Holding Anhui Co., Ltd.Purchase of goods558,299.15539,726.50
Sinopharm Holding Hainan Co., Ltd.Purchase of goods556,396.5997,450.60
Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Co., Ltd.Purchase of goods551,162.81763,625.20
Anhui Jingfang Pharmaceutical Co., Ltd.Purchase of goods537,444.48(13,269.30)
Sinopharm Group Guizhou Blood Products Co., Ltd.Purchase of goods536,000.00-
Shanghai Merro Pharmaceutical Co., Ltd.Purchase of goods513,712.422,016,321.47
Sinopharm Holding Quanzhou Co., Ltd.Purchase of goods509,096.37509,662.25

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions –goods and services (Continued)
Purchase of goods and receiving of services from related parties
Related partyType of ransactionFor the six months ended 30 June 2019For the six months ended 30 June 2018
Guilin South pharmaceutical Co., Ltd.Purchase of goods491,705.68-
Shanghai Transfusion Technology Co., Ltd.Purchase of goods444,825.76-
Sinopharm Holding Yangzhou Medical Treatment Equipment Co., Ltd.Purchase of goods434,284.50-
Sinopharm Holding Zhejiang Co., Ltd.Purchase of goods383,036.87289,516.54
Wuhan Zhonglian Pharmaceutical Group Co., Ltd.Purchase of goods357,980.82435,887.39
Fujian Chentian Jinling Pharmaceutical Co., Ltd.Purchase of goods328,557.99-
Sinopharm Shantou Jinshi Pharmaceutical Co., Ltd.Purchase of goods257,629.73109,039.96
Sinopharm Wuhan blood products Co., Ltd.Purchase of goods248,000.00-
Sinopharm Holding Shanxi Zhidekang Medicine Co., Ltd.Purchase of goods189,064.65-
Sinopharm Holding Dalian Hecheng Co., Ltd.Purchase of goods175,327.42262,027.99
Sinopharm Holding Yangzhou Biological Products Co., Ltd.Purchase of goods166,268.35444,000.00
Foshan Fengliaoxing Pharmaceutical Co., Ltd.Purchase of goods160,792.592,015,702.90
Sinopharm Holding (Hubei) Base Pharmaceutical Co., Ltd.Purchase of goods152,076.28-
Sinopharm Holding Dezhou Co., Ltd.Purchase of goods148,796.05228,731.52
Sinopharm Holding Hunan Pharmaceutical Development Co., Ltd.Purchase of goods142,539.15-
Jiangsu Huanghe Pharmaceutical Co., Ltd.Purchase of goods133,968.48-
Sinopharm Holding Bayannaoer Co., Ltd.Purchase of goods120,003.15-
China Medical Equipment Shandong Co., Ltd.Purchase of goods116,013.65-
Sinopharm Group Shanxi Co., Ltd.Purchase of goods111,864.7787,596.90
Foshan Dezhong Pharmaceutical Co., Ltd.Purchase of goods95,965.53-
Sinopharm Liaoning Medical Equipment Co., Ltd.Purchase of goods90,783.71-
Sinopharm Xinjiang Pharmaceutical Co., Ltd.Purchase of goods73,542.9612.82
Sinopharm Holding Fuzhou Medical Devices Co., Ltd.Purchase of goods40,707.96-
Sinopharm Holding Sanyi Medicine (Wuhu) Co., Ltd.Purchase of goods39,203.4758,952.78
The Fourth Pharmaceutical Co., Ltd. of Zhonglian GroupPurchase of goods35,353.2924,295.86

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions –goods and services (Continued)
Purchase of goods and receiving of services from related parties
Related partyType of ransactionFor the six months ended 30 June 2019For the six months ended 30 June 2018
Sinopharm Holding Taizhou Co., Ltd.Purchase of goods34,438.8873,304.23
Sichuan Jiangyouzhongbafuzi Technology Development Co., Ltd.Purchase of goods29,090.9149,297.30
Sinopharm Holding Rizhao Co., Ltd.Purchase of goods19,834.99586,905.03
Sinopharm Holding Nanjing Wende Pharmaceutical Co.,Ltd.Purchase of goods19,401.8927,310.34
Guoyao Lerentang Hebei Medical Device Supply Chain Management Co., Ltd.Purchase of goods17,131.04-
Sinopharm Holding Ulanqab Co., Ltd.Purchase of goods17,027.43308,191.79
Sinopharm Holding Shanxi Mingdikang Medicine Co., Ltd.Purchase of goods14,185.41-
Sinopharm Holding Jilin Co., Ltd.Purchase of goods13,152.13-
Sinopharm Group Medicine Logistic Co., Ltd.Purchase of goods10,445.10-
Sinopharm Holding Zhangzhou Pharmaceutical Co., Ltd.Purchase of goods10,137.93-
Sinopharm Holding Shanxi Jincheng Co., Ltd.Purchase of goods8,408.7411,481.46
Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co., Ltd.Purchase of goods6,891.48335,484.62
Lanzhou Institute of Biological Products Co., Ltd.Purchase of goods-52,860,000.00
China National Pharmaceutical Foreign Trade CorporationPurchase of goods-13,645,110.09
Sinopharm Holding Shanxi Instrument Branch Co., Ltd.Purchase of goods-7,410,730.23
Shanghai Shyndec Pharmaceutical Marketing Co., Ltd.Purchase of goods-995,510.64
Sinopharm Lerentang Qinhuangdao Medicine Co., Ltd.Purchase of goods-193,277.45
Sinopharm Group Zhijun(Suzhou) Pharmaceutical Co., Ltd.Purchase of goods-173,484.94
Sinopharm Holding Guizhou Co., Ltd.Purchase of goods-73,729.75
Chongqing Haisiman Pharmaceutical Co., Ltd.Purchase of goods-33,895.38
Sinopharm Lerentang Tangshan Medicine Co., Ltd.Purchase of goods-20,598.94
Sinopharm Holding Nanping Newforce Co., Ltd.Purchase of goods-15,315.32
Sinopharm Zhuhai Medical Instrument Co., Ltd.Purchase of goods-9,564.95
Sinopharm Hebei Medical Instrument Co., Ltd.Purchase of goods-6,533.84
Beijing Huamiao Pharmaceutical Co., Ltd.Purchase of goods-2,649.79

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions –goods and services (Continued)
Purchase of goods and receiving of services from related parties
Related partyType of ransactionFor the six months ended 30 June 2019For the six months ended 30 June 2018
Sinopharm Group Guangdong Medicine Device Co., Ltd.Purchase of goods-1,770.86
Sinopharm Holding Jinhua Co., Ltd.Purchase of goods-38.80
Sinopharm Holding Ordos Co., Ltd.Purchase of goods-(10,667.01)
Sinopharm Holding Yongzhou Co., Ltd.Purchase of goods(49.36)38,141.67
Sinopharm Prospect Dentech (Beijing) Co., Ltd.Purchase of goods(63.80)4,073.48
Sinopharm Group Chengdu Xinlibang Biological Products Co., Ltd.Purchase of goods(9,500.00)-
Shandong Lu Ya Pharmaceutical Co., Ltd.Purchase of goods(23,551.03)2,909,280.05
Huayi Pharmaceutical Co., Ltd.Purchase of goods(191,940.52)695,732.52
Sinopharm Group Medicine Logistic Co., Ltd.Storage and transport cost;Consulting service fee7,275,965.456,666,668.71
Sinopharm Health Online Co., Ltd.Consulting service fee6,298,404.976,085,895.22
Shanghai Beiyi Guoda pharmaceutical Co. Ltd.Consulting service fee1,229,716.931,263,962.22
Shanghai Tongyu Information Technology Co., Ltd.Information system access fee142,764.1598,113.21
Pingdingshan Pusheng Pharmaceutical Co., Ltd.Others109,458.10-
China National Pharmaceutical Logistics Co., Ltd.Storage and transport cost54,651.5944,030.65
Sinopharm Holding Tianjin Binhai Pharmaceutical Co., Ltd.Information system access fee-7,075.47

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

5. Major transactions between the Group and its related parties (Continued)

(1) Related party transactions –goods and services (Continued)

Sale of goods and rendering of services

Related partyType of transactionFor the six months ended 30 June 2019For the six months ended 30 June 2018
Sinopharm GroupSale of goods113,329,103.3054,514,170.65
Foshan Chancheng Pharmaceutical Co., Ltd.Sale of goods59,004,606.0242,375,781.14
Shanghai Beiyi Guoda pharmaceutical Co. Ltd.Sale of goods55,645,701.0449,727,338.63
Sinopharm Holding Hainan Co., Ltd.Sale of goods48,570,645.0029,338,160.25
Sinopharm Holding Hainan Hongyi Co., Ltd.Sale of goods17,357,873.1624,127,524.50
Sinopharm Holding Wenzhou Co., Ltd.Sale of goods14,754,017.7610,830,194.79
Sinopharm holdings Beijing huahong co., LtdSale of goods13,727,246.494,816,641.92
Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd.Sale of goods12,079,800.797,489,471.75
Sinopharm Holding Sub Marketing Center Co., Ltd.Sale of goods12,022,683.328,970,804.72
Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd.Sale of goods11,241,528.419,738,902.57
Sinopharm Holding Beijing Co., Ltd.Sale of goods10,806,898.055,770,691.44
Shenzhen Heng Sheng HositalSale of goods10,482,252.708,215,885.93
Sinopharm Le-Ren-Tang Medicine Co., Ltd.Sale of goods9,207,801.667,728,482.84
Pudong New Area of Shanghai Pharmaceutical Medicine Ltd.Sale of goods9,123,984.7510,524,551.98
Sinopharm Holding Henan Co., Ltd.Sale of goods8,408,084.978,736,054.45
Sinopharm Sichuan Pharmaceutical Co., Ltd.Sale of goods7,749,468.189,061,104.38
Sinopharm Holding Nantong Co., Ltd.Sale of goods7,649,412.438,717,338.95
Sinopharm Holding Shandong Co., Ltd.Sale of goods7,547,654.374,577,546.05
Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd.Sale of goods7,346,892.056,837,559.00
Foshan Chancheng District Central HospitalSale of goods5,456,346.954,504,644.96
Sinopharm Holding Hubei Co., Ltd.Sale of goods5,366,299.133,772,162.27
Sinopharm Holding Shanxi Co., Ltd.Sale of goods5,246,365.87917,123.69
Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd.Sale of goods4,369,980.09673,847.93
Sinopharm Holding Yangzhou Co., Ltd.Sale of goods4,293,371.835,144,530.81
Shanghai Merro Pharmaceutical Co., Ltd.Sale of goods4,068,584.001,223,626.19
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd.Sale of goods3,423,834.3917,376,808.71

