Sinopharm Group Co. Ltd. — Board/Management Information 2011

Aug 5, 2011

THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.

If you are in any doubt about any of the contents of this circular, you should obtain independent professional advice.

If you have sold or transferred all your H shares in Sinopharm Group Co. Ltd. , you should at once hand this circular together with the form of proxy and reply slip, both sent to you earlier, to the purchaser or transferee or to the bank, stockbroker or other agent through whom the sale or transfer was effected for transmission to the purchaser or transferee.

==> picture [57 x 71] intentionally omitted <==

SINOPHARM GROUP CO. LTD. 國藥控股股份有限公司 (A joint stock limited company incorporated in the People’s Republic of China with limited liability and carrying on business in Hong Kong as 國控股份有限公司)

(Stock code: 01099)

RE-ELECTION OF DIRECTORS AND SUPERVISOR

A notice convening the EGM to be held at VIP Room 1, 3rd Floor, Four Seasons Hotel Shanghai, 500 Weihai Road, Shanghai, the PRC at 9:30 a.m. on Wednesday, 21 September 2011 is set out on pages 12 to 15 of this circular.

Whether or not you are able to attend the EGM in person, please complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as practicable and in any event not less than 24 hours before the time appointed for the holding of the EGM or any adjournment thereof, and deposit it with Computershare Hong Kong Investor Services Limited, the H shares registrar and transfer offi ce of the Company in Hong Kong, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong. Completion and return of the form of proxy will not preclude you from attending and voting at the EGM or any adjournment thereof should you so desire.

5 August 2011

* The Company is registered as a non-Hong Kong company under Part XI of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) under its Chinese name and the English name “ Sinopharm Group Co. Ltd.”.

CONTENTS

		Page
DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .		1
LETTER	FROM THE BOARD. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
I.	INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	2
II.	RE-ELECTION OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	3
III.	RE-ELECTION OF SUPERVISOR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	10
IV.	EGM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
V.	RECOMMENDATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	11
NOTICE	OF EGM. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .	12

— i —

DEFINITIONS

In this circular, unless the context otherwise requires, the following terms shall have the following meanings:

“Articles of Association”	articles of association of the Company
“Board”	the board of directors of the Company
“Company”	Sinopharm Group Co. Ltd. (國藥控股股份有限公司), a joint
	stock limited company incorporated under the laws of the PRC
	and whose H shares are listed and traded on the Hong Kong Stock
	Exchange
“Director(s)”	the director(s) of the Company
“EGM”	the extraordinary general meeting of the Company to be held on 21
	September 2011 to consider the proposed re-election of Directors
“Hong Kong”	Hong Kong Special Administrative Region of the PRC
“Hong Kong Listing Rules”	the Rules Governing the Listing of Securities on the Hong Kong
	Stock Exchange
“Hong Kong Stock Exchange”	The Stock Exchange of Hong Kong Limited
“PRC”	the People’s Republic of China, excluding Hong Kong, the Macau
	Special Administrative Region of the PRC and Taiwan, for the
	purpose of this circular
“RMB”	Renminbi, the lawful currency of the PRC
“SFO”	the Securities and Futures Ordinance (Chapter 571 of the Laws of
	Hong Kong) as amended and supplemented from time to time
“Shareholder(s)”	the shareholder(s) of the Company
“Supervisor(s)”	the supervisor(s) of the Company

— 1 —

LETTER FROM THE BOARD

==> picture [57 x 71] intentionally omitted <==

*

SINOPHARM GROUP CO. LTD. 國藥控股股份有限公司

(A joint stock limited company incorporated in the People’s Republic of China with limited liability and carrying on business in Hong Kong as 國控股份有限公司)

(Stock code: 01099)

Executive Directors: Mr. Wei Yulin

Non-executive Directors:

Mr. She Lulin Mr. Wang Qunbin Mr. Chen Wenhao Mr. Zhou Bin Mr. Chen Qiyu Mr. Deng Jindong Mr. Fan Banghan Mr. Liu Hailiang

Independent non-executive Directors:

Legal address in the PRC: 6th Floor No. 221 Fuzhou Road, Shanghai The PRC

Principal place of business in the PRC:

6th Floor No. 221 Fuzhou Road, Shanghai The PRC

Principal place of business in Hong Kong: Flat/Room A, 17th Floor Victor Court, 18 Wang On Road North Point, Hong Kong

Mr. Wang Fanghua

Mr. Tao Wuping Mr. Xie Rong Mr. Zhou Bajun

5 August 2011

To the Shareholders

Dear Sir or Madam,

RE-ELECTION OF DIRECTORS AND SUPERVISOR

I. INTRODUCTION

The purpose of this circular is to provide you with all the information regarding the proposed reelection of Directors and Supervisor to enable you to make an informed decision on whether to vote for or against the proposed resolutions at the EGM.

• The Company is registered as a non-Hong Kong company under Part XI of the Companies Ordinance (Chapter 32 of the Laws of Hong Kong) under its Chinese name and the English name “ Sinopharm Group Co. Ltd.”.

