The 2008 First Quarterly Report of Livzon Pharmaceutical Group Inc.

Transcription

1 The 2008 First Quarterly Report of Livzon Pharmaceutical Group Inc. 1 Important notice 1.1 The Board of Directors (BOD), Board of Supervisors (BOS), directors, supervisors, and senior executives hereby guarantee that the data in the present report contain no false representation, misleading statements and serious omissions, and shall be severally and jointly liable for the authenticity, accuracy and completeness of the content. 1.2 No directors, supervisors and senior executives have any guaranty or objection to the authenticity, accuracy and completeness of the content. 1.3 All directors attended the shareholders meeting. 1.4 The first quarterly report has not been audited by any accountants firms. 1.5 Mr. Zhu Baoguo, principal of the Company, Mr. An Ning, the principal in charge of accounting, and Ms. Si Yanxia, the principal of the Accounting Department hereby declare: We guarantee the authenticity and completeness of the Financial Report in this quarterly report. 2 Brief introduction of the Company 2.1 Financial highlights Unit :( RMB) Yuan End of this report period End of previous Year Increase or decrease (%) Total assets 3,000,772, ,945,723, % Owners equity (or Shareholders equity) 1,953,863, ,942,664, % Net asset per share % End of this report period Same period in previous year Increase or decrease (%) Net profit 51,598, ,166, % Net cash flows from operating Net cash flows per share from operating 33,946, ,853, % % Basic profit per share % Diluted profit per share % Yield rate of net asset 2.64% 8.54% Decrease by 5.90% Yield rate of net assets after deduction of non-recurring profit and loss The items of non-recurring profit and loss 2.57% 8.52% Decrease by 5.95% 1

2 Unit :( RMB) Yuan Items of non-recurring profit and loss Amount from the year beginning to end of report period 1. Profit and loss in disposal of non-circulation assets 2. Governmental allowance accrued to the current profit and loss 3. Net amount of other non-operating income and expense 147, ,782, , Subtotal 1,882, Minus: Effect of income taxes 338, Non-recurring profit and loss attributable to the minority of shareholders 159, Total of non-recurring profit and loss 1,384, Table about total quantity of all shareholders and shareholding particulars of top ten shareholders without trading restriction at the end of report period Unit: share Total quantity of shareholders The shareholder quantity amounted to 50,776 (including 14,149 B-share holders) Shares held by top ten shareholders without trading restriction No. Shareholder name Quantity of shares without trading restriction Share type 1 Tiancheng Industry Co., Ltd 44,537,733 Domestically-listed shares for overseas investors 2 Joincare Pharmaceutical Group Industry Co., Ltd 42,963,439 RMB Common share 3 First Shanghai Securities Co., Ltd 10,107,760 Domestically-listed shares for overseas investors 4 Bank of Communications - Penghua China 50 Open-end Security Investment Fund 6,612,661 RMB Common share 5 Shenzhen Haibin Pharmaceutical Co., Ltd 5,892,943 RMB Common share 6 Shenzhen Shengjibaili Advertisement Co., Ltd 5,684,000 RMB Common share 7 National Social Security Fund 104 Portfolio 5,206,753 RMB Common share 8 Agricultural Bank of China-LOF 4,760,000 RMB Common share 9 Bank of Communications - Hua an Strategic Optimization Stock-type security investment fund 2,922,092 RMB Common share 10 Industrial and Commercial Bank of China-(LOF) 2,300,000 RMB Common share 2