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions –goods and services (Continued)
Sale of goods and rendering of services
Related partyType of ransactionFor the six months ended 30 June 2019For the six months ended 30 June 2018
Sinopharm Holding Yunnan Co., Ltd.Sale of goods3,291,886.515,713,012.18
Foshan Chanyixing Medicine Development Co Ltd.Sale of goods3,252,324.631,450,198.02
Sinopharm Holding Anhui Co., Ltd.Sale of goods2,691,014.381,168,187.29
Sinopharm Holding Jinzhou Co., Ltd.Sale of goods2,509,334.67-
Sinopharm Holding Xuzhou Co., Ltd.Sale of goods2,496,791.90-
Sinopharm Holding Tianjin Co., Ltd.Sale of goods2,043,046.861,029,758.40
China National Medicines Co., Ltd.Sale of goods1,932,350.561,740,716.75
Sinopharm Holding Shanxi Co., Ltd.Sale of goods1,927,565.822,577,305.96
Sinopharm Holding Jilin Co., Ltd.Sale of goods1,861,781.971,172,196.27
Sinopharm Holding Dalian Co., Ltd.Sale of goods1,833,913.001,263,047.36
Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical Co., Ltd.Sale of goods1,828,562.254,409,528.78
Sinopharm Holding Fujian Co., Ltd.Sale of goods1,731,691.96979,220.98
Sinopharm Group Southwest Medicine Co., Ltd.Sale of goods1,580,662.421,006,172.43
Sinopharm Holding Hunan Co., Ltd.Sale of goods1,476,158.081,308,950.82
Sinopharm Holding Anhui Pharmaceutical Co., Ltd.Sale of goods1,436,139.10-
Shanghai Liyi Drug Store Co.,LtdSale of goods1,432,059.22-
Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Co., Ltd.Sale of goods1,283,881.89-
Yuxi Sinopharm Medicine Co., Ltd.Sale of goods956,668.77625,927.21
Sinopharm Holding Ningxia Co., Ltd.Sale of goods772,293.60240,539.93
Sinopharm Holding Dalian Hecheng Co., Ltd.Sale of goods743,390.17301,982.46
Sinopharm Holding Shenyang Co., Ltd.Sale of goods608,363.96103,846.57
Sinopharm Holding Gansu Co., Ltd.Sale of goods505,887.621,353,030.00
Sinopharm Holding Wuxi Co., Ltd.Sale of goods484,790.17349,203.27
Shanghai Guoda Lingyun Pharmacy Co., Ltd.Sale of goods425,714.65540,476.78
Sinopharm Holding Wuhu Co., Ltd.Sale of goods419,826.51127,195.59

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions –goods and services (Continued)
Sale of goods and rendering of services
Related partyType of ransactionFor the six months ended 30 June 2019For the six months ended 30 June 2018
Sinopharm Holding Jiaozuo Co., Ltd.Sale of goods406,784.27-
Sinopharm Holding Yancheng Co., Ltd.Sale of goods382,851.04-
Sinopharm Holding Honghe Co., Ltd.Sale of goods377,186.119,595.25
Sinopharm Holding Tianjin North Medicine Co., Ltd.Sale of goods363,748.9358,775.86
Sinopharm Holding Inner Mongolia Co., Ltd.Sale of goods326,327.82239,130.68
Sinopharm Group Guangdong Medicine Device Co., Ltd.Sale of goods296,825.53-
Sinopharm Group Shanxi Co., Ltd.Sale of goods266,895.84486,510.78
Sinopharm Holding Chengdu Co., Ltd.Sale of goods252,754.20215,685.18
Sinopharm Holding Qinghai Co., Ltd.Sale of goods250,674.21168,653.68
Sinopharm Holding Donghong Medical (Shanghai) Co., Ltd.Sale of goods225,250.43448,887.64
Sinopharm Holding Tongren Co., Ltd.Sale of goods197,968.7821,011.20
Sinopharm Holding (Hubei) Hankou Pharmacy Co., Ltd.Sale of goods195,295.22-
Nanchang Sinopharm Holding Guoyaotang Pharmacy Co., Ltd.Sale of goods173,403.11-
Sinopharm Holding Guizhou Co., Ltd.Sale of goods158,213.271,042,466.52
Sinopharm Holding Chongqing Taimin Pharmaceutical Co., Ltd.Sale of goods155,771.69-
Sinopharm Holding Zunyi Co., Ltd.Sale of goods146,542.7835,054.94
Sinopharm Holding Taizhou Co., Ltd.Sale of goods141,236.61-
Shenzhen Qianda Medical Beauty ClinicSale of goods140,970.86-
Sinopharm Holding Chongqing Co., Ltd.Sale of goods138,748.70145,147.69
Sinopharm Holding Hubei Hongyuan Co., Ltd.Sale of goods132,556.0297,162.40
Sinopharm Holding Fuzhou Co., Ltd.Sale of goods131,753.266,927.14
Sinopharm Group Fengliaoxing Pharmacy (Foshan) Co., Ltd.Sale of goods128,687.69-
Sinopharm Holding Jiangxi Co., Ltd.Sale of goods123,135.25371,671.87
Sinopharm Medical Instrument Guizhou Qiannan Co., Ltd.Sale of goods114,833.4312,712.58
Sinopharm Fengliaoxing Medical Hospital Co., Ltd.Sale of goods101,588.5916,804.60

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions –goods and services (Continued)
Sale of goods and rendering of services
Related partyType of ransactionFor the six months ended 30 June 2019For the six months ended 30 June 2018
Sinopharm Holding Changzhou Medical Logistics Center Co., Ltd.Sale of goods86,668.69175,352.41
Sinopharm Holding Jiangsu Co., Ltd.Sale of goods76,013.68-
Sinopharm Guangdong Medical Examination Co., Ltd.Sale of goods73,203.54-
Sinopharm Holding Guizhou Medical Equiment Co., Ltd.Sale of goods70,073.94133,404.19
Sinopharm Group Guangxi Medical Equipment Co., Ltd.Sale of goods66,013.12-
Shanghai Compound Technology Medical Devices Co., Ltd.Sale of goods59,482.76-
Sinopharm Medical Instrument Foshan Co., Ltd.Sale of goods58,330.19-
Sinopharm Guanai Yuankang Pharmacy (Haikou) Co., Ltd.Sale of goods55,763.79-
Sinopharm Holding Changzhou Co., Ltd.Sale of goods50,185.70435,840.01
Sinopharm Holding Ulanqab Co., Ltd.Sale of goods47,434.77175,775.17
Sinopharm Holding Longyan Co., Ltd.Sale of goods44,963.9758,172.99
Sinopharm Holding Chuxiong Co., Ltd.Sale of goods41,712.99-
Sinopharm Holding Jilin Chain Store Co., Ltd.Sale of goods38,234.4891,435.98
Sinopharm Holding Deyang Co., Ltd.Sale of goods36,771.21-
Dongyuan accord pharmaceutical chain Co., Ltd.Sale of goods30,868.2739,393.65
Sinopharm Holding Anshun Co., Ltd.Sale of goods21,688.95-
Sinopharm Nanping Medical Instrument Co., Ltd.Sale of goods19,993.91-
Sinopharm Holding Ningde Co., Ltd.Sale of goods19,818.6723,864.90
Sinopharm Holding Liaocheng Co., Ltd.Sale of goods15,779.7915,596.82
Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd.Sale of goods14,949.897,617.49
Sinopharm Zhuhai Medical Instrument Co., Ltd.Sale of goods13,939.159,119.70
Sinopharm Holding Shanxi Jincheng Co., Ltd.Sale of goods11,204.59-
Sinopharm Holding Siping Co., Ltd.Sale of goods9,998.2826,548.13
Sinopharm Holding Hongrun Medical Business Service (Shanghai) Co., Ltd.Sale of goods9,884.4619,240.32
China National Scientific Instruments & Materials Imp/Exp Shenzhen Co., Ltd.Sale of goods6,320.71-