— 2 —

LETTER FROM THE BOARD

II. RE-ELECTION OF DIRECTORS

The Board currently comprises thirteen Directors, being Mr. Wei Yulin, Mr. She Lulin, Mr. Wang Qunbin, Mr. Chen Wenhao, Mr. Zhou Bin, Mr. Chen Qiyu, Mr. Deng Jindong, Mr. Fan Banghan, Mr. Liu Hailiang, Mr. Wang Fanghua, Mr. Tao Wuping, Mr. Xie Rong and Mr. Zhou Bajun.

According to the Articles of Association, other than Mr. Chen Qiyu whose term of offi ce as nonexecutive Director of the current term will expire on 30 May 2013, Mr. Chen Wenhao and Mr. Zhou Bin whose terms of offi ce as non-executive Directors of the current term will both expire on 6 January 2014 and Mr. Zhou Bajun whose term of offi ce as independent non-executive Director of the current term will expire on 18 August 2012, the other retiring Directors will be re-elected upon the approval by the Shareholders at the EGM.

The Company has nominated Mr. Wei Yulin, as candidate of executive Director, Mr. She Lulin, Mr. Wang Qunbin, Mr. Deng Jindong, Mr. Fan Banghan and Mr. Liu Hailiang, as candidates of non executive Directors and Mr. Wang Fanghua, Mr. Tao Wuping and Mr. Xie Rong, as candidates of independent non-executive Directors.

At the EGM, resolutions will be proposed to re-elect the Directors. The term of offi ce of the re-elected Directors will be for a period of three years which is proposed to take effect from the date of approval by the Shareholders in the EGM to 20 September 2014 (the “ Next Term ”).

Upon approval for the re-election of Directors by the Shareholders at the EGM, the new session of the Board will comprise Mr. Wei Yulin, Mr. She Lulin, Mr. Wang Qunbin, Mr. Chen Wenhao, Mr. Zhou Bin, Mr. Chen Qiyu, Mr. Deng Jindong, Mr. Fan Banghan, Mr. Liu Hailiang, Mr. Wang Fanghua, Mr. Tao Wuping, Mr. Xie Rong and Mr. Zhou Bajun.

Biographical Details

Mr. Wei Yulin , aged 53, was nominated as an executive Director with effect from the date of approval by the Shareholders in the EGM and until the expiration of the Next Term.

Mr. Wei has around 33 years of working experience, over 16 years of which is management experience in the pharmaceutical and healthcare products industry.

Mr. Wei served as the deputy general manager of the Company from January 2003 to December 2009, Mr. Wei also served as the general manager of Sinopharm Holding Tianjin Co., Ltd (國藥控股天 津有限公司) from January 2003 to December 2003 and from October 2004 to April 2006, and its chairman from January 2004 to October 2004. Mr. Wei served as the chairman of each of Sinopharm Holding Shanxi Co., Ltd. (國藥控股山西有限公司), Sinopharm Holding Shenyang Co., Ltd. (國藥 控股瀋陽有限公司), China National Pharmaceutical Group Southwest Medicine Co., Ltd. (國藥集 團西南醫藥有限公司), Sinopharm Holding Hunan Co., Ltd. (國藥控股湖南有限公司), Sinopharm Holding Zhejiang Co., Ltd. (國藥控股浙江有限公司), and Sinopharm Holding Henan Co., Ltd. (國 藥控股河南有限公司) from January 2007 to January 2009, from May 2006 to January 2009, from March 2007 to January 2009, from September 2007 to January 2009, from October 2007 to January 2009 and from April 2008 to January 2009, respectively. Mr. Wei served as the general manager of the department of pharmaceutical distribution business of the Company from September 2008 to October

— 3 —

LETTER FROM THE BOARD

1. In addition, Mr. Wei served as a director of China National Pharmaceutical Group Xinjiang Medicines Co., Ltd. (國藥集團新疆藥業有限公司) from March 2009 to August 2009. Mr. Wei has been appointed as the chairman of Sinopharm Holding Hongkong Co., Limited (國藥控股股份香港 有限公司), since January 2011 and the chairman of Beijing Tianxingpuxin Bio-Med Co., Ltd. (北京 天星普信生物醫藥有限公司) since April 2010. He is currently the chairman of Sinopharm Holding Beijing Huahong Co., Ltd. (國藥控股北京華鴻有限公司) and Yujia Medical Service Co., Ltd. (禦 佳醫療服務有限公司). Mr. Wei has been serving as the executive Director and the president of the Company since 22 December 2008 and 20 December 2009, respectively.

Mr. Wei graduated from the Cheung Kong Graduate School of Business (長江商學院) with a degree of Executive Master of Business Administration in September 2007. Mr. Wei is a licenced pharmacist, and was qualifi ed as a senior economist in December 2009.

Save as disclosed herein, Mr. Wei has not held any directorship in other listed companies in the past three years nor has any relationship with any Directors, senior management, substantial shareholders or controlling shareholder of the Company.

