Stock Code 600511 Stock Abbreviation Sinopharm Corporation Code 03130216 Announcement Date 2006-8-2 Legal Chinese Name Sinopharm Pharmaceutical Group Pharmaceutical Company Limited Legal English Name CHINA NATIONAL MEDICINES CO.,LTD Registered Capital 13,300 (RMB) Registered Office Address No. 12, A, Yongwai Sanyuan Xixiang, Chongwen District, Beijing Legal Representative Fu Mingzhong Board of Directors Secretary Lv Zhiyuan Contact Address No. 12, A, Yongwai Sanyuan Xixiang, Chongwen District, Beijing Office Address No.A12, Yongwai Sanyuan West Lane, Chongwen District, Beijing Legal Representative Fu Mingzhong Secretary of the Board of Directors Lv Zhiyuan Contact Address No.A12, Yongwai Sanyuan West Lane, Chongwen District, Beijing Office Address No.A12, Yongwai Sanyuan West Lane, Chongwen District, Beijing Zip Code 100077 Establishment and Historical Evolution of the Company's history and restructuring and reorganization of the company: Sinopharm Pharmaceuticals Group Limited is a company authorized by the People's Republic of China and the State Economy and Trade Commission (SETC). Ltd. is a joint-stock company approved by the State Economic and Trade Commission of the People's Republic of China and State Economic and Trade Commission (1999〗945), with China National Pharmaceutical Group Corporation (CNPC) as the main sponsor and UNPharm Shanghai Medical Devices Company Limited, Tianjin Qiyu Medical Devices Limited Liability Company, Guangzhou Nanfang Medical Devices Company, and Beijing Renkang Medical Devices Department*** as co-initiators. China Pharmaceutical Group Corporation is based on the approval of the State Drug Administration, China Pharmaceutical (Group) Company as the core enterprise, accepted the China Pharmaceutical Industry Corporation, China Medical Device Industry Corporation, China Pharmaceutical Foreign Trade Corporation, the overall transfer, merger and formation of the Central Enterprise Work Committee directly managed by a large state-owned enterprises, in November 1998 was renamed China Pharmaceutical Group Corporation. Formerly known as China National Pharmaceutical Company, China National Pharmaceutical Group Corporation was established in August 1950 as China's largest pharmaceutical commercial enterprise, and was the administrative unit in charge of the national pharmaceutical business, undertaking the work of first aid supply for major disasters, epidemics and accidents in the country. When the Company was established, according to the scope of assets belonging to the former China National Pharmaceutical (Group) Company before November 1998, and in accordance with the requirements of relevant national laws and regulations, China National Pharmaceutical Group Corporation, as the main sponsor, transferred all the operating assets related to the operation of pharmaceutical products from the head office of the former China National Pharmaceutical (Group) Company, as well as all the operating assets of the subordinate National Pharmacy, and all the operating assets (non-operating assets) related to the production and sale of pharmaceutical products from the subordinate Huainan Sixth Pharmaceutical Factory. All operating assets of the subordinate Huainan Sixth Pharmaceutical Factory related to the production and sale of pharmaceuticals (non-operating assets are still retained in the factory) were invested into the joint stock company. The 14 subsidiaries of the former China National Pharmaceutical (Group) Corporation, including China National Pharmaceutical (Group) Shanghai Company, China National Pharmaceutical (Group) Shanghai Chemical Testing Company, China National Pharmaceutical (Group) Guangzhou Company, China National Pharmaceutical (Group) Tianjin Company, China National Pharmaceutical Beijing Purchasing and Supply Station, as well as their subsidiaries and non-pharmaceutical assets of the headquarters, were all divested. When the Company was restructured, the main sponsor did not put the office building and warehouse of China National Pharmaceutical Beijing Purchasing and Supply Station into the Company, mainly due to the following reasons: Firstly, before the restructuring, the Company's head office only leased and used one-third of the area of the office building, and the remaining two-thirds of the office building was used by China National Pharmaceutical Beijing Purchasing and Supply Station, and based on the principle of weighting of the right to use and the principle of minimizing the number of related transactions, the office building was not invested into the Company; and secondly, the high standard and safety requirements of the storage of pharmaceuticals are very high, and the safety requirements are very high. Secondly, the high standard and strong security requirements of drug warehousing, the cost of building a new drug warehouse is large and time-consuming, and the use of leasing is economical and reasonable, and is conducive to the development of the Company's main business by focusing on the existing capital conditions. The Company adopts the leasing method to solve the problem of the operation space of the Company's headquarters. At the time of the Company's restructuring, the main sponsor incorporated all of the operational assets of the Sixth Huainan Pharmaceutical Factory related to drug production into the joint stock company, including a portion of the office building. Due to the shortage of office space, the Company leased part of the floor of Huangshan Hotel belonging to Huainan Sixth Pharmaceutical Factory as office space. Since it was not easy to divide Huangshan Hotel into parts to handle the relevant property rights formalities, part of the property of Huangshan Hotel was not put into the Company. At the same time, the investment in land use rights is not conducive to improving the rate of return on assets. When the Company was restructured and established, Shenzhen Tongren Accounting Firm Limited Liability Company and Beijing Guoyou Dazheng Asset Appraisal Company Limited were commissioned to audit and appraise the assets invested by the shareholders. The total net assets invested in the Company by the promoters amounted to RMB122,235,000,000, which was converted into shares at a ratio of 65.45%, and the nature of the above shares was defined as state-owned legal person shares. According to the Capital Verification Report No. 113 of Beijing Kyoto Accounting Firm Limited Liability Company (Beijing Kyoto Verification No. 1999), as of December 2, 1999, the capital contributions of the shareholders had been fully paid in. On October 12, 1999, the Company held the Founding General Meeting, which agreed to establish Sinopharm Pharmaceutical Group Pharmaceuticals Co. On December 21, 1999, the Company obtained an industrial and commercial business license. Main business: Organized pharmaceutical production; sales of chemical raw materials, western pharmaceutical preparations, biochemical drugs, biological products, and proprietary Chinese medicines; self-supporting and acting as an agent for import and export of all kinds of commodities and technologies; processing of incoming raw materials and "three to one subsidy" business; countertrade and re-export trade; sales of health food; and part-time business with the above industries (no data) Employees Total 1362Number of managers 393Number of technicians 103Authorized representative of the Board of Directors Zhao XingweiContact person Lv Zhiyuan, Zhao XingweiCompany information disclosure newspaper Shanghai Securities News, Securities TimesCompany establishment date 1999-12-21Business Registration No. 1000001003268(2-1)Whether a listed company YesWhether to issue bonds No