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions –goods and services (Continued)
Sale of goods and rendering of services
Related partyType of ransactionFor the six months ended 30 June 2019For the six months ended 30 June 2018
Sinopharm Group Fengliaoxing Traditional Chinese Medical Center Foshan Nanhai Co., Ltd.Sale of goods6,233.90-
Sinopharm Jienuo Medical Treatment Sevice Guangdong Co., Ltd.Sale of goods3,590.16-
Guoyao Lerentang Shijiazhuang Medical Management Co., Ltd.Sale of goods2,663.79-
Sinopharm Holding Zhejiang Co., Ltd.Sale of goods-921,282.05
Hubei Pharmaceutical Group Co., Ltd.Sale of goods-853,130.68
Sinopharm Holding Heilongjiang Co., Ltd.Sale of goods-324,789.98
Sinopharm Holding Yongzhou Co., Ltd.Sale of goods-203,544.77
Sinopharm Holding Huaian Co., Ltd.Sale of goods-128,653.00
Sinopharm Holding Suzhou Co., Ltd.Sale of goods-103,840.63
Sinopharm Group Zhijun(Shenzhen) Pingshan Pharmaceutical Co., Ltd.Sale of goods-79,279.28
Sinopharm Holding Lu'an Co., Ltd.Sale of goods-66,987.18
Sinopharm Holding Nanchang Chain Store Co., Ltd.Sale of goods-54,017.59
Sinopharm Holding Xinxiang Co., Ltd.Sale of goods-34,164.62
Sinopharm Holding Huangshi Co., Ltd.Sale of goods-34,025.78
Sinopharm Holding Jining Co., Ltd.Sale of goods-19,035.54
Fujian Sinopharm Medical Instrument Co., Ltd.Sale of goods-13,988.00
Sinopharm Lerentang Baoding Medicine Co., Ltd.Sale of goods-12,991.45
Sinopharm Lerentang Hengshui Medicine Co., Ltd.Sale of goods-12,108.38
Sinopharm Holding Hulun Buir Co., Ltd.Sale of goods-4,570.00
Sinopharm Holding Putian Co., Ltd.Sale of goods(33,809.91)64,610.68
Sinopharm Holding Quanzhou Co., Ltd.Sale of goods(87,055.63)-
China National Medicines Co., Ltd.Transport and storage income4,430,727.403,580,698.30
Sinopharm Group Medicine Logistic Co., Ltd.Transport and storage income401,376.93294,804.62
Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd.Meal fee308,882.00294,180.00
Sinopharm Group Zhijun(Shenzhen) Pingshan Pharmaceutical Co., Ltd.Transport and storage income123,995.03122,242.00

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
5. Major transactions between the Group and its related parties (Continued)
(1) Related party transactions –goods and services (Continued)
Sale of goods and rendering of services
Related partyType of ransactionFor the six months ended 30 June 2019For the six months ended 30 June 2018
Sinopharm Group Southwest Medicine Co., Ltd.Transport and storage income82,001.72-
Sinopharm Holding Biopharmaceutical (Tianjin) Co., Ltd.Consulting service income2,792.45-
Sinopharm Holding Shanxi Co., Ltd.Consulting service income1,688.129,433.96
Guizhou Tongjitang Pharmaceutical Co., Ltd.Consulting service income-8,285.71
Winteam Pharmaceutical Group Ltd.Consulting service income-2,023.58
Sinopharm Holding Shanxi Instrument Branch Co., Ltd.Other income-1,132.08

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

5. Major transactions between the Group and its related parties (Continued)

(2) Related party transactions - leases

(a) As the lessor
Type of assets under leasesIncome from leases For the six months ended 30 June 2019Income from leases For the six months ended 30 June 2018
Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd.Building957,142.86351,428.58
Shenzhen Zhijun Pharmaceutical Trade Co., Ltd.Building285,714.30285,714.30
China National Medicines Co., Ltd.Building24,000.0045,714.29
(b) As the lessee
Type of assets under leasesExpense from leases For the six months ended 30 June 2019Expense from leases For the six months ended 30 June 2018
Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd.Building6,670,660.925,461,904.76
Sinopharm Group Medicine Logistic Co., Ltd.Equipment3,750,000.003,750,000.00
Sinopharm Group Shanghai Co., Ltd.Building3,721,698.573,790,426.48
Sinopharm Group Medicine Logistic Co., Ltd.Building3,539,999.983,539,999.98
Lerentang Investment Group Co., Ltd.Building3,354,162.222,277,892.99
Pingdingshan Pusheng Pharmaceutical Co., Ltd.Building2,405,696.371,277,732.57
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd.Building2,234,982.503,914,124.76
Sinopharm Holding Yangzhou Co., Ltd.Building1,902,091.521,862,857.14
Hunan Minshengtang Investment Co., Ltd.Building1,838,716.702,027,673.99
Linyi Medical Group Co., Ltd.Building1,482,764.042,036,376.45
Guangdong Jiyuantang Development Co., Ltd.Building1,088,752.311,192,864.11
Nanjing Yuanguang Trading Co., Ltd.Building855,468.84866,794.89
Shaoguan Wujiang District Muyang Medicine Information Consultant Co., Ltd.Building476,713.98470,161.86
Taishan Xiangranhui Trade Co., LtdBuilding456,054.17451,963.88
Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd.Building277,303.54184,253.18
Sinopharm GroupBuilding267,553.06259,915.02
Wang YangBuilding262,857.12262,857.12
Sinopharm Holding Beijing Co., Ltd.Building260,870.74235,714.29
Shenyang Pharmaceutical Co., Ltd.Building253,564.153,548,219.75
Zhang ZhenfangBuilding214,062.49402,499.98

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

5. Major transactions between the Group and its related parties (Continued)

(2) Related party transactions – leases (Continued)

(b) As the lessee (continued)
Type of assets under leasesExpense from leases For the six months ended 30 June 2019Expense from leases For the six months ended 30 June 2018
Gu JinhuaBuilding207,084.48178,800.00
Beijing Sinopharm Tianyuan Real Estate & Property Management Co., Ltd.Building173,068.27173,523.81
Hangzhou Xihu Business Group CorporationBuilding145,986.38132,823.81
China National Medicines Co., Ltd.Building145,865.91153,750.00
Sinopharm Xinjiang Pharmaceutical Co., Ltd.Building136,369.86130,208.30
Gu HaiqunBuilding108,277.610.00
Shenzhen Jiufeng Investment Co., Ltd.Building100,414.1989,260.15
Taishan Qunkang Pharmacy Co., Ltd.Building70,864.9574,170.32
Sinopharm Holding Xinjiang Special Drugs Kashgar Pharmaceutical Co., Ltd.Building47,990.56236,051.50
Sinopharm Holding Fujian Co., Ltd.Building6,571.396,571.38
Sinopharm Holding Shanxi Co., Ltd.Building0.00234,017.16
Xinjiang Baitong Property Service Co., Ltd.Building0.0044,581.16
Sinopharm Group Zhijun(Shenzhen) Pingshan Pharmaceutical Co., Ltd.Park0.0035,428.57

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

5. Major transactions between the Group and its related parties (Continued)

(3) Related party transactions – Financing

Related partyAmountInceptionMaturityNote
Borrowed from
Group Financial Co.43,428,873.4522 April 201931 May 2019Discount on commercial acceptance notes
Group Financial Co.40,197,120.8417 April 201917 July 2019Short-term borrowings
Group Financial Co.38,384,946.6724 January 201928 February 2019Discount on commercial acceptance notes
Group Financial Co.37,311,327.2722 May 201922 August 2019Short-term borrowings
Group Financial Co.33,815,106.0818 March 201930 April 2019Discount on commercial acceptance notes
CNPGC31,600,000.0024 May 201724 May 2020Long-term borrowings
Group Financial Co.27,852,641.7530 January 201930 April 2019Discount on commercial acceptance notes
Group Financial Co.27,408,812.8321 May 201930 June 2019Discount on commercial acceptance notes
Group Financial Co.23,148,716.5518 March 201925 May 2019Discount on commercial acceptance notes
Group Financial Co.21,601,820.9018 March 201931 May 2019Discount on commercial acceptance notes
Group Financial Co.20,902,069.2330 January 201928 March 2019Discount on commercial acceptance notes
Group Financial Co.18,680,669.1421 May 201931 July 2019Discount on commercial acceptance notes
Group Financial Co.18,309,493.1930 January 201929 March 2019Discount on commercial acceptance notes
Group Financial Co.14,997,301.9930 January 201909 May 2019Discount on commercial acceptance notes
Group Financial Co.14,442,689.9830 January 201925 March 2019Discount on commercial acceptance notes
Group Financial Co.11,932,011.3730 January 201926 April 2019Discount on commercial acceptance notes
Group Financial Co.9,827,139.5922 April 201909 August 2019Discount on commercial acceptance notes
Group Financial Co.9,776,155.1822 April 201925 June 2019Discount on commercial acceptance notes
Group Financial Co.2,227,866.6030 January 201928 June 2019Discount on commercial acceptance notes
Group Financial Co.2,115,440.2622 April 201926 September 2019Discount on commercial acceptance notes
Group Financial Co.2,037,126.5030 January 201928 May 2019Discount on commercial acceptance notes
Group Financial Co.1,628,019.4618 March 201927 August 2019Discount on commercial acceptance notes
Group Financial Co.1,188,450.2230 January 201926 June 2019Discount on commercial acceptance notes
Group Financial Co.859,454.6021 May 201926 August 2019Discount on commercial acceptance notes
Group Financial Co.798,997.8022 April 201926 July 2019Discount on commercial acceptance notes
Group Financial Co.729,054.6018 March 201926 June 2019Discount on commercial acceptance notes

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

5. Major transactions between the Group and its related parties (Continued)

(4) Related party asset transfer

Type of transactionFor the six months ended 30 June 2019For the six months ended 30 June 2018
Sinopharm Holding Tianjin Binhai Pharmaceutical Co., Ltd.Purchase of construction in progress-21,794.87

(5) Other related party transactions

For the six months ended 30 June 2019For the six months ended 30 June 2018
(a) Remuneration for key management personnel3,843,750.002,981,250.00
(b) Interest expense
Related partyCategoryFor the six months ended 30 June 2019For the six months ended 30 June 2018
Group Financial Co.Payment of notes discount interest2,615,234.173,411,652.84
China National Pharmaceutical Group CorporationPayment of entrusted loan interest641,469.02641,469.02
Group Financial Co.Payment of loan interest473,516.87-
Sinopharm Holding Financing Lease Co., Ltd.Payment of financing lease interest177,850.56623,402.17
Sinopharm Holding Financing Lease Co., Ltd.Payment of non-recourse receivable factored interest expense63,750.00-
Guorun Medical Supply Chain Services (Shanghai) Co., Ltd.Payment of related parties loan interest-1,778.67
3,971,820.624,678,302.70
(c) Interest income
Related partyCategoryFor the six months ended 30 June 2019For the six months ended 30 June 2018
Sinopharm Group Zhijun (Suzhou) Pharmaceutical Co., Ltd.Entrusted loan interest1,669,601.711,549,650.99
Group Financial Co.Deposit interest145,659.27387,479.46
1,815,260.981,937,130.45