As at the date of this circular, Mr. Wei has no interest in the shares of the Company within the meaning of Part XV of the SFO. Upon due appointment as an executive Director, Mr. Wei will enter into a service contract with the Company for a term of three years. Mr. Wei will not receive any remuneration from the Company in his capacity as the executive Director.

Save as disclosed above, the Board is not aware of any other matters in relation to the appointment of Mr. Wei that need to be brought to the attention of the Shareholders nor that is required to be disclosed pursuant to Rule 13.51(2)(h) to (v) of the Hong Kong Listing Rules.

Mr. She Lulin , aged 54, was nominated as a non-executive Director with effect from the date of approval by the Shareholders in the EGM and until the expiration of the Next Term.

Mr. She has around 27 years of working experience, over 24 years of which is management experience in the pharmaceutical and healthcare products industry.

Mr. She served as the deputy head of the general manager’s offi ce, assistant to the general manager, deputy general manager and general manager of China National Pharmaceutical Group Guangzhou Corporation (中國醫藥集團廣州公司) (“ CNPGC ”) from January 1985 to August 1996. Mr. She also served as the general manager of China National Pharmaceutical Industry Corporation Limited (中國醫藥工業有限公司) and the vice chairman of CNPGC from August 1996 to December 1998 and from December 1998 to October 2004, respectively. Mr. She has been a director, general manager and the legal representative of CNPGC since December 1998, December 1998 and September 2007, respectively. Mr. She served as the chairman of China National Medicines Co., Ltd. (國藥集團 藥業股份有限公司, a company listed on the Shanghai Stock Exchange) from December 1999 to January 2001. Mr. She has been the chairman and the legal representative of Sinopharm Industrial Investment Co., Ltd. (國藥產業投資有限公司) since July 2008 and the vice chairman of CNPGC since November 2009. Mr. She has been serving as the non-executive director of the Company since 8 January 2003, and he also served as the vice chairman of the Company previously and has served as the Chairman of the Company since 30 August 2007.

— 4 —

LETTER FROM THE BOARD

Mr. She graduated from Nanjing Pharmaceutical Institution (南京藥學院, currently known as China Pharmaceutical University), with a bachelor’s degree in science, majoring in Pharmacy in July 1982 and a degree of Executive Master of Business Administration from Tsinghua University (清華大學) in July 2005.

Save as disclosed herein, Mr. She has not held any directorship in other listed companies in the past three years nor has any relationship with any Directors, senior management, substantial shareholders or controlling shareholder of the Company.

As at the date of this circular, Mr. She has no interest in the shares of the Company within the meaning of Part XV of the SFO. Upon due appointment as a non-executive Director, Mr. She will enter into a service contract with the Company for a period of three years. Mr. She will not receive any remuneration from the Company in his capacity as the non-executive Director.

Save as disclosed above, the Board is not aware of any other matters in relation to the appointment of Mr. She that need to be brought to the attention of the Shareholders nor that is required to be disclosed pursuant to Rule 13.51(2)(h) to (v) of the Hong Kong Listing Rules.

Mr. Wang Qunbin , aged 41, was nominated as a non-executive Director with effect from the date of approval by the Shareholders in the EGM and until the expiration of the Next Term.

Mr. Wang has around 18 years of working experience, over 15 years of which is management experience in biological medicine.

Mr. Wang was previously a lecturer at the Genetic Research Institute of Fudan University (復旦 大學) from September 1991 to September 1993, and then the general manager of Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (上海復星醫藥（集團）股份有限公司, a company listed on the Shanghai Stock Exchange) from October 1993 to October 2007 and a director of Tianjin Pharmaceutical Holdings Ltd. (天津藥業集團有限公司) from March 2001 to February 2009. Mr. Wang has been the chairman of Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (上海復星醫藥（集 團）股份有限公司, a company listed on the Shanghai Stock Exchange) since October 2007, a director and the president of Shanghai Fosun High Technology (Group) Co., Ltd. (上海復星高科技（集團） 有限公司) since November 1994 and January 2009, respectively, as well as a director of Shanghai Friendship-Fortune Holding Co., Ltd. (上海友誼復星（控股）有限公司) and Sinopharm Industrial Investment Co., Ltd. (國藥產業投資有限公司) since September 2000 and July 2008, respectively. Mr. Wang has been a director of Shanghai Friendship Group Incorporated Co., Ltd. (上海友誼集團 股份有限公司) (a company listed on the Shanghai Stock Exchange) since September 2000 and Henan Lingrui Pharmaceutical Company Ltd. (河南羚銳製藥股份有限公司) (a company listed on the Shanghai Stock Exchange) since May 2003, and has also been an executive director and the president of Fosun International Limited (復星國際有限公司) (a company listed on the Hong Kong Stock Exchange) since August 2005 and January 2009, respectively. Mr. Wang has been serving as the nonexecutive Director since 8 January 2003.

Mr. Wang graduated from Fudan University with a bachelor’s degree in science majoring in genetics in July 1991. Mr. Wang is currently the vice chairman of China Pharmaceutical Industry Association, the chairman of the Shanghai Biopharmaceutics Industry Association and the chairman of the Huzhou Chambe of Commerce in Shanghai.

