China National Accord Medicines Corporation Ltd. Annual Report 2013(Full-text) China National Accord Medicines Corporation Ltd. Annual Report 2013 March 2014 1 China National Accord Medicines Corporation Ltd. Annual Report 2013(Full-text) Section I. Important Notice, Contents and Paraphrase Board of Directors, Supervisory Committee, all directors, supervisors and senior executives of China National Accord Medicines Corporation Ltd. (hereinafter referred to as the Company) hereby confirm that there are no any fictitious statements, misleading statements, or important omissions carried in this report, and shall take all responsibilities, individual and/or joint, for the reality, accuracy and completion of the whole contents. Other directors attending the Meeting for annual report deliberation except for the followed: Name of director absent Title for absent director Reasons for absent Attorney He Zhiyi Independent director Official business Xiong Chuxiong The Preplan Profit Distribution of the Company deliberated and approved by the Board is: based on total stock issue of the Company 362,631,943 shares as the radix , distributed 1.8 Yuan (tax included) bonus in cash for every 10-share hold by all shareholders and no capitalizing of common reserves carried out. Yan Zhigang, Principal of the Company, Wei Pingxiao, person in charger of accounting works and Chi Guoguang, person in charge of accounting organ (accounting principal) hereby confirm that the Financial Report of 2013 Annual Report is authentic, accurate and complete. Concerning the forward-looking statements with future planning involved in the Report, they do not constitute a substantial commitment for investors. Investors should be cautious with investment risks. 2 China National Accord Medicines Corporation Ltd. Annual Report 2013(Full-text) Contents Annual Report 2013 ........................................................................................................................... 1 Section I Important Notice, Contents and Paraphrase .................................................................. 2 Section II Company Profile ............................................................................................................... 6 Section III Accounting data and summary of finnaical indexes ………………………………….8 Section IV Report of the Board of Directors ................................................................................. 11 Section V Important Events ............................................................................................................ 29 Section VI Changes in shares and particular about shareholders ............................................... 41 Section VII Particulars about Directors, Supervisors,Senior Executives and Employees ........ 49 Section VIII Corporate Governance .............................................................................................. 62 Section IX Internal Control ............................................................................................................ 71 Section X Financial Report ............................................................................................................. 73 Section XI Documents available for reference ............................................................................ 181 3 China National Accord Medicines Corporation Ltd. Annual Report 2013(Full-text) Paraphrase Items Refers to Contents Listed Company, Company, the Company, Refers to China National Accord Medicines Corporation Ltd. Sinopharm Accord, the Group Sinopharm Holding Refers to Sinopharm Group Co.,Ltd.; Controlling shareholder of the Company ―Twelfth Five-Year‖ Refers to Year of 2011 to 2015 Company Law Refers to Company Law of the People’s Republic of China Securities Law Refers to Securities Law of the People’s Republic of China Yuan, 10 thousand Yuan, 100 million Yuan Refers to RMB, RMB 10 thousand, RMB 100 million Terminology: Direct selling Refers to A sales method of selling drug to the hospital directly GMP certificate Refers to Good Manufacture Practice of Drugs certificate GSP certificate Refers to Good Supply Practice certificate That is CMS, and information system processing workflow & Supply Chain Management Refers to procurement, inventory & sales documents Company profile Sinopharm Refers to China National Pharmaceutical Group Corporation Sinopharm (CNCM LTD) Refers to China National Medicines Corporation Ltd. Sinopharm Holding Guangzhou Refers to Sinopharm Holding Guangzhou Co., Ltd. Sinopharm Holding Liuzhou Refers to Sinopharm Holding Liuzhou Co., Ltd. Sinopharm Holding Guangxi Refers to Sinopharm Holding Guangxi Co., Ltd. Zhijun Pharmaceutical Refers to Shenzhen Zhijun Pharmaceutical Co., Ltd. Main Luck Pharmaceutical Refers to Shenzhen Main Luck Pharmaceuticals Inc. China National Zhijun (Suzhou) Refers to China National Zhijun (Suzhou) Pharmaceutical Co., Ltd. Zhijun Pharmacy Trade Refers to Shenzhen Zhijun Pharmacy Trade Co., Ltd. 4 China National Accord Medicines Corporation Ltd. Annual Report 2013(Full-text) Major Risk Warning It is likely to existing risks in aspect of industrial competition, operation& management, market and national policy, and majority investors are advised to exercise caution of investment risks. 