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

6. Amounts due from related parties

Accounts receivable30 June 20191 January 2019
Related partyGross carrying amountProvision for bad debtGross carrying amountProvision for bad debt
Foshan Chancheng Pharmaceutical Co., Ltd.45,958,521.41276,165.3439,888,094.43235,040.74
Sinopharm Group40,401,102.06-32,263,115.51-
Sinopharm Holding Hainan Co., Ltd.9,869,915.19-6,607,589.69-
Shanghai Beiyi Guoda pharmaceutical Co. Ltd.9,772,467.43-11,966,548.05-
Sinopharm Health Online Co., Ltd.7,991,221.08-6,543,624.21-
Sinopharm Holding Sub Marketing Center Co., Ltd.4,943,166.98---
Sinopharm holdings Beijing huahong co., Ltd4,491,263.20-4,009,562.41-
Shenzhen Heng Sheng Hosital4,350,627.94-2,674,948.35-
Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd.4,350,308.37-5,372,873.84-
Pudong New Area of Shanghai Pharmaceutical Medicine Ltd.4,175,729.23-3,839,268.45-
Sinopharm Le-Ren-Tang Medicine Co., Ltd.4,123,874.57-3,143,231.13-
Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd.4,092,864.80-3,986,543.21-
Sinopharm Holding Beijing Co., Ltd.3,345,842.50-888,815.16-
Sinopharm Holding Hainan Hongyi Co., Ltd.3,314,718.28-5,370,089.88-
Foshan Chancheng District Central Hospital3,160,081.1344,928.582,440,447.5212,753.61
Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd.2,539,969.75-986,526.05-
Sinopharm Holding Henan Co., Ltd.2,447,128.74-1,036,327.62-
Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd.2,196,272.00-1,178,605.80-
Sinopharm Holding Shandong Co., Ltd.2,037,494.51-210,969.36-
Foshan Chanyixing Medicine Development Co Ltd.1,865,947.366,667.321,743,775.579,377.72
Sinopharm Holding Wenzhou Co., Ltd.1,710,031.20-1,261,643.94-
China National Medicines Co., Ltd.1,604,941.84-1,454,237.32-
Sinopharm Sichuan Pharmaceutical Co., Ltd.1,424,513.17-1,081,909.20-
Sinopharm Holding Yangzhou Co., Ltd.1,366,338.68-540,349.73-
Shanghai Merro Pharmaceutical Co., Ltd.1,348,428.86-884,486.53-
Sinopharm Holding Xuzhou Co., Ltd.1,272,626.48-34,941.30-
Sinopharm Holding Anhui Pharmaceutical Co., Ltd.1,095,210.16---
Sinopharm Holding Shanxi Co., Ltd.1,044,424.48-1,028,660.04-
Sinopharm Holding Yunnan Co., Ltd.852,406.76-27,737.44-

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
6. Amounts due from related parties (Continued)
Accounts receivable (Continued)30 June 20191 January 2019
Related partyGross carrying amountProvision for bad debtGross carrying amountProvision for bad debt
Sinopharm Holding Tianjin Co., Ltd.736,401.04-200,407.20-
Sinopharm Holding Jilin Co., Ltd.638,937.96-1,499,742.50-
Sinopharm Holding Nantong Co., Ltd.637,245.24-66,541.32-
Sinopharm Holding Fujian Co., Ltd.602,589.12---
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd.599,179.84-772,488.31-
Sinopharm Holding Donghong Medical (Shanghai) Co., Ltd.596,543.86-164,566.12-
Sinopharm Holding Anhui Co., Ltd.583,647.00-221,425.72-
Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical Co., Ltd.552,496.16-1,704,316.57-
Sinopharm Holding Hunan Co., Ltd.537,470.30-569,264.26-
Sinopharm Holding Hubei Co., Ltd.457,991.94-68,314.16-
Sinopharm Holding Shanxi Co., Ltd.368,536.28-68,361.75-
Yuxi Sinopharm Medicine Co., Ltd.365,065.92-182,532.96-
Sinopharm Holding Dalian Co., Ltd.357,662.16-144,334.03-
Shanghai Guoda Lingyun Pharmacy Co., Ltd.357,524.59-17,535.13-
Sinopharm Holding Dalian Hecheng Co., Ltd.286,270.00-126,684.00-
Sinopharm Holding Chengdu Co., Ltd.280,800.00---
Sinopharm Group Southwest Medicine Co., Ltd.248,554.12-5,090,863.70-
Sinopharm Group Medicine Logistic Co., Ltd.209,724.91-139,697.93-
Sinopharm Holding (Hubei) Hankou Pharmacy Co., Ltd.201,154.08---
Sinopharm Jienuo Medical Treatment Sevice Guangdong Co., Ltd.124,568.18-120,403.60-
Sinopharm Holding Qinghai Co., Ltd.110,520.40-96,319.48-
Sinopharm Holding Yancheng Co., Ltd.108,561.80---
Sinopharm Holding Ningxia Co., Ltd.100,896.00---
Sinopharm Holding Gansu Co., Ltd.94,147.34-176,910.34-
Sinopharm Holding Shenyang Co., Ltd.84,504.52-123,126.34-
Sinopharm Holding Tianjin North Medicine Co., Ltd.78,465.54-91,390.41-
Sinopharm Group Fengliaoxing Pharmacy (Foshan) Co., Ltd.69,005.33453.65--
Sinopharm Holding Inner Mongolia Co., Ltd.63,160.96-90,159.36-
Sinopharm Group Zhijun(Shenzhen) Pingshan Pharmaceutical Co., Ltd.59,076.00-39,618.00-
Sinopharm Holding Honghe Co., Ltd.58,831.14---
Sinopharm Holding Heilongjiang Co., Ltd.50,000.0050,000.0050,000.00-
Sinopharm Guangdong Medical Examination Co., Ltd.41,360.00---

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
6. Amounts due from related parties (Continued)
Accounts receivable (Continued)30 June 20191 January 2019
Related partyGross carrying amountProvision for bad debtGross carrying amountProvision for bad debt
Sinopharm Holding Jiangxi Co., Ltd.22,606.08---
Shanghai Liyi Drug Store Co.,Ltd19,278.81-76,366.48-
Sinopharm Holding Zunyi Co., Ltd.18,358.20---
Sinopharm Holding Changzhou Co., Ltd.15,557.40---
Sinopharm Holding Fuzhou Co., Ltd.15,195.60---
Sinopharm Holding Chuxiong Co., Ltd.13,132.80---
Sinopharm Fengliaoxing Medical Hospital Co., Ltd.12,020.2674.5416,836.25136.35
Nanchang Sinopharm Holding Guoyaotang Pharmacy Co., Ltd.11,448.00---
Sinopharm Holding Guizhou Co., Ltd.8,307.00-16,026.00-
Sinopharm Holding Wuxi Co., Ltd.6,818.00-157,614.80-
Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd.6,669.00-1,070.60-
Sinopharm Holding Hongrun Medical Business Service (Shanghai) Co., Ltd.5,900.96-1,300.54-
Sinopharm Holding Ulanqab Co., Ltd.3,933.10---
Sinopharm Guanai Yuankang Pharmacy (Haikou) Co., Ltd.3,366.10-1,488.00-
Sinopharm Group Fengliaoxing Traditional Chinese Medical Center Foshan Nanhai Co., Ltd.1,526.024.78695.700.94
Sinopharm Group Shanxi Co., Ltd.1.60-58,518.00-
Sinopharm Xinxiang Chain Store Co., Ltd.--2,064.20-
Sinopharm Holding Changzhou Medical Logistics Center Co., Ltd.--144,600.00-
Sinopharm Medical Instrument Foshan Co., Ltd.--11,904.00-
Hubei Pharmaceutical Group Co., Ltd.--61,959.91-

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

6. Amounts due from related parties (Continued)

Notes receivable30 June 20191 January 2019
Related partyGross carrying amountProvision for bad debtGross carrying amountProvision for bad debt
Sinopharm Holding Financing Lease Co., Ltd.13,210,232.00-202,456,075.93-
Sinopharm Holding Hainan Co., Ltd.3,896,828.51-12,035,409.02-
Sinopharm Le-Ren-Tang Medicine Co., Ltd.2,500,000.00-1,148,409.56-
Sinopharm Holding Hainan Hongyi Co., Ltd.1,528,421.30-10,234,483.82-
Sinopharm Holding Hubei Co., Ltd.1,008,876.24---
Sinopharm Holding Nantong Co., Ltd.750,000.00---
Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical Co., Ltd.472,387.20---
Sinopharm Holding Gansu Co., Ltd.239,670.00-163,198.80-
Sinopharm Holding Shanxi Co., Ltd.--1,077,861.97-
Sinopharm Holding Shenyang Co., Ltd.--422,520.00-
Sinopharm Holding Shanxi Co., Ltd.--359,459.04-
Sinopharm Holding Sub Marketing Center Co., Ltd.--3,144,392.00-
Sinopharm Holding Henan Co., Ltd.--1,032,584.76-
Sinopharm Holding Anhui Co., Ltd.--390,062.21-
Sinopharm Holding Shandong Co., Ltd.--1,241,661.12-
Sinopharm Holding Fujian Co., Ltd.--400,000.00-
Sinopharm Holding Ningxia Co., Ltd.--176,568.00-
Sinopharm Holding Jilin Co., Ltd.--274,058.00-
Sinopharm Holding Chengdu Co., Ltd.--201,332.00-
Other receivables30 June 20191 January 2019
Related partyGross carrying amountProvision for bad debtGross carrying amountProvision for bad debt
Sinopharm Group Zhijun(Suzhou) Pharmaceutical Co., Ltd.44,000,000.002,200,000.0044,000,000.00-
Sinopharm Group Medicine Logistic Co., Ltd.6,226,734.36-2,494,174.31-
Shyndec Pharmaceutical5,624,940.00-7,913,430.00-
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd.385,381.65-100,000.00-
Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd.234,693.89600.00109,774.26600.00
Sinopharm Lerentang Hebei Medical Instrument Trade Co., Ltd.48,493.16-48,493.16-
Sinopharm Holding Tianjin Co., Ltd.41,100.00---
Sinopharm Group13,416.00---