Save as disclosed herein, Mr. Wang has not held any directorship in other listed companies in the past three years nor has any relationship with any Directors, senior management, substantial shareholders or controlling shareholder of the Company.

— 5 —

LETTER FROM THE BOARD

As at the date of this circular, Mr. Wang has no interest in the shares of the Company within the meaning of Part XV of the SFO. Upon due appointment as a non-executive Director, Mr. Wang will enter into a service contract with the Company for a period of three years. Mr. Wang will not receive any remuneration from the Company in his capacity as the non-executive Director.

Save as disclosed above, the Board is not aware of any other matters in relation to the appointment of Mr. Wang that need to be brought to the attention of the Shareholders nor that is required to be disclosed pursuant to Rule 13.51(2)(h) to (v) of the Hong Kong Listing Rules.

Mr. Deng Jindong , aged 46, was nominated as a non-executive Director with effect from the date of approval by the Shareholders in the EGM and until the expiration of the Next Term.

Mr. Deng has over 23 years of working experience, over 18 years of which is fi nancial management experience.

Mr. Deng was previously the chief fi nancial offi cer of Economic Information Network Data Co., Ltd. (中經網數據有限公司), senior audit manager of Taikang Life Insurance Co., Ltd. (泰康人壽保險 股份有限公司) and the head of the accounting department of CNPGC from April 2000 to October 2001, from October 2001 to October 2002 and from October 2002 to October 2004, respectively. Mr. Deng has been the chief accountant of CNPGC since October 2004 and a director and the chief fi nancial offi cer of Sinopharm Industrial Investment Co., Ltd. since July 2008. Mr. Deng has also been a director of China National Pharmaceutical Group Xinjiang Medicines Co., Ltd. since March 2009. Mr. Deng has been serving as the non-executive director of the Company since 30 August 2007.

Mr. Deng graduated from Hangzhou Electronics Industry Institution (杭州電子工業學院, currently known as Hangzhou Dianzi University) with a bachelor’s degree in economics in July 1986, majoring in industrial accounting. He obtained a master’s degree in economics from Central Institute of Finance and Economics (中央財政金融學院, currently known as Central University of Finance & Economics) in January 1991. He is a non-practicing PRC certifi ed public accountant.

Save as disclosed herein, Mr. Deng has not held any directorship in other listed companies in the past three years nor has any relationship with any Directors, senior management, substantial shareholders or controlling shareholder of the Company.

As at the date of this circular, Mr. Deng has no interest in the shares of the Company within the meaning of Part XV of the SFO. Upon due appointment as a non-executive Director, Mr. Deng will enter into a service contract with the Company for a period of three years. Mr. Deng will not receive any remuneration from the Company in his capacity as the non-executive Director.

Save as disclosed above, the Board is not aware of any other matters in relation to the appointment of Mr. Deng that need to be brought to the attention of the Shareholders nor that is required to be disclosed pursuant to Rule 13.51(2)(h) to (v) of the Hong Kong Listing Rules.

Mr. Fan Banghan , aged 57, was nominated as a non-executive Director with effect from the date of approval by the Shareholders in the EGM and until the expiration of the Next Term.

Mr. Fan has around 30 years of working experience, over 24 years of which is management experience in the pharmaceutical and healthcare products industry.

— 6 —

LETTER FROM THE BOARD

Mr. Fan was a deputy general manager of Shanghai Pharmaceutical Co., Ltd. (上海市醫藥股份有 限公司) (a company listed on the Shanghai Stock Exchange) from January 1998 to March 2000 and a supervisor of China National Medicines Co., Ltd. (a company listed on the Shanghai Stock Exchange) from December 2005 to May 2009. Mr. Fan has been a deputy general manager of Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (上海復星醫藥（集團）股份有限公司, a company listed on the Shanghai Stock Exchange) since 2000 and a director of China National Medicines Co., Ltd. since May 2009. Mr. Fan has been a director and the general manager of Sinopharm Industrial Investment Co., Ltd. since July 2008. Mr. Fan has been serving as the non-executive Director since 8 January 2003.

Mr. Fan graduated from Branch Institute of the Shanghai Education Institute (上海教育學院) and obtained an associate education, majoring in politics and education, in July 1984. Mr. Fan is currently the vice chairman of the Shanghai Pharmaceutical Trade Association (上海醫藥商業行業協會).

Save as disclosed herein, Mr. Fan has not held any directorship in other listed companies in the past three years nor has any relationship with any Directors, senior management, substantial shareholders or controlling shareholder of the Company.

As at the date of this circular, Mr. Fan has no interest in the shares of the Company within the meaning of Part XV of the SFO. Upon due appointment as a non-executive Director, Mr. Fan will enter into a service contract with the Company for a period of three years. Mr. Fan will not receive any remuneration from the Company in his capacity as the non-executive Director.

Save as disclosed above, the Board is not aware of any other matters in relation to the appointment of Mr. Fan that need to be brought to the attention of the Shareholders nor that is required to be disclosed pursuant to Rule 13.51(2)(h) to (v) of the Hong Kong Listing Rules.