5 China National Accord Medicines Corporation Ltd. Annual Report 2013(Full-text) Section II Company profile I. Company information Short form of the stock Sinopharm Accord ; Accord B Stock code 000028, 200028 Stock exchange for listing Shenzhen Stock Exchange Name of the Company (in 国药集团一致药业股份有限公司 Chinese) Short form of the Company 国药一致 (in Chinese) Foreign name of the China National Accord Medicines Corporation Ltd. Company(if applicable) Short form of foreign name of Sinopharm Accord the Company(if applicable) Legal representative Yan Zhigang Registrations add. Accord Pharm. Bldg., No. 15, Ba Gua Si Road, Futian District, Shenzhen, Guangdong Province Code for registrations add 518029 Offices add. Accord Pharm. Bldg., No. 15, Ba Gua Si Road, Futian District, Shenzhen, Guangdong Province Codes for office add. 518029 Company‘s Internet Web Site http://www.szaccord.com.cn E-mail [email protected] II. Person/Way to contact Secretary of the Board Rep. of security affairs Name Chen Changbing Accord Pharm. Bldg., No. 15, Ba Gua Si Contact add. Road, Futian District, Shenzhen, Guangdong Province Tel. +(86)755 25875195 Fax. +(86)755 25875147 E-mail [email protected] III. Information disclosure and preparation place Newspaper appointed for information disclosure Securities Times; China Securities Journal; Hong Kong Commercial Daily 6 China National Accord Medicines Corporation Ltd. Annual Report 2013(Full-text) Website for annual report publish appointed by http://www.szse.cn; http://www.cninfo.com.cn CSRC Preparation place for annual report Secretariat of the Board of Directors IV. Registration changes of the Company Registration NO. for No. of taxation Date for registration Place for registration enterprise legal Organization code registration license Initial registration 1986-08-02 Shenzhen. P.R.C 4403011001677 440301192186267 19218626-7 Registration at end 2012-11-06 Shenzhen. P.R.C 440301103040048 440301192186267 19218626-7 of report period V. Other relevant information CPA engaged by the Company Name of CPA PricewaterhouseCoopers Zhongtian Certified Public Accountants Co., Ltd. (LLP) 11/Floor,PWC Center, Building 2#, Corporate Avenue, No.202 Hubin Rd., Luwan District, Offices add. for CPA Shanghai, P.R.C Signing Accountants Chen Yuntao, Tang Pianpian Sponsor engaged by the Company for performing continuous supervision duties in reporting period □ Applicable √ Not applicable Financial consultant engaged by the Company for performing continuous supervision duties in reporting period □ Applicable √ Not applicable 7 China National Accord Medicines Corporation Ltd. Annual Report 2013(Full-text) Section III. Accounting data and summary of financial indexes I. Main accounting data and financial indexes Whether it has retroactive adjustment or re-statement on previous accounting data for accounting policy changed and accounting error correction or not □Yes √ No Changes over last year 2013 2012 2011 (%) Operating income (RMB) 21,199,466,399.21 18,011,759,178.26 17.7% 15,150,128,554.59 Net profit attributable to shareholders of the listed 520,488,198.80 475,792,491.12 9.39% 328,323,616.75 company(RMB) Net profit attributable to shareholders of the listed company 506,078,794.23 448,238,374.59 12.9% 311,849,021.90 after deducting non-recurring gains and losses(RMB) Net cash flow arising from 465,028,099.83 323,955,332.76 43.55% 230,104,293.35 operating activities(RMB) Basic earnings per share 1.81 1.65 9.7% 1.14 (RMB/Share) Diluted earnings per share 1.81 1.65 9.7% 1.14 (RMB/Share) Weighted average ROE (%) 26% 30.51% -4.51% 27.47% Changes over end of End of 2013 End of 2012 End of 2011 last year (%) Total assets (RMB) 11,057,896,941.31 9,295,839,939.64 18.96% 7,679,312,771.78 Net assets attributable to shareholder of listed 2,244,757,658.03 1,775,943,028.96 26.4% 1,350,093,276.86 company(RMB) II. Explanation on differences of data under accounting standards in and out of China No impact from differences of accounting standards in and out of China in aspect of net profit for year of 2013 and net assets at year end of 2013 III. Items and amounts of extraordinary profit (gains)/loss 8 China National Accord Medicines Corporation Ltd. Annual Report 2013(Full-text) In RMB Item 2013 2012 2011 Note RMB 3.14 million obtained from