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
6. Amounts due from related parties (Continued)
Other receivables (Continued)30 June 20191 January 2019
Related partyGross carrying amountProvision for bad debtGross carrying amountProvision for bad debt
Sinopharm Holding Sub Marketing Center Co., Ltd.10,990.00---
Wuhan Zhonglian Pharmaceutical Group Co., Ltd.5,000.001,000.005,000.001,000.00
Sinopharm Holding Fujian Co., Ltd.3,476.39-5,476.34-
Sinopharm Holding Jiaozuo Co., Ltd.--30,171.00-
Henan Wanxitang Pharmacy Co., Ltd.--1,098,981.30-
Sinopharm Health Online Co., Ltd.--81,755.36-
Sinopharm Group Medicine Logistic Co., Ltd. Guangzhou Branch--18,650.00-
Advances to suppliers30 June 20191 January 2019
Related partyGross carrying amountProvision for bad debtGross carrying amountProvision for bad debt
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd.1,628,396.28-1,643,251.42-
Chongqing Yaoyou Pharmaceutical Co., Ltd.1,097,717.47-931,286.48-
Sinopharm Group760,415.14-2,308,319.33-
Guizhou Tongjitang Pharmaceutical Co., Ltd.446,109.64-227,175.58-
Sinopharm Holding Xinjiang Special Drugs Kashgar Pharmaceutical Co., Ltd.242,701.50---
Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd.230,666.79---
Sichuan Hexin Pharmaceutical Co., Ltd.174,960.00---
Anhui Jingfang Pharmaceutical Co., Ltd.146,744.67-45,611.47-
Sinopharm Weiqida Pharmaceutical Co., Ltd.140,382.00---
Chengdu Rongsheng Pharmacy Co., Ltd.122,000.00-1,416,622.63-
Beijing Sinopharm Tianyuan Real Estate & Property Management Co., Ltd.82,800.00-78,857.14-
Sinopharm Yixin Pharmaceutical Co., Ltd.81,152.00---
China National Medicines Co., Ltd.78,750.00-78,750.00-
Chengdu Institute of Biological Products Co.,Ltd.64,979.60-48,734.70-
Sinopharm Group Guorui Medicine Co., Ltd.63,310.27---
Shyndec Pharmaceutical56,281.48-57,838.35-
Shenzhen Wanwei Medicine Trading Co., Ltd.50,658.00---
Jinzhou AoHong Pharmaceuticals Co., Ltd.33,040.00-16,520.00-
Sinopharm Group Yibin Pharmaceuticals Co., Ltd.27,085.38-15,655.31-

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
6. Amounts due from related parties (Continued)
Advances to suppliers(Continued)30 June 20191 January 2019
Related partyGross carrying amountProvision for bad debtGross carrying amountProvision for bad debt
Guilin South pharmaceutical Co., Ltd.26,524.88-10,989.56-
Shanghai Chaohui Pharmaceutical Co., Ltd.21,646.80---
Sinopharm Xinjiang Korla Pharmaceutical Co., Ltd.20,279.70-282,467.38-
Jiangxi Erye Medicine Marketing Co., Ltd.16,726.80-729,789.16-
Shantou Jinshi Powder Injection Co., Ltd.14,889.93---
Sinopharm Holding Sub Marketing Center Co., Ltd.14,885.06---
Taishan Qunkang Pharmacy Co., Ltd.13,150.07---
Shandong Lu Ya Pharmaceutical Co., Ltd.11,436.42-1,412.52-
Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd.9,560.00-1,846.55-
Suzhou Erye Pharmaceutical Limited Company9,242.76---
Winteam Pharmaceutical Group Ltd.8,877.09-9,346.82-
Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd.5,812.50-139,392.00-
Sinopharm Holding Jilin Co., Ltd.4,267.77---
Sinopharm Group Zhijun(Shenzhen) Pingshan Pharmaceutical Co., Ltd.778.62---
Jiangsu Fuxing Pharmaceutical Trading Co., Ltd81.08-81.08-
Sinopharm Holding Shanxi Co., Ltd.--3,890,993.71-
Sinopharm Holding Shanxi Co., Ltd.--3,330,287.42-
Sinopharm Holding Shanxi Lvliang Co., Ltd.--660,000.00-
Sinopharm Holding Beijing Co., Ltd.--123,809.52-
Sinopharm Holding Fujian Co., Ltd.--225.81-
Xinjiang Baitong Property Service Co., Ltd.--16,856.89-
Sinopharm Group Guizhou Blood Products Co., Ltd.--536,000.00-
Sinopharm Xinjiang Pharmaceutical Co., Ltd.--45,432.69-
Shanghai Modern Hasen (Shangqiu) Pharmaceutical Co., Ltd.--103,503.41-
Shanghai Shyndec Pharmaceutical Marketing Co., Ltd.--609,418.22-
Sinopharm Chuan Kang Pharmaceutical Co., Ltd.--346,772.59-
Fresenius Kabi Huarui Pharmaceuticals Co., Ltd.--1,231.58-
Shenyang Hongqi Pharmaceutical Co., Ltd.--237,150.00-
Linyi Medical Group Co., Ltd.--775,396.82-
Hunan Minshengtang Investment Co., Ltd.--3,349,268.77-
Taishan Xiangranhui Trade Co., Ltd--39,450.05-

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
6. Amounts due from related parties (Continued)
Advances to suppliers(Continued)30 June 20191 January 2019
Related partyGross carrying amountProvision for bad debtGross carrying amountProvision for bad debt
Nanjing Yuanguang Trading Co., Ltd.--169,697.02-
7. Amounts due to related parties
Related party30 June 20191 January 2019
Accounts payable
Sinopharm Holding Sub Marketing Center Co., Ltd.195,937,772.42104,262,822.63
China National Medicines Co., Ltd.62,209,906.1648,352,935.82
Sinopharm Holding Shanxi Co., Ltd.51,758,102.97945,054.21
Sinopharm Holding Shanxi Co., Ltd.31,832,547.24-
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd.28,675,206.9218,259,929.53
Fresenius Kabi Huarui Pharmaceuticals Co., Ltd.24,077,737.2710,470,003.68
Sinopharm Le-Ren-Tang Medicine Co., Ltd.21,572,062.09-
Sinopharm Group21,374,852.1213,732,261.69
Jiangsu Wanbang Pharmacy Marketing Co., Ltd.21,363,008.2615,038,618.86
Lanzhou Biotechnology Development Co., Ltd.20,100,000.00-
Sinopharm Holding Lunan Co., Ltd.16,885,035.5971,599.97
Sinopharm Holding Shenyang Co., Ltd.11,151,742.574,015,953.59
Sinopharm Holding Inner Mongolia Co., Ltd.10,342,153.142,225,947.78
Shenzhen Main Luck Pharmaceutical Co., Ltd.9,804,573.268,565,744.21
Sinopharm Holding Yangzhou Co., Ltd.9,362,416.327,630,403.88
Sinopharm Holding Lerentang Pharmaceutical Co., Ltd.8,517,232.268,402,288.43
Tibet Yaoyou Medicines Co.,Ltd.8,066,785.648,346,619.80
Sinopharm Holding Hubei Co., Ltd.7,380,255.63-
Jinzhou AoHong Pharmaceuticals Co., Ltd.7,121,913.422,422,868.00
Sinopharm Holding Beijing Co., Ltd.6,747,587.357,478,006.36
Sinopharm Lerentang Shijiazhuang Medicine Co., Ltd.6,179,335.72183,737.13
Winteam Pharmaceutical Group Ltd.6,143,556.766,294,519.81
Sinopharm Holding Fujian Co., Ltd.5,942,354.784,484,641.23