Mr. Liu Hailiang , aged 61, was nominated as a non-executive Director with effect from the date of approval by the Shareholders in the EGM and until the expiration of the Next Term.

He has around 41 years of working experience, over 14 years of which is management experience.

Mr. Liu served as the human resources manager of Johnson & Johnson China Ltd. (強生（中國）有限公司) from March 1995 to March 2000. Mr. Liu was an assistant to the general manager and chief human resources offi cer of Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (上海復星醫藥（集團）股份 有限公司, a company listed on the Shanghai Stock Exchange) from March 2000 to May 2004, and has been a supervisor of Shanghai Fosun Pharmaceutical (Group) Co., Ltd. (上海復星醫藥（集團） 股份有限公司, a company listed on the Shanghai Stock Exchange) since May 2004 and has been the chairman of the supervisory committee since May 2008. Mr. Liu has been serving as the nonexecutive Director since 8 January 2003.

Mr. Liu graduated from Shanghai Construction Institute and obtained an associate education in business administration in September 1986.

Save as disclosed herein, Mr. Liu has not held any directorship in other listed companies in the past three years nor has any relationship with any Directors, senior management, substantial shareholders or controlling shareholder of the Company.

— 7 —

LETTER FROM THE BOARD

As at the date of this circular, Mr. Liu has no interest in the shares of the Company within the meaning of Part XV of the SFO. Upon due appointment as a non-executive Director, Mr. Liu will enter into a service contract with the Company for a period of three years. Mr. Liu will not receive any remuneration from the Company in his capacity as the non-executive Director.

Save as disclosed above, the Board is not aware of any other matters in relation to the appointment of Mr. Liu that need to be brought to the attention of the Shareholders nor that is required to be disclosed pursuant to Rule 13.51(2)(h) to (v) of the Hong Kong Listing Rules.

Mr. Wang Fanghua , aged 63, was nominated as an independent non-executive Director with effect from the date of approval by the Shareholders in the EGM and until the expiration of the Next Term.

Mr. Wang has 41 years of working experience.

Mr. Wang worked at Fudan University as the head of the Faculty of Business Administration of the School of Management from July 1994 to July 1998. He has been the dean of Antai College of Economics & Management of Shanghai Jiao Tong University (上海交通大學) since January 2003. Mr. Wang was an independent director of Shanghai Jinjiang International Hotels Development Co., Ltd. (上海錦江國際酒店發展股份有限公司) (a company listed on the Shanghai Stock Exchange) from August 2003 to May 2009. Mr. Wang has been an independent director of each of Shanghai Oriental Pearl Co., Ltd. (上海東方明珠（集團）股份有限公司) (a company listed on the Shanghai Stock Exchange), Shenzhen Auto Electric Power Plant Co., Ltd. (深圳奧特迅電力設備股份有限 公司) (a company listed on the Shenzhen Stock Exchange) and Shanghai New World Co., Ltd. (上海 新世界股份有限公司) (a company listed on the Shanghai Stock Exchange) since June 2005, March 2007 and June 2008, respectively. He has also been an independent non-executive director of Lonking Holdings Limited (中國龍工控股有限公司) (a company listed on the Hong Kong Stock Exchange) since May 2008. Mr. Wang has been serving as the independent non-executive Director since 16 January 2003.

Mr. Wang graduated from Fudan University with a master’s degree in economics in January 1989.

Save as disclosed herein, Mr. Wang has not held any directorship in other listed companies in the past three years nor has any relationship with any Directors, senior management, substantial shareholders or controlling shareholder of the Company.

As at the date of this circular, Mr. Wang has no interest in the shares of the Company within the meaning of Part XV of the SFO. Upon due appointment as an independent non-executive Director, Mr. Wang will enter into a service contract with the Company for a period of three years. Mr. Wang will not receive any remuneration from the Company in his capacity as the independent non-executive Director.

Save as disclosed above, the Board is not aware of any other matters in relation to the appointment of Mr. Wang that need to be brought to the attention of the Shareholders nor that is required to be disclosed pursuant to Rule 13.51(2)(h) to (v) of the Hong Kong Listing Rules.

Mr. Tao Wuping , aged 55, was nominated as an independent non-executive Director with effect from the date of approval by the Shareholders in the EGM and until the expiration of the Next Term.

Mr. Tao has around 38 years of working experience, over 24 years of which is for practising law.

— 8 —

LETTER FROM THE BOARD

Mr. Tao has been the head of Shen Da Law Firm (申達律師事務所), a visiting law professor of Shanghai Institute of Foreign Trade (上海對外貿易學院), a part-time professor at the Law and Politics College of East China Normal University (華東師範大學), and the honorary dean and a parttime professor at the Law and Politics College of Shanghai Normal University (上海師範大學) since August 1994, March 2002, June 2003, and September 2003, respectively. Mr. Tao has been serving as the independent non-executive Director since 16 January 2003.

Mr. Tao graduated from Fudan University with a master’s degree in law, majoring in international economic law, in June 1997. Mr. Tao is a lawyer. Mr. Tao was recognized as the “National Outstanding Attorney at Law” by All China Lawyers Association and the fi rst session of “Eastern Attorney at Law” by Shanghai Bar Association (上海律師協會).