3 3 Major events 3.1 Great changes and reasons of main financial statement items and financial indexes of the Company Applicable Inapplicable I. Items in the Balance Sheet: 1. the currency capital increases by RMB million Yuan over the same period of previous year, up 34.66%. The main reasons are as follows: 1) during the report period, the Company has disposed of the saleable financial assets, and 2) the loans increase. 2. The saleable financial assets decrease by RMB million Yuan over the same period of previous year, down 77.29%. The main reason is as follows: during the report period, the Company has sold the equities of Huadong Medicine Co., Ltd and Nanjing Medical Company Limited through the security transaction system. 3. the salary and compensation payable decrease by RMB million Yuan over the same period of previous year. The main reason is as follows: during the report period, the Company distributes the year-end bonus that was withdrawn in advance in the previous year. 4. the deferred income tax liabilities decrease by RMB million Yuan over the same period of previous year, down 53.61%. The main reasons are as follows: 1) during the report period, the fair values of transactional financial assets have changed; and 2) the Company has disposed of the saleable financial assets. II. Items in the Profit Statement: 1. the operating income increases by RMB million Yuan over the same period of previous year, up 34.19%. The main reasons are as follows: 1) the marketing system reform of the Company has contributed to the continuous expansion of the sales scale and 2) the sales volume of medical products has steadily increased. 2. The sales expenses increase by RMB million Yuan over the same period of previous year, up 34.50%. The main reason is as follows: the Company has expanded the sales scale and the promotion expenses and rewards of sales representatives have increased. 3. the benefits from the changes of fair values decrease by RMB million Yuan over the same period of previous year, down %. The main reason is as follows: during the report period, the Company distributes the year-end bonus that was withdrawn in advance in the previous year. 4. the deferred income tax liabilities decrease by RMB million Yuan over the same period of previous year, down 53.61%. The main reason is as follows: during the report period, the fair prices of transactional financial assets have changed. 4. the net profit attributable to listed companies decreased by RMB million Yuan over the same period of previous year. The main reason is as follows: during the report period, the net profit contributed by the main businesses increases by 6.27% over the same period of previous year, but the benefits from fair value changes of security investments decrease by RMB million Yuan. III. Items in the Cash Flow Statement: 1. the net cash flow from operating decreases by RMB million Yuan over the same period of previous year, down 49.22%. The main reasons are as follows: 1) the received accounts of the Company increases by RMB million Yuan, 2) the payment for purchasing the commodities increases by RMB million Yuan; 3) the cash paid to or on behalf of the staffs increase by RMB 7.05 million Yuan; 4) the paid tax increases by RMB million Yuan; 5) other payments increase by RMB million Yuan. 2. The cash flow from the investment increases by RMB million Yuan over the same period of previous year, up %. The main reasons are as follows:1) during the report period, the received amount of the Company from the stock investment decreases by RMB million Yuan; 2) the expenses paid to acquire and construct the fixed assets decreases by RMB million Yuan; 3) the cash paid for investment decreases by RMB million Yuan. 3. The net cash flow from raising increases by RMB million Yuan over the same period of previous year, up %. The main reason is as follows: during the report period, the bank loans increase by RMB million Yuan over the same period of previous year, but the cash paid for the liabilities decreases by RMB million Yuan. 3

4 3.2 Analysis and particulars of major events, their effects and resolutions Applicable Inapplicable 3.3 Performance of commitment by the Company, shareholders and actual controllers Applicable Inapplicable 3.4 Warning and relevant reasons for the forecast that the accumulative net profit from the beginning of 2008 to the end of next report period may suffer from any loss or have any great changes over the same period of previous year Applicable Inapplicable 3.5 Particulars about Other Major events Particulars about Security investment Applicable Inapplicable Unit :( RMB) Yuan Percentage No. Security Type Security Code Security abbreviation Initial investment amount (Yuan) Holding quantity Book Values at the end of period of total investment in this security at the end of Profit and loss during the report period period (%) 1 Stock Chenming Paper 228,813, ,386, ,606, % -22,628, Stock 0152 Shenzhen International 13,462, ,000,000 16,667, % -4,246, Stock 2007 Phoenix Island 21,502, ,450,000 14,826, % -5,201, Stock Stock Stock China Shenhua Energy Company Limited China Hongkong Petrol Pingmei Tian An 4,632, ,000 11,724, % -5,822, ,911, ,500,000 11,269, % -4,568, ,770, ,000 6,103, % -667, Stock 0883 China National 2,955, ,000 5,808, % -844,