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
7. Amounts due to related parties (Continued)
Related party30 June 20191 January 2019
Accounts payable (Continued)
Sinopharm Group Zhijun(Shenzhen) Pingshan Pharmaceutical Co., Ltd.5,480,684.063,550,454.25
Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd.4,903,616.192,922,052.73
Sinopharm Holding Jiangsu Co., Ltd.4,884,948.336,745,253.51
Shenzhen Wanwei Medicine Trading Co., Ltd.4,704,357.804,219,138.81
Chongqing Yaoyou Pharmaceutical Co., Ltd.4,440,477.233,506,823.08
Sinopharm Holding Shandong Co., Ltd.3,795,662.5410,865.00
Sinopharm Holding Pingdingshan Co., Ltd.3,638,807.193,603,335.66
Sinopharm Holding Xinjiang Special Drugs Western Pharmaceutical Co., Ltd.3,182,288.62795,448.03
Yichang Humanwell Pharmaceutical Co., Ltd.3,022,607.791,936,090.54
Sinopharm Holding Xiamen Co., Ltd.2,812,274.621,710,756.72
Sinopharm Holding Changzhou Co., Ltd.2,732,668.551,484,634.49
Beijing Huasheng Pharmaceutical Biotechnology Development Co., Ltd.2,630,700.01637.01
Sinopharm Holding Shanghai Likang Pharmaceutical Co., Ltd.2,493,666.001,755,209.60
Sinopharm Holding Ningxia Co., Ltd.2,423,060.643,007,737.39
Sinopharm Lerentang Hebei Medical Instrument Trade Co., Ltd.2,265,517.011,519,045.91
Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd.2,257,975.91966,925.12
Henan Wanxitang Pharmacy Co., Ltd.2,041,958.502,053,637.44
China Otsuka Pharmaceutical Co., Ltd.1,959,904.381,571,696.86
Sinopharm Holding Tongliao Co., Ltd.1,758,793.98872,644.61
Sichuan Hexin Pharmaceutical Co., Ltd.1,685,255.64454,536.00
Jiangxi Erye Medicine Marketing Co., Ltd.1,673,658.34262,590.49
Sinopharm Holding Heilongjiang Co., Ltd.1,478,359.09922,059.45
Sinopharm holdings Beijing huahong co., Ltd1,373,387.431,498,601.00
Sinopharm Yixin Pharmaceutical Co., Ltd.1,339,719.99175,855.31
Jiangsu Fuxing Pharmaceutical Trading Co., Ltd1,274,138.60549,104.40
Sinopharm Holding Henan Co., Ltd.1,265,401.401,441,223.83
Sinopharm Holding Jinan Co., Ltd.1,251,027.35189,250.47
Sinopharm Group Rongsheng Pharmaceutical Co., Ltd.1,225,702.70398,911.58
Shenyang Hongqi Pharmaceutical Co., Ltd.1,162,650.621,191,792.10
Sinopharm Holding Wuxi Co., Ltd.971,301.75492,702.04
Sinopharm Holding Fuzhou Co., Ltd.955,698.95328,729.69
Sinopharm Holding Beijing Kangchen Bio-926,405.95917,154.80

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
7. Amounts due to related parties (Continued)
Related party30 June 20191 January 2019
Accounts payable (Continued)
Pharmaceutical Co., Ltd.
Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd.891,429.221,050,690.44
Sinopharm Holding Changzhou Medical Logistics Center Co., Ltd.853,893.173,080,381.47
Hunan Dongting Pharmaceutical Co., Ltd.795,952.06265,365.25
Shyndec Pharmaceutical696,904.24511,528.32
Shanghai Chaohui Pharmaceutical Co., Ltd.694,598.86311,797.36
Sinopharm Holding Hulun Buir Co., Ltd.661,633.04364,441.22
Chengdu Rongsheng Pharmacy Co., Ltd.657,794.891,947,271.88
Chengdu Institute of Biological Products Co.,Ltd.655,200.00370,800.00
Sinopharm Holding Suzhou Co., Ltd.644,244.311,871,807.98
Sinopharm Holding Xinjiang Xinte Karamay Pharmaceutical Co., Ltd.611,742.481,133,803.05
China National Pharmaceutical Industry Co., Ltd.588,962.54363,778.78
Sinopharm Holding Hainan Co., Ltd.558,876.1072,738.00
Guizhou Tongjitang Pharmaceutical Co., Ltd.558,859.22342,846.28
Sinopharm Holding Donghong Medical (Shanghai) Co., Ltd.498,790.10213,020.90
Sinopharm Holding Changsha Co., Ltd.481,119.66-
Huayi Pharmaceutical Co., Ltd.473,024.00961,440.00
Suzhou Erye Pharmaceutical Limited Company446,987.01278,341.97
Sinopharm Holding Xinjiang Special Drugs Kashgar Pharmaceutical Co., Ltd.445,108.34350,668.16
Sinopharm Group Yibin Pharmaceuticals Co., Ltd.431,253.60150,034.94
Foshan Fengliaoxing Pharmaceutical Co., Ltd.424,687.331,254,306.67
Sinopharm Group Southwest Medicine Co., Ltd.401,710.17194,982.00
Wuhan Zhonglian Pharmaceutical Group Co., Ltd.385,312.50560,483.58
Sinopharm Holding Hunan Co., Ltd.362,310.867,718.24
Sinopharm Holding Lianyungang Co., Ltd.353,590.00276,118.64
Sinopharm Fengliaoxing (Foshan) Medicines Co., Ltd.326,508.24149.02
Sinopharm Lingyun Biopharmaceutical (Shanghai) Co., Ltd.318,353.90165,476.77
Shanghai Transfusion Technology Co., Ltd.311,860.00352,100.00
Sinopharm Chuan Kang Pharmaceutical Co., Ltd.310,881.30472,481.64
Sinopharm Holding Jinzhou Co., Ltd.304,289.19530,995.29
Jiangsu Huanghe Pharmaceutical Co.,284,275.55261,207.05

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
7. Amounts due to related parties (Continued)
Related party30 June 20191 January 2019
Accounts payable (Continued)
Ltd.
Sinopharm Holding Yangzhou Medical Treatment Equipment Co., Ltd.282,295.9355,877.68
Sinopharm Holding Putian Co., Ltd.274,267.657,144.64
Sinopharm Group Medicine Logistic Co., Ltd.267,956.64-
Sinopharm Holding Zhihuiminsheng (Tianjin) Pharmaceutical Co., Ltd.266,517.35-
Sinopharm Holding Dezhou Co., Ltd.251,966.42233,602.84
Sinopharm Group Guorui Medicine Co., Ltd.241,407.191,057,129.20
Sinopharm Holding Tianjin Co., Ltd.233,292.1715,615.31
Sinopharm Group (Tianjin) Eastern Bokang Pharmaceutical Co., Ltd.231,523.37-
Sinopharm Holding Yancheng Co., Ltd.201,484.85190,168.37
Sinopharm Holding Shanxi Zhidekang Medicine Co., Ltd.165,906.67139,969.67
Shanghai Merro Pharmaceutical Co., Ltd.161,072.3390,275.31
Sinopharm Holding Hunan Pharmaceutical Development Co., Ltd.160,457.71-
Anhui Jingfang Pharmaceutical Co., Ltd.148,041.15165,171.12
Sinopharm Holding Anhui Co., Ltd.139,702.6718,589.18
Foshan Dezhong Pharmaceutical Co., Ltd.139,274.5198,835.01
Sinopharm Holding Dalian Co., Ltd.136,272.27182,516.75
Sinopharm Holding Bayannaoer Co., Ltd.131,992.42-
China National Pharmaceutical Foreign Trade Corporation122,930.63122,930.63
Sinopharm Shantou Jinshi Pharmaceutical Co., Ltd.120,579.21102,693.04
Sinopharm Holding Biopharmaceutical (Tianjin) Co., Ltd.108,541.1720,509.50
Pudong New Area of Shanghai Pharmaceutical Medicine Ltd.106,921.1391,493.10
China Medical Equipment Shandong Co., Ltd.106,382.80-
Sinopharm Liaoning Medical Equipment Co., Ltd.102,585.59-
The Fourth Pharmaceutical Co., Ltd. of Zhonglian Group92,151.6497,099.70
Sinopharm Holding Taizhou Co., Ltd.76,424.0099,508.00
Sinopharm Group Shanxi Medical Devices Co., Ltd.75,016.66-
Sinopharm Holding Zhejiang Co., Ltd.72,393.6658,508.35
Shanghai Modern Hasen (Shangqiu) Pharmaceutical Co., Ltd.67,745.5457,148.85
Sinopharm Holding Yangzhou Biological Products Co., Ltd.64,687.7350,162.16
Shandong Lu Ya Pharmaceutical Co., Ltd.52,819.0752,819.07

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
7. Amounts due to related parties (Continued)
Related party30 June 20191 January 2019
Accounts payable (Continued)
Sinopharm Xinjiang Pharmaceutical Co., Ltd.49,772.389,720.00
Sinopharm Holding Fuzhou Medical Devices Co., Ltd.46,000.00-
Sinopharm Holding Nanjing Wende Pharmaceutical Co.,Ltd.44,682.80102,437.80
Sinopharm Holding Ulanqab Co., Ltd.44,330.0061,246.80
Shantou Jinshi Powder Injection Co., Ltd.39,838.05245,352.00
Sinopharm Holding Sanyi Medicine (Wuhu) Co., Ltd.33,085.4425,483.57
Sinopharm Holding Rizhao Co., Ltd.32,873.6710,236.15
Beijing Huamiao Pharmaceutical Co., Ltd.29,912.02372,103.86
Sinopharm Holding Dalian Hecheng Co., Ltd.28,687.56-
Guangdong Medi-World Pharmaceutical Co., Ltd.27,719.91297,576.35
Sinopharm Holding Quanzhou Co., Ltd.26,085.8862,947.60
Sinopharm Holding Shanxi Mingdikang Medicine Co., Ltd.24,871.1127,215.64
Sinopharm Group Zhijun(Suzhou) Pharmaceutical Co., Ltd.22,800.00-
Sinopharm Holding Yongzhou Co., Ltd.19,809.3619,858.72
Sinopharm Group Shanghai Medicine Device Co., Ltd.16,603.0216,603.02
Sinopharm Holding Liaocheng Co., Ltd.16,197.9316,197.93
Sinopharm Holding Beijing Tianxing Puxin Biological Medical Co., Ltd.13,891.7884,524.54
Sinopharm Holding Zhangzhou Pharmaceutical Co., Ltd.11,760.00-
Sinopharm Group Shanxi Co., Ltd.10,144.80-
Sinopharm Group Anhui Medical Devices Co., Ltd.5,200.00-
Changchun Changsheng Gene Pharmaceutical Co., Ltd.3,017.201,492.91
Sinopharm Holding Ordos Co., Ltd.1,771.201,771.20
Sinopharm Holding Shanxi Jincheng Co., Ltd.1,659.943,846.13
Sinopharm Prospect Dentech (Beijing) Co., Ltd.1,461.991,536.00
Guilin South pharmaceutical Co., Ltd.1,210.431,210.80
Sinopharm Holding Huaideju Pharmaceutical (Xiamen) Co., Ltd.1,113.851,113.85
Guizhou Tongjitang Pharmacy Chain Co., Ltd.991.50-
Shenzhen Zhijun Pharmaceutical Trade Co., Ltd.534.20534.20
Shanghai Shyndec Pharmaceutical Marketing Co., Ltd.106.76106.76
Chongqing Haisiman Pharmaceutical Co., Ltd.101.91101.91