Save as disclosed herein, Mr. Tao has not held any directorship in other listed companies in the past three years nor has any relationship with any Directors, senior management, substantial shareholders or controlling shareholder of the Company.

As at the date of this circular, Mr. Tao has no interest in the shares of the Company within the meaning of Part XV of the SFO. Upon due appointment as an independent non-executive Director, Mr. Tao will enter into a service contract with the Company for a period of three years. Mr. Tao will not receive any remuneration from the Company in his capacity as the independent non-executive Director.

Save as disclosed above, the Board is not aware of any other matters in relation to the appointment of Mr. Tao that need to be brought to the attention of the Shareholders nor that is required to be disclosed pursuant to Rule 13.51(2)(h) to (v) of the Hong Kong Listing Rules.

Mr. Xie Rong , aged 58, was nominated as an independent non-executive Director with effect from the date of approval by the Shareholders in the EGM and until the expiration of the Next Term.

Mr. Xie has around 41 years of working experience.

He served as the deputy head of the Accounting Department of Shanghai University of Finance & Economics (上海財經大學) and a partner of KPMG China (畢馬威華振) from September 1994 to November 1997 and from December 1997 to October 2002, respectively. Mr. Xie has been a director of SAIC Motor Co., Ltd. (上海汽車股份有限公司) (a company listed on the Shanghai Stock Exchange) since April 2003 and was its independent director from April 2003 to June 2008. Mr. Xie served as an independent non-executive director of China Shipping Development Co., Ltd. (中海發 展股份有限公司) (a company listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange) from May 2003 to May 2009. He has been an independent non-executive director of each of China Eastern Airlines Corporation Limited (中國東方航空股份有限公司) (a company listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange), China CITIC Bank Corporation Limited (中信銀行股份有限公司) (a company listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange) and Tianjin Capital Environmental Protection Group Co., Ltd. (天津創業 環保集團股份有限公司) (a company listed on the Hong Kong Stock Exchange and the Shanghai Stock Exchange) since June 2003, February 2007 and April 2008, respectively. Mr. Xie has been serving as the independent non-executive Director since 30 August 2007.

— 9 —

LETTER FROM THE BOARD

Mr. Xie graduated from Shanghai University of Finance & Economics (上海財經大學) with a doctorate degree in economics, majoring in accounting, in January 1993. Mr. Xie is currently the vice president of the Shanghai National Accounting Institute (上海國家會計學院), a member of the Master of National Accounting Professional Education Guidance Committee of the Degree Committee of the State Council (國務院學位委員會全國會計碩士專業學位教育指導委員會), a standing commissioner of the China Auditing Institute (中國審計學會) and standing commissioner of the China Accounting Institute (中國會計學會).

Save as disclosed herein, Mr. Xie has not held any directorship in other listed companies in the past three years nor has any relationship with any Directors, senior management, substantial shareholders or controlling shareholder of the Company.

As at the date of this circular, Mr. Xie has no interest in the shares of the Company within the meaning of Part XV of the SFO. Upon due appointment as an independent non-executive Director, Mr. Xie will enter into a service contract with the Company for a period of three years. Mr. Xie will not receive any remuneration from the Company in his capacity as the independent non-executive Director.

Save as disclosed above, the Board is not aware of any other matters in relation to the appointment of Mr. Xie that need to be brought to the attention of the Shareholders nor that is required to be disclosed pursuant to Rule 13.51(2)(h) to (v) of the Hong Kong Listing Rules.

III. RE-ELECTION OF SUPERVISOR

Ms. Zhang Jian whose term of offi ce as employee representative Supervisor of the current term will expire on 12 September 2011 and will be elected democratically by employees’ representative meeting of the Company on or before 12 September 2011 for a term of three years with effect from 21 September 2011, while Mr. Yao Fang and Mr. Lian Wanyong whose terms of offi ce as shareholders representative Supervisors of the current term will expire on 6 January 2014.

Upon the re-election of Supervisor becoming effective on the date of the EGM, the new session of the supervisory committee of the Company will comprise Mr. Yao Fang, Mr. Lian Wanyong and Ms. Zhang Jian.

Ms. Zhang Jian , aged 37, was nominated as employee representative Supervisor.

Ms. Zhang has around 12 years of working experience.

Ms. Zhang has been serving as the supervisor of each of Sinopharm Holding Beijing Co., Ltd. (國藥 控股北京有限公司), Shanghai Sinopharm Waigaoqiao Co., Ltd. (上海國藥外高橋醫藥有限公 司), and Sinopharm Holding Shanxi Co., Ltd. since September 2007, October 2007 and November 2007, respectively. Ms. Zhang served as the supervisor of China National Medicines Co., Ltd. from May 2008 to August 2010. Ms. Zhang has been appointed as the supervisor of China National Pharmaceutical Group Xinjiang Medicines Co., Ltd. and Beijing Tianxingpuxin Bio-Med Co., Ltd. since March 2009 and April 2010 respectively. She is currently the supervisor of Sinopharm Medicine Holding Beijing HuaHong Co., Ltd., Sinopharm Holding Shanxi Co., Ltd. and Beijing Kangchen Pharmaceutical Co., Ltd. (北京康辰藥業有限公司). Ms. Zhang has been serving as the head of the auditing department of the Company since February 2008 and the Supervisor since 12 September 2008.