5 Offshore Oil Corporation 8 Stock Stock Stock Industrial and Commercial Bank of China China BlueChemical Ltd Shanxi Taigang Stainless Steel Co., Ltd 2,310, ,000 4,037, % -136, ,113, ,000,000 3,715, % -845, ,447, ,000 3,350, % -1,097, Other securities investment at the end of this period Profit and loss of sold security investment during the report period 22,740, ,684, % -7,569, , Total 327,661, ,793, % -53,347, Shareholding particulars of other listed companies Applicable Inapplicable Unit :( RMB) Yuan Security Security code Initial Percentage Book value at abbreviation investment of total the end of Profit and loss Change of ownership capital shares of this period during the interests during the report this report period period Company Bank of Communication s ,640, % 11,989, ,756, Huadong Medicine Co., Ltd ,200, % 1,310, ,445, ,489, Nanjing Medical Company Limited , ,096, ,735, Total 2,970, ,300, ,541, ,981,

6 3.5.3 Routine associated transactions Applicable Inapplicable Purchase of commodities Unit: (RMB) Yuan Associated party January to March 2008 January to March 2007 Changzhou Kangli Pharmaceutical Co., Ltd under Livzon Group 1,500, ,435, Guangdong Blue Treasure Pharmaceutical Co. Ltd 5, Shenzhen Haibin Pharmaceutical Co., Ltd 186, Jiaozuo Joincare Pharmaceutical Group Industry Co., Ltd 55,275, Total 56,966, ,435, Sales of commodities Unit: (RMB) Yuan Associated party January to March 2008 January to March 2007 Zhuhai Joincare Pharmaceutical Group Industry Co., Ltd Guangdong Blue Treasure Pharmaceutical Co. Ltd 30, Total 31, Provision of labors Unit: (RMB) Yuan Associated party January to March 2008 January to March 2007 Guangdong Blue Treasure Pharmaceutical Co. Ltd 2,456, ,263, Rental Payment Unit: (RMB) Yuan Associated party January to March 2008 January to March 2007 Guangdong Blue Treasure Pharmaceutical Co. Ltd 53,

7 Leasing income The 2008 First Quarterly Report of Livzon Pharmaceutical Group Inc. Unit: (RMB) Yuan Associated party January to March 2008 January to March 2007 Zhuhai Joincare Pharmaceutical Group Industry Co., Ltd 25, , The above-mentioned associated transaction came from the normal supply demand of the company. It is predicated that this associated transaction will continue during the production operations from now on. The associated transaction follows the principle of equity, justice and no damage to the company s benefits. Because the associated transaction amount accounts for the small percentage of total sales revenue or purchasing amount, it makes no effect on financial status and operation result. And it also makes no effect on the independence of the company. The company also will not depend on associated person due to this associated transaction List of Activities that the Company receives the investigation, communication and interview, etc during the report period. Reception date Reception place Reception mode Objects Discussion topics and provided materials February 18, Office building of the Local investigation 2008 Company Penghua Management Ltd Fund Co., Operation status of the Company February 28, Office building of the Local investigation 2008 Company Essence Securities Operation status of the Company Co. Ltd 4 Appendix 4.1 Balance sheet Prepared by: Livzon Pharmaceutical Group Inc. March 31, 2008 Unit :( RMB) Yuan Item Balance at the end of this period Balance at the beginning of this period Consolidation Parent company Consolidation Parent company Current assets: Currency capital 380,624, ,061, ,663, ,055, Sales financial assets 402,793, ,034, ,101, ,657, Note receivable 121,830, ,117, ,126, ,195, Accounts receivable 410,003, ,015, ,992, ,882, Advance money 63,196, ,024, ,145, ,492, Dividend receivable 717, , Interests receivable 7

