This excerpt taken from the TCM 20-F filed Jun 30, 2008.
Other related party transactions:
Other than the dispositions to the controlling shareholder as described above, the Company purchased materials from Tongjitang Sliced Herbs amounting to RMB1,908 and RMB915 for the year ended December 31,
TONGJITANG CHINESE MEDICINES COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS(Continued)
(In thousands of Renminbi, except share data, per share data and convenience translations)
2005 and 2006, respectively. The Company also assigned a trade receivable of RMB6,465, together with a severance pay liability of RMB4,637 to Tongjitang Sliced Herbs as at December 31, 2005, and reduced its accounts payable balance to Tongjitang Sliced Herbs for the difference.
In January 2005, Tongjitang Pharmaceutical also entered into a patent license agreement with Mr. Wang for licensing his patent for a medicine and its processing method for a term of ten years up to the patent expiry at nil consideration. This patent was purchased by Mr. Wang on behalf of Tongjitang Pharmaceutical in November 2003 from an independent individual where the purchase consideration of RMB400 was paid by Tongjitang Pharmaceutical.
In June 2006, Tongjitang Pharmaceutical established Tongjitang Planting, together with Tongjitang Sliced Herbs, which contributed capital of RMB250 to Tongjitang Planting for a 5% equity interest.