— 10 —

LETTER FROM THE BOARD

Ms. Zhang graduated from Shanghai University of Finance & Economics (上海財經大學) with a bachelor’s degree in economics, majoring in accounting, in July 1997. She is a non-practicing PRC certifi ed public accountant.

Save as disclosed herein, Ms. Zhang has not held any directorship in other listed companies in the past three years nor has any relationship with any Directors, senior management, substantial shareholders or controlling shareholder of the Company.

As at the date of this circular, Ms. Zhang has no interest in the shares of the Company within the meaning of Part XV of the SFO. Upon due appointment as a Supervisor, Ms. Zhang will enter into a service contract with the Company for a period of three years. Ms. Zhang will not receive any remuneration in her capacity as the employee representative Supervisor.

Save as disclosed above, the Board is not aware of any other matters in relation to the appointment of Ms. Zhang that need to be brought to the attention of the shareholders nor that is required to be disclosed pursuant to Rule 13.51(2)(h)to (v) of the Hong Kong Listing Rules.

IV. EGM

The EGM will be held at VIP Room 1, 3rd Floor, Four Seasons Hotel Shanghai, 500 Weihai Road, Shanghai, the PRC at 9:30 a.m. on Wednesday, 21 September 2011. The notice of EGM is set out on pages 12 to 15 of this circular.

Whether or not you are able to attend the EGM in person, please complete and return the enclosed form of proxy in accordance with the instructions printed thereon as soon as practicable and in any event not less than 24 hours before the time appointed for the holding of the EGM or any adjournment thereof, and deposit it with Computershare Hong Kong Investor Services Limited, the H shares registrar and transfer offi ce of the Company in Hong Kong, at 17M Floor, Hopewell Centre, 183 Queen’s Road East, Hong Kong. Completion and return of the form of proxy will not preclude you from attending and voting at the EGM or any adjournment thereof should you so desire.

V. RECOMMENDATION

The Directors consider believe that the resolutions in respect of the proposed re-election of Directors are in the best interests of the Company and the Shareholders as a whole. Accordingly, the Directors recommend that all Shareholders should vote in favour of the resolutions at the EGM.

By Order of the Board of Sinopharm Group Co. Ltd. She Lulin Chairman

— 11 —

NOTICE OF EGM

==> picture [57 x 71] intentionally omitted <==

* SINOPHARM GROUP CO. LTD. 國藥控股股份有限公司

(A joint stock limited company incorporated in the People’s Republic of China with limited liability and carrying on business in Hong Kong as 國控股份有限公司)

(Stock code: 01099)

NOTICE OF EGM

NOTICE IS HEREBY GIVEN that the extraordinary general meeting (the “ EGM ”) of Sinopharm Group Co. Ltd. (the “ Company ”) will be held at VIP Room 1, 3rd Floor, Four Seasons Hotel Shanghai, 500 Weihai Road, Shanghai, the People’s Republic of China (the “ PRC ”) at 9:30 a.m. on Wednesday, 21 September 2011, for the purposes of considering and, if thought fi t, passing the following resolutions:

AS ORDINARY RESOLUTIONS:

1. To consider and, if thought fi t, to approve the appointment of Mr. Wei Yulin as an executive director of the Company, and to authorize the Chairman of the board of directors of the Company to execute a service contract or such other documents or supplemental agreements or deeds on behalf of the Company.

2. To consider and, if thought fi t, to approve the appointment of Mr. She Lulin as a non-executive director of the Company, and to authorize the Chairman of the board of the directors of the Company or the executive director of the Company to execute a service contract or such other documents or supplemental agreements or deeds on behalf of the Company.

3. To consider and, if thought fi t, to approve the appointment of Mr. Wang Qunbin as a nonexecutive director of the Company, and to authorize the Chairman of the board of directors of the Company or the executive director of the Company to execute a service contract or such other documents or supplemental agreements or deeds on behalf of the Company.

4. To consider and, if thought fi t, to approve the appointment of Mr. Deng Jindong as a nonexecutive director of the Company, and to authorize the Chairman of the board of directors of the Company or the executive director of the Company to execute a service contract or such other documents or supplemental agreements or deeds on behalf of the Company.

5. To consider and, if thought fi t, to approve the appointment of Mr. Fan Banghan as a nonexecutive director of the Company, and to authorize the Chairman of the board of directors of the Company or the executive director of the Company to execute a service contract or such other documents or supplemental agreements or deeds on behalf of the Company.

— 12 —

NOTICE OF EGM

1. To consider and, if thought fi t, to approve the appointment of Mr. Liu Hailiang as a nonexecutive director of the Company, and to authorize the Chairman of the board of directors of the Company or the executive director of the Company to execute a service contract or such other documents or supplemental agreements or deeds on behalf of the Company.