8 Other receivables 18,502, ,245, ,634, ,435, Purchased and resold financial assets Inventory 304,113, ,309, ,407, ,020, Non-current assets due within one year Other current assets Total of current assets 1,701,064, ,555,525, ,586,070, ,398,455, Non-current assets: Loans & cash advances Saleable financial assets 13,300, ,300, ,571, ,571, Investment held to the maturity date Long-term accounts receivable Long-term equity investment 40,318, ,391, ,458, ,666, Real estate for Investment Fixed assets 935,448, ,750, ,219, ,351, Engineering under construction 44,412, , ,843, , Engineering goods 16,154, ,818, Liquidation of fixed assets Production biology assets Oil and gas assets Intangible assets 153,468, ,585, ,567, ,259, Development expenses 1,872, ,872, ,534, ,534, Goodwill 67,179, ,179, Long-term deferred and prepaid expenses Assets with deferred income taxes 6,923, ,689, ,489, ,316, ,607, ,797, Other non-current assets 139, , Subtotal of non-current assets 1,299,707, ,271, ,359,652, ,236, Total of assets 3,000,772, ,481,796, ,945,723, ,373,692, Current liability: Short-term loan 441,680, ,485, ,012, ,129, Tradable financial liability Notes payable 7,916, ,581,

9 Accounts payable 168,949, ,693, ,977, ,272, Deposit receivable 8,774, ,393, ,049, ,622, Selling price of the repurchased financial assets Payable formality expenses and commission Payroll payable 20,722, ,998, ,842, ,707, Tax payable 82,022, ,885, ,618, ,800, Dividend payable 11,262, , ,056, , Interests payable Other accounts payable 119,858, ,653, ,914, ,959, Non-current liabilities due within one year 40,600, ,000, ,400, ,000, Other current liabilities Total of current liabilities 901,787, ,655, ,453, ,036, Non-current liabilities Long-term loan 70,700, ,000, ,700, ,000, Securities payable Long-term accounts payable Special accounts payable Deferred profit 15,116, ,026, ,256, ,052, Anticipation liability Liabilities with the deferred income taxes 15,024, ,691, ,388, ,719, Other non-current liabilities Subtotal of non-current liabilities 100,841, ,717, ,345, ,771, Total of liabilities 1,002,629, ,372, ,798, ,808, Owners' equity (or shareholders' equity): Paid-up capital(or stock) 306,035, ,035, ,035, ,035, Capital reserve 442,586, ,411, ,651, ,476, Minus: inventory share Surplus reserve 348,091, ,455, ,091, ,455, General risk reserve Profit in the current year 51,598, ,605, Undistributed profit 817,303, ,916, ,303, ,916,

10 Conversion margin in foreign currency statement Subtotal of equities attributable to the owners of parent company Equities of the minority of shareholders -11,750, ,417, ,953,863, ,602,424, ,942,664, ,511,883, ,279, ,260, Subtotal of owners equities 1,998,143, ,602,424, ,990,925, ,511,883, Total of liabilities and owners equities 3,000,772, ,481,796, ,945,723, ,373,692, Profit statement Prepared by: Livzon Pharmaceutical Group Inc. January to March 2008 Unit :( RMB) Yuan Item Current period Same period of previous year Consolidation Parent company Consolidation Parent company I. Total operating income 524,489, ,715, ,844, ,637, Including: operating income 524,489, ,715, ,844, ,637, Interest income II. Total operating cost 432,835, ,982, ,287, ,857, Including: operating cost 307,534, ,570, ,020, ,122, Operating taxes and additional charge 828, , , Sales expense 76,912, ,250, ,185, ,849, Management expense 43,199, ,678, ,504, ,056, Financial expenses -612, , ,964, ,364, Loss for asset depreciation 4,973, ,856, ,867, , Plus: profits from the fair value changes (The loss is listed beginning with - ) Investment gains (The loss is listed beginning with - ) Including: the investment gains from the associated enterprises and joint ventures -53,833, ,842, ,092, ,686, ,059, ,254, ,405, ,865, , , , , Exchange gains (The loss is listed beginning with - ) III. Operating profit (The loss is listed beginning with - ) 70,879, ,145, ,054, ,331,