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
7. Amounts due to related parties (Continued)
Related party30 June 20191 January 2019
Accounts payable (Continued)
Sinopharm Holding Chongqing Co., Ltd.45.0045.00
Linyi Medical Group Co., Ltd.10.4710.47
Sinopharm Holding Xinyu Co., Ltd.0.010.01
Sinopharm Holding Jilin Co., Ltd.--
Sinopharm Holding Shanxi Instrument Branch Co., Ltd.-6,309,208.47
Sinopharm Holding Tianjin Distribution Center Co., Ltd.-35.32
Sinopharm Holding Zhangzhou Co., Ltd.-5,472.50
Sinopharm Sichuan Pharmaceutical Co., Ltd.-2,741.40
Sichuan Jiangyouzhongbafuzi Technology Development Co., Ltd.-80,000.00
Lanzhou Institute of Biological Products Co., Ltd.-180,000.00
Sinopharm Wuhan blood products Co., Ltd.-170,387.93
Hutchison Whampoa Sinopharm Pharmaceuticals (Shanghai) Co., Ltd.-255,089.90
Sinopharm ShanXi Ruifulai Pharmaceutical Co., Ltd.-63,081.60
Jiangsu Lianhuan Pharmaceutical Co., Ltd.-1,321,298.26
Qinghai Pharmaceutical Factory Co., Ltd.-32,970.00
Jingfukang Pharmaceutical Group Co., Ltd.-184,438.44
Shanghai Sinopharm Pharmaceutical Co., Ltd.-92,610.00
Fujian Chentian Jinling Pharmaceutical Co., Ltd.-505,555.00
Related party30 June 20191 January 2019
Notes payable
Sinopharm Holding Sub Marketing Center Co., Ltd.116,044,638.24230,067,443.17
Sinopharm Holding Shenyang Co., Ltd.65,065,373.0176,894,045.21
Sinopharm Holding Inner Mongolia Co., Ltd.25,122,678.3820,459,755.01
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd.18,119,677.1313,887,657.53
Sinopharm Holding Shanxi Co., Ltd.7,725,000.0067,926,610.30

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
7. Amounts due to related parties (Continued)
Related party30 June 20191 January 2019
Notes payable (Continued)
Sinopharm Holding Fujian Co., Ltd.7,114,576.437,011,034.30
Sinopharm Holding Lerentang Pharmaceutical Co., Ltd.6,824,078.9514,650,495.82
Chongqing Yaoyou Pharmaceutical Co., Ltd.6,503,471.905,538,258.30
China National Medicines Co., Ltd.5,851,346.2826,654,608.10
Sinopharm Holding Xiamen Co., Ltd.5,423,216.115,361,959.66
Chengdu Rongsheng Pharmacy Co., Ltd.5,041,000.002,673,500.00
Lanzhou Biotechnology Development Co., Ltd.4,860,000.003,000,000.00
Sinopharm Lerentang Shijiazhuang Medicine Co., Ltd.4,185,619.888,148,267.06
Sinopharm Holding Jinzhou Co., Ltd.2,493,839.621,611,340.65
Jiangsu Wanbang Pharmacy Marketing Co., Ltd.2,439,745.894,817,408.42
Sinopharm Holding Shanxi Co., Ltd.2,082,000.0018,340,013.80
Sinopharm Holding Hunan Co., Ltd.2,043,558.463,114,143.15
Sinopharm Group Zhijun(Shenzhen) Pharmaceutical Co., Ltd.1,856,344.00325,741.92
Shenzhen Wanwei Medicine Trading Co., Ltd.1,802,808.002,402,393.40
Shenzhen Main Luck Pharmaceutical Co., Ltd.1,769,052.602,877,350.00
Sinopharm Holding Ningxia Co., Ltd.1,538,808.001,413,847.22
Sinopharm Holding Jinan Co., Ltd.1,240,000.001,880,000.00
Sinopharm Xingsha Pharmaceuticals (Xiamen) Co., Ltd.1,145,486.98356,554.16
Sinopharm Group Shanxi Medical Devices Co., Ltd.949,700.00-
Sinopharm Holding Dalian Co., Ltd.857,791.87950,169.80
Guangdong Medi-World Pharmaceutical Co., Ltd.755,306.20-
Guizhou Tongjitang Pharmaceutical Co., Ltd.632,834.40-
Sinopharm Holding Changsha Co., Ltd.632,325.90-
Anhui Jingfang Pharmaceutical Co., Ltd.409,923.80-
Sinopharm Holding Changzhou Medical Logistics Center Co., Ltd.400,000.001,000,000.00
Shanghai Transfusion Technology Co., Ltd.301,800.00503,000.00
Sinopharm Group Zhijun(Shenzhen) Pingshan Pharmaceutical Co., Ltd.262,800.00-
Shyndec Pharmaceutical255,516.40475,780.40
Sinopharm Group Rongsheng Pharmaceutical Co., Ltd.213,037.00223,333.00
Sinopharm Holding Quanzhou Co., Ltd.205,791.15170,891.70
Sinopharm Holding Putian Co., Ltd.160,980.86614,504.48

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
7. Amounts due to related parties (Continued)
Related party30 June 20191 January 2019
Notes payable (Continued)
Sinopharm Holding Yancheng Co., Ltd.160,000.00-
Winteam Pharmaceutical Group Ltd.154,417.60111,322.50
Sinopharm Yixin Pharmaceutical Co., Ltd.107,472.00394,064.00
Sinopharm Group-1,183,604.16
Sinopharm Holding Shanxi Instrument Branch Co., Ltd.-1,981,189.60
Sinopharm Holding Lunan Co., Ltd.-8,596,290.47
Sinopharm Holding Yangzhou Co., Ltd.-626,534.40
Sinopharm Holding Heilongjiang Co., Ltd.-31,320.00
Sinopharm Le-Ren-Tang Medicine Co., Ltd.-22,076,249.59
Foshan Fengliaoxing Pharmaceutical Co., Ltd.-320,310.10
Sinopharm Group Guizhou Blood Products Co., Ltd.-536,000.00
Lanzhou Institute of Biological Products Co., Ltd.-6,236,153.40
Shenyang Hongqi Pharmaceutical Co., Ltd.-602,172.00
Chongqing Haisiman Pharmaceutical Co., Ltd.-275,652.00
China Otsuka Pharmaceutical Co., Ltd.-1,793,583.51
Jiangsu Lianhuan Pharmaceutical Co., Ltd.-522,071.08
Jingfukang Pharmaceutical Group Co., Ltd.-151,120.00
Fujian Chentian Jinling Pharmaceutical Co., Ltd.-100,600.00

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
7. Amounts due to related parties (Continued)
Related party30 June 20191 January 2019
Other payables
Sinopharm Group Medicine Logistic Co., Ltd.11,518,140.632,278,301.79
Shanghai Dingqun Enterprise Management Consulting Co., Ltd.10,000,000.0010,000,000.00
Sinopharm Chongqing Pharmaceutical and Medical Industry Design Institute5,173,229.105,943,030.80
Sinopharm Group3,842,067.593,706,406.59
Sinopharm Group Shanghai Co., Ltd.1,690,992.161,660,431.38
China National of Traditional&Herbal Medicine Co., Ltd.1,300,000.001,300,000.00
Sinopharm Holding Tianjin Binhai Pharmaceutical Co., Ltd.387,617.70339,760.00
Shyndec Pharmaceutical327,973.63327,973.63
Shanghai Beiyi Guoda pharmaceutical Co. Ltd.195,898.04566,180.09
Sinopharm Holding Hunan Weian Pharmacy Medicine Chain Company Limited97,305.0030,000.00
Sinopharm Group Xinjiang Special Drugs National Pharmaceutical Co., Ltd.76,540.1941,794.27
Sinopharm Holding Sub Marketing Center Co., Ltd.37,782.3337,782.33
Xinjiang Baitong Property Service Co., Ltd.33,713.74-
China National Pharmaceutical Logistics Co., Ltd.10,349.7010,349.70
Sinopharm Group Medicine Logistic Co., Ltd. Guangzhou Branch-18,650.00
Sinopharm Holding Financing Lease Co., Ltd.-4,424,970.21
Heyuan Mairui Trading Co., Ltd.-672,396.36
Shenyang Pharmaceutical Co., Ltd.-4,419,166.69
Linyi Medical Group Co., Ltd.-51,398.45
Zhang Zhenfang-2,309,999.96
Pingdingshan Pusheng Pharmaceutical Co., Ltd.-1,246,412.02