2. To consider and, if thought fi t, to approve the appointment of Mr. Wang Fanghua as an independent non-executive director of the Company, and to authorize the Chairman of the board of directors of the Company or the executive director of the Company to execute a service contract or such other documents or supplemental agreements or deeds on behalf of the Company.

3. To consider and, if thought fi t, to approve the appointment of Mr. Tao Wuping as an independent non-executive director of the Company, and to authorize the Chairman of the board of directors of the Company or the executive director of the Company to execute a service contract or such other documents or supplemental agreements or deeds on behalf of the Company.

4. To consider and, if thought fi t, to approve the appointment of Mr. Xie Rong as an independent non-executive director of the Company, and to authorize the Chairman of the board of directors of the Company or the executive director of the Company to execute a service contract or such other documents or supplemental agreements or deeds on behalf of the Company.

By Order of the Board of Sinopharm Group Co. Ltd. She Lulin Chairman

Shanghai, the PRC 5 August 2011

As at the date of this notice, the executive director of the Company is Mr. Wei Yulin; the non-executive directors of the Company are Mr. She Lulin, Mr. Wang Qunbin, Mr. Chen Wenhao, Mr. Zhou Bin, Mr. Chen Qiyu, Mr. Deng Jindong, Mr. Fan Banghan and Mr. Liu Hailiang; and the independent non-executive directors of the Company are Mr. Wang Fanghua, Mr. Tao Wuping, Mr. Xie Rong and Mr. Zhou Bajun.

Notes:

1. Eligibility for Attending the EGM

Holders of H Shares whose names appear on the register of members of the Company maintained by Computershare Hong Kong Investor Services Limited, the H share registrar and transfer offi ce of the Company in Hong Kong, at the close of business of Friday, 19 August 2011 shall be entitled to attend the EGM.

Holders of H Shares intending to attend and vote at the EGM to be held on Wednesday, 21 September 2011 shall lodge all the transfer documents for H Shares with the relevant share certifi cates to Computershare Hong Kong Investor Services Limited, the H share registrar and transfer offi ce of the Company in Hong Kong, at Rooms 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong, no later than 4:30 p.m. on Friday, 19 August 2011.

— 13 —

NOTICE OF EGM

2. Proxy

• (1) Shareholders entitled to attend and vote at the EGM may appoint one or more proxies in writing to attend and vote at the meeting on his behalf. The proxy need not be a shareholder of the Company.

• (2) A proxy shall be appointed by a shareholder by a written instrument signed by the appointor or his attorney duly authorized in writing. In case of a corporation, the same must be either under its common seal or under hand of its director(s) or duly authorized attorney(s). If the written instrument is signed by an attorney of the appointor, the power of attorney or other documents of authorization of such attorney shall be notarized.

• (3) To be valid, the notarized power of attorney or other document(s) of authorization (if any), and the form of proxy shall be delivered to (i) the board offi ce of the Company for holders of domestic shares; and (ii) Computershare Hong Kong Investor Services Limited, the H share registrar and transfer offi ce of the Company in Hong Kong, for the holders of H Shares, no less than 24 hours before the time fi xed for convening the EGM or any adjournment thereof (as the case may be).

Completion and return of a form of proxy will not preclude a shareholder from attending and voting in person at the meeting if he so wishes.

• (4) If a shareholder appoints more than one proxy, such proxies can only exercise their voting rights by a poll.

3. Registration Procedures for Attending the EGM

• (1) A shareholder or his proxy shall produce his identifi cation document when attending the EGM. Where a shareholder is a legal person, the legal representative of that shareholder or the person authorized by its board of directors or other governing body shall produce a copy of the resolution of the board of directors or other governing body of such shareholder appointing such person to attend the meeting.

• (2) Shareholders intending to attend the EGM shall return to the Company the reply slip stating their attendance on or before Wednesday, 31 August 2011.

• (3) A shareholder may return the above reply slip to the Company in person, by post or by facsimile.

4. Closure of Register of Members

The register of members of the Company will be closed from Monday, 22 August 2011 to Wednesday, 21 September 2011 (both days inclusive), during which time no transfer of shares will be registered.

5. Method of Voting at the EGM

According to Rule 13.39(4) of the Hong Kong Listing Rules, any vote of shareholders at a general meeting must be taken by way of poll. Accordingly, the chairman of the EGM will demand a poll in relation to all the proposed resolutions at the EGM.

— 14 —

NOTICE OF EGM

6. Miscellaneous

• (1) The EGM is expected to be held for less than half a day. Shareholders attending the EGM shall be responsible for their own travelling and accommodation expenses.

• (2) The address of Computershare Hong Kong Investor Services Limited, the H share registrar and transfer offi ce of the Company in Hong Kong, is 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wan Chai, Hong Kong.

• (3) Contact details of the board offi ce of the Company in the PRC are as follows:

Address: 6th Floor, No. 221 Fuzhou Road Shanghai 200002, the PRC Telephone No.: (86 21) 6339 1911 Fax No.: (86 21) 6321 2722

— 15 —