11 Plus: non-operating income 2,120, , , , Minus: non-operating expense 215, , , , Including: loss in disposal of non-current assets IV. Total profit (The loss is listed beginning with - ) 32, , , ,784, ,158, ,416, ,305, Minus: income tax expense 16,943, ,552, ,805, ,569, V. Net profit (the net loss is listed beginning with - ) Net profit attributable to the owners of parent company Profit and loss of the minority of shareholders 55,841, ,605, ,610, ,736, ,598, ,605, ,166, ,736, ,243, ,444, VI. Profit per share: (I) Basic profit per share (II) Diluted profit per share Cash flow statement Prepared by: Livzon Pharmaceutical Group Inc. January to March 2008 Unit :( RMB) Yuan Item Current period Same period of previous year Consolidation Parent company Consolidation Parent company I. Cash flows from operating Cash received from sales of goods or rendering of services 386,814, ,425, ,733, ,942, Tax refunding 425, ,732, Cash received related to other operating Subtotal of cash inflow from the operating 7,018, ,940, ,503, ,863, ,258, ,365, ,969, ,805, Cash paid for goods and services 134,365, ,171, ,509, ,120, Cash paid to and on behalf of employees 68,720, ,917, ,666, ,307, Tax payments 67,217, ,098, ,457, ,024, Other cashes paid to operating 90,008, ,836, ,482, ,386, Cash outflow subtotal of operating 360,312, ,023, ,116, ,839, Net cash flow from operating 33,946, ,342, ,853, ,966,

12 II. Cash flow from investment : Cash received from disposal of investments 39,223, ,553, ,915, ,513, Cash received from investment return 701, ,701, , , Net cash received from disposal of fixed assets, intangible assets and other long-term assets 332, , , , Net cash amount received from the disposal of subcompanies and other business units Cash received related to other investment Subtotal of cash inflow from the investment Cash paid to acquire and construct fixed assets, intangible assets and other long-term assets 40,257, ,349, ,657, ,041, ,010, ,709, ,182, , Cash paid to acquire investments 16,069, ,658, ,690, ,231, Net increase amount in pledged loans Net cash amount paid to acquire the subcompanies and other operating units Cash paid related to other investment Sub-total of cash outflow from the investment Net amount of cash flow received from the investment 36,079, ,368, ,873, ,097, ,177, ,980, , ,944, III. Cash flow from financing : Cash received by investors Including: cash received from the minority of shareholders by the subcompanies Cash received from loans 389,228, ,062, ,223, ,223, Cash received from the issuing of bonds Cash received related to other financing Subtotal of cash inflow from the financing 389,228, ,062, ,223, ,223, Cash paid for liabilities 319,737, ,022, ,995, ,851, Cash paid for distribution of dividends, profits and repayment of interests 8,523, ,057, ,983, ,612, Including: the dividends and profits paid to the minority of shareholders by the subcompanies 12

13 Cash payments related to other financing Sub-total of cash outflow from the financing 861, ,261, ,080, ,979, ,324, Net cash flow from financing 60,966, ,017, ,756, ,101, IV. Effect of foreign exchange fluctuation on cash and cash equivalents V. Net increase amount of cash and cash equivalents Plus: Balance of cash and cash equivalents at the beginning of the period VI Balance of cash and cash equivalents at the end of the period -1,129, , , , ,961, ,005, ,867, ,167, ,663, ,055, ,852, ,564, ,624, ,061, ,719, ,396, Auditing of the report The auditing opinion: the report has not been audited. Livzon Pharmaceutical Group Inc. Chairman: Zhu Baoguo April 21,