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)
7. Amounts due to related parties (Continued)
Related party30 June 20191 January 2019
Contract liability
Sinopharm Holding Quanzhou Co., Ltd.111,943.0910,088.00
Sinopharm Holding Inner Mongolia Co., Ltd.23,021.8023,021.80
Sinopharm Holding Jiangxi Co., Ltd.22,924.9134,334.51
Sinopharm Holding Gansu Co., Ltd.21,960.00-
China Otsuka Pharmaceutical Co., Ltd.20,475.00-
China National Pharmaceutical Foreign Trade Corporation2,727.231,495.33
Sinopharm Holding Chengdu Co., Ltd.851.59851.59
Sinopharm Holding Chongqing Co., Ltd.755.62755.62
Sinopharm Group Guangdong Medicine Device Co., Ltd.639.921,599.80
Sinopharm Holding Taizhou Co., Ltd.24.80-
Sinopharm Holding Jinzhou Co., Ltd.0.19-
Sinopharm Holding Hunan Co., Ltd.-87,764.97
Sinopharm Holding Hunan Weian Pharmacy Medicine Chain Company Limited-67,305.00
Sinopharm Xinxiang Chain Store Co., Ltd.-0.01
Sinopharm Holding Yunnan Co., Ltd.-11,900.19
Sinopharm Holding Nantong Co., Ltd.-143,177.12
Sinopharm Sichuan Pharmaceutical Co., Ltd.-1,123,087.93
Sinopharm Medical Instrument Guizhou Qiannan Co., Ltd.-93.60
Sinopharm Zhuhai Medical Instrument Co., Ltd.-3,719.00
Sinopharm Health Online Co., Ltd.-416,056.44
Sinopharm Holding Hulun Buir Co., Ltd.-21,177.25
Sinopharm Holding Huaian Co., Ltd.-19.40

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

8. Amounts due to related parties (Continued)

Related party30 June 20191 January 2019
Interest receivable
Sinopharm Group Zhijun(Suzhou) Pharmaceutical Co., Ltd.1,484,841.221,846,618.96
Interest payable
Group Financial Co.98,338.84-
CNPGC35,440.2138,984.25
Other non-current assets
Hunan Minshengtang Investment Co., Ltd.-3,519,217.54
Lease liability
Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd.51,477,662.49-
Lerentang Investment Group Co., Ltd.15,361,691.91-
Linyi Medical Group Co., Ltd.7,333,666.982,214,094.34
Sinopharm Holding Financing Lease Co., Ltd.6,824,613.019,625,302.89
Guangdong Jiyuantang Development Co., Ltd.5,895,887.176,679,233.35
Sinopharm Holding Yangzhou Co., Ltd.5,440,115.487,178,262.00
Taishan Xiangranhui Trade Co., Ltd2,506,316.512,834,391.56
Gu Jinhua2,091,695.722,224,810.30
Nanjing Yuanguang Trading Co., Ltd.1,979,076.072,675,365.64
Shenyang Pharmaceutical Co., Ltd.1,685,513.081,885,957.03
Shaoguan Wujiang District Muyang Medicine Information Consultant Co., Ltd.996,884.751,441,844.49
Sinopharm Group917,838.401,156,090.31
Sinopharm Holding Beijing Co., Ltd.866,374.991,094,397.22
Gu Haiqun686,419.59766,279.30
Beijing Sinopharm Tianyuan Real Estate & Property Management Co., Ltd.506,243.41652,436.66
Hangzhou Xihu Business Group Corporation422,980.77553,514.61
China National Medicines Co., Ltd.417,186.76550,480.20
Shenzhen Jiufeng Investment Co., Ltd.385,892.93377,758.33

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

X. Related party relationships and transactions (Continued)

8. Amounts due to related parties (Continued)

Related party30 June 20191 January 2019
Entrusted loan
CNPGC-31,600,000.00
Other non-current liabilities
Sinopharm Group-35,061,743.31
short-term loan
Group Financial Co.111,418,168.96122,426,393.33
Long-term payables
Sinopharm Holding Financing Lease Co., Ltd.-3,763,978.52
Non-current liabilities due within one year
CNPGC31,600,000.00-
Beijing Golden Elephant Fosun Pharmaceutical Co., Ltd.9,673,454.339,206,427.16
Lerentang Investment Group Co., Ltd.8,032,346.405,822,550.02
Sinopharm Holding Financing Lease Co., Ltd.6,157,645.875,861,324.37
Sinopharm Holding Yangzhou Co., Ltd.3,587,508.603,512,206.10
Guangdong Jiyuantang Development Co., Ltd.1,752,116.601,649,377.54
Linyi Medical Group Co., Ltd.1,450,117.001,549,099.93
Nanjing Yuanguang Trading Co., Ltd.1,407,714.781,163,845.57
Shaoguan Wujiang District Muyang Medicine Information Consultant Co., Ltd.918,533.66899,216.52
Taishan Xiangranhui Trade Co., Ltd657,171.76660,453.69
Sinopharm Group491,639.09481,344.63
Sinopharm Holding Beijing Co., Ltd.477,779.78460,701.48
Shenyang Pharmaceutical Co., Ltd.428,258.20404,634.11
Beijing Sinopharm Tianyuan Real Estate & Property Management Co., Ltd.325,813.14295,389.79
Hangzhou Xihu Business Group Corporation276,559.91263,776.29
China National Medicines Co., Ltd.275,115.69269,340.95
Gu Jinhua273,920.39268,369.48
Shenzhen Jiufeng Investment Co., Ltd.188,790.90184,833.91
Gu Haiqun168,618.03161,206.64
Cash deposite with a related party
Group Financial Co.11,759,504.842,125,351.39

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

XI Commitments and contingencies

1. Commitments

(1)Capital commitments
Capital expenditures contracted for at the balance sheet date but not recognized in balance sheet are analyzed as follows:
30 June 201931 December 2018
RMB‘0,000RMB‘0,000
Buildings, machinery and equipment2,196.5042.16
Investment commitments (Note)6,000.006,000.00
8,196.506,042.16

Note: The Group subscribed to Sinopharm Zhongjin medical industry fund as its limited partner,and thetotal investment amounted to RMB200 million. The investors contribute year by year in batch. The fundmanager will send out payment notification to investors according to the actual progress of the projectand the investors will commit to complete the payment in 3 year. The investors have paid 30% of theamount of contribution during 2017, namely RMB60 million, and 40% in 2018, amounting to RMB80million. The remaining payment amount is RMB60 million. .

2. Contingencies

As of the balance sheet date, there were no contingencies that the Group was required to disclose.

Notes to financial statements (Continued)

For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

XII Other significant events

1. Segment reporting

Operating segments

For management purpose, the Group is organized into business units based on itsproduct and service and has four reportable operating segments as follows:

a) The Head Office, which is mainly engaged in investing and managing business;b) Pharmaceutical distribution segment, which is mainly engaged in the

distribution of medicine and pharmaceutical products to customers;c) Retail pharmacy segment, which is the managing the operation of Guoda

Pharmacy;

Management monitors the results of the Group’s operating segments separately for thepurpose of making decisions about resource allocation and performance assessment.Segment performance is evaluated based on reportable segment profit, which is ameasure of adjusted profit before tax. The adjusted profit before tax is measuredconsistently with the Group’s profit before tax except that finance costs, dividendincome, non-operating income, non-operating expense, investment income, as well ashead office and corporate expenses are excluded from such measurement.

Inter-segment sales and transfers are transacted with reference to the selling pricesused in the transactions carried out with third parties at the then prevailing marketprices.

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

XII Other significant events (Continued)

2. Segment reporting (Continued)

Operating segments (Continued)

Operating segment information as at and for the semi year ended

Head OfficePharmaceutical distributionRetailElimination between segmentsTotal
Revenue of main operations-19,442,945,442.545,957,083,892.95(359,409,396.51)25,040,619,938.98
Cost of main operations-(18,238,282,841.05)(4,518,680,260.83)358,635,569.45(22,398,327,532.43)
Investment income169,889,995.08(995,293.58)247,588.49-169,142,289.99
Net profit607,413,658.42403,231,513.97186,189,865.75(428,742,482.83)768,092,555.31
Total assets11,863,959,776.8120,784,963,352.5710,847,813,404.32(9,957,137,850.76)33,539,598,682.94
Total liabilities(2,406,658,554.25)(15,349,630,522.38)(5,670,681,594.90)4,445,868,231.85(18,981,102,439.68)

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

XIII Notes to key items of the company financial statements

1. Accounts receivable

The accounts receivable by category are analyzed below:
30 June 20191 January 2019
Gross carrying amountProvision for bad debtGross carrying amountProvision for bad debt
AmountProportionAmountProportionAmountProportionAmountProportion
Items for which provision for bad debt is recognised separately19,207,761.363.15%161,522.250.84%17,846,941.302.83%--
Items for which provision for bad debt is recognized by the company (credit risk characteristics)591,029,383.8096.85%--613,389,652.6497.17%--
610,237,145.16100.00%161,522.250.03%631,236,593.94100.00%--
At 30 June 2019, accounts receivable that are individually significant and individually assessed for provisions are as follows:
Accounts receivable(by company)Carrying amountBad debt provisionRateAssessment for impairment
Receivable of related party18,884,716.86-0.00%Receivable due from a related party with low risk of recoverability
Shenzhen Dongtai Pharmaceutical Co., Ltd.323,044.50161,522.2550.00%The customer has poor management and bad financial situation with high risk of recoverability
Total19,207,761.36161,522.25
Provision for bad debts of accounts receivable according to the general model of expected credit loss:
30 June 2019
Estimated default amountExpected credit loss in entire lifetimeExpected credit loss rate
Within 1 year591,029,383.80--
591,029,383.80--

Notes to financial statements (Continued)For the six months ended 30 June 2019

(All amounts in Renminbi “RMB” unless otherwise stated)

XIII Notes to key items of the company financial statements (Continued)

1. Accounts receivable (Continued)

The aging analysis of accounts receivables was as follows:

30 June 2019
Within 1 year610,237,145.16
Total610,237,145.16

Bad debt provision for the current period as follows:

Opening balanceReversal of write-off in previous yearsIncreases in the yearReversal in the yearWritten off in the yearClosing balance
Bad debts--161,522.25--161,522.25
Total--161,522.25--161,522.25
On 30 June 2019, the top five accounts receivable by customer